Six-Party Talks Hopefully to Open in December

BEIJING (Xinhuanet) -- The second round of the six-party talks on the Korean nuclear issue will hopefully be held in December, said a Chinese Foreign Ministry spokesman here Tuesday. During a regular press conference, Liu Jianchao said that if all sides work together, and preparation goes well and differences reduce, the second round of talks is very likely to be held before the end of this year. China hopes it can be held "as early as possible", he said. Chinese Vice Foreign Minister Wang Yi discussed this issue with the US side last Thursday and Friday. Dai Bingguo, another Chinese vice foreign minister, met with related officials of the Republic of Korea (ROK) Monday and will visit Japan Wednesday. Liu said China and the United States have reached consensus on peacefully resolving the Korean nuclear issue and pushing six-party talks. They also exchanged views on preparation for the second round of talks. The two sides agreed to maintain contact and hoped all sides would contribute to an early opening of the talks. China and the ROK, Liu said, reiterated that peacefully resolving the Korean nuclear issue is their common goal and they are willing to push the progress forward. The six parties, which are the Democratic People's Republic of Korea, China, the United States, Russia, the ROK and Japan, held the first round talks in Beijing last August.

From http://www.chinaview.cn 11/11/2003

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China-ASEAN: Tariff of 500 Products to Be Cut Next Year

Starting next January, the plan of Early Harvest under the framework of China-ASEAN Free Trade Zone will be carried out. Tariffs of over 500 varieties of products (mainly farm produces) will be lowered, and will drop to zero by 2006. Upon the establishment of the China-ASEAN Free Trade Zone, an economic area with 1.7 billion of consumers, nearly RMB2 trillion of GDP and US$120 million of trade aggregate will be formed. Since the first China-ASEAN Entrepreneur Exchange Seminar was held in 2001 in Chengdu of China, China and ASEAN have concluded a series of agreements and announcements. This October, leaders of both sides signed a joint declaration, defining the contents of economic cooperation between both sides. It is expected that the trade volume between China and ASEAN will total more than US$100 billion in 2005.

From FDI 11/12/2003

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SAARC Countries Agree on Liberal Visa Norms for Journalists

* Conference decides to set up information centre in Nepal
* Vajpayee calls for reaping benefits of cooperation

NEW DELHI: South Asian Association for Regional Cooperation (SAARC) countries agreed on Tuesday to liberalise visa norms for free movement of media persons in the region. At the end of the one-day SAARC Information Ministers' Conference, representatives from India, Pakistan, Bangladesh, Bhutan, Nepal, Sri Lanka and Maldives decided to set up a regional information centre in Nepal and train media persons in India. The representatives from Nepal and Bhutan were divided over setting up the SAARC Information Centre. Bhutan said since the SAARC Secretariat was in Kathmandu, the information centre should be set up in Thimpu. Pakistan had already withdrawn its claim in favour of Nepal. After a two-hour heated debate, Bhutan agreed to withdraw its claim. The conference could not decide the issue of adopting model trans-national guidelines on broadcasting suggested by India as all member countries, except Bhutan, failed to provide their proposals. Opening the conference, Indian Prime Minister Atal Behari Vajpayee warned that "other alignments" would develop to seize the economic opportunities, if South Asian countries did not stand up to reap the benefits of cooperation. Mr Vajpayee said, "If SAARC cannot organise itself, it will simply miss the boat." Stressing that there was an "overwhelming desire" for friendship and cooperation at the level of people in the region, Mr Vajpayee said, "We as politicians should respond to this demand." Soon after his address, Pakistani Information and Broadcasting Minister Sheikh Rashid warmly shook hands with Mr Vajpayee as the representatives posed for a group photograph. Before emplaning for Moscow, Mr Vajpayee told reporters at Delhi airport that they did shake hands. "There was no conversation today", he said. Mr Rashid said he had conveyed President Pervez Musharraf's message of good wishes to the Indian prime minister. He said a good environment to boost cooperation and development among the SAARC countries was possible only if a determined effort was made to "resolve disputes" and "allow them to simmer". Talking to reporters, Indian Information and Broadcasting Minister Ravi Shankar Prasad said all member countries would provide technological inputs for the information centre. On setting up a SAARC Media Development Fund, Mr Prasad said Bangladesh was asked to put up a revised draft, which would be studied by all members. He said India had offered to train 12 journalists from the SAARC countries. (by Iftikhar Gilani)

From http://www.dailytimes.com.pk/ 11/12/2003

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Japan Will Ink ASEAN Peace Pact

Bowing to strong overtures from the Association of Southeast Asian Nations, Japan has decided to sign a regional nonaggression treaty, Chief Cabinet Secretary Yasuo Fukuda said Tuesday. Deputy Foreign Minister Hitoshi Tanaka reportedly conveyed the decision to senior ASEAN officials in Tokyo for preparatory talks ahead of next month's Japan-ASEAN summit. The ASEAN side welcomed the move, according to a Japanese government official. "Japan deemed it beneficial to sign, as there were strong requests from ASEAN members" as well as China and South Korea, Fukuda told a regularly scheduled news conference. The Treaty of Amity and Cooperation in Southeast Asia, crafted in 1976, aims to solve regional disputes through peaceful means. Although China and India put their names on the treaty during last month's ASEAN summit in Indonesia, Prime Minister Junichiro Koizumi expressed reluctance to follow suit, saying Japan-ASEAN ties are already solid without Tokyo joining the pact. The noncommittal stance prompted resentment from ASEAN, which sought another major power to become a signatory to maintain the balance of power within the region in the wake of China's participation. Tokyo, for its part, was apparently concerned that given China's rising presence, Japan's political and economic influence in Southeast Asia would decline if the government failed to show its commitment to the region. (by Kanako Takahara)

From The Japan Times 11/19/2003

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China, Japan, ROK Hold Policy Dialog on Intellectual Property

Top intellectual property watchdogs from China, Japan and the Republic of Korea (ROK) held the third trilateral policy dialog meeting in Beijing Friday, discussing new cooperation and the possibility of arranging talks with Southeast Asian countries. Wang Jingchuan, commissioner of China's State Intellectual Property Office (SIPO), said that the trilateral cooperation in trade, economic and other fields was greatly promoted in recent years. During the "10+3" meeting October in Indonesia, which was attended by 10 members of the Association of Southeast Asian Nations (ASEAN) and China, Japan and the ROK, leaders from the three sides agreed to strengthen intellectual property protection and coordination, Wang said. Yasuo Imai, commissioner of the Japan Patent Office (JPO), said that the three countries are playing key roles in many fields in Asia, including intellectual property. The three sides have conducted many concerted projects and cooperated widely, he said. In the 21st century, said Dong-Man Ha, commissioner of the Korean Intellectual Property Office (KIPO), high-profile dialogs among the three countries on intellectual property are particularly important. He hoped the three sides would discuss more substantial issues. The three commissioners agreed to set up an information-exchange platform, to experiment on electronic document exchange in 2004, to explore the possibilities of sharing a patent search and examination database among the three sides, and to compile a technical dictionary. The trilateral policy dialog was initiated in 2001. JPO hosted the first meeting in Tokyo, where the three sides agreed to host the meeting in turn since then.

From http://fpeng.peopledaily.com.cn/ 11/14/2003

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CHINA: Funds Law Passed

China's lawmakers voted 146-to-1 for the securities investment fund law yesterday, with one abstaining, according to China News Services. The law, which will take effect on June 1, 2004, lowers the threshold for the establishment of the funds. It has no rules governing private funds while allowing open-end funds to decide for themselves on short-term financing. The law does not stipulate whether open-ended funds can apply for short-term loans from commercial banks, which leaves space for further amendments according to the developing needs of the situation.

From http://www.Eastday.com 10/29/2003

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Wu Bangguo on Legislative Work to Serve Market Economy

China's top legislator, Wu Bangguo says legislative work must serve the goal of developing the socialist market economy. Speaking at the fifth meeting of the NPC Standing Committee, Wu Bangguo says legal construction provides basic guarantees for the establishment of an ordered and matured market economy. Thus, he asserts, the quality of legislation must be ensured. Wu Bangguo also notes the legislation in economic fields should be the key task of NPC and its Standing Committee. The legislation on property rights, social insurance, labor and employment must be strengthened. He also calls on the People's Congresses at all levels to strengthen supervision on the implementation of laws. During the session, two new laws have been approved. The first was a law on Road Traffic Safety while the second concerned securities investment and funds.

From http://www.crienglish.com/ 10/28/2003

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Laws on IPR to Be Extended

The Ministry of Science and Technology is looking at law drafts for protecting intellectual property rights covering biological and information technology. The ministry is also considering legal proposals to protect property rights on large instruments and animals used in experiments related to State-level research programmes, said Li Xueyong, vice-minister of science and technology. Li made the comments at a conference on scientific systems and intellectual property which opened on Nov.3 in Beijing. The Legislative Affairs Office of the State Council has been charged with drafting frameworks for the proposed laws, he said. The concept of protecting intellectual property rights (IPR) on new technology has become a major consideration in scientific research. Scientific departments which undertake the so-called "863 Programme" (China's high-tech development plan initiated in March 1986) and other national scientific programmes are required to submit IPR protection strategies before they apply for project implementation, Li said. As a result, some projects have gained patented technologies. A new technology for growing genetically modified pest-resistant cotton, for example, was granted the "Golden Award of Invention Patent" by the World Intellectual Property Organization last year. Li said his ministry's preparatory strategies for intellectual property protection will be made in parallel with the development of new scientific projects. According to the State Intellectual Property Office, patent protection has been strengthened to spur the development of cutting-edge technology in China, and has been linked with 12 key scientific projects launched last year by the Ministry of Science and Technology. The State Intellectual Property Office has also launched patent protection programmes in large firms in more than 20 provinces, municipalities and autonomous regions and will continue to supervise patent systems in these regions.

From China Daily 11/04/2003

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China Reacts to Bush Remarks on Democracy, Saying It Follows Its Own Path

BEIJING: China said Saturday it will pursue its own path to democracy, reacting to remarks by US President George W. Bush that the Chinese people will eventually want their liberty "pure and whole." "The Chinese people know how to cherish and develop the socialist democracy which best suits the real condition of China," the state-run Xinhua news agency said, citing foreign ministry spokeswoman Zhang Qiyue. "(They) will continue to follow their own way under the leadership of the Communist Party of China," she said according to the agency. She said the Chinese government is committed to promoting democracy and protecting human rights, adding 25 years of efforts in the field has been "paying off." The remarkably mild Chinese reaction came after President Bush warned on Thursday that economic reforms in China would unlock a mass yearning for personal freedoms. Bush criticised the tight control exercised by its communist leadership. "Our commitment to democracy is tested in China," Bush said in a speech to the non-profit National Endowment for Democracy. "The nation now has a sliver, a fragment of liberty. Yet China's people will eventually want their liberty pure and whole." The United States has seen its geopolitical interests coincide with Beijing in several areas since the September 11 attacks, notably in anti-terror cooperation and efforts to ease the North Korea nuclear crisis. But it is still at odds with Beijing over its political system, and what it says is "backsliding" on human rights commitments and a poor record on religious tolerance.

From http://www.channelnewsasia.com/ 11/08/2003

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China to Unify Organic Food Standards

China is trying to set a unified organic food standard to improve the authentication of such products. A press release from the organization committee for the China AG Trade Fair (ATF) noted that China now has many authentication organizations in this field, and the standards they adopt differ. Some use standards of the United States, while some use Japanese ones, and some European. The ATF, sponsored by the Ministry of Agriculture, will open on Nov.12, featuring an exhibition of green food and organic food products in the country. Organic food are agricultural products grown without use of genetic projects or chemical products, such as fertilizers and pesticides. China is now lagging behind in the production of organic food, according to the release. By 2002, China had only some 50 varieties of organic agricultural products growing on 700,000 hectares of land. But the export of organic food is ever increasing to 25 million US dollars in 2001 from 10 million US dollars in 1998. In the world, the total land used for organic food production has reached 23 million hectares. The consumption of organic food is expected to reach 100 billion US dollars in 2010, with the United States, European countries and Japan as the major organic food markets.

From China Daily 11/10/2003

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China Plans Shake-Up for State Enterprises

China yesterday announced a bold new drive to reform its state-owned enterprises, building on an ideological breakthrough at a key Communist party meeting last month which banished much of a residual antipathy towards selling state assets to foreigners and private Chinese companies, the Financial Times reports. The new policy meant the party has decided that in order to retain a key role in the economy, it must sell parts of its biggest companies to foreign or private companies, officials said. Smaller companies could be released from state ownership. The Washington Post adds that the privatization campaign also ushers in a new phase in China's fitful transition from a planned economy in which workers were guaranteed employment to a market economy in which they are forced to fend for themselves. More than 25 million state workers have already lost their jobs. The government hopes private owners can help turn around money-losing companies that have been a drain on the nation's booming economy. In addition, some officials have said proceeds from the sales could be used to repair China's tattered social safety net, including under-funded health care, pension and welfare systems. Business Daily Update meanwhile notes that China's strong economic performance will help shore up sluggish global growth and create an expanding market for regional economies, financial thinkers said. The country's Asian neighbors, who most feared China's export power, have already been the biggest gainers from China's robust development, said Huang Yiping, a researcher with Salomon Smith Barney. Huang's opinion was supported by a recent World Bank report, saying China's sustained robust economic growth will support East Asia, already the fastest growing region in the world, to record strong growth in the coming year. The region's rosy outlook is underpinned by its booming trade with China, said Jemal-ud-din Kassum, the World Bank's regional vice-president for East Asia and the Pacific. Martin Wolf of the Financial Times writes in a commentary that a World Bank study notes that between 1985 and 2001, exports from other east Asian emerging market economies to China grew from $5.9 billion to $83.5 billion. In 2001, 15 percent of east Asia's exports to China consisted of parts of office machines and telecommunications equipment and electronic microcircuits, all of which were for assembly and re-export. How should other countries respond to the Chinese shock? "Calmly" is the best advice. One reason is economic: the most adversely affected countries can do little about China's rise, while those that can do something also benefit most from it. But the bigger reason for calm comes from history. If China is permitted to thrive as a dynamic exporter of cheap manufactures, its people will obtain the prosperity they want. If China is thwarted by protectionist barriers, its people will be correspondingly frustrated and dangerous. Finally, Dow Jones reports that in a sign of strong foreign interest in China's distressed-debt market, more than 12 investors have paid hefty fees for access to information about the country's biggest auction of bad loans, the seller of the loans said. The sale process "is moving smoothly," Han Sheng Qi, senior deputy manager at China Huarong Asset Management Co. in Beijing, told The Asian Wall Street Journal via e-mail Wednesday.

From http://web.worldbank.org/ 11/12/2003

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China Warns Chen Pushing Taiwan 'to the Brink of Danger'

BEIJING: China warned Taiwanese leader Chen Shui-bian his efforts to promote independence were pushing the island towards "the brink of danger," and the mainland was ready to crush any attempt to split the country. "Chen Shui-bian has been pushing the island closer and closer to the dangerous brink of Taiwan independence," Li Weiyi, a spokesman for the State Council's Taiwan Affairs Office was quoted as saying by the Xinhua news agency. "This will ultimately drag Taiwan compatriots into a disaster, and will prompt Chinese people to make preparations to crush the conspiracy to achieve Taiwan independence," Li said. He warned efforts to push for independence were doomed to fail and would not be tolerated by China. China has considered Taiwan part of its territory awaiting reunification since the Nationalist government fled to the island in 1949. "Taiwanese independence is not in accordance with the people's will. Taiwan separatism has nowhere to go. The Chinese people will never allow the attempt to split the country to be successful," Li said. The spokesman did not elaborate on what measures Beijing might take to crack down upon on Chen's activities, although China has said in the past it would use force to reunify the island with the mainland if necessary. Beijing considers the Taiwan issue linked to its sovereignty and territorial integrity. The China Daily cited political analysts as saying Chen's increasingly radical campaign, which Beijing interprets as advocating separatism, is an effort to boost his chances of re-election in next year's presidential campaign. During a stopover last week in New York en route to Panama, Chen "beat the drum hard" for his plan for a new "constitution" and an island-wide referendum, the paper said. It cited experts as saying the referendum was aimed at paving the way for formal independence. In one of the key policy positions for his re-election bid, Chen asserted that Taiwan and China were "one country on each side" of the Taiwan Straits. The "provocative" definition of cross-Straits ties goes against Beijing's one-China principle, that the mainland and Taiwan are the same country. The state-run paper also criticized Chen's move to "instigate" his pro-independence Democratic Progressive Party to put forward a draft law on the referendum, which makes it clear a future plebiscite can be held on any issue, including the island's independence. Li said Chen's recent pro-independence moves had demonstrated that the Taiwan leader was failing to honour his earlier pledges not to include the concept of "state-to-state" relations in Taiwan's "constitution." It also indicated he was retracting from his promise not to promote any referendum on changing the status quo on independence. "So Chen's promises to not push for Taiwan independence during his term have proven to be nothing but an outrageous lie," Li said.

From http://www.channelnewsasia.com/ 11/13/2003

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Financing Rules Announced

China has issued follow-up rules on auto financing, detailing regulatory requirements and procedures for the establishment of auto financing companies in the country, one of the world's fastest-growing car markets. The rules, announced by the China Banking Regulatory Commission (CBRC) on Nov.12, require such companies to have capital adequacy ratios of 10 per cent, which is stricter than the 8 per cent requirement for commercial banks. Total guaranteed outstanding loans must not exceed 200 per cent of the financing company's registered capital, nor can they offer preferential treatment to related parties, according to the new regulations. Interest rates can be up to 10 per cent less or 30 per cent more than the base rate set by the central bank, the same standard for commercial banks' loan operations. China issued auto financing regulations in October under its World Trade Organization (WTO) commitments. The regulations require at least 4 billion yuan (US$483.2 million) in assets, though this was relaxed from earlier guidelines stipulating minimum assets of 8 billion yuan (US$963 million). A release from the commission said the stricter rules aim to ensure the stability of the burgeoning industry, as China still lacks a personal credit record system and related laws. There is still a gap between the commission's rules and those in developed countries in terms of business scope and supervision, the statement said. It added that the moves have been put in place in order to maintain the stability of financial markets, and ensure the steady development of China's auto financing industry. US auto giant General Motors Corp became the first overseas car maker to apply to offer auto financing in China on Wednesday, which executives have said could boost its already booming sales by another 20 per cent, Reuters reported on Nov.13. Sales from GM's four ventures in China soared by almost 38 per cent year-on-year in the first nine months to 267,395 units, already overtaking 2002's total of 264,101.

From People's Daily 11/14/2003

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New SFC Appointments Announced

Christopher Cheng and Jasper Tsang have been appointed and re-appointed respectively as Non-Executive Directors of the Securities & Futures Commission. Mr Cheng will take over Henry Fan's seat. Secretary for Financial Services & the Treasury Frederick Ma announced the appointments today, adding they will be for two years from November 15. The commission is served by six executive directors, including the chairman, and seven non-executive directors, which include Raymond Kwok, Thomas Stevenson, Anna Wu, Daniel Fung, and Dr York Liao. Mr Ma said Dr Liao will also replace Mr Fan as an ex-officio member of the Process Review Panel from November 15 to October 31, 2004. Mr Ma said Mr Fan's work has been instrumental in enhancing the commission's corporate governance, accountability and transparency. Commission Chairman Andrew Sheng welcomed the appointments. "I am particularly grateful to Mr Fan for his exemplary contribution to the commission and the development of our market in the past eight years. I would also like to welcome Mr Cheng who will bring with him a wealth of professional expertise and public service experience, which will be of tremendous help to the commission," he said, adding he is pleased to be able to continue working with Mr Tsang.

From http://www.news.gov.hk/ 11/14/2003

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Favorable Policy for Multinationals to Base Headquarters in Beijing

Beijing is to introduce a favorable policy to encourage multinationals to base their China headquarters in Beijing. At the First Forum on International Investment Promotion, Director of Beijing Municipal Bureau of Investment Promotion Qiu Shuiping disclosed relevant departments are wasting no time formulating the preferential policy attracting multinationals to set up their China headquarters in the city so as to draw more multinationals to invest in Beijing. It's learned the number of multinationals basing China headquarters in Beijing has totaled 24 to date. Around 120 of Fortune top 500 enterprises have invested in Beijing.

From FDI 11/17/2003

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Overhaul of Nation's Tax, Fiscal Systems Announced

China will reform its fiscal and taxation systems, officials announced over the weekend. The fiscal reforms, revealed at a finance forum in Beijing, will firmly support the development of social undertakings, strengthen direct subsidies to farmers and back the go-west programme and old industrial bases in Northeast China. They will also help solve the problem of export rebates in arrears, and increase input into environmental protection, CCTV news said, quoting sources from the Ministry of Finance. The reforms include improving the personal income tax regime, switching from production-based value-added tax to consumption-based value-added tax, amalgamating enterprise income tax and adjusting consumption tax. Improving the personal income tax system is regarded as a key area of reform, as it still falls short of the role it is expected to play in narrowing the gap between the rich and poor. Transforming the value-added tax is also necessary for economic restructuring. Under the current system of production-based value-added tax, fixed assets are classified as consumer goods and are subject to value-added tax. This increases the tax burden on capital- and technology-intensive enterprises that cannot claim tax deductions for the purchase of fixed assets. The reform will unify the criteria on who is liable to pay the tax and how the pre-tax cost and other details will be calculated, to standardize income tax for domestic and foreign enterprises. The reform will also remove consumption taxes on commodities that have become mass consumer goods. A consumption tax will be imposed on new luxury goods instead.

From http://english.peopledaily.com.cn/ 11/17/2003

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China to Issue New Policy on Auto Industry

China will issue a new industrial policy to relax control on automobile makers and avoid duplicated projects, said Shen Ningwu, vice secretary-general of the China Association of Automobile Manufacturers, on Nov.18. Shen said at a China-Japan-Korea business forum being held in Beijing that the new policy is expected to be issued in two months. According to the policy, China encourages private and foreign capital to enter the automobile sector, but the floor share for the Chinese side in foreign-funded car-makers will remain 50 percent. China will encourage individuals and families to buy cars which are energy-saving, less-polluting and cheap, Shen said. An irrational limitation on car purchase will be eliminated and the service sector, including credit loans, sale of used cars and components will be enhanced to boost the market, Shen noted. The China Banking Regulatory Commission agreed last October that companies with total assets over four billion yuan (480 million dollars) and registered capital over 500 million yuan (60 million dollars) are eligible to provide auto loans to customers. China's auto production will hit 4.2 million to 4.3 million vehicles this year and six million to seven million in 2005, Shen said.

From People's Daily 11/19/2003

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China to Reform GDP Calculation and Statistics Release

China will reform gross domestic product (GDP) calculation and statistics release based on international standards, so that the statistics objectively reflect the performance of the economy. Li Deshui, director of China's National Bureau of Statistics (NBS), said in Beijing Thursday that the reform plan had been approved bythe State Council, and will be implemented by NBS. He pointed out China's GDP calculation method, initiated in 1985, had been improved gradually. However, the calculations still had some problems due to the lack of a regular adjusting and revising mechanism. Some traditional methods did not comply with international norms, arousing some criticism from the international community. Li said the reform plan will mainly focus on the annual and quarterly GDP calculation. Important statistics relevant to GDP and the method of calculation will be announced to the public if necessary. Monthly GDP figures would no longer be released except in special circumstances. Li Deshui said that the statistical methods China is adopting have met international standards, providing reliable figures. Li denied that China has deliberately lowered the GDP figure for the first three quarters of the year, saying China conducted the statistics in accordance with the existing methods and rules, in response to a foreign journalist's question at a press conference held by the Information Office of the State Council. Some people believe that the figures were underestimated, he said. The director noted that the economic growth rate cannot be reckoned simply through single indices that the NBS has announced.Investment for fixed assets, for example, jumped 30.5 percent on ayearly basis from January to September, but one could not say thatthe GDP increased about 12 percent since investment contributes to40 percent of the GDP, because some investment -- for the purchaseof land, old factories and equipment -- do not contribute to GDP growth on a timely basis. He said that the SARS epidemic affected China's economy "very severely", citing that the value of social services declined year-on-year 14.8 percent in the first half of the year and the combined traffic volume decreased for the first 10 months. Due to frequent natural disasters, the agricultural value recorded only a slight increase -- 2.8 percent -- for the first three quarters, which also brought down China's economic growth rate. China's economy grew 8.5 percent from January to September according to the NBS figures. Li Deshui said that China will, however, seek to improve statistical methods, catering to domestic conditions and the socialist market economy.

From http://english.peopledaily.com.cn/ 11/20/2003

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Measure to Protect Farmers' Land Rights

No requisition of rural land will be approved without the endorsement of affected farmers, the Ministry of Land and Resources announced yesterday, abolishing a decades-old practice of only publishing plans after they had been approved by the central government. Wang Shiyuan, head of the general office of the ministry, called the new measure "a solid step forward" in protecting farmers against governments abusing their land requisition rights. Although the country's current Land Managerial Law does require publishing the scale of the land requisitioned and the compensation involved, it has proved hard for farmers to get the plans changed once they have been approved by the central government. From now on, Wang said, all rural land requisition should be subjected to discussions with farmers and undergo public hearings on its compensation before being submitted to the ministry for scrutiny. Wang admitted at yesterday's press conference that abuses of land requisition powers have become a major factor of instability in Chinese society. Not only are a few Chinese governments at various levels free from farmers asking for their requisitioned land back, but some staggering cases are deeply rooted in the unfair treatment of farmers involved in land requisition. One such farmer burned himself on Tian'anmen Square earlier this year. The crux of the issue is the compensation for farmers who lose their land to requisition. In most cases, the farmers complain about compensation which is much lower than the true market value of their land. Although the government is entitled to requisition land for the benefit of society at much lower costs than those in a comparable case of commercial development, Wang said the government is obliged to secure those farmers' livelihoods in the long term. And the livelihood of most of them hangs on their small pieces of land, he said. Statistics from the ministry indicate local governments can requisition 1 mu or 0.07 hectare of cultivated land from farmers at a compensation varying from a meager 300 yuan (US$36.20) in comparatively backward places to a rare 5,000 yuan (US$603.90) in more advanced regions such as Beijing. Although the revolutionary move of the ministry has been warmly received, doubts were surging regarding the execution of the new stipulation considering that local land authorities are actually subordinates of various local governments as well.

From China Daily 11/20/2003

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SASAC Announces Five Measures to Promote China's SOE Reform

A senior Chinese official said on Nov.19 that China will take five measures to promote the restructuring and reorganization of the country's state-owned enterprises (SOEs). Li Rongrong, minister in charge of the State-owned Assets Supervision and Administration Commission (SASAC) of China's State Council, made the remark at an international merger and acquisition summit, which opened in Beijing on Nov.19. Li said China welcomes more foreign and domestic private capital to participate in China's SOE reform, as China's market economy advances, reform and opening expand, legal systems and capital market improve. According to Li, the first of the five measures is to encourage more SOEs to list in the domestic market by introducing domestic and foreign investment. The second is to give full play to the role of China's large SOEs in the process of merger and acquisition, striving to cultivate and develop some enterprise groups with international competitiveness, Li said. Thirdly, more SOEs who lose to the competition on the market will have to leave the stage. China will speed up the process by establishing a quitting mechanism and a system of elimination through selection or contest specially for the SOEs. China will continue to encourage more SOEs to invest abroad, set up branch factories in other countries and participate in international merger and acquisition. To that end, China will further improve consultation service, legal protection and the international adjustment system for overseas investment, said Li, when listing the fourth measure. Li said the last measure is to create opportunities for foreign enterprises to participate in the merger and acquisition of China's SOEs, by improving relevant merger and acquisition laws and establishing a modern property rights system and market. Li said great achievements have been made in the process of adjusting the layout and structure of China's state economy, an important part of China's economic reform started in the late 1970s. According to Li, at present, a group of large enterprises have emerged in China, and by 2002, 11 Chinese SOEs have entered the global top 500 list. China's SOE reform has also made progress, said Li. By 2002, more than half of China's 159,000 SOEs had launched their enterprise reform, with some enterprises suffering long-term losses and in heavy debt and some exhausted mining sites having all quit the market. About 85 percent of China's small SOEs have realized multi-level property rights through reforms, said Li. He added that though nearly half of China's SOEs have been closed, the total profits they made had increased from the 83.8 billion yuan (10.1 billion US dollars) in 1995 to 220.9 billion yuan (26.7 billion US dollars) in 2002. Li said China is facing many favorable conditions for the adjustment of the layout and structure of the state economy, like the establishment of the SASAC, the increasing proportion of the non-public economy, and the abundant capital for merger and acquisition from global investors. But he also mentioned some irrational problems existing in the economic reform process, such as the still high proportion of processing industry and common service industry in the state-owned economy, the small scale of China's SOEs and the bankrupt SOEs that have not yet closed.

From People's Daily 11/20/2003

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Hong Kong New Power Co. Provisions Set for January 1

Improvements have been made to the Scheme of Control Agreements with Hong Kong's two power companies and they will take effect from New Year's Day. The Economic Development & Labour Bureau today said the upgrades are the result of the second interim review of the current Scheme of Control Agreements. The improvements will benefit consumers. The objective of the agreements is to ensure that electricity is supplied adequately, reliably, efficiently and at reasonable cost to consumers. The current agreements were signed in 1992 and 1993 for China Light & Power (CLP) and Hong Kong Electric (HEC) respectively. They are valid for 15 years and provide for two interim reviews, each of one-year duration.

Main improvements
On financial and administrative issues:
* the depreciation periods for certain CLP assets will be extended; and,
* the excess capacity penalty for HEC's generation projects approved from 2004, will be increased.
For both CLP and HEC:
* there will be a mechanism to keep the Development Fund balance at a reasonable level;
* there will be a mechanism to deal with balances in the Development Fund and Rate Reduction Reserve upon the expiry of the agreements;
* both companies will provide three-year rolling forecasts to the Government at the time of the Annual Tariff Review to facilitate monitoring of the Development Fund, the Fuel Clause Account and Rate Reduction Reserve over a longer timeframe; and,
* both will segregate and present data pertaining to generation, and transmission and distribution in the Financial and Auditing Reviews for the Government's consumption.
On environmental issues:
* both companies recognise the Government's efforts in improving regional air quality and exploring alternative power generation sources, including renewable energy, to supplement conventional power generation from fossil fuels; and,
* both will inform the public of their environmental performance on a regular basis.

Good news for consumers
The change in the depreciation period for certain fixed assets of CLP will lead to savings of about $650 million (or 0.3 to 0.6 cents per kWh) for their customers between 2004 and 2008. The deduction for the mechanical and electrical equipment costs from the average net fixed assets for excess capacity, arising from HEC's generation projects approved as from 2004, will be increased from 40% to 50%. As the average net fixed assets is the basis on which Permitted Return is calculated, the new arrangement is an alternative approach to containing the Permitted Return available to the company. The bureau said there will be a cap, equivalent to 12.5% of the company's annual local sales, on the balance in the Development Fund. Excess above this level will be returned to consumers in the immediate following year in the form of a one-off rebate or tariff reduction. This trigger mechanism should go some way towards addressing the long-time concern that CLP has been accumulating excessive 'reserves' and keeping to the company monies that belong to the consumers. There will be an additional provision to the effect that the Government and the company concerned will have specific discussions with regard to arrangements to deal with any balance in the Development Fund, and the related Rate Reduction Reserve, 12 months before the expiry of the current Scheme of Control Agreements. This additional provision should again go some way towards addressing concerns that consumers' money might be taken up by the power companies when the agreements expire.

From http://www.news.gov.hk/ 11/21/2003

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JAPAN: Key Points Worked Out for Scenic Beauty Law

TOKYO - The land ministry has drawn up key points for legislation aimed at creating urban towns with scenic beauty by way of zoning to regulate development, ministry sources said Saturday. The bill requires that municipal governments designate scenic beauty zones and regulate building construction and that both municipal and prefectural governments formulate plans to enhance scenic beauty, according to the sources.

From Kyodo News 11/03/2003

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Support for New Constitution

About 90 percent of Liberal Democratic Party candidates, 60 percent of those from Minshuto (Democratic Party of Japan), and more than half of New Komeito candidates in the Lower House election favor revising the Constitution, an Asahi Shimbun survey found. But views over what parts of the 57-year-old Constitution should be revised varied along party lines, the survey found. LDP candidates overwhelmingly favor changing the war-renouncing Article 9 and security-related articles. Minshuto candidates, meanwhile, are split between those who back such revisions and those who seek an amendment to include stipulations on expanding human rights and introducing a direct election system for the prime minister's seat. New Komeito candidates mainly wanted amendments to address new rights. The survey was distributed from late September to all 1,159 candidates running in the Lower House election. Valid responses were received from 1,101 candidates, or 95 percent. Respondents were asked to clarify their stances on revising the Constitution using a five-level scale. Those who supported revision were asked to specify what they thought should be changed. Among LDP candidates, 63 percent supported revising the Constitution, while a further 26 percent said they were ``relatively in favor.'' About 61 percent of Minshuto candidates said they were for or relatively for revision, compared with 21 percent opposed or relatively opposed. Fifty-five percent of New Komeito candidates backed revising the Constitution, while 23 percent did not. With one exception each, all Japanese Communist Party and Social Democratic Party candidates opposed any revision. That one candidate instead reported being ``relatively opposed.'' All Hoshu Shinto (New Conservative Party) candidates favored revision. The results suggest more politicians lean toward revising the Constitution than during a similar survey before the 2000 Lower House election, although the outcome is not directly comparable because candidates at that time were asked only whether they were for or against revision. In that survey, 75 percent of LDP candidates said they supported revision, while 29 percent of Minshuto and New Komeito candidates answered similarly. In the current survey, 80 percent of LDP respondents called for Article 9 and other articles related to national security to be revised. Some said the Constitution ``was forced upon Japan'' by occupation forces after World War II. Nearly half of Minshuto respondents also pointed to Article 9, while 30 percent suggested introducing new stipulations on rights related to environmental issues and information disclosure. Twenty percent said revisions should give the Cabinet more decision-making power and introduce a system that allows the public to directly elect the prime minister.

From http://www.asahi.com/ 11/04/2003

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Drastic Easing of Monetary Policy Urged for Japan

With an apology for a radical -- even "shocking" -- approach to solving Japan's economic problems, British economist Andrew Smithers dismissed the strategies put forward by proponents of a supply-side driven recovery as well as those advocating fiscal stimulus measures, during a recent symposium in Tokyo. Instead of these approaches to reversing the decade-old recession, the founder of Smithers & Co. told the Nov. 10 symposium, organized by Keizai Koho Center, that Japan should dramatically ease monetary policy. But before it can do that, Japan first needs to overcome its reluctance to face up to the problems that confront the nation, he said. "The key problems are awkward ones," he conceded. "The ultimate problem today is a widespread refusal to discuss the key issues and thus never to face them." Smithers opened the symposium, titled "Japan's past decade -- bad luck or poor policy?" by laying out the supply siders' case, which states that inefficiencies at the micro-economic level are the problem, with supply rather than inadequate demand at the heart of the problem. "Its proponents emphasize some key points: massive inefficiencies are supported by government regulation and 'zombie' companies by the banking system; inefficient 'zombie' companies reduce the returns on efficient ones; and privatizations, deregulations and the euthanasia of zombie companies would increase investment and growth," he said. This argument, however, cannot be fitted into mainstream economics as it involves a "fallacy of composition," he said. "At a micro-economic level the bankruptcy of a weak company reduces competition and should thus increase the profitability of the survivors," he said. "But such bankruptcies also reduce demand, as unemployment rises, which reduces profits." Emphasizing Japan's declining birth rate and the impact that will have on the labor force, productivity and profitability over the next 20 years, Smithers said the supply siders assume that Japan can grow significantly faster than, for example, the United States. "Without a dramatic change in immigration policies, faster growth in Japan than in the U.S. require an even more dramatic gap in terms of the growth in output per head," he said. "In short, a productivity miracle. "That would be nice," he added, "but it's not a sound assumption for economic policy." Turning to the proponents of fiscal stimulus measures, Smithers said this group's theory is that Japan is suffering from inadequate demand rather than inefficient supply. That problem, they claim, would be rectified by creating a larger budget deficit. "Fiscal enthusiasts face the problem that this policy appears to have been tried -- and failed to get the economy moving," Smithers countered. And while Keynesian economic theory states that fiscal stimulus is appropriate for a cyclical recession, Japan's problems are structural, he added. Smithers then turned to his own "pet solution." "I apologize for saying that Japan needs to run a much higher current account surplus; it's a shocking thing to say, I know," he said. "The idea that countries should neither run large current account surpluses nor deficits is deeply ingrained in popular economics. It is, however, dangerous nonsense today. "Demographic differences between Japan, Europe and America mean that such deficits and surpluses are the natural equilibrium position," he pointed out, before underlining the importance of reducing the corporate sector's debts. "It is often remarked that inflation provides the only long-term solution to Japan's public sector debt," he said. "I suspect that it is also, and probably more urgently the only realistic solution to the corporate debt problem." "Japan needs inflation," he added. "It shouldn't be rapid, but the deflation problem must not get any worse. Japan needs inflation of around 3 percent a year to get the economy back in shape." Setting out the ways that the economy could receive that shot in the arm, Smithers suggested increasing the monetary base at an even faster rate than the present 20 percent; weakening the yen by massive market intervention -- which would be "very aggressive internationally," he admitted; or using funding policy to increase the money aggregates directly. The most effective of these approaches would be the third proposal, he said, which would see the Finance Ministry stopping funding the deficit and borrowing short term. (by Julian Ryall)

From The Japan Times 11/17/2003

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Pension System Proposal Meets Criticism

A much-awaited proposal to reform the nation's pension system met criticism Tuesday that it would place too heavy of a burden on future generations and hurt the nation's economic power. The debate heated up the day before when the Health, Labor and Welfare Ministry announced a proposal to reform the existing pension system. It submitted the proposal to the Council on Economic and Fiscal Policy, a key policy-setting panel headed by Prime Minister Junichiro Koizumi, on Tuesday. The proposal was spotlighted during the campaign for the Nov. 9 Lower House election. Japan faces a rapidly aging population, declining birth rate and growing concerns over the sustainability of the current pension system. Under the proposal, the health ministry calls for pension premiums to be raised to 20 percent of the annual income of salaried workers by fiscal 2022 from the current 13.58 percent. The premiums are currently equally shouldered by companies and employees..Benefits would be lowered to around 50 percent from the current 59 percent of an employee's averaged preretirement salary, it says. The proposal would serve as the basis of a government plan to be mapped out by the end of the year. "The 20 percent premium proposed by the health ministry is very high, and not sustainable. It would not regain young generations' trust in the nation's pension system," said a statement jointly released by four panel members from the business sector and academics, including Hiroshi Okuda, chairman of the Japan Business Federation (Nippon Keidanren) and chairman of Toyota Motor Corp. The statement said the proposed burden would hurt the nation's economy and that the premiums should be limited to around 16 percent. "The figure of 20 percent is very close to the upper end of the limit," Finance Minister Sadakazu Tanigaki said. The Finance Ministry said in a report to the key panel that the government needs to make efforts to limit the future financial burden. It said the total financial burden on Japanese should also regard tax and the country's fiscal deficits. Such a burden should be limited to around 50 percent of people's income, it said.If these factors are included, according to an estimate by the four panel members, the total burden of the health ministry's scenario would reach 63 percent in 2025. (by Hiroko Nakata)

From The Japan Times 11/19/2003

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Gov't to Cut Local Subsidies by Y1 Tril

TOKYO - Government officials began discussions Saturday on how to implement a 1 trillion yen cut in state subsidies to local governments being planned by Prime Minister Junichiro Koizumi for fiscal 2004. The Ministry of Health, Labor and Welfare has been told to cut up to 250 billion yen, the Ministry of Land, Infrastructure and Transport about 350 billion yen, the education ministry nearly 300 billion yen, government sources said.

From http://www.japantoday.com/ 11/23/2003

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SOUTH KOREA: Customs Clearance Reforms Sought

Korea will collect customs duties on a monthly lump-sum basis, instead of the current system whereby customs duties on each import item must be paid individually. The Ministry of Finance and Economy on Sunday (Nov. 2) said a revision to the current customs law will be sought to expedite import and export clearance procedures. Under the proposed amendment, the Korea Customs Service will exempt model companies from being subject to having their customs duties records audited. Companies and individuals will be immune from penalties when they voluntarily report wrong trade statements within three months following the transaction, the ministry said.

From http://search.korea.net:9000/ 11/03/2003

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Gov't Moving to Curb Housing Speculation

The government has decided to impose a heavy economic burden on multiple-home owners and create more luxurious residential complexes, in a bid to curb sky-high housing prices. It will also introduce a legislation, under which all housing transactions in speculation-prone zones are to be reported to local governments upon finalizing contracts, a move seen as the precursor to controlling property use. Under a new set of anti-speculation measures unveiled on Wednesday, those who own three or more houses or apartments will face the maximum tax rate of 82.5 percent on capital gains they accrue through the sale of properties, including 75 percent of capital gains taxes and local taxes. The capital gains taxes will also be raised up to 51 percent in the country's 53 high-speculation zones from the current range of 9-36 percent. The drastic tax hikes are aimed at promoting the role of real estate as a program for the public good, and keep properties from being used as a speculative tool, government officials said. President Roh Moo-hyun also said in a Cabinet meeting on Wednesday (Oct. 29) that "the government will try to collect all capital gains from property transactions that exceed interest rates." He added that even single-home owners might be subject to heavier capital gains taxes in selling their homes, if it is used for speculation. Cheong Wa Dae explained that Roh's remarks reflect his resolution to root out property speculation, as skyrocketing housing prices are behind rising wages, a key factor undermining national competitiveness. The government also plans to take various financial and systemic measures to plug loopholes in fighting against property speculators. The loan-to-value (LTV) ratio will be lowered to 40 percent from 50 percent in speculation-prone areas, especially for apartments south of Seoul's Han River. "In addition, the government will set up a database for the records of property holdings across the country within this year," Finance-Economy Minister Kim Jin-pyo told reporters after a meeting of economic ministers. He added that related ministries are to establish the Real Estate Trading System next year to hunt down property tax dodgers. Korea's top economic policymaker made clear that the government will seek additional measures including higher taxes and the restriction of property rights, if the measures fail to stabilize the property market. "We are consider banning the re-sale of rights to buy newly-built apartments across the country," he said, "In speculation-prone areas, apartment transactions might be restricted without government approval." Kim, however, stressed that the main focus will be placed on addressing the chronic shortage in housing supply. The housing supply ratio in Seoul and surrounding Gyeonggi Province will be increased from the current 92 percent to 115 percent by 2012, he added. To that end, the government plans to designate 12-13 new sites for new towns in northern Seoul next month, while speeding up the project of turning Pangyo, south of Seoul, into a new city with high quality living conditions, which includes the so-called Edu-Park area packed with special purpose high schools and private tutoring institutions. Huge housing complexes will be developed from 2005 in two cities with easy access to bullet train stations _ Gwangmyeong, Gyeonggi Province, and Asan, South Chungcheong Province.

From http://search.korea.net:9000/ 10/30/2003

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Assembly Passes Counsel Bill

The National Assembly yesterday passed a bill authorizing an investigation by an independent counsel into corruption allegations involving aides to President Roh Moo-hyun. A total of 184 of the 193 lawmakers present voted for the controversial bill proposed by the majority Grand National Party. Two opposed it and seven abstained from voting. Lawmakers of the pro-government Uri Party walked out of the main chamber to protest the vote. The new party accused the GNP of trying to shield itself from the ongoing prosecution probe into the illegal fund-raising scandal and plotting to undermine Roh ahead of the general elections in April. Most of the lawmakers from the two other opposition parties - the Millennium Democratic Party and the United Liberal Democrats - supported the bill. The three opposition groups have cooperated to secure two-thirds of lawmakers' support - enough to nullify a possible veto by the president. Angered by the parliamentary decision, Justice Minister Kang Kum-sil said she would ask Roh to veto the bill. In a meeting at Cheong Wa Dae with floor leaders of the four major parties, Roh said he was pondering his decision seriously, explaining, "We have to consider the morale of the prosecution and the nation's image." If he refuses to accept the bill, a two-thirds majority of lawmakers in the National Assembly can override his veto. Currently, the GNP holds a majority in the 272-member legislature with 149 seats, while the MDP has 61. The Uri Party has 47 seats. Political watchers said passage of the bill would likely put Roh under pressure to sign it into law, creating a quandary for him as it would mandate a special prosecutor to hone in on his key aides, possibly damaging him and the Uri Party ahead of the April parliamentary elections. The GNP submitted three separate special counsel bills last month that would make Roh and his aides the main targets of investigation, apparently in retaliation for what it called an unjust probe by the prosecution to "destroy the party" in connection with an election-funding scandal. A special prosecutor will look into an allegation that Choi Do-sul, Roh's former secretary on general affairs, took an inappropriate gift of 30 billion won after Roh clinched the presidency last December, as well as investigate two other bribery cases implicating Lee Kwang-jae, a former key aide to Roh, and Yang Gil-seung, the former personal secretary of the president. After the bill is sent to him, Roh will have 15 days to make a decision to accept it or send it back to the Assembly for a second vote. The Korean Bar Association recommends two candidates for the special prosecutor post, and the president chooses one. Initially, the independent team would be granted two months to conduct its investigation, but if necessary the deadline could be extended by an additional month. (by Joo Sang-min)

From http://www.koreaherald.co.kr/ 11/11/2003

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Assembly Passes Special Probe Bill

The majority Grand National Party (GNP) and the Millennium Democratic Party (MDP) on Monday (Nov. 10) joined forces to push a bill sanctioning special investigations into President Roh Moo-hyun's aides through the National Assembly. Out of 192 legislators in attendance, 184 cast votes in favor of the bill, while two voted against. There were six abstentions. The pro-government Uri Party, comprising 47 lawmakers loyal to President Roh, boycotted the vote, but the GNP, which holds 149 seats in the 272-member National Assembly, passed it with the MDP's support. Roh has 15 days to decide whether to accept or veto it. During a meeting with floor leaders of the four major political parties at Cheong Wa Dae, Roh replied negatively to the bill's passage. "I am giving careful consideration to the matter, taking into account the morale of the prosecution and the national prestige," he said. If he accepts it, the Korean Bar Association will recommend two special counsel candidates, from which the president will choose one for the post. The independent counsel would be guaranteed an initial two-month period to conduct his investigations, and will have an additional 30 days with the consent of the President. The bill is aimed at facilitating a special inquiry, focusing on three alleged influence-peddling cases involving the head of state's former aides _ Choi Do- sul, Lee Kwang-jae and Yang Gil-seung. Choi, Roh's former secretary for general affairs, faces allegations that he pocketed about 30 billion won from Busan-based construction companies around last year's presidential race. He is currently in custody for receiving 1.1 billion won from SK Group, the nation's third largest conglomerate. Lee, former senior presidential secretary for information and policy monitoring, allegedly hid money from Sun & Moon, a leisure company in return for business favors. Yang, Roh's former personal secretary, was wined and dined by a nightclub owner under investigation from the prosecution who asked the politician to exert influence on his behalf. Shortly after the bill was passed, the GNP and MDP pressed Roh to accept the outcome as the voice of the public. "President Roh should humbly accept the will of the people," the party statement said. "He pledged during last year's election that he will have an independent counsel investigate corruption and irregularities by those wielding power." The GNP has been pursuing the special legislation on the grounds that the prosecution unfairly singled it out in its investigations into the illegal campaign funding scandals. Faced with harsh opposition from the Uri Party, however, the bill last week failed to reach the main floor. The Uri Party members heaped scorn on the GNP-led passage of the bill saying it is seeking to divert public attention away from its own illegal fundraising.

From http://search.korea.net:9000/ 11/11/2003

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President Roh Urges to Accelerate Regulatory Reforms

President Roh Moo-hyun presided over a policy review meeting on regulatory reforms Thursday (Nov. 13) at Cheong Wa Dae. At the briefing on the performance of the Regulatory Reform Committee, the President gave instructions to actively go ahead with deregulation to facilitate foreign investments. Specifically, he directed to improve the nation's regulatory standards both in its volume and quality up to the levels of Korea's economic rivals within three years. Roh emphasized reasonableness in carrying out deregulation measures. "Even though the Regulatory Reform Committee's deregulation efforts have been carried out actively over the years, the results fell short of public expectations because the greatest priorities were placed on reducing the number of regulations," the President said. "It is more important to take a balanced perspective. Rushing to abolish or ease regulations thinking that all regulations are bad is not necessarily desirable," he said.

From http://www.kois.go.kr/ 11/14/2003

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Six Cities Blacklisted as Speculation Zones

Six cities have been added to the list of areas named as property speculation zones and subject to heavy taxation. The Ministry of Construction and Transportation (MOCT) announced on Monday (Nov. 17) Busan, Daegu, Ulsan, Gwangju, Changwon and Yangsan as among those now blacklisted from Wednesday. As a result, Seoul and six other metropolises, including Incheon, Busan, Daegu, Daejeon, Gwangju and Ulsan, all are bound by the restrictive regulations in taxation and trading of new apartment rights. Yangsan and Changwon in South Gyeongsang Province have also been on the list as competition has intensified for the subscription rights for the new apartments, the MOCT said. In June, Cheonan, Asan, Cheongju cities and Chongwon, where land prices have jumped in keeping with the new administrative capital relocation plan, were also designated as inflamed markets. The MOCT showed its continuing resolve to designate more areas as speculation zones as soon as they show signs of what it deems excessive speculation. The measures are seen as a final attempt to stabilize the housing market before the government resorts to the introduction of a housing transaction permit system.

From http://search.korea.net:9000/ 11/18/2003

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Cut in Corporate Income Tax Gets Green Light

A subcommittee of the National Assembly's Finance and Economy Committee passed on Thursday a revision bill, setting forth a 2 percent cut in the current corporate income tax starting 2005. The bill is now to be reviewed by a plenary session of all the National Assembly's standing committees. An member of the subcommittee said that the subcommittee reached an agreement to cut the corporate income tax from the current 27 percent to 25 percent for firms with a taxable profit of over W100 million, and from the current 15 percent to 13 percent for those with less than W100 million in taxable profit. The member said that because the ruling and opposition party members on the subcommittee agreed on the tax cut, the revision bill would not face roadblock during its screening by the main session of the Assembly. He added, however, said that when the bill takes effect in 2005, the government is likely to have its tax revenue cut by about W1.8 trillion a year. The nation's corporations have been demanding the cut for several years, saying income taxes in advanced countries are far lower than in Korea. (by Lee Myung-jin)

From http://english.chosun.com/ 11/20/2003

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MONGOLIA: Draft Laws on Exemption from Customs Dutywere Presented

On Monday, U.Enkhtuvshin, Chief of the Cabinet Secretariat, submitted to S.Tumur-Ochir, Speaker of the State Great Khural, draft laws on Exemption from Customs Duty, on Making Changes and Amendments to the Law on Archive, on Making Amendments to the Law on Courts and on Repealing the Laws. In addition, a draft Parliamentary Resolution on Approving the Development Loan Agreement of the Economic Capacity Building Technical Assistance Project concluded on September 23 of this year between Mongolia and the International Development Association was presented. Also a draft resolution on Development and Adoption of Main Guidelines on Social Economic Development and a procedure for implementation of them were also submitted to the State Great Khural for discussion. After receiving these draft laws, S.Tumur-Ochir, Speaker of the State Great Khural, has decided to present them to the respective Standing Committees.

From http://open-government.mn/ 11/04/2003

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Law on Water Transport Approved

A draft law on water transport was discussed and approved at a united meeting of the Parliament autumn session on November 13. Under the law, activities to transport passengers and freight by a way of exploiting the water of rivers and lakes and relations related water transport action will be coordinated. As a result of the new law, an economic favorable environment for development of the water transport is being expected to be comprised.

From http://www.montsame.mn/ 11/18/2003

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INDONESIA: Government Completes Autonomy Revision

The government has completed the draft revision of the 1999 autonomy law, which will take back some of the power it dispensed to local authorities. Minister of Home Affairs Hari Sabarno said on Wednesday that the revision would ease difficulties facing the central government in managing the country with autonomy placed in the hands of regents. "It is impossible for the central government to supervise 416 regencies at the same time, so we decided to expand the role of the governors," Hari said before meeting with President Megawati Soekarnoputri. "With the revision, we will have a stronger administrative hierarchy and therefore the authority of provinces will be expanded." He said that since its implementation in 2000, regional autonomy had resulted in many flaws. Megawati ordered the revision of the law when she assumed power in July 2001, on the grounds autonomy threatened national unity. She has repeatedly said that regencies had excessively exercised their authorities for the sake of revenue, but failed to improve people's welfare and preserve natural resources. The revision plan has been met with strong resistance from regents across the country. Hari said the revision was not aimed at weakening regional autonomy, but to correct mismanagement taking place in the past three years. "We have to provide a clear outline of what the authorities of the regencies and governors will be." Apart from the controversial plan to curb the power of regional administrations, the draft stipulates direct election of regents, mayors and governors, reminiscent of the landmark direct presidential election to be held next year. With the change in the election system, articles on the relations between the regional heads and the local legislature need revision too. The government has also revised the articles on the financial allocation between Jakarta and regencies, as well as articles on the sea borders between the regencies. Hari said the draft would be presented to the President and Cabinet before it was submitted to the House of Representatives, the dates of which were undecided. (by Fabiola Desy Unidjaja)

From http://www.thejakartapost.com/ 11/06/2003

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New Govt Ruling on Procurement Signed

President Megawati Soekarnoputri has signed a ruling which tightens procedures for procurement in the public sector, to help curb flourishing corruption, according to a government official. Signed on Monday, the new ruling could in turn help Indonesia secure more loans from the country's creditors, such as the World Bank, Mahendra Siregar, an advisor to the office of the coordinating minister for the economy said on Wednesday as reported by Dow Jones. Details of the ruling were not available, except that it would promote transparency and efficiency in the procurement of goods and services. It should underline the government's commitment to fight rampant corruption in the public sector. International institutions -- such as the World Bank and the Asian Development Bank -- have often stated that corruption is mostly evident during the procurement of goods and services for state institutions. The World Bank had even suggested that leakage in the process could account for up to 50 percent of any project's value. The bank is currently one of Indonesia's major traditional lenders, providing $400 million in loans annually to help finance various development projects across the country. The amount is a far cry from the some $1.5 billion disbursed annually in the early 1990s. Many analysts attribute the decline in the bank's loans to rising concerns about the misuse of loans by corrupt officials and business players. The new ruling would come ahead of the government's plan to propose a law on public procurement, which is now in the drafting stage. The law, which will replace Presidential Decree No. 18/2000 on public sector procurement, will ensure severe punishment for corruption in the procurement process.

From http://www.thejakartapost.com/ 11/06/2003

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House Passes 2004 Budget Bill into Law

The House of Representatives passed on Monday the government-proposed 2004 state budget bill into law, despite objections from some individual lawmakers who criticized the budget as lacking in stimulus and not doing anything to improve the well-being of the people. The House plenary session endorsed the budget, which sets the deficit at Rp 24.4 trillion (US$2.89 billion), or 1.2 percent of the country's gross domestic product (GDP). The figure was higher than the Rp 23.02 trillion, or some 1.17 percent of GDP, agreed to last week by the government and the House budget commission. This year's deficit is estimated at 1.9 percent of GDP. The government is aiming to balance the budget by 2006. Still, it drew objections from a dozen lawmakers, who said that the higher deficit would only force the country to ask for more overseas loans as well as put more local assets up for sale to cover it. Even without new loans, they argued, the annual state budget was already heavily burdened by the repayment of foreign debts, which in turn limited the government's ability to allocate more money on subsidies and development spending. They said in a statement that the budget did nothing to promote the welfare of the average person. Under the 2004 budget, the government will need some Rp 26 trillion in foreign financing to help cover the deficit, which will probably mostly come from the Consultative Group on Indonesia (CGI) -- the country's traditional lenders, which will convene next month to determine the exact amount it can give Indonesia. However, all the factions in the House said that the budget had heeded these concerns as could be seen from the subsidies allocated to ease the burden on the people despite the huge pressure from debt repayments. They said the higher deficit was in part the result of higher subsidies. In 2004, the budget sets subsidy spending at Rp 26.4 trillion, higher than the government's proposal of Rp 23.3 trillion, mostly caused by higher spending on fuel subsidies. Meanwhile, the budget also highlighted optimism that the economy would fare better next year than previously forecast. It sets a higher growth target (4.8 percent compared to 4 percent previously), and lower inflation (6.5 percent compared to 7 percent).

From http://www.thejakartapost.com/ 11/11/2003

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Government to Tighten Labor Export Rules to Minimize Abuses

This is the third and the last of a series of articles on Nusa Tenggara Barat villagers employed overseas. Following the steady stream of workers returning home with stories of the abuses that they suffered abroad, our reporter Ridwan Sijabat visited the province last month and talked with some of the villagers about their experiences.Given the large number of complaints about the mistreatment of migrant workers abroad, the government has no other alternative than revise the current labor export procedures to provide proper legal protection for Indonesian workers employed overseas, according to labor activists. Endang Sulistiyani, coordinator of the Panca Karsa Foundation in Mataram, West Nusa Tenggara, has campaigned against the current procedures, which she said failed to provide assurances that workers would be fully protected during their recruitment at home and employment overseas. "First of all, there is no standard recruitment system to regulate how the workers are recruited, trained and placed overseas and, simultaneously, prevent unauthorized parties from taking advantage of their situation," she told The Jakarta Post recently at her office in Mataram. She explained that many workers were subject to various forms of extortion prior to their departure overseas and after their return home because the current regulations did not stipulate how workers should be recruited or the standard training the workers should receive before been sent overseas. Ministerial Decree No. 104A/2002 provides that only labor export companies that are licensed by the Ministry of Manpower and Transmigration are allowed to recruit workers and send them overseas. Before their placement, labor export companies are required to provide one month of training in certain fields and foreign languages, and prepare employment contracts to be signed by the workers and their employers. Besides this, the government has also appointed a consortium of five insurance companies to provide legal protection for workers. License revocation is the maximum sanction that can be applied against companies violating the decree. According to Endang, the government should enact legislation to regulate the standard procedures governing labor recruitment and placement overseas, and impose harsh sanctions on companies that violate the procedures and unauthorized parties that smuggled workers overseas. "We need a harsh law to prevent labor abuses and human trafficking otherwise the violence against migrant workers will continue," she said, adding that local governments should issue similar bylaws to help minimize labor abuses. Wahyu Susilo, coordinator of the Consortium for Legal Aid for Migrant Workers (Kopbumi), said that while working out the legislation, the government could immediately issue a regulation in lieu of a law (Perpu) because like terrorism, the question of abuses against migrant workers needed an urgent response. "Compared with the massive number of Indonesian workers working overseas, the number of those who have died, been extorted, tortured or raped is quite small, but such human rights abuses cannot be tolerated, and the nation's dignity is at stake. If, for example, the United States makes a storm over human rights violations in the case of the killing last August of two of its citizens in Timika, why do we remain silent at the killing and torture of dozens of Indonesians overseas?," he said angrily. He said that besides issuing an immediate regulation in lieu of law, the government should enter into bilateral agreement with countries where Indonesian migrant workers were employed to ensure their right to fair payment and maximum legal protection. Both Endang and Wahyu agreed that the government ought to be proactive in supervising labor exports to avoid violence against them and widespread people trafficking. The two said that more than two million Indonesian workers were working overseas and hundreds of others were on their way overseas. They were all under threat of mistreatment if adequate supervision was not conducted. "The practice in the field has been that many labor exporters have sent workers abroad without adequate training so that they have got into trouble with their employers, or on their way overseas or home. No serious action has ever been imposed," said Endang. Many others have also called on the government to suspend labor exports while working out labor protection legislation and revising labor export procedures. Deputy speaker of the House of Representatives Muhaimin Iskandar strongly criticized the government for its failure to provide legal protection for workers, saying it had to investigate abuses and overhaul the system so as to reduce the number of such cases in the future. Former president Abdurrahman Wahid called on workers who found themselves in difficulties to report their cases to his office, saying he would go to embassies of the relevant countries to have the cases solved. Minister of Manpower and Transmigration Jacob Nuwa Wea, who was recently asked by President Megawati Soekarnoputri to revise the labor export procedures, said in an interview with The Jakarta Post that the government had decided to act resolutely to solve the problem. "Following a series of meetings, five ministers under the coordination of the coordinating minister for people's welfare have agreed to issue a joint decree to form an advocacy agency and design a special passport for workers to provide legal protection for them during their employment overseas," he said. A number of advocacy teams consisting of government officials and lawyers would be set up and they would be stationed in the countries where most Indonesian workers were employed. Meanwhile, the special passport would only be valid for three years, and would only be available to workers sent by authorized labor exporters, he explained. "For the first step, we will form five advocacy teams to be stationed in five cities in Saudi Arabia to take over the protection program for more than 35,000 workers in that country," he said, adding that the teams would be assigned offices in buildings belonging to the Ministry of Religious Affairs in those cities. He said he would leave for Saudi Arabia next month to seek a bilateral agreement with the Saudi government to forge cooperation in the labor field. "If Saudi Arabia refuses to enter into a labor agreement, we will consider stopping the supply workers to that country," he said. Nuwa Wea said, however, that this was only one part of the new approach the government would adopt regarding labor exports. Other measures would be as follows: ú Labor exporters to be made responsible for the recruitment process, placement of workers overseas and their return home ú All workers to be employed overseas to be required to possess skills and be able to speak the language of the country where they are to be employed ú Workers to be required to receive certification from an independent body tasked with testing them before their departure abroad. ú The use of Terminal 3 at Soekarno-Hatta International Airport for workers returning home will be ended and, instead, workers will be pooled by the Ministry of Manpower in Ciracas, East Jakarta, before leaving for their home villages. ú The government to set up an advocacy agency and issue special passports to workers ú The government to enact legislation to better regulate labor export and provide maximum legal protection for workers.

From http://www.thejakartapost.com/ 11/12/2003

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House to Speed Up Law Revision to Build Better Judiciary

A House of Representatives (DPR) committee is speeding up its revision of law No. 14/1970 on the judicial power, saying that the country can no longer wait for an integrated judicial system. After amending the law, the committee will set its sights on reviewing four related legislations on the Supreme Court, State Administrative Court, Public Court, and State Prosecutors. "We hope the revision of the law will be completed by early December. From Dec. 5, we will then discuss the revision of the Supreme Court Law," committee chairman Zain Badjeber told The Jakarta Post on Saturday. The amendment of the law was proposed by 42 inter-faction legislators in June last year. Zain asserted that the revision would put an end to interference of the executive body with judicial affairs. Currently, the Ministry of Justice and Human Rights and the Ministry of Defense play pivotal roles in determining which court will hear cases involving both civilians and military personnel. Under the revision, the appointment of judges presiding over joint civilian-military courts will be in the hands of the Supreme Court, Zain said. A committee member Agun Gunandjar Sudarsa said amendments to the Law No. 14/1970 remained a necessity, although the government of President B.J. Habibie had enacted the Law No. 35/1999 to revise the 1970 law. The 1999 law stipulates that the establishment of an integrated judicial system under the Supreme Court should come into effect within five years of its enactment. Agun stressed that the establishment of an integrated judicial system could not be delayed further. "Legal reform, in the form of an integrated judicial system, should be completed before elections in April next year," he told the Post. Meanwhile, the director of Indonesian Judiciary Watchdog (MAPPI), Asep Rahmat Fajar, said that the draft revision ignored the recruitment and promotion of judges. "We know that the problems facing our judicial system lie in the quality of human resources. If the revision does not improve the recruitment and promotion of judges, the legal reform will not work," Asep said. (by Kurniawan Hari)

From http://www.thejakartapost.com/ 11/17/2003

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MALAYSIA: Bankruptcy Act to Include All Civil Servants

The Government will amend the Bankruptcy Act 1967 to bar bankrupt civil servants from remaining in office, said Minister in the Prime Minister's Department Datuk Seri Dr Rais Yatim. Currently, under Section 36 of the Act, the disqualification only applies to Sessions Court judges and magistrates and those nominated or elected to or holding or exercising the office of a councillor of a local authority. Dr Rais said the provision needed a closer look to embrace all public servants and the ministry's legal department had been instructed to study the matter. It is a public policy that a bankrupt should not serve in the public office. This is due to the pecuniary indebtedness position one is in, he said in a telephone interview. Dr Rais was responding to a report that the Jasin district council secretary, Abdul Manaf Jaffar, had had his contract renewed on Jan 1 this year although he had been declared a bankrupt three months earlier. Malacca Chief Minister Datuk Seri Mohd Ali Rustam had said that there was nothing wrong in a bankrupt holding the post as no rules had been broken. He added that the Official Assignee had also not stated that Abdul Manaf could not hold the post. Dr Rais said Abdul Manaf's case was covered under Section 36 of the Bankruptcy Act because he was nominated to the post. Some people may split hairs over the fact that he is not a councillor but just a contract secretary. However, the key word is that he is nominated to the office of a local authority and he forms part of the council administrative structure. When asked to comment on the amendment to the Bankruptcy Act, Cuepacs adviser Datuk N. Siva Subramaniam said it would be unfair to dismiss all public servants who were declared bankrupts. Some became bankrupts not by their own fault but because of being guarantors for loans taken by others. The current regulations that allow disciplinary action based on the merit of the case is sufficient to deal with the situation, he said when contacted. Siva Subramaniam said the proposed compulsory dismissal for bankrupt public servants could push hard pressed civil servants to the edge and seek help from loan sharks instead. This will open the opportunity for loan sharks to threaten civil servants, he added. In Malacca, Mohd Ali said he would submit a report to Prime Minister Datuk Seri Abdullah Ahmad Badawi this week on the matter. 揑 will abide by any advice given by the Prime Minister, he added, saying the state government was ready to rescind Abdul Manaf's contract. Abdul Manaf, 47, was declared a bankrupt on Sept 11 last year for standing as a guarantor for a company over a RM2.5mil loan. He said yesterday that he had nothing to hide. I am not a criminal. Everyone in the council and my friends know that I am a bankrupt. I am also a victim here, said the former Jasin Umno committee member. (by Lam Li )

From http://thestar.com.my 11/18/2003

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PHILIPPINES: Congressmen Tackle P864-B National Budget

Congressmen who spent eight hours of marathon session deliberating on the Davide impeachment issue last Monday will start today another series of prolonged debates when they resume legislative work for the P864.8-billion budget proposed by the government. However, despite the 115-77 vote to uphold Speaker Jose de Venecia's ruling to recognize the Supreme Court decision on the impeachment issue, congressmen who sought Davide's ouster vowed to move today for the transmittal of the Articles of Impeachment to the Senate. The House leadership declared not to hold session yesterday in order to give lawmakers time to rest and be prepared for another grueling task of debating on the budget. Budget hearings were stalled for at least three days after the impeachment controversy hit the Lower House and after solons decided to adjourn early last October. Speaker Jose De Venecia presided over the marathon session that saw members of the House of Representatives vote on the Speaker's ruling that the House will recognize the High Court decision that declared as unconstitutional the second impeachment complaint against Chief Justice Hilario Davide Jr. De Venecia said the 115-77 voting "decisively defeated the impeachment complaint" against Davide and ended the impending constitutional crisis that would have pitted the Lower House and the High Tribunal against each other. Majority of the solons present at the resumption of session last Monday opted to use the three minutes allotted for each of them to explain their vote during the nominal voting that sealed the fate of the impeachment bid. Majority Leader Neptali Gonzales II confirmed the Speaker's stand that the impeachment is water under the bridge, saying that "as far as the House is concerned the issue has come to an end." "The House majority voted to respect the decision of the Supreme Court. We have decisively defeated the moves of those who wanted to impeach Chief Justice Davide," De Venecia said. But the House leadership's stand failed to move staunch impeachment supporters who vowed to take the floor today to press for the transmittal of the Articles of Impeachment to the Senate. Minority Leader Carlos Padilla said he will push for reconsideration of his motion to transmit which Gonzales, who was then acting as presiding officer, rejected. "The impeachment complaint is not yet dead, it is just in the ICU. But it is alive," Padilla stressed. Together with Rep. Rodolfo Albano (Lakas, Isabela), Padilla noted that the motion to overrule De Venecia's ruling to yield to the High Court decision received 77 votes which is more than the required votes that would result to the transmittal of the complaint. Albano said the "unconstitutional decision" of the High Court is a temporary setback. "Not even the most painfully convoluted legal acrobatics can justify the anomaly that a public official refuses to be accountable to the people for his stewardship of funds," Albano said. Party-list Rep. Loretta Ann Rosales, who campaigned openly for support of the High Court's decision, appealed to backers of the impeachment to respect the voting. (by Ben R. Rosario)

From http://www.mb.com.ph/ 11/11/2003

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SINGAPORE: Govt Revises Tax System for Developers Enhancing Land Value

The government is revising the way it taxes developers for enhancing the value of a plot of land. This is because its current system is quite antiquated, in some cases based on valuations that have remained unchanged for almost 50 years. National Development Minister Mah Bow Tan, in moving an amendment to the Planning Act in parliament on Tuesday, says we should move with the times. If a developer takes an old parking lot and want to transform it into a housing block, for instance, the value of the land shoots up. And developers like Far East and CapitaLand are taxed 50 per cent on how much they have increased its worth. The original valuation of the land is called a "development baseline". And under the current Planning Act, this is calculated by looking at the site's valuation in the government's 1958, 1980 and current Master Plans. It picks the highest of these three valuations. With the latest change, old valuations from 1958 and 1980 will be history. Only the government's latest Master Plan will now be used. Mr Mah said: "Any enhancement in value arising from the redevelopment would be above this base, and not that above a historically prescribed base that has no direct link with the actual development history of the site." Developers are being given four-years advanced notice to adjust. And according to analysts, some developers may be bringing forward certain developments if they think they can pay a lower tax. (by Frederick Lim)

From www.channelnewsasia.com 11/11/2003

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Parliament Approves Consumer Protection Bill, Cap on $20,000 Claims Remains

Parliament has approved the Consumer Protection (Fair Trading) Bill to protect consumers from errant retailers. But the Government turned down requests from MPs to raise the $20,000 cap on claims and to set up a Fair Trading Office to enforce the new legislation. Mr Raymond Lim, Minister of State for Trade and Industry, said: "We were concerned in creating another regulatory agency which might add another layer of bureaucracy to businesses." If you have the time and would like to look at some jurisdiction, you find this voluminous demand of directives that you have to comply with for consumer protection. So we were mindful of that." As for the cap on claims, Mr Lim pointed out that between 1999 and 2001, 99 percent of complaints to the Consumers Association of Singapore (CASE) were for claims of between $7,000 and $12,000.He said the $20,000 cap was more than adequate. Mr Lim also felt the same way about the three-day cooling-off period, which he said was long enough. Mr Lim said: "It is a significant departure from the sanctity of contract...it is a cooling-off period, not a see-and-decide period. "The issue here is really high-pressure sales. Because of high-pressure sales, you are forced to buy a vacuum cleaner for instance which you do not want. So you have three days away from the pressure to review your decision." (by Ken Teh)

From http://www.channelnewsasia.com/ 11/11/2003

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THAILAND: Ministry to Draft Bill Legalising All Gambling

The Justice Ministry has indicated that it will draft legislation to legalise all types of gambling so that the government can use the proceeds to benefit social development, a senior official said yesterday. Pongpat Riangkrua, director of the ministry's legal office, said Justice Minister Pongthep Thepkanchana would invite concerned parties to help draft the bill during a brainstorming session in December. Pongthep is the chairman of the sub-committee charged with revamping the anti-corruption law. Pongpat said that legalising gambling would put an end to underground mobsters and corruption. He said the government should accept the fact that illegal gambling exists. "We have been turning a blind eye to gambling dens and prostitution problems. We just sweep the dirt under the carpet and are too naive to accept it," he said. "We also haven't accepted the fact that social and legal mechanisms can help control it. We do not believe that we can stop children and poor people from gambling.'' The present gambling law makes it tough for gambling operators, he said. They have to deal with many different agencies and pay huge sums of money under the table. But it's cheaper for them to pay the bribes than seek licences legitimately. The law should be amended to make licensing easier, he said, so that the government can establish controls and tax the operators. The Anti-Money Laundering Law should also be amended to include gambling-related offences, he said. The government should legalise casinos by giving them concessions. Meanwhile, the Thai Research Fund organised a seminar that discussed possible abuses of funds raised through legalised gambling. Participants suggested the government issue laws to ensure transparency in the management of gambling funds. Prof Pasuk Pongpaijit, from Chula-longkorn University's Faculty of Econo-mics, said legislation should be drafted to manage all gambling revenue, and the Office of the Auditor-General should be employed to ensure there is transparency in the bookkeeping. "The Government Lottery Office is generating huge revenue from the new two- and three-digit lottery game, but there is no mechanism to monitor the funds. Politicians could easily pocket some of the money,'' she said. Gambling should also be legalised, she said, because it has become a way of life as our lives are dominated by capitalism and speculation. "People nowadays want to get rich quick and try their luck without working. It would be an up-hill task to stop gambling. It's better to bring it out in the open and control it properly,'' she said. Extensive research should be carried out before implementation, Pasuk said, to find out what kind of people gamble, why they gamble, where they get their income from and if they have family problems. "Laws must be strong enough to prevent money laundering in gambling dens,'' she said. According to statistics compiled by researcher Dr Sangsit Piriyarangsan, Bt1.8 trillion was circulated through illegal gambling last year - 8 per cent of the gross domestic product. Gamblers lose Bt353-Bt415 billion a year by gambling. More than 21 million people bought underground lottery tickets in 1995, he said, a number which had risen to almost 24 million in 2001.

From http://www.nationmultimedia.com/ 11/12/2003

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Govt Pushes Village Fund Bill Through

By a vote of 265 to five, the government yesterday pushed for the first reading of a draft bill on village funds, although the opposition claimed the legislation was redundant. "The village funds have been in existence since 2001, and the country has no need for additional legislation to validate them," Democrat MP Nipit Intarasombat said. Nipit argued that the government had already issued an executive decree to disburse Bt1 million to every village, so there was no need for an Act of Parliament on the topic. Deputy Prime Minister Suwit Khunkitti countered that the draft bill was meant to encourage villages and communities to become selfreliant. "The spirit of the bill is to ensure the access of villages and city communities to roving funds aimed at enabling them to develop work skills and create jobs," he said.

From http://www.nationmultimedia.com/ 11/13/2003

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BOI Reviews Policy on Public Housing

The Board of Investment will on Wednesday review three major investment promotion policies in the areas of technology and innovation, state enterprises and lower-income housing projects, said Sompong Wanapa, secretary-general of the BOI. Newly-appointed Industry Minister Pinij Charusombat yesterday chaired a BOI sub-committee meeting that considered guidelines in granting investment promotion privileges emphasising skills development, technology and innovation, Sompong said. The panel also considered an adjustment in investment promotion policy towards projects proposed by state enterprises and privatised state-owned companies. "BOI will suggest that the Cabinet relax regulations for state enterprises which have undergone privatisation to become corporate or public company entities to qualify for BOI privileges," he said. "We will propose an amendment to the 1998 cabinet resolution which prohibits investment promotion to state enterprise projects." In addition, the BOI sub-committee rejected a request from property-development companies to increase the price of homes in projects eligible for promotion from the current limit of Bt600,000. "Even though building material prices have gone up, the cost of land and interest charges on loans are still low compared with the pre-crisis period. The total cost of constructing a house should not change that much," Sompong said. The meeting agreed to maintain the maximum price of houses eligible for BOI investment promotion privileges at Bt600,000 in line with its policy to assist lower- and medium-income earners, he said. The three resolutions will have to be approved by the BOI's main board, chaired by Deputy Prime Minister Somkid Jatusripitak, on Wednesday.

From http://www.nationmultimedia.com/ 11/17/2003

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VIETNAM: Deputies Endorse Revised Law for State-owned Firms

The National Assembly on Thursday passed amendments to the State-Owned Enterprise Law, promulgated in 1995, to make it easier for State-run firms to operate competitively in a market-driven economy. The Assembly's Deputy Chairman, Truong Quang Duoc, presented the response of the NA Standing Committee to suggestions and comments made earlier by deputies, and read out the proposed new version of the law. The revised State-Owned Enterprise Law was approved by 421 of the 425 deputies present at the session. The new law, which has 11 chapters comprising 95 articles, will come into force on July 1, 2004. The first chapter deals with general regulations on State-owned enterprises (SOEs) which, it says, are economic entities organised in the form of State firms, stock or limited liability companies in which the State holds the entire registered capital or the total stock or majority share of capital. Article 5 in the chapter states that political and social organisations in SOEs must operate within the framework of the Constitution, the law and their own statutes in line with the law. Chapters 2 and 3 dwell on the establishment and registration of SOEs, and their rights and responsibilities. Article 17 in Chapter 3 rules that pay rises and rewards for leaders and workers of an SOE should be considered only after all mature debts have been paid. Chapter 4 defines the way to run SOEs, with clear stipulations governing enterprises with or without management boards. Rights and duties of the management council chairman and those of the general director, deputy general director, chief accountant, and employees are specified. Article 27 in the same chapter says that the director's spouse, parents, children and siblings are not allowed to hold the post of chief accountant or chief cashier of the SOE. The form, organisation and operation of State-owned corporations are detailed in Chapter 5. Corporations set up and financed by the State are required to operate in key industries and sectors to play a pivotal role in stimulating economic growth and contributing to the State budget revenue. The rights and responsibilities of those State institutions which own SOEs are described in Chapter 6, together with their rights and responsibilities when dealing with State capital in other firms. Chapters 7 governs SOEs' reorganisation, abolition and bankruptcy, and Chapter 8 deals with the transfer of their ownership. The State management of SOEs is defined in Chapter 9. Chapter 10 explains rewards and punishments which may result from SOEs' production and business activities, and Chapter 11 deals with the execution of the revised law.

From http://vietnamnews.vnagency.com.vn/ 11/07/2003

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NA Passes Much-Awaited Amendments to Land Law

The National Assembly passed the long-awaited revised Land Law on Thursday after the Standing Committee told the deputies that it had amended eight controversial provisions. The new law won the approval of 84.94 per cent of the 429 delegates. The law will become effective from April 1 next year and is the fourth revision since the Land Law was first promulgated in July 1993. It was previously changed in 1998 and 2001. It has seven chapters and 146 articles; 99 of these went unchanged, the remainder went through several re-writes. More than half the 32 registered speakers had no time to put their views because of the prolonged arguments put by those able to speak when the revisions were previously debated on October 27. Those unable to take the floor were advised to put their recommendations in writing to the Draft Committee for consideration. The Standing Committee's report, delivered by Deputy Assembly Chairman Truong Quang Duoc, says the Standing Committee had asked the Draft Committee and other relevant authorities to sum up all the recommendations raised at the previous debate in the new draft. Duoc said the new amendments govern the definition of land ownership; land-use rights, the transfer, certification and dimensions of land as well as the settling of disputes. He said some suggestions made by the deputies had been accepted and some had not. An example was definitions of land ownership. Some delegates had suggested the phrase "land is owned by the entire people but that ownership is vested in the State which acts as the people's representative" should be changed to "Land is owned by the State." These deputies argued that their change was necessary because the proposed phrase could be understood to mean the giving of privileges to some officials and public employees while the majority of the people were not asked for their opinion about the use of land. But the Standing Committee refused to give ground saying the phrase should go unchanged to conform with the 1992 Constitution. This says: "Land, forests, mountains, rivers, lakes, water resources, natural resources under the ground, sources of income from the sea, the continental shelf and the sky... are all owned by the entire people." The Standing Committee also stood firm about the price for land; land-use certificates and the settling of land disputes. Duoc said some delegates had proposed that the law should specify the relationship between land prices fixed by the Government and those by the market with the meticulous calculation of the price remaining the prerogative of the Government. But the Standing Committee held that the fundamental basis for calculating land prices should be "close to the price for the transfer of land-use actually conducted in the normal market" and should "not take into account irregular factors caused by land hoarding and other land-related price fluctuations. It said the provision would eliminate the weaknesses in the State's land price fixing system that failed to take into account actual market prices.

From http://vietnamnews.vnagency.com.vn/ 11/07/2003

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Delegates Deliberate on First Civil Procedures Code

The National Assembly is considering Viet Nam's first civil procedures code to help the courts deal with the growing number of disputes in the country. Chief judge of the Supreme People's Court, Nguyen Van Hien, presented the code to the National Assembly on Monday, saying it would help Viet Nam fill a large legal gap. Hien said Viet Nam urgently needed to implement civil procedures to settle business and investment disputes, especially as the country has signed many international treaties and conventions, and is applying for membership of the World Trade Organisation. Hien, who is also head of the committee drafting the code, said Viet Nam has guidelines for criminal procedures but none to govern civil cases. Family, business and labour disputes have been settled according to three different ordinances governing civil cases, economic fraud and workplace relations. Even though all civil cases have been conducted in line with a number of principles, he said, the different rules applied under the three ordinances had led to dissatisfaction among the involved parties. And the principles are insufficient for dealing with the rapid growth in the number of civil disputes in the country. Hien said the three ordinances, issued separately in 1990, 1994 and 1996, only provided general instruction rather than specific procedures for settlement. The draft presented to the National Assembly on Monday is the 11th version. It draws upon current court operations as well as other countries' civil code. The code covers fundamental principles of civil procedures, the powers of the District Court and the Court of Appeal, evidence, subpoenas, procedures to solve civil problems involving foreigners and international co-operation. Chairman of the Assembly's law committee, Vu Duc Khien, said the committee had evaluated the draft code and found it had been meticulously re-written to cover all aspects of civil code. He said the draft code was "more systematic, adequate and specific" than the existing three ordinances. But Khien said the law committee had still asked the draft committee to clarify a number of points. These included procedures to solve industrial actions, complaints about voter registration, residency registration offices and the execution of court verdicts. Khien said the committee also wanted more discussion about the decen-tralisation of power to the District Court to solve all civil court cases, particularly those involving foreigners. Although, he said the law committee fully supported the draft's proposal to allow Vietnamese courts to solve civil lawsuits involving foreigners. More debate was also needed to decide the number of jurors and judges to be included in the Court of Appeal and Supreme Court hearings. Khien said the new code should be issued quickly so it will be in place by the beginning of 2005.

From http://vietnamnews.vnagency.com.vn/ 11/11/2003

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BANGLADESH: ADB Accord Specifies Long-Term Goals to Reduce Income Poverty

Asian Development Bank (ADB) and the Government of Bangladesh signed the Partnership Agreement on Poverty Reduction (PAPR) on April 2000. Consistent with the millennium development goals (MDGs), the PAPR specifies medium-term (up to year 2005) and long-term (up to year 2010) goals for reducing income poverty, and improving other social indicators such as primary education, gender disparities, maternal and infant mortality rates, malnourishment, and access of women to reproductive health services, said the Quarterly Economic Update released on Thursday. In order to prepare a comprehensive agenda for the implementation of PAPR, and ADB's new Country Strategy and Programme (CSP) for Bangladesh, the bank has undertaken several studies on the different aspects of poverty reduction, and reviews work undertaken by others, which is also relevant to the PAPR and preparation of the new CSP. "Women in Bangladesh remain particularly vulnerable to living in conditions of poverty. Socially prescribed roles have limited women's access to economic resources such as capital, skills and marketing know-how. These same social norms limit women's participation in political and other forms of decision-making that affects their lives. These restrictions are particularly hard to overcome for women who head households, whether as widows or through divorce or abandonment". " However, changes in social attitudes are taking place, and some women have taken new opportunities for economic and social development with far reaching effects, improving their potential for taking greater control over their own lives as well as accessing the resources necessary to remove themselves and their families from poverty in a sustained manner", the ADB report observed. The report said, contributions from women have been vital for improvements in some key development indicators over recent years. Participation of women in the wage labour force has increased, particularly into the ready-made garment (RMG) sector that currently brings in approximately 70 per cent of foreign currency earnings to the economy and increasing income 'levels for many families. Through increased access to micro-finance, women's labour at the household level has been transformed into cash contribution to household income. Through improved services and access to cash incomes, more women are able to use health services and female life expectancy rates have increased. Social mobilisation of women has contributed to overall reductions in fertility and improved health of family members and some women have been able to take greater control over their own lives. Girls are enrolling in primary school on an equal basis with boys, indicating a significant change in family attitudes towards the value of girls, not only economically, but as individuals with a right to education. It is anticipated that as these girls become adults, higher levels of education will bring significant economic as well as overall gains to their households and communities. "The government's increased recognition of women's human rights has also contributed to these changes in attitudes towards women and girls. Some reservations placed by the government when ratifying the Convention for Elimination of Discrimination against Women have been lifted, and there have been legal reforms concerning gender-based violence (domestic violence and acid throwing). But there remain continuing challenges", the ADB report added. Despite the increase in number of women in the paid workforce, there remain many aspects of the labour market where gender disparities are marked. The gap in wage rates between men and women is still significant. Women's employment is also concentrated in sectors with low returns on their labour and characterised by temporary terms. These trends mean that in 1999-2000 according to Labour Force Survey of Bangladesh Bureau of Statistics, 41.7 per cent of women drew a salary less than 750 Taka per month compared to 7.3 per cent of men and 71.5 per cent of women were earning less than 1,500 Taka per month compared to only 26.4 per cent of men. Women are also concentrated in low or unpaid agricultural work in the rural areas, with almost 75 per cent of women reporting underemployment (working less than 35 hours per week) intensifying urban-rural inequalities in income and poverty levels, the repot said.

From http://www.bangladesh-web.com/ 11/01/2003

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VoIP Legalisation Finally Gets Cabinet Nod

The cabinet on Monday approved a bill for legalising voice over Internet protocol (VoIP) operations in the country. According to the proposal submitted by the Bangladesh Telecommunications Regulatory Commission (BTRC), operators will be given licences on the basis of their prescribed criteria and a certain fee. Industry insiders had earlier expressed their doubts about 'frivolous' licensing and suggested limiting of the number of licenses to ensure quality of service. Akhtaruzzaman Manju, president of the Internet Service Provider's Association of Bangladesh, told New Age Monday, "The decision to legalise VoIP will prove to be a milestone in the economic growth of the country. I am grateful to the prime minister and her Cabinet on behalf of ISPA for approving the bill." But Manju struck a note of caution, saying that the authorities concerned should ensure fair competition among the VoIP operators and hinted that certain quarters should not be allowed to run monopoly businesses in this sector. He also pointed out that the specified criteria should ensure the quality of service. Syed Marghub Murshed, chairman of the BTRC, told New Age on November 8, "There will be a mandatory licensing fee in order to discourage frivolous licensing." He said that once the cabinet agreed to the proposal submitted by the commission, they would move ahead on the matter in consultation with the genuine operators. Concerned quarters believe that the legalisation of VoIP will substantially decrease the cost of business since this technology allows overseas telephonic conversations at a much cheaper rate than is currently offered by the Bangladesh Telegraph and Telephone Board, the national operator. Manju told New Age earlier on November 8 that, with the VoIP being legalised, the exporters can easily arrange video conferencing, 'which is as good as meeting the clients in person'. Besides reducing the cost of business, VoIP is considered to be a vehicle for other businesses including international calling centres, which is said to be a billion dollar industry. There will also be substantial gains in the country's foreign reserves as operators will remit their earnings through the formal channels. According to inside sources, there were numerous questions at the Cabinet meeting as to why the bill had been delayed for such a long time before finally being submitted to the Cabinet for approval. The regulatory commission had submitted three proposals before the current one since last year but had been rebuffed each time. It is widely believed that this bill has so far been stalled in order to benefit the cartels, close to the powers that be, that had been running illegal VoIP operations in the country worth crores of Taka.

From http://www.bangladesh-web.com/ 11/11/2003

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President Assents to Civil Procedure (Amendment) Bill

President Dr Iajuddin Ahmed on Saturday assented to the Code of Civil Procedure (Third Amendment) Bill 2003 passed in the just-ended 10th session of Parliament, reports UNB. The parliament passed the bill on Wednesday (November 19) to discourage filing of false cases and quickly settle huge backlog of civil cases. It provides for increasing compensation up to Tk 20,000 from Tk 5,000 for filing of a false case on false deeds and documents. Under another provision, the court may fine either party in a case up to Tk 2000 as cost of delay in making application in respect of interlocutory matters.

From http://www.bangladesh-web.com/ 11/23/2003

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BHUTAN: Draft Constitution on Firm Foundation

The draft Constitution of Bhutan is on firm foundation but it requires careful whetting to ensure that it serves the purpose and objectives declared by His Majesty, said Mr K K Venugopal a distinguished and renowned constitutional expert from India. "What His Majesty desires is a democratic constitution which will serve the needs of the people not only today but for the long future," said the senior advocate of the Supreme Court of India who is in the country to share his expertise and comment on the draft Constitution. Mr Venugopal who was granted an audience by His Majesty on November 7 said that it was a matter of considerable significance that the sovereign should want to give to the people the right to govern themselves through their elected representatives. "His Majesty expressed concern for the people and wanted a constitution which would meet their hopes and aspirations," said Mr Venugopal. Mr Venugopal said that he was confident that the people of Bhutan would implement the Constitution to ensure that it would serve the purpose which His Majesty had in mind at the time it was decided that Bhutan should have a constitution of its own. A widely respected personality who has represented many landmark constitutional cases in India, Mr Venugopal has served in several important public posts in India and a few foreign countries. He was conferred the 'Padma Bhushan' in India and received prestigious awards and medals from abroad in recognition of his achievements in human rights and legal multi-lingualism and multi-culturalism. The Chairman of the Constitution drafting committee, chief justice Lyonpo Sonam Tobgye, said that Bhutan will benefit from the professional expertise of Mr Venugopal "so that the draft Constitution would be strengthened and avoid weaknesses". "The Constitution of Bhutan is a product of peace. Therefore, the Constitution must strengthen sovereignty, security and stability, ensure peace and prosperity to promote goodness and make the kingdom of Bhutan a great nation," said Lyonpo Sonam Tobgye. A 39-member Constitution drafting committee comprising elected members of the people, monastic body, the judiciary and the executive arms of the government was formed soon after His Majesty commanded the drafting of a Constitution on September 4, 2001. After six meetings, the drafting committee formally submitted the first draft of the Constitution to His Majesty in December last year. On the command to make further improvements the Constitution committee submitted the second draft in June 2003. (by Kinley Y Dorji)

From http://www.kuenselonline.com/ 11/08/2003

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INDIA: SEZ Rules Put Off Again

NEW DELHI - The government has once again put off implementation of the rules and regulations regarding special economic zones till December 1, mainly due to reservations expressed by several units on certain aspects of these rules. The Council for EOUs and SEZs, however, wants the government, in the meantime, to consider framing such rules for EOU units as well after the SEZ rules have been made effective. Implementation of the SEZ rules, originally scheduled for August 15, was first postponed to October 15. According to Council for EOUs and SEZs director-general LB Singhal the delay has been caused by some SEZ units which have expressed reservations on certain provisions of the rules. The council, therefore, wants to ensure that the viewpoints of these members are also taken into account before finalising the rules, says Mr Singhal says, adding there has been no difference of opinion between the finance and commerce ministries on the rules. In fact, the issue of framing the SEZ rules was discussed threadbare at a high-level meeting held recently. It was attended among others by additional commerce secretary Vinay Bansal, customs department director AK Prasad, Kochi SEZ development commissioner Paul Antony, and Kandla SEZ development commissioner Yogendra Garg, besides Mr Singhal. Mr Singhal says the council has been working out rules and regulations for some time now with a view to make these applicable to the EOU units on the lines of SEZs. Both the EOU and SEZ schemes have a great potential as their combined contribution to exports was nearly 32 per cent during the past decade. There is, therefore, a need for making coordinated efforts by all concerned to achieve a quantum jump in exports by these units. The SEZ scheme became effective from April 1, 2000. So far, 21 SEZs have been approved on the basis of proposals received from states/private promoters. Of these, the SEZs at Indore, Salt Lake (Kolkata) and Jaipur are ready for operation. Those at Navi Mumbai and Maha Mumbai, Visakhapatnam, Hassan (Karnataka) and Jodhpur (Rajasthan) have made substantial progress and sizeable land has also been acquired. Under the current policy, supplies from domestic tariff area (DTA) units to SEZ units will be considered as exports by DTA units and supplies to DTA units from SEZs will be considered as imports by DTA units. The government has also clarified that supplies from SEZ units will be governed by the provisions of the Customs Act and not by the provisions of the Central Excise Act. (by S Venkitachalam)

From http://www.financialexpress.com/ 11/03/2003

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Cabinet Defers Decision on Unorganized Workers' Bill

THE Union Cabinet has deferred its decision on the Unorganized Sector Workers' Bill that seeks to extend minimum wages and other social benefits to labourers in 122 sectors. The Bill has been sent back to the Ministry of Labour for "fine-tuning". Speaking to newspersons here on Thursday after the Cabinet meeting, Ms Swaraj said the Group of Ministers (GoM) has already cleared the Bill and the Cabinet will again take it up in a week to 10 days. "The Cabinet today discussed the Bill and it was felt that it needs to fine-tuned and loose ends tied up," she said. The Bill seeks to bring 75 per cent of the country's workforce under the social security net by providing pension, health and welfare schemes at nominal costs. It is also envisages that no worker will have to work for more than eight hours a day. Ms Swaraj said the Cabinet has decided to permit opium processing in the private sector, as there is a shortage of processed opium in the country. The move will help the domestic pharmaceutical industry, as drug manufacturers now have to import processed opium for use in many medicines. "The opium processing has been under the control of the Central Government and we have only two factories processing opium. This has created a shortage for processed opium though India produces some 700 metric tonnes of raw opium a year," the Minister said. Now anyone can process opium after obtaining necessary approvals and licences as stipulated in the Narcotics Act. Ms Swaraj also stated that the Cabinet Committee on Economic Affairs, which also met today, approved continuation of the Centrally sponsored scheme of restructuring and reorganisation of teacher education.

From http://www.thehindubusinessline.com/ 11/06/2003

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Govt Seeks Higher Payout from Public Sector Banks

THE Government has set its sights on the large treasury profits generated by the public sector banks and asked them to make interim dividend payments. Highly-placed banking sources said that the PSU banks were told to alternatively to increase the quantum of dividends paid out for the current fiscal year. For the year, the estimates for dividend receipts from public sector banks, financial institutions and the Reserve Bank of India is Rs 10,700 crore. But the sources said that the Ministry of Finance has already indicated that the Government would like to have a higher dividend receipts. This is despite the fact that in some of the banks, the Government equity holding has already been diluted through further equity issues and partially through equity buyback. The sources said that the Government had made this demand in view of the expected revenue short falls during the current year from both tax and non-tax sources. The demand for additional dividends was to partially offset this anticipated fiscal slippage, the sources added. Besides, the sources said, that the Government had also pointed out that some of the banks were likely to show large profits on account of the securities buyback in July. Many of the banks, which had participated in the securities buyback are expected to be using the profits earned for creation of floating provisions. This essentially implied they were doing this as a contingency against any future asset stress. Only a handful of banks actually needed the funds to make provisions. Besides, most of the PSU banks have conservative accounting system and have already made provisions on the basis of the income recognition guidelines to come into effect from March 31 2004. These guidelines prescribe that debt servicing dues beyond 90 days would have to be treated as non-performing assets. Consequently these surpluses are now expected to become part of the reserves. Further the sources said the MoF had also pointed out that banks had made large trading profits due to the soft interest rate regime. In fact, the sources said that the government move had come close on the heels of the second quarter of the banks. Most of them had shown large increases in profits and almost 50 per cent of these profits were driven by the treasury operations. When the dividend estimates for the current year were made, the ten-year yield on gilts was in the region of about 6.2 per cent. Currently it is in the region of about 5.1 per cent, implying an appreciation in the value of investments part of which had translated to trading profits. The sources said that each of the banks was expected to make recoveries to the extent of at least Rs 250 crore to Rs 300 crore of non-performing assets. Consequently, the sources said that estimates in the Ministry were that the banks could afford to foot a higher dividend bill, without impairing the capital adequacy. (by C. Shivkumar )

From http://www.thehindubusinessline.com/ 11/18/2003

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India Not Looking for Bargaining Chip on Agriculture at WTO

India has let it be known that its position on agriculture at the World Trade Organisation negotiations has nothing to do with gaining tactical or bargaining advantage. The country's approach will be purely dictated by its development strategy to provide employment and eradicate poverty. "To us, this is a moral and ethical imperative, and we hope that the rest of the world appreciates the gravity of the situation," visiting Planning Commission chairman KC Pant told US policy-makers and experts here on Monday. Pant, addressing the Centre for Strategic and International Studies, said Indian agriculture will have to grow by at least 4 per cent per annum over the next decade to reduce poverty and provide full employment. Exports are deemed critical since domestic demand for farm products is estimated to grow by only 3 per cent. "Anything that retards our rate of progress will eventually have repercussions on the pace of growth and stability of the larger system," he said, stressing that India, along with China, is potentially the future market driver for the word economy. "These are not issues of tactical manoeuvring, but of long-term strategy." Pant pointed out that trade issues impeding India's development efforts are not confined to agriculture. In the manufacturing sector, tariff peaks and escalations on goods limit the extent of value addition. Similarly, trade in services is still tied up in debates on modes of delivery, especially in such services where countries like India have a comparative advantage. India, Pant said, was on course to achieve its millennium development goals. The incidence of poverty is expected to be brought below 15 per cent by 2015, and the literacy level taken to 90 per cent by the same year. On the infrastructure, he said the new moves to involve the private sector have begun to bear fruit. Shortcomings are now being addressed in power, roads, telecom and ports sectors with the help of private participation. (by S Rajagopalan)

From http://hindustantimes.com/ 11/18/2003

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Government to Expand Open-Sky Policy to Attract Foreign Tourists

NEW DELHI - With India now being one of the most sought after tourist destinations, government is planning to cash in on the opportunity by giving a fillip to the civil aviation sector to further boost tourist inflow into the country. According to civil aviation ministry officials, government is contemplating allowing foreign tourist charter flights on major airports in the country. As per the open sky policy the government has been gradually liberalising the conditions for allowing chartered flights at a larger number of airports. Except for popular destinations like Goa, Jaipur, Agra, etc., charters are now permitted to fly Indian nationals as well, to other tourist destinations, officials said. The government has already allowed new points of call for foreign airlines and has agreed to the utilisation of the Indian landing entitlement in other countries by foreign carriers on mutually beneficial terms. A meeting of empowered group of ministers (GoM) would be meeting on Wednesday to discuss various issues including selection of a financial consultant to advice the government on airport modernisation, strategic partnership and private participation. The GoM had shortlisted ABN-Amro, Ernst and Young and KPMG, for appointment of the financial consultant for privatisation and modernisation of the Mumbai and Delhi airports. The empowered GoM comprise Finance Minister Jaswant Singh, Disinvestment Minister Arun Shourie, Law Minister Arun Jaitley and Civil Aviation Minister Rajiv Pratap Rudy. The government had decided to restructure and modernise the international airports at Mumbai and Delhi through formation of joint ventures between the Airports Authority of lndia (AAI) and private players, to be selected through an international competitive bidding process. The ministry had also constituted a committee to prepare a roadmap for the civil aviation sector covering all relevant aspects including restructuring of airports with a view to developing a world-class airport infrastructure with one or more international hubs; affordability and connectivity in the domestic aviation sector and development of regional air connectivity within the country. India has a well-developed and large civil aviation network. There are 122 airports in the country, controlled by the AAI, of which 11 are international airports. The air services of the country were liberalised in 1994 through a move towards an open-skies policy of the government. The total passenger traffic handled by Indian airports in 2001-02 was over 40 million, while the cargo traffic handled was around 854,000 tonnes.

From http://timesofindia.indiatimes.com/ 11/19/2003

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SRI LANKA: Supreme Court Opinion on Defence Powers Be Non-Binding

The opinion of the Supreme Court on the question of law relating to exercise of executive powers of defence will be a non-binding opinion stated Attorney General K.C. Kamalasabeyson PC in his submission before the specially constituted five member bench. He was making his submission on the determination sought by the President Chandrika Bandaranaike Kumaratunga over her executive powers relating to defence of Sri Lanka. The bench comprised Chief Justice Sarath N. de Silva PC, Justices Shirani Bandaranayke, Hector S. Yapa, Asoka de Silva and Nihal Jayasinghe. He further submitted that in terms of Section 44 (1),(2) of the constitution the President shall in consultation with the Prime Minister appoint ministers and shall retain the portfolios that have not been assigned and remain in charge of those subjects. He said that the President shall activate his/her executive power through the constitutional mechanism and that is through the Cabinet of Ministers headed by the Prime Minister. The Attorney General stated that the President has invoked the consultative jurisdiction of the Supreme Court under Article 129 (1) of the Constitution on a matter of law relating to her executive power of defence of Sri Lanka and that the Courts' opinion will not be a binding one. Making a lengthy submission, counsel for the President H.L. De Silva PC stated that the present constitution is a prototype of a presidential constitution and for the first time in history of constitutional development, after the General Election of December 2001, majority of the Government were drawn from a coalition of political parties of which the Executive President is not a member. Tracing back to the geneses of the constitutional evolution of the country, the Counsel submitted that the 1978 Constitution was a watershed in our constitutional evolution where the Parliament deligeted its executive powers to a Executive President. He further submitted that in terms of the Section 5 of the 1972 constitution, the National State Assembly shall exercise the executive power of defence of Sri Lanka through the President and the cabinet of Ministers. According to the Section 46 - sub-section 4 of the 1972 Constitution the subject of defence of Sri Lanka was vested in the Prime Minister and that the executive power was continued to be with the Majesty and Prime Minister was in charge of the executive power of defence. He further submitted that there has been a continuous constitutional tradition where the President held the portforlio of defence and that that executive power is inalianable and should be exercised by the President and that it was the essence of the Presidential system. He submitted that President shall deligate that executive power relating to defence of Sri Lanka to a minister in terms of the Section 158 of the Constitution and that President may revoke that deligation at any time. The Silva said that according to the Article 33 (p), the President shall have the power to declare either war or peace and that that is a power not even exercised by the President of the USA where that power is vested with Congress. By the 17th amendment to the 1978 constitution, Section 61 was introduced and according to which the President shall be vested with the power of appointing head of the Army, Navy and Air Force and that shall not be concurrent to the Constitutional Assembly. In terms of the Army, Navy and Air Force Act the President shall extend the service of a Major General on completion of stipulated period of three years in the rank, on the recommendation of the Commander of the Army and that the recommendation shall be endorsed by the Minister of Defence. And according to the 1972 Constitution, he said function was performed by the Governer General on the advice of the Prime Minister he stated. (by Indeewara Thilakarathne )

From http://www.dailynews.lk/ 11/01/2003

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Sri Lanka's President Lifts 'Emergency' Order

Sri Lanka's President Chandrika Kumaratunga on Friday lifted a state of emergency as her political rival Ranil Wickremesinghe, the prime minister, returned from Washington to assert his mandate to govern. Earlier this week Ms Kumaratunga suspended parliament and dismissed three cabinet ministers in the name of national security, accusing the government of making too many concessions in peace talks with the separatist Liberation Tigers of Tamil Eelam (LTTE). But Mr Wickremesinghe said his government had the support of the US to advance the 20-month-old ceasefire with the Tamil Tigers, who have fought for 20 years for an independent state - a civil war that has claimed more than 64,000 lives. At the airport on Friday Mr Wickremesinghe told supporters: "We have to first ensure that parliament reassembles. Parliament is the only institution which has a mandate from the people to engage in dialogue with the LTTE." Mr Wickremesinghe, who belongs to a rival political party to Ms Kumaratunga, but shares power under Sri Lanka's constitution, said he wanted to get the peace process "back on track", including the immediate delivery of a national budget. But Ms Kumaratunga said in a speech to the nation late on Friday night that parliament would reconvene on November 19 to consider the budget. She also made an appeal for political parties to join her to form a "government of reconstruction and reconciliation". Western diplomats say Mr Wickremesinghe's government had planned to deliver a populist budget next week to highlight the "peace dividend" of the ceasefire, reflected by greater tourist numbers and year-on-year export growth in July of about 17 per cent. K.R. Choksy, the finance minister, said the government had to retain confidence among investors and warned the country could face a fiscal crisis unless parliament approved a budget soon. "A budget has to be delivered before the 31st of December or the finances available to the government will run out," Mr Choksy said in an interview with the Financial Times. "We planned to introduce a budget that would bring relief to people. We wanted to raise public officials' salaries and agricultural subsidies, encourage private sector employment of university graduates, and employment for rural youth," he added. Sri Lanka's stock market rose 7.8 per cent on Friday after Ms Kumaratunga lifted the emergency decree and Mr Wickremesinghe returned to Colombo. (by Ray Marcelo )

From http://news.ft.com/ 11/07/2003

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MALDIVES: President Says the Country Is Committed to Create the Most Beneficial National Environment

President Maumoon Abdul Gayoom has said that the country was and should be committed to create the most beneficial national environment for the people and, in a world of rapid change, remain free of influences unsuitable for the Islamic faith and culture of the people. The President made his remarks in a message to the nation on the occasion of Victory Day which is November 3. The President said that the Maldives was a very fortunate country, for the people had been blessed by the Almighty Allah with the basic requirements to build a nation of peace and unity. He noted that everyone belonged to the same faith, and further that the country did not share a land border with any state. He also said that there were no groups in the country with a different religious, historical or cultural identity. Pointing out that in some countries attempts were made to breakaway from the state by different groups. The President said that there was no room for such desire in the Maldives as the Almighty Allah had blessed the people with a strong and unified national identity. Gayoom stressed that, given the favourable circumstances of the country, the people must always remain alert against any external influence or interference that could threaten the independence, the sovereignty and the identity of the nation. He also emphasised the importance of the firm resolve to safeguard national unity and identity. The President expressed praise and gratitude to the Almighty Allah for the important victory that was bestowed on the nation. He also conveyed his good wishes and greetings to the people on the occasion of Victory Day. Noting that on 3rd November 1988, the country faced the most dangerous threat of recent times, President Gayoom paid tribute to the memory of the brave heroes who were martyred while defending the Islamic faith and the independence of the people. He also prayed to the Almighty Allah to grant their souls the blessings of Paradise. The President said that the martyrs had made a very heroic and noble sacrifice, which left behind lasting memories of courage and honour.

From http://www.haveeru.com.mv/ 11/03/2003

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NEPAL: Govt Launches Sustainable Development Agenda

KATHMANDU - The government today launched a Sustainable Development Agenda for Nepal (SDAN) with its aims to guide and influence national-level planning and policies up to 2017. The agenda was formulated in response to the UN's call to all the participating countries of Earth Summits to build National Strategies for Sustainable Development (NSSD) along the lines of Agenda 21, a blue print for sustainable development, adopted at the first summit held in Rio de Janeiro in 1992. It is formulated by the National Planning Commission (NPC) in conjunction with the Ministry of Population and Environment (MoPE) and participation of various stakeholders. It was approved by the government in July 2003. The agenda is in conformity with Nepal's long term goals envisaged in the Ninth Five-year plan, Tenth plan, the poverty reduction strategy paper, the millennium development goals and its commitments in various international forums. It has listed a set of broad goals that Nepal aspires to achieve by pursuing sustainable development by the end of 2017. Among them, the major goals are to provide atmosphere for every citizen to lead free and dignified life; education to every girl and boy child; easy access for everyone to clean drinking water, nutritious food, clean air and basic medical facilities; enhance transportation and communication system; to develop hydropower exports as a steady source of income. The document also contains topics related to opportunities and constraints, current status and future agenda, necessary government policies and methods to implement them to attain those goals. Speaking at the launch of the agenda, NPC vice-chairman Dr Shankar Sharma expressed belief that despite being ambitious in nature, it would be durable and viable if properly implemented through clear policy. He conceded that the present conflict would have some negative effects on the agenda but said that the country could still catch up with the lost time to achieve those goals once the problem is resolved. "However, concerted efforts from all sectors, government, donor agencies, and other stakeholders will be imperative to achieve the desired results," Dr Sharma added. On the occasion, Matthew Kahane, UNDP resident representative, stressed the need for the government to provide conducive, consistent policy and economic incentives to local bodies and communities to convert the promise into practice. Calling for more permanence and sustained support mechanism that would include all stakeholders, Kahane said, "How well SDAN stands the test of time, depends on how well and effectively it is implemented." Member of NPC Dr Hari Krishna Upadhyay, under secretary at NPC Gyan Prasad Sharma and joint secretary at MoPE Dr Jibgar Joshi also shed light on different aspects of the SDAN.

From http://www.nepalnews.com.np/ 11/06/2003

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AFGHANISTAN: Afghanistan Unveils Draft Constitution

Afghanistan unveiled a post-Taliban draft constitution Monday, a historic milestone on what has been a bloody, bumpy and often tragic path to recovery after decades of war. The draft starts by declaring that "Afghanistan is an Islamic Republic," then later creates the posts of president and vice president, as well as envisioning two houses of congress. The draft reflects the government's desire to bring the country together under the banner of Islam, which is practiced by the vast majority of Afghans. However, the hardline Islamic law enforced by the former Taliban regime is not expected to be a part of Afghanistan's future. Under the Taliban, men were forced to grow beards and pray, women were banned from schools and almost all public life, and music was forbidden. Executions were carried out before large crowds at Kabul's sports stadium. "The religion of Afghanistan is the sacred religion of Islam. Followers of other religions are free to perform their religious ceremonies within the limits of the provisions of law," the draft states, according to an English translation provided by the government. While avoiding direct mention of Shariah, Islamic holy law, the draft states that "in Afghanistan, no law can be contrary to the sacred religion of Islam and the values of this Constitution." The position of prime minister _ included in previous versions _ was cut from the final draft. Many feared a strong prime minister could have emerged as a political and military rival to the president, a major concern in a country that has known little but war for a quarter-century. "The most important thing that a country like Afghanistan needs is stability," said Jawid Luddin, a spokesman for President Hamid Karzai. "This constitution is made for Afghanistan for the next 100, 200 years." The draft must still be debated at a grand council, or loya jirga, next month. Ratification of the document will set the stage for nationwide elections scheduled for June. A rash of violence by suspected Taliban insurgents and fighting among powerful warlords that control large swaths of the country has raised fears of the security of holding a vote in June, and officials say privately it is possible the election might be delayed. A red-bound copy of the long-awaited draft constitution was handed to former King Mohammad Zaher Shah, Karzai and Lakhdar Brahimi, special envoy of U.N. Secretary-General Kofi Annan, during a ceremony at Kabul's Presidential Palace. "I hope this will be acceptable for the people and will direct people toward peace, security and democracy," said the 88-year-old Shah. The constitution enshrines Shah as the ceremonial "father of the nation," but he has no official political role and the title will not be passed along to his son. Karzai made no comment during the unveiling ceremony. The draft constitution was handed out in Dari and Pashto, and the English-language version was later released by e-mail. The draft allows political parties to be established as long as their charters "do not contradict the principles of Islam" and sets other conditions such as not having any military aims or foreign affiliation. It sets Pashto and Dari as the official languages, but the national anthem will be sung in Pashto. While not specifying gender, the draft states "any kind of discrimination and privilege between the citizens of Afghanistan are prohibited. The citizens of Afghanistan have equal rights and duties before the law." Women suffered greatly under the former Taliban regime and in conservative Afghan society are usually given fewer rights than men. Many still wear the all-covering burka robe, and husbands don't allow wives to be seen by male guests. A variety of divisive issues sparked heavy backroom negotiating between various factions, and the release of the draft constitution has been delayed several times over the past month. The constitution, which has 12 chapters and 160 articles, was drafted by a 35-member Constitutional Review Commission that started work a year ago after two months of delays. The constitutional loya jirga has also already been pushed back two months. After criticism that the constitution was being written in secrecy, the commission sent 460,000 questionnaires to the public and held meetings in villages across the country seeking input. Karzai is widely expected to win next year's elections, and some of the disputes have focused on how much power will be concentrated in the presidency. Had a prime minister's post been established, it likely would have been filled by a member of the ethnic Tajik-dominated Northern Alliance _ who toppled the Taliban with the help of the U.S.-led anti-terror coalition. Karzai, an ethnic Pashtun, has increasingly distanced himself from the Northern Alliance and its military commanders as he seeks to expand the influence of his central government. Under the draft, the vice president will run on the same ticket as the president and succeed him should he die in office or become incapacitated. New elections would be mandated within three months. The constitution gives congress the power to impeach the president, but bars the president from dissolving congress. The country also commits to preventing terrorism as well as the production and smuggling of narcotics. Afghanistan is the world's leading producer of opium.

From http://www.aopnews.com/ 11/03/2003

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AZERBAIJAN: Eighty Amendments to Be Made to Tax Code

The Azerbaijan Government plans to make 80 amendments to the Tax Code. The bill on those amendments has been forwarded to the Parliament in the budgetary package for 2004. The bill means that the profit tax rate will decrease from 25% to 24%. Despite the insistent recommendations of the International Monetary Fund, the bill keeps the regional and sector differentiation in this tax. The schedule of income tax imposed on individuals has been considerably changed. It is planned to raise the amount of monthly salary not imposed by the income tax from 100,000 to 150,000 AZM. Salary below 3 million AZM will be imposed by a tax of 14%, while salary above this limit will be imposed by a tax of 35%. A three-step system is used in collecting the income tax now. The rate is 12% for incomes from 100,000 to 1 million AZM, 25% for incomes from 1 to 5 million AZM and 35% for larger incomes. The facilitated tax system will change too. E.g., the change will concern Clause 218.1, where the words "less than the untaxed monthly income multiplied by 1,250" will be replaced by the words "less than the Conditional Financial Unit (5,500 AZM) multiplied by 22,500". It means that the facilitated taxation will concern a three-month turnover of 123,750,000 AZM (5,500 x 22,500) instead of the currently accepted 125 million AZM (100,000 AZM x 1,250). The facilitated tax rates keep as 4% of the three-month turnover of the enterprises of Baku and 2% of the three-month turnover of those in the regions of Azerbaijan.

From http://www.bakutoday.net/ 11/01/2003

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KAZAKHSTAN: President Signs Law on Monitoring Property Ownership

Nursultan Nazarbaev signed a law on 4 November that provides for government monitoring of property ownership in strategic spheres of the country's economy, khabar.kz reported. The law defines as these strategic spheres the extraction and processing of coal, oil, gas, uranium, and other metal ores, as well as the machine-building, transport, telecommunications, power-engineering, chemical, and defense sectors. The objective of the law is to generate information for a database on Kazakhstan's major enterprises that will be used by state agencies to make economic forecasts. BB (by Timur Onica)

From http://www.eurasianet.org/ 11/05/2003

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TURKEY: Public Management Basic Draft Law

SAHIN: ``DRAFT LAW ABOUT PUBLIC ADMINISTRATION REFORM HAS COME TO THE STAGE OF BEING SUBMITTED TO THE PARLIAMENT``ANKARA - State Minister and Deputy Prime Minister Mehmet Ali Sahin said on Monday that the draft law about public administration reform had come to the stage of being submitted to the parliament. Together with Prime Ministry Undersecretary Omer Dincer, Sahin held a press conference to give information about the draft. ``Under the draft, number of state ministries will be reduced from 20 to 8. When the draft envisaging rebuilding of public sector is put into practice, Turkey will have an annual saving of 500 trillion Turkish liras (TL),`` he said. Sahin told reporters, ``the draft will bring forth performance control in the public sector. As a result, bureaucrats cannot refrain from their responsibilities any longer.`` The draft law, which was prepared aiming to ``set up a public pluralist and transparent management basing on human rights and freedoms``, targets re-structuring of organizations, and distribution of assignment and authorities of central administrations, local administrations, and other state organizations and institutions. In case the draft becomes legalized, central administration will transfer some of its authorities and responsibilities to local administrations and provincial private administrations. According to this assignments, authorities and responsibilities will be transferred to the most appropriate or close unit in state institutions and organizations. State institutions and organizations will not be able to set up business enterprises, produce goods and services in areas where they were not authorized. Also, personnel, buildings, vehicles and equipment will not be allocated. -ASSIGNMENTS OF CENTRAL MANAGEMENT- The draft determines general principles and policies regarding public services, sets targets and goals in this respect, covers, evaluates and controls convenience of public services to law, determined policies and standards, provides fulfillment of services in coordination with local administrations. The draft sets up mechanisms that provides communication and cooperation among professional institutions and non-governmental organizations. Justice, defense, security, intelligence, foreign relations, foreign policy, finance, treasury, foreign trade, customs, services in markets, training and education, assignments and services about religious affairs, services about social security, population and citizenship procedures, emergency case administration, civilian defense, technical and financial services to local management are considered among the assignments of central administration. Central administration units will not be able to set up organizations in local level for the assignments and services that are in field of responsibility. Number of state ministries will be limited to 8 the most. Ministries and other public institutions and organizations will not be able to set up organizations abroad apart from foreign ministry and Turkish Cooperation and Development Administration Chairmanship (TIKA). -HIERARCHICAL POSITIONS AND TITLES- The draft law regulates hierarchical positions and titles of central and rural offices of ministries and concerned institutions. Under the bill, there will be undersecretary, general director, chairmen of departments and branches. The Foreign Ministry, Secretariat General of National Security Council, Undersecretariat of National Intelligence Organization and concerned institutions will not be subject to provisions regarding hierarchical positions and titles. Hierarchical positions and titles in these institutions will be regulated under the law on their foundation. -INSPECTION AND CONSULTANCY- Under the bill, inspection and control will be made according to basic principles of public management, annual aims and targets, performance indictors, service, standards of quality. The bill foresees that education and guidance will be given importance and that reports will be announced to public opinion. Internal and external inspection will be made in public institutions and organizations. Accordingly, external inspection of institutions and organizations under authority of central administration, special administrations, municipalities and concerned organizations and local administrative units will be made by the Accounting Bureau or under principles set by the Accounting Bureau. -HUMAN RESOURCES MANAGEMENT- Civil servants and other public officials will be recruited or promoted by a competence examination or under principles of merit. Other public officials or employees working full or half time will be employed by a contract without any cadre. The contract will write about duties, rights and liabilities and performance indicators of personnel. -TERM IN OFFICE OF UNDERSECRETARIES, GENERAL DIRECTORS TO END AS GOVERNMENTS TERM IN OFFICE ENDS- In accordance with the draft law, term in office of undersecretaries, general directors and chairmen of institutions bound to the government will automatically end as the term in office of the government ends. Such people will be appointed to ministry consultancy cadres preserving their rights. -LIFTED PROVISIONS AND INSTITUTIONS- Under the draft law, the law on formation of defense secretariats and the decree in the force of law on duties and foundation of Prime Ministry Supreme Inspection Board will be abolished. Also, the Directorates General of Rural Affairs will be abolished. Foreign representations of ministries except Foreign Ministry and Turkish Cooperation Agency (TIKA) and other public institutions will be lifted and their cadres will be cancelled.

From http://turkishpress.com/ 11/03/2003

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TURKMENISTAN: New Law on Religion Goes into Effect

A new, more restrictive law on religious activities went into effect in Turkmenistan on 10 November, turkmenistan.ru, Russian news agencies, and the website of Forum 18 (http://www.forum18.org), a Norwegian-based NGO monitoring freedom of religion in the former USSR, reported on 10 and 11 November. The new law formally criminalizes religious activities by any confession that is not registered by the Justice Ministry -- in effect, any confession other than Sunni Islam and Russian Orthodoxy. Violators may be sentenced to one year of corrective labor. Previously, unregistered religious groups were subject to administrative sanctions. The new law also requires that any religious group seeking to register must prove that it has 500 members in Turkmenistan, and only clergymen with Turkmen citizenship and a higher education in theology may lead a congregation. Formation of political parties or movements on a religious basis is prohibited, along with private teaching of religion, which is also criminalized. BB

From http://www.rferl.org/ 11/12/2003

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Federal cabinet has approved a $50billion blueprint for the next-generation Australian defence force that includes a contentious billion-dollar tank purchase as well as new destroyers and strike aircraft. The revised equipment plan marries the core doctrine of protecting Australia with the Government's desire to increase the defence force's ability to operate overseas and fight in the global struggle against terrorism. The Government has approved plans for three new multi-billion-dollar destroyers as well as three new amphibious support ships, which will allow more military force to be sent overseas on sustained operations. "The importance to the Government of the ability to safely deploy, lodge and sustain Australian forces offshore has been reaffirmed," Defence Minister Robert Hill said yesterday. But the Howard Government has also reaffirmed the existing defence-of-Australia doctrine as the "primary driver" of the future force structure. "Tasks such as the protection of Australia's borders remain as important as ever," Senator Hill said. "The Government has decided to provide the ADF with new assets, equipment and capabilities that will ensure it continues to be able to defend Australia and Australian interests in an uncertain and complex environment." He declined to give precise costings, claiming the revised capability plan would be accommodated within existing budget guidelines. The RAAF will phase out its F-111 strike force from 2010 -- five years earlier than planned -- as the Government confirmed plans to acquire up to 100 Joint Strike Fighters to replace both the F-111s and the F/A-18s from about 2013. The navy will get three new multi-purpose amphibious ships to carry troops and helicopters from 2010, and four of the existing FFG frigates will be upgraded with new missiles. Both the new air-warfare destroyers and the amphibious transports are expected to be built in Australia, giving a big boost to naval construction. But the savings offsets will include early retirement for two frigates and two Huon class minehunters. After a long debate, the Government accepted the army's case for new tanks, but has stopped short of a final decision on which one to buy. This means the Government is yet to agree to Defence chief Peter Cosgrove's preference for the US-built Abrams tank. General Cosgrove said anti-armour weapons were proliferating in the hands of otherwise lightly armed troops: "These weapons will knock out a lightly armed vehicle quite easily." Air Force chief Angus Houston said the upgrade of the frontline fighters, the F/A-18 Hornets, together with new airborne early warning aircraft, would maintain Australia's air defences, even if there was a gap between the phasing out of the F-111s and delivery of the $12billion Joint Strike Fighter from 2013. "It (the F-111) is a very old platform and the risk of capability failure will increase with age," he said. Opposition defence spokesman Chris Evans said the plan would see the scrapping of many important capabilities for the defence of Australia. "The Government has been unable to address the reported $12billion blowout in the Defence Capability Plan. "Its solution has been to make major cuts to Australia's long-term defence equipment priorities." (by Patrick Walters)

From http://theaustralian.news.com.au/ 11/08/2003

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The Howard Government is set to appease China by softening proposed amendments to anti-dumping legislation that were expected to help Australian manufacturers win stiff penalties against Chinese imports. At the same time, the Government has denied, as some lawyers assert, that a bilateral trade agreement made with China during President Hu Jintao's visit to Australia would affect, in China's favour, the workings of the legislation. The Opposition this week accused Prime Minister John Howard of selling out manufacturers in his rush to get a free trade agreement with China. "The deal has been done, China has market economy status," said Opposition Customs spokesman Mark Bishop. In the Trade and Economic Framework Agreement signed with China during Mr Hu's visit, Australia agreed to suspend for two years the provisions of China's accession agreement to the World Trade Organisation that treat it as an "economy in transition" in return for China's agreement to consider a free trade deal. Under the terms of China's entry to the WTO two years ago, China was to have "economy in transition" status for up to 15 years. The penalties applied for dumping from "economies in transition" are typically much more severe than for those treated as market economies. China has been lobbying the US and European Union for a switch of status. With the TEFA, Australia has gone further than any other country to meet China's demand for recognition as a market economy. "A conclusion you can draw is that for the time being it is the intention to treat (China) as a market economy," said Melbourne lawyer Andrew Hudson, of Herbert, Geer and Rundle. The legislation could be applied with reference to the TEFA in a way that "may not provide the additional level of assurance which Australian industry had originally desired", said Mr Hudson, who contributed to the Law Council's submission to a Senate committee inquiry into the amendments. But in a Senate estimates committee hearing this week, a senior Department of Foreign Affairs and Trade official said that the TEFA would have no impact on the anti-dumping legislation, because Australia had never applied the WTO provisions it had now agreed to suspend. (by Catherine Armitage)

From http://www.theaustralian.news.com.au/ 11/08/2003

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TEACHERS, families and students will be better equipped to deal with bullying under a new code to be prepared for all NSW schools by the state government. Under the anti-bullying code, teachers will be given information on how to identify the behaviour and clear procedures on how to deal with it. Students will also be shown a straightforward approach for reporting bullying. The code will ensure parents are given advice on a clear course of action if their child reports bullying. "Bullying and anti-social behaviour is not acceptable in our schools - it needs to be dealt with swiftly and effectively," NSW minister for education and training Dr Andrew Refshauge said. "The new code will educate teachers, families and students on how to deal with bullying." Dr Refshauge said a working party with representatives from various education bodies would help develop the code, which will consist of specific strategies for dealing with bullying.

From http://www.theaustralian.news.com.au/ 11/09/2003

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Mark Latham has sought to grab back control of Labor's taxation policy, declaring his preference to cut tax rates of all working people as part of a package of economic reforms focusing on boosting competition and creating a culture of enterprise. After days of sniping from his colleagues, Labor's Treasury spokesman insisted he was the Opposition's spokesman on tax and his view was that the tax burden must be reduced. Labor frontbenchers are angry with Mr Latham for floating policy ideas without first getting the blessing of shadow cabinet. Wayne Swan, the ALP's family and community services spokesman, continued to push for tax relief to be focused on low-income workers, insisting he would not be silenced. "I'm not advising Mark Latham. I'm not impinging on anyone else's portfolio and I'm talking constructively about positive proposals for the future," Mr Swan said in Canberra. But Mr Latham, speaking at the Pursuing Opportunity and Prosperity Conference in Melbourne, suggested he would continue to push for across-the-board tax cuts. While not going into detail, Mr Latham indicated he did not favour incremental changes such as lifting the tax-free threshold. "As a general principle in public life I would rather be a rate cutter than a threshold fiddler," he said. Mr Latham said Labor was committed to removing the "cruelty" of the tax system for low and middle-income families where in some cases families lost more money through tax and the withdrawal of benefits than the extra dollar earned. He said a system where 1 million families faced effective marginal tax rates of 60 cents in the dollar harmed the whole economy. "You can't run an economy that way, you can't run a modern economy with that level of disincentive," he said. He also slammed arrangements where some workers were on the top marginal tax rates while others who had incorporated or engaged in other avoidance strategies paid a lot less. "The hard workers are being punished while the rorters are being rewarded. It is a real barrier to economic growth in this country, a real barrier to productivity - the current system looks sick and crook." Mr Latham also signalled he was prepared to use economic policy to counter the Coalition's political campaign on defence and terrorism, declaring that as important as national security was, it should not obscure economic reform. (by Sid Marris and Steve Lewis)

From http://www.theaustralian.news.com.au/ 11/15/2003

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Prime Minister John Howard today released details of a four-year $2.4 billion shake-up of Medicare. Under the package, doctors will be offered more money to bulk-bill children and concession card holders, and a new safety net will help people cover out-of-pocket medical expenses. Mr Howard said the package would not change the right of Australians to have free medical treatment in public hospitals, or access to affordable medicine through the Pharmaceutical Benefits Scheme. Under the safety-net scheme, 80 per cent of out-of-pocket expenses will be covered for concession card holders and average families once they have spent $500 in a year. Those not entitled to the benefit would have 80 per cent of expenses covered once their family had spent $1000 a year on out-of-pocket costs. Doctors who bulk-billed children and concession card holders would receive an extra $5 from early next year. And patients who are no't bulk-billed would be able to lodge their Medicare claim electronically at doctors' surgeries, with the rebate paid directly into a bank account. Mr Howard said the package would increase the number of doctors and nurses for areas in need in rural and regional Australia and outer metropolitan areas. He said the package would support about 1500 more doctors and 1600 more practice nurses by 2006-07. "Today's announcement builds on the Government's significant investment in Australia's health system," Mr Howard said. "It is tangible proof of our commitment to protect Medicare as a universal public health insurance scheme." He said the Government would amend its Medicare package when Parliament resumed next week, and he urged opposition parties in the Senate to pass the package before Christmas.

From http://www.theaustralian.news.com.au/ 11/18/2003

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Prime Minister Robert Woonton is expected to table the new look Electoral Bill when parliament resumes, but a political activist organisation, the Group for Political Change, says the bill will be inadequate if a provision to stop party hopping is not included. A special committee set up early this year to review the Electoral Act recommended that party hopping should be stopped, but the Cook Islands News say contrary to this advice, cabinet insisted that the anti-party hopping provisions in the new laws be deleted from the bill. A spokeswoman for the Group for Political Change, Liz Ponga, says the people of the Cook Islands want stability and not governments that can change overnight. Legislation to prevent the tabling of no-confidence motions during the first two years of a parliamentary term is expected to be introduced in the near future.

From http://www.pacificislands.cc/ 18/2003

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Attorney-General and Minister for Justice Qoriniasi Bale yesterday confirmed the Government's proposal to table a Constitutional Amendments Bill next year. The Bill is expected to cover what are considered the non-controversial amendments to the Constitution. This, Bale said, could test out the extent of the difficulty we could expect on the task of amending the Constitution under the procedures set out in the document in the political climate we have. In closing the Attorney General's Conference at the Outrigger Reef Resort, Bale said he hoped that reference made to the Supreme Court by the President Ratu Josefa Ilioilo under section 123 of the Constitution, on the issue of seat entitlements in a multi-party Cabinet, would be the last issue to be resolved. It is linked to problems Fiji has encountered in the interpretation and application of the concept of multi-party Cabinet under section 99, indirectly also under section 64(2) of the Constitution. Bale said his chambers were compiling a list of the provisions of the Constitution which need non-controversial amendments for clarification or corrections: "The procedure required under the Constitution will necessarily involve wide consultations after the introduction of the Bill before debate," he said. On the issue of problems faced by the courts, Mr Bale said as minister responsible he wished he had All the money we need to perfect all the shortcomings in the support services for the Judiciary in Fiji". "The fact is we do not have all the money we can show we need. In fact, no government department or institution ever gets all it wants for its requirements in any budgetary year," Bale said. This, he said, meant we must all try to manage within our shares of the national cake each year. In a meeting with representatives of the High Court and Fiji Law Society, Mr Bale said he was informed that there were no serious complaints about the criminal jurisdiction, non-legal staffing, facilities and accommodation.

From http://www.pacificislands.cc/ 11/17/2003

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Poultry farmers say new food safety and hygiene rules are creating uncertainty for some farms, and will cause at least one in Hawkes Bay to close. The Dooney Poultry Farm in Napier will close by January, after 50 years in operation, blaming the cost and effort of complying with the new rules. David Dooney said he could not afford to comply with requirements under the Animal Products Act 1999, so his family business, started in 1947, would have to close. "We are getting out of the industry by January at the very latest. The new legislation is too much for us." Under the act, poultry farmers will be required from next July 1 to produce a risk management plan to reduce the hazards involved in primary processing operations. That plan must include monitoring of water quality, concrete pads in sheds for washing down, and ensuring the person who collects eggs does not grade or sell them without a full change of clothing beforehand. Workers will not be allowed to keep birds at home, to lower the risk of disease spreading. Inspectors will ensure that all poultry farms have plans and are adhering to them. Dooney said the legislation required his 1970s-era chicken sheds to be upgraded to state-of-the-art standards, including climate-control equipment that would cost about $200,000. "We had a MAF inspector come through here and he said our sheds were not sufficient." Knowing the legislation was coming, the company laid off three staff last November. "If we still had staff they would not be able to have any avian species at home. The legislation is very dictatorial," Dooney said. "I have just got to the point that I can't be bothered with it - I don't want anything further to do with it." The legislation requires producers to keep intricate records detailing staff movements from when they arrive on the premises until they leave. Such records will bring the industry into line with other animal industries. Chris Friis, of Pakowhai Egg and Poultry in Napier, said the legislation would have a huge effect on businesses and it would be out of the question for smaller operators to comply with it. But Lorraine Whittle, who runs Keighleys Poultry Farm in Hastings with partner David Keighley, said their enterprise would have no problems complying with the law. Mike Brooks, chief executive of the Egg Producers' Federation, was surprised that the legislation would cause any business to close. He said similar legislation had been in place for other industries working with animal products, but it had not been applied to the egg industry before.

From http://www.nzherald.co.nz/ 11/03/2003

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The Government says it would have preferred that some women instead of only men were appointed to review the Pacific's main regional political body. The 16-nation Pacific Forum, chaired by Prime Minister Helen Clark, this week unveiled an Eminent Persons Group (EPG) to review the organisation. Foreign Minister Phil Goff named the group of five men, all in their 60s. Yesterday his office conceded that New Zealand had wanted women in the group. A spokesman for Mr Goff said the composition of the EPG was the result of consultation with leaders of all forum countries. New Zealand wanted women in the group, he said, but a couple of people approached were unavailable. "We would also note that the terms of reference for the EPG require it to consult widely in the various [countries] they visit, and that is to include consulting with women from political, Government and civil society," the spokesman said. The Fiji-based Pacific Concerns Resource Centre said yesterday that the composition gave the impression that only men of the older generation were capable of becoming members of the EPG. "The Pacific is inhabited by men and women, old and young, and the children, who learn from each other as we paddle our canoe together in calm and rough waters of the Pacific," said the centre's director, Motarilavoa Hilda Lini of Vanuatu. The EPG is made up of Kiribati President Teburoro Tito, former Papua New Guinea Prime Minister Sir Julius Chan, Samoan Ombudsman Maiava Iulai Toma, University of the South Pacific pro-chancellor Langi Kavaliku of Tonga and retired Australian diplomat Bob Cotton. The review move followed the August Pacific Forum summit. Ms Lini said although she respected the wisdom and calibre of elders, "we also expect the truth and reality of 50 per cent voices of women and 75 per cent voices of youth". The review will make recommendations on the mandate for the forum in addressing key regional issues and international issues. The review report, paid for by Australia and New Zealand, would be presented early next year.

From http://www.nzherald.co.nz/ 11/05/2003

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Child, Youth and Family is starting a major recruitment drive in a bid to employ about 90 more social workers early in the New Year. The need for the extra workers was identified in a review of the department made public a fortnight ago. The findings confirmed the pressure CYF had been under in recent years, acting chief executive Brenda Pilott said in a statement today. "Child, Youth and Family is investing heavily in the frontline. Our staff have been under pressure to respond to an increasing volume of incoming work, as well as dealing with their existing clients. "This has resulted in us focusing more on managing critical incidents than on ongoing case management. This has led to an inadvertent trade-off between quality and quantity," she said. "The appointment of additional social workers is fundamental to stabilising the organisation and improving our services." The review found CYF had serious systemic problems and was struggling to manage complex services with the money allocated to it. On the day it was released the Government announced the department would receive an extra $127 million funding over three years. The department said in a statement it was targeting qualified and experienced social workers, including those who had left the workforce completely, had been employed by CYF in the past or had been working overseas and planned to return to New Zealand in the New Year. High quality graduates would also be considered as would those with qualifications and expertise in related disciplines such as education, nursing and psychology. The number of children in CYF care had risen from 3265 in 1999 to 4480 in 2002, but the yearly rate of growth was beginning to slow and during 2002/03 reached a year-on-year low of 2 per cent growth, the department said. CYF received 31,781 notifications of child abuse, neglect or welfare issues in the year ending 30 June 2003, up 15 per cent on the previous year. Eighty-eight per cent of these required further action by the department.

From http://www.nzherald.co.nz/ 11/07/2003

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The National Party will on Wednesday launch a candidates college to spot, prepare and train aspiring MPs as it gears up for the 2005 election. The idea was approved at the special April conference which extensively reshaped the party's constitution. A innovation for this country, the college has some similarities with schemes operated by the Conservatives in Britain and the Republicans in the US. The college will be an informal group chaired by president Judy Kirk and consisting of MPs Simon Power and Pansy Wong, the Auckland and Canterbury regional chairmen Scott Simpson and Roger Bridge, ex-MP Roger McClay and general manager Steven Joyce. It will develop a team of "talent scouts" to seek out potential candidates and will evaluate nominations of people to the college, and train and mentor those it accepts. Becoming a member of the candidate college will not guarantee a candidacy for either an electorate or the list. There will also still be five places on the list held back for people of high quality who cannot declare their hands far in advance of an election - like, for example, leader Don Brash, who left the Reserve Bank only three months before the 2002 election. It is expected some aspiring politicians will join the college young, sometimes several elections before being selected as candidates. The college will hold one or two training days a year for its members and mentors will be assigned to them to help prepare them for candidate selection. They will be "advised to have an active involvement in the party", attending conferences and carrying out mundane party activities. They will also be encouraged to become known for their community involvement. The first training day will be in February. Training will include party background and organisation, Parliament, campaigning, and media and policy matters.

From http://www.nzherald.co.nz/ 11/17/2003

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A push to have the law changed to open up the Family Court to public scrutiny will be made by National after a couple used the protection of Parliament to talk about how they lost custody of their son. National MP Judith Collins said she would take proposed amendments to the Care of Children Bill, which updates guardianship laws, to her party to endorse so there can be more access and reporting of Family Court hearings. At the moment reports of hearings can only be made by news media with the approval of the court. This week, Jocelyn and Philip Keen used the protection of parliamentary privilege to outline how they lost custody of their fourth, and youngest, child. They had asked a relative to care for their son temporarily. The woman later sought custody of their child, through a legal process where Mr and Mrs Keen did not have to get told. They lost their three-and-a-half year battle to regain custody earlier this year. They told Parliament's justice and electoral committee that the Family Court judge agreed they were good parents who would provide a good family home. However the judge ruled the child had been with the relative for so long it would be too disruptive to move him. A Law Commission report on the Family Court, released in April, was heavily critical of the court's frequent approval of ex-parte orders in custody disputes, recommending that if a without notice application for custody or access was granted, the other party should be notified in most cases and a full hearing be held swiftly. The Keens told the committee they found out about the relative getting custody of their son through another family member, and had to wait three years and eight months for a hearing. National's Nelson MP Nick Smith has been charged with contempt of court for releasing details of their case, even though he had the couple's permission. The Care of Children Bill will allow for increased reporting of custody proceedings, and better access for family members to attend hearings, but Mrs Collins said it did not go far enough. She said the court should be open so most of its work could be scrutinised. "What we're hearing is that by keeping it closed it means the only people who benefit are the people in the court, and the court system, who are not doing their jobs. "By keeping it closed, it is not helping the thousands of parents who go to that court, and it is not helping the children." Mrs Collins said opening the court would also allow better oversight of the quality of the social workers, psychologists, judges and court appointed counsel for children, who appear in cases. The Government has not yet fully responded to the Law Commission's report on the Family Court, which listed 135 recommendations for improving its work, many resource-linked. Last month, Associate Courts Minister Rick Barker announced that a public education campaign on the court, new mediation processes and better training for staff would begin in the 2004-2005 financial year, subject to funding. The bill * The Care of Children Bill will allow the reporting of family court cases, provided no one involved or associated with the proceedings is identified, or can be identified through any material published. * Leave of the court to publish material can still be sought. * The bill increases the fines for anyone wrongly publishing material, from $500 to $2500 for individuals and from $2500 to $10,000 for a corporate or organisation.

From http://www.nzherald.co.nz/ 11/19/2003

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The Government today unveiled proposed legislation allocating about $700 million of Maori fisheries assets. The Maori Fisheries Bill contains the legal foundations for allocating settlement assets as proposed by the Treaty of Waitangi Fisheries Commission earlier this year. It provides for about half the settlement assets to be allocated directly to iwi and for the remaining assets, mostly company shares, to be centrally managed on behalf of iwi. It also provides for the establishment of a series of new entities required by the model, including two specialist trusts, to promote education and training for Maori and to advance Maori freshwater fishing interests. Other features include: * basing the formula for inshore quota on an iwi's coastline; * basing the formula for deepwater quota on a 25/75 split between an iwi's coastline and population, except for the Chatham Islands, where it will be 50/50; * generally dividing cash on an iwi's population; and * giving Ngai Tahu, Ngati Kahungunu, Nga Puhi, Ngati Porou, Chatham Islands iwi and Waikato iwi the biggest parcel of assets. Fisheries Minister Pete Hodgson, announcing the bill, said it followed more than 10 years of discussion and debate among Maori. "Its passage will begin a new era of Maori participation in the fishing industry, enabling the beneficiaries of the 1992 Fisheries Settlement to receive the assets and use them for the economic and social benefit of all Maori," he said. "Perhaps inevitably, the allocation model does not command universal support among Maori. It is nevertheless a remarkable achievement, given the history of this issue." National MP Wayne Mapp said the bill raised serious questions about the Government's constitutional processes. "This week and last there have been three major cases heard in court on the issues at the very heart of the legislation," Dr Mapp said. "A better constitutional process would have been to wait until the High Court has handed down all the decisions on the allocation model." Mr Hodgson will ask Parliament to refer the bill to a special select committee, the membership of which would be determined by all parliamentary parties.

From http://www.nzherald.co.nz/ 11/20/2003

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The government is distancing itself from a proposal by the deputy prime minister that local media outlets should be majority PNG-owned. Andrew Baing made the suggestion at a function to mark the 10th anniversary of the local newspaper, the National, which is owned by Malaysian interests. The other main daily newspaper is controlled by News Limited; the television station EM-TV is owned by the Packer family's Publishing and Broadcasting Limited; and the dominant commercial radio stations by Fijiian interests. Mr Baing, who has been in the role as deputy prime minister for less than one week, says he is thinking of proposing the new ownership requirement be imposed through legislation, however a spokeswoman for the prime minister, Sir Michael Somare, says Mr Baing's comments do not represent government policy.

From http://www.pacificislands.cc/ 11/18/2003

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Parliament has passed changes to the banking law that opponents say create loopholes for money laundering and risk adverse action from abroad. The United States and Japan have already expressed concern about the bill, which Palau's Congress maintains is aimed at helping two home-grown banks to reopen their doors. The legislation is now before President Tommy Remengesau, who has opposed the changes but is facing a veto if he strikes it down outright. The president said Congress had "to understand that there were serious ramifications that come with re-licensing two banks. He said Palau could be blacklisted or penalized. Palau was one of three Pacific Island countries targeted by international banks in 1999 because of suspected money laundering by the Russian Mafia.

From http://www.pacificislands.cc/ 11/17/2003

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The leader of Tonga Human Rights and Democracy Movement, Lopeti Senituli, says he hopes tough new drug laws will deter the rising number of high school students turning to drugs. The government has lifted the maximum penalty for drug smuggling to 30 years hard labour or half a million US dollars fine ?or both. The new law also means that anyone found guilty of cultivating or distributing illegal drugs will be fined 340 thousand US dollars or given 25 years hard labour or both. Senituli says stiffer penalties are appropriate because there has been a major increase in drug use and abuse in the past 18 months and marijuana has become readily available to the young. '"There has been certainly a marked increase in the incidence of drug use and to a great extent the increase in drug use has been amongst high school and young people," he said. Mr Senituli says he hopes the new law will also deter smugglers.

From http://www.pacificislands.cc/ 11/19/2003

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Bo'ao Forum for Asia 2003 Concluded

The annual conference of the Bo'ao Forum for Asia has concluded. Asian leaders attending the forum express confidence in the continent's future growth. Leaders of China, Singapore and Pakistan outlined ambitions of creating an Asia catalyst for the global economy and call for greater cooperation and integration. Chinese Premier Wen Jiabao delivered a speech at the forum. He said mutual support is the key to Asia's rejuvenation. He also urges Asian countries to open their markets wider to each other and achieve development and common prosperity through cooperation. The premier says China will stick to its opening-up policy, honor its WTO commitments and make its market more accessible with an improved investment environment and better business conditions for Asian and other entrepreneurs. He also encourages Chinese enterprises to invest overseas. The next annual Forum for Asia will be held at the end of April in Bo'ao in China's Hainan Province.

From http://www.crienglish.com/ 11/04/2003

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South Korea Ranks 2nd in E-Gov't Ranking in Asia

GENEVA - South Korea ranked second in Asia and 13th in the world in terms of its use of electronic technology in providing public services, the Yonhap News Agency reported quoting a United Nations report released here Tuesday. Singapore, in fourth place overall, was the only Asian nation ahead of South Korea in the electronic government ranking of the 2003 UN World Report on the Public Sector titled e-Government at the Crossroads. Japan came in 23rd out of the 191 countries listed. South Korea, which moved up two notches from 15th place last year, has carried out one of the most dramatic projects in instituting electronic transaction services and networking, while Japan didn't achieve its full capacity to help its citizens live more conveniently in terms of online public services, the report said. A South Korean official said that the government completed its "electronization project" last year. "In most cases, people don't need to bother to go to public offices to pay their bills or get their official documents. Almost every transaction between an individual and the government can be made online," said Lee Gui-hyun, deputy director of the information Support Bureau of the Ministry of Information and Communication. "Electronization has also made the government operate in a more transparent way when collecting taxes and issuing purchase orders to private businesses, since things are not done by hand but by computer system," he added. The e-government report evaluated each nation on how effectively its government uses electronic means to provide public services. The criteria included whether the government possesses a website, the quality of public services provided through the Internet and the penetration rates of electronic services and devices such as broadband Internet access, personal computers, telephones and mobile phones. The U.S. government topped the ranking, followed by Australia, New Zealand and Singapore. European nations, including Britain, the Netherlands and Denmark, filled out the top 10. A total of 173 nations out of the 191 U.N. member nations had a government website, an improvement from 143 in 2001. The remaining 18 countries without government homepages were mostly in Africa. The annual report, launched last year, is a co-project between the UN and the American Society for Public Administration, an organization that studies how to make governments and public services work better. Even though the development and the existence of e-government do not necessarily reflect the quality of life in a country, the facilitation of electronic tools by governments can make public services more convenient and transparent and "positively impact human development," the report concluded.

From http://search.korea.net:9000/ 11/06/2003

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Asia-Pacific Nations to Set Up Space Cooperation Organisation

BEIJING: Asia-Pacific nations are planning to establish a space cooperation grouping to better coordinate environmental protection, disaster reduction and resources exploration, state media reported Tuesday. The Asia-Pacific Space Cooperation Organisation (APSCO) will be officially set up next year after final approval from participating governments, the China Daily said. Representatives from 14 countries and the United Nations are in Beijing to sign formal proceedings following a preliminary meeting last year in Bangkok, which designated the Chinese capital as APSCO's headquarters. Among those attending are officials from Bangladesh, Brazil, China, South Korea, Iran, Malaysia, Mongolia, Peru, the Philippines, Russia, Thailand, Pakistan, Ukraine and Chile -- some as observers. Luan Enjie, minister of China's National Space Administration, said the purpose of the new grouping was to promote the development of space technologies and their applications. "We are willing to join hands with people of all nations to make due contribution to the peaceful exploration and uses of space resources for the progress and common development of humankind," he said. China is the leading player in space exploration in the Asia-Pacific, becoming only the third country to send a man into space with its successful Shenzhou V mission last month. Luo Ge, secretary general of the Asia-Pacific Multilateral Cooperation in Space Technology and Applications, said countries joining APSCO could make use of space technology in environmental protection and disaster reduction, resources exploration, construction, telecommunications and distance education. He said China and other countries will develop and launch eight satellites within the next eight years to monitor the natural conditions of the planet and send back data and image-24 to be used specifically by Asia-Pacific nations.

From http://www.channelnewsasia.com/ 11/11/2003

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The First Study on Digital Governance in Municipalities Worldwide Ranked Seoul, Hong Kong, Singapore, New York, and Shanghai as the Top Five Cities

NEWARK, N.J. (PRIMEZONE) -- This survey was conducted jointly by the E-governance Institute of Rutgers University-Newark and the Global e-Policy e-Government Institute of Sungkyunkwan University, Korea, and was co-sponsored by the UN Division for Public Administration and Development Management, and the American Society for Public Administration. This is the first research effort to evaluate digital governance in municipalities throughout the world. This survey examined the largest city in each of 98 countries with the highest percentage of Internet users, and Hong Kong SAR and Macao SAR were included. This research evaluated the official Web sites of each city in their native languages. Our instrument for evaluating municipal Web sites consists of 92 measures over five core areas: 1. Security and Privacy, 2. Usability, 3. Content, 4. Services, 5. Citizen Participation. Each measure was coded on a scale of four-points (0, 1, 2, 3) or a dichotomy of two points (0, 3 or 0, 1). Then, an overall score for each municipality (on a 100-point scale) was derived by giving equal weight to each of the five categories. Professor Marc Holzer, Chairman of the E-Governance Institute said, "This joint research was helpful for reducing cultural bias in our survey methodology. During the design of the 92 measures in our e-government index, we identified some terms which people in various cultures might not understand. So, we developed an index which was 'cultureneutral'." Each Web site was assessed by two independent evaluators between June and October 2003, and in cases where significant variation existed on the raw score between evaluators, websites were analyzed a third time. Based on the evaluation of 100 cities, the top 10 cities are as follows; Top 10 Cities in Digital Governance Worldwide (ranking/city/score): 1 Seoul 73.48; 2 Hong Kong 66.57; 3 Singapore 62.97; 4 New York 61.35; 5 Shanghai 58.00; 6 Rome 54.72; 7 Auckland 54.61; 8 Jerusalem 50.34; 9 Tokyo 46.52; 10 Toronto 46.35. New York City was ranked No. 1 worldwide in terms of content. Among the top 20 cities, three are from developing countries: Tallinn (Estonia) 14th, Dubai (United Arab Emirates) 18th, and Jakarta (Indonesia) 20th. This research identified a digital divide gap between developed and less developed countries. Although the average score for all cities is 28.10 out of 100, the average score in OECD countries is 36.34; however the average score in non-OECD countries is only 24.26. In addition, 67% of cities selected in Africa have not established official city websites, whereas only 3% in Europe have no city Web sites. Sungkyunkwan University is holding an international conference to present best practices cases based on this survey and is giving a "World Cities Best Practices E-Government Award" to the top five cites on November 21 in Seoul. Professor Seang-Tae Kim, President of the Global e-Policy e-Government Institute said, "Government services can be improved remarkably by E-government, but the digital divide is a problem to be solved. We can encourage e-government among cities in the world by measuring them and giving this kind of award." (Tel 82-2-760-0374, e-mail kimst@skku.edu) Scores and ranking of all 100 cities are online at http://www.andromeda.rutgers.edu/ egovinst/Website/ CONTACT: Professor Marc Holzer (973) 353-1351/5504, Ext, 23 mholzer@pipeline.com Mr. Chan-Gon Kim chankim@pegasus.rutgers.edu http://www.pressreleasenetwork.com/newsroom .

From http://www.unpan.org/ 11/17/2003

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CHINA: Tian Fengshan Removed from Post of Minister of Land and Resources

China's top legislature has removed Tian Fengshan from the post of the Minister of Land and Resources for his serious problem of discipline violations. Tian Fengshan is currently under investigation. The Standing Committee of the National People's Congress has also appointed Vice Minister of Land and Resources Sun Wensheng to replace Tian Fengshan. The new minister is 61 years old and had served as governor of Shanxi Province.

From http://www.crienglish.com/ 10/28/2003

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China to Improve System of GDP Accounting and Data Release

A State Council executive meeting has agreed to improve the system of GDP accounting and data release and authorized the State Statistics Bureau to implement changes. The meeting seeks to increase the transparency and credibility of GDP accounting and data and gradually integrate the methods into common practice. It also decided to conduct the first comprehensive survey of China's economy in 2004. The State Statistics Bureau says China began a new system of national economic accounting by adopting methods close to international standards this year. As a result, the World Bank and other international financial institutions now directly quote national economic data provided by the Chinese government.

From CRIENGLISH.com 11/12/2003

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Comment: Who Is Going to Unmask Corruption?

China's minister of land and resources Tian Fengshan was lately dismissed from his post for his "serious violation of discipline". The exposure has drawn wide attention from home and abroad, showing the determination of the state's new leadership to root out the corruption. The breaches done by Tian mainly focus on two aspects according to the related reports of various newspapers. First, during his tenure of office in Heilongjiang, Tian was involved in many corruption cases found in the province of northeast China. Second, during his working period in the Ministry of Land and Resources, a series of problems were discovered in some places in land approval, transfer and use of state special funds. No matter whether these reports are convinced or not, one thing is, however, for certain---the Central Commission for Discipline Inspection of the CPC will never be so risky as to make decision for his dismissal without solid corruption facts of such an official, especially one belonging to the "cabinet", as termed by westerners. So, one is by no means difficult to find out many thought-provoking questions should he pit the clues and traces of dishonesty of Tian against the process of his being promoted. Deep-thought 1: is it the case on Tian while he was being promoted one following another he was engaged in corruption activities? When he acted as secretary of the CPC Harbin City Committee in Heilongjiang, for example, Tian was already involved in a local bribery case. But later he was promoted to the post of province governor, then minister of land and resources. According to the procedure for cadre-selection and appointment no decision for appointment and promotion should be made hastily before strict examination, yet Tian seemed to remain untouched. Doesn't it indicate that the system is still ripped open with some flaws in selecting and assigning important leaders? Deep-thought 2: what a role on earth can the masses of people play in the supervision over high-ranking officials? Theoretically speaking, the masses of people is the main body of state power, under which all powers exercised by state officials should be subject to its supervision. However, in reality ordinary people could hardly exercise any force of supervision. Lu Tianming, a famous writer, recently revealed that he was aware of Tian 's corruption when he made the dishonest official a principal character in a TV drama that was on show at least two years ago, but dared not to breathe a word about him at that time. Asking a writer to stand out and unmask corrupted officials would be too much for him, since their means of revenge are too cruel. A cadre in Shijiazhuang, who fought eight years with Cheng Weigao (the former chief leader of Hebei Province) and was thrown into the jail, serves a ready notation to the fact. Even if Lu really braced up and exposed the corruption, how far he could carry on remains still doubtful. Can these tails of the "state masters" still wag to exercise power of supervision in a place where the masses of people are silenced by the revenge-intimidation from their "servants"? Deep-thought 3: Is it necessary to establish a special supervisory framework for special posts in exercising public powers? From Cheng Weigao, Liu Fangren, to Tian Fengshan, one can find in them a common phenomenon that is they were in no way lack of personal struggle during their rising, and didn't intend to become a corruptible element from the very beginning. The tragedy in common is that, when they were given too much power and effective supervision was absent, their self-control, flaw in nature as human beings, collapsed under the pressure of temptations and desires fluxing in from all sides, and they betrayed all their beliefs they once advocated. Becoming dubious in personality in the long run, they were broken to pieces by their own words and deeds. While playing a "gentlemen" on the one hand in the face the others, they are on the other in tenterhooks all day long for fear of being exposed and disciplined. All these cases prove that, for those special posts (high posts with absolute authority) in the execution of public powers, only by establishing a special supervisory framework can the malpractice of powers be prevented so as to avoid the heavy losses entailed therefrom to the nation and the people.

From http://english.peopledaily.com.cn/ 11/14/2003

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First UN Agency's Headquarters Established in China

The United Nations and the Chinese government declared the establishment of the first office from the UN Secretariat in China at a brief agreement signing ceremony held in Bangkok. The new headquarters for the Asian and Pacific Center for Agricultural Engineering and Machinery (APCAEM) under the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) is set to open in China's capital Beijing following the signing of the Host Country Headquarters Agreement between the Chinese government and the UNESCAP. "The opening of the APCAEM office in Beijing will strengthen cooperation between the government of China and the UNESCAP, which has always been substantial," UNESCAP Executive Secretary Kim Hak- Su said at the signing ceremony. He added that the "UNESCAP has its roots in China, since the then Economic Commission for Asia and the Far East was established in Shanghai back in 1947." "The opening of APCAEM is significant for the improvement of international cooperation in the fields of agriculture technology, farm mechanization, food processing and biotechnology," said China 's Permanent Representative to the UNESCAP Zhang Wanhai, who signed the agreement on behalf of the Chinese government. He also said that the Chinese government welcomes more international organizations to set up their offices in China, which will benefit the development of related Chinese sectors and speed up China's process of opening up. The APCAEM headquarters is located at the China International Science and Technology Convention Center in Beijing, "fully mechanized, modernized and high-tech," according to Kim. He noted that, in addition to these office facilities, China also provided an additional 3.8 million US dollars in financial support. The APCAEM aims to improve research and development of agriculture engineering and machinery and strengthen related cooperation in the region. It currently has 13 members, with the Democratic People's Republic of Korea becoming the 13th member in July 2003.

From Xinhuanet 11/19/2003

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China Publishes Guide to SARS Prevention in Hospitals

The Chinese Ministry of Health has issued a technical guide to medical institutions on prevention and control of severe acute respiratory syndrome (SARS) in hospitals, ministry sources said. The six-chapter guide offers hospital staff ways to disinfection, quarantine and human protection, and improving management of key departments and medical waste in order to prevent possible spread of SARS in hospitals. The guide was worked out according to the experience of China and other nations in the fight against the disease earlier this year, said the officials. The ministry issued emergency notifications to hospitals on ways to prevent hospital-based SARS infection to medical hospitals during the first half of this year, when the country was fighting the disease. There have been neither clinically confirmed nor suspected SARS cases on the Chinese mainland since Aug. 16 when the last SARS patient on the mainland was discharged from hospital, according to the ministry.

From Xinhuanet 11/20/2003

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Chinese Government Reassesses Social Security Tasks

China's central government plans to extend pension insurance to all urban workers and is encouraging efforts to establish a pension system for the country's 900 million rural residents. A decision passed by the Third Plenary Session of the 16th Central Committee of the Communist Party of China (CPC) in October set new goals for China's social security system which would result in great benefits, said Liu Yongfu, vice minister of labor and social security. Liu made the remarks at a recent symposium on "the socialist market economic system and China's social security". Hu Xiaoyi, an official with the Ministry of Labor and Social Security said the decision accepted for first time all urban workers into the pension insurance scheme, whereas previously coverage had been confined to employees of publicly owned enterprises. "It's a new idea, and also a new task for us," Hu said. The decision also demanded the establishment of province-based planning for pension insurance funding and promoted the idea of establishing nationwide basic funding if conditions permitted. The new request for more advanced levels of general planning would impose new challenges on China's social security work, experts said. Jia Kang, head of the financial science research institute under the Ministry of Finance said China was encouraging a more flexible employment system as small and medium sized enterprises were employing more staff and the ranks of the self employed were also growing. As a result, increasing numbers of migrant rural laborers, employees of smaller companies and freelancers had surfaced to pose fresh new tasks for the social security system. "However, China's current planning for social security funding, either at county level or city level, discourages the diversion of the pension fund from one place to another as laborers migrate," he said. "A perfect social security system should enable laborers to flow freely in nationwide markets, without boundaries formed by a regionally planned social security fund." While the current social security system does not cover China's900 million rural population, the decision proposed that rural areas base the pension insurance system on households, with aid from the community or state. It also encouraged regions with stronger economic conditions to explore mechanisms pledging a minimum standard of living for rural residents. Other breakthroughs in the decision included requests for maintaining the insurance through pregnancy and while recuperating from injuries suffered on the job. The decision also explored the option of assigning part of state-owned assets to supporting social security funding.

From Xinhuanet 11/20/2003

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JAPAN: British-Style Parliament May Not Suit Japan

For the time being, I think we ought to concentrate on how best to make an election an opportunity to choose our government, on the assumption that Japan will maintain a coalition government, and that any integration of the ruling coalition and the Cabinet is simply not possible. Reiko Oyama, professor of political institutions at Komazawa University, questions the tendency in Japan to want to model its political system after Britain's. She outlined her reasons in a recent interview with Junichi Saito of The Asahi Shimbun. Excerpts follow: It is a fact that Japanese politics is in its present sorry state because there has not been any change of government to speak of. In this sense, it is good that an attempt is finally being made to stop election pledges from remaining mere slogans. But I certainly do not think all our problems are behind us now. ``Manifesto'' has become a campaign buzzword, as if this will make it easier for voters to decide what kind of government they want. Most Japanese people think vaguely of the British-style parliamentary Cabinet system as the ideal model to follow. However, whether this is so is open to question. The British system features one-on-one contests between two major parties in single-seat constituencies. The ruling party equals the Cabinet, which means the government leader, or prime minister, is in a position to exert powerful leadership. This is unique even among nations that follow the parliamentary Cabinet system, and that is why the British system is sometimes dubbed an ``elected dictatorship.'' There are problems inherent in the single-seat constituency system itself, and not a few nations have dropped it in favor of something else. In fact, questions are being raised even in Britain. Anyone who accepts this system without question is being dangerously simple. The biggest flaw in the single-seat constituency system is that it helps to preserve and perpetuate the now-dysfunctional two-party system and keeps out new parties. One argument I hear often in Japan is that Japan should follow Britain's example and let the ruling party and the Cabinet be one and the same. But Britain's Cabinet members are none other than the leaders of the House of Commons majority party. This is entirely different from Japan's situation. If the ruling party and the Cabinet are to be one and the same, Japan will have to first satisfy a good number of conditions, such as making sure every election is fought on party policy and completely overhauling the present manner in which Diet deliberations are conducted. Without changes in these areas, any change in the system itself will not only be just superficial, but there will be even more clandestine wheeling and dealing and less transparency in the policy-making process. In Japan, where economic growth remained everybody's shared objective for decades, distributing profits was about the only thing politicians were expected to do, and the collective decision-making took precedence over the individual leadership. The prime minister was not required to take any firm stand on policy, and decisions were left to the ruling party to make. This has resulted in the common understanding that legislation proposed by Diet members is the fastest means for restoring political initiative to where it belongs. This, however, contradicts the very spirit of what a manifesto is all about. The Cabinet's job should be to define vital policies and implement them, not delegate that responsibility to the ruling party. It is definitely time for ruling party politicians to shed their old political custom of considering themselves primarily as the distributors of profits and delegating system reforms to the bureaucracy, and occasionally asserting their initiative by sponsoring bills. Probably because their own Cabinet hardly ever exerts leadership, many Japanese must think the British system, which is very different from theirs, is what the nation needs. But they must take a good, hard look at the reality. The worst-case scenario I envision is one in which the ``reformists'' rush into some extreme decision, only to realize belatedly that nothing is going to change. The recent argument in favor of publicly electing the prime minister is one perfect case in point. For the time being, I think we ought to concentrate on how best to make an election an opportunity to choose our government, on the assumption that Japan will maintain a coalition government, and that any integration of the ruling coalition and the Cabinet is simply not possible. In a coalition government, you just cannot expect any policy of one coalition partner to be implemented immediately. Under the Liberal Democratic Party's current partnership with New Komeito, the latter's intentions are reflected considerably in government policy. This means any policy promised by the LDP alone cannot be considered a legitimate election pledge. Rather than compete on policy detail, every political party ought to present its own framework as a party in power and spell out promises they intend never to break. The most irresponsible thing any party could do after being elected to power would be to break its election pledge and come up with an excuse like, ``We were forced by our coalition partner to amend our policy.'' So long as there is even the remotest possibility that something like this could happen, even the most detailed manifesto is nothing but a useless piece of paper.

From http://www.asahi.com/ 11/07/2003

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Japan's Governing Party Keeps Power, but Loses Strength

Japanese Prime Min Junichiro Koizumi's governing coalition holds on to power in parliamentary elections, even as voters hand big gains to main opposition party; ballot could help lead country toward two-party system; Koizumi fails to get popular mandate that could help him decisively push through economic and political reforms against conservatives in his own Liberal Democratic Party; strong showing by main opposition party, which campaigned on reformist agenda, could put pressure on governing party to stick to Koizumi's plans to curb public spending and to reshape economy. (by Norimitsu Onishi)

From http://query.nytimes.com/ 11/10/2003

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Japan's PM to Retain Present Cabinet Lineup

Japanese Prime Minister Junichiro Koizumi says he will retain his present cabinet lineup, after his three-party coalition was returned to power in a weekend general election. Sunday's election delievered the coalition government a reduced majority in the House of Representatives, prompting speculation of changes in cabinet. But Mr Koizumi, who reshuffled his cabinet in September to give it a more reformist profile, says the present system will continue.

From http://www.goasiapacific.com/ 11/10/2003

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Koizumi Wins Japan Election

The coalition government of Japan's Prime Minister, Junichiro Koizumi, has won the election but also suffered a setback. The Liberal Democratic Party's parliamentary majority has been cut back. The AFP newsagency says the LDP now has 237 seats in the lower house, down from 247. If confirmed in official results, which will be released later today, the LDP will have lost the lower house majority it previously held in its own right. The Opposition, the Democratic Party of Japan, has won 177 seats, up from 137. The election was the first chance for 103 million voters to pass judgement on the two and a half year-old Koizumi government.

From http://www.goasiapacific.com/ 11/10/2003

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Mr. Koizumi's Postelection Challenges

Continuity and unity underscored Monday's meeting of the heads of the three ruling coalition parties, which gained a solid majority in Sunday's Lower House election. Prime Minister Junichiro Koizumi, president of the Liberal Democratic Party, is certain to be re-elected at the outset of a special Diet session that opens next week. However, the going promises to be tough for the Koizumi administration. The coalition victory came with a price: The LDP failed to win a majority on its own, while the three parties combined lost 12 seats. The "Koizumi myth" -- his Teflon popularity -- appears to be diminishing. His critics in the party may be waiting for a chance to roll back his reform initiative. The challenge for Mr. Koizumi is, in his own words, to "make sure the buds of reform grow into trees." Basically, that means putting the economy on track for deflation-free, self-sustaining expansion. The election, though conducted amid increasing signs of economic recovery, did not give him the kind of reward that he seemed to think he deserved -- a majority for the LDP as well as the coalition. The election result has changed the coalition's power balance. While the LDP suffered a mild setback and the New Conservative Party a rout, New Komeito scored a clear win. The NCP, which managed to win just four seats, found itself teetering on the brink of collapse. Its leader, Hiroshi Kumagai, lost his seat. Following the coalition summit, the party chose what seemed to be an inevitable course: merging into the LDP. So the three-way coalition is about to disappear, making way for an LDP-Komeito alliance. In the consolidated coalition, New Komeito's role is expected to increase. The party, which gained 34 seats, enjoys the solid support of Soka Gakkai, a lay Buddhist organization. Its campaign cooperation, which is said to have played a decisive role in Sunday's election, is likely to become even more crucial in future elections. The NCP's merger, along with the admission of three independents to the LDP, brings the number of LDP seats in the Lower House to 244 -- three more than a simple majority of 241 but three less than the 247 it held before the election. Among the three entrants is former LDP Secretary General Koichi Kato, who had left the Diet and the party over a money scandal. As far as numbers go, all this makes up for Prime Minister Koizumi's failure to secure a single-party majority in the first place. In reality, though, this is not likely to help him much. For one thing, he appears to face renewed pressure from the LDP's old guard. Already, the head of an anti-Koizumi faction has criticized him for having called a snap election at the wrong time. Koizumi's biggest bulwark against his critics in the LDP has been -- and still is, albeit to a lesser extent -- his high popularity. It is believed that this personal factor enabled him to pull off a smashing LDP victory in the July 2001 Upper House election. If this factor is seen to be losing its "magic power," his opponents will likely mount a new offensive against him. His reform campaign is already under attack from interest groups that feel their future is threatened. It is also under fire from a dramatically strengthened opposition, the Democratic Party of Japan, which blames Mr. Koizumi for not moving rapidly and boldly enough. With the DPJ trumpeting its policy "manifesto," Mr. Koizumi can no longer claim "structural reform" as his exclusive slogan. The DPJ is calling for basically the same reforms as the Koizumi administration, such as streamlining the public sector and decentralizing central-government powers. The two sides differ mostly in method, not in principle. This appears to be putting Mr. Koizumi on the defensive. The popular perception is that his reform efforts have not been making much progress. His immediate challenge comes from abroad: Iraq to which the government plans shortly to send troops of the Self-Defense Forces to help rebuild the country. The Cabinet is expected to give the go-ahead for a dispatch plan, perhaps as early as this week. Troops are likely to be deployed, possibly by the end of the year, in southern Iraq, where security is said to be relatively good. At a news conference Monday, the prime minister said Sunday's election outcome is a vote of confidence in his plan to send SDF units to Iraq. The ruling coalition is not going to take up the plan in the brief postelection Diet session. The DPJ, however, is opposed to an SDF dispatch, citing security concerns and other problems, and so, too, is a large body of public opinion.

From The Japan Times 11/12/2003

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Report by the Local Government System Research Council

Prime Minister Junichiro Koizumi received the "Report on the Modality of the Local Administration in the Future" from Mr. Ken Moroi, the Chair of the Local Government System Research Council at the Prime Minister's Official Residence. This report was decided at the general meeting of the Local Government System Research Council held on November 13, and includes measures for the promotion of mergers of municipals after the expiration of the Laws on Special Cases of Municipal Mergers at the end of March, 2005. The report centers on promoting municipal mergers, intensively small-scale municipals with population of "less than approximately 10,000 people," under the leadership of the prefectures. Furthermore, from the perspective of creating a highly independent area suitable for the decentralized-type society, the report also points out the necessity in considering the introduction of a "Do-Shu system" and suggests that further discussions will be made at the next research council.

From http://www.kantei.go.jp/ 11/13/2003

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Voters Call 2-Party System a Good Idea

Nearly 70 percent of voters say the emerging two-party political system is a good idea, according to a survey by The Asahi Shimbun. The survey asked voters to consider the merits of a two-party system in relation to Sunday's Lower House election. Sixty-eight percent of respondents thought it was a good move; 18 percent did not. Findings were based on a telephone sampling of eligible voters conducted Monday and Tuesday that yielded 920 valid responses. Forty-two percent of those responding said they hoped the opposition Minshuto (Democratic Party of Japan) would come out on top in next summer's Upper House election, while 34 percent favored the Liberal Democratic Party. Fifty-four percent of respondents said they were glad the LDP failed to win an outright majority of 241 seats in the Lower House in Sunday's vote. Only 25 percent felt that was bad. But respondents were more evenly divided on the effect of the vote on the coalition's stable majority in the Lower House, with 40 percent saying it was good and 37 percent saying it was not. Asked why the LDP failed to obtain an outright majority, 60 percent of those responding said it was ``because the old structure of the party had not changed,'' a much higher percentage than those who said ``dissatisfaction with policy.'' Forty-seven percent of respondents said they supported the Cabinet of Prime Minister Junichiro Koizumi, a decline from the 59 percent in the September poll. Thirty-seven percent of respondents said they did not support the Koizumi Cabinet. Thirty-four percent of respondents identified themselves as LDP supporters, while 24 percent aligned themselves with Minshuto. Minshuto support was the highest ever in an Asahi survey. Since party support has often risen in earlier surveys conducted soon after a national election, however, analysts said it is too early to determine the durability of that support.

From http://www.asahi.com/ 11/13/2003

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Japan's Margaret Thatcher Quits After Poll Fiasco

THE woman who arguably did more for women in the male-dominated world of Japanese politics resigned yesterday as head of the Social Democratic Party, which was all but eliminated as a political force in Sunday's election. Takako Doi, 74, said she resigned as leader of the left-wing party to take responsibility for the loss, which saw its 18 seats reduced to just six. "The responsibility for the defeat in the lower house election is mine, as head of the party," Ms Doi said in Tokyo. She had enjoyed an impressive rise to speaker of the House of Representatives, becoming the first woman to hold the post, and played a key role in the only non-Liberal Democratic Party-led government in more than half a decade. At the peak of her power, she was widely considered the Japanese equivalent of Margaret Thatcher. Her political career, however, was almost an accident. Before she was elected to the diet in 1969, her local newspaper wrongly reported that she planned to run for a seat in the lower house. She went to the mayor to explain the error, only for him to joke at how "stupid" it would be for her to run when she had no chance of winning. Outraged, she ran, and won. (by Julian Ryall)

From http://www.thescotsman.co.uk/ 11/14/2003

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Koizumi Makes Choice on Japan Highway Chief

The government decided informally Thursday to appoint a House of Councilors member and former businessman as president of Japan Highway Public Corp. Takeshi Kondo will likely fill the key position in Prime Minister Junichiro Koizumi's plan to privatize the debt-ridden semigovernmental entity in 2005. Japan Highway's top post has been vacant since Oct. 24, when Land, Infrastructure and Transport Minister Nobuteru Ishihara removed Haruho Fujii, 67. Ishihara charged that Fujii was unfit for the job and an obstacle to privatization. After sacking Fujii, a former vice construction minister, the Koizumi administration hoped to recruit his successor from the private sector rather than appoint another ex-bureaucrat. But the government has faced difficulty finding an appropriate candidate. Kondo, 62, was picked for his background in the private sector. He will have to give up his Diet seat if he accepts the offer. Koizumi called Kondo and Ishihara to his official residence in the afternoon to make the request. Kondo did not give an immediate response but said he would positively consider the offer. "I feel honored if I'd be able to make a contribution in this way, since (Japan Highway's) privatization is a major policy pillar under the Koizumi administration," Kondo told reporters after his meeting with the prime minister. Kondo was elected to the Upper House in July 2001 after serving as managing director of Itochu Corp. through December 2000. He won on the Liberal Democratic Party's proportional representation ticket with the endorsement of then Japan Federation of Economic Organizations (Keidanren), which has since been reorganized into the Japan Business Federation (Nippon Keidanren). He is credited for his expertise in international trade and macroeconomic issues. Ishihara cited as reasons for Kondo's appointment his experience in the private sector and his efforts to support reform of government-affiliated corporations. "I would hold a great deal of respect for him if he decides to support the Koizumi administration's reforms even though he'd have to resign his Diet seat. I expect to hear good news sometime tomorrow," Ishihara told reporters, suggesting Kondo would give his reply Friday. Ishihara added he believes Kondo has the competence, vitality and decisiveness to act in accordance with the government's plan to privatize the heavily indebted Japan Highway. Koizumi said he chose Kondo for the job because, in addition to his long experience as a corporate executive, he has a network of associates that includes other Diet members and bureaucrats. While Koizumi had said he would leave Ishihara to select the new president, Kondo was Koizumi's choice. "It's an important matter," he said, "and since Mr. Ishihara had not decided on the personnel, I asked Mr. Kondo to take the post today." (by Tetsushi Kajimoto)

From The Japan Times 11/14/2003

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Inauguration of the Second Koizumi Cabinet

Prime Minister Junichiro Koizumi was reappointed as the Prime Minister by both the House of Representatives and the House of Councilors at the 158th special session of the Diet. After his appointment, Prime Minister Koizumi held a press conference and again quoted the words of the Chinese philosopher Mencius, "when about to place a great responsibility on a person, heaven may test one with hardship and frustrated efforts in order to toughen one's nature and shore up deficiencies," which he had quoted earlier at the press conference when he was first inaugurated as Prime Minister in April 2001. He expressed his resolution that upon fulfilling the weighty responsibilities as Prime Minister of Japan, he should endure all manners of difficulties and work to nurture the buds of reform into a large tree. Prime Minister Koizumi then reappointed all the ministers under the Cabinet reshuffled in September and formed the Second Koizumi Cabinet. Prime Minister Koizumi was appointed the 88th Prime Minister of Japan (the 56th person) since Hirobumi Ito at the investiture of the Prime Minister in the Imperial Palace and then attended the attestation ceremony of the appointment of the Ministers of State of the Koizumi Cabinet. On the evening of the same day, Prime Minister Koizumi held the first meeting of the Second Koizumi Cabinet and announced the Statement by the Prime Minister.

From http://www.kantei.go.jp/ 11/19/2003

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NPSC Chief Admits More Donations from Rightist

The head of the agency that oversees the nation's police forces has admitted to receiving 1 million yen from a construction company whose chairman is a senior rightist. Kiyoko Ono of the National Public Safety Commission said Tuesday she received 960,000 yen in donations between 1995 and 1998 from the firm, which has not been identified. Last week, Ono acknowledged that the same construction company had paid 20,000 yen to take part in a breakfast meeting she organized in September 2002. And during a regular news conference Tuesday, Ono said an employee from the firm had paid 20,000 yen to attend a study session in June. Ono said that "in order to avoid a misunderstanding," she returned the money to the company earlier in the day. She added that she has no intention of stepping down over the matter. Ono, a member of the Liberal Democratic Party, was appointed head of the commission at a Cabinet reshuffle in September. "These (donations and party fees) were paid before I became head of the National Public Safety Commission," she said, "and I had no idea that the company's chairman was linked to a rightwing organization." According to Ono, her political fund management group had received 240,000 yen annually from the construction company starting in 1995. The contributions were included in her political donation records and submitted to election management officials, she said, adding that she did not believe donations were made by the firm before that time.

From The Japan Times 11/19/2003

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Tanaka Gets a Stage in Diet as DPJ Ally

The Democratic Party of Japan may have obtained a powerful weapon Tuesday to wield against Prime Minister Junichiro Koizumi: former Foreign Minister Makiko Tanaka. Tanaka, an extremely popular political figure among female voters and one of Koizumi's most vocal critics, joined a 179-member Diet group comprising 177 DPJ members and two independent lawmakers just one day before a special Diet session is set to convene. While Tanaka will not be a DPJ member, she will now have opportunities to speak at Diet sessions within the question time allocated to the largest opposition party -- and possibly to grill Prime Minister Koizumi. DPJ chief Naoto Kan said that he himself proposed that Tanaka join the DPJ's Diet group, with Tanaka having been a vocal critic of the Koizumi administration. As a member of the DPJ-led Diet group, Tanaka is obliged to follow party decisions in terms of prime ministerial votes and budget deliberations, though she will be given room to make her own decisions on other matters, Kan said. "I hope we can work with her as a team, if she can make the most of her good characteristics," Kan told reporters. Tanaka's sharp tongue, however, could be a double-edged sword for the DPJ, given that her political career has been characterized by brushes with colleagues and subordinates. Tanaka was once a strong ally of Koizumi, helping his rise to the positions of LDP chief and prime minister in April 2001. Koizumi accordingly named Tanaka as Japan's first female foreign minister when he launched his first Cabinet. But Tanaka has become hostile toward the Koizumi administration since her sacking in January 2002, following a protracted standoff with Foreign Ministry bureaucrats, fellow Cabinet ministers and LDP colleagues. Tanaka resigned her Diet seat in August last year over unfounded allegations that she had misappropriated the state-paid salaries of her secretaries. Earlier, the LDP had suspended her party membership for two years. In September, Tokyo prosecutors concluded that she had no case to answer. She successfully ran as an independent in the Nov. 9 House of Representatives election, thereby securing her comeback to the national political arena. Before the official campaign for the general election began, Tanaka tendered her resignation from the LDP. (by Reiji Yoshida)

From The Japan Times 11/19/2003

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Koizumi Brings in 3 New Senior Vice Ministers

TOKYO - Prime Minister Junichiro Koizumi on Wednesday named 22 lawmakers as senior vice ministers, reappointing 19 and bringing in three new ones to replace those who failed to get reelected in the Nov 9 general election. The new senior vice ministers are Yukio Jitsukawa at the Justice Ministry, Yamato Inaba at the Ministry of Education, Sports, Culture, Science and Technology and Eiko Kaneta at the Ministry of Agriculture, Forestry and Fisheries. All the three belong to Koizumi's Liberal Democratic Party.

From Kyodo News 11/20/2003

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SOUTH KOREA: Anti-Corruption Probe Targets Local Governments

The government will begin a nationwide anti-corruption investigation covering local administrative offices starting at the end of November. Targets of the inquiry will be local governments' civil affairs administrations, with the objective of rooting out corruption related to government projects. The Korean Independent Commission Against Corruption on Monday sent President Roh Moo-hyun a report on its pending questions and measures against corruption. The commission said that the government investigation was intended to fundamentally prevent corruption and that a joint inspection team would be formed in collaboration with the Board of Audit and Inspection, the Public Prosecutors Office, the National Police Agency and the National Tax Service. The investigation team will be operating from the end of this month to next April. The commission has proposed that the investigation be concentrated on corruption in local administrative bodies, the misuse of government funding by tourism-related organizations and private schools, and abuses of power by government institutions. The commission has also decided to form a council of institutions opposing corruption in order to design preventive measures from the government level. The council would hold biannual meetings with the president. The council members would be selected from 12 government agencies, including the commission, the Board of Audit and Inspection, the Ministry of Justice, the Ministry of Government and Home Affairs, the Financial Supervisory Commission, the Public Prosecutors Office, the National Police Agency, the National Tax Service. "The results of the joint inspections team's investigation that begins this month will be reported to the commission during the first half of next year," said an official at the anti-corruption agency. "Matters that need improvement will be brought to the policymakers, and the police and related inspection departments will be notified about cases of corruption." (by Han Jae-hyun)

From http://english.chosun.com/ 11/03/2003

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S Korean Parliament Approves Special Prosecutor for Corruption Probe

SEOUL: South Korea's parliament endorsed a bill Monday to appoint special prosecutors to probe corruption allegations surrounding President Roh Moo-Hyun's aides. Of 192 lawmakers who voted, 183 endorsed the bill, proposed by the main opposition Grand National Party. Two voted against it and seven abstained. The allegations which surfaced last month triggered a political crisis in South Korea with Roh calling for a referendum on his rule and saying he would step down if he lost. Roh, who has said he opposes an investigation by independent prosecutors, has 15 days to decide whether to accept or veto the bill. State prosecutors have promised to enlarge an investigation they launched last month into illegal cash donations to political parties during last year's presidential election campaign. But opposition legislators say they cannot trust state prosecutors to carry out a thorough probe. Roh's approval ratings have crashed to under 30 percent since prosecutors questioned his aides in October for allegedly taking money from SK Group, South Korea's third largest conglomerate. The SK scandal highlighted deep-rooted corrupt connections between businessmen and top politicians in all the main parties. Roh, a former human rights lawyer who won the December elections on a pledge of honest government, has said he would step down if he loses a referendum which he has tentatively scheduled for next month although he needs approval from a hostile parliament to carry it through. The anti-Roh Grand National Party has 149 seats in the 272-member National Assembly. The former ruling Millennium Democratic Party (MDP) has 63 seats while a new party of Roh loyalists claims just 43 seats.

From http://www.channelnewsasia.com/ 11/10/2003

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Ministry Urged to Adapt to Media Convergence

The Ministry of Information and Communication is being urged to come up with new policies that can handle a fresh wave of technology convergence and service bundling, telecommunication sources said. The Korean government is currently pushing for the so-called "ubiquitous" network environment, which inevitably involves the combination of telecommunications, broadcasting and the Internet. The problem is that the ministry's major policies are not friendly to such convergence of new technologies. In fact, the ministry bans telecom operators from bundling similar services, citing concerns about monopoly and unfair competition. As a result, KT Corp., the country's largest fixed-line carrier, cannot bundle services with its mobile subsidiary, KTF Co. In fact, in the process it is consumers that lose a chance to enjoy better and cheaper services. If KT and KTF combined their fixed-line and mobile services as a single package, the subscription rate could go down significantly, saving customers' money. But the Information Ministry blocks such bundling, arguing that combinations of services would just help telecom heavyweights further solidify their market dominance. KT has been planning to offer a new package service that combines Skylife satellite broadcasting and Megapass high-speed Internet access in early December. The new package will be 20 percent cheaper than the separate fees for the two services. However, the ministry remains adamant about its policy, making it uncertain whether KT will be able to launch the new offering and prompting industry pressure for the ministry to change the regulations. Bundling, meanwhile, is already available in many countries, including the United States, Canada, Australia, Britain and Japan. (by Yang Sung-jin)

From http://www.koreaherald.co.kr/ 11/11/2003

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Female Employment Low in Public Sector

Women account for only 26 percent of employees in state-affiliated enterprises, with many of them hired on contract and most of them holding nonmanagement positions, a government survey showed yesterday. Female workers hold a mere 17.7 percent of nearly 178,000 regular jobs in the public sector, the Ministry of Labor said based on its recent survey of 211 government-related corporations. According to the survey, men fill 95.3 percent of management-level positions. Some 80 companies had no female managers. "At private companies, 36 percent of the employees are women, 10 percentage points higher than the corresponding figure at public enterprises," said Kong Seok-won, a Labor Ministry official with the Women Employment Division. "Even considering that more manufacturing and service jobs are offered in the private sector, public companies should be criticized for their low rates of female employment," he said.

From http://www.koreaherald.co.kr/ 11/14/2003

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GNP Eyes Watchdog on President's Staff

The majority Grand National Party is preparing a bill to establish an organization specializing in investigating any corruption on the part of the president's family and staff. GNP chief policymaker Lee Kang-too said yesterday that his party planned to submit the bill for a new investigative body during parliament's regular session, which will close Dec. 9. "We need to take a radical step to eradicate any corruption by the president's family and staff," Lee said. The main opposition party proposed a similar bill in November last year, which is still pending in the National Assembly. The then-ruling Millennium Democratic Party strongly opposed the bill at the time. "We will revise the previously suggested bill and submit it before the Assembly's regular session ends," Lee said. According to the bill, the investigative organization, under the control of the Korea Independent Commission Against Corruption, can ask the Assembly to appoint a special counsel to look into any irregularities committed by the president's close family and aides. If parliament approves the bill, it will be possible to appoint a special counsel virtually at any time to investigate such cases of corruption. The move comes after President Roh Moo-hyun suggested Wednesday that he might veto a bill on a special probe into allegations of corruption on the part of his aides, which the National Assembly authorized Monday. Roh said he may ask parliament to reconsider the bill in order to give the prosecution more time to complete its ongoing probe into the bribery scandal surrounding Choi Do-sul, Roh's former secretary on general affairs. Roh said it would be inappropriate to appoint a special counsel on cases that the prosecution is still investigating. (by Sim Sung-tae)

From http://www.koreaherald.co.kr/ 11/14/2003

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Chough Enters Leadership Race in MDP

Rep. Chough Soon-hyung of the Millennium Democratic Party declared yesterday that he would run for election later this month to select the party's new chairman. "I have reached a decision that it would be wrong for a responsible politician to ignore the fellow party members' loyalty and turn away from the crisis the party is in," Chough said in a news conference. Five-term lawmaker Chough is renowned for his quiet manner and sharp tongue. "If the party decides to honor me with the chairman's post, I will put all my efforts toward regaining the public's trust and raising the MDP up to become the largest parliamentary bloc in the 17th general elections next April," he said. The former ruling party is holding a national convention Nov. 28, at which time it will pick a new leadership ahead of the parliamentary elections April 15 next year. Chough will be competing against Rep. Choo Mi-ae, a two-term lawmaker and one of the most popular female politicians. Chough currently heads the party's crisis management committee, which also includes Reps. Kang Un-tae, Kim Kyung-jae and Cho Han-chun. (by Lee Joo-hee)

From http://www.koreaherald.co.kr/ 11/17/2003

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Seoul Ranked as Best 'E-Gov'

The Seoul Metropolitan City Government announced on Sunday that it has been selected as the best "e-government" out of 100 cities worldwide, in a recent survey on assessing websites and measuring the e-government indexes of global cities. The survey was conducted on 100 cities worldwide, from last March until October, jointly by the Global e-Policy and e-Government Institute of Korea's Sungkyunkwan University and the e-Governance Institute of Rutgers University, in the United States, under the sponsorship of the United Nations' Division for Public Administration and Development Management, Department of Economic and Social Affairs. Appraisals were made in five areas: security, usability, content, service and citizen participation. The survey listed Hong Kong, Singapore, New York, Shanghai, Rome, Auckland, Jerusalem, Tokyo and Toronto, ranking second to 10th. "It was the first research comparing e-government indexes of international cities. Seoul City was awarded top place as a result of its work since last year to remake its Internet homepage," a city official said. The award ceremony is to take place at the 600th Anniversary Hall of Sungkyunkwan University on Nov. 21. (by Shin Hyung-joon)

From http://english.chosun.com/ 11/17/2003

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Korea's Nts to Tighten Tax Control over Foreign-Owned Real Estate

SEOUL - The National Tax Service (NTS) said Tuesday it will tighten its tax control regime for domestic real estate owned by foreigners. The measures follow reports that foreign companies have reaped huge profits from offices they bought following the 1997-98 Asian financial crisis, but have failed to pay the requisite taxes. Some outside investors and companies have also been accused of leaving the country after selling the property at a profit without settling their dues. The state authority said it will keep closer tabs on the sale of large office buildings owned by foreigners and request detailed sales information that can be used to levy taxes.

From http://www.asiapulse.com/ 11/18/2003

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Campaign Fund Probe Reaches Critical Stage

The prosecution's investigation into illicit presidential campaign funds and corruption cases involving aides to President Roh Moo-hyun is expected to reach a critical stage this week, prosecution sources said yesterday. A string of business tycoons and associates of the president will be summoned for questioning in the coming week. A senior prosecutor said last week the prosecution would begin taking legal steps against those being investigated in the illegal fund-raising and graft cases next month. The outcome of pending interrogations is expected to be crucial in determining whether and what legal measures to apply to the suspects, according to the sources. In tandem with summoning key suspects, the prosecution has been tracing bank accounts held by corporations and major political parties in a bid to find out details of improper donations made during last year's presidential campaign. Prosecutors will call in LG Chairman Koo Bon-moo, Hanjin Chairman Cho Yang-ho and other heads of conglomerates who are alleged to have donated illegal funds to the camps of Roh and his rival contender, Lee Hoi-chang, during the campaign. Kumho Chairman Park Sam-koo, who underwent questioning last week, may also be summoned again, prosecution sources said. Ahn Dae-hee, a senior prosecutor directing the campaign fund probe, told reporters last week the prosecution would look into the cases in which conglomerate bosses raised slush funds by doctoring books and used part of them to boost their level of corporate control. The prosecution will also summon senior party officials, including Rep. Chyung Dai-chul, former chairman of the Millennium Democratic Party, and Rep. Lah Oh-yeon of the opposition Grand National Party, for questioning over campaign financing. Chyung served as chairman of Roh's campaign team and Lah led a GNP financial supporters' group. Prosecutors are also accelerating their probe into corruption allegations involving Roh's aides, as the president and the opposition are locking horns over a bill authorizing a special counsel to investigate the allegations. Kang Keum-won, a textile company owner close to Roh, and Seon Bong-sul, Roh's childhood friend who received 950 million won from Kang late last year, will be summoned soon for additional questioning. The prosecution is considering seeking an arrest warrant for Kim Sung-chul, a business leader in Busan, on charges of giving bribes to Choi Do-sul, a close aide to Roh, shortly after Roh was elected president last December. Moon Byung-uk, chairman of Sun & Moon Group, and two other executives of the group were put under exit bans yesterday. Prosecutors are tracing their bank accounts and planning to summon them for questioning over dubious financial transactions, which the opposition alleged were related to improper donations to Roh's campaign team. (by Kim Kyung-ho)

From http://www.koreaherald.co.kr/ 11/24/2003

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INDONESIA: Army Announces Reshuffle

The Army unveiled a major reshuffle on Friday, replacing Jakarta Military Commander Maj. Gen. Djoko Santoso with Pattimura Military Commander Maj. Gen. Agus Tadi.Djoko, who graduated from the Military Academy (Akabri) in 1975, will reportedly be promoted to a three-star general and replace Army deputy chief Lt. Gen. Sudarsono, who is about to reach the mandatory retirement age of 55. "The Army completed a reshuffle of high-ranking and middle-ranking officers last week. Some 30 officers have been transferred to new posts, including five regional military commanders," Army chief Gen. Ryamizard Ryacudu said after breaking the fast at the Jakarta Military Headquarters in East Jakarta. "Maj. Gen. Agus Tadi will soon be assigned to Jakarta to replace Pak Djoko (Santoso). Djoko will replace another military officer who will soon retire," Ryamizard said without elaborating. Agus Tadi was Ryamizard's classmate at Akabri. They both graduated from the academy in 1974. Agus Tadi's position in Pattimura will be assumed by his chief of staff, Brig. Gen. Syarifuddin Suma, a 1973 Akabri graduate. Ryamizard declined to comment on why the Jakarta Military commander was being replaced ahead of the 2004 general election. The general also appointed Maj. Gen. Soenarso, a 1973 academy graduate, to fill the post of Diponegoro Military commander, which has been vacant since the death of Maj. Gen. Amirul Isnaini, a 1975 Akabri graduate, due to cancer in June. Soenarso is the current Sriwijaya Military commander overseeing South Sumatra, Jambi, Bengkulu and Lampung provinces. His chief of staff, Brig. Gen. Syahrial, will take over as the head of the Sriwijaya Military Command. Maj. Gen. Agus Yitno, the head of the Udayana Military Command overseeing Bali, East and West Nusa Tenggara, will be replaced by Brig. Gen. Supiadin Yusus, a 1975 Akabri graduate. Supiadin is currently the chief of staff of the Tanjungpura Military Command. Agus, according to Ryamizard, take over as the Army's territorial commander, replacing Maj. Gen. Mahidin Simbolon. There were rumors last week that the reshuffle would also affect top-level military officers at the Indonesian Military (TNI) Headquarters in Cilangkap, with some suggesting that TNI chief Gen. Endriartono Sutarto would be replaced by Marshall Chappy Hakim, the Air Force commander. According to the rumors, Endriartono would move into the post of defense minister, replacing Matori Abdul Djalil, who is suffering from a serious illness and is being treated at the Mount Elizabeth General Hospital in Singapore. (by Tiarma Siboro)

From http://www.thejakartapost.com/ 11/01/2003

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Elections Commission Presents Draft Decree on Electoral Campaign

The General Elections Commission (KPU) presented on Friday a draft decree on election campaign mechanism that will require electoral candidates to consult the commission on the types and the number of advertisements they will place in the mass media. The draft is an elaboration of the Election Law, which stipulates that electronic and print media provide equal chance for all electoral candidates to place their advertisements. It states that an advertisement slot allotted to a candidate cannot be given to another candidate for whatever reason, as is stated in the explanatory appendix of the Election Law. Besides advertisements, each electoral candidate is given a chance of airing recorded speeches through radio and television stations. The draft decree is expected to be passed in December after public scrutiny. According to the draft decree, electoral candidates are defined as either political parties or candidates of Regional Representative Councils (DPD) that are seeking votes in the general elections on April 5 next year. While the Election Law defines an election campaign as an activity carried out by electoral candidates to woo voters with their platforms, the draft decree says that an election campaign is intended to influence outsiders and can be held in both open and closed venues or through the mass media. Electoral candidates are obliged to submit an event report to local police on their campaign, including details of the location, estimated number of participants, designated routes to and from the campaign, and the persons responsible for the campaign. According to the draft decree, a party activity involving party members or supporters is not regarded as a campaign, although it often attracts outsiders in practice. KPU deputy chairman Ramlan Surbakti told a press briefing on Friday that the decree would include the definition of an election campaign to avoid misinterpretations and violations. He said the definition was open to debate. Rallies involving party supporters before the election campaign decree comes into effect are not subject to the decree. The campaign period is scheduled to last three weeks between March and April 2004, and must end three days before the April 5 legislative election. The draft decree also stipulates that a campaign featuring electoral candidate symbols can be held at select locations as determined by local administrations, and/or at a private venue. Rallies held during a campaign are not allowed outside the predetermined route, cannot spread to other electoral districts and must not violate traffic regulations. In the event of a security problem, the police can take any necessary measures to stop or halt the campaign in accordance with the decree. Meanwhile, judges and Supreme Court justices, State Audit Agency (BPK) officials and chief, Bank Indonesia governor and deputies, officials of state/provincial firms, civil servants and village heads are prohibited from taking part in electoral campaigns, says the draft. State officials representing political parties must take leave if they wish to participate in campaigns, and they are not permitted to use state facilities. The KPU will stop a campaign if any violations of the article regarding the participation of state officials occur. Between the campaign period and the ballot, legislative candidates are not allowed to promise to give money, nor to give money and/or other materials to voters. Those who violate the article will be sent to court and may be disqualified from the election. (by Moch. N. Kurniawan)

From http://www.thejakartapost.com/ 11/01/2003

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Govt to Set Up Special Unit to Take Over Role of IBRA

A special unit under the Ministry of Finance will be established to take over the role of the Indonesian Bank Restructuring Agency (IBRA) in implementing the government blanket guarantee program on bank deposits, when the agency's mandate expires by Feb. 27 next year, a senior official at the ministry said. The government has said that it would not extend the five-year mandate of IBRA, meaning that the powerful agency -- the executor of the guarantee program -- will be closed down on Feb. 27 as scheduled. Ministry financial institutions director general Darmin Nasution, speaking Tuesday, did not say when the special unit would be set up but said details were still being worked out and would be announced in the near future. The unit, to be called the banking guarantee implementation unit (UP3), would operate on a temporary basis -- pending the planned establishment of a deposit guarantee agency (LPS), which needs more time to be set up as the government has yet to finish drafting the law as the legal basis for the agency. Darmin also said the LPS would need around one year of preparation after enactment of the law to be effective, possibly in 2004. The UP3 only needed a ministerial decree as its legal basis. The government has said that due to its temporary nature, the UP3 would take over part of the current roles of IBRA in executing the guarantee program, especially those related to administrative tasks. Its most important job will be managing and collecting premium fees from national banks participating in the blanket guarantee program, which amounts to 0.25 percent of third party liabilities. With the country's total third party funds standing at more than Rp 900 trillion currently, UP3 could collect annual premium fees amounting close to Rp 2 trillion. The setting up of the new agencies, both UP3 and LPS, is part of the government's plan to gradually terminate the blanket guarantee for bank deposits and other liabilities. As reported earlier, the government plans to phase out the scheme especially for big depositors, while for the small depositors, it will continue to protect them via a new deposit insurance scheme to be managed by the LPS. The blanket guarantee scheme was first introduced in 1998 to help revive confidence in the ailing banking sector, badly hurt by the devastating financial crisis in 1997-98. It was also meant to avoid widespread panic when the government had to close down banks. Under the scheme, if a bank is closed down, the government would cover all of the banks' obligations, including their third party liabilities. It was the absence of such a scheme that was believed to have helped cause massive capital flight during the early period of the crisis, when the government closed down a number of local banks. However, to minimize the cost of any bank failures to the state -- as well as removing the moral hazards among bankers, the government came up with the idea of gradually terminating the program. Elsewhere, asked whether the establishment of UP3 in such a short time would cause difficulties, Darmin suggested to recruit some of IBRA's professionals who have been in charge of the program during their tenure at the agency. "Workers from IBRA could be placed in the unit. They could be assigned through probably a presidential decree to control the program," he said.

From http://www.thejakartapost.com 11/19/2003

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INDONESIA: House Forms 24 More Regencies

The House of Representatives (DPR) on Thursday endorsed 13 bills on the establishment of 24 new regencies in 13 provinces throughout the country. The formation of the new regencies has increased their number nationwide from 324 to 348. The number of municipalities is now 86 spread out among the country's 33 provinces. At a plenary meeting also attended by officials from the newly established regencies, all nine factions in the House backed the creation of the new administrative divisions, arguing that their establishment would help boost the prosperity of the people in those areas. In his speech, Minister of Home Affairs Hari Sabarno remarked that political reasons were the main factor in the past as well as the recent establishment of the new regencies. The minister warned the House of the fact that some new regencies set up earlier had not performed effectively. "The future creation of new regencies must be based on serious assessments," he said. He added that the government would re-merge regencies if they failed to perform effectively as evidenced by their financial dependence on the province and its former regency after three years. The establishment of new regencies or provinces is made possible with the enactment of Law No. 22/1999 on regional administrations and Government Regulation No. 129/2000 on the requirements for the establishment of new regencies and provinces. Any group of people that wishes to propose the creation of new regencies or provinces can do so by formally requesting it from the House, which will then assess the validity and send it onward to the Cabinet for further consideration. The Council of Regional Autonomy Advisory (DPOD) consisting of the home ministry, the finance ministry, the state secretary and regional representatives will study if the proposal meets all the criteria or not. The home minister emphasized that the establishment of regencies, in the past and in the present, is based more on sentiment of historical, geographical or ethnic identity rather than on economic potential of the respective areas. "Proposals to create new regencies are because of public pressure. This must be avoided in the future," the minister said. He ensured that the creation of the new regencies would not change the allocation of seats in the House of Representatives (DPR) for next year's elections. Hari, however, said that the General Elections Commission (KPU) would soon allocate seats and map the new regencies to create regency legislatures (DPRD). No. New Regency Province 1. North Kolaka, Bombana, Wakatobi Southeast Sulawesi 2. West Sumbawa West Nusa Tenggara 3. Lingga Riau 4. Tojo Una-Una Central Sulawesi 5. North Minahasa North Sulawesi 6. Sekadau, Melawi West Kalimantan 7. Supiori Papua 8. Serdang Bedagai, Samosir North Sumatra 9. Ogan Ilir, East OKU, South OKU South Sumatra 10. South Solok, West Pasaman, Dharmasraya West Sumatra 11. Lebong, Kepahiang Bengkulu 12. West Seram, East Seram, Aru Islands Maluku 13. Bener Meriah Aceh

From http://www.thejakartapost.com/ 11/21/2003

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Mahathir Quits, Abdullah Sworn-In as Malaysian PM

The end of an era has been marked in Southeast Asia as the region's longest-serving elected leader, Mahathir Mohamad, stepped down and Abdullah Ahmad Badawi was sworn-in as Malaysia's prime minister. In contrast to Mahathir's often controversial 22 years in office, the formal hand-over of power was performed with quiet dignity in a nationally-broadcast ceremony before King Tuanku Syed Sirajuddin at the royal palace in Kuala Lumpur. Abdullah, 63, took the oath of office as Malaysia's fifth prime minister since independence from Britain in 1957 as Mahathir, 77, followed through on a pledge to retire first made 16 months ago. After the ceremony the two men were due to travel separately to the prime minister's office in the new administrative capital of Putrajaya south of Kuala Lumpur. At 4:45 pm, Mahathir was due to clock out, using the punch card system he introduced for civil servants a month after becoming prime minister in July 1981. On Monday, Abdullah will clock in at 8.15 am after spending the weekend in his home state of Penang. Mahathir's last day as premier was marked both by bouquets and brickbats, as were his two decades in power. Local newspapers published massive supplements of lavish praise for the outgoing premier, but he was snubbed by Australian Prime Minister John Howard and criticised by the United States congress. Howard said in a radio interview he had no farewell message for Mahathir, who has regularly dismissed Australia's bid to be accepted as part of Asia, describing it recently as "some sort of transplant from another region". In Washington, the House of Representatives joined the Senate in condemning Mahathir for his remarks at an Islamic summit in mid-October that Jews rule the world by proxy. Mahathir acknowledged in one of his final news conferences that his legacy was a controversial one. Asked how he would like to be remembered, he said he did not mind if he was forgotten, but added: "They will not forget all -- as Shakespeare has said, 'the evil that men do lives after them, the good is oft interred with their bones'." The "good", though, was the focus of Friday's media tributes, one of which described Mahathir as "the greatest Malaysian alive". Echoing the grudging acknowledgement of even his critics, the New Straits Times said: "No one can dispute his central accomplishment of transforming Malaysia from an agricultural backwater into a rapidly industrialising economy and manufacturing powerhouse." Mahathir has been accused by some in the West of being a dictatorial Muslim bigot, but he has run a moderate multi-religious country and stepped down voluntarily with a democratic system, though criticised as flawed, still in place. Abdullah will face general elections within a year, with the hardline Islamic Party (PAS) presenting the biggest challenge to his United Malays National Organisation (UMNO), which has been in power since independence. Mahathir's departure is part of a sweeping political makeover across East Asia, where a new generation of leaders is taking charge and several countries will hold elections within 18 months. Mahathir, who came to power when Ronald Reagan and Margaret Thatcher led the United States and Britain, outlasted contemporaries like the late Philippine dictator Ferdinand Marcos, Indonesia's ousted strongman Suharto, 82, and Singapore's Lee Kuan Yew, 80. Abdullah will join a different breed of younger leaders exemplified by Thai Prime Minister Thaksin Shinawatra, 54, Philippine President Gloria Arroyo, 56, and Indonesian President Megawati Sukarnoputri, 56. The most obvious change in Malaysia, however, will be one of style rather than substance. Abdullah is not expected to make any radical changes to Mahathir's economic and social policies, at least in the short term, but he is quieter and less confrontational than his predecessor.

From http://www.channelnewsasia.com/ 10/31/2003

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No Cabinet Shake-Up Yet

Prime Minister Datuk Seri Abdullah Ahmad Badawi said Wednesday there will not be any Cabinet appointments or a reshuffle at the moment. Emerging after chairing his first Cabinet meeting as Prime Minister, he said he had told the Ministers that he was not yet making any Cabinet appointments neither was he going to make any reshuffle for the time being. "I have already informed His Majesty (the Yang di-Pertuan Agong Tuanku Syed Sirajuddin Syed Putra Jamalullail) on the day that I was sworn in that all Ministers will stay put with the same portfolio," he told a media conference after the Cabinet meeting here. He said when changes were made later, he would inform the King. Abdullah was sworn in as Malaysia's fifth Prime Minister last Friday, succeeding Tun Dr Mahathir Mohamad who stepped down after leading the country for 22 years. Abdullah, who called on Tuanku Syed Sirajuddin at Istana Negara before the Cabinet meeting Wednesday, as done regularly by the Prime Minister, also said he had assumed the post of Finance Minister held by Dr Mahathir. He said he would attend a briefing at the Treasury next Tuesday to have a better knowledge and understanding of related issues. On speculation over the appointment of the Deputy Prime Minister, he said there was no need for it. "Why speculate because I will definitely appoint the Deputy Prime Minister, an appointment will be made. "I need a deputy and I will choose the person I feel will be able to assist me and, at the same time, provide good leadership," he said. Abdullah said he would have more responsibilities, including as Chairman of the Non Aligned Movement (NAM) and the Organisation of Islamic Conference (OIC) which require him to attend various meetings. "Since the last several years the heads of government, even heads of state are also managing foreign relations like never before...we attend meetings, we get into discussion on what needs to be done," he said. Asked if he would be stretching himself too thin by holding several portfolios, apart from being the Prime Minister, Abdullah said: "In the Ministry of Finance, I have the second Minister and we have a Deputy Minister and also a Parliamentary Secretary. "In the Ministry of Home Affairs, there are two Deputy Ministers and one Parliamentary Secretary. I think they are people who can be made to work harder," he said. Abdullah was asked repeatedly on the appointment of the Deputy Prime Minister during the media conference and he maintained that he was not ready to make an announcement yet. "When I'm ready and when I've decided, of course I will announce," he said. To this, a foreign reporter asked if he had decided (on the DPM) and the Prime Minister replied: "When I announce it means I have decided." Being the first Cabinet meeting that he chaired as the Prime Minister, Abdullah took the opportunity to explain the measures to be pursued and projects that needed to be introduced. "I mentioned to them that it is important that we in the administration continue with the hands-on approach in dealing and managing the various programmes under our respective ministries," he said. "We must know what is happening in our Ministry and know exactly what to expect, what to anticipate and must provide leadership," he said. "Leadership by example to me is important. I remember I was responsible for the initiation and implementation of the 'Leadership By Example' programme when I was first appointed as Minister in Dr Mahathir's Cabinet. "I still believe in the efficacy of such a programme and I believe that this is something that we must do. "If we talk about hard work, honesty and integrity, then we in the administration must be the first to show, to demonstrate that we are people of integrity, that we work hard, that we are dedicated, we know the stuff that we provide, we are ready to provide the leadership," he said. Abdullah also told them about his speech in Penang on Saturday in which he had asked the people to "work with me, not work for me" so that together they could help to achieve more for the nation and people. "I want all the Ministers to adopt the same approach, nobody should be made to work for us, they will be working with us," he said. "And talking about honesty, integrity, we must not be displaying wealth and showing how much we have," he said, recalling a point he made at the four-hour meeting. He said the important thing was to have the right attitude. "I told them that we must continue to work hard. "I said as much as I want the rakyat to be working with me, more importantly I would like my colleagues in the administration to be working with me. "I told them that of course I play the role of the leader but all of us are working towards the same objective," he said.

From http://www.dailyexpress.com.my 11/06/2003

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PM Wants Government Depts to Be More Efficient

Datuk Seri Abdullah Ahmad Badawi has directed government departments to cut red tape and strengthen the civil service to fight corruption and deliver quality service to the rakyat. The Prime Minister proposed that each ministry set up a task force to look at ways to reduce bureaucracy in all departments under them because inefficiency could breed corruption. He also directed the re-engineering of all district offices and local councils to rid them of "unwieldy bureaucratic procedures" that could tempt people to commit bribery. Abdullah said a special task force, to be headed by Chief Secretary to the Government Tan Sri Samsudin Osman, would be formed. He said no timeframe had been set for the task force to carry out its job, but hoped that it would be completed as soon as possible. "The improvement of the public service delivery system is very important. Certain measures must be introduced to cut red tape so that the people can get fast and quality service. "I have informed the Cabinet that I would be paying keen attention to frontline government departments that deal with people through counter services. I want them to be improved to ensure that the rakyat will get fast and reliable service," he told reporters after chairing his first Cabinet meeting as Prime Minister at Perdana Putra Complex here yesterday. He said the task forces in the ministries must look at ways to cut red tape in departments so that the waiting period for all applications for government approvals like licences and permits could be reduced. "The long waiting periods can breed corruption as people who are impatient could very easily be tempted to offer bribes to speed things up," he said. On the re-engineering of district offices and local councils, Abdullah said apart from weeding out corruption, a review was necessary because of their increasing workload and responsibilities. "We have identified district offices as being bogged down with too much work compared to what they were expected to do 20 or 30 years ago. Today, they are expected to play a major role in the development of the districts. The land offices are also much burdened compared to before, having to issue licences for all kinds of activities. "The same is also true of local councils, which are now involved in all kinds of urban and semi-urban development within their jurisdiction. "Although we need regulations, let us not be too preoccupied with enforcement, as equally important is that the Government, besides being a regulator, must also be able to help people get what they need," he added. Abdullah said the re-engineering of district offices and local councils would help raise the effectiveness of other measures to combat corruption. When pointed out that the highest number of graft cases was recorded among civil servants in the Home Ministry, Abdullah, who is also Home Minister, said: "Yes, we have been fighting this very hard. If we hadn't, the number would have been much higher than what we see today. "There are a lot of things that we have to do. I won't hide facts and will not sweep things under the carpet. We just need to work harder to tackle this problem." Abdullah also announced the proposal to set up the Institute for Public Ethics to promote good governance in both the public and private sectors and the formulation of a National Integrity Plan that would go hand in hand with the setting up of the institute. The institute, he said, would provide a platform for greater interaction and discussion between the public and private sectors to promote accountability, transparency and efficiency in both sectors.

From http://thestar.com.my/ 11/06/2003

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Ministry Warns NUBE to Hold Fresh Election

The Human Resources Ministry has once again threatened to deregister the National Union of Bank Employees (NUBE) if its two feuding factions refuse to hold a fresh election. Its Minister Datuk Dr Fong Chan Onn, however, could not say how much time they would be given before taking such an action. Trust give us a little bit more time before we consider that alternative, he said when asked how much longer the ministry would allow the crisis to drag on before invoking the powers of the Director-General of Trade Unions (DGTU) to de-register a trade union. Dr Fong said the ministry had a healthy respect for the autonomy of trade unions and the international laws on unionism. As such, he said, the ministry would prefer a more democratic solution. But if the feuding factions are only interested in protecting their own interests instead of that of the members, what choice do we have? If it drags on and on, obviously the situation will turn chaotic. Then de-registering NUBE will be our only choice as our responsibility is to restore order and to ensure that order in trade unions is maintained, he told reporters at his office yesterday. However, Dr Fong said this would be the last resort as such an act could result in the government being branded as anti-union. In the interest of its 28,000 members, a fresh election needed to be called so that new leadership could start its works of tackling many issues affecting members,'' he said Commenting on a statement by the former deputy DGTU Chen Voon Shian that the DGTU actually has, under Section 4A of the Trade Union Act, the power to order a trade union to hold a fresh election, Dr Fong said that was not so. Dr Fong said his understanding of the provision of the Act was based on the advice of the Attorney-General's chambers which opined that taking actions not specified by the Act would only result in it being disputed in court. He also said that the AG's chambers was currently looking into the repercussion arising from the High Court decision last Thursday, which nullified the decision of the DGTU to recognise the faction led by Muhammad Fauzi Shamsuddin as NUBE's legitimate office-bearers. The High Court decision, he said, effectively meant that none of the factions could claim to be the legitimate office bearer of the union.

From http://thestar.com.my/ 11/08/2003

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Retiring Civil Servants Will Be Paid Up to 120 Days in Lieu of Leave

The "golden handshake" for retiring civil servants has been increased by a further 30 days, according to the Public Services Department. "Civil servants will be allowed to accumulate not more than 120 days for cash in lieu of leave throughout their service," PSD Director-General Tan Sri Jamaluddin Ahmad Damanhuri said in a circular issued yesterday. Previously, they could only be paid for a maximum of only 90 days. The change took effect from Aug 1. The PSD said that while the Government's policy was to encourage civil servants to take their leave each year, it was accepted that some were unable to do so due to the call of duty. "In such situations, they are allowed to accumulate leave, subject to certain conditions, to be replaced with cash," the circular stated. The circular said for the implementation of the new formula for cash in lieu of leave, the number of leave days accumulated up till Dec 31, 2002, would be taken up to 90 days only. During the last year of service, civil servants would be allowed to accumulate up to a maximum of their leave entitlement, added the circular. With the enforcement of the circular, payment for leave not taken would be calculated based on the formula: 1/30 x last pay received x accumulated annual leave days (subject to a maximum of 120). (Jane Ritikos)

From http://thestar.com.my/ 11/15/2003

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PHILIPPINES: John O. Bill Shows the Way to 'Stronger' Judicial System

The independence of the judiciary, especially on the fiscal side, would be strengthened if judges and court employees are prohibited from receiving compensation and allowances from local government units (LGUs), Sen. John Osme?a said Tuesday. Osme?a, former chair of the Senate committee on finance, has been batting for greater fiscal autonomy of the judiciary and for a clearer definition on the use of the Judiciary Development Fund. He stressed his point: "These are precisely the main objectives of Senate Bill 2675 which I authored and which the Senate recently passed on third reading." Osmena lamented that while the judiciary is upset over issues affecting its independence, it saw nothing wrong in allowing judges and their court personnel to receive compensation and allowances from LGUs. "Allowances and compensation from LGUs could erode the much-needed independence of the judiciary. Some vengeful LGU executives could suddenly cancel the grant of these perks to judges and their court personnel if they could not get what they want," Osme?a explained. There had been instances when an LGU even asked the courts housed in a municipal hall to move elsewhere as the space would be used for another purpose. Osme?a, however, stressed that his bill has a mechanism to make sure judges and their personnel would still get their due allowances despite the ban on their acceptance of perks from LGUs. Osme?a said his measure seeks to realize this by creating a Local Government Judicial Development Fund, to be administered by the executive judge of the judicial region or district. "Each sala in said judicial region or district shall receive a uniform rate of allotment as determined by the Supreme Court, intermediate appellate justices, regional trial judges, metropolitan trial judges, municipal trial judges and municipal circuit trial judges, as the case may be," Osmena said. He stressed that nothing in the bill could be construed to affect or diminish the duty of local government units to provide office spaces, equipment and facilities to the courts within their respective territories. The Senate, acting on orders of Senate President Franklin Drilon, unanimously passed the measure on third and final reading last October 27 not only to strengthen the fiscal autonomy of the judiciary but also to clarify the use of the Fund. Osme?a said there is urgent need to clarify this in the face of the controversy spawned by different interpretations of the law creating the Fund, resulting in the impeachment by the House of Chief Justice Hilario Davide Jr. The Cebuano lawmaker said a key amendment in the section on the use of the Fund deletes the word " facilities" and substitutes it with "maintenance and other operating expenses". "Chief Justice Hilario Davide got into trouble with the congressmen because Davide believed that the term 'facilities' included repair and purchase of luxury and service vehicles, purchase of curtains and the construction or repair of courthouses or judicial rest houses," Osme?a pointed out. (by Efren L. Danao)

From http://www.manilatimes.net/national 11/05/2003

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Cabinet Revamp Planned by Arroyo

There will be a revamp in the Cabinet due to plans of some officials to stand for elections next year, President Arroyo announced yesterday. "There will be changes in the Cabinet for two reasons. First, some of the members plan to run in the next elections. Second, to prepare for programs for reforms," she said in her regular radio address. The President, however, did not identify the Cabinet officials planning to join the May 2004, national and local elections. Mrs. Arroyo is expected to appoint new members of her cabinet before deadline for the filing of certificates of candidacy at the Commission on Elections (Comelec) next month. Among the Cabinet members reportedly seeking higher office are Tourism Secretary Richard Gordon, Trade and Industry Secretary Manuel Roxas III, Interior and Local Government Secretary Jose Lina Jr., Agriculture Secretary Cito Lorenzo, Health Secretary Manuel Dayrit, and National Security Adviser Roilo Golez. Former defense secretary Angelo Reyes, now anti-kidnapping czar, and Metro Manila Development Authority (MMDA) Chairman Bayani Fernando are also planning to run for office next year.Roxas, who has appeared in public information reports on consumer rights as Mr. Palengke, is reportedly eyeing a seat in the Senate. Fernando and Gordon, on the other hand, reportedly plan to run for vice president. Mrs. Arroyo herself has announced plans to seek a full six-year term in the presidential elections next year. She has rejected media questions related to her political ambitions, saying it was not yet campaign time. (by Genalyn D. Kabiling)

From http://www.mb.com.ph/ 11/08/2003

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PHILIPPINES: Finance Chief Resigns

Finance Secretary Jose Isidro Camacho resigned on Friday, the end of the government's push for fiscal reform measures and the start of the political season. "It is very clear that politics has taken center stage," he told reporters who gathered at his office on the sixth floor of the Department of Finance Building on Roxas Boulevard. "Between now and [the May presidential] election, politics will be the main preoccupation of Filipinos," he said at a press conference held on his return from a meeting with President Arroyo. The Manila Times learned, however, that Camacho's resignation was prompted by Malaca?ang's "lack of support" for his efforts to reform the financial sector, an agenda that was put on hold when President Arroyo reneged on her word not to run in 2004. "I'm financially, physically and emotionally exhausted," Camacho said. In particular he was upset about President Arroyo's decision to back Winston F. Garcia, the Government Service Insurance System (GSIS) president and general manager, over Camacho's recommendation that he be fired for alleged anomalies at the state pension fund. When pressed about the GSIS, Camacho explained that the pension fund is a "difficult issue." "We made recommendations there, and we stuck to them," he said. On two occasions Camacho asked for Garcia's replacement on grounds that Garcia allegedly mismanaged the pension fund, as cited by a Commission on Audit report. President Arroyo, however, denied Camacho's request on both occasions, fanning suspicions that Malaca?ang had cut a deal with the Cebu-based Garcia clan to deliver votes during the May election. Citing the reports made by the COA and the Insurance Commission, Camacho said the GSIS requires "competent people running it." Asked about the competence of those managing the pension fund, he merely said, "No comment." Finance industry sources said Camacho's departure was hastened by the President's decision to focus on campaigning for next year's election. "Camacho's reform program was being sidetracked," said an official who works with the finance secretary in an interagency government task force. He added that Camacho fears that he will be blamed for the country's economic problems while "his hands are tied" for "lack of support" from the Palace. "Several bills need to be pushed through Congress," the official said. "Although the President has certified them as urgent, they still need to shepherded through Congress, but that's not happening right now." Already, opposition senators are blaming Camacho for going on a "borrowing binge" to support the government's expenses in the face of a large budget deficit. Camacho delivered his resignation letter to the President earlier that day. She accepted his resignation, which takes effect on November 30. He recommended Finance Undersecretary Juanita Amatong, who is on an official trip abroad, as officer in charge, but the President has yet to act on his replacement. Although confident that the economy would continue to grow despite his departure, Camacho expects the economic reform momentum to slow down as the election season draws near. "After the December [congressional] break, [practically] all legislative measures will come to a halt," he said. He admitted frustration at Congress's failure to pass two administration-sponsored measures-the bills on the indexation of sin taxes and the creation of a new tax agency replacing the Bureau of Internal Revenue. Despite Congress's failure to expedite passage of the bills, Camacho cited the progress made regarding other priority measures. These include the bills rationalizing the documentary stamp tax, exempting professionals and banks from the value-added tax, and the revisions to the Antimoney Laundering Act. Camacho's departure leaves the President without her standard-bearer in the campaign to speed up the economy and rein in a budget deficit that has driven foreign debt to a record. Foreign investment has withered amid concern about corruption, terrorism by Muslim extremists and kidnappings. Camacho, 48, was a 22-year veteran of Bankers Trust Co. and Deutsche Bank AG when Mrs. Arroyo named him energy secretary in March 2001. He was appointed finance secretary three months later. He presided over the worst budget deficit in history last year, speed up tax collections to put the 2003 budget on track to show its first deficit decline in five years. Camacho had been denying reports that he would resign as long ago as November 2002, and as recently as Wednesday, when he announced that the monthly deficit had narrowed in October from September. At the Philippine Dealing System, the peso closed at P55.58 to the dollar-its lowest close since the Central Bank of the Philippines was created in 1949. The previous low was P55.53, which happened after the Court of Appeals suspended the central bank governor, Rafael B. Buenaventura, and other senior monetary officials. Informed Camacho's resignation, Buenaventura said the government has a lot of explaining to do. "The government must show and convince the financial markets that there is no change in its reform program, and in its resolve [to pursue this program]," he said.

From http://www.manilatimes.net 11/22/2003

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SINGAPORE: Civil Servants to Get Lower Bonuses; Cut in Starting Pay for New Employees

Civil servants will get lower bonuses this year after the Government announced a reduction in year-end Annual Variable Component (AVC), from 1/2-month to 1/4-month.Together with the 1/4-month AVC paid in July 2003, the bonus reduction leaves civil servants with a total AVC payment of 1/2-month for 2003. The reductions in the AVC payment will result in savings of up to $53 million. Civil servants will continue to receive the one-month Non-Pensionable Annual Allowance (NPAA) in Dec 2003.A statement from the Prime Minister's Office said this was in line with private sector salaries, which have fallen over the last two years. The Government also announced a cut in the starting pay of the Civil Service by up to 20 percent from January next year. The cut in starting salaries will affect nearly 100 percent of graduate new recruits, and about 50 percent of non-graduate new recruits into the Civil Service. The statement added that the average reduction in the starting salaries is 11 percent. The reductions in starting salaries will result in net savings of the Government's wage bill by an estimated $10 million per year. The statement said the Government would continue to monitor the private sector closely and make prompt adjustments whenever necessary. According to the Civil Service website, the starting pay for university degree holders currently ranges from $1,930 to $2,713, while that of polytechnic diploma holders falls between $1,527 and $1,737. (by Dennis Lim)

From http://www.channelnewsasia.com/ 11/07/2003

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Bangkok Government: Plan Calls for 13 'Cities' with Appointed Mayors

The Interior Ministry yesterday forwarded a proposal to the Cabinet to divide Bangkok into 13 administrative units, with the aim of boosting administrative efficiency and encouraging the decentralisation of power. Interior Minister Wan Muhamad Noor Matha said |the proposed legislation would allow an elected Bangkok governor to appoint mayors to run various "cities" within Greater Bangkok. The appointment of mayors for the 13 cities would require approval from the City Council. "Initially it was agreed that [the mayors] must not be permanent officials or national politicians, but local politicians might be eligible," Wan Noor said. He said the ministry was |consulting the Council of |State, the government's legal advisory agency, on the issue. The mayors would take care of matters in the areas under their responsibility in order to lessen the workload of the Bangkok governor, the interior minister added. A draft of the proposed legislation will be submitted to the Cabinet on November 20 for endorsement so that it can be forwarded to Parliament within the current session, he said. If approved, the law is expected to take effect next year, in time for Bangkok's gubernatorial election in August. The Interior Ministry's proposal is based upon a previous proposal by the governing Thai Rak Thai Party. The main difference is that Thai Rak Thai suggested gubernatorial candidates submit the names of their mayors when registering to contest the election. A rival proposal by the opposition Democrat Party calls for separate elections for the Bangkok governor and mayors.

From http://www.nationmultimedia.com/ 11/12/2003

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Legal Reform: Wheels of Justice to Spin Faster

The glacial pace of justice may turn into a flood when new trialdate scheduling rules are adopted nationwide. Under the old rules, some trials last up to 15 years. The new system is expected to ensure that even serious proceedings are completed in less than a year. Prompted by the judicial reform provisions of the 1997 Constitution, courts are getting ready to speed up the trial process by doing away with the timeconsuming way of trial scheduling. Kririrk Kasemsant, chief justice of the Appeals Court Region 6, has been assessing the new scheduling methods. In his report released yesterday, Kririrk said he found that in the courts where new scheduling rules have been introduced, there has been a reduction in the backlog of cases - despite initial fears that the system would further burden trial judges. "The scheduling of consecutive trial dates in six provincial courts has reduced the trial period to much less than one year, freeing up judges to handle more cases on the docket," he said. Of 174 courts of justice nationwide, six have completed the implementation of new scheduling rules and another 24 will have done so by the end of the year. A further 110 will complete the implementation next year and the remaining 34 are expected to follow in 2005. Courts that have already introduced the new rules include Nakhon Pathom provincial court, Northern Bangkok court and Nonthaburi provincial court. The new scheduling rules will apply to criminal cases involving a jail term of more than three years and civil cases involving a dispute exceeding Bt300,000. Justice Minister Pongthep Thepkanchana said courts would introduce the new rules in stages, depending on their readiness. "I expect the courts to gradually speed up the trial period rather than waiting for complete readiness before introducing the new rules," he said. Law Society of Thailand president Sak Korsaengreung said the new rules should be introduced with caution. "The courts are very much understaffed and any drastic attempts to shorten the trial period might result in the compromise of justice," he warned.

From http://www.nationmultimedia.com/ 11/13/2003

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VIETNAM: Changes Clarify Roles for Local Authorities

Viet Nam's legislators adopted changes to the laws governing the organisation of People's Councils and People's Committees and the People's Council Election Law on Wednesday. They did so after agreeing that loopholes had been closed by revised versions of the laws. The amended People's Council and People's Committee Organisation Law was passed with the approval of 406 of the 428 deputies at the fourth session of National Assembly's 11 legislature. The revised People's Council Election Law was also approved with 87.75 per cent "yes" vote. Many redundant functions of People's Councils and Committees had been eliminated by the new law, said National Assembly Deputy Chairman Nguyen Van Yeu. Vagueness about their responsibilities had also been clarified. But it was inevitable that the People's Committee and People's Council would continue to share some identical functions and responsibilities. Some deputies argued that there should be a difference between the functions of urban and rural local authorities when they debated the proposed changes to the laws two week ago. "But most of Viet Nam's urban jurisdictions include a rural population," said Yeu. "In some cases, the rural population in some cities is even bigger than their non-farming peers," he said. The revised People's Committee and People's Council Organisation Law includes a new chapter detailing People's Council supervising power. The chapter enables the People's Council to organise yearly supervisory operations. All councillors have the right to require a council's standing committee, specialist boards, People's Court, and People's Procuracy with the same status to report about any issue the councillor thinks needs clarifying. The People's Council is empowered to dismiss its chairperson, deputy chairperson and member of a People's Committee with the same status. Commune People's Council standing committee will have two members; districts and province will have three. Each council will have two to three specialist boards dealing with economic and budgetary matters; social and cultural issues and legalities. For the first time, the law includes an article that shows councillors how to fill their council's decision making positions by vote of trust. Any councillor failing to win half of the vote will be dismissed in accordance with Article 64 of the changed law. The amended law had made major and specific changes to the functions and responsibilities of the People's Committee at different levels, said National Assembly chairman Nguyen Van An. Provincial People's Committee was entitled to formulate comprehensive socio-economic development plans for its jurisdiction and submit them to the Government for approval. Provincial Peoples Committees could also organise and inspect development projects in the province in co-ordination with ministries and central offices. The powers and responsibilities of individual members of the People's Committee had been distinguished from those of the organisations as a whole, An told the deputies. A report by the assembly's Legal Commission says that many committees and councils in smaller communities have failed to operate actively because of ambiguity in the original laws. The new law is expected to enable the full and efficient use of the local administrative system by clarifying the functions and responsibilities of People's Council and People's Committee members at three levels. Provincial People's Council members can now make a range of decisions from macro-economic management to law enforcement and social development. The amendments also mean that all issues relating to the planning, investment, and the building of key projects will be decided by a majority vote of People's Committee members. Pressing issues of finance and human resources will also be determined by a People's Committee vote before being submitted to the People's Council for approval. Article 126 of the new law empowers a People's Committee chairperson to dismiss any member of a lower-ranked organisation. A People's Committee chairperson will also advise about and implement measures to deal with as natural disaster, social disorder or epidemics within their jurisdiction. The chairperson will then report to the People's Council. The amended law for the organisation of the People's Council and People's Committee Organisation has six chapters and 140 articles. On Wednesday the National Assembly deputies heard that the amended People's Council Election Law enlarged the councils. Commune People's Councils will now have 25-35 councillors against the previous 19-25; districts 30-40, instead of 25-35; and provincial, 50-85, instead of 45-75, said Chairman of NA's Law Committee Nguyen Duc Khien. Ha Noi and any other cities with a population of more than three million could have a maximum 90 councillors, he said. Article 14 of the new law ensures that a People's Council must have minority and female councillors. The law also details criteria for candidates seeking election as well as election schedules and voting procedures. The revised law has 9 new articles and 44 amended articles. Both the People's Council and People's Committee Organisation Law and the People's Council Election Law were passed in 1994 but shortcomings made the changes imperative. The new laws will become effective early next year.

From http://vietnamnews.vnagency.com.vn/ 11/06/2003

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BANGLADESH: Independent Anti-Corruption Commission: Js Body for Exclusion of Ministers from Selection Panel

Two Members of Parliament, one each from the treasury and the opposition benches, are likely to replace the finance and law ministers on the selection committee for appointments to the proposed anti-corruption commission. The parliamentary standing committee on the law, justice and parliamentary affairs is expected to make amendment to some provisions in the Anti-corruption Commission Bill for exclusion of the ministers from the commission, sources said. An inter-ministerial meeting will be held at the finance ministry Saturday to take a decision to this effect. According to the sources, the schedule of the bill will also be amended for expansion of the commission's jurisdiction. The amendment may include the Foreign Exchange Act, 1947, the Passport Act and the Customs Act in the schedule to empower the commission to deal with corruption and violation of the acts. "The commission will have jurisdiction wherever there is a scope for corruption by government officials," said a minister asking anonymity. Earlier on October 23, a roundtable, organised by the law ministry, reached a consensus on those issues. The Anti-Corruption Commission Bill, now pending before the parliamentary standing committee, proposes that the president shall appoint the chairman and the members of the three-member commission from a panel recommended by a selection committee. According to the bill, the six-member selection committee will include the finance and law ministers, two Supreme Court judges - one from the Appellate Division and another from the High Court Division, comptroller and auditor general, and the chairman of the Public Service Commission. According to the sources, the parliamentary standing committee may submit its report on the bill with amendments to the Jatiya Sangsad in its next session, starting on November 16. The bill may also be passed in the session, said a minister.

From http://www.bangladesh-web.com/ 11/05/2003

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Jalil Predicts Change of Power by March-April Next Year

Awami League general secretary Abdul Jalil MP yesterday predicted change of power by March-April next year for what he said installation of a democratic government in the country. "The prevailing situation is known to all. It would be good for the people if the regime quit as early as possible. We're trying to clean up the present garbage by March-April and establish a people's government through democratic movement," he told reporters at Hotel Purbani. Elaborating his point, Jalil said they would complete party councils in different tiers by December-January, injecting momentum into the current anti-government movement. He pointed his finger to law-and-order situation, unabated price rises and unrest in society, and said Awami League would come up at an appropriate time to discharge its responsibility with the support of the people. The AL general secretary's remarks came at a press briefing where his party presidium member and former Foreign Minister Abdus Samad Azad gave Awami League's observations on the foreign policy being pursued by the coalition government that he said turned Bangladesh into a "friendless nation".

From http://www.bangladesh-web.com/ 11/05/2003

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BHUTAN: Appointment of Senior Officials in the Ministries/Agencies

The Royal Civil Service Commission during its 192nd Meeting (first meeting after its reconstitution) held on October 30, 2003 appointed the following officials to the post of Director of Departments and Managing Director/Head of Agencies:

The above appointments have been made after reviewing the existing vacancies and suitability of each official against the respective posts. The order shall come into force with immediate effect.

From http://www.kuenselonline.com/ 11/13/2003

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Chimi Elections See Joys and Sorrows

Deciding that the Dzongkhag Yargye Tshogdu (DYT) members would cast votes on behalf of the people, Sarpang's DYT re-elected Thakur Prasad Humagai of Dovan geog as chimi for the third time, on November 19. Of the 27 votes cast by the DYT members, Humagai secured 18 votes while Singye Dorji, Mangmi of Dekiling geog, won five votes, and Jatu Tshewang of Hilley geog and Pema Dolma of Darjeythang geog secured two votes each. Although there were some unofficial criticism of the election the Sarpang dzongda, Sonam Dawa, said that the DYT decided on this because some villages and geogs like Dovan and Gong were a three-day walk from the voting centre. "If these people are called to vote it will be troublesome for them," he said. "The Speaker of the National Assembly also endorsed the proposal of the DYT." The amended chathrim for election of National Assembly members of 1995 is currently being followed, according to officials of the National Assembly. The chathrim requires one member from each gung (household) to be represented for the election of chimi. Meanwhile, the chimi election for the geogs of Gelephu, Bhur, Jigmecholing, Serzhong, Chuzegang and Umling, to be held on the same day, was postponed after the serving chimi, San Maya Gurung, lodged a complaint to the DYT alleging that she was not informed or aware of the election. But the gup of Jigmecholing, who had nominated another candidate, maintained that he had informed her about the election. Five candidates were nominated for the constituency. The candidate from Serzhong geog was disqualified at the geog level because he could not meet the election criteria. In Lhamoyzingkha dungkhag the people unanimously re-elected Dilip Kumar Mukhia as their chimi. In Lhuentse the serving chimi of Menbi geog, Deki Pelzom, was re-elected in a close contest. She secured 107 votes while former dzongrab, Jigme, secured 105 votes. Five candidates contested in the elections which was monitored by the dzongkhag officials. (by Rinzin Wangchuk)

From http://www.kuenselonline.com/ 11/22/2003

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INDIA: Election Commission Spoils Jogi's Party

NEW DELHI - Chhattisgarh chief minister Ajit Jogi's joy of drawing political mileage over his rival Union minister Dilip Singh Judeo's resignation was shortlived. The Election Commission on Monday took the unprecedented step of seeking the state governor's help in the transfer of the collectors of Bastar and Jashpur for violating the model code of conduct. The EC also asked the chief secretary to immediately transfer S K Raju, collector of Surguja, and S R P Kalluri, SP Bilaspur. "This is important for conducting free and fair elections," a senior EC official said. On Monday, the EC wrote a "serious" letter to the governor and requested him that under Article 324(6) of the Constitution, he should ensure the implementation of its October 29 order transferring B S Ananth, collector of Jashpur, and I N Suryavanshi, collector of Bastar, to the state secretariat. The governor was also requested to provide a panel of names of IAS officers for being posted as collectors in these two districts. Article 324(6) says: The President or the governor of a state shall at the EC's request would make available to the EC or to a regional commissioner such staff as may be necessary for the discharge of the functions

From http://timesofindia.indiatimes.com/ 11/17/2003

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PM Accepts Judeo's Resignation, Orders CBI Probe

PTI New Delhi Nov 17: Caught in a political storm over video tapes purportedly showing him receiving bribes, the Union Minister of State for Environment, Mr Dilip Singh Judeo resigned today with the Prime Minister, Mr Atal Behari Vajpayee ordering a Central Bureau of Investigation (CBI) probe into the matter. Acting swiftly within hours of his return to India from a foreign tour last night, Mr Vajpayee consulted his senior colleagues about the damaging scandal involving Bharatiya Janata Party's potential chief ministerial candidate for Chhattisgarh which goes to polls in a fortnight. Mr Judeo persisted with his protestations of innocence and claimed to have resigned moral grounds. As television channels continued to air embarassing footage purporting to show Mr Judeo in a hotel room allegedly accepting money for fixing a mining lease in Orissa, Mr Vajpayee moved fast to limit the damage to the party and announced a probe by CBI which said it was taking immediate follow up steps. Asked whether he had seen the controversial footage, the Prime Minister replied, "saaf nahi hai (it is not clear)". He chose not to hazard a guess about the likely impact of the episode on BJP's prospects in the upcoming assembly elections, saying that it would be known only after the votes are counted. "Judeo has sent his resignation to the Prime Minister," the BJP president, Mr M Venkaiah Naidu told reporters, a day after the party spokesman and some other leaders described the video tape purportedly showing Judeo receiving money as "fake" and part of a Congress conspiracy to malign the party ahead of the assembly elections. The meeting at Mr Vajpayee's residence was attended among others by the Deputy Prime Minister, Mr L K Advani, the Finance Minister, Mr Jaswant Singh and the general secretary, Mr Pramod Mahajan. Mr Naidu said leaders requested Mr vajpayee to order an inquiry by CBI or by an "appropriate" agency "so that truth comes out". On his return from a six-day foreign tour, Mr Vajpayee told reporters last night that an enquiry into the allegation against Mr Judeo was on and "he has to go if found guilty". Mr Judeo told reporters in Raipur that he had resigned on "moral grounds" and the Union Agriculture Minister, Mr Rajnath Singh said it has been accepted. Mr Singh said Mr Judeo, in fact, wanted to resign yesterday but was asked to hold on till the Prime Minister's return from abroad.

From http://www.navhindtimes.com/ 11/17/2003

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SRI LANKA: Law and Order Commission Begins Hearings

President Chandrika Bandaranike Kumaratunga in a message to the inaugural sessions of the Presidential Commission of Inquiry on Matters Relating to Maintenance of Law and Order, stated it was necessary to establish a Commission of Inquiry for the purpose of inquiring into the matters in respect of which an inquiry will, "in my opinion, be in the public interest." The President appointed retired Supreme Court Judge, Justice S.W.B. Wadugodapitiya PC as the Commission Chairman. The other two members of the Commission are retired Additional Secretary to the President and a former Ambassador to France C.G. Wickremasinghe and former Inspector General of Police Dr. T.P. Frank de Silva. Supreme Court Registrar Bandula Atapattu, Secretary to the Commission M. A. Cyril, Additional Secretary D.G. Dissanayake, Senior State Counsel Dappula de Livera and State Counsel Menaka Wijesundera assisting the Commission. The President's message said the Commission will inquire whether there has been a significant increase in crime in Sri Lanka over the last two decades affecting the maintenance of law and order. The message said "if so, is it due to any deficiencies on the part of State Agencies charged with maintenance of law and order. If so, the reasons for such deficiencies. What remedial measures are recommended for the proper maintenance of law and order in Sri Lanka. I authorise and empower you, the three Commissioners, to hold such inquiries and make all other investigations into the matters as may appear necessary, and require you to transmit to me within three months from the date hereof a report or interim reports thereon, under your hand, setting out the findings of your inquiries and your recommendations relating thereto. I do hereby require and direct that such part of any inquiry relating to the matters as you may in your discretion determine, shall not be held in public. All public officers and other persons to whom you may apply for assistance or information for the purpose of your inquiry, to render all such assistance and furnish all such information as may be properly rendered and furnished, in that behalf. That the Provisions of Section 14 of the Commissions of Inquiry Act (Chapter 393), shall apply to the Commission." The first witness to give evidence before the Commission was Deshamanya Dr. P.R. Anthonis, Sir Arthur C. Clarke and Deshabandu A.T. Ariyaratne also gave evidence before the Commission. (by Sarath Malalasekera)

From http://www.dailynews.lk/ 11/21/2003

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MALDIVES: The President Appoints Ministers for the New Presidential Term

President Gayoom yesterday made appointments to the posts of the Chief Justice and the Speaker of the People's Majlis following the inauguration of the new presidential term. He also appointed Ministers for the new term. The Chief Justice, the Speaker, members of the Cabinet, and State Ministers were sworn-in at mid-day yesterday at the President's Office. The highest ranking posts of the government have been constituted as follows: President, Commander-in-Chief of the Armed Forces and of the Police, Minister of Defence and National Security, and Minister of Finance and Treasury-- His Excellency Mr. Maumoon Abdul Gayoom Chief Justice-- Mr. Mohamed Rasheed Ibrahim Speaker of the People's Majlis and Minister of Atolls Development-- Mr. Abdulla Hameed Minister of Foreign Affairs-- Mr. Fathulla Jameel Minister of Youth Development and Sports-- Dr. Mohamed Zahir Hussain Minister of Construction and Public Works-- Mr. Umar Zahir Minister of Justice-- Mr. Ahmed Zahir Minister of Home Affairs and Environment-- Mr. Ismail Shafeeu Minster of Employment and Labour-- Mr. Abdul Rasheed Hussain Minister of Health-- Mr. Ahmed Abdulla Minister of Tourism-- Mr. Hassan Sobir Minister of Information, Arts and Culture-- Mr. Ibrahim Hussain Maniku Minister of Trade and Industries-- Mr. Abdulla Yameen Minister of State for Defence and National Security-- Mr. Abdul Sattar Adam Minister of Transport and Civil Aviation-- Mr. Ilyas Ibrahim Minister of Fisheries, Agriculture and Marine Resources-- Mr. Abdulla Kamaaludeen Minister of Gender, Family Development and Social Security-- Ms. Aneesa Ahmed Minister of Communication, Science and Technology-- Mr. Midhath Hilmy Minister of Planning and National Development-- Mr. Hamdoon Hameed Minister of Education-- Dr. Mahmood Shaugee Attorney General-- Dr. Hassan Saeed Minister of State for Presidential Affairs-- Mr. Mohamed Hussain Minister of State for Finance and Treasury-- Mr. Mohamed Jaleel Auditor General and Minister of State-- Mr. Ismail Fathy

From http://www.haveeru.com.mv/ 11/12/2003

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Department of Higher Education and Training Established

MALE -- President Maumoon Abdul Gayoom has established the Department of Higher Education and Training. The new Department was established following approval by the Cabinet. The new Department will function under the Ministry of Education. The President had revealed plans to establish the new department, which has the mandate to strengthen higher education and training in the Maldives, in his inaugural address to the nation, following his swearing-in for a sixth five-year term in office, earlier this month. Among the principle tasks of the Department of Higher Education and Training are the drawing-up of the national policy on higher education, under the guidance of the Council for Higher Education, the alignment of matters related to higher education in the country to the national policy, and the planning and implementation of vocational training in the country. Following the establishment of the Department of Higher Education, the President has reassigned the Maldives College of Higher Education to function under the new Department. The Maldives College of Higher Education previously functioned under the President's Office. Dr. Abdul Muhsin Mohamed has been appointed as the Assistant Executive Director at the Department of Higher Education and Training.

From http://www.haveeru.com.mv/ 11/20/2003

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Director-general Appointed to EDC

MALE -- Zahiya Zareer of Galolhu Moonimaage has been appointed as the Director General at the Educational Development Centre, the President's Office announced.

From http://www.haveeru.com.mv/ 11/20/2003

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Government Directors for Board of Directors of Bank of Maldives Announced

MALE - The seven government directors for the 2003-2004 Board of Directors of Bank of Maldives have been announced. Ibrahim Zuhair was named as the new Chairman of the Board of Directors. The other six members who were appointed for the Board by the government were Dr. Ahmed Shaheed, Abdul Razzaq Idris, Mohamed Manik, Mohamed Ahmed Didi, Nadiya Hassan and Aminath Ali Manik.

From http://www.haveeru.com.mv/ 11/23/2003

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NEPAL: Govt. Directives on Anti-Corruption Drive

Prime Minister Surya Bahadur Thapa Thursday directed all government secretaries to effectively implement the action plans on anti-corruption policy and strategy passed by the Council of Ministers, RSS said. "PM Thapa told the secretaries to immediately pass the information, if someone is trying to influence them unnecessarily," the news agency said. The PM further told the high-level bureaucrats to be cautious on sensitive matters, such as, transfer of employees and issuance of tenders and contracts for development works of departments and agencies under the ministries. On the occasion, a memo of the directives, signed by the government's acting chief secretary Lava Kumar Devkota was distributed to the secretaries, the agency said.

From http://www.nepalnews.com.np/ 11/07/2003

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AI Flays Govt. Plan to Set Up Rural Peace Committees

KATHMANDU - Amnesty International (AI) has raised strong objection to the government's plans to set up "Rural Volunteer Security Groups and Peace Committees". In a letter sent to Prime Minister Surya Bahadur Thapa, the international human rights organisation expressed fears that such a step can place the civilian population in grave danger by seriously compromising their neutrality, the organisation said in a statement released in Kathmandu Tuesday. "Without appropriate supervision, training and clearly defined mechanisms for accountability, there is a clear risk that the creation of these groups could lead to an increase in human rights violations carried out with impunity," AI said. "Those refusing to join are likely to be seen as tacitly supporting the armed opposition." The Government announced its plans to introduce "Rural Volunteer Security Groups and Peace Committees" on November 4. The Committees are being set up as a way "to promote the role of the general citizens in maintaining peace and security" in the context of the ongoing conflict between the security forces and the Maoists. "The introduction of such groups affects the sense or interpretation of the Geneva Conventions of 1949, in relation to the state's responsibility at all times to clearly separate civilians from combatants," the organisation said in the statement, citing cases of atrocious human rights abuses in Guatemala. Furthermore, the organisation noted the growth in the number of human rights violations with impunity as the country slides towards militarisation.

From http://www.kantipuronline.com/ 11/12/2003

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Appointment of Lawyers in Govt Depts Suggested

KATHMANDU - In a bid to bolster government's cases in the court, the Office of the Attorney General (OAG) has suggested the government to appoint lawyers in all government departments. In its recent report submitted to the government, the OAG, arguing the need of appointing lawyers in all government departments said, "It is difficult to understand the context and the complexity of the cases in which the government is the plaintiff as there are no separate lawyers in government departments." The report has mentioned that the attorney general always has to face practical problems while replying to the show cause notices issued by the Supreme Court in the name of the different government departments like revenue, customs, land reform and land revenue. Thus the attorney general has to respond to the show cause notices relying on general knowledge about the departments, said the report. The report was recently handed over to the Prime Minister by Attorney General Susil Kumar Panta. It has been learnt that the Prime Minister has already ordered the Ministry of Law and Parliamentary Affairs to implement the report.

From http://www.kantipuronline.com/ 11/17/2003

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Govt. Sets Up HR Promotion Center

KATHMANDU- The government has formed Human Rights Promotion Center (HRPC) under the office of the Prime Minister and Ministerial Secretariat. According to the office of the Prime Minster and Ministerial Secretariat Wednesday, a nine-member directorate was also constituted under the Chief secretary of the government to issue necessary directives to the center. Provision of special class officer of the government as the national director was also made to look after the administrative tasks of the center. The center will look after cases of human rights violation in country in accord with the constitution and other document on the rights. However, the government's decision to set up HRPC parallel with National Human Rights Commission, the constitutional human rights watchdog has been strongly opposed by the political parties. The parties say the government move is to bypass the already existing NHRC.

From http://www.kantipuronline.com/ 11/19/2003

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PAKISTAN: Federal Communications Minister Forced to Resign

ISLAMABAD - Prime Minister Zafarullah Jamali has accepted the resignation of Federal Minister for Communications Ahmed Ali who was asked to relinquish charge over alleged involvement in corruption, sources told Daily Times on Tuesday. Senator Ahmed Ali was given the cabinet portfolio to accommodate the Muttahida Qaumi Movement (MQM), a coalition partner in the Jamali government. "Mr Ahmed Ali was asked to resign after the prime minister received reports about the his involvement in corruption," sources said, adding that Mr Ali's successor was also expected to be from the MQM. "This matter is also in the knowledge of President Musharraf who asked for the minister's resignation in a meeting with Sindh Governor Dr Ishratul Ibad during his last visit to Karachi," sources added. "The president took serious notice of reports of the minister's alleged corruption," they said. NNI adds: "Mr Ali was forced to resign on evidence of his corruption worth billions of rupees," NNI quoted unnamed sources as saying. The news agency said President Musharraf handed over a detailed intelligence report of the communication minister's corruption to the Sindh governor. The minister is said to have made billions of rupees in two contracts of the National Highway Authority and the Sindh governor is said to have informed MQM chief Altaf Hussain about the issue, who approved the resignation.

From http://www.dailytimes.com.pk/ 11/05/2003

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PAKISTAN: SHC Seeks Govt Update on Urdu

KARACHI - The Sindh High Court (SHC) on Tuesday asked the Sindh and federal governments to give an update on enforcing article 251 (I) of the 1973 constitution, which provides for making Urdu the official language of the country. A division bench, comprising of Chief Justice Saiyed Saeed Ashhad and Justice Ghulam Rabbani, hearing a constitutional petition seeking enforcement of article 251 (I) of the 1973 constitution, asked Additional Advocate General (AAG) Sindh Dr Qazi Khalid and standing counsel for the federal government, Syed Tariq Ali, to submit comments on behalf of their respective governments as to what steps they had taken. The petition had been filed by a citizen, Tahseen Ahmed, in 1997 and had already been admitted for a regular hearing. Two petitions similar petitions are pending adjudication before the Sindh High Court: one by Mr Ahmed and the other by Dr Mubeen Akhtar. Article 251(I) of the 1973 constitution says: " The national language of Pakistan is Urdu, and arrangements shall be made for its official use and other purposes within fifteen years from the commencement day."

From http://www.dailytimes.com.pk/ 11/19/2003

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Thirteen More Ministers Likely in Balochistan Cabinet

QUETTA - The Balochistan cabinet is likely to have 13 more ministers and Chief Minister Jam Muhammad Yousaf has asked allied parties to give him a list of their candidates, sources said on Tuesday. They said six new ministers would be from the Muttahida Majlis-e-Amal and seven from the ruling alliance at the centre consisting of the Pakistan Muslim League (Quaid-e-Azam) and the National Alliance. The PML-QA and the MMA share an equal number of ministers under a mutually agreed formula. The total number of cabinet members after new inductions will reach 28. Sources said Mr Yousaf would have difficulty distributing ministries within the alliance because the National Alliance has demanded three more ministries and threatened to part ways if the demand is not met. Sources said some PML-QA members of the provincial assembly (MPAs) were annoyed that important ministries were given to the MMA, while the PML-QA MPAs were only given "B and C grade ministries." PML-QA MPA Jan Muhammad Jamali said the existing structure should be changed in order to fix the imbalance between MMA and PML-QA ministries. Planning and Development Minister Maulana Abdul Wasey said the MMA would concede important ministries to the PML-QA if an MMA member was made chief minister. (by Azizullah Khan )

From http://www.dailytimes.com.pk/ 11/19/2003

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AFGHANISTAN: Afghanistan to Raise Salaries by Seven Times

The Afghan government, under criticism for paying too less to its employees, has decided to increase salaries up to seven times for government workers, Xinhua reports. Finance Minister Ashraf Ghani announced here Saturday that increments would be implemented from the Afghan month Aqrab, which ended Friday. This follows a finance ministry proposal approved by President Hamid Karzai. However, this scheme would not cover army personnel and teachers in the country as their salaries had already been increased earlier, he added. "This increment totalling 379 million Afghanis (over $7 million) has been allocated from the government's general expenditure for the current fiscal year," the minister said. The government's budget of general expenditure for the current fiscal year, starting from March 21, is at $550 million, finance ministry officials said. Prices for basic living needs have been shooting up in Afghanistan, especially Kabul, since the fall of the extremist Taliban regime two years ago, people have complained. The unchecked price hikes, which added to the miseries of the salaried class and common people, stirred criticism from various social segments, even government employees, against President Karzai's government, which was installed with U.S. backing in late 2001.Afghans working in government offices in the past months held several peaceful demonstrations, urging the increment of their salaries and timely payment. Under the new salary increment package, salaries for government employees would be increased by up to 700 percent, Finance Minister Ghani said. According to him, salaries for most senior employees in government offices would increase from the current 455 Afghanis (less then $10) to 3,185 Afghanis. Plus other allowances including those for transportation and lunch, provided by the government, their monthly income would reach nearly $100, he added. Out of all the 450,000 government employees, about 40 percent would benefit from the new programme, an official said, adding that salaries for military personnel and teachers increased respectively late last year and early this year. The Afghan government is depending largely on foreign aid to reconstruct a country that had been almost destroyed by over two decades of war and civil conflicts. According to Afghan officials, the country received $1.7 billion in aid, much of them through the United Nations and other agencies working on reconstruction efforts. Donors pledged about $4.5 billion for Afghanistan's post-war reconstruction over five years at an aid conference in Tokyo in January 2002, but Afghanistan said the amount was far from its rebuilding needs. The U.S., which overthrew the former ruling Taliban through a military campaign, last week announced an increase of its Afghanistan assistance from $1.2 billion to $1.7 billion for the current fiscal year.

From http://www.aopnews.com/ 11/23/2003

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President of Azerbaijan Re-Appointed 17 Senior Officials

Ilham Aliyev, the President of Azerbaijan, re-appointed 17 senior officials in the Government of Azerbaijan. Agency "Trend" reports I.Aliyev re-appointed Namik Abbasov as Minister of National Security, Ramil Usubov as Minister of Internal Affairs, Safar Abiev - Minister of Defense, Kemaleddin Нeydarov - Chairman of State Customs Committee, Avez Alekрerov - Minister of Finance, Farhad Aliyev - Minister of Economic Development, Fazil Mamedov - Minister of Taxes, Ziya Mamedov - Minister of Transport, Ali Insanov - Minister of Health, Ali Nagiev - Minister of Labor and Social Protection, Abulfaz Garaev - Minister of Youth, Sport and Tourism. Moreover, I.Aliyev affirmed Vilayat Guliev as Minister of Foreign Affairs, Guseingulu Bagirov - Minister of Ecology, Misir Mardanov - Minister of Education, Fikret Mamedov - Minister of Justice, Polad Bul-bul oglu - Minister of Culture, Nazim Ibragimov - Chairman of State Committee for Azerbaijanis Living Abroad. Agency "Trend" reports I.Aliyev earlier stated that he isn't in a move to change the Cabinet of Ministers and re-appointed Artur Rasizade as Prime-Minister.

From http://www.bakutoday.net/ 11/11/2003

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IRAQ: 36-member Assembly to Replace Council

Baghdad - A 36-member National Assembly is to replace the current interim Governing Council before the United States officially hands power over to a transitional government, it has emerged. The assembly will be an elected body of two representatives from each of the country's 18 provinces. Each province will hold elections to choose its two representatives to the Assembly which will form the government and prepare for the writing of a constitution and elections before the end of 2005. But the US-led Coalition Provisional Authority will hand over power officially to the new government in June 2004. The move is part of the US-backed plans unveiled on Saturday to give Iraqis almost full say in running their affairs by June next year. The 25-member Governing Council has welcomed the latest US timetable for the transfer of power. But others see the handover as too slow. The present US-handpicked council has failed to move quickly to fill the power vacuum created after the collapse of the former regime. Many say the council's "impotence" is mainly due to its ethnic and sectarian makeup where the 25 members spend most of their time quarrelling over quotas and power sharing than how to move ahead. Even the current cabinet, announced on September 1, mirrors the council's ethnic structure and as a result has been target of scathing attacks in newspaper articles. If the forthcoming transitional assembly and the transitional government are formed on the same principles, they are probably bound to end up in the same vicious circle the present council finds itself in. There is no end in sight to the current violent unrest which is spreading rather than receding. And in the meantime various power groups are jostling for influence in whatever shape the next government is going to take. The supporters of the controversial Shiite cleric Muqtada Sadr have already called for a conference in Baghdad to advance their notion of how Iraq should be governed in the future. The young cleric, seen by his supporters as wise and as inexperienced and radical by opponents is said to have established a shadow government of his own. "Our conference is to discuss his (Sadr's) proposals for the establishment of a new Iraqi government," said Abdulkarim al-Ali al-Rubai, head of Progressive National Party. Rubai said he would invite other political groups for what he called "a national Iraqi front" to back "the formation of an Iraqi government as suggested by cleric Muqtada Sadr." Rubai said his group will form a transitional national assembly and a transitional government, to rival the US-led steps for the handover of power to a sovereign transitional Iraqi government in June.

From http://www.iraqpress.org/ 11/19/2003

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KYRGYZSTAN: Women's Party Changes Name and Orientation

The Democratic Party of the Women of Kyrgyzstan, one of the older and more active political groups in the country, has changed its name and charter and reregistered with the Justice Ministry, KyrgyzInfo reported on 4 November, quoting party Chairwoman Tokon Shailieva. The party is now called the New Force and accepts for membership any citizen regardless of sex who has reached the age of 18. According to Shailieva, the party presently has 5,000 members. BB

From http://www.rferl.org/ 11/14/2003

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TURKMENISTAN: President Reshuffles Cabinet

Turkmen President Saparmurat Niyazov appointed two new deputy prime ministers at a cabinet meeting on 15 November, RIA-Novosti and centrasia.ru reported the following day. Agriculture Minister Begench Atamuradov was appointed deputy prime minister for agriculture while retaining his ministerial post; poet Gozel Nuralieva, chief editor of the daily "Neitralnyi Turkmenistan," was appointed deputy prime minister and will head the newly created Culture and Information Ministry. Former Culture Minister Orazgeldy Aidogdyev, who had held the post since 1995, was fired for failing to discover new cultural stars, while Muhammednazar Khudaikuliev, the long-serving minister of construction and building-materials production, was reportedly fired for incompetence. Deputy Prime Minister Rejepdurdy Ataev was given Khudaikuliev's post. Water Resources Minister Kurbangeldy Volmuradov, who was accused of abuse of office, was replaced by Byashimklych Kalandarov, head of the cabinet's agriculture department. BB

From http://www.rferl.org/ 11/18/2003

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AUSTRALIA: Union Block on Big State Projects

Ambitious plans by state governments to build social infrastructure using private investment are at risk from a concerted campaign by left-wing unions trying to stop large industry superannuation funds investing in such projects. Australian Manufacturing Workers Union secretary Doug Cameron is understood to have objected strongly at a recent board meeting of the massive Superannuation Trust of Australia when a $210 million package of three "public private partnerships" was presented for the board's consideration as an investment. And Rob Durbridge, the federal secretary of the Australian Education Union, has written to all big industry super funds, large unions and the ACTU asking that they "not support this form of investment in its current form". Unions have a blocking stake on the boards of Australia's biggest industry super funds which control $56 billion in assets, 11 per cent of Australia's total super pie. A concerted boycott by industry super funds would make it difficult to finance many new projects. Mr Cameron would not comment on board meetings but told a recent meeting of the ALP Left in Canberra that PPPs ripped money away from the public to pay top dollar to the private sector for substandard assets. He said governments were attracted to PPPs because they could build infrastructure without reporting the liability as debt on the balance sheet. The recent ACTU Congress passed an anti-PPP resolution, and ACTU secretary Greg Combet is also on the board of Superannuation Trust of Australia. At issue is a package of three pieces of public infrastructure being presented to super funds by broker Industry Funds Services. The package has nine public schools in NSW, which are yet to be built; Wyuna Water, which owns two plants providing drinking water to 500,000 Sydneysiders; and Melbourne's Spencer Street train station. IFS executive chairman Garry Weaven confirmed yesterday that he was trying to raise $210 million from super funds to buy the package from investment bank ABN Amro and set up a new social infrastructure investment fund. The fund would pay investors a safe 9 per cent annual return over 30 years. "It would be a ridiculous death knell of the super industry if they were excluded from social infrastructure," Mr Weaven said. (by Michael Bachelard)

From http://www.theaustralian.news.com.au/ 11/18/2003

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$100m Spend to Attract Tourists

THE Federal Government would invest hundreds of millions of dollars in promoting some of Australia's lesser-known tourism attractions, Prime Minister John Howard said today. Mr Howard and Tourism Minister Joe Hockey will launch the Government's tourism white paper in south western Sydney today, aimed at promoting Australian tourism in international and domestic markets. "This is a very attractive country for tourists," Mr Howard told Sydney radio C91.3FM. "We're seen as a friendly and open and stable and safe (country) and there's a lot more we could do to promote Australia. "And not just the well known parts of Australia such as Sydney Harbour and the Opera House and the Barrier Reef and the beaches, and Ayers Rock and all of those things. "But there are also a lot of other regions that don't get the same exposure overseas that offer a great deal and the purpose of this investment will be largely be to promote Australia and all of its assets to the rest of the world."

From http://www.theaustralian.news.com.au/ 11/20/2003

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FIJI: Police to Get Armed Units

The police force will set up an Armed Offenders Units to counter violent crimes where firearms are used. Police Commissioner Andrew Hughes says that the new units will replace the current police mobile force and that officers wishing to join the Armed Offenders Unit would be trained to handle arms if the need arises. He says the Armed Offenders Units will be based in all major police stations with their own armory, "The officers that will be deployed in the unit have been trained and they know how to handle the weapons and they know when and how they can use these weapon," said Hughes. "Its never a pleasant thing to get involved in an exchange of gunfire for police officers or anyone else but this is our job," said Hughes who added he hopes the cops don't have to use their weapons. "Now I'm hoping that we don't end up in a confrontation where such exchange and people get hurt, but that's our job and we have to do it." The establishment of the unit follows a recent armed robbery where robbers fired gunshots inside the bank.

From http://www.pacificislands.cc/ 11/13/2003

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NEW ZEALAND: Police Get Help to Slow Drivers on Auckland Speed Strip

Tamaki Drive motorists have been given a stick and a small carrot. As well as their instant fines, speedsters have received a key-ring with the words: "Slow down on Tamaki Drive." Auckland police district communications manager Noreen Hegarty said the Auckland City Council and ACC had been helping police target one of Auckland's notorious speeding zones. "Tamaki Drive is a recognised hot-spot for speeding and obviously we police it as such," Ms Hegarty said. "Any initiative that impacts on people's speeding in a positive way is worthwhile in our books." One speeding motorist, who did not want to be named, said she would not speed again after being caught at the weekend. "The fine and demerit points will now make me slow down all over Auckland." The driver received a $120 fine after being clocked at 67km/h in the 50km/h area. Auckland City Council traffic safety manager Karen Hay said there had been 138 speed-related crashes along Tamaki Drive in the past five years, two of them fatal. Before the campaign the council found that 56 per cent of drivers were exceeding 50km/h along Tamaki Drive. Afterwards the figure had dropped to 49 per cent. "It is a really good result in that short space of time." Ms Hay said the Land Transport Safety Authority helped pay for road safety initiatives in high-risk areas. The Tamaki Drive project ran from June to mid-July. "The community really got behind the project and most of the cafes along Tamaki Drive were handing out 'slow down' balloons, chocolates and key-rings. "The key-rings were also handed out by the police to raise awareness." Ms Hay said more campaigns were planned for other high-risk areas of Auckland. (by Matthew Torbit)

From http://www.nzherald.co.nz/ 11/05/2003

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Government Imposes $20m Levy on Trade

A new security fee will be charged on businesses by the Government to cover the cost of meeting higher security standards being imposed on trade by the United States. About $20 million is expected to be collected from the new "security compliance fee", Customs Minister Rick Barker said yesterday. The fee is planned to be introduced from July next year, but it is sure to raise the hackles of the business sector, which is already sensitive to more compliance costs being imposed. The proposed amount to be collected is more than double the controversial flatulence tax, which the Government backed down on last month after extensive protests from farmers. Barker said that in the wake of the September 11, 2001, terrorist attacks the US was insisting traders have security systems to prove that goods crossing its borders have not been interfered with. European Union nations and other countries that New Zealand traded with would also implement the tougher standards. New Zealand Customs would need about 130 extra staff and new x-ray Machines and other gear to ensure high-risk cargo was checked and cleared without delay. The extra staff and gear were announced in the Budget, and since then the Government has outlined plans to inspect all shipping containers coming into New Zealand under tough new biosecurity measures. But Barker said the cost of establishing and maintaining the new security measures demanded by the US would exceed Customs' budget, and its "core responsibility of protecting New Zealanders". "So the Government has decided that those who benefit from New Zealand's reputation as a safe and secure trading partner should contribute toward the cost of meeting these new requirements." The security fee would recover about $8 million from the export sector, $4 million from importers and $8 million for security screening of goods trans-shipped through New Zealand. "The new standards would mean that trading partners could be confident that cargo sealed with a New Zealand Customs-approved seal is secure and therefore did not need to be checked on arrival at their wharves." Barker said if New Zealand did not comply with the tough new rules vital exports could sit on foreign wharves for days awaiting Customs clearance while competitors with better security agreements got their cargo across the border without delay. He said he was inviting business representatives to work with Customs concerning the fee. The Government is developing a proposal to charge a flat fee of between $450 and $650 for the processing of the outward cargo report that must be lodged for every departing ship or aircraft. It will be up to the transport or shipping company how the charge is passed on. In the year to June 2003, the total value of New Zealand's trade was about $62.1 billion. Background papers released by Barker's office said the $20 million traders were being asked to contribute amounted to less than 0.03 per cent of the country's total trade. (by Kevin Taylor)

From http://www.nzherald.co.nz/ 11/06/2003

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Brownlee Elected National Party Deputy Leader

National Party MPs this morning elected Gerry Brownlee their deputy leader. He replaced Nick Smith, who resigned yesterday after learning leader Don Brash now supported Mr Brownlee. Dr Smith had been in the job just three weeks, most of which was spent on sick leave said to have been brought on by stress and exhaustion. Dr Brash announced the decision after a caucus meeting in Parliament Buildings. Dr Brash told reporters he had "in recent days" reached the view it was in the best interests of Dr Smith and the party for Dr Smith to step down. "A clear majority of the caucus also reached that view," he said. "This morning the caucus accepted my advice to elect Gerry Brownlee as deputy leader and I am very delighted with that outcome." Mr Brownlee had put his name forward, unopposed. Dr Brash said the new deputy had considerable experience as a Member of Parliament, and was an aggressive debater. Mr Brownlee, a former woodwork teacher and an MP since 1996, was held in high regard by his colleagues and the wider party, Dr Brash said. "I am delighted that he has accepted this role," he said. Mr Brownlee said he was delighted the caucus had shown confidence in him. "It's a rather sombre occasion for us, given the circumstances, but I am confident that I will be good support to Don as he leads us to an election victory in 2005." Dr Smith's short tenure as deputy leader ended bitterly yesterday, when he was told Mr Brownlee would challenge him. He resigned when Dr Brash told him he supported the challenge. "It is with regret that I resign but I have been forced into this position," Dr Smith said. He alleged there had been a campaign to undermine him while he was on sick leave, effectively gagged from speaking to the news media. Mr Brownlee dismissed that. "I'm a little disappointed by that, and we'll leave it simply at that," he said.

From http://www.nzherald.co.nz/ 11/18/2003

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Organised Crime Targeting Public Servants

Organised crime is targeting those public servants who stand in the way of their profits, State Services Commissioner Michael Wintringham told MPs today. Mr Wintringham told the government administration select committee this week's case of a corrupt Customs officer showed how the environment had changed. Tori Rocky Kotahi Puata gave drug smugglers details of security secrets. He has pleaded guilty to a charge of importing crystal methamphetamine and is awaiting sentence. "In the case of criminal activity the customs case in particular shows the environment has changed," Mr Wintringham said. "Now organised crime specifically targets some areas of the public service where a financial advantage can be seen, or where the public servant stands in the way of profits from criminal activity." "I expect public service chief executives to understand the environment that they are operating in, to understand the risks and take steps to mitigate them," he said. "That is an important part of the performance management environment in which they operate." While there have been several high profile recent cases of public servants breaking the law, Mr Wintringham said he oversaw an "incorrupt" administration. "The New Zealand public service has and continues to have a fine record of honesty and integrity. "I personally feel betrayed when public servants act corruptly or otherwise betray the expectations that the Government and New Zealanders should have of their behaviour." In addition to criminal action, there were also cases when senior public servants exercised poor judgement in areas such as hospitality expenditure, or dealing with offers of corporate gifts. Both types of case risked public confidence in the administration, he said. He had reissued the code of conduct, with supporting material for enforcing. That had attracted international interest from countries who saw New Zealand as a model. "We still have a record, rightly so, for having an incorrupt public service with high standards of integrity," he said. "There is international concern that that should be an important part of any public administration." Inquiries had taxed commission resources, he said. There had been about seven in four years. Te Puni Kokiri, the Civil Aviation Authority and Fisheries Ministry administration of the scampi industry have come under the commission spotlight this year. Such inquiries required careful definition , an adherence to due process and careful judgment in responding to public and political demands while maintaining principles of natural justice, Mr Wintringham said. "That is not the kind of situation or environment in which one puts relatively junior or untried people, it requires very often the best and most seasoned of our staff."

From http://www.nzherald.co.nz/ 11/20/2003

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PAPUA NEW GUINEA: Deputy PM Dumped in Cabinet Reshuffle

Deputy Prime Minister Allan Marat is one of two ministers dropped from Papua New Guinea's cabinet in a cabinet reshuffle here. Prime Minister Michael Somare said the changes were aimed at strengthening the ruling coalition ahead of an important parliamentary vote. Marat was dropped after he was dismissed as the head of a party in the coalition. Parliament is considering ambitious constitutional changes, which would better protect the government from frequent no-confidence votes. Labour Minister Peter Yama, who had opposed the changes, was also fired. Former fisheries minister Andrew Baing has been appointed deputy prime minister, Paul Tiensten took over the trade ministry, formerly held by the deputy prime minister, and Tom Tomiape was appointed as minister for labour.

From http://www.channelnewsasia.com/ 11/12/2003

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SOLOMON ISLANDS: Minister Wants Police Force Reformed

Minister for Police and National Security Michael Maina has called on the government, donor partners and those who make decisions to address the reform of the Royal Solomon Islands Police. Speaking to the Solomon Islands Government and donor and development partners meeting in Honiara, Maina stressed that if the reform of the country does not start with the police, it's not going to happen. He said that if funds are not directed towards the retirement of people in the police force, the partnership between the government and the donor community wouldn't work and called on the government and the donor community to address the police force, by down-sizing it, retiring those who have been earmarked and then start recruiting new young people. He said without a strong, dedicated police force there will be no investment, adding that investment in Solomon Islands borders very well with law and order. He said if there is time to engage donor partners, it is now.

From http://www.pacificislands.cc/ 11/21/2003

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VANUATU: Government Says Talk of Changes in NPF Nonsense

Minister of Finance Sela Molisa has dismissed union claims that the government is trying to exert greater control over the board of the National Provident Fund. Next week the Government is expected to make amendments to the legislation governing the NPF, including cutting employer contributions from six to four percent to boost the economy. Ephraim Kalsakau of the National Union of Workers Board, says the Government also wants its union nominee on the NPF, so it can get direct access to the Funds money. But Molisa says this claim is total nonsense. He says currently only the National Union of Workers represents non government workers and the Government simply wants all unions to have a say. What I am doing with this is to say it is up to the unions to choose who they want as their representative, at least it is not limited to one union. The amendment is to allow unions, whether big or small, equal opportunity to be on the board Molisa said. Molisa also says he has no intention of changing the restrictions governing access to NPF funds.

From http://www.pacificislands.cc/ 11/17/2003

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Cutting-edge Agriculture Research to Boost Food Security in 14 Asian Countries

MANILA, PHILIPPINES - The Asian Development Bank (ADB) approved a US$3 million regional technical assistance (RETA) grant yesterday to fund four cutting-edge agriculture research projects to fight poverty, improve the livelihoods of farmers, and boost food security in 14 Asian countries. The RETA is the eighth annual grant for research at international agricultural research centers (IARCs) focusing on helping the poorest regions and most unfavorable environments of Asia. These include semiarid and marginal lands, rain-fed areas without irrigation, and areas where water resources are inadequate and high-yielding varieties of fish are unavailable. The projects chosen for this year's grant will be implemented through three CGIAR (Consultative group on International Agriculture Research) centers, in partnership with national agriculture research and extension systems, and ADB. The International Center for Agriculture Research in the Dry Areas (ICARDA) will demonstrate efficient water and soil fertility management in small farms of six Central Asian countries - Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. The International Rice Research Institute in the Philippines will develop cropping systems and technologies to stabilize and increase rice productivity in a range of unfavorable monsoon-dependent rice environments in Bangladesh, India, Indonesia, Lao People's Democratic Republic, Philippines, Thailand, and Viet Nam. The World Fish Center, headquartered in Malaysia, will test and demonstrate genetically improved carp species - the most important fish in aquaculture - to fish farmers, hatchery managers, and national researchers. It will also establish national carp breeding programs in Bangladesh, People's Republic of China, India, Indonesia, Thailand, and Viet Nam. ADB will hold regional workshops in Central and South Asia to promote information-sharing and collaboration between the IARCs, national governments and donors, so that regional and country level priorities and programs for the agriculture sector can be better focused and coordinated. "Projects have been chosen for their sound design, innovation, and relevance to emerging priorities in agriculture in Asia," says Pratima Dayal, an ADB Senior Agriculture Specialist. "The development and dissemination of technologies in these projects are expected to make an important contribution to improving Asia's agriculture and natural resources, and alleviating poverty." Years of misuse have left millions of hectares of arable lands degraded in Asia, making them prone to drought, desertification, soil erosion, and loss of fertility, and depleting forest cover. In many of these areas, agricultural technologies cannot support further increases in production or even sustain existing levels. New technologies are needed. "There is a need to support and catalyze innovations in technology, disseminate successes, build capacity among farmers and national research and extension systems, and support public policies to boost growth in agriculture," says Ms. Dayal. ADB has been supporting a package of high-priority research proposals annually since 1996, and has provided a total of $35.5 million, mostly to member centers of CGIAR. Established in 1971, CGIAR is an association of 16 IARCs working in more than 100 developing countries to mobilize cutting-edge science to achieve sustainable food security, protect the environment, and reduce poverty. The total cost of the project is $8.4 million, of which the research institutions will finance $3.4 million from their budgets, and the 14 participating national agriculture research systems will contribute $2 million equivalent. Each project is expected to begin in January 2004 and be carried out over three years to January 2007.

From http://www.adb.org/ 11/12/2003

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Public Hearings to Be Practiced on Establishment of Large Commercial Outlets

When talking about the planning and construction of urban commercial outlets, Assistant Minister of Commerce Huang Hai disclosed that the country will follow international practice to set up public hearing system for establishment of large commercial outlets through legislation so as to curb the blind siting of Chinese and foreign-funded commercial enterprises. "Urban commercial outlets planning can reduce and avoid blindness in investment and over competitiveness." It's learned that the Ministry of Commerce has resolved to finish the planning of commercial outlets in municipalities, provincial capitals and cities on the list of the State plan. Research findings of relevant departments under the Ministry of Commerce reveal that current investment in the country's circulation field mainly comes from non-public sectors, and most investors come from sectors other than commerce. Driven by interests, quite some investments are featured by spontaneity and blindness, with outstanding structural contradiction in outlay of commercial outlets. 1. The irrational layout - the commercial outlets in the east and old cities far outnumber those in the west and new cities, and that in old cities more than those in new cities; 2. Irrational structure of business - the surplus of large-scale department stores and the stagnant development of new type of businesses; 3. There leaves much to be desired in terms of siting and business positioning, resulting in a waste of social resources.

From FDI 11/12/2003

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Research and Development High on APEC Ministers' Agenda

Research and development leaders will have an unprecedented opportunity to influence decision makers' thinking at next year's meeting of APEC Science and Technology Ministers in Christchurch, New Zealand. The 4th APEC Ministers's Meeting on Regional Science & Technology Co-operation is the first APEC ministerial level event for 2004 and is part of a series of high level meetings convening under the theme of 'Connecting Science, Policy and Business' from 8 - 12 March. A number of countries have already indicated they will send a strong delegation, and in some cases more than one Minister, to the event. This includes the United States, Australia, Japan, Korea, Thailand, China, Chinese Taipei and Brunei Darussalam. The R & D Leaders Forum will be held at the same time, bringing together leaders from the private and public research sectors in the APEC region and further afield. For the first time R & D leaders will be able to sit down with APEC Science Ministers and have direct input into their thinking says Forum Convenor Anthony Scott, who is the Executive Director of New Zealand's Association of Crown Research Institutes. "This is a unique opportunity for R & D leaders to influence the way in which the knowledge gained through scientific research is used to benefit the health, wealth and welfare of societies in the APEC region. These two influential groups will be able to discuss face-to-face how science and technology can create value and how we can do it better across the APEC region." Capturing value from science is the overall theme of the R & D Leaders Forum, which will feature presentations from international leaders in their field. "The Forum will feature a unique mix of leaders in R & D policy making, operational research and business," Mr Scott says. "We need to have these people talking to each other so they understand each others issues and the drivers. At times there seem to be walls between these groups - the R & D Leaders Forum programme removes these barriers to bring people together to identify and discuss the issues." Among the leaders confirmed to speak at the Forum are: Dr Masayuki Kondo, Professor of Technology Management, Graduate School of Environment and Information Sciences at Yokohama National University of Japan. Dr Kondo is a distinguished scholar who will examine management, science and contemporary issues in developing nations. Dr Gregory Yurek, President, CEO and Chairman of the Board of American Superconductor Corporation. Dr Yurek is a world class business leader who will focus on commercialising science: lessons from the high-technology coalface. Dr Paul Callaghan and Dr Peter Hunter. Professor Callaghan is the Director of the MacDiarmid Institute for Advanced Materials and Nanotechnology and a Professor of Physical Sciences at Victoria University in Wellington, New Zealand. Professor Hunter is the Director of the Bioengineering Institute at the University of Auckland, New Zealand. These two world class science leaders will discuss new policy and strategy challenges shaped by converging sciences Meanwhile, to connect international researchers, business and investment partners with world class New Zealand companies an Innovation Showcase is being organised by New Zealand Trade and Enterprise, the New Zealand Government's trade and economic development agency. It will run alongside the R & D Leaders Forum and ministerial meeting. The Innovation Showcase has been developed to provide commercial opportunities for attending APEC Business Delegations and will involve some of New Zealand's leading biotechnology, information and communication technology, creative and niche manufacturing businesses. The programme includes an exhibition, business meetings and site visits for pre-qualified international business delegates, a symposia and some informal sector-based site visits in and around Christchurch. Through the pre-arranged business meetings and site visits international business delegates including potential investors and business partners will be able to make connections with leading New Zealand businesses. The exhibition will showcase some of New Zealand's most innovative companies and their world leading products and services while the symposia will focus on market opportunities and key New Zealand industry sectors. The half-day visits to selected science, technology or research organisations will provide an opportunity to share best practice examples. Other APEC economies are also being invited to exhibit examples of their science and technology strengths at the Innovation Showcase exhibition. There is already keen interest in the high level events being held next year in New Zealand, with New Zealand's track record for innovation in science and technology believed to be a strong drawcard. New Zealanders are well known for their flair for ingenuity and for thriving on solutions for innovative problem solving, evidenced by three New Zealanders having been named Nobel laureates in the science sector. This includes Maurice Wilkins who received a Nobel Prize in 1962 for elucidation of the structure of DNA, alongside Watson and Crick.

From http://www.apecsec.org.sg/ 11/17/2003

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Asia-Pacific Tourism Risk Management Report to Provide Guidance in Preparing for Tourism Crises

The "Tourism Risk Management for the Asia Pacific Region" report has been completed and will be presented to officials from APEC's 21 Member Economies at the 23rd meeting of the Tourism Working Group (TWG) in Bali, Indonesia, on November 29-30. Developed in response to the damaging effect on the tourism industry of terrorist attacks and the SARS epidemic, the report details key issues and provides recommendations for both government and business to effectively deal with future crises. This is the first time that Risk Management principles have been applied to the Tourism Industry in such a detailed report. The report has been prepared by the APEC International Centre for Sustainable Tourism (AICST) in collaboration with universities, governments and tourism operators in the APEC Region. AICST Chair, Sir Frank Moore, said the report covers a number of potential future crises and uses case studies to draw on the experience of past crises. "This AICST report offers a broad coverage of risks related to tourism in the Asia Pacific region and strategic approaches to managing these risks," Sir Frank said. "Adequate planning for what has in the past been seen as the 'unexpected' can be the difference between a well-managed problem and a human and economic disaster. "The report outlines a series of key tourism themes and recommends actions that should be taken before, during and after a crisis. "There have already been a number of unfortunate incidents that have occurred in the region and it is important to learn from these experiences. "These include events such as the Bali bombing and other events such as the SARS Epidemic. "Crises covered in the report range from terrorist attacks to natural disasters such as earth quakes, to disease epidemics." Sir Frank said the report also focuses on governments and tourism operators providing timely and accurate information in times of crisis. "The public is not well served by incorrect information and rumors being reported in the media," Sir Frank said. "It is essential that the governments and tourist businesses have effective communications strategies in place to actively engage with the media in times of crisis." After the report has been presented to APEC Member Economy Officials, a press conference will be held in Bali (at a time to be advised). AICST was established in 2002 by the APEC Tourism Working Group and the Tourism Ministers of the 21 economies of APEC. Its role is to identify and research the major issues that are likely to impact on tourism in the Asia Pacific region in the next 10-15 years. AICST is a cooperative organization of APEC Economies, Universities, and the Tourism Industry.

From http://www.apecsec.org.sg/ 11/21/2003

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CHINA: Wen Jiabao: Government Policy-makers Must Listen to Experts' Suggestions

Premier Wen Jiabao says that government policy-makers must listen to suggestions from experts to make new policies more scientific and practical, especially on important economic and social issues. The Premier said this when listening to a report from the Chinese Academy of Engineering on the development strategy of China's oil and natural gas resources. With the strategic importance of oil and gas resources, the project was launched this May, involving 86 experts. Wen Jiabao adds the State Council attaches great importance to the group's efforts and believes it is a good demonstration of collective research.

From CRI 10/30/2003

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Appraisal for Sci-Tech Projects Gets National Standards

China has issued an administrative regulation on standardizing appraisals for government-sponsored scientific and technological projects. Shi Dinghuan, a senior official with the Ministry of Science and Technology, said the regulation was the first of its kind in China, and was expected to encourage innovation and commercialization of research achievements. The ministry stipulated that appraisal teams should consist of specialists from research bodies, universities and even companies.In some frontier areas in which consensus has yet to be reached among home scientists, the regulation says overseas scientists are also qualified to be enlisted into the talent pool. As for key national and local scientific and technological programs, Shi said, strict appraisals must be required before, during and after implementation. The regulation also stresses the integrity of appraisers. Any inappropriate behavior, if verified, will be recorded. "Effective appraisal for projects using public money will help create transparency of budget planning and governmental administration," Shi said.

From Xinhuanet 11/05/2003

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Innovation in Law Urged

A senior Party official yesterday called on legal professionals to be more creative in pushing for innovation in legal theory, and in the system and culture of law in China. "Innovation is the source of a nation's prosperity, and the strong impetus for the development of legal theory and practice," said Luo Gan, secretary of the Political and Judiciary Commission under the Central Committee of the Communist Party of China. Luo was addressing the opening ceremony of the Fifth Congress of the China Law Society. President Hu Jintao and Vice President Zeng Qinghong attended the opening ceremony. The congress, which is being attended by over 400 legal professionals in China, will fix major goals for the society for the coming five years and elect new leadership officials in its three-day meeting. Luo asked legal professionals to pay more attention to legal issues that have a stake in improving the country's market economy system as well as coordinated and sustainable development. She Mengxiao, deputy vice president of the society, added priority should be given to studying how to build an open, competitive and ordered modern market system. Luo also highlighted the importance of integrating studies on domestic and international legal issues.

From China Daily 11/06/2003

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Common Recruitment Exam Applications Open

People who are interested in joining civil-service posts at degree or professional levels may apply before November 25 to sit for the common recruitment examination. The exam is scheduled for January 10 in Hong Kong and will also be held on February 7 in several overseas cities. Degree holders, those with professional qualifications or undergraduates who will attain their degree in the next year are eligible to apply. The Civil Service Bureau said several grades had won approval for exemption from the recruitment freeze. Some disciplined services grades, such as Police Inspector and Immigration Officer, offer different entry pay points to candidates according to their academic qualifications. Degree holders without valid common recruitment examination results may still apply for these posts, but they will not be eligible for the degree pay point. Application forms (CSB31 (10/2003)) can be downloaded from the Civil Service Bureau website or collected from District Offices' Public Enquiry Service Centres and the Labour Department's Job Centres from November 15 onwards.

From http://www.news.gov.hk/ 11/14/2003

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Beijing Calls in Foreign Banking Advisers

Some of the biggest names in international finance are due on Friday for a new assignment in Beijing - advising China's banking regulator on how the country should reform a financial system bogged down in bad debts and sealed off from international capital flows. The establishment of a "council of international advisers" to the China Banking Regulatory Commission, which holds its first meeting on Friday, represents a new level of openness and transparency for the government. It has never before assembled a group of foreigners to help a ministry-level agency, Chinese officials and industry executives said. Members of the council include Sir Edward George, former governor of the Bank of England; Gerry Corrigan, former president of the New York Federal Reserve; Andrew Crockett, former general manager of the Bank of International Settlements; David Carse, former deputy chief executive of the Hong Kong Monetary Authority; and Sir Howard Davies, former head of the UK's Financial Services Authority. The council is thought to be the initiative of Liu Mingkang, who took over the CBRC earlier this year after jobs as president of the Bank of China, one of the "big four" state banks, and vice-governor of the People's Bank of China, the central bank. Mr Liu was keen to recruit overseas talent both to advise the CBRC and to take positions on Chinese banks' boards to improve corporate governance, officials said. Analysts said the council's agenda was likely to focus on the big issues facing the state- dominated banking system, including how to whittle down a mountain of non-performing loans, wield effective regulatory power, and manage risks inherent in a move toward greater openness in the capital account. (by James Kynge)

From http://news.ft.com/ 11/20/2003

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China Issues Quality Satisfaction Rate of Domestic Brands

China's Quality Inspection Bureau has released its 2003 quality satisfaction rate of famous, domestic brands, with domestically manufactured Electro-thermal blankets ranked number one. The report indicates that inspectors are satisfied with the quality of selected products 73 percent of the time. But mobile phones found a place at the bottom of their list, and their quality needs improving. Inspections were made by a company research center at Tsinghua University over a three month period during which they tested 20 different kinds of commodities including at least 120 famous national brands.

From CRIENGLISH.com 11/20/2003

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China to Launch National Economic Census

China's official statisticians will launch a national economic census next year to improve the data collection used as the basis for its often-criticised figures measuring the Chinese economic growth. Li Deshui, head of the National Bureau of Statistics, said the new samplings of economic data for calculating growth could see gross domestic product figures for China revised as far back as the 1950s. "We will continue to carry out reform to make [the statistics] more reliable, more transparent, more standardised and integrated into international practice," said Mr Li. Such censuses are expensive and labour-intensive, involving the dispatch of large teams to different parts of the country to collect sets of data for use in calculating GDP. The bureau had been expected this year to do a census of just the service economy, which has been consistently understated in the country's GDP because of the difficulty of measuring its many informal, cash transactions. But funds have apparently been provided for a comprehensive census next year, with a particular focus on tracking the construction sector and the black economy. "Clearly, there has been a decision at the top that China needs new and more reliable numbers and they have given the bureau more money," said Arthur Kroeber of the China Economic Quarterly. The census will also give the statistics bureau in Beijing more tools to circumvent one of its biggest problems in delivering accurate numbers - the provincial officials who constantly tailor their reporting to the central government to local political imperatives. Mr Li said the bureau had worked hard to make its numbers meet international standards, including taking lessons from Italy in measuring the black economy. "They have great experience in dealing with the underground economy," he said. The bureau, which came under fire in the late 1990s for overstating China's growth, has more recently faced criticism that it is understating economic activity. The bureau says China's GDP grew at 8.5 per cent in the first three quarters of this year, a figure 1 or 2 percentage points below the estimates of numerous local and foreign economists. Mr Li said that despite some problems, the bureau's data "basically" reflected economic growth in China. "I can confidently tell everyone that China's statistical work and method of collecting data is basically integrated with internationally accepted standards," he said. (by Richard McGregor)

From http://news.ft.com/ 11/20/2003

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Japan: Companies Urged to Engage in Good Citizenship

In the wake of huge corporate scandals in Japan and the United States, companies are under pressure to be more socially responsible. The trend has fed demand for universal guidelines for firms to use in filing reports on how they are performing in terms of society, the environment and ethics, according to Ernst Ligteringen, head of the Amsterdam-based nonprofit organization Global Reporting Initiative, known as GRI. "It is important to have a global standard (for comparability) because the economy is (becoming) increasingly integrated at a global level," Ligteringen said in a recent interview in Tokyo. GRI released its first guidelines in 2000. They were revised last year. GRI is collaborating with the United Nations Environment Program to promote the guidelines, which are for use by any company or organization, regardless of industry sector, size or location. More than 328 firms in 26 countries have published reports using the Sustainability Reporting Guidelines. Most of their reports are available on the companies' Web sites. In Japan, 62 companies -- including Ajinomoto Co., Nissan Motor Co., Hitachi Ltd., Sony Corp. and Shiseido Co. -- have referred to GRI guidelines. The number of users in Japan doubled from last year, Ligteringen said. "It is not surprising that sustainability in Japan is such a pressing issue," because Japan lacks natural resources, he said. The guidelines cover three categories: economic, social and environmental performance. Each category has dozens of detailed indicators, including what policy a firm adopts to prevent child labor, what measures have been taken for energy-saving and waste management, and how a firm maintains compliance mechanisms to prevent corruption. The economic category overlaps financial statements. Companies can use any of the indicators, if not the whole package. Most of the reports published by Japanese firms focus on environmental activities. Ligteringen noted that this is because environmental issues have traditionally been an emphasis of Japanese firms. The Japanese government also pays attention. The Environment Ministry's guidelines for corporate environmental reports, first issued in February 2001, was modeled after the GRI standards, a ministry official said. Although there are some codes of conduct set out by international organizations, including the U.N., the GRI guidelines are the first for filing reports, according to Ligteringen. (by Kaho Shimizu)

From The Japan Times 10/29/2003

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Gov't Kicks Off Crisis Management Seminar on Terrorism

TOKYO - The Foreign Ministry on Friday kicked off a series of crisis management seminars for Japanese firms with operations in foreign countries to boost their awareness of the risks of terrorism and abduction. About 300 company officials participated in the first seminar, which was held in Tokyo.

From Kyodo News 11/01/2003

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Ministry Eyes Specialists to Teach Public About Science

To stimulate the public's declining interest in science, an institute of the Education, Science and Technology Ministry is urging training programs for "science communicators" who would explain science to the public in easily understood ways. The institute, the National Institute of Science and Technology Policy (NISTEP), made the recommendation in a report it submitted to the ministry Tuesday. The report recommends setting up postgraduate courses to train science communicators. One cannot get by in modern society without understanding the basics of science and technology. But compared with Westerners, the Japanese have a dismally low level of such comprehension. Particularly worrying is that interest in science among those in their 20s and 30s is declining every year, while primary and middle school students are showing less and less interest in science. Results of various polls have suggested that the majority of the public recognizes the importance of science and technology, which they believe they may understand if somebody gives them comprehensive explanations. But such opportunities are few, they feel, according to the polls. NISTEP has concluded there is a need for specialists who can talk to the public about science and technology in a simple way. There are science communication programs for postgraduate students at Western universities, such as the University of London and Massachusetts Institute of Technology.

From http://www.yomiuri.co.jp/ 11/13/2003

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Troubled Sony Unveils Restructuring Plans

Sony Corp. on Tuesday unveiled sweeping restructuring measures, including plans to shed 20,000 jobs and close domestic TV plants, with the consumer electronics giant struggling to reclaim a competitive edge over its rivals. Sony Corp. Chairman Nobuyuki Idei looks pensive after unveiling the firm's new strategy. The company also announced a tieup with Samsung Electronics Co. of South Korea to produce large liquid crystal display panels used for flat-screen TVs. The restructuring announcement by Sony, which reported a 25 percent drop in its second-quarter profit last week, had been anxiously awaited by investors, even though many details were reported by some media beforehand. "It is an undeniable fact that we are seeing a profit shrinking trend," Sony Chief Executive Nobuyuki Idei told the media in Tokyo. "As a global player, we have to achieve at least 10 percent (in operating margin)." He referred to the company's goal of lifting the ratio of group operating profit against sales from the current 4 percent to 10 percent by the end of fiscal 2006. To this end, the company said it will slash 20,000 jobs, or 13 percent of Sony's global workforce, by March 2006. Some 7,000 will be cut in Japan. Of the total, about 11,000 will come from the administrative tier. It will close 30 percent of 200 production, distribution, and customer service locations worldwide by March 2006. The company will spend 335 billion yen from fiscal 2003 to 2005 to carry out the restructuring measures. As the result of these and other cost-cutting measures, the company said it will be able to cut fixed costs by 330 billion yen annually, beginning in fiscal 2006. Meanwhile, the company said it signed a basic agreement with Samsung to set up a joint venture to manufacture large LCD panels in South Korea. The initial investment for the project is about $2 billion, with the production line scheduled to operate at the initially targeted capacity by summer 2005. By launching the joint venture to produce so-called seventh-generation LCD panels and the development of powerful image processors, Sony said it will be able to compete well with its rivals in the TV market. The move, coupled with its decision to close domestic cathode-ray tube production lines by March, marks a belated attempt to cash in on a rapidly growing consumer shift from bulky CRT to flat-screen TVs. The firm, which has dominated the conventional TV market with its Trinitron technology, introduced in 1968, has been lagging behind rivals. Sony also said it will set up a financial holding company, consisting of Sony Life Insurance Co., Sony Assurance Inc. and Sony Bank around April, pending regulatory approval. The holding company eventually aims to float its shares. Sony's Idei defended the company's restructuring moves, saying they were not a reaction to the company's recent poor performance. He bristled when asked whether he would resign to take responsibility for the current situation. "Sony is not even in the red," he said. (by Taiga Uranaka)

From The Japan Times 11/19/2003

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SOUTH KOREA: City to Use Korean, English in Official Documents

The Seoul Metropolitan Government is reviewing legal matters to clear the way for using English and Korean together in official documents and some high-level meetings, Mayor Lee Myung-bak has said. In yet another effort to bring change to the traditionally-stubborn city bureaucracy, the business-minded mayor pledged he would lead the charge to expand the use of English, saying that it will help South Korea improve its chances to become a financial hub in Asia. "English is becoming a second mother tongue," the 61-year-old said during an interview with The Korea Times on Friday. "I will encourage Seoul officials to use English in official documents and the policy-making process." It is not clear when the government will actually begin to use English in its documents, but the policy will be put place within next year at the earliest, he said. The bold initiative is Seoul's first concrete step to follow Hong Kong and Singapore by making English an official language. Many _ including a recent McKinsey &  Company report _ see it as a prerequisite for the city to be an economic center in Asia. Comparing Seoul to those two cities, the consultant cited Seoul's relatively weak base of English-speakers as a key hurdle in the effort to develop into a regional hub. Seoul officials said a task force has been set up to review related legal documents to ensure there are no legal problems. Lee, who admires former General Electric chairman Jack Welch for his strenuous efforts to guide a struggling company to the summit of international business success, said the idea needs assistance from the government to be effectively carried out. His plan is not entirely compatible with some elements of the city government who prefer to emphasize political traditions. But he said he is ready to be actively involved in the process. Lee has not been deterred by criticism from nationalistic Korean scholars of the city's "Hi Seoul" slogan. The world is changing, he said, and South Korea is in the middle of the change. English competency is a vital weapon for survival. "More importance should be given to English education," he said. "I want to make a society where at least people can explain simple directions in English when they encounter foreigners on the street."

From http://search.korea.net:9000/ 10/27/2003

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Shadow Voting System Discouraged

The government will promote the rights and views of minor shareholders by limiting the use of the so-called shadow voting and pursuing a more formal written ballot system. The Ministry of Finance and Economy (MOFE) said on Tuesday (Nov. 11) the measures are in line with the move to check arbitrary decision-making by chaebol owners and to promote corporate transparency. It said these measures would take affect when regulations are revised next year. Currently, a written ballot system, which entitles shareholders unable to attend shareholders meetings to cast absentee votes, is allowed. But only 15 percent of companies listed on the Korea Stock Exchange adopted the system. Most listed companies prefer the shadow voting method to get the required number of shares in the voting process that will make the board members' decision legally binding, according to an MOFE official. He said the focus of the revision of the current securities transaction law would be on giving minority shareholders methods to express their views in a direct way on critical corporate issues, instead of resorting to the indirect approach through the shadow voting system. Under the shadow voting system, those holding too few stakes to cast votes on corporate decisions made by board of directors, entrust the Korea Securities Depository (KSD) to cast ballots on their behalf. But the KSD is barred from casting voting beyond the voting percentage of large shareholders. This gives major shareholders advantage over minor shareholders.

From http://search.korea.net:9000/ 11/12/2003

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FTC to Revamp Competition Bureau

The Fair Trade Commission (FTC) plans to revamp its organizational structure through a reshuffle in the first half of next year to strengthen its expertise in competition issues specific to various industries. The FTC said on Friday (Nov. 14) that it is drawing up a detailed plan to restructure its Competition Bureau to be industry-specific to enable it to better handle cartels and infringements of fair competition rules. "The FTC has been considering the reorganization for years as the present division of labor within the Competition Bureau has been considered ineffective in grasping an accurate market situation and industrial developments," FTC official Park Ui-jin said. "We think the restructuring of the Competition Bureau would improve the commission's ability to accurately analyze market competition situations in specific industries, which will contribute to drawing up more effective competition policies." The FTC's Competition Bureau, responsible for investigations involving abuse of market dominance, resale price maintenance, unfair trade practices and prohibited acts by trade associations, presently consists of four divisions _ trade practice, competition promotion, cartel and trade association. "In addition, with the reorganization of the Competition Bureau, companies are expected to find it easier to work with regulators because they will deal with just one FTC bureau," Park said. Bureaus under the FTC are presently divided by function or by the type of infringement of the Fair Trade Law. Thus companies investigated for possible infractions have to deal with several bureaus every time they are called upon for inquiries. The regulatory agency has been operating six bureaus _ anti-trust, consumer protection, competition, competition policy, subcontract and investigation. The remaining five bureaus are not subject to the future restructuring, FTC spokesman Shin Young-ho said. After the restructuring, for instance, a new division for automobile manufacturing will handle all market competition related matters in that industrial field, while the same will be true for other industries. "The reorganization will help the FTC develop expertise in a number of industries important to consumers, such as merchandise, telecom service, health care, food, energy as well as other professional services," Shin said. He said industry-specific organization structure is common in anti-trust agencies in developed economies. However, there are also negative views within the FTC that a reshuffle will require an increase in staff, and there will be a greater risk of businesses increasing their influence on the commission's policies. The FTC plans to submit its reorganization plan to the Ministry of Government Administration and Home Affairs late this year and, if approved, the reshuffle will be implemented in the first half of next year.

From http://search.korea.net:9000/ 11/15/2003

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Downsizing Boosts Public Firms' Net Profits

The country's major public firms have successfully overhauled their bloated cost structure since the 1997-98 economic crisis, but they still have a long way to go to for competitive profit models. The Ministry of Finance and Economy (MOFE) announced on Monday (Nov. 17) that 13 major state-owned enterprises, in which the government holds more than 50 percent stake, chalked up the largest combined net profit of 3.9 trillion won last year since the 1997-98 economic crisis. It marks a 124.9-percent increase from a year ago. Korea Electric Power Corp. (KEPCO) and Korean Land Corp. (KLC) led the jump by doubling their net profits to 3.6 trillion won and 3.7 trillion won, respectively. On the other hand, the sales of KEPCO and KLC increased only 7 percent to 21.4 trillion won, and 30 percent to 4.9 trillion won, respectively. In case of Korea Minting and Security Printing Corp., net profit surged from 18.3 billion won to 28 billion won, while its sales decreased from 236 billion to 231 billion won. As a result, total sales of the public firms grew 9.9 percent in 2002 from 2001,far below growth in their net profits. MOFE officials stressed that growth in both sales and net profits reflect advanced management and good business conditions last year. Critics, however, downplay such remarkable growth in net profits, saying it was mainly attributable to a reduction of manpower and asset sales, not resulting from improvement business operations. "The country's 31 state-funded firms recorded a combined net loss of 5.4 trillion won between 1998-2002," Rep. Lee Hahn-koo from the opposition Grand National Party, said, "And the government poured taxpayers' money to cover the loss." While state-funded financial services firms showed poor performances, non-financial ones managed to increase their financial status with the help of the government, he added.

From http://search.korea.net:9000/ 11/18/2003

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Korea, Canada Co-host Social Policy Symposium

The Ministry of Health and Welfare, along with the Canadian Embassy in Seoul, will sponsor a social/welfare policy symposium in celebration of the 40th anniversary of diplomatic ties between Korea and Canada, at Lotte Hotel in central Seoul on November 21. On the agenda of the symposium will be welfare programs and medical services for the elderly as well as national pension programs, which are timely topics for Korea where the aging population over the age of 65 is rapidly increasing, up to 14 percent of the general population by 2019, the ministry said. Taking part in the event will be a number of renowned professors and experts, including Kim Sang-kyun of Seoul National University, Lee Hye-kyung of Yonsei University, and Ito Peng of Toronto University and Jane Jenson of the University of Montreal. The symposium will help pave the way for greater Korea-Canada academic exchanges in social/welfare areas, the ministry added.

From http://www.kois.go.kr/ 11/20/2003

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INDONESIA: Corruption Undermines RI's Competitiveness

Rampant corruption and ineffective bureaucracy are the two most important factors behind the country's low business competitiveness index, according to the latest global competitiveness report of the World Economic Forum (WEF).The other negative factors were political instability, limited access to credit, tax rulings and tax rates, said Tulus Tambunan of the Institute for Economic Studies, Research and Development (LP3E), which helped WEF in conducting the survey in Indonesia. He was speaking to the press on Friday to unveil the WEF report. According to the WEF report, Indonesia ranked 60 (out of a total 102 countries surveyed) in terms of business competitiveness. In comparison, neighboring Malaysia ranked 26, Singapore 8, Thailand 32, while Vietnam is ranked 50. Finland was ranked the most competitive country in the world, edging out the United States. Taiwan and Singapore were the highest-ranked Asian economies, in fifth and sixth place respectively. Surprisingly, despite its heady economic growth, China, now No. 44, fell nine places down the table because of a remarkable deterioration in the perceived quality of public institutions, said the survey. WEF launched the business competitiveness index for the first time this year. Analysts have said weak investment activities in the country and slow export performance have been linked to the above problems. They said that pushing investments and exports were key to a stronger economic growth needed to create more jobs for the millions of unemployed. Meanwhile, in terms of the growth competitiveness index, Indonesia is ranked 72nd, down from last year's 66, which is also lower than the above mentioned countries. While some other countries benefited from their excellent performance in technology, macro economic environment and quality of public institutions, Indonesia is relatively weak in these areas. The Geneva-based WEF is an independent international organization committed to improving the state of the world. Soy Pardede of the Indonesian Chamber of Commerce and Industry (Kadin) said that the outcome of the survey would not have a significant effect on investment and trade activities in Indonesia as many of the business players here had been already accustomed to the above negative factors. He said that Kadin had started a program to help create a better business climate in the country such as through the recent anticorruption campaign. (by Sari P. Setiogi)

From http://www.thejakartapost.com/ 11/01/2003

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INDONESIA: Students to Monitor Election

Thousands of students from more than 100 universities across the country are expected to be involved in monitoring and voter education work during next year's general elections, it was announced on Friday. The rector of the Yogyakarta-based Gadjah Mada University, Sofian Efendi, said that the Rectors Forum, a grouping of more than 100 university rectors from throughout Indonesia, had agreed to get students involved in the upcoming elections. The students's involvement could be substituted for their obligatory community service, which would not be held next year due to the elections. Final-year students in Indonesia must do community service work before completing their studies. Students were also involved in monitoring the 1999 elections. The students could be drafted in to educate voters or to monitor both the legislative and presidential elections. "We will train them first. Therefore, the forum will cooperate with the central and local offices of the General Elections Commission (KPU), as well as the General Elections Monitoring Committee (Panwaslu)," Sofian said. He said that each university would fund the work of the students.

From http://www.thejakartapost.com/ 11/22/2003

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MALAYSIA: Uphold Democracy, Representatives Told

Prime Minister Datuk Seri Abdullah Ahmad Badawi has called on elected representatives to preserve and uphold the democratic traditions of the country. He said the parliamentary democracy system had served the people well. "Ours is a healthy parliamentary democracy. No one is hit on the head and suffers head injuries. The Speaker does not resign abruptly or hold the Government to ransom. "We have fiery debates and sometimes it is hard to control when everyone is speaking and no one is paying attention. "Sometimes, there is over exuberance but in the end, the Bills are passed," he said after breaking fast with senators, members of parliament and state assemblymen at the Parliament here yesterday. Also present were Dewan Rakyat Speaker Tun Zahir Mohd Ismail, Dewan Negara Speaker Tan Sri Abdul Hamid Pawanteh, MCA president Datuk Seri Ong Ka Ting and MIC president Datuk Seri S. Samy Vellu. Abdullah said he hoped the elected representatives would refrain from raising issues which would cause disunity. Zahir said the gathering was the largest he had ever attended at the Parliament.

From http://thestar.com.my 11/04/2003

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Government to Focus on Education and Corruption

Education and corruption have been singled out by the Barisan Nasional as the two most important issues requiring the immediate and full attention of the Government. Newly-appointed Barisan chairman Datuk Seri Abdullah Ahmad Badawi said the coalition discussed in detail and at length the two issues at its supreme council meeting at the Putra World Trade Centre here yesterday. Education is a big and important programme and needs the attention of the Government because, through it, our children and future are shaped, she said at a press conference after the meeting. Abdullah said the population of the country was generally and comparatively young. They have to be educated to realise their full potential and to become assets to the country. He need to ensure our youths grow up to be intelligent and knowledgeable if we want an excellent future, he said. He said education was also an important tool to unite the various races of in the country. Asked if the Government would revamp the National Education Policy to reflect this emphasis of his premiership, Abdullah said the current policy was adequate. But we need to ensure it is carried out efficiently, he said. On corruption, Abdullah said he had received overwhelming support to tackle the scourge since he first outlined his intention in Parliament and during his first Cabinet meeting on Wednesday. 揑t is vital to clean up our Government for the rakyat, and action has to be taken immediately and effectively, he said. He said all the ministers had taken an oath to show their sincerity. Abdullah said he had asked the Attorney-General's Chambers to speed up several outstanding corruption cases, including the case involving national steel corporation Perwaja. He have asked the A-G on the status, and the preparation to prosecute or whatever. I have asked them to speed up (the process) but I did not give them any deadline, he said.

From http://thestar.com.my/ 11/08/2003

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First of Many Visits to Frontline Government Offices, Says Abdullah

Prime Minister Datuk Seri Abdullah Ahmad Badawi paid a surprise visit to the crowded Immigration Department here yesterday and promised it would be the first of more such checks on frontline offices of government departments. Abdullah arrived at 9.33am at the department in Pusat Bandar Damansara, catching officers and staff by surprise. Immigration officers at the entrance to the building quickly scrambled inside to alert their colleagues, momentarily forgetting about several foreign visitors whose arrival they were awaiting. Abdullah went straight to the passport application counters followed by his aides and a group of newsmen who had been told about the spot-check. About 600 people, some who had been waiting since 5am for their numbers in the queue, jumped to their feet and applauded on seeing the smiling Prime Minister. Abdullah shook hands with many of them and enquired about problems they faced at the counters. He also made stops at the counters and spoke to the staff manning them. He later said he wanted to visit the passport application office at the department to see for himself the situation there. It was informed that there is always a big crowd here. I was told today that there are 600 people here but that this is not usual because it is the school holidays and people take the opportunity to settle their passport matters. Usually, there are between 300 and 350 people coming to the counters daily, he said. Among those who relayed their grouses to the Prime Minister was Laks Meyyapan, 37, a managing director of a company in New York. Laks said he flew to Kuala Lumpur to renew his Malaysian passport because it would take him three months to do it at the Malaysian embassy in New York. The best thing is that here I can get it done in three days instead of three months. But the worst thing is that I have been waiting since 5am and I am still waiting for my turn at 11am, he said. Yap Choon Sang, 64, who came all the way from Bentong in Pahang to renew his passport, waited since 5.45am. The ex-serviceman said he wished the department could do something about the long waits, which were unbearable. It's good that the Prime Minister shows his concern and visit the counters, he said. Abdullah later held a 30-minute meeting with department director (security and passport division) Ab Rahim Ismail. Immigration Director-General Datuk Jamal Kamdi is overseas. Speaking to reporters later, Abdullah said he told the department to find ways to reduce the long wait at its counters. He said there were some immediate measures that could be taken, including giving priority to those who, at the end of the day, still could not be served because of the long queue. They must be given a number or a letter to allow them to be served first the next day to avoid them having to come a third day to have their matters attended to, he said. He also told the department to designate a counter to serve the disabled and old folks. He said the special counter could still serve others. Abdullah said Ab Rahim informed him that the staff worked overtime to ensure that passports were issued within three days in accordance with the department's client charter. The Prime Minister also said the department provided emergency service to those who needed passports or travel documents urgently. The service, however, could not be extended in all situations because the department did not have enough manpower, he said. On long delays for approval of documents, Abdullah asked the department to check files which had been pending for a long time. They should not be put aside without making any decision. He also told Ab Rahim to give attention to ways to ensure the best service even when the crowd is larger than usual. The test of a department's capability is when it has to work under pressure or in a crisis situation or when the facilities or computers break down, he said. (by Jane Ritikos)

From http://thestar.com.my 11/14/2003

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Rating Government Department Services

The Prime Minister has directed all government frontline offices to introduce, with immediate effect, customer satisfaction forms at their counters to gauge how customers rate their services. Datuk Seri Abdullah Ahmad Badawi said this was aimed at improving services to the public and enhancing the departments and government's image. He said the forms should include the counter number and time the service was rendered so that any dissatisfaction could be traced to the employee responsible. The customer's feedback can be taken as a record of the staff's performance when a confidential report is made. If the staff has too many complaints against him or her the department can call the staff up to advice him. This will provide room to improve service, he said after a surprise visit to the Immigration Department's passport application office at Pusat Bandar Damansara yesterday. Abdullah said questions in the forms must be brief and simple so customers would spend little time filling them. It should have questions such as lease evaluate the service rendered to you. Is it satisfactory, not satisfactory, average or useless? he said. The Prime Minister said that allowing customers to express their satisfaction or dissatisfaction on the service would show the departments self-confidence. He said the feedback could be evaluated by the departments daily or weekly. In Putrajaya, a statement issued by the Prime Minister's communication unit said the public could now air their opinions and views on the effort to cut red tape in the civil service. Those interested in making suggestions on ways to deal with unwieldy bureaucratic procedures or wanting to express their experiences on such problems could visit the Prime Minister's Office website at www.pmo.gov.my/redtape.nsf or they can also access the website www.pmo.gov.my and click on the words Initiatif Kurangkan Red Tape. nbsp; They can also fax to 03-8888-3424 or e-mail reduceredtape@pmo.gov.my or kurangkanredtape@pmo.gov.my. The statement said the move was part of the comprehensive measures by the Government to trim red tape in the civil service.

From http://thestar.com.my/ 11/14/2003

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PHILIPPINES: Court Employees Want Volunteer Group to Monitor Disbursement of JDF Money

THE employees of the Judiciary have asked Chief Justice Hilario Davide Jr. to allow a group of volunteer auditors to monitor the collection and the subsequent use of the controversial Judiciary Development Funds (JDF). In a letter to Davide dated November 18, the Alliance of Court Employees Association of the Philippines (Aceap) executive committee, through its president, Jose Dante Guerrero, said that it has formed a task force of volunteer auditors (TFVA) to "accurately monitor the collection and the disbursements" of the Fund. The association also requested Davide to give them access to the JDF books and documents and the bidding documents on the uniform allocation of court employees in the national capital region. "Please be assured, your honor, that this request is motivated by a genuine desire that the employees' communication line with the Chief Justice will be clear and that their needs may be accurately transmitted to the Office of the Chief Justice. Unfortunately, many have pretended to speak for the court employees although many of them speak with a false voice because as we repeat our universe is quite small. We are concerned only with the issue of survival and not with the grand and complicated issues raised by those who are hitchhiking on the issues raised by the court employees," the two-page letter said. The letter also disclosed that Davide met with leaders and members of the Aceap on November 8, and "expressed willingness" to discuss the terms of a new collective negotiating agreement. The group also requested Davide to permit its leaders to hold a national congress in January 2004. "The conditions are ripe for collective negotiations to take place. Hopefully, the employees' demands may be more clearly heeded and addressed now that the Supreme Court and the Chief Justice have been unburdened of the anxieties of the impeachment debacle," the letters said. The House of Representatives had impeached Davide on allegations that he had misused and mismanaged the Fund. The Supreme Court declared the second impeachment "unconstitutional," preventing the articles of impeachment transmitted before the Senate. However, several quarters are still insisting that the Fund books be opened for scrutiny.

From http://www.manilatimes.net/ 11/24/2003

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SINGAPORE: Academy to Train Professionals in Financial Services and Insurance Industry Launched

An Academy that aims to train new and current professionals in the financial services and insurance industry, and with an eye to practitioners in ASEAN and the region.That Academy was launched on Tuesday with the signing of a Memorandum of Understanding (MOU) between Nanyang Polytechnic (NYP) and NTUC Income. Known as NYP-NTUC Income Academy, it will provide wide ranging specialist courses in financial services and insurance and has plans to reach out to practitioners in ASEAN and the region from 2004."Together, we hope to target the industry practitioners here and abroad to raise their professionalism and technical competence," said Mr Tan Kin Lian, Chief Executive Officer of NTUC Income, one of Singapore's largest insurance companies. The Academy will implement its plans in a three-pronged "Extending Circle" model. The First Circle, or the inner circle, will see the Academy providing training opportunities for new and current practitioners of NTUC Income. The Second Circle, or the middle circle, will have the Academy extend its training programmes to non-NTUC Income employees but who are new entrants to the industry and existing practitioners. It will also reach out to professionals and executives who are keen to join the industry from other sectors as part of their professional career change. Finally, the Third Circle, or the outer circle, will provide for training opportunities for professionals in ASEAN and the region. Said V Seshamani, Director of the School of Business Management, NYP: "The First Circle has already started at NYP. Eleven certificate courses in financial planning have been conducted for over 350 NTUC Income practitioners since early this year. "As a progression, NYP has also launched a Specialist Diploma in Insurance Studies last week to train 21 new NTUC Income Management Trainees with university degrees from NUS & NTU, and diploma holders from local polytechnics with in-depth technical knowledge and skills." The Second and Third Circles will benefit those who are not employees of NTUC Income but would like to enhance their professional qualifications and seek career re-profiling with knowledge and skills to enter the dynamic industry. The Third Circle, in particular, will extend NTUC Income's arms into the region, where courses will be customised to suit the various financial regulations of the country. Courses conducted in Mandarin will also be offered. Also in the pipeline, the Academy will look into providing a number of customised niche courses in Customer Relationship Management (CRM) to various companies in the financial services sector. The courses will seek to change the mindsets of professionals in the financial services sector to be more customer-focused. (by Jamari Mohtar)

From http://www.channelnewsasia.com/ 11/04/2003

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Singapore to Develop New Corporate Governance Index for Listed Firms

Singapore is developing a new Corporate Governance Index for listed companies, to measure the quality of their corporate governance practices. The Singapore Institute of Directors, which is spearheading the project, also announced on Wednesday that DBS has clinched the inaugural Best Managed Boards Award. The award recognises the bank's efforts to build a diverse and independent board. The judges singled out the boards of DBS along with runners-up Keppel Corp, SIA Engineering and ST Engineering for their good governance practices. Jackson Tai, Vice Chairman, DBS, said: "In Asia, we have to demonstrate to the outside world that we have centres of excellence here, that we can be transparent, that we are leading the industries that we serve in. It's important that the world sees that. And good governance differentiates Singapore and can differentiate our companies here." Two relatively new listings, massage chair maker OSIM International and ornamental fish breeder Qian Hu, were also commended for their willingness to learn and improve in this area.

From http://www.channelnewsasia.com/ 11/19/2003

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VIETNAM: Deputies Query Top Judge About The Quality of Trials

Both the quality of trials and the competence of the judiciary were at the heart of many questions asked of the Supreme People's Court's Chief Judge, Nguyen Van Hien, in the National Assembly last Saturday. The deputies conceded that much progress had been made in judicial reform but said much remained to be done. Asked by Nguyen Thi Van Lan, HCM City, and Nguyen The Hiep, Da Nang, about the numerous provincial and district court verdicts revised or revoked, the chief judge replied that revision or revocation of 19.3 per cent of all verdicts was acceptable. It was up to 40 per cent in other countries of the region and the world. The chief judge said that statistics showed that about 25,820 or 19.3 per cent of the 133,767 prosecutions in criminal, civil and economic courts of the first instance since the beginning of the year had been followed by an appeal. Of the 21,661 finally heard by the Appeal Courts, the verdicts of 7,295 had been changed and only 1,616, or just 1.2 per cent of all trial decisions, had been overturned. Nguyen Thac Nhuong, Bac Ninh province, said wrong decisions went beyond mere comparative figures to grave political and economic consequences for citizens. Many deputies and voters remained worried about the quality of provincial and district court trials, he said. But the chief judge said only a small number of appeals were caused by an abuse of power by the judiciary, bribe-taking or violations of legal procedure. The revision of decisions and quashing of court verdicts mostly resulted from after-trial agreements by both plaintiffs and defendants and the provision of new evidence and witnesses. This showed that the quality of court trials has been significantly improved, the chief judge said, emphasising that tougher penalties would be handed down to judges and other court officials found guilty of bribe-taking and other violations of law. Dinh Huu Toi, Nghe An province, and Nguyen Minh Thuyet, Lang Son province, queried the delayed execution of court decisions and asked the chief judge how this could be changed. The deputies were told that the Criminal Procedures Law requires that court decisions be executed within 15 days but this could not be done because every year the appeal courts have to deal with a great number of trials. Therefore an amendment that matched reality was needed. The chief judge said that holding trials in remote regions needed a week's travelling as well as time for the processing of papers and the issuing of warrants of execution. Effective co-operation between the relevant agencies, such as police and local officials, was also required. The chief judge pledged to work closely with other relevant offices to address the issues raised by the deputies. The deputies, in turn, asked that more heed be given to forging a strong contingent of qualified staff with high professional and ethical standards to meet the nation's demands in the new stage of development.

From http://vietnamnews.vnagency.com.vn/ 11/17/2003

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BANGLADESH: Major Changes in C&AG Operations Underway: Public Auditing to Focus on Corruption

Major changes are under way in country's public auditing system as the government has taken steps to put stress on issue-based audit instead of conducting overall audit that has been going on for years. The new system will see the Office of the Comptroller and Auditor General (C&AG) and its nine Director General's offices extensively conducting audit on issues like corruption in a particular project or office and it would address wider pubic and taxpayers" interests. "Instead of making reports that serve no particular purpose, the C&AG will delve deep into the books of the projects and offices where corruption or mishandling of public money is rampant," an official associated with the project said. He said the whole methodology of the auditing system will be changed and audit conducted on areas where there is a requirement, not in the traditional manner. The new system would see the C&AG and its directorates set their own priorities according to an annual strategy. Nine key strategic goals have been identified and jobs would be done reflecting C&AG's short and long-term plans. Presently, the C&AG and its directorates concentrate on conducting overall audit of the government and semi-government offices, but very often the audit report hardly reflects the actual needs of the government. Under the projects, new manuals would be prepared for conducting audits. The audit reports would be concise and transparent to make those understandable for the members of the Public Accounts Committee of Parliament. Besides, instead of opening a separate performance audit cell, the same would be introduced in all nine directorates, sources said. The changes are being brought in under the Financial Management Reform Programme (FMRP), a Taka 2.17 billion project of the Ministry of Finance. The project is financed jointly by the Department for International Development (DFID) and the Bangladesh government. The five-year project started functioning from July 1 this year. Already the project had set an annual planning for the C&AG in September. The new audit manual on annual job planning had been made applicable to all nine directorates by September 30 this year. Under the new system, each job would be derived from the annual plan, jobs would be grouped into key issues and task areas and there would be more balanced audits covering revenue, assets, liabilities as well as expenditure system. The nine strategic goals include increasing C&AG's role in making public offices more accountable and transparent, improving internal control and auditing standards, introducing new audit methods etc. The project already started field testing procedures in October and new planning methods would be fully in use by July 2004. Besides, 1000 audit and accounts officials would be trained on the new system under the project. Major changes are under way in country's public auditing system as the government has taken steps to put stress on issue-based audit instead of conducting overall audit that has been going on for years. The new system will see the Office of the Comptroller and Auditor General (C&AG) and its nine Director General's offices extensively conducting audit on issues like corruption in a particular project or office and it would address wider pubic and taxpayers" interests. "Instead of making reports that serve no particular purpose, the C&AG will delve deep into the books of the projects and offices where corruption or mishandling of public money is rampant," an official associated with the project said. He said the whole methodology of the auditing system will be changed and audit conducted on areas where there is a requirement, not in the traditional manner. The new system would see the C&AG and its directorates set their own priorities according to an annual strategy. Nine key strategic goals have been identified and jobs would be done reflecting C&AG's short and long-term plans. Presently, the C&AG and its directorates concentrate on conducting overall audit of the government and semi-government offices, but very often the audit report hardly reflects the actual needs of the government. Under the projects, new manuals would be prepared for conducting audits. The audit reports would be concise and transparent to make those understandable for the members of the Public Accounts Committee of Parliament. Besides, instead of opening a separate performance audit cell, the same would be introduced in all nine directorates, sources said. The changes are being brought in under the Financial Management Reform Programme (FMRP), a Taka 2.17 billion project of the Ministry of Finance. The project is financed jointly by the Department for International Development (DFID) and the Bangladesh government. The five-year project started functioning from July 1 this year. Already the project had set an annual planning for the C&AG in September. The new audit manual on annual job planning had been made applicable to all nine directorates by September 30 this year. Under the new system, each job would be derived from the annual plan, jobs would be grouped into key issues and task areas and there would be more balanced audits covering revenue, assets, liabilities as well as expenditure system. The nine strategic goals include increasing C&AG's role in making public offices more accountable and transparent, improving internal control and auditing standards, introducing new audit methods etc. The project already started field testing procedures in October and new planning methods would be fully in use by July 2004. Besides, 1000 audit and accounts officials would be trained on the new system under the project. (by M Shafiqul Alam )

From http://www.bangladesh-web.com/ 11/01/2003

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Political Will Required to Bring Opposition Back to Parliament

Visiting Deputy Administrator of USAID Frederick W Schieck said "political will" is a prerequisite to bring the Opposition back to the parliament. "Outsiders cannot force to make your parliament functional...we can simply show the way and share ideas about strengthening parliamentary democracy in Bangladesh," Frederick told a group of journalists at the US Embassy here. Frederick, who was here on the last leg of his South Asian tour, also said that boycotting the parliament by opposition parties is common in the countries that have shifted from military dictatorship to parliamentary democracy. Frederick says democracy is not yet fully developed in these transitional democracies, including Bangladesh, recollecting his visit to the country about 20 years back. He said only free and fair elections are not enough for democracy, unless other institutions, including judiciary, are strengthened. "Decentralisation and empowerment of local government are important. Proper legislation is also a factor that matters in strengthening democracy," he added. While narrating his experience of visit to the countryside of Bangladesh, the USAID executive said much progress has been made in the last 20 years and a lot of activities are going on around the country. Responding to a question, he said Bangladesh has the opportunity to export its surplus gas with a view to investing the money in more important areas, like health, education and infrastructure development. "Many countries around the world are exporting their excess gas," he pointed out. He said US government is satisfied with the implementation process of the USAID-funded projects around the country, including the long-term ones. USAID is implementing both short-term and long-term projects in Bangladesh, of Frederick said, adding that rural electrification and family planning are among the long-term ones while education for retrenched garment workers, democracy and good governance are the new sectors. The USAID-funded projects are run by local NGOs, he said. Referring to the cooperatives for the rural electrification programme in Bangladesh, he said these were success stories in terms of quality services and bill recovery. A total of 67 rural cooperatives are currently functioning in the country, a USAID official said. About Bangladesh's shrimp industry, the second largest foreign exchange earning sector after the apparel industry, Frederick said, quality requirements remained the major challenge for the producers to maintain their competitive edge. The shrimp sector, which fetches around US $300 million annually as export earnings for the country, must ensure hygiene, labour standard and environment in order to maintain the market share in the world's largest economy, he felt. During his four-day stay in Bangladesh, the USAID official visited health clinics, schools and centres of alternative dispute resolution. With a world-wide network in 75 countries, the USAID has been assisting the developing and transitional economies to enable them achieve social and economic development.

From http://independent-bangladesh.com/ 11/19/2003

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MALDIVES: President Gayoom Asks Maldivian People to Send Him Suggestions on Reform

MALE - The President's Office has made an announcement calling on the Maldivian people to send letters of suggestion on national reform to President Maumoon Abdul Gayoom. The President seeks people's ideas on areas of reform and as such people are encouraged to send in writing their suggestions addressed to the President, a press release from the President's Office said Tuesday. During his Oct 22 address to the nation after being elected for a sixth five-year term in office, Gayoom said that as Maldives is on the threshold of changes, he needed the ideas of people with regard to reform and that he planned to have frank and open discussions with people regarding reforms. The President is now in the process of arranging platforms for such discussions, the President's Office said. In the announcement made by the office, people are asked to send their letters addressed to the President at the President's Office with the words "Hiyaalu Hushahelhumah" ("Suggestions") written on the envelope. Letters can be sent to the President's Office between 9:00am to 1:00pm on all working days.

From http://www.haveeru.com.mv/ 10/28/2003

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President Calls on Government Offices to Provide Good Public Services

MALE -- President Maumoon Abdul Gayoom on Tuesday evening called on all government offices to provide public services in such a manner that they instil confidence in the public that their concerns are being heard and that their views are taken into account. The President's call came in his speech at a meeting held at the Presidential Palace with the delegations from the atolls who were in Male and the wards of Male. The delegations conveyed the sentiments of the people and congratulated the President for his re-election for a sixth Presidential term in office. The President said that all government offices should listen to people's concerns and views, and try to respond to them as much as possible. Highlighting that the government and the people were one and the same, the President urged on all government offices to pay further attention to this in carrying out their duties during this fresh Presidential term in office. The President also highlighted the importance of consulting as many people as possible in decision-making. The President noted that we should cultivate this practice, and that seeking people's advice, in personal and family affairs, as well as public affairs would not belittle one's self. The President said that ministers, senior government officials, Atoll Chiefs and in fact anyone in such positions would also greatly benefit from seeking the opinions and suggestions of the general public. The President noted that, throughout the ages, Maldivians had lived in friendship and brotherhood, and that they shared the same history and tradition. The President added that, therefore, no one should fuel divisions among the people, and that such divisions based particularly on religious grounds could be very damaging. The President said that meeting the delegations from the atolls and the wards of Male was a source of great joy for him. The President also thanked them for the sincere sentiments that they had expressed, and said it was a source of added happiness for him that Members of the People's Majlis (parliament) were among them. The Minister of Atolls Development, Abdulla Hameed, and the Minister of Home Affairs and Environment, Ismail Shafeeu, also spoke during the meeting. They thanked the President for meeting with the delegations. The delegations from the atolls included the Members of the People's Majlis from the atolls, Atoll Chiefs, some senior island functionaries and members of various committees. The delegations from the wards of Male comprised heads of the wards, the two Members of the People's Majlis for Male, Ilyas Ibrahim and Abdulla Kamaludin, and senior functionaries of all the Ward Offices.

From http://www.haveeru.com.mv/ 11/20/2003

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IRAN: Reform Takes on a New Face

PARIS - Iran's reformists, already facing defeat that some political analysts predict as "crushing" in the legislative elections due in February, face a further daunting challenge from militia belonging to the ruling ayatollahs' guardians of the Islamic revolution. At least 40 officers of the elite Revolutionary Guards are believed to have shed their olive-green uniforms to take seats in the next majlis, which will be the eighth since the country's Islamic revolution in 1979. "Though the military is barred by the constitution from political activities, their participation in elections has no constitutional limitation on condition that they have got out of the ranks in due time," Dr Qasem Sho'leh Sa'di, a prominent lawyer and scholar, told Asia Times Online. The conservatives plan to retake control of parliament by bringing in the soldiers at a time that reforms promised more than six years ago by Hojjatoleslam Mohammad Khatami during his electoral campaign have not only not materialized, but the regime faces a "legitimacy crisis". "Iran is on the brink of a kind of social collapse," warned Mohammad Ali Namazi, a member of the reformist fraction that currently controls the majlis, calling on officials to pay more attention to domestic problems, particularly social factors, than political and international issues. "Generalized corruption, the increase in cases of illegitimate relations of women for material reasons, the escape from home of young girls, the staggering number of financial and drug addict prisoners on the one hand and prostitutes on the other, the hopelessness of the youngsters and the gap between the rich and the poor etc have discredited the system," he told a recent open session of parliament. Tensions between the Revolutionary Guards - or Pasdaran in Persian - with reformists heightened after Fatemeh Haqiqatjoo, an outspoken member of the majlis' Article 90 Committee, which deals with legal, judicial and human rights issues, denounced the guard's "illegal activities", including allegedly the incarceration of dissidents in prisons that are outside the control of both the government and the majlis. "Arrest, imprisonment and torture of students, nationalist-religious activists, journalists and dissidents in the past years were carried out by the Revolutionary Guards," she told the open House on November 10, noting that lawmakers had been able to visit most of the prisons bar "frightening, terrible, dreaded ones that are controlled by the Guards". "If threatening the Islamic Iran Participation Front [the country's largest political organization led by Mohammad Reza Khatami, the president's younger brother] by a high-ranking commander of the Revolutionary Guards, the arrest of students and journalists, torturing and forcing them to fabricate confessions shown latter on television are not brazen cases of involvement in political affairs, what are they?", asked the outspoken deputy from Tehran. Her remarks met with a stern warning from General Yahya Rahim-Safavi, the commander of the Revolutionary Guards, who, in a letter to Hojjatoleslam Mehdi Karroobi, the speaker of the majlis, urged him to "harness some of his cattle". "I call on you to stop some of the deputies going too far in their declarations by informing them that confronting the enemy, wherever and whoever he might be, is the prime duty of the Guardians of the Islamic revolution," he said. At the same time, a student commander of the Basiji - Iran's volunteer Islamist militia - warned reform-seeking students that their views and activities would no longer be tolerated by the forces of the revolution. Sho'leh Sa'di says that the regime is "already overwhelmed by the military" and observes that every time dissidents or the population show any signs of major protest, the rulers call on the military to frighten them. "The militarization of the regime's organs, particularly the majlis, would only precipitate the confrontation between the regime with the population," he warned, explaining: "The more soldiers take part in the elections, the less people will turn out at ballot boxes. As the elimination of the classic reformists would place the conservatives directly in front of the people, mostly the young generation and its growing demands for radical changes, the outcome is crystal clear: more civil disobedience leading to more confrontation, leading to opening the doors to foreign intervention," hinting at possible United States involvement as Washington has Tehran firmly in its sights. A university professor, Sho'leh Sa'di, spent 40 days in jail because of an open letter to Ayatollah Ali Khamenei, the leader of the Islamic Republic, not only because he addressed him as hojjatoleslam, a lower rank in the Shi'ite hierarchy, but also because he criticized Khamenei's domestic and foreign policies. Ali Keshtgar, editor of the Paris-based Mihan (Homeland) monthly review, agrees. "By bringing in the soldiers of their own to the majlis, the conservatives, already a tiny minority, would cut their remaining roots in Iranian society, paving the way for more opposition from the people against the present oppressive system," he told the Persian service of Radio France International. According to a recent opinion survey carried out by students at Tehran Medical University, more than 83 percent of the people want radical changes in the constitution, and 77 percent of the interviewees believe that the reform process has reached a dead end. As a result, 38 percent demand that Khatami step down, while 30 percent would prefer that all reformist members of the majlis resign. Asked to designate the main causes of the failure of the reformists to implement their promised reforms, the great majority of the people questioned in the survey point to the systematic opposition of the all-important organs controlled by Khamenei, namely the Council of Guardians and the judiciary. A crucial, if not the vital issue, in the elections will be the normalization of relations with the "Great Satan", the name Grand Ayatollah Ruhollah Khomeini, the leader of the Islamic revolution, bestowed to the United States. Washington cut all relations with the newly-proclaimed Islamic Republic of Iran soon after the events of 1979 that drove the US-backed monarchy out of power, and imposed economic sanctions after revolutionary students stormed the huge American embassy in Tehran on November 4, 1979, taking 55 staff and diplomats hostage for 444 days. Aware that the survival of their regime is directly linked to the state of relations with the US, the world's undisputed master after the fall of the Soviet empire, the conservatives have appointed Mohammed Javad Ardeshir Larijani, one of their best and most trusted brains, to lead the campaign for the conquest of the majlis as the first step towards restoration of ties with America. "Larijani, an ardent defender of Islamic values, educated in sun-bathed California, and his team of strategists not only do not consider the 'Great Satan' as an enemy of the Islamic Republic, but as a political and trading partner in the future," wrote Der Spiegel, one of Germany's most influential news weeklies in a recent article. The son of a senior ayatollah, Larijani was named some months ago as the international communications director for the judiciary. His younger brother, Ali, a former officer of the Revolutionary Guards, is the director general of the state-run, leader-controlled Voice and Visage (Radio Television) of the Islamic Republic. The Havana cigar-smoking, smartly dressed Larijani is the director of a think tank that advises the leader on important, complicated and complex international issues. He is credited for having urged Khamenei to authorize the signing of the controversial additional protocol to the Non-Proliferation Treaty and thereby escape possible international sanctions that could have been decided by the United Nations Security Council in the event that Tehran did not bow to the demands of the Vienna-based International Atomic Energy Agency (IAEA). The US, Israel and some European countries are concerned that Iran's ongoing project for the construction of an atomic-powered electricity plant in the Persian Gulf port of Bushehr is a front for building a nuclear arsenal aimed primarily at destroying Israel. But Iran and Russia, which is providing the atomic reactor, insist that the project is for civilian use only, and IAEA inspectors have confirmed that they have found no evidence confirming American claims. Under the agreement signed by Hojjatoleslam Hasan Rohani, the influential secretary of the Supreme Council for National Security, with the foreign affairs ministers of Britain, France and Germany, on October 21, Iran accepted to open up all its nuclear-related projects and programs to international inspectors and suspend its uranium-enriching activities. Although many people see no way out for Iran's hardliners, they still have some trump cards to play. "Contrary to the reformists, who claim that opening up the political atmosphere of the nation is key to solving other shortcomings, mostly the anger of the young generation at the lack of political freedom, what the majority of people are interested in is not politics, but more employment, especially for the hundreds of thousands of youngsters who under present conditions see no other solution but to seek jobs outside the country," notes one Iranian economist in Tehran. Directly controlling all the regime's levers of power, including the armed forces, the security and intelligence services, the economy and the judiciary, the conservatives call all the shots. Thus, they could, should they seriously want to remain in power, yet improve relations with the US, take a number of steps. These could include: order the Revolutionary Guards back to their garrison; rein in the activities of pressure groups; enforce more privatization of the economy; bring the huge wealth of the bonyads - foundations - under government control, such as making them pay taxes; improve the country's human rights record, and stop supporting radical Islamist and Arab groups opposed to peace with Israel. "If they do that, and the odds are that they will, a new map will emerge for the region comprising Iran, Turkey and ... believe it or not, Israel, the three linked to Washington at the expense of Europe in one hand and some Arab states, like Saudi Arabia, Jordan and Egypt, on the other," an Iranian scholar following the situation in his home country told Asia Times Online on condition that his name not be mentioned. (by Safa Haeri)

From http://www.atimes.com/ 11/19/2003

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KYRGYZSTAN: Banking Reform Key Task

Bishkek - Banking reform is one of the most important tasks of Kyrgyzstan's government, Prime Minister Nikolai Tanayev said during a meeting in Bishkek on Wednesday with International Monetary Fund Managing Director Horst Koehler. "It is necessary to restore the population's confidence in banks, which has been shaken after a series of major bankruptcies. It is also our goal that banks should take a more active part in financing the real sector of the economy," Tanayev said. "Unfortunately, so far the level of loans that are issued is low," he said. He told Koehler about administrative, legislative and fiscal reforms. As part of the fiscal reform, the country has set up an Incomes Committee, which replaced the Financial Police, Customs Inspectorate and Tax Inspectorate.

From http://www.interfax.com/ 11/12/2003

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TURKEY: Minimum Wage Fixing Commission to Convene on November 4

ANKARA - The Minimum Wage Fixing Commission will hold its first meeting on November 4 to set the new minimum wage which will be valid as of January 1, 2004.Labor and Social Security Minister Murat Basesgioglu will make the opening remark of the meeting. During the first meeting, directors of the Confederation of Employers' Unions (TISK) and the Confederation of Turkish Labour Unions (Turk-Is) will explain their views about the minimum wage. The Minimum Wage Fixing Commission is comprised of five workers, five employers and five representatives of the government. While the Turk-Is represents workers at the commission, employers are represented by the TISK. The current net minimum wage is 225 million 999 thousand Turkish liras (TL) for workers who are above 16 years.

From http://turkishpress.com/ 11/03/2003

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UZBEKISTAN: Conference Addresses Criminal Legislation Reform

A conference dedicated to reforming criminal legislature in Central Asia has opened in Tashkent. During three days, scientists, parliamentarians and representatives of legal bodies of Central Asian states will discuss priority issues of reforming the system of criminal legislation. Russian specialists will also attend. The forum will discuss such mechanisms like control of arrest and consider activity of lawyers and introduction of a competition between the advocacy and the prosecution.

From http://www.uzreport.com/ 11/06/2003

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AUSTRALIA: Warning on a Slide in Innovation

Australia had transformed itself from an "imitator" economy in the 1980s to a second-tier innovator - but a stable performance over the past five years has raised the risk of slippage against other advanced countries. Melbourne Business School's Joshua Gans told the Pursuing Opportunity and Prosperity Conference in Melbourne that international competitiveness increasingly relied on innovation, especially in advanced countries. He said the nation's 17th ranking for global innovative capacity, measured by our ability to generate international patents, compared with 14th position five years before. "There are some important variables we are neglecting, like expenditure on education and research and development by universities," Professor Gans said. "If we improve we could match other countries with our international patenting and not be at the low-tech end with less patenting activity." But while commercialisation of high-technology innovation was something to aspire to, Jonathan Lacey from Hewlett-Packard spin-out Agilent Technologies warned there were no quick fixes. He said it had taken 30 years for California's vaunted high-technology Silicon Valley precinct to take shape, with its huge pool of entrepreneurial talent and eager investors. Australia also had to recognise that nine out of 10 hi-tech businesses would invariably fail. "We need to be prepared to fail a lot for a long time," Mr Lacey said. The key, he said, was a successful marriage between the hard-nosed investor and the "evangelising entrepreneur". "If the portfolio of 10 attempts is managed successfully, the one success can make up for the nine failures," he said. Mr Lacey said the commercial disciplines imposed by a 90 per cent failure rate in high-technology start-ups meant the sector was no place for "soft" funding. It was also important to kill failing start-ups early, so that scarce resources and entrepreneurs could be redeployed. Australia, moreover, should publicise its high-technology start-up activity. That way, some of the sector's entrepreneurs, who often sought business experience offshore despite wanting to work in their home country, could be lured back. Professor Gans said in an accompanying paper that a lot of the increase in R&D investment by Australian business had been inward-looking, focusing on how to tailor global technology to the Australian environment. But the competitiveness of local companies depended on their ability to develop new technology and processes with global application. (by Richard Gluyas)

From http://www.theaustralian.news.com.au/ 11/15/2003

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NEW ZEALAND: Patent Stats Reveal Innovation Lag

New Zealand's appalling lack of international patents being filed, compared with other countries, raises the concern that we may not be the innovators we believe ourselves to be --?and if we are, why are we failing to convert new ideas into powerful commercial intellectual property? Dr John Hood, the new vice chancellor of Oxford University, was reported in The National Business Review (Sept 26) as being concerned that "In 2001 New Zealand registered 32 US 'utility' patents per million of population for a ranking of 23 on a country list headed with 314 patents per million people, 10 times higher than New Zealand." Dr Hood's use of patent statistics as a measure of productivity has OECD approval and presumably derives from a paper by Michael Porter and Scott Stern, of Harvard's National Bureau of Economic Research, which examined the link between "the national ideas production function" and patents granted by the US Patent Office to foreign organisations. Porter and Scott also examined the relationship between growth of the production of ideas and productivity. They found that patenting activity is proportionate to the domestic knowledge stock of nations. They found a less direct but still significant link between productivity and increase in ideas production. Any suggestion that New Zealand's low 2001 figure for issued US patents might be just an aberration is dispelled by figures for New Zealand's international patent applications (PCT) filed in 2002. The US, Germany and Japan were at the top of that table, with percentages of total filings of 39, 13 and 12%. New Zealand scored only 0.3% of the total filings. That this really is low is evident from a comparison with other developed countries of a similar population. Israel and Denmark scored 1% of the total filings ?a figure three times that achieved by New Zealand. A June Treasury paper (Black, Guy and McLellan), based on index number techniques and data from Statistics New Zealand, reported productivity in New Zealand had experienced an annual 1.32% growth rate since 1993. This was equivalent to Australia and represented a dramatic increase 1988-92. However, the bad news in that report was that productivity growth in manufacturing was comparable only with that experienced in 1988. Productivity growth in manufacturing had declined since 1993. Porter and Scott believe the reason an increase in the national production of ideas does not feed directly into productivity increases is due to the difficulty the productive sector has in taking advantage of new ideas. The factors preventing this include the usual suspects: lack of capital, lack of skilled labour, rigid consumer habits and a burdensome regulatory framework. But this problem is faced by industry in all countries and does not explain New Zealand's low patent statistics. It is important to ascertain why New Zealand's patent figures are one third of those of other countries of comparable population. These figures represent the national production of ideas. Are we really only producing ideas at one-third our predicted rate ?punching below our weight? Or is there some fundamental distinction in New Zealand's production profile that makes Porter and Scott's measure of ideas production invalid for New Zealand? Possibly, the agricultural dominance in New Zealand might distort this measure. Urgent research is required because although increasing the ability of the productive sector to take advantage of new ideas should lead to a small increase in productivity, the rate of production of the ideas may be only one third of what they could be. The bad news is we really might be failing to punch at our weight because a September Treasury paper (Claus and Li) on New Zealand's production structure seems to conclude "New Zealand's industrial structure is broadly similar to that in other OECD countries." (by Ken Moon)

From http://www.nbr.co.nz/ 11/07/2003

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NZ 'Decaff Light' on Governance

New Zealand is just "not getting it" on corporate governance, says Simon Botherway, of Brook Asset Management. The biggest clean-up in business practices since the 1930s was happening elsewhere and was relevant to New Zealand because capital was global, he said. In presentations to business conferences, the fund manager has argued that the cost of complying with new rules would be more than offset by a reduction in the risk premium that investors put on New Zealand equities. A higher premium made capital more costly for local firms and weighed on valuations, disadvantaging the companies in mergers and acquisitions with firms from countries with lower equity-market risk premiums, such as Australia. "The extra compliance costs are explicit, but there is an implicit cost in the higher risk premium in the New Zealand equity market." It was incorrect to argue that New Zealand had not had an Enron-style disaster, Botherway said, citing situations from Fletcher Forests, Air New Zealand and Tranz Rail in the past four years as examples of questionable accounts or disclosures. Shareholders had been handed large-scale losses. New Zealand's approach to corporate governance was "decaff light" and we regarded moves by others as an over-reaction, he said. "I don't accept that. The new US legislation will set the standard for the next 50 years. We have to get with this process." New Zealand was moving in the right direction, but not matching best practice elsewhere. The Securities Commission needed the power and resources to enforce rules, said Botherway. Courts must support the intent of legislation, and voluntary business codes should be mandatory. The commission is seeking submissions on principles for governance. Commerce Minister Lianne Dalziel has said the debate is finely balanced between a rules-based or principles-based approach. The commission project covers ethical conduct, board composition and performance, reporting and disclosure, remuneration for executives and directors, risk management, auditor rotation and oversight, shareholder relations and stakeholder interests. Bruce Sheppard, of the Shareholders' Association, said companies were about the interaction of owners, managers and directors, but owners were being neglected. Institutions should act as owners, he said. Institutions were trustees of investor interests. Also, shareholder votes should be made on an informed basis, not merely by a broad proxy in favour of the board. Last month, Botherway and Sheppard challenged banker Lindsay Pyne's appointment as a Telecom director. (by Pam Graham)

From http://www.nzherald.co.nz/ 11/13/2003

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Leaky Building Service Resolves 33 of First 2200 Complaints

The year-old Weathertight Homes Resolution Service has completed a total of 33 resolutions, the Department of Internal Affairs said today. The service, set up to help owners of houses less than 10 years old that are leaking and suffering damage, completed the first resolution in July. It gives free assessments to determine the extent of the water damage and offers mediation and adjudication services. More than 5000 people had called the freephone information line, and more than 2200 owners had completed claim forms, the department said in a statement. Of the 33 resolutions, 21 had been resolved through mediation, two at adjudication and 10 by other means. The service employs 19 staff and brochures for dwelling owners have been produced in English, Chinese, Korean, Samoan, Tongan and Maori. A freephone information line in six languages was set up in response to demand.

From http://www.nzherald.co.nz/ 11/20/2003

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South Korea Ranks 3rd in Market Potential of Emerging Nations

South Korean economy has the third biggest market potential after Hong Kong and Singapore among 24 emerging markets in the world, which are identified by U.K.-based business weekly The Economist, the Korea International Trade Association (KITA) said yesterday. The ranking comes from an annual indicator for the market potential of emerging markets in the world, which is made by the Center for International Business Education and Research in at Michigan State University (MSU-CIBER), it added. Eight dimensions are chosen to represent the market potential of a country over a scale of 1 to 100. Eight criteria are market size, market growth rate, market intensity, market consumption capacity, commercial infrastructure, economic freedom, market receptivity and country risk. In the overall market potential rank that combine those eight dimensions, Asia's fourth largest economy stood at the third marking 94 scores in a 2003 market potential ranking after Hong Kong (100) and Singapore (95). Other Asian competitors China and India were ranked in the fifth and the ninth with the indexes of 84 and 61, respectively. When it comes to the nation's rank in the 8 dimensions, Korea stood at the top in terms of country risk. It was placed the third in the categories of market consumption capacity and commercial infrastructure. The market size of the Korean economy is the sixth largest among 24 respondents, while the market intensity is the fourth largest. In the dimensions of economic freedom and market receptivity, Korea stood at the ninth each. Meanwhile, Korea showed the poorest ranking in terms of the market growth rate, with it being ranked the 16th. In the same category, Malaysia stood at the top and Turkey and Mexico followed. China and India ranked 8th and 12th, respectively. The market growth rate ranking of Hong Kong and Singapore was lower than Korea down to 13th and 19th, each.

From http://times.hankooki.com/ 10/28/2003

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Internet Democracy Elusive: Report

Australia has been ranked third in an international survey of electronic-government readiness, according to a UN report. The report says more governments around the globe are using the Internet, but only 20 per cent of people with World Wide Web access use government sites and those sites rarely encourage users to participate in making policy. Even though the 2001 terror attacks made security - rather than accessibility - the main concern in many nations, the number of countries with at least one government Web site continues to increase, according to the 2003 UN World Report on the Public Sector, E-Government at the Crossroads. The report on "electronic government" was released yesterday in Mexico City. A total of 173 of the United Nation's 191 member nations had a Web presence in 2003, an increase from 143 in 2001. Only 18 countries, many in Africa, remained completely off-line. While Web-based access can link citizens to everything from schools to hospitals and libraries, it is not the whole answer. "Only a very few governments have opted to use e-government applications for transactional services or networking," the report states, "and even fewer use it to support genuine participation of citizens in politics." The US Government led the ranking of e-government "readiness", the amount of information, services and products it offers over the Internet, combined with the infrastructure - telephones, computers, Internet connections - and the education needed to access them. In that ranking, Sweden was second, followed by Australia, Denmark, Great Britain, Canada, Norway, Switzerland, Germany and Finland. The report, however, gave very different marks on the quality of countries' Web sites, a ranking in which many developing nations placed higher than their developed counterparts. "This is a measure of how well the governments are doing in meeting citizen's needs," Seema Hafeez, one of the report's authors, said. The United States took top place in the Web-quality index, followed by Chile, Australia, Mexico, Great Britain, Canada, the Philippines, Singapore, Denmark and Sweden. In another ranking for "e-participation" - a measure of a government's willingness to interact and dialogue with citizens over the Net - Britain beat the United States for the top spot. While many of the same countries - New Zealand, France, the Netherlands, and Ireland - made the Top 10 in that category, there were some surprises. Several developing countries, such as Chile, Estonia, the Philippines, Mexico and Argentina, ranked among the Top 10 in eparticipation. Estonia, for example, has a site known as "Today I Decide", in which people can propose, amend, and vote on policy issues. Officials are then required to consider those proposals. "It is refreshing that this is not like a train that has to follow the developed nations," Jerzy Szeremeta, an author of the report, said. "Creativity and policy centred on human development can be located anywhere in the world." Still, only 15 governments in the world accept Internet comment on public policy issues. Only 33 countries allow government transactions, such as filing forms or paying fines, over the Net. At least 60 per cent of all e-government projects in developing countries fail, and about half waste taxpayers' money to some extent, the report says. There are success stories, such as Hong Kong's one-stop Electronic Service Delivery, which allows citizens to do everything from paying taxes to renewing a drivers' licence on the Web. Other countries publish bids for government purchasing contracts on the Web, to help fight corruption and kickbacks. While South Korea's OPEN application/complaint portal allows users to see exactly where their case is being handled in the government approval process. "What e-government does is make many things obvious," Szeremeta said. "In Australia, to establish a firm it was necessary to go through 17 formalities. When they put that online, they laughed - why 17?" Online, "you see the possibility of merging things ... now they have reduced it from 17 to 2", he noted. But the report notes that "a too-grandiose approach may result in failures or expensive white elephants". "Because of a high rate of failure in specific government projects in developed as well as developing nations, bricks-and-mortar public services need to be maintained even as digital applications are increasing," the report says. In many countries, women and the poor have less access to the Internet than other sectors. "Security and privacy issues" also discourage use among all populations, the report notes. Most Americans who use government Web sites do so to get tourism information, do research for school or work, download government forms or get information on services. "US users perceive the availability of e-government first and foremost as an opportunity to get quick and easy access to information," the report says. That, according to the United Nations, is only part of the Web's potential. "Many governments turn to Internet-based services as a way to cut red tape," Jose Antonio Ocampo, the U.N. undersecretary-general for economic and social affairs, said. "But we also see the Internet as a means of advancing and consolidating transparency and democracy." (by Mark Stevenson)

From http://www.unpan.org/ 11/05/2003

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Central Asia Needs Investment Despite Oil Wealth-World Bank: Dennis De Tray

Cash may be pouring in to some Central Asian states from oil and gas sales, but they should not put off hunting for the foreign investment they need, the top World Bank official in the region said, according to Reuters. Dennis de Tray, director for the Central Asia Regional Office of the global lender, said late on Wednesday Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyztan and Tajikistan were crippled by their small markets and distance from major trade routes. "They all have to recognise that their geographic location really gives them no choice but to move aggressively to improve their investment environments for domestic investment as well as international investment," de Tray told Reuters in an interview. "Because they are relatively geographically isolated, attracting foreign direct investment is going to be difficult." Kazakhstan, the region's biggest country and economy, has a mere 15 million people, despite being the world's biggest land-locked state. And Kazakhstan - home of the Kashagan oil field, the biggest oil find of the last 30 years - could postpone the hard decisions as money from energy, and other commodities such as grain and copper, swelled its budget. "Because Kazakhstan has such large oil reserves...it hasn't quite decided what kind of relationship it wants with outside investors," de Tray said.Although Kazakhstan had one of the best banking systems in the CIS, its financial markets were next to non-existent, and basic infrastructure like education and health was poor. The country is also heavily dependent on world oil prices, while the central bank has to constantly purchase dollars from the market to prevent the tenge currency from rising too much.Uzbekistan, the world's second top cotton exporter, also needed to broaden its economy. It claims to have suffered only a minor reduction in national wealth since the Soviet collapse, but this is mostly due to the fact that it had not undertaken any serious reforms. The country has still not fully relaxed currency restriction imposed after a disastrous cotton harvest in 1996, and most analysts see its stable currency as rising from curbs on money supply and trade rather than reforms. "They are reaching a point where they simply will have to move more aggressively to allow Uzbek citizens to be entrepreneurs," de Tray said. "(Otherwise) the best you can hope for is that the economy stays what it is." The IMF forecasts 2003 GDP growth of just one percent, and the future is even duller for the other three. Turkmenistan's President-for-Life Saparmurat Niayzov has built made his gas-rich state into a command economy more cumbersome than even the Soviet Union. His response to the perpetual failure of cotton farms to meet their sky-high targets is to sack their managers. "There are very few countries in the world that are like Turkmenistan...(that are) as unaware how bad their economic policies are," de Tray said. Bordering China is Kyrgyzstan, one of the world's poorest states, whose economy slumps whenever the Kumtor gold mine suspends output. "Unfortunately, the message for the Kyrgyz republic is yes, you've tried hard, but you have to try harder," de Tray said. The last country, Tajikistan, ended a civil war little more than five years ago, and is only starting to build the basis of a market economy. "The prospect of export growth from these poor countries (Tajikistan and Kyrgyzstan) in the short term is not terribly high," de Tray said. "The biggest problem...is finding markets for exportable goods other than traditional gold for Kyrgyzstan and aluminium and cotton out of Tajikistan." Meanwhile, Adrian Hamilton of the Independent (UK) writes that whilst the World Bank this week was putting its imprimatur on the Caspian pipeline to take oil from Azerbaijan to the Mediterranean via the former Soviet republic of Georgia, announcement of the results of the Georgian elections had to be delayed because of the riots and widespread accusations of fraud. It was even worse in Azerbaijan three weeks ago when riots following the gerrymandered elections to establish the President's son in power led to half a dozen deaths and the arrest of most of the opposition. Oil, corruption and tyranny: the cycle goes on as we prop up the worst of regimes in the name of stability and security of energy supply.

From http://web.worldbank.org/ 11/06/2003

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Japanese Govt to Propose Creation of East Asian Community

The government will propose the creation of an East Asian community--an Asian version of the European Union--at the Commemorative Summit meeting between Japan and the Association of Southeast Asian Nations to be held Dec. 11-12 in Tokyo, The Yomiuri Shimbun has learned. The Yomiuri Shimbun obtained a draft statement to be adopted at the summit meeting, which will be considered a guideline for the future relationship between Japan and ASEAN. The draft proposes reinforcing the Japan-ASEAN relationship in various fields, including politics, economics and security. In economic terms, for instance, it proposes comprehensive economic partnerships, stabilizing the currencies in the East Asian region and alleviating economic disparities among ASEAN members. Comprehensive economic partnerships mean the conclusion of free trade agreements among Japan and ASEAN members by 2012, as agreed at the Japan-ASEAN summit meeting in Bali, Indonesia, in October, sources said. The draft also proposes developing a market for bonds denominated in the currencies of countries in the region to stabilize local currencies by avoiding the negative effects of attacks by international speculators and exchange fluctuations. In the field of security, the draft proposes further mutual cooperation to deal jointly with cross-border threats, such as terrorism and piracy, as well as to maintain the security of food and energy supplies in East Asia as a whole. Japan will propose the creation of the Asian community at vice ministerial talks in Tokyo next week. Japan also will urge ASEAN members to share principles of democratic governance, basic human rights and market economy, they said.

From http://www.yomiuri.co.jp/ 11/14//2003

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Internet to Be 50 Times Faster by 2010

The telecommunications network in South Korea will increase to 50 times its current speed and will cover the entire nation by 2010, the Ministry of Information and Communication (MIC) said on Monday (Nov. 17). According to a BcN (Broadband convergence Network) infrastructure plan announced by the MIC, the government will invest 2 billion won and induce another 67 billion won from the private sector to provide a high-quality broadband multimedia service covering the whole country. BcN, TV broadcasts, telecommunications and the Internet will be converged into one single network with transmission speeds of 50~100 Mbps, which is about 50 times faster than the current VDSL line used in many households. Ubiquitous networking will also be available through BcN, whereby any electronic device, such as refrigerators or digital televisions, will be able to perform as a network console enabling customers to use Internet anytime and anywhere. The report also said that for BcN to be successful it must provide a high quality of service, security, and sufficient IP addresses using IPv6. IPv6 is an enhanced address system, which provides almost limitless IP addresses while the current IPv4 system only has about 4.3 billion addresses and is expected to be full by 2006. The report estimates BcN to contribute 95 trillion won to the economy as well as 370,000 jobs by 2010. The export of BcN-related products will also increase from the current $2.7 billion to $13.5 billion in 2010. The report was compiled by a special research team, consisting of 178 experts from various research labs and companies including ETRI, KSDNI, KT, SK Telecom, and LG Telecom, for the MIC. The research team, which has been working on the project since May, will present seminars to the public and finalize details before the finished report is published in December. The first seminar on BcN technology and strategy will be held on Tuesday at 9:30 a.m. at the Seoul Hilton.

From http://search.korea.net:9000/ 11/18/2003

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S'pore Leads for Protecting Assets and Supporting R&D

SINGAPORE has surprisingly emerged tops in innovation policy ahead of countries such as the United States in a recent study conducted by Harvard don Michael Porter. Singapore's top score was for its effectiveness in protecting intellectual property, as well as for its support for research and development (R&D) through tax credits and subsidies. One of the best-known business school dons, Professor Porter noted that Singapore has put in place innovation-oriented policies which India and China - often cited as emerging innovator economies - have not. Both India and China ranked below 25th on innovation policy in a ranking of 73 countries, he said in his joint study with Northwestern University don Scott Stern. A number of OECD economies also failed to score well in innovation policies, the two academics wrote in the World Economic Forum's 2002/3 Global Competitiveness Report. 'There is an increasing gap between countries in their willingness and ability to implement innovation-oriented policy reforms,' they said. Singapore's top ranking for innovation policy boosted its overall ranking for national innovative capacity, which measures the degree to which an economy offers a favourable environment for global innovation. In the overall innovative capacity rankings, the US came in tops, ahead of the United Kingdom, Finland, Germany, Japan and Switzerland. Singapore was ranked 10th, an improvement from its 13th position a year ago. Taiwan was the only other Asian economy to make the top 10, coming in at eighth place. The improved rankings for Singapore reflect its recent emphasis on promoting innovation as a source of growth, through supporting start-ups and R&D projects and local incubators housing technological companies. (by Audrey Tan)

From http://straitstimes.asia1.com.sg/ 11/18/2003

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Asia Quickly Adopting Information Technology, U.N. Agency Says: Research Suggests English No Longer Decisive in Affecting Access

The increase in access to information technology in Asia during the past few years suggests that English is no longer a decisive factor in a country's quickly adopting information and communication technology (ICT), according to the U.N. International Telecommunication Union (ITU). In a November 19 press release, the ITU said it had completed the first global ranking of economies' access to ICTs, finding that South Korea, Taiwan, Singapore and Hong Kong had made the greatest progress since 1998. The ranking was made using a new transparent "Digital Access Index," the release said. Using the index, researchers grouped countries into four categories of access -- high, upper, medium and low. While limited infrastructure has been regarded as the main barrier to access, the ITU's research "suggests that education of users and affordability of access are equally important factors," said Michael Minges of ITU's market, economics and finance unit. In China, for example, researchers found that over half of Internet users have university educations, the release said. Service quality was another factor found to affect access, according to the release. Widespread access to information technology "can boost economic development and improve citizens' lives," the release said. An overview of the indicators used to measure access to information technology will be included in a World Telecommunication Development Report to be published just prior to the December World Summit on the Information Society (WSIS) in Geneva, the release said.

From http://usinfo.state.gov/ 11/20/2003

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CHINA: China Issues World Economic Declaration

China has promulgated its first declaration on the state of global economic development. This is the first time China has initiated and organized a declaration on the world economic situation, reflecting the country's active role in dealing with economic globalization. The declaration, issued today in south Chinese city of Zhuhai, deals with such topics as interdependence, scientific and technological progress and the sustainable economic development. Economists say the declaration shows China's determination and willingness to further integrate with the world economy in the wake of its entry into the World Trade Organization two years ago.

From http://www.crienglish.com/ 11/06/2003

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E-Cert, Your Key to Secure Online Business

In the real world, we can use our smart ID cards to identify ourselves. But how can we deal securely in cyberspace? Recently, cyber crime, like fake online auctions and fraudulent websites, has increased. So when we conduct online business, how do we know people are really who they claim to be? How can we better protect ourselves from these cyber fraudsters? To eliminate these worries, under the Government's ID card replacement exercise, Hongkong Post offers smartcard holders a year's free usage of the e-Cert within the card. Hongkong Post General Manager, Electronic Services, Allen Mok said an e-Cert serves as an online identity card. It authenticates the online identity of the user and enables electronic commerce to be conducted securely. Encryption and decryption ensure the information transmitted is not tampered with, thus providing top security, confidentiality and integrity."With the digital signature offered by the e-Cert, one can prove they are the right person for doing the online transaction," Mr Mok said. "Under the Electronic Transactions Ordinance, digital signatures have the same legal status as their paper-based counterparts. Digital signatures are protected by law." With the e-Cert, you can use your smart card to enjoy various online services. These include e-Government services, like changing your address, applying for a driving licence or registering as a voter. You can also enjoy various commercial online services, such as e-banking, online stock trading, shopping, auctions and betting. The latest service available is online access to personal credit reports. All 35 authorised institutions offering e-banking services now have digital certificates installed on their e-banking servers to allow customers to verify the authenticity of the websites. Hongkong Post has been issuing the e-Cert since January 2000. As at October, over 220,000 e-Certs have been issued. Among them, over 60,000 are e-Certs in smart ID cards.

From http://www.news.gov.hk/ 11/14/2003

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China to Facilitate Merger, Acquisition of SOEs by Foreign Companies

A senior Chinese official said on Nov.19 that China will create a better environment for large foreign companies to participate in the merger, acquisition and restructuring of its state-owned enterprises (SOEs). Li Rongrong, minister in charge of the State-owned Assets Supervision and Administration Commission, said at international forum on merger and acquisition, foreign investors will see a broader field and more relaxed policies when engaged in the merger and acquisition business in China. According to Li, foreign companies and non state-owned enterprises have been involved in 83 percent of the property right transfer of SOEs directly under the central government since the establishment of the commission in March this year. Foreign investors currently are concerned with sound enterprises in China, including listed companies, and most of them are targeted at leading enterprises in their industries, Li added. China will further formulate and improve related laws and regulations to provide perfect legal guarantee for foreign investors' merger and acquisition of Chinese SOEs, Li said.

From China Daily 11/19/2003

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Over 2,500 SOEs Yet to Be Closed: Official

BEIJING (Xinhuanet) -- A senior official said here Wednesday China now has some 2,500 large and medium-sized state-owned enterprises (SOEs) that are in fact bankrupt but yet to be closed down. Li Rongrong, minister in charge of the State-owned Assets Supervision and Administration Commission, made the remarks at the International Merger and Acquisition Summit Beijing 2003. These SOEs employ 5.1 million workers and involve a total of 240 billion yuan (29.0 billion US dollars) of liabilities. Li said the SOEs cannot immediately exit the market due to certain restrictions, including banks' inability to write off the non-performing loans, limited fiscal resources of the government and inadequacy of the social security system. From 1994 to 2002, Li said, 3,080 SOEs were closed down or went bankrupt in China, with 199.54 billion yuan (24.1 billion US dollars) of non-performing loans written off and 5.3 million laid-off workers relocated.

From http://www.chinaview.cn 11/19/2003

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Software Enhancement Key Gov't Priority

The Government supports the information technology industry in enhancing software engineering practices to produce high-quality software, Director of Information Technology Services Alan Wong says. Speaking at the opening ceremony of the Asia Pacific Software Engineering Process Group Conference 2003, Mr Wong said he recognised the importance of software quality as people relied more and more on IT and telecoms services. The Government fully supported the adoption of quality management systems and accreditation by the IT industry, he said.

$5 million funds grant to improve software development
To assist local software vendors in improving their software development processes through adopting the Capability Maturity Model, he said, the Government has allocated $5 million to launch a Capability Maturity Model Assessment Grant through the Innovation & Technology Fund. The funding was awarded to 15 software vendors, which are expected to attain Capability Maturity Model Level 2 or above by early 2005. The Trade & Industry Department has also provided, through the Small & Medium Enterprise Development Fund, financial support to IT professional bodies to conduct CMM training courses.

Training courses well received
About $2 million has been approved so far for this purpose and the training courses have been well received by IT practitioners. Mr Wong said that the Information Technology Services Department was also committed to improving the Government's software process and quality management. The department has more than 700 IT professionals involved in software-engineering projects or management of software-driven computer systems. To maintain their professional standards, regular training and refresher programmes are provided.

The department is also establishing a knowledge-management system to promote a culture of knowledge creation and sharing, including in the field of software engineering.

From http://www.news.gov.hk/ 11/19/2003

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10,000 Big Merger Deals Expected in Five Years in China

China will have 10,000 big merger deals in the coming five years, and China should enhance enforcement of laws and regulations to speed up mergers and acquisitions of state-owned enterprises (SOEs), according to an analyst. Gary Coull, executive chairman of the Asia-Pacific markets of the Credit Lyonnais Securities Asia (CLSA) made the prediction at an international forum on mergers and acquisitions held in Beijing. About 1.7 million Chinese SOEs will be restructured, he said. China is determined to reform its vast SOE group and vowed to bring in more foreign and private investors to diversify the shareholding of state enterprises to improve efficiency. Tang Xin, associate professor of the Commercial Law Center of the Qinghua University Law School, suggested the nation reform laws and regulations on mergers and acquisitions to protect the individual investors' interest. Simon L. Tang, a lawyer of the US win-win international law center, said Chinese SOEs are attractive for foreign investors dueto their good capacity, rich human resources and market share. From 1995 to 2002, the number of Chinese SOEs in the industrial sector reduced from 77,600 to about 42,000 while total profit surged by 163.6 percent to 221 billion yuan (26.6 US dollars) and number of small and medium-sized SOEs, from 245,000 to 149,000, figures from the State-owned Assets Supervision and Administration Commission (SASAC) show. China will further improve laws and regulations to facilitate mergers and acquisitions of SOEs in a bid to speed up reform in the sector, said Zhang Delin, SASAC director of the policy and regulation bureau.

From People's Daily 11/20/2003

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JAPAN: Investment Boosts GDP

Japan's economic growth in the third quarter largely sustained the momentum built up in the previous three-month period. Seasonally adjusted real GDP grew by a higher-than-expected 0.6% quarter on quarter, or at an annualised rate of 2.2%. Growth was bolstered by exports and, especially, by business investment, suggesting that corporate Japan is benefiting from recent restructuring. That said, the current pace of growth has been flattered by two previous years of stagnation and is not sustainable. We expect the economy to slow over the next two years.

Everything is relative
It should be noted from the outset that the latest results include extensive revisions to previous quarters' data. This makes comparisons with previous releases less reliable; data for July-September are quite likely to be revised in the fourth quarter, so a trend that is visible now may no longer be supported in three months' time. With that caveat, the July-September outturn is encouraging. Although growth slowed from the previous quarter, it came off a higher-than- expected base. Japan's economy had already attracted attention for its strong performance in the three months to June. But the government's Cabinet Office has now raised its estimate for growth in that quarter to 0.9% from 0.6% (quarter on quarter, seasonally adjusted), with the annualised figure rising to a stunning 3.5%. This revision makes the latest quarter's result look that much more impressive. Despite the strong performance, the economy's real growth rate was, as ever, flattered by price deflation. Nominal GDP failed to grow at all, following a revised 0.3% expansion in the previous quarter. This is a familiar phenomenon in a deflationary environment such as Japan's, where even quite respectable real rates of growth can be deceptive. Indeed, while consumer price deflation has been easing this year, raising hopes of an end to Japan's deflationary spiral, significant downwards price pressure remains. In the Cabinet Office's latest data, the GDP deflator--a broader indicator of inflationary or deflationary trends in the economy-- showed a 2.7% year-on-year decline, a wider margin than in the second quarter. Evidence that concerns over deflation have not disappeared can also be seen in the recent reassertion by the Bank of Japan (BOJ, the central bank) of its commitment to ultra-easy monetary policy.

Corporate turnaround
The big story in the third quarter was the continued strength of "private non-residential investment" (the Cabinet Office's term for investment by private-sector businesses). This category of investment grew by 2.8% in real terms from the previous quarter. It made the biggest contribution of any category of expenditure to the headline GDP growth rate, accounting for 0.5 percentage points of overall growth. Although the increase in investment was less than the 4.7% seen in April-June, it still underlines the positive effects corporate restructuring is having on the Japanese economy. Restructuring, particularly by large Japanese manufacturers, is boosting corporate profitability. This, along with signs of firming external demand, is encouraging businesses to expand. As a consequence, business confidence is improving. The BOJ's third- quarter Tankan survey of business sentiment showed that more large manufacturers felt optimistic than pessimistic about short-term prospects. This was the first time in nearly three years that optimists had outnumbered pessimists, and supports our forecast of a continued recovery in business investment in the short term. Provided the US economic recovery deepens next year, we expect corporate sentiment in Japan to improve further, driving business investment growth of 3-5% in 2004-05. It was not just businesses that invested heavily during the third quarter. The period also saw a 2.7% real increase in private residential investment. However, this category's contribution to overall GDP growth was much lower, at 0.1 percentage points.

All eyes on the currency
Exports were the other main area of growth. They increased by 2.8% quarter on quarter, contributing 0.3 percentage points to growth. Strong overseas sales of electronics and telecommunications products and increased demand from China for machinery were the main drivers of export growth, according to the Cabinet Office. Although deflation continues to weigh heavily on the domestic economy, it is at least helping to keep down costs for export-oriented manufacturers, allowing them to be more competitive in foreign markets. The strengthening of the yen will, of course, make conditions more challenging for Japanese exporters in the months ahead. It is worth remembering that the latest GDP data do not yet really reflect recent exchange-rate movements, the impact of which will show up more strongly in the fourth quarter. During July and August, by contrast, the yen was still trading at around Y117-120:US$1. Despite the challenges of a strengthening currency, prospects for the export sector remain broadly positive. More sophisticated hedging and increased flexibility in outsourcing suggest that many Japanese exporters can remain competitive up to an exchange rate of around Y105:US$1, higher than was previously the conventional wisdom in Japan. Although export growth accelerated in the third quarter, net trade's contribution to GDP declined slightly as overseas sales were offset by a recovery in imports. This was largely expected, as the previous quarter's decline was probably related to a fall-off in outbound tourism during the regional outbreak of SARS. As import demand picks up in the next two years--bolstered in part by a stronger currency as well as by some improvement in consumer sentiment--we expect the foreign balance to make only modest contributions to GDP growth. Next year, we forecast that imports of goods and services will grow by 5.1%, outpacing growth in exports.

Weak spots
If business in the third quarter was, by Japanese standards, buoyant, it was a very different story for the consumer. Private consumption accounts for around 57% of GDP in Japan. In theory, improvements in the corporate sector should ultimately support a gradual turnaround in consumer sentiment, owing to increased employment and higher wages. However, it is far from clear that this knock-on effect will indeed occur, and for now private consumption remains very weak. During the third quarter consumer spending was flat in real terms, and data for previous quarters have also been revised downwards.
Predictably, the weakest area of the economy in the third quarter was public investment. It fell by 3.9% in real terms from the previous quarter, the sixth consecutive quarter of decline. While, at one level, the figure is encouraging because it means the government is no longer relying on pork-barrel spending to boost GDP, it is also sadly indicative of the precarious state of the public finances. General government debt is estimated at over 150% of GDP, a ratio that is only likely to get worse. The pressures of caring for an ageing population and the resistance of the prime minister, Junichiro Koizumi, to an increase in consumption tax will place further strain on the public purse.

Don't break out the champagne
Indeed, Japan's dreadful fiscal position provides an apt reminder that the current healthy pace of growth continues to mask many underlying weaknesses in the economy. This extends beyond problems of government indebtedness. Although a substantial number of larger companies are making real progress in restructuring their operations to become more competitive, overall the economy still suffers from chronic overcapacity in many sectors. Despite Mr Koizumi's reformist rhetoric, his administration has done very little to implement structural reforms, for example forcing banks to let unprofitable "zombie" companies go bankrupt, and the government continues to prop up the weakest financial institutions.

In short, the latest data are encouraging in and of themselves, but should not be mistaken for the results of the government's much-heralded (but in reality, largely empty) programme of reform.

From http://www.viewswire.com/ 11/14/2003

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Japan Spurns Small Business

Nine months ago the Japanese government made it possible to set up a new company with just one yen - the price of a stick of chewing gum. A lack of business innovation has long been recognised as one of the structural weaknesses behind the lacklustre economic performance of one of the world's most expensive countries. Research by the Global Entrepeneurship Monitor, a 37-country study of start-up business activity and economic growth, put Japan at the bottom of the league. Just 2 per cent of the population were involved in starting a new business or owning a business less than 42 months old. In China the figure was 12 per cent, in Korea 14 per cent and in Thailand 18 per cent. Hence the one-yen initiative, which is part of a drive to foster entrepreneurial activity under which the Japanese government has committed itself to doubling the number of enterprises established each year to 360,000 by 2006. However, since February only 268 applications have been received under the new rules and just 178 one-yen companies have actually been set up. While new business formation has risen by 8 per cent year-on-year in 2003 after two years of decline, according to the Ministry of Justice, which monitors legal incorporations, it is still well below the levels previously seen in Japan and still stands significantly below international averages. Instead, the country remains trapped in the worst of all possible worlds - not only does it not have very many entrepreneurs in the first place, but those few it does possess are being stunted by a lack of financing channels and a cultural aversion to risk-taking. Part of the reason for this state of affairs is that Japanese attitudes towards entrepreneurs seem different from those elsewhere. When, for example, a sample of US citizens was asked if entrepreneurs were socially valuable, 91 per cent said yes. Just 8 per cent of Japanese respondents agreed with them. Figures from the Ministry of Public Management, Home Affairs, Posts and Telecommunications reflect this trend. Over the last 20 years the number of would-be entrepreneurs in Japan has been over 1m annually, but the number of successful start-ups out of that 1m has declined from an average of 66 per cent to 31 per cent over the same period. The numbers tell a depressing story. Despite the government's moves to foster young companies, the country's efforts to create an environment that encourages new businesses are being outpaced by its Asian regional rivals. Japan's apparent lack of capitalist endeavour also has much to do with the lack of a mature financing market. The most dramatic illustration of this is the fact that there are around 400,000 "angel" investors prepared to finance start-up companies in the US compared with just 1,500 in Japan, according to the Ministry of the Economy, Trade and Investment. Venture capital investment in Japan in 2001 on a stock basis was around Y1,020bn ($9.34bn) - 30 times less than in the US - according to the US Venture Enterprise Centre. An economy ministry survey of creative entrepreneurial activity revealed that 62 per cent of enterprises said raising funds was the main challenge when trying to start up a business, and 80 per cent were forced to use their own capital. Start-up costs are also high. A survey of new companies by National Life Finance Corporation - a government agency that supports small and medium-sized businesses - revealed that 58 per cent of start-ups in the US used $20,000 or less, while in Japan only 25 per cent started with less than Y45,000. At the same time, according to the Bank of Japan, lending by financial institutions to small and medium enterprises has been falling since 1994 at large banks, regional banks, credit associations and government financial institutions, mainly as a result of their non-performing loan problems. In response, the government has taken action to try to fill the gap created by the financial institutions, but the numbers are small. The Japan Finance Corporation for Small Business - which was established in 2000 - has provided 802 loans which amount to $300m, and the Shoko Chukin bank has offered zero collateral loans to 310 start-ups totalling $28m. The Japanese government has recognised that the country's lack of entrepreneurial activity is a significant problem and has taken action to try to solve it. But as the great British economist John Maynard Keynes put it: "The difficulty lies not in the new ideas but in escaping from the old ones." (by David Ibison)

From http://news.ft.com/ 11/20/2003

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66 Law Schools Approved to Open Next Spring

TOKYO - An education ministry council approved Friday the opening of 66 law schools at universities next spring in a measure intended to address the shortage of practicing lawyers in Japan, the ministry said. Seventy-two universities applied to the ministry to open law schools, but the council submitted a report to it saying four must be rejected and two must be put on hold for failing to meet standards.

From http://www.japantoday.com/ 11/22/2003

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Investors to Push for Seoul's Globalization

International business leaders will gather for an annual meeting in Seoul on Friday (Oct. 31) to advise the city government on how to increase the capital's chances of becoming an Asian financial hub. The 2003 meeting of the Seoul International Business Advisory Council (SIBAC), an advisory body to the Seoul Metropolitan Government, will be held at the Shilla Hotel with about 150 city officials and businesspeople attending. "The main point of all discussions will be what steps Seoul should take to build a world-class financial service center here," city government spokesman Kim Soon-jik said on Thursday. Launched in November 2001, the SIBAC, composed of 14 members from distinguished finance and investment banking companies and other sectors in Asia, is mandated to advise the city on various economic issues. Participating council members include David Eldon, chairman of Hong Kong and Shanghai Banking Corp. (HSBC); Vernon Ellis, international chairman of Accenture; Chee Onn Lim, chairman of Keppel Group; Alex Long Fei Ye, chairman of Shangril-La Asia; Christopher Forbes, deputy chairman of Forbes and other dignitaries. Also in attendance will be Jeffrey D. Jones, president of the American Chamber of Commerce in Korea, Keith G. Newton, Accenture Managing Partner, and Kim Ki-hwan, international adviser to Goldman Sachs Korea. Following Seoul Mayor Lee Myung-bak's opening speech, AIG Group board council member Frank G. Zarb will give a key-note speech on how to improve ways of building a financial center in Seoul. Takumi Shibata, chief vice president of Nomura Securities, Christopher J. Ryan, CEO of ING Group Asia Pacific and John J. Studzinski, CEO of HSBC Investment Banking will give experts' perspectives on securities, asset management and investment banking sectors on building a financial center.

From http://search.korea.net:9000/ 10/31/2003

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S Korea's Jobless Numbers Up, Youth Unemployment Tops 7 Pct in Oct

SEOUL - South Korea's jobless rate rose by 0.1 percentage point to 3.3 per cent as unemployment among youth grew to 7.3 per cent in October from 6.6 per cent in the previous month, the National Statistical Office (NSO) said. The monthly employment report also said the seasonally adjusted unemployment rate of 3.7 per cent was the highest in 26 months and underpinned the country's growing unemployment problem. The statistical authority said last month's rise can be attributed to an increase in the number of people trying to find work, particularly students who are expected to graduate early next year.

From http://www.asiapulse.com/ 11/13/2003

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Labor Conflict May Hit 13-Year Peak

This year is likely to be remembered as a time marred by the worst labor discontent since 1990, with labor disputes occurring almost every day. According to the Ministry of Labor, the number of labor disputes at local worksites has topped 305 so far this year, an increase of 6.64 percent from a year earlier. Many labor experts expect the number to surpass 322, the highest yearly record set in the strike-ridden year of 1990. This year's labor conflicts involved a record number of 131,563 workers, up 43.8 percent from 91,630 a year earlier. "I think labor unions had high expectations from the Roh Moo-hyun administration," said Lim Chong-yul, a labor specialist who headed the labor reform committee that, in August, submitted to the government a set of measures on reshaping the labor market. "Frankly, I think the president changed his stance on labor issues slightly after he took office in February. This has disappointed workers," he said. "As politicians are refusing to touch labor reform issues before the election scheduled for April, the labor unrest will persist or even aggravate throughout next year," he added. Shattering previous expectations, labor problems have worsened under the government of President Roh, a former pro-labor activist lawyer. A string of massive strikes in the transportation and manufacturing sectors swept the nation beginning in May. Recently, a new bout of industrial conflict began after several union activists committed suicide to protest the "pro-business" government and labor laws. "During the past eight months under the Roh administration, 190 laborers were arrested. That means the police captured five workers a week, while employers remained intact," said Son Nak-gu, a spokesman at the Korean Confederation of Trade Unions, which is regarded as the country's most aggressive labor group. "It was the government's labor policy which drove workers at bay," he said. A series of clashes between management and labor raised skepticism about the nation's ambition to be the economic hub in Southeast Asia. "Militant labor unions give foreign executives pause when they are considering a big investment in Korea," said Kim Kyeong-won, executive researcher at the Samsung Economic Research Institute. "Union militancy does not only scare away foreign investors but also produces youth-unemployment problem, as companies are unable to lay off senior workers in the face of strong unions," he said. (by Kim Sung-mi)

From http://www.koreaherald.co.kr/ 11/14/2003

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Executives Put Under Exit Ban over Funds

The prosecution is pushing major conglomerates to disclose any illicit funds they might have delivered to the rival candidates' camps during the last presidential campaign, banning an additional group of corporate leaders from leaving the country over the weekend. The new additions to the exit ban list, which includes LG Chairman Koo Bon-moo and Lee Hak-soo, chief restructuring official of Samsung, brings the number of corporate executives barred from going abroad to more than 20, prosecution sources said yesterday. Prosecutors have interrogated financial executives from some corporations that allegedly donated improper funds during the presidential campaign. They have also reviewed their accounting books. The exit ban on Koo, the first business tycoon subjected to the measure, does not mean he will necessarily be summoned for questioning, the sources said. It may be a symbolic measure that investigators hope will further press LG and other conglomerates being investigated to come clean on any improper funds they provided to the major contenders' camps ahead of last December's presidential election. LG is one of the five major conglomerates facing the brunt of the extensive investigation that has ensnared both President Roh Moo-hyun's campaign team and the opposition Grand National Party. The four other chaebol are Samsung, Hyundai Motor, Lotte and SK. The latter was accused of handing over 10 billion won and 2.5 billion won in illicit funds to the respective camps of the GNP Roh ahead of the election. Prosecutors have said they would investigate other smaller business groups if they secured clues suggesting the possibility they also made illicit political donations. But Prosecutor General Song Kwang-soo said last week the investigation would not last long, explaining that a prolonged probe would have a negative impact on the nation's sluggish economy. The increasing pressure on the major conglomerates, including the move to investigate their slush funds as a whole, is intended to push corporate executives to reveal illicit political donations, prosecution sources say. In its parallel investigation of campaign officials, the prosecution interrogated Rep. Kim Young-iel, former GNP secretary-general, Friday. Kim, who managed the campaign of GNP presidential candidate Lee Hoi-chang, acknowledged instructing party officials to destroy financial records pertaining to the campaign, according to prosecution sources. The lawmaker conceded that the party collected 10 billion won in illicit funds from SK but denied he was directly involved in the transaction.

From http://www.koreaherald.co.kr/ 11/17/2003

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Realty Market Reform Needed for Hub Initiative

To make the nation the economic hub of Northeast Asia, real estate market conditions have to be improved to the level of developed countries and the anti-speculation measures by the government are moving in that direction, according to the president of the Korea Appraisal Board (KAB). ``For the hub project to be successful, it is essential to induce foreign investment on the peninsula,'' Kang Suk-cheon said in an interview with The Korea Times. ``As foreign capital's advance into the peninsula will eventually be followed by foreigners' activities in the real estate market, the market policies and systems have to be adjusted.'' Kang stressed the significance of the foreign investment in the realty market, saying the capital will be a catalyst for regional and national economic development. ``The investment will contribute not only to the local government's large-scale regional development projects but also to enhancing realty market conditions and systems to the level of most advanced nations,'' Kang said. Advanced financing methods of overseas realty markets, which will flow into the peninsula through capital exchanges, will influence the domestic market to develop as a scientific information industry, Kang said. He also said rises in foreign investment in the nation will indicate the nation's positive credit ratings and market conditions. ``The same concept applies to the realty market as well,'' the KAB president added. Kang said that some 3-4 trillion won worth of real estate in the nation is owned by foreign investors. ``The real estate owned by foreigners and foreign companies is estimated to be the size of Yoido,'' Kang said. ``Most of the investments were from the United States. Especially, Korean-Americans are significant investors in the residential market.'' Kang added many of major office buildings in Seoul have sold to foreign companies. As part of the government's efforts, the KAB has prepared an international forum to discuss the realty market and find a way to attract foreign investment. The KAB and the European Union Chamber of Commerce in Korea will co-host the ``2003 Real Estate Finance Workshop'' at the Shilla Hotel on Thursday, under the theme ``Ways to Attract Foreign Investment Following the Changes in the Real Estate Financing Market.'' Topics including ``Status of Mortgage-Backed Securities (MBS) in Korea and Ways to Attract Foreign Investment Following the Expansion of MBS Market,'' will be discussed with the participation of Chung Hee-soo of the Korea Development Institute, Konkuk University professor Koh Sung-soo, Jay Junekun Choi, an attorney with Burns, Figa and Will, and Yukio Egawa, director of Deutsche Bank Group in Japan. Kang said the workshop will give a chance to look into the domestic market environment, including the real estate boom, and see the big picture of the market for the future. ``The recent boom in the realty market is caused by the low interest policy which has been adopted to get through the economic slowdown,'' Kang said. ``The floating money has unable to find a place to be invested, thus it has flowed into the realty market, especially into the reconstruction market in the Kangnam area.'' Kang said the boom created a bubble in prices of the Kangnam area, saying that the Korea Research Institute for Human Settlement found that some 40 percent of the prices in Kangnam's real estate are exaggerated. The series of anti-speculation measures by the government are necessary to improve market stability, resulting in more foreign investment, Kang said. While enhancing the investment environment, the KAB is making efforts to prepare information about the overseas market for locals, Kang said. ``Since the monetary transaction regulations were amended in 2000, people have a way to invest in real estate in other nations,'' Kang said. ``However, there is lack of information about overseas markets. The Korea Appraisal Board is promoting the collection of data on overseas markets, including trade systems, to meet locals' expected demand in the future.'' (by Bae Keun-min)

From http://search.hankooki.com/ 11/19/2003

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Korea Ranks 4th in Digital Access Index

Korea was recognized by a world organization for its easy access to digital environments, including cable and wireless communications. The International Telecommunication Union announced Wednesday Korea's Digital Access Index or DAI stood at 0.81, the fourth highest among 178 nations surveyed. Rounding up the top three, Sweden secured the top spot followed by Denmark and Iceland. This marks the first time that Korea ranked among the top ten in the level of Internet and information technology developments in what analysts say reflects the country's notable strides in digital advances.

From http://english.chosun.com/ 11/20/2003

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INDONESIA: Govt Starts Computer Literacy Program

The government launched here on Saturday a student computer literacy program aimed at introducing information technology to schools nationwide. Called the One School One Computer Lab (OSOL), the program was opened by State Minister of Communications and Information Syamsul Mu'arif as part of Indonesia compliance with a United Nations declaration, which seeks to create a technology-based global communication society by 2015. Indonesia has no choice but to improve its human resources to stay in touch with the rest of the world in terms of information technology, Syamsul said. The country, he added, still lagged behind in communication technology, let alone information technology, as reflected by the fact that it only had between seven and eight million registered fixed telephone lines. Indonesia is home to over 214 million people, the world's fourth most populated country. "Transfer of data remains a future goal, as many people here do not have telephones. Therefore, we will start with students and will introduce them to information technology as early as possible," Syamsul said. Also attending the launch at the SMK I vocational high school in Batu Aji district was Minister of National Education Abdul Malik Fajar. The national program has targeted Batam for its pilot project, with the support of American software giant Microsoft. Syamsul said the program would involve all stakeholders in the education, finance, infrastructure and Internet service sectors. Both central and regional governments are to work together to provide each school with a computer laboratory and enable students to learn how to use computers in class. Malik expressed hope that students could use the facilities provided in the computer labs to improve their literacy in information technology. "I am sad to see computers functioning only as a typewriter or a play station. We know there are many more benefits to be had from a computer," Malik said. Microsoft is supporting the program by providing discount software to prevent the use of pirated products. Each software program costs US$2.5 for the OSOL. Batam Deputy Mayor Asman Abnur, representing the local administration, welcomed the national program and expected that eventually, there would be one computer for every student. "I look to Singapore and the U.S., where students only bring their diskettes to school, as there are enough computers to go around. Hopefully, the same thing could happen here and in Indonesia," he said.

From http://www.thejakartapost.com/ 11/03/2003

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Network Asks Govt to Pursue Reforms

A national network of some 40 non-governmental organizations, mass media, government institutions and political parties called on the government on Wednesday to pursue badly needed reforms to dig the country out of the current multidimensional crises. They also expressed a commitment to assisting public policy makers in policy reform after next year's elections. State-owned Gadjah Mada University rector Sofian Effendi told a press conference here on Wednesday that the government should cut its role in controlling the people in order to strengthen democracy. "Civil supremacy must also be upheld and the military must not return to rule the country even if it has strong discipline and leadership to manage the country." Sofian was asked to address the press after Jajaki's two-day meeting that ended on Wednesday. Fears of the military returning to the political stage have resurfaced after polling carried out by a number of research agencies showed that some former military generals had gained strong support from the grassroots for the presidential post. Coordinating Minister for Political and Security Affairs Gen. (ret.) Susilo Bambang Yudhoyono has topped several presidential candidate surveys, while former Indonesian Military (TNI) chief Gen. (ret.) Wiranto, and former commander of the Army's Strategic Reserve Command (Kostrad) Lt. Gen. Prabowo Subianto are joining Golkar's convention to choose the party's presidential candidate. Sofian also said that civil service reform must also proceed and regional autonomy should be based on economy and social justice rather than political consideration to distribute power. "Those are priorities in political reforms that we would like to deeply analyze in the upcoming years. We will come up with policy recommendations to be handed to the government," he said. The head of the United Nations Support Facilities for Indonesian Recovery (UNSFIR) Satish C. Mishra attended the press conference. UNSFIR facilitates the network that aims to provide an informal but organized channel of government and non-government institutional consultation on priority policy issues. Among the Jajaki network members are state-owned University of Indonesia, Gadjah Mada University from Yogyakarta, the West Sumatra administration, the Indonesian Institute of Sciences (LIPI), Muslim organizations Nadhlatul Ulama and Muhammadiyah, Golkar and The Jakarta Post. The Office of Coordinating Ministry for Political and Security Affairs and other ministries are expected to join the network. Sofian said the Jajaki network also wanted economic reform to focus on reviving the real sector. The present government has so far still focused on assisting the ailing banking sectors instead of real sector. On social reform, civil society groups must be continuously empowered to help meet the people's aspirations on good public policy. More and more people should also be educated to better understand their rights as citizen, while poverty must be eradicated, he said. On legal reform, the network called for concerted efforts at the national level to fight corruption. "Otherwise, our corruption problem will never end," he said. The Berlin-based Transparency International (TI) ranks Indonesia as the second most corrupt country among members of the Association of Southeast Asian Nations (ASEAN) and the sixth worst of the 132 countries surveyed worldwide from July 2002 through June 2003. Meanwhile, Satish emphasized that Indonesian people should push for a broadened public participation in determining public policy. The government has always made important decisions regarding public interests based on lobbies among political elites or foreign pressure without the involvement of the people and explanations to them, he said. (by Moch. N. Kurniawan)

From http://www.thejakartapost.com/ 11/06/2003

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IMF Completes Final Review of RI Economy

The International Monetary Fund (IMF) has completed its review of the country's economic reform program, the final review under its four-year US$5 billion loan program. A press release said on Thursday that an IMF visiting team had completed the eleventh review to be presented soon to the Fund's Board of Executives in Washington. If the presentation was successful, it will pave the way for the Board's approval to disburse the final loan tranche of around $490 million for the country, the release said. In its final review, the IMF acknowledged the progress the country had made in various areas during the four-year span, and gave a vote of confidence that it could be sustained in the future. "Reflecting on developments over the course of the four-year arrangement, macroeconomic stability has been restored, the banking system recapitalized and most banks (that were) taken over during the crisis divested," the IMF said in the statement. With inflation easing, a stable rupiah and falling Bank Indonesia benchmark interest rate, Indonesia is experiencing its most stable macroeconomic condition since the crisis. "In addition, balance of payments vulnerability has been reduced sharply with declining of external debt and rebuilding of foreign reserves." Indonesia asked for the IMF assistance in 1999 -- under a program called the IMF Extended Fund Facility -- following the 1997-1998 economic crisis. In return, it had to meet quarterly economic reform targets according to signed letters of intent (LoI). Only if this LoI is approved by the IMF board, then the IMF funds can be transferred. The government has decided not to extend the current IMF program when it expires later this year. This will mean the country is no longer eligible for debt rescheduling from the Paris Club of lending nations, which could create a heavier burden on the state budget starting next year as it would have to repay maturing debts. To replace the IMF-sponsored program, the government has designed its own economic reform program in a bid to help maintain investor confidence. IMF key points in 11th review 1. On Macroeconomics: Economic growth has picked up and is on track to reach 3.5 - 4 percent and inflation is likely to be 5 or 6 percent by year-end. The IMF views the government's targets of close to 5 percent for growth and 6.5-7 percent inflation in 2004 as appropriate. 2. Challenges: The IMF team welcomes the government's plans to sustain macroeconomic gains and boost growth and employment opportunities. This will be reinforced by renewed focus on measures to strengthen the investment environments. 3. On Fiscal Policy: The 2003 budget is on track to achieve its 1.9 percent of GDP target. The approved 2004 budget, targeting a deficit of 1.2 percent of GDP, is in line with the government's medium term efforts to strengthen fiscal sustainability. 4. Structural and Legal Reform: The IMF welcomed progress toward selecting commissioners for the Anti Corruption Commission and looks forward to establishment of the commission by early 2004. 5. Post-Program Monitoring: After the end of the current program, the Fund will hold regular consultancy meetings with the government, twice a year, on the country's economic performance and policy. 6. Strengthening SOEs: The IMF team welcomed recent efforts to improve state bank governance through, among other things, appointment of additional independent commissioners at Bank Mandiri. The team was also encouraged by the government's commitments to take stern actions to address core concerns related to the recently revealed loan scam at BNI. (by Dadan Wijaksana)

From http://www.thejakartapost.com/ 11//14/2003

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BURMA: Prime Minister Attends Opening of New School Building, E-Library in Kyauktan Township

Prime Minister General Khin Nyunt attended the opening of new school building of the Basic Education Primary School in Shwegon Ward, Kyauktan Township, Yangon South District, this morning. Also present on the occasion were wife of the Prime Minister Chairman of Myanmar Maternal and Child Welfare Association Dr Daw Khin Win Shwe, Yangon Division Peace and Development Council Chairman Yangon Command Commander Maj-Gen Myint Swe, ministers, the Yangon mayor, deputy ministers, district/township PDC members, departmental officials, members of social organizations, wellwisher of new school building families of Luk Hing Too Foundation, acting Director-General of Basic Education Department No-3 and officials, members of school board of trustees, the Schoolhead, teachers and students.

From http://www3.itu.int/ 11/16/2003

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Prime Minister Inspects All-Round Renovation Tasks of Kyaik Pyathat Tanon Pagoda, Kyaikkamo Pagoda in Kyauktan Township

Prime Minister General Khin Nyunt and party arrived at Min Kyaung Pariyatti Sarthintaik in Kyauktan and paid obeisance to State Ovadacariya Min Kyaung Sayadaw Agga Maha Pandita Bhaddanta Jagara and members of the Sangha this morning. After presenting offertories to the Sayadaws, the Prime Minister and party went round the Kyaik Pyathat Tanon Pagoda clockwise and paid homage to the Buddha image-24 in the prayer hall. Officials reported to the Prime Minister on all-round renovation tasks of the pagoda. Deputy Minister for Religious Affairs Brig-Gen Thura Aung Ko accepted the donations for all-round renovation of the pagoda: K 3 million by ACE Co, K 500,000 each by Daw Aye Myat Nwe of Bagan Hotel, Fortune International Co Ltd, and the Ministry of Hotels and Tourism, K 100,000 by the Ministry of Information, K 500,000 each by U Maung Maung Naing, Tawwin Family Co, and Dagon International Co and K 300,000 by the Defence Services (Navy) families of Thanlyin Station. The Prime Minister and party then proceeded to ancient Hsandawshin Kyaikkamo Taungpaw Pagoda where they were welcomed by district/township Peace and Development Council chairmen and members, departmental officials, members of the Pagoda Board of Trustees and officials. Afterwards, the Prime Minister and party paid homage to the pagoda and inspected all-round renovation tasks including construction of prayer hall. The ministers accepted the cash donations for all-round renovation of the pagoda: K 50 million by Dr Khin Shwe-Daw San San, son Maung Zay Thiha and Lieutenant Toe Naing Mann-Ma Zay Zin Latt of Zay Kabar Co, K 10 million by ACE Co, K 5 million by Olympic Co, K 500,000 each by the Ministry of Livestock and Fisheries, the Ministry of Labour, and Daw Aye Myat Nwe of Bagan Hotel, K 100,000 by the Defence Services (Navy) families of Thanlyin Station, K 300,000 each by YCDC, and the Ministry of Social Welfare, Relief and Resettlement, K 100,000 each by the Ministry of Construction, the Ministry of Electric Power, the Ministry of Education, the Ministry of Home Affairs, Mann Myo Thu Construction and Daw Khin Moe Swe of Doh Yoe Ya Khaungyay. The Prime Minister was then reported on field research works and findings in Kyauktan and Thanlyin townships by Research Officer Daw Ngwe Ngwe Soe of Archaeological Department. Minister for Culture Maj-Gen Kyi Aung and Director-General U Nyunt Han of the Archaeological Department presented supplementary reports. The Prime Minister and party left there in the afternoon.

From http://www3.itu.int/ 11/16/2003

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PHILIPPINES: Substitute for Gov't Social Security Program Studied

The government is studying the possibility of decentralizing the country's social security programs and contracting private insurers as provider of social security such as retirement income and pension. The Insurance Commission, an attached agency of the Department of Finance, received proposals from the private sector to assist the government in providing benefits to private and public employees in lieu of the diminishing state funds allotted for social security .A high-ranking IC official said the agency is now conducting a study on how best to tap the industry as social security provider. "The proposal has merit and it is worth our while to look into it and later implement it," the official disclosed. Life insurers said the government could tap into their resources and network as substitute for the diminishing state-provided social security programs and help improve benefits deserving of both private and government employees. The Philippine Life Insurance Association in a study proposal, said due to the financial difficulty of state-run social security programs, benefits are not properly dispersed and does not match contributions from members. "In most of the developed countries in the world the centralized social security programs run by the state are increasing exhibiting financial distress," PLIA said. Social security in the Philippines is provided for by the Social Security System for private employees and the Government Service Insurance System for those employed by the state. Both government financial institutions are cashstropped and funds released to employee benefits are being limited, or subject to qualifying factors that are not usually met. In most cases and in the Philippine situation, PLIA said government social security programs are problematic because the range of universal benefits and members' contributions are mismatched. The group also points out that the practice of "borrowing the funds of these institutions at below market interest rates and the general under-performance in investment yields (of these programs)" also add to the decline in resources. PLIA said given the "politically sensitive and politically unpopular solutions to these problems," the proposal to utilize the private sector for these social security programs should merit consideration. "The most radical but powerful solution is to essentially delegate major managerial and investment functions to the private sector," the association, which groups 39 life insurers, said. The private sector, the study added, has the "expertise and experience in managing actuarial and demographic risks while providing superior returns" as well as liquidity and long-term savings. (by Lee C. Chipongian)

From http://www.mb.com.ph/ 11/10/2003

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Legarda Urges More Funds for Education & Poverty Alleviation

Senate Majority Leader Loren Legarda yesterday said that the "highest form" of national unity can be demonstrated through a multi-partisan commitment to rewrite the 2004 budget and pledge more state investments to what matter to most Filipinos: education, basic health, and poverty alleviation measures. "Reconciliation and unity can transcend the realm of rhetoric and can be transformed into concrete and dramatic initiatives to move the nation. This is to commit the bulk of the 2004 budget to urgent and extremely important social expenditures," said Legarda. Legarda added she is willing to lead any multipartisan effort to reduce the budgetary allocation for non-essential items in the 2004 budget and the big debt service allocation to free more money for social services and poverty alleviation programs. "Once the parties in the ruling political coalition and the opposition agree with the independents to pursue this initiative, we will have a real basis for unity, cooperation, and reconciliation," said Legarda. She said that the R864.7- billion budget for 2004 proposes a R271.5- billion budget for debt service, or 31.4 percent of the entire budget. In contrast, the combined appropriations for education, culture, manpower development, and health is only R145 billion, or just 17 percent of the 2004 budget. The agricultural modernization fund for 2004 is just a little over R15 billion, she said. Legarda said the 2004 budget should not be passed "with the mind-set that development, growth, and anti-poverty initiatives can be carried out without putting state investments into social expenditures." "It cannot be budgeting as usual. The status quo in the budget process will not work," she said. Legarda said that the huge allocation for debt service "is an irregularity, given the deteriorating state of the education sector, the depressing state of food production, and the failure to provide enough money for basic health care." "First things first, and these are our precious human capital," said Legarda. Legarda said that putting more money into education, health, and poverty-alleviation measures will spur economic activity and create jobs in the rural areas.

From http://www.mb.com.ph/ 11/13/2003

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SINGAPORE: Govt-Funded Super-Computing Grid Launched

It may still be far from the likes of the Matrix, but Singapore's landmark project to connect the island's computing systems into a super network could open doors to endless possibilities. International engineering and life sciences companies have already expressed interest in taking part in the project. From improving high tech satellite monitoring pictures to cutting down the time it takes to produce an animated movie - all part of the promise of the things the National Grid Pilot Platform hopes to achieve. Minister for Trade and Industry Brigadier-General George Yeo said: "It will link computers, sensors and other IT resources into a single virtual pool or market which can be shared by geographically dispersed users. In this way, the system becomes much more than the sum of its parts. "Several multinational companies like Rolls Royce and BAE Systems, which require super computing resources for engineering and design processes, have signed up for the project. And it can even help develop cures for diseases like SARS which require complex modelling. But the fear, of course, is what happens if security is breached. "You have police, you have ostracism, so this is something we got to learn as we go along. I think the grid itself must have a culture. But how all this will evolve, we don't know now. This is a very exciting experiment that is taking place in Singapore," said BG Yeo. The project costs tens of millions of dollars and 90% of the funds come from the government. The authorities are upbeat that the private sector will help to share the cost of developing the grid, which they say, might eventually allow Internet users to tap on the power of the grid. (by Ken Teh)

From http://www.channelnewsasia.com/ 11/01/2003

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SIA to Offer Passengers Broadband Internet Access in 2004

Singapore Airlines is offering high-speed wireless Internet access on some of its planes, including live TV - not the pre-taped shows passengers are used to. The airline will be one of Asia's first carriers to use a new technology developed by an arm of aviation giant Boeing, called Connexion by Boeing. However passengers will have to pay for the service. The carrier said from the third quarter of next year, passengers will be able to surf the Internet at speeds of up to 256 kilobytes per second, send and receive emails, and watch real-time TV on its long haul flights. What they will need is a laptop computer with a wireless access card slotted in and a credit card for payment, which could either be a flat rate for the entire flight or a fee based on the usage. Scott Carson, President, Connexion by Boeing, said: "We flew some trials earlier this year with British Airways and what we learned from those trials is that for the long haul flights, typically over 5 hours, passengers found a US$30 to US$35 charge quite acceptable and in fact found great value in it. My expectations for SIA flights would be in that range. "A few European and Japanese airlines are already planning to carry the service and many more are expected to follow. Connexion by Boeing is now looking at over 10 proposals and aims to equip 4,000 to 5,000 planes in the future. (by Dawn Teo)

From http://www.channelnewsasia.com/ 11/11/2003

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Manufacturing Sector Leads Singapore's Q3 GDP Recovery

Singapore's third quarter GDP recovery to 1.7 percent was led by a rebound in the manufacturing sector, said the Ministry of Trade and Industry. Releasing the economic data on Monday, the Ministry said the manufacturing sector turned around to record growth of 3.3 percent, up from a negative 7.1 percent in the previous quarter. It said this was reflected by stronger output in the electronics and biomedicals. The wholesale and retail trade sector also put on a strong performance in the third quarter. It grew by 8.4 percent after a 0.5 percent expansion in the second quarter. Wholesale trade was boosted by non-oil re-exports, while retail trade saw a surge in vehicle sales. The construction sector, however, continued to shrink with output declining by 9.1 percent, compared with a 9.0 percent fall in the previous quarter. The Ministry said the private sector saw a steeper drop in new contracts awarded. The hotels and restaurants sector recovered steadily after the SARS outbreak was contained by the end of May. Though it contracted by 9.7 percent in the third quarter, the figure was an improvement over the negative 29.5 fall in the second quarter. The recovery was further aided by more visitor arrivals to Singapore. The transport and communications sector also saw a sharp improvement in the third quarter, contracting by a smaller 1.6 percent compared with a 10.5 percent fall in the previous quarter. Pick-up in container and air cargo trade, as well as air travels helped improve the sector. The financial services maintained its growth in the third quarter, registering 5.7 percent from the previous quarter of 6.8 percent. Business services, however, contracted by 2 percent, after falling 3.3 percent.

From http://www.channelnewsasia.com/ 11/17/2003

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THAILAND: Tax Breaks Coming to an End

Time is running out for home buyers to avail themselves of tax breaks that may expire at the end of the year. The government slashed the business tax, land-transfer fees and house-registration fees three years ago, and they are not likely to be renewed, developers say. They were part of a government scheme to stimulate the property market. The business tax paid by property developers was cut from 3.3 per cent to 0.11 per cent, and land-transfer fees were cut from 2 per cent to 0.01 per cent. House-registration fees for home buyers were cut from 2 per cent to 0.01 per cent. The latest home-related fair is currently being held at SCB Park on Ratchadaphisek Road. The "Secondary Home Fair", which ends tomorrow, was organised by Siam Commercial Bank (SCB), BCP Housing Co, Home Product Centre and Home Buyer's Guide magazine. Home buyers will receive many special offers at the fair, such as mortgage loans with a fixed rate of 2.5 per cent for the first year, a credit line for home extensions or renovations, and home-decoration products. If buyers pay for the more than 60,000 properties on offer with an SCB credit card, they are entitled to an interest rate of 0.8-per-cent monthly for 36 months. SCB is showcasing more than 680 homes, worth Bt8.5 billion, that have been classified as non-performing assets (NPA). "The bank is hoping to see Bt25 million in house transactions at the fair," said Karoon Laoharattanun, assets management manager at Siam Commercial. Somsak Chutisilp, managing director of BCP Housing Co, said the value of transactions at the fair could reach Bt200 million, giving the company annual revenue for the year of about Bt800 million. Somsak said the mid-sized property broker currently has 200 homes worth Bt1.2 billion, of which 70 per cent were built by its parent company, Land and Houses Plc. Karoon said the secondary-property market this year would grow by 20 to 30 per cent over last year, because home buyers were rushing to buy houses before tax privileges expire. He added that the government might decide to reduce the old property-transaction fees by half - rather than the deep cuts that have been in effect for three years - for next year. Because of this, Somsak said, the second-home market was likely to slow early next year.

From http://www.nationmultimedia.com/ 11/01/2003

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NA Deputies Urged to Bridge Poverty Gap

Viet Nam has made huge gains in the fight against hunger and poverty but much remains to be done to narrow the gap between rich and poor, and between urban and rural areas, the National Assembly heard this week. Average per capita income rose to VND6.72 million in 2002 from VND6.11 million the previous year, but income in mountainous provinces was half of that, Tran Dinh Dan, a deputy from the central province of Ha Tinh, told the Assembly. He said the gap in development levels was also clear from local contributions to the State budget, with the provinces of Ha Noi, HCM City, Hai Phong and Ba Ria-Vung Tau together accounting for 75 per cent of the total. Dan said the country must bridge this divide to ensure social equality and stability, and also to sustain economic growth. Hoang Van Xim, a deputy from the northern province of Ha Tay, asked the Government to spend more on rural infrastructure - especially in disadvantaged upland provinces - to improve trade and economic ties between different parts of the country. According to deputy Pham Van Tich from the central province of Thanh Hoa, the current programme of agricultural extension and restructuring was crucial to raising rural people's income. He called on the Government to help farmers develop intensive production techniques such as the use of high-yield seed varieties and efficient irrigation management. Chau Thi Le, a deputy from the central coastal province of Binh Thuan, stressed the importance of linking agricultural production to marketing, and of developing the food-processing sector to add value to farm produce. "Farmers should be assisted to produce what they can sell, rather than sell what they produce," she said. Dieu K're, from the Tay Nguyen (Central Highlands) province of Dac Lac, welcomed the initial results of the Government's anti-poverty campaigns in the disadvantaged mountainous regions, but said more remained to be done. He said ethnic minorities needed expertise in agriculture and forestry as well as investment capital, and proposed that every such household be granted a collateral-free, soft loan of up to VND15 million (US$968) to help expand the family-based economy. Several deputies said the restoration and expansion of craft villages would help generate jobs in rural areas. To make the products of such villages more competitive, the Government and local authorities should help craftsmen gain easy access to bank loans to invest in new equipment, learn new technical skills, and improve their knowledge of market conditions. Dan, from Ha Tinh Province, also asked the Government to pay heed to tapping natural resources in poor provinces. Ha Tinh and Lao Cai provinces contain huge iron mines, with an estimated deposit of almost 500 million tonnes in each province. The mines, if developed effectively, could become an important income source and an economic stimulus for both provinces.

From http://vietnamnews.vnagency.com.vn/ 11/05/2003

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Deputy PM Calls for Farm Facelift

Viet Nam's State-managed farms and plantation forests must be revamped to become more productive and competitive for today's market-driven economy, Deputy Prime Minister Nguyen Tan Dung said in Ha Noi last week. He told a national conference of representatives from the sector that all aspects of land management and use of State-run farms should be reassessed for future development. Viet Nam today has 314 State-run farms covering 367,780ha and 368 State-run plantation forests covering more than 5 million hectares. Since 1991, when the Government embarked on a programme of reforms in agriculture and forestry, the number of State-managed farms has fallen by 12 per cent and plantation forests by 10.7 per cent. The total land area and the number of employees have also fallen, under the State's policy of redistributing loss-making farms and plantations to local farmers. The agriculture and rural development minister, Le Huy Ngo, told the conference of the need to reassess each State-run farm and plantation to ensure they were developed to be as efficient and profitable as possible. "To ensure sustainable growth of agriculture and forestry is essential for any plans of development," Ngo said. He suggested they should be classified into three categories. The first group would include those farms growing perennial, industrial and cash crops such as rubber, coffee, tea, cashew nuts and fruit trees. For these farms, the Government would focus on expanding their processing and marketing facilities to add value to the crops. Farms in the other two categories - those growing annual crops and raising livestock - could shift their focus from production to providing technical and scientific assistance to meet the needs of local farmers and processors. Those farms that were no longer necessary for development could be dissolved and their land transferred to private farmers, Ngo said. He said the Government would also reclassify the State's plantation forests according to their public service and economic roles. Forest land has been distributed to local farmers as an active measure to protect and expand forests, and improve incomes. Dung told the conference he appreciated the effectiveness of the contractual system being applied to each production team and each household on several State-managed farms and plantations. He asked scientific and technical establishments to expand their co-operation with farms and plantations in the areas of irrigation, soil studies, selection of high-yield seed varieties and livestock breeds, intensive farming, crop processing and technical training. Social insurance and material incentives would be introduced to encourage farm employees to work harder, he said. The Deputy Prime Minister praised the efforts of many State-run farms and plantations, especially those located in remote border regions, in stimulating local socio-economic development and assisting in the country's national defence.

From http://vietnamnews.vnagency.com.vn/ 11/10/2003

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Education Falls Short of Needs, NA Hears

The quality of education was still failing to meet the demands of industrialisation and modernisation, Education and Training Minister Nguyen Minh Hien told the National Assembly last Friday. Both teachers and students did not pay due attention to thorough quality learning as they strove for immediate results, he said. He attributed their attitude to poor management and obsolete teaching and learning methods. "We have a surplus of urban teachers but a shortage in the remote, disadvantaged and isolated regions," he said. Teaching standards were not uniform. Some teachers were qualified and others were not. Equipment and teaching facilities were also in short supply and were of poor quality. He, his ministry, and their advisors, had primary responsibility for raising the standard followed by their advisors and grassroots educational agencies, Hien said Answering Ha Van Tuan, northern Hoa Binh province, Hien said his ministry had already discussed measures to improve management and update teaching and learning methods. These included improving the syllabus for primary and secondary schools; socialising education and helping with its development in difficult and disadvantaged regions. "But the most important and decisive factor in improving the quality of education was improving human resources, especially the teachers, "Hien told deputy Nguyen Thi Hai, Central Phu Tho province. Hien, whose 'Question Time' began Thursday afternoon and continued last Friday, was also asked about primary and secondary school exams; enrolments at tertiary institutions and the high cost of fees for extra teaching and tuition. Improved text books, the training of teachers and better school facilities was the only way to change students from rote learning to thinking and creativeness, he said in reply to a question from Ton That Bach, Ha Noi. "This would need a long-term effort to at least 2008," he said. "We will continue to improve policies and give priority to teachers and educational management while co-ordinate with relevant agencies and localities to optimise good teaching and to ensure reform of primary and secondary education," he said. Answering both Truong Huu Chi, southern Dong Nai province and Ton That Bach, Ha Noi, about tertiary quality, Hien said quality was set by teachers but they were in short supply, especially for tertiary education. The country had 36,000 lecturers in 224 universities and colleges but they taught 1 million students. It meant one lecturer had to teach 30 students compared with 15 in other countries. Deputy Tran Ngoc Duong, An Giang, the Cuu Long (Mekong) Delta, asked the minister about the "commercialisation" of education and training and ethics of teachers. Hien conceded that there had been 'commercialisation' and that several schools had tried to recruit as many students as possible for their tuition fees while trying to dilute the set teaching and training programmes. " It's our ministry's responsibility and we will restore the situation as soon as possible," he pledged. As for teacher ethics, Hien said most were good and dedicated to their job. Many worked very hard in severe and remote schools to teach children to read and write. Only a few had been downgraded. But violations would be sternly punished. Hien said Viet Nam had 24 million pupils and students - one-third of the population - compared with only 11 million students enrolled in schools 10 years ago. He was optimistic that the contemporary school population would prove itself within ten to 15 years. The number of students winning gold medals at international academic contests had increased and these were drawn from both schools for the talented and the public-funded, Hien said.

From http://vietnamnews.vnagency.com.vn/ 11/15/2003

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BANGLADESH: VOIP Okayed, Overseas Calls Become Cheaper

The Cabinet yesterday approved the proposal for opening up Voice Over Internet Protocol (VOIP), popularly known as internet phone, to the private sector. The cabinet in its weekly meeting held with Prime Minister Begum Khaleda Zia in the chair in the cabinet room of PM's office approved the third proposal of the Bangladesh Telecommunication Regulatory Commission (BTRC) for legalising VOIP in the private sector. The National ICT Task Force headed by the Prime Minister in September last year directed the BTRC to formulate recommendations on VOIP. Accordingly, the BTRC submitted its recommendations to the Ministry of Posts and Telecommunications on January 1 last recommending to open VOIP to the private sector. But the Ministry returned the recommendations to the Commission twice for further amendments. The BTRC submitted its third recommendation in June. The BTRC, in its recommendations, suggested reaching the VOIP facilities to general people for using the popular technology of making overseas phone calls through internet at a cheaper. A caller will be able to make international telephone call at a much cheaper call rate using VOIP than using normal telephone. Official sources said, with the legalisation of the VOIP the government's revenue earnings will increase as the subscriber will pay T&T charge for using its line. The government will also realise a fixed amount of charge from the operators of the international call centres of VOIP. The BTRC will fix the amount of fees for using VOIP facilities. At present some service providers have been using VOIP illegally and the government is continuing drive against such illegal operators. The Bangladesh Telegraph and Telephone Board (BTTB) has disconnected some 3,000 telephone lines so far for illegal use of the VOIP. Internet service providers said after legalisation of VOIP there should be some conditions so that only the organisations having adequate facility to provide service get licence. Expressing his reaction, President of the Internet Service Providers Association (ISP) of Bangladesh Akhteruzzaman Monju told The Independent, "It is a milestone for the growth of the whole Information Communication Technology sector." He said there should not be too many strict conditions for issuing licence. Monju said IST related service providing business will be expanded after the opening up of VOIP to the private sector. He said they had been struggling for the last two years for this. The cabinet meeting okayed the proposal for ratification of the Cartahena Protocol on Bio-Safety to the Convention on Biological Diversity. It also approved the proposal to pack 10 per cent of Urea fertiliser produced in the country in polypropylene bags for transportation and preservation of the fertiliser to Buffer godowns and distribution. The meeting also gave its nod to the draft of The Code of Civil Procedure (Third Amendment) Act, 2003. Cabinet members and state ministers of the concerned ministries attended the meeting. The Principal Secretary to the Prime Minister and concerned secretaries were present.

From http://www.bangladesh-web.com/ 11/11/2003

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BHUTAN: The Mobile Comes to the Country

The prime minister, Lyonpo Jigmi Y Thinley, the trade and industries minister, Lyonpo Yeshey Zimba, and the Indian ambassador to Bhutan, Mr. K S Jasrotia, spoke to each other on mobile telephones on November 11 inaugurating the cellular mobile telephone system in Bhutan. Coinciding with the 48th birthday celebrations of His Majesty the King on November 11, Lyonpo Yeshey Zimba launched the new telecommunication service in Thimphu at a function attended by cabinet ministers and dignitaries from various international organisations. Describing the mobile service as a "much awaited and a landmark development" Lyonpo Yeshey Zimba said that "the giant leap forward in telecommunication development will spur social and economic development". "The launch, coinciding with the birth anniversary of His Majesty, is a humble tribute to His Majesty under whose leadership the people of Bhutan continues to enjoy unprecedented development, peace and prosperity," he added. "The launching of B-Mobile will enhance the people's access to information and have far reaching impact on rural development and good governance." The first phase of the B-Mobile project, which covers Thimphu, Paro, Chukha, Gedu and Phuentsholing was completed in less than a year at a cost of over Nu 400 million of which Nu 115 million was grant assistance from the government of India. Ambassador Jasrotia described the project as "yet another milestone" in Indo-Bhutan friendship. "The project is a continuation of our cooperation in strengthening linkages and the development of infrastructure in the communication sector of this country, our friend and close neighbor," he said. "As we anticipate Bhutan's leap into the new communication age, we hope that it would bring happiness, prosperity and harmony, without compromising the cherished social and cultural values of the Bhutanese." A total of 13 base stations - five in Thimphu, two in Paro, one in Phuentsholing and five along the Thimphu - Phuentsholing highway ensures connectivity along the road. Call rates will average between Nu 4 and Nu 5 a minute for local and domestic calls. To India, it will cost Nu 22 and Nu 20 a minute during peak and off peak hours. To other countries, it is Nu 55 and Nu 50 in the pre-paid connection. SMS messaging services will cost about Nu 2 a message, while all incoming calls will be free of charge. For the post paid, Nu 8 and Nu 7 during peak and off peak hours is charged for domestic long call (both mobile to fixed and mobile to mobile). To India Nu 20 and Nu 19 per minute and to other countries Nu 50 and Nu 48. The B-Mobile project was implemented on a turn-key basis by Telecommunications Consultants of India limited, a government of India enterprise. TCIL supplied materials and installed towers and also provides maintenance support for the cellular mobile phone network in Bhutan. The contract also involves provisions for billing and customer care system including pre-paid system and SMS center. The mobile phone has quickly become the latest craze with excitement abuzz over the new trend in communication. Even before the official launch, cell phones users became a common sight in Thimphu, Paro, and Phuentsholiing. "The benefits are manifold," a business man told Kuensel. "I need not wait to get home to receive important calls, while I can virtually conduct business or contact anyone anytime." "The mobile phone has become the topic of any conversation anywhere," said Yeshey Choden, a contractor. "In fact it is fast becoming a social status symbol. Soon everybody will discard the ordinary telephone." Much before the launch, B-Mobile registered about 2,255 subscribers and expects it to double by the end of this year. While many bought mobile phones both from within and outside, B- Mobile has almost sold out its 900 cell phones. According to B-Mobile project manager, Tashi Tshering, more than 80 percent of the subscribers chose the pre-paid service, while corporate and government clients chose the post paid service. "The increasing rush of subscribers indicates that B-Mobile is a successful and desirable project," Tashi Tshering said. Post paid service users will have to pay Nu 1,000 as activation charge, similar to the installation charge in ordinary telephones and will get their monthly bills. Prepaid subscribers will pay Nu 600 for activation and buy scratch cards or recharge vouchers to make calls and budget their calls. B-Mobile has immediate plans to extend its network to Punakha and Wangduephodrang and expects to complete the network by summer 2004. (by Ugyen Penjore)

From http://www.kuenselonline.com/ 11/15/2003

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MALDIVES: UN Maldives Launches Common Country Website

MALE - The United Nations Country Team on Wednesday evening launched the UN Common Country website for Maldives. At a function held at the UN building, Communications Minister Midhat Hilmy launched the website as part of the UN Country Team's activities to mark the 25th anniversary of the founding of the UNDP and UNICEF offices in Maldives and the United Nations Day for this year. Speaking at the event, Midhat said that a Common Country UN website for the Maldives would help enhance public knowledge about the many activities that the UN undertakes in Maldives. He further said that it would increase transparency and thereby the effectiveness of the programs while at the same time creating a more informed public. He said that communications empowered people and made entities more responsive to the needs of the people. UN Resident Coordinator Minh Pham highlighted the two objectives of coming up with a common website for the UN Country Team. He said that the first was to underscore the unity of purpose of the UN agencies in the Maldives to work better as a team so that the UN can serve Maldives more effectively and more efficiently. The second objective was to reaffirm the principle that the UN is an institution of the people. "…For that principle to hold true, we need to inform and provide the public with a clear and coherent picture as to who we are, what we do, and what we have done - or not done. Only in that sense, do we fulfil the twin goals of transparency and accountability as a public institution," he said.

From http://www.haveeru.com.mv/ 10/30/2003

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President Gayoom Identifies Five Strategic Areas of Action for the Next Five Years

President Maumoon Abdul Gayoom said that he will diligently strive to facilitate the achievement of continued progress, development and harmony for the nation and his aim in these endeavours will be to make progress towards fulfilling the expectations of the people highlighted in the Maldives Vision 2020. In working to achieve that goal, the President said he had identified five strategic areas of action for the term that lies ahead. In his inaugural address to the nation today after the assumption of his sixth term of office, Gayoom said that the first area deals with the strengthening of democratic institutions and processes of governance. "This will involve, among other measures, strengthening and expanding the national and the political role of the People's Majlis, consolidating democratic institutions and processes of governance, and protecting and promoting human rights," he said. The President said that in this regard, a National Commission on Human Rights will be established to safeguard the civil liberties enshrined in the Constitution of the Maldives, and to protect and promote human rights in the country. "Additionally, attention will be given to increasing the inclusion and the participation of the people in the social, economic and political life of the country, and to expediting the work being carried out to improve the legal framework required for national development," he said. In addition, further efforts will be made to increase the role of women in the affairs of the nation, and to provide equality of opportunity for women and men in all areas, the President said. "It is my intention also to establish mechanisms to undertake research and analyses in relation to trends in the global economy and various developments within the nation. Such a mechanism will provide me with access, on a continuing basis, to intellectual inputs to shape government policy and the affairs of the state in the best interest of the nation." The second key area of action involves placing emphasis on establishing a government that listens and works with the people, and to introduce institutional mechanisms to facilitate these processes. Steps taken in this regard will include increasing the accountability of ministers, senior officials and, indeed, all government employees, in carrying out their official duties, Gayoom said. "These measures will also include widening the role of the public and the civil society in the formulation of policy and in the implementation and oversight of various programmes, projects and activities carried out by the government. "Additional measures include organising and carrying out of the work of government offices with openness and transparency." President Gayoom said that the third principal area of action will focus on streamlining and reducing the size of the public service, on increasing productivity, and promoting the values of service, honesty and integrity, especially in relation to public property and finance. The fourth area of action aims at instituting modern management practices, and re-orienting government departments to be more result-oriented, he said. President Gayoom said that the fifth area of action will focus on strengthening the role of the family in the society, and on promoting greater participation of all sectors of the society in nation-building. "In this regard, programmes designed to strengthen family values and to increase the participation of the general public and the civil society in the affairs of the nation will be carried out. The aim of these activities will be to provide a positive environment that will nurture children and youths in accordance with the principles of Islam and help them become productive citizens." President Gayoom said that as Maldives is a 100 percent Muslim nation It is imperative, for national harmony and security, to strengthen the religious unity of the people and to maintain a national consensus on matters of religion. "I also intend to implement measures to further develop and strengthen the administration of justice in the country in accordance with the principles of Islam and the laws of the nation," said the President. "A revised and modernised code of procedures relating to the investigation of crime and to the standards of proof and evidence required in criminal cases will be developed and implemented." President Gayoom said that given the vital importance of broadening the economic base of the country, he would continue to endeavour to further expand, diversify and strengthen the economy in the term ahead. "In this regard, the government will work with the private sector in identifying new industries that could be introduced to the country, and in securing the resources and the skills required to initiate and carry out such new activities," he said. The President said that in the next five-year period ahead further efforts will be made to improve the quality of educational services provided in the country, widen access to learning, develop a sharper focus on the national identity, and emphasise values in education. "The government has decided to establish a Department of Higher Education and Training under the Ministry of Education. The rationale for creating the new department is to consolidate the provision of higher education services and human resources development," he said. "The health and well-being of the entire population will continue to remain a high priority of the government. The quality of the health services available in the country will be further improved, as will be the access to such services throughout the country," Gayoom said. He also said that to facilitate continued national advancement, further efforts will also be made to encourage the use of information and communication technologies in all sectors of the country. Furthermore the efforts of the government to facilitate job opportunities for youths and others seeking employment, and the quest to make every citizen a productive and responsible person, will be intensified, the President said. "Given the importance of proper land utilisation, increasing the availability of land, and of formulating and executing housing projects, it is necessary to dedicate a separate administrative structure to direct and manage those tasks I intend to create a new Ministry of Housing and Urban Development for that role." "I intend to strengthen mass communication and information dissemination facilities in the country in order to improve the people's access to news and information, and to preserve and promote the rich cultural heritage and the unique national identity of the people." The President said that as the spread of drug abuse among the young was posing a major threat to the nation, he had recently called for a national campaign to save the nation from the menace of narcotic drugs. "I look forward to the views and the ideas of the people of the nation in carrying out these tasks that I have outlined for the term ahead, as I do to their active contribution in realising these goals." President Gayoom said that in the international arena, the Maldives will continue to advance the cause of world peace, security and stability. "We will also further develop the friendly ties that exist with all countries, and promote international and regional co-operation."

From http://www.haveeru.com.mv/ 11/11/2003

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NEPAL: IMF Approves US $ 72 Million Loan for Nepal

KATHMANDU - The International Monetary Fund (IMF) has approved in-principle a three-year US$72 million (about 5.33 billion rupees) poverty reduction and growth facility loan for Nepal to support the country's economic reform program through July 2006. The final decision on the IMF's financial package will be made following a review meeting of the World Bank Executive Board on Nepal's Poverty Reduction Strategy Paper (PRSP), scheduled for November 18, states a press communiqué by IMF Friday. With final approval of the loan, Nepal will be able to immediately draw an amount of $10 million, the IMF said. In exchange for the loan, Nepal had agreed to refurnish its financial sector and civil service, as well as seeking to contain widespread corruption in the country. The reform programme aims at improving the conditions for sustained growth and poverty reduction, based on sound macroeconomic policies, better prioritization and enhanced efficiency in government expenditure, said Shigemitsu Sugisaki, Deputy Managing Director and Acting Chairman of IMF. The authorities have demonstrated their commitment to reforms through strong policy implementation under difficult circumstances and the broad support for the PRSP represents an encouraging basis for breaking the cycle of low growth, poverty and insurgency which Nepal has faced, he said. "Continued implementation of financial sector reforms is critical for achieving the PRSP's objectives. The Nepal Rastra Bank will be transformed into a modern and efficient central bank, and the authorities are strengthening the commercial banking sector through enhanced debt recovery, including tightened criteria for blacklisting loan defaulters and the establishment of a Debt Recovery Tribunal," said Sugisaki following the Executive Board discussion. The IMF official have commended Nepal's agreement on WTO accession, however cautiously said, "to fully realize the benefits from accession, it will be important to enhance external competitiveness, including through measures that will make the labor market more flexible." Almost 40 percent of Nepal's population lives in poverty. The country's gross domestic product (GDP) is expected to reach 2.3 percent in 2003 on an annualized basis, according to the IMF.

From http://www.kantipuronline.com/ 11/15/2003

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PAKISTAN: IMF Approves US$247 M Loan Under Poverty Reduction and Growth Facility

Washington - Observing that Pakistan's economic performance has been "strengthening", the International Monetary Fund on Monday approved a 247.54 million dollar loan to the country under its Poverty Reduction and Growth Facility (PRGF). In this regard, Pakistan's request for waivers for the non-observance of three structural performance criteria" was approved by the Executive Board of the IMF, said an IMF press release here. The waivers related to a "short delay" in the submission of the fiscal responsibility law to Parliament, the approval of some minor new tax exemptions, and the non-removal of the exemption from withholding tax for National Savings Scheme (NSS) instruments of less than Pakistani rupees 150,000. PRGF for Pakistan, a three-year, US dollar 1.5 billion arrangement was approved on December 7, 2001 and is due to expire in December 2004, the IMF release said. Commending the "continued strengthening of Pakistan's macroeconomic performance," IMF said GDP growth picked up in 2002/03, inflation remained subdued, and large external current account and overall balance of payments surpluses were recorded. "The fiscal deficit was lower than expected, tax collection exceeded its target by a small margin, and social- and poverty-related expenditure grew only slightly less than targeted."

From http://www.expressindia.com/ 10/28/2003

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AFGHANISTAN: New TV Station Goes on Air in North Afghanistan

(AFP) - Two years after the fall of the Taliban, which banned all forms of entertainment, people in northern Afghanistan are tuning in to a new television station. Aina ("Mirror") has started test broadcasts from Sheberghan, 130 kilometres west of the main northern city of Mazar-i-Sharif, station director Sayeed Anwar Sadat said. "This is a totally independent TV and is not linked to any political faction," he said. Sheberghan is the stronghold of Uzbek warlord General Rashid Dostam, who has been vying with his Tajik rival General Atta Mohammad for control of northern Afghanistan. Sadat said the channel would broadcast cultural, social, entertainment, political and sports programs in the local Dari, Pashtu, Uzbek and Turkman languages. The station will initially broadcast over an area of 300 kilometres, covering the surrounding northern provinces, he said, adding that it may extend to Kabul in the future. On air for six hours a night, the station already reaches a wider area than Kabul TV broadcast from the Afghan capital, he said. Trading company Zafar Faryabi set up the new station with $US500,000 dollars worth of equipment purchased from Italy. Under the Taliban, people caught watching television or movies could be jailed.Radio stations were only allowed to broadcast news and information. Since the fall of the Taliban two years ago, radio, television and movies have returned with a vengeance. Pirated copies of new Western and Indian films are available in Kabul within days of their release abroad. Cable operators have also started up to feed the Afghans' appetite for Bollywood films and other Indian entertainment, although the chief justice has declared the broadcasts are un-Islamic. The ministry of information and culture is working on a law to regulate cable television but in the meantime cable operators continue broadcasts without official permission.

From http://www.myafghan.com/ 11/12/2003

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AZERBAIJAIN: MOC Accuses CATEL JV of Providing Mobile Communication Services

Azerbaijani-U.S. CATEL JV illegally provides 3G CDMA mobile communication services to population, Ministry of Communication has announced recently. Ministry claims that CATEL obtained no license for such services, started pirate cellphones sale and then launched unlicensed mobile communication services within Absheron peninsula. JV has not paid its 5 billion manat worth debt to Aztelecom company for long-distance calls and spent money for acquisition of mobile equipment without subscribers' consent and tender in violation of Azerbaijan legislation. Ministry of Communication also found mobile phones with 48 index among some JV's subscribers. A source from CATEL noted that activities of JV established by Azerbaijan Ministry of Communication and U.S. Omni Communications company in 1997 is aimed at providing wireless telephone communication, but not mobile one, in Baku. It is a common knowledge that CATEL provides two types of wireless telephone services within Absheron. The first service envisages installation of terminals, via which company's stations provide telephone services to subscribers. In mid-2003 CATEL - operator of ATS 47/48 - has invested capital for the project to launch wireless fixed telephones of 3G CDMA system. This is nothing but upgrade of the previous CDMA system, which allows to improve quality and reduce cost price of traditional CATEL services and provide new services, such as a high- speed internet connection. Some elements of 3G technology, such as video conference services, have not been applied yet, due to poor demand and high price. As far as Ministry of Communication's information about illegal distribution of mobile phones by JV is concerned, it is absolutely groundless, claims JV. To-date CATEL has sold no cellphones at the market. Communication quality should be tested on the entire coverage area after installation of wireless system. For this purpose 20 mobile phones have been brought for the company's employees to test 3G CDMA system. The claim to test the system has been laid by Chinese Huawei company - equipment supplier. Order and import of the phones, which are for official use only, to test the fixed wireless communication system has been confirmed by documents. Ministry's employees confiscated this official phone from one of CATEL's employees and distributed false information about alleged sale of mobile phones on the Absheron peninsula. With regard to information about debt to Aztelecom for long-distance calls, a source from CATEL said that after a long-lasting trial between CATEL and Aztelecom, JV was obliged to pay the latter a certain sum. Although court has given CATEL a six-month period for repayment, JV has partially repaid to-date almost half of this sum.

From http://www.bakutoday.net/ 11/04/2003

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Pensioners Will Get Pensions Through Plastic Cards in Azerbaijan

Chairman of State Social Fund Salim Muslimov informs that the Fund is going to announce tender on application of pension card system. Mr. Muslimov said experts of the Fund visited an enterprise specialized on making plastic cards in China aiming to get acquainted with foreign experience. According to chairman of the Fund the process won't take much time and a winner of tender will have to complete the task within two or three months. After this pensioners will be able to get pensions through cash dispensers in Azerbaijan. First of all pensioners will be enlightened as the process is new in Azerbaijan and Social Fund chairman said 100 million AZM will be spent for this purpose next year. The card system is planned to apply in Baku and Sumgayit since April 1, 2004 and pensioners living in the regions will use card system by the end of year.

From http://www.bakutoday.net/ 11/11/2003

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IRAN: Businesspersons Should Be Registered in Information CD-Bank

TEHRAN -- Businesspersons and tradesmen should be registered in Information CD-Bank, Deputy Head of Commerce Developing Department for the Commercial Organization of Tehran province Mohammad Faqihi said here on Friday. Faqihi said that the newly founded Information Bank of Businesspersons is to boost foreign commercial activities monitored by the Ministry of Commerce. This bank is a wide scale plan, which includes all the Businesspersons and tradesmen in the country, he added. Export subsidies contemplated by the government through the Budget Bill of the current Iranian calendar year of 1382 (started March 21, 2003) would be offered only to the registered Businesspersons, Faqihi said. Registration in the bank would allow the exporters and businesspersons to take advantages of different kinds of subsidies and facilities, he said, adding that a rich information bank would let the decision-makers to allocate the resources in a proper way. These subsidies are allocated to expenditures necessary for the commercial tours, export prizes, invitation of foreign commercial missions, and participation in international exhibitions, the official said. The registration of Tehran Businesspersons had previously been begun by the Export Developing Center on early Iranian month of Mordad, 1 (July, 23, 2003).The figures show that Tehran, with 67 percent, claims the biggest share of Iran's total Businesspersons.

From http://www.tehrantimes.com/ 11/09/2003

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TAJIKISTAN: ADB Grant for Irrigation Development

A technical assistance (TA) grant of US $600,000 is being prepared by the Asian Development Bank (ADB) to develop and repair irrigation facilities in order to help poor farmers in Tajikistan, according to an official. "The TA amount is just to prepare the project for ADB's pipeline for next year," Emile Gozali, a project economist in the Agriculture, Environment and Natural Resources Division at ADB headquarters, told IRIN from the Philippines capital, Manila on Tuesday. A loan of about $20 million would cover between 60,000 and 80,000 ha, or about 10 percent of the country's irrigation command area, he said, adding that twofold project goals envisaged the prevention of operational failures of key irrigation facilities, as well as capacity-building for local government and farmers to run the water systems on a sustainable basis. "The latter will provide a model for investment in and maintenance of other less dilapidated irrigation systems," he said. Five years of civil war in the 1990s had destroyed or led to the neglect of irrigation systems, resulting in critical damage such as washed-out diversion headworks, collapsed main canals, severe siltation and breakdown of pumps, an earlier ADB press statement said. With poverty levels estimated at 83 percent, efforts to address poverty should focus on rural areas, where livelihoods rely heavily on agriculture, it added. Tajikistan had decontrolled agricultural prices, abolished mandatory crop sales to the government and transferred state and collective farms to private management, the statement said, but added that serious impediments remained for the rural economy. "The liberalisation in agricultural production and pricing regimes has been a move in the right direction," Gozali said, pointing out, however, that Tajikistan's economy continued to suffer from inherent problems dating back to the time when it was a part of the former Soviet Union. "These relate to the lack of capacity of the local economy to generate adequate outputs to sustain the population's standard of living. Further, as a relatively new country, Tajikistan needs to develop capacity for long-term strategic planning and governance of the market economic system newly introduced to the country," Gozali observed. It was the lack of regulatory control and competition within the private sector that had resulted in the growth of farm indebtedness, he said, stressing that in order to address these issues the project would provide capacity-building and investment funds to promote private-sector competition in agricultural input supply and agro-processing. "The project will also assist the government to refine its strategic planning in water-resources management," Gozali said, pointing out that the eventual project would involve building capacity for the operation, maintenance and repair of irrigation and rural infrastructure, as well as management of water resources and enhanced farm management and technologies. The project-feasibility study to be funded by the TA would be completed by June 2004, he added, saying that the study would identify and select the areas to come under the project and work out the costs etc. Lack of government funds had also left rural settlements without adequate domestic water-supply systems, the ADB statement said, as a result of which only one-fifth of the population had access to safe drinking water. That had led to a high incidence of typhoid and hepatitis in rural areas, it added. "Serious waterborne-disease outbreaks have occurred in every region of the country since 1991," Gozali said, a phenomenon which had substantially reduced the earning capacities of rural families, and thereby contributed to high poverty levels. "It is estimated that only 20 percent of the rural population in Tajikistan has access to safe drinking water. If poverty is going to be tackled in a meaningful way, then providing safe water for a larger proportion of the population is going to have to be a priority," Gozali stressed. "Since rural domestic water-supply and irrigation systems usually share water sources and distribution infrastructure, improvements in the two subsectors should be jointly carried out in a cost-effective manner," he said. Such an approach amplified the benefits of rural water-sector investments and promoted an integrated management of water resources, he added. The ADB was already studying, through an ongoing technical assistance project, various options for Tajikistan towards easing its farm-debt burden, the press statement said. "Resolution of farm indebtedness was discussed in an ADB-funded conference in 2002," Gozali said, adding that options discussed had included debt rescheduling and temporary management control of farms by the creditors. "These options are complex and are currently being studied and discussed with relevant stakeholders as part of our ongoing technical assistance on the farm-debt resolution," Gozali added. The press statement said the total cost of the water-resources project TA was estimated at $708,000, of which the government would provide the equivalent of $108,000.

From http://news.somoni.com/ 11/19/2003

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UZBEKISTAN: Higher Certification Commission Launches Website

The Higher Certification Commission (HCC) of Uzbekistan has launched its website at www.vak.uzsci.net. The site contains regulations on conferring academic degrees, as well as documents related to the activity of HCC, its Specialised Council and Expert Council. The site visitors can also get acquainted with the HCC structure and the contents of the HCC magazine. An electronic database of PhD theses has also been posted on the website.

From http://www.uzreport.com/ 11/18/2003

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AUSTRALIA: Black Economy Mystery to Taxman

Despite promising that the GST would rake in billions of dollars from the black economy, the Australian Taxation Office has admitted it does not measure the success of its anti-avoidance crackdown - or the size of the problem. More than three years after the introduction of the new tax system, the ATO has told The Australian it has no way of knowing whether taxpayers are reaping a "compliance dividend" from the GST. The embarrassing revelation has provoked fresh attacks by the Opposition and tax experts that the tax office is not fair dinkum in cracking down on the black economy, despite initial studies suggesting the compliance dividend was higher than first expected. Peter Costello and John Howard promised the GST - and other tax measures introduced in 2000 - would make it harder for businesses to operate in the black economy. The ATO estimated it would rake in $3.5 billion in the first three years. But the tax office has conceded it has no way of determining how big the problem is. Responding to a Freedom of Information request by The Australian, the ATO said it "does not undertake analysis to quantify the extent or size of the cash or 'black' economy". This is despite Tax Commissioner Michael Carmody in September referring to estimates that the cash economy could be as high as 15 per cent of gross domestic product. "The ATO has looked at a number of academic and other studies and ... the size of the cash economy is found to be in the range of 3 to 15 per cent of GDP," the ATO told The Australian. "As the ATO does not attempt to analyse either the size or extent of the cash economy there are no documents indicating the impact (the) GST has had on cutting the size of the black economy. "Similarly, there are no records detailing the effectiveness of the ATO in reducing the size and extent of the black economy," the October letter says. Labor Treasury spokesman Mark Latham seized on the revelations, accusing Mr Carmody of being more interested in flashy PR than serious tax avoidance. "I think it's in the taxpayers' interest that they get a handle on the size of the black economy," Mr Latham said. Mr Carmody engaged in a public brawl with Mr Latham in late September over remarks attributed to the Tax Commissioner over the size of the black economy. This followed the release of a report by a tax office taskforce set up to recommend ways of cracking down on the cash economy. Hitting back last night, Mr Latham said: "This has been much more of a PR exercise than a tax avoidance exercise." He said the tax office was "not fair dinkum" in using the new tax system to crack down on the cash economy. Taxation Institute of Australia tax director Michael Dirkis said there had been anecdotal evidence since 2000 of the growth in the cash economy. "When you have made claims about reducing the size of the black economy then the ATO has to have some substance to back those claims," he said. (by Michael McKinnon)

From http://www.theaustralian.news.com.au/ 11/03/2003

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Australia 3rd for e-Government

AUSTRALIA has been ranked third in an international survey of electronic-government readiness, according to a UN report. The report said more governments were using the internet, but only 20 per cent of people with internet access use government sites and few of those encourage users to participate in making policy. Even though the 2001 terror attacks made security - rather than accessibility - the main concern in many nations, the number of countries with at least one government web site continues to increase, according to the 2003 UN World Report on the Public Sector, entitled "E-Government at the Crossroads." A total of 173 of the United Nation's 191 member nations had a web presence in 2003, an increase from 143 in 2001. Only 18 countries, many in Africa, remain completely off-line. While web-based access can link citizens to everything from schools to hospitals and libraries, it isn't the whole answer. "Only a very few governments have opted to use e-government applications for transactional services or networking," the report states, "and even fewer use it to support genuine participation of citizens in politics." The US government led the ranking of e-government "readiness," the amount of information, services and products it offers over the internet, combined with the infrastructure - telephones, computers, internet connections - and the education needed to access them. In that ranking, Sweden was second, followed by Australia, Denmark, Great Britain, Canada, Norway, Switzerland, Germany and Finland. The report, however, gave very different marks on the quality of countries' web sites, a ranking in which many developing nations placed higher than their developed counterparts. "This is a measure of how well the governments are doing in meeting citizen's needs," said Seema Hafeez, one of the report's authors. The United States took top place in the web-quality index, followed by Chile, Australia, Mexico, Great Britain, Canada, the Philippines, Singapore, Denmark and Sweden. In another ranking for "e-participation" - a measure of a government's willingness to interact and dialogue with citizens over the net - Great Britain beat the United States for the top spot. While many of the same countries - New Zealand, France, the Netherlands, and Ireland - made the Top 10 in that category, there were some surprises. Several developing countries, like Chile, Estonia, the Philippines, Mexico and Argentina, ranked among the Top 10 in e-participation. Estonia, for example, has a a site known as "Today I Decide," in which people can propose, amend, and vote on policy issues. Officials are then required to consider those proposals. "It is refreshing that this is not like a train that has to follow the developed nations," said Jerzy Szeremeta, an author of the report. "Creativity and policy centered on human development can be located anywhere in the world." Still, only 15 governments in the world accept internet comment on public policy issues. Only 33 countries allow government transactions, like filing forms or paying fines, over the net. At least 60 per cent of all e-government projects in developing countries fail, and about half waste taxpayers' money to some extent, the report said. There are success stories, like Hong Kong's one-stop Electronic Service Delivery, which allows citizens to do everything from paying taxes to renewing a drivers' license on the web. Other countries publish bids for government purchasing contracts on the Web, to help fight corruption and kickbacks. While South Korea's OPEN application/complaint portal allows users to see exactly where their case is being handled in the government approval process. "What e-government does is make many things obvious," said Mr Szeremeta. "In Australia, to establish a firm it was necessary to go through 17 formalities. When they put that online, they laughed - why 17?" Online, "you see the possibility of merging things ... now they have reduced it from 17 to 2," he noted. But the report noted that "a too-grandiose approach may result in failures or expensive white elephants." "Because of a high rate of failure in specific e-government projects in developed as well as developing nations, bricks-and-mortar public services need to be maintained even as digital applications are increasing," the report said. In many countries, women and the poor have less access to the Internet than other sectors. "Security and privacy issues" also discourage use among all populations, the report noted. Most Americans who use government web sites do so to get tourism information, do research for school or work, download government forms or get information on services. "US users perceive the availability of e-government first and foremost as an opportunity to get quick and easy access to information," the report said. That, according to the United Nations, is only part of the web's potential. "Many governments turn to internet-based services as a way to cut red tape," said Jose Antonio Ocampo, the UN undersecretary-general for economic and social affairs. "But we also see the internet as a means of advancing and consolidating transparency and democracy." (by Mark Stevenson)

From http://australianit.news.com.au/ 11/05/2003

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Finance IT Outsourcing Losses

THE department that championed the failed $5 billion handover to private industry of all federal government computer business has now abandoned its own outsourcing model. The Finance Department, whose minister pushed the mandatory outsourcing scheme against the wishes of many public service heads in 1996, has now decided that contracting out all computer needs to one company is not in its own best interests. Finance, which controls the nation's pursestrings, has confirmed it will not renew its contract with computer giant IBM when the deal expires next November. It will bring some work back under its own control and management, including help-desk services and strategy and governance, and will farm the rest out to contractors in small chunks. "Single source provision is not in our best interests," a Finance source said yesterday. The source said the department expected to make savings as a result of the decision, which comes three years after the mandatory outsourcing scheme was panned by the Auditor-General. The audit report found patchy service levels and a blown budget and timeframe, and said the anticipated savings had been overestimated on the first contracts let. Under the now discredited policy, all government information technology infrastructure had to be outsourced to private contractors, mainly multinational companies, in large chunks of work. The Government had expected the scheme to save $1billion over five years. Finance staff yesterday gave IBM representatives the necessary one-year's notice that it would no longer require its services. The IBM contract was extended for two years one year ago. The initial five-year contract to IBM was let without a public tender being released for the work. Labor IT spokeswoman Kate Lundy said: "It's an absolute disgrace that the department responsible for inflicting so much damage on the IT landscape has taken so long to see the light and understand that whole-of-agency and cluster contracts were inappropriate, damaging and a waste of taxpayers' money." (by Selina Mitchell)

From http://australianit.news.com.au/ 11/07/2003

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e-Health Project Takes Off

US defence systems integrator Boeing is partnering with Australian healthcare providers to develop and commercialise an innovative "health value chain management" approach to the network and interoperability problems delaying widespread adoption of e-health programs. Boeing has put up $5.6 million to fund the work in conjunction with the Australian Network of Healthcare Providers (ANHP), which plans to have a pilot running at the Uniting Health Care Group's St Andrews War Memorial Hospital in Brisbane by the middle of next year. The private/public sector initiative, dubbed Health VCM, has attracted federal Health Department endorsement as well as a small $200,000 grant from the government's Information Technology Online (ITOL) program. IT Minister Daryl Williams, who was on hand to launch the project in Sydney today(Wed 19), said Boeing's commitment "is good news" for local ICT development and for the national health system. "If successful, Health VCM will improve connectivity and co-ordination throughout the health system, leading to better patient care and greater efficiencies,'' Mr Williams said. "The project will bring hospitals, health workers, private suppliers and GPs together to share a common approach to the way they manage information." Boeing plans to support the venture by extending its "Phantom Works" technology incubator operations to Australia, Boeing Homeland Security and Services vice-president Rick Stephens said. "We will leverage our experience in developing network-centric infrastructures for the US Department of Defence," Mr Stephens said. "Like Defence, health involves integrating highly complex and diverse environments. But we are not in the health market, so we need to partner with people who know the medical business." ANHP members have a wide range of expertise across the sector, and will help address key initiatives including web-enabling patient records, hospital supply chains, sophisticated theatre scheduling and inventory management, plus real-time tracking of service delivery. (by Karen Dearne)

From http://australianit.news.com.au/ 11/19/2003

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Bigger You Are, Cheaper the Call

THE nation's biggest businesses are getting increasingly heavy discounts of up to 75 per cent on telecommunications services such as mobiles, calls from fixed-line phones to mobiles and local calls. This highlights the widening gap between the prices paid for telecommunications services by large corporations compared with small business and consumer users. "Prices in the corporate market have fallen in the order of 20 per cent in the past couple of years," Macquarie Bank analyst Scott Ryall said. Optus, Australia's No.2 telco with revenues of more than $5 billion each year, has also raised the spectre of lowest income groups being hardest hit if it is forced to drop its mobile termination rates. These are the per minute rates other telcos must pay to Optus to have their calls carried to Optus's mobile customers. Such charges become the basis for so-called "fixed to mobile" calls. Consumers pay about 60c a minute for fixed to mobile calls but sources said large businesses are being offered pricing as low as 15c a minute. Other sweeteners being used to lure business customers are mobile pricing with discounts of at least 30 per cent on headline rates, cheap local calls as low as 8c each, and cheap mobile data rates - at less than half the $10 per month available to normal users. The Australian Competition and Consumer Commission is putting the finishing touches on a six-month inquiry into the mobiles market. ACCC telecommunications commissioner Michael Cosgrave said "it's due to come out shortly". Mr Cosgrave said the main focus of the report was mobile termination charges. The ACCC is considering regulating the termination price in a bid to bring retail fixed to mobile prices down. Despite mobile termination charges falling in recent years, retail prices have moved little. Fixed to mobile pricing is fixed as part of the Government's price cap regime, which is set until 2005. Mr Ryall said: "It's true to say that corporate pricing has come down faster than consumer pricing. But consumer pricing is more affected by the price cap regime, whereas corporate pricing is affected more by competitive forces.'' After its release, the ACCC's report will be open for public discussions. But a Telstra spokesman said: "Margins may be higher for fixed to mobile than other services but pricing for other services means they have lower margins. Pricing across the sector is distorted by the price cap regime." (by Michael Sainsbury)

From http://australianit.news.com.au/ 11/20/2003

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NEW ZEALAND: $40m to Boost IT Growth

The Government will spend more than $40 million over the next four years on a 10-year project to have 100 high-tech companies turning over $100 million a year. Unveiling the official response to the June report of the ICT Taskforce which came up with the target, Information Technology and Communications Minister Paul Swain said the Government wanted to work in partnership with the ICT sector to support its growth ambitions. While some of the taskforce recommendations were addressed by yesterday's package, other key elements are still being worked on. Swain said a working group of industry and Government representatives was being set up to look at issues of Government ICT procurement. The taskforce observed that while the Government accounted for a third of IT spending, the public sector had a poor record of buying locally made technology. Work is also continuing on the taskforce's recommendations on tax and regulatory issues. Swain said the Business Law Reform Bill, due to be passed by April 2004, would improve investment opportunities in the ICT sector. The taskforce's work is being continued by the Higrowth Project, a charitable trust set up by taskforce members with a five-member board headed by SolNet founder Murray McNae and a 30-member advisory council. Swain said the HiGrowth project would receive $1.5 million over four years. It was expected to be self-funding through industry donations after that. Other investments spread over the next four years include: * $11.55 million to a tertiary sector project, Enterprise training for emerging industries. * $10 million for the entrepreneurship and knowledge transfer initiative, which is aimed at graduates. * $8 million for projects which support the technology curriculum in secondary schools. * $5.6 million for FutureInTech, a national ICT awareness programme for secondary school students. (by Adam Gifford)

From http://www.nzherald.co.nz/ 11/04/2003

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Council Unifies Data Network

The Taupo District Council is switching its data and voice services to an 802.11b wireless network from Auckland private network builder Chiliad Communications. IT manager Susan Souren said the council needed to upgrade its systems and wanted to bring remote sites in Turangi and Mangakino into the main network. "We were looking at a way to standardise connectivity," she said. "The main driver was delivery of services to sites like our services centres, visitor centres and water treatment plant. "This means we can give our people more information, like electronic maps, when they are out in the field." Chiliad sales manager Mike Dagg said the Taupo installation differed from those the company had built for other councils because it was, in fact, two networks. "At the lower-demand sites which just require data, we have deployed 2.4 Mhz gear because of the cost," Dagg said. This would allow the council to make more use of telemetry to monitor its water and sewerage businesses and get early warnings if things went wrong. At higher-demand sites Chiliad was working in the 5.8 Mhz band with 10Mb of throughput. The setup would save the council money. Dagg said both networks had high security built in. Normal scanning software could not detect the radio signal. Souren said that centralising the council's phone system on one access point meant it could give all staff access to the Zeacom phone messaging system. "We are already streamlining our systems and pulling back servers from remote sites, which bring additional cost savings," she said. "It also makes virus and security management easier, and it means we don't have to have people sending in back-up tapes from the various sites." Taupo is leasing the network from Chiliad under a five-year deal. "We expect a lot of change in the wireless area in the next three or four years so we want to remain flexible." (by Adam Gifford)

From http://www.nzherald.co.nz/ 11/04/2003

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Free Map Data Shows Way

Three years ago the Government agreed to forgo copyright on its 1:50,000 scale topographical maps and make the data available for the costs of dissemination. This led to a surge in digital mapping activity as entrepreneurs looked for new ways to use the data. "It made a huge difference to what I was able to do," says Roger Smith, of Wellington firm GeographX, which is about to launch a 3D digital map of New Zealand. "The data was created at taxpayer expense and it was being hoarded. "Map data ages; it loses currency. We argued that it was not scarce and if it was released, we couldn't destroy it - all we could do was add value." Smith describes himself as a born geographer who did not find his calling until late in life. He trained as a geologist, then farmed sheep and cattle in Marlborough for 12 years, as well as doing some part-time flying. He moved back to Wellington to do analysis and policy work for Tourism New Zealand, before deciding he wanted to work for himself. "I could see the potential of GIS [Geographic Information Systems] technologies." Using the freed data, GeographX produced digital elevation models of the country, followed by shaded relief image-24 that can be used by mapmakers and GIS professionals. The elevation data was rejigged for use in Microsoft Flight Simulator as a free 10MB download. "That is responsible for about half the hits on the website," says Smith. Last year, he and Les Molloy used 73 GeographX maps for the book Landforms: The Shaping of New Zealand. The 3D digital map, which will be released at Te Papa on Wednesday, was a joint venture with K2Vi, which makes the visualisation software. The two firms also work together on an interactive system for civil defence and emergency management, and one that is being implemented in the Defence Forces. Along with Wellington web design company Chrometoaster, they supplied mapping data for this week's Southern Traverse endurance race, which includes QuickTime movies of the course through the Otago backblocks. Smith welcomes the surge of competition as digital mapmakers find market niches and develop innovative software. "If we all put our heads together we can probably take the world by storm with our technologies." Like Smith, K2Vi technical director Gert van Maren has a passion for seeing the landscape from above - he moved to Wanaka so he could spend his spare time paragliding. K2Vi grew out of work being done by forestry management company Asset Forestry. "When the forestry industry collapsed, we looked for other markets," van Maren says. Much of his work comes from urban planning and property development, creating virtual views of projects for use in sales or resource consent processes. Tourism also has potential, with kiosks now being set up in Queenstown and Wanaka to give visitors a 3D view of local attractions. Similar kiosk technology is being used for a virtual flythrough of the Whanganui River, which will form part of the Whanganui exhibition opening at Te Papa at the end of the month. "For that we built a specialised viewer with a touchscreen and links to video and sound files, so as you work your way down the river, places of historical interest pop up," says van Maren. Another company using the Land Information New Zealand topographic map data is Rotorua-based Vision Software, which offers Tumonz: The ultimate map of New Zealand. Vision, which also came out of the forestry industry, has gone for a static rather than interactive approach to mapping. Ross Stewart, of Auckland, takes a different approach for his Livingstone Guides, scanning paper maps for use on Pocket PC devices running Microsoft Windows CE. Most of his sales come from Britain, from hikers wanting ordnance survey maps. "We can take any map and geo-reference it," say Stewart, meaning users can work out where they are from a GPS (global positioning system) satellite signal. "We sell a Baghdad map which came out of the CIA." Long-established mapping company Wises has its maps online in an easily searchable service. Terralink International, the former state mapping company bought out of receivership by Animation Research and New Zealand Aerial Mapping, offers digital maps and a wide range of other property information and services. It has revamped its Terranet website to offer a one-stop shop for the data, which is mostly used by property buyers or sellers, including title, survey and valuation information and the aerial views produced by NZ Aerial Mapping. Chief executive Mike Donald says Terranet was one of the first e-commerce sites in the country when it launched five years ago. "We redeveloped the site to make it more user-friendly, and recognised the value we can add is bringing all the data to one point," he says. "We have about 20 different data sources now, and we will be adding more as they become available."

From http://www.nzherald.co.nz/ 11/14/2003

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TONGA: Report Studies Poverty and Corruption

The state of poverty and corruption in Tonga was highlighted by researchers in Nuku'alofa at the end of October. A study on corruption in Tonga, carried out by researchers from the Australian National University, focused on Tonga's National Integrity System. Dr Peter Larmour, from the National Centre for Development Studies at ANU said that the ultimate goal of a National Integrity System was to promote good government and good governance. The study was commissioned by Transparency International Australia and funded by AusAID. Larmour said?the research on Tonga, which had been carried out by Dr Kerry James, should be completed early next year and it will be made available to the public in March 2004. He said that the work of Transparency International was "to prevent corruption, looking at a system and a way a country is structured to prevent corruption." Meanwhile, after looking at poverty in Tonga, researchers from the Asian Development Bank, led by David Abbott presented their findings. Abbot said that poverty in Tonga was not the same as the extreme poverty in the third world countries in Asia and Africa. He said that the situation in Tonga, as in other small Pacific countries, "is hardship not poverty, the difficulty of having access to medical centres, to schools and telephones". This ADB researchers report will also be made accessible to the public in March 2004.

From http://www.pacificislands.cc/ 11/12/2003

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ADB Study of Guarantee Mechanisms to Support Asian Bond Market Initiative

MANILA, PHILIPPINES - The Asian Development Bank (ADB) will help identify and explore better utilization of guarantee mechanisms that can support development of domestic and regional bond markets in the ASEAN+3 countries through a technical assistance (TA) grant just approved for US$500,000. The TA will review and compare existing and past mechanisms, as well as regional and international best practices, and consider the most effective guarantee mechanism that could foster bond market development, particularly in Indonesia, Malaysia, Philippines, and Thailand. The assistance will support the work of the voluntary working group created under the Forum of Finance Ministers of the ASEAN+3 on Guarantee Mechanism for the Asian Bond Market Initiative (ABMI). The working group is one of six set up under the ABMI to examine the conditions necessary for bond market development. The groups are expected to provide valuable input to the decision-making by the finance ministers of ASEAN+3, which comprises the 10 Association of Southeast Asian Nations (ASEAN) members, plus People's Republic of China, Japan, and Republic of Korea. The ABMI, endorsed at the ASEAN+3 deputies meeting in Chiang Mai in December 2002, emphasizes the promotion of greater access to the market by a wide variety of issuers and the creation of an environment conductive to domestic and regional bond market development. The mismatch of debt maturity and currency and Asia's financing needs was identified as a major factor underlying the regional financial crisis that began in 1997. Although Asia has since made a remarkable recovery, mismatches remain a major source of financial vulnerability. The ASEAN+3 and other forums have been trying to address the issue through the development of domestic and regional bond markets. "This is ADB's first concrete support for the ASEAN+3's Bond Initiative," says Masato Miyachi, an ADB Senior Advisor. "The TA will help the working group fulfill its key mandate of developing a model that may be used as a benchmark, examine existing facilities, and suggest areas for improvement. If we will be able to develop strong bond markets in ASEAN+3 countries, such efforts would provide a good model for other countries in the region to follow." ADB has been a member of the voluntary working group on guarantee mechanisms for the ASEAN+3 since its inception in February 2003. The working group has identified several domestic guarantee agencies, as well as bilateral and multilateral institutions that provide local currency guarantees. However, there are few guaranteed local currency bond transactions in the market. The reasons vary, from lack of market acceptance for the guarantee to structural hurdles caused by processing lead-time. "There is no best practice model for guarantee facilities that can be readily applied to improve the effectiveness of domestic or regional agencies," says Mr. Miyachi. "The potential and limitations of facilities need to be critically examined in order to establish effective domestic and regional mechanisms for bond market development." The TA is due to be completed by the end of April 2004.

From http://www.adb.org/ 10/30/2003

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Closer Regional Monetary and Financial Cooperation Needed to Reduce Risk of Another Crisis

BOAO, HAINAN PROVINCE, PRC -- Regional monetary and financial cooperation -- including the development of Asian bond markets -- should be strengthened to enhance resilience and reduce the risk of another Asian financial crisis, a senior Asian Development Bank official told the Boao Forum for Asia today. Moreover, such steps need to be properly designed to ensure they complement other global efforts to promote financial stability, said Yoshihiro Iwasaki, Head of ADB's Regional Economic Monitoring Unit (REMU). Summarizing the recommendations of a soon-to-be-published book by ADB's REMU, he said, "The regional contagion during the 1997 crisis provided the impetus for integration in Asia, fanned also by the successful example of Europe." The book, "Monetary and Financial Integration in East Asia: The Way Ahead," will be published for ADB by Macmillan later this month. Comprising reports and background papers by eminent economists and policymakers, the book reviews ongoing initiatives in promoting monetary and financial cooperation in East Asia and recommends forms of enhanced cooperation and actions over the short- (within the next 2 years), medium- (3-5 years), and longer-term (over 5 years). It also raises questions such as whether the bilateral swaps under the Chiang Mai Initiative (CMI) should be multilateralized when the CMI is reviewed next year? The book stresses that attempts to build a regional financial architecture in Asia should not run counter to the international architecture being nurtured by various institutions. Short-term recommendations include: Establishing an independent Regional Policy Dialogue Unit to support peer review meetings of policymakers and to monitor regional financial developments; Expanding the Bilateral Swap Agreement Network under the Chiang Mai Initiative and earmarking a portion of foreign exchange reserves for financing short-term liquidity needs of member countries. Medium-term recommendations include: Replacing bilateral swaps with a centralized reserve pool. Developing guidelines for the disbursement from the reserve pool; Continuing efforts at financial sector cooperation by fostering greater regional harmonization of prudent standards and banking practices; Establishing an Asian Monetary Cooperation Fund with responsibilities in regional policy dialogue, reserve pool management, and monitoring regional financial sector developments. Long-term recommendations include: Implementing regional exchange rate arrangements to promote stability of intraregional exchange rates; Completing the process of standardization and harmonization of banking practices and prudential norms across countries.

From http://www.adb.org/ 11/02/2003

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Deeper Regional Financial Cooperation in Asia is a Work in Progress

BOAO, HAINAN PROVINCE, PRC - Asian countries are working to reach a broader consensus about next steps to enhance resilience and reduce the risk of another Asian crisis, ADB Vice President Joseph Eichenberger told the Boao Forum for Asia today. However, key challenges remain. Since the 1997 Asian Financial Crisis, some real progress has been made in monetary and financial cooperation. "A key challenge going forward, perhaps the key challenge, is for the countries of the region to reach a deeper consensus around their objectives and aspirations for moving financial sector cooperation onto the next plane," he said. Despite the broad differences in views and next steps, Mr. Eichenberger said there is wide agreement on the core prerequisites for deepening integration and building a credible mechanism for crisis avoidance and response. High-quality and timely information is essential on macroeconomic developments and capital flows of all kinds. There must be a sound mechanism for effective surveillance, including early warning diagnostic capacity, and for conducting high-level consultations, both of which are vital for meaningful peer review. There must be a standing capacity to mobilize resources rapidly, on the basis of agreed criteria and objectives, and on a sufficient scale to achieve results. In outlining some of challenges facing the region, Eichenberger stressed the challenge of deepening and strengthening domestic financial sectors across Asia, especially the need to further reduce non-performing loans and move assets off public sheets. He added that another challenge is to achieve greater consensus about the desired relationship between regional arrangements and those that already exist at the global level.

From http://www.adb.org/ 11/02/2003

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Experts Outline Roadmap for Asian Monetary and Financial Cooperation

MANILA: Southeast Asian nations and China, Japan and South Korea should set up a common fund from their huge foreign reserves as part of a strategy to cope with regional financial turmoil, a group of experts has recommended. In one of the most comprehensive studies on East Asia's biggest financial turmoil six years ago, the experts also said the region must pool its resources in dealing with financial sector reforms and move towards greater exchange rate policy coordination. The study by 23 economists and policymakers from the United States, Japan, Australia, France, Thailand, South Korea, Switzerland and Luxembourg was commissioned by the Manila-based Asian Development Bank (ADB). "This study is timely because East Asia has reached a critical juncture in its initiatives at regional monetary and financial cooperation," Yoshihiro Iwasaki, head of the ADB's regional economic monitoring unit, told AFP. After the 1997-98 financial crisis which plunged the region into recession, East Asian countries agreed to undertake a series of measures to strengthen regional monetary and financial cooperation to prevent future turmoil. They held regular dialogues on financial policies, built up macro-economic and financial monitoring mechanisms, initiated a regional bond market and set up a network of bilateral currency swap and repurchase agreements. Iwasaki said these measures needed to be strengthened with "strong political will" into a fully-fledged regional monetary and financial cooperation framework. For instance, the study wants the current network of 13 bilateral currency swap arrangements among the East Asian nations totalling 33 billion dollars to be expanded into a centralised, multilaterally administered arrangement to better shield the region during financial turmoil. At present, China, Japan and South Korea have swap agreements with individual Southeast Asian nations in which each party can request the other to provide an agreed amount of funds when faced with crisis. But the bilateral swaps are relatively small compared with the foreign exchange reserves held by member countries and the resources to which these countries have through the International Monetary Fund (IMF), Iwasaki said. For example, Thailand can draw only about seven billion dollars under its current swap arrangements with China, Japan and South Korea. The sum is substantially lower than the 17.2 billion dollars it requested from the IMF when it plunged into financial crisis in 1997. "There is considerable merit in expanding the size of resources available," Iwasaki said. He recommended that East Asian nations initially earmark a certain percentage of their foreign exchange reserves for swaps before eventually considering a centralised pool. Iwasaki said establishing a centralised reserve fund with a mandate for crisis prevention and crisis management could set the pace, as proposed by the study, for a common basket pegging of regional currencies and adoption of a single regional currency in the long run. Although East Asia had greater political, cultural and economic diversity than Europe, it had within a relatively short period of time launched a number of post-financial crisis initiatives with potential for fuller monetary and financial cooperation.

From http://www.channelnewsasia.com/ 11/10/2003

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CHINA: Tang Warns of Plunge in Fiscal Reserves

Financial Secretary Henry Tang has admitted the fiscal reserves could fall as low as the equivalent of six months' spending before he can balance the books. He told legislators this would breach the limit of 12 months' spending set by his predecessor, Antony Leung and that he would consult the community about it. Tang was responding to Liberal Party leader James Tien, who said the SAR's nest-egg could slump as low as HK$110 billion, - about five or six months' expenditure - within two to three years, leaving the situation for the next government to deal with and affecting Hong Kong's credit rating. The Financial Secretary also pledged yesterday not to cap welfare spending despite planned deep budget cuts. Tang was facing questions in the Legislative Council financial services panel about his changed budget plans, which include balancing the books by 2008-2009 - two years beyond the objective set by Leung - and increasing spending cuts to 11 per cent. He made no prediction on how much would be left in the reserves by the balance-out date. Tang said he would consult ``various sectors'' about how many months' of spending should be saved as reserves and would set the figure in his March budget. ``This is a big question,'' he said. ``My predecessor believed 12 months' spending should be left. I will consult everyone here about whether a reserve of 12 months' spending is reasonable, whether it is too much or too little. ``Do we need to borrow to close this gap? If not, then we need to expand our income or to impose deeper cuts in spending,'' he said, adding that the reserves were already around the HK$200 billion level and there could not be that much left by 2008-2009. Tang insisted the government would be able to achieve his 11 per cent spending cut target over the next five years - HK$3.5 billion to HK$4.5 billion a year - and pledged he would not leave the problem to be tackled by the next government. University of Science and Technology economist Lui Ting-ming warned that spending reserves adequate for a six-month period might not be enough to cover cash-flow variations. Usually by January or February, when the bulk of the government's income flowed in, there was already only about six months' spending left in reserves. But faced with a worst-case scenario, it could draw on its foreign currency reserves of about HK$600 billion. (by Cannix Yau)

From http://www.thestandard.com.hk/ 10/30/2003

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China Endeavors to Build Legal Framework for Banking Supervision

The China Banking Regulatory Commission (CBRC) is reviewing over 2,000 existing banking rules and regulations to put in place a legal framework for the financial sector. Liu Mingkang, chairman of the CBRC, told the on-going World Economic Development Declaration Conference that a well-designed legal framework is a precondition for effective banking supervision and a sound credit environment. Liu noted that the draft Law on Banking Supervision and Regulation passed a second reading this October at the Standing Committee of the National People's Congress, China's law-making body. To improve risk control of banking sector, the CBRC is also urging all banks to adopt the five-category loan classification system, improve their analysis of cash flow, and narrow the gap between their accounting rules and the international standards. Liu admitted that there is still a gap between the accounting rules for the Chinese enterprises, including banks, and the international accounting standards. "We hope that through these efforts the prudent accounting standards will be finally adopted by the entire banking sector in China," said Liu. Transparency of banking operation is also listed as a priority for the CBRC, said Liu, noting that Chinese commercial banks, including the state-owned ones, are making considerable progress in information disclosure and subjecting their activities to market discipline.

From CRI 11/07/2003

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Renminbi Services Open Up

Chinese regulators announced on Nov.6 that overseas banks will be allowed to provide renminbi services for Chinese enterprises beginning next month. The China Banking Regulatory Commission said that effective December 1, foreign financial institutions, subject to the CBRC's approval, may provide RMB services for domestic enterprises. Overseas banks can apply to conduct the local currency business for Chinese companies in regions where foreign financial institutions have already been permitted to offer RMB banking services, said the CBRC in its statement. Currently, foreign banks can only provide RMB businesses to foreign-funded enterprises and non-Chinese residents in Shanghai, Shenzhen, Tianjin, Dalian, Guangzhou, Zhuhai, Qingdao, Nanjing and Wuhan. The CBRC also announced on Thursday that it will open four additional mainland cities, namely Jinan, Fuzhou, Chengdu and Chongqing, for overseas banks to conduct RMB businesses. "Foreign financial institutions that are already authorized to operate RMB businesses may apply to provide RMB services for Chinese enterprises," the CBRC said in a statement. Only overseas banks which have reported profits for two consecutive years prior to the application and meet other requirements, such as good corporate governance, sound risk management and internal controls and efficient controls on money laundering, are qualified to apply for the RMB business, according to the CBRC.

From People's Daily 11/07/2003

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Li Rongrong: State Share Sales Will Be Delayed

The central government won't press ahead with plans to sell state shares in domestically listed firms for the time being due to a lack of an appropriate means to handle the issue, a top official announced on Nov.11. Li Rongrong, director of the State-Owned Assets Supervision and Administration Commission (SASAC), said that the sale of state-owned shares, which account for nearly two-thirds of the total equities in more than 1,200 public companies, will not go forward until the government finds a way to sell them that protects the interests of both the state and public investors. "The basic point of selling state-owned shares is to give equal attention and protection to all investors," Li said during a nationally televised press conference in Beijing on Nov.11. "The problem cannot be put on hold forever and will be dealt with one day but we still have no idea of what will happen then," said Zhang Qi, an analyst with Haitong Securities Co Ltd. The government tried to sell state-owned shares in June 2001 to shore up China's underfunded pension fund. However, the sale sent share prices down nearly 30 percent in three months, forcing the government to suspend the sale. Li said apart from selling shares, state firms might transfer ownership through mergers and acquisitions with non-state and foreign firms. Li announced that China Telecom and China Unicom will transfer US$4.3 billion worth of state-owned assets into listed companies by the end of 2003. "I have received some complaints that the state assets were sold at too low a price. So what we want to do is to put these deals on a better regulated footing to ensure transparency, fairness and openness," he said. Li also said the government will not set a minimum price for selling state-owned assets to foreign investors. "We have no such rules," he said, adding any sale price would be set by the market.

From China Daily 11/12/2003

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Central Bank Governor on Financial Reform

China will deepen the reforms in its financial sector, including to quicken the steps of making RMB yuan a convertible currency, to meet the demands of the country's modernization drive, according to Zhou Xiaochuan, governor of the People's Bank of China, the central bank. "China will perfect the mechanism for forming the exchange rate of yuan to enable it to play a more prominent role in adjusting the economic development," Zhou said in a recent interview with Xinhua. Efforts will be made to gradually lift the control over foreign exchange while maintaining a stable and reasonable exchange rate of RMB yuan to bring about an international balance of revenue and expenditure, he said when explaining future financial reform specified in a decision approved at the Third Plenum of the 16th CPC Central Committee in October. The RMB is now only convertible under the current account and its exchange rate floats within a unified, managed regime based onmarket supply and demand of foreign exchange. Between 1994 and 1997, the exchange rate of the RMB against the US dollar appreciated from 8.7:1 to 8.3:1. The interest rates of bank loans would also have more room for fluctuation in line with market supply and demand, he said, adding that the upper limits for loan interest rates would be gradually removed. Zhou also elaborated on the reform of the state-owned commercial banks, saying that the reform has become urgent for China as the banks, which make up the major part of the country's financial industry, face a lot of financial problems. Official statistics indicated that by the end of June this year,the big four state commercial banks had had the combined non-performing loans exceeding 2 trillion yuan (about 240 billion US dollars), with the rate of non-performing loans as high as 22.2 percent. Zhou also urged the improvement of the financial service systemin the rural areas, saying that such reform was important to increase farmers' income and promote rural economy.

From People's Daily 11/18/2003

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HK Banks to Start Trial Operation of Personal RMB Service

Hong Kong Chief Executive Tung Chee Hwa announced on Nov.18 that approved by the State Council, Hong Kong banks will be permitted to start operation of personal renminbi services on a trial basis around the beginning of 2004 and the People's Bank of China will offer clearing arrangements for this purpose. He made the announcement at the a press conference held Tuesday afternoon. The chief executive said personal renminbi services will include deposit, renminbi yuan-HK dollar exchange, cash remittanceand credit card services, which will be gradually unfolded, with the sole aim to facilitate personal consumption in Hong Kong. All licensed banks in Hong Kong will be able to provide such services,he said. Tung said it is an important measure taken by the central government to support Hong Kong's economic recovery and will help consolidate Hong Kong's status as an international financial center. He said the People's Bank of China (China's central bank) and the Hong Kong Monetary Authority are expected to sign a memorandumon cooperation in providing renminbi services in Hong Kong on Wednesday, under which the People's Bank of China is to provide clearing arrangements for the trial operation of personal renminbi services by Hong Kong banks. Tung said with ever closer links between Hong Kong and the Chinese mainland, the renminbi bank services would be significant in volume.

From People's Daily 11/18/2003

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Personal RMB Service OK'd in HK

The central government has given the green light for Hong Kong banks to operate personal renminbi (RMB) banking services, the special administrative region's Chief Executive Tung Chee-hwa revealed yesterday. Tung said it is an important step allowing all banks to operate renminbi services from January. He said the move is significant and will help maintain Hong Kong's status as a leading financial centre. The banks are allowed to run four aspects of RMB services namely deposit-taking, currency exchange, remittances and credit-card services. Financial Secretary Henry Tang said the arrangements for banks to conduct RMB business on a trial basis are important steps forward for the development of the banking sector. He said it will help promote economic integration between Hong Kong and the mainland, and facilitate cross-border tourist spending. Monetary Authority Chief Executive Joseph Yam said the move will open a new channel for the flow of RMB funds between Hong Kong and the mainland through the banking system. In the long term, this development will have great significance for developing Hong Kong as an international financial centre, he said. With two currencies, "there is a lot that needs to be done to facilitate the more efficient financial intermediation'' between Hong Kong and the mainland, said Yam. "There are very important infrastructural issues and this is a very good start, a promising start, that will enhance Hong Kong's status as an international financial centre and enable Hong Kong to play a significant role in financial intermediation involving Hong Kong and the mainland,'' Yam said. The initiative could pave the way for Hong Kong to become an overseas RMB centre, once the mainland authorities remove the control on the capital account of the currency, analysts say. The mainland, with limited opening-up experience to Hong Kong, could better prepare itself for what it calls a gradual opening-up of its capital account, they added.

From http://www.chinadaily.com.cn/ 11/18/2003

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JAPAN: IMF Growing More Optimistic on Japan-IMF's Rajan

WASHINGTON - The International Monetary Fund has grown more hopeful about Japan's economic recovery, which could prove stronger than expected if real estate prices revive after their long slump, the IMF's chief economist said on Wednesday. "I think there is a sense that there is a strengthening recovery in Japan," IMF chief economist Raghuram Rajan told Reuters in an interview. "There is a sense that the authorities want to do something about the problem of deflation," he said. "The other place where some action is taking place is on the banking system." A little over a month ago, the fund had forecast growth in Japan of 2 percent this year and 1.4 percent in 2004, but Rajan indicated those figures could prove too low. "I think we are a little more optimistic about Japan," Rajan said, adding that a revival in property prices could ease strains on the banking system. "There are some signs the property market is reviving and if, with some recovery, property prices also start recovering, then potentially some of these bad loans become less bad and the health of the banking system recovers more rapidly than the economy as a whole because of this virtuous circle," he said. "If that happens, I think we could get a stronger recovery in Japan," Rajan added. Still, he said it was too soon to celebrate an end to Japan's long battle with weak growth and falling prices. "As of now, everything is very tentative, because people have the sense of having seen false dawns before," he said. "I think the signs are good but we are certainly in a wait and watch mode." Economists are optimistic the worst of Japan's deflation -- which has hobbled its economy for over four years -- is behind it, although an end could still be a long way off. Data released last month showed Japanese consumer prices fell from year-ago levels for the 48th consecutive month in September, but was down by only 0.1 percent for the second straight month.

From Reuters News Service 11/12/2003

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Govt Eyes Trimming Mortgage Tax Credit

The government's Tax Commission on Friday has tentatively decided to reduce a tax credit for people holding mortgages next year, government sources said. The commission is considering lowering the maximum amount mortgage holders can claim from the current 5 million yen to 3.5 million yen for mortgage holders taking up residence in new homes by the end of next year. The commission is also considering lowering the tax credit for those earning high incomes. Under the current housing loan-related tax cut, people with mortgages are eligible to receive up to 5 million yen in tax credits over 10 years if they take up residence by the end of this year. An earlier decision would have lowered the tax credit for those who take up residence from next year to 1.5 million yen over six years, and would have ended the tax cut entirely at the end of next year. But Prime Minister Junichiro Koizumi in July made clear his interest in seeing the tax cut continued. The Construction and Transport Ministry has also demanded that the tax cut, with the upper limit of 5 million yen, be extended for another two years. The commission, however, judged that it was unfair to give such large-scale tax cuts only to those who borrowed money to buy homes, especially in light of the government's severe fiscal situation. The commission judged that a trim of the tax cut was in order, and plans to include the plan in its report on taxation reform for next year. The commission will make the decrease in the tax cut smaller than the initial plan called for. Commission Chairman Hiromitsu Ishi said, "We must try to avoid an overly abrupt change in the tax cut."

From http://www.yomiuri.co.jp/ 11/15/2003

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SOUTH KOREA: Financial Sector Set for 2nd Phase Reforms

The financial sector will undergo major changes over the next few years, paving the way for its emergence as a next-generation growth engine, the country's top economic policy planner said on Monday (Nov. 10). Finance-Economy Minister Kim Jin-pyo said that the government will accelerate the drive for the second stage of financial restructuring. "The mergers and acquisitions among local and foreign financiers have become an inevitable and unavoidable tool to keep abreast of globalization and achieve economy of scale," he said during a keynote speech at an international seminar held in Seoul. South Korea is bracing for a rough ride towards financial restructuring, Kim added. The government will double efforts to bring up the regulatory system to global standards, and plug remaining loopholes in the restructuring process, he said. Work is underway to merge the country's 40 finance-related laws into four by function _ entrance, transaction, asset management and liquidation. "If the program is implemented successfully, the framework of the country's financial sector will be overhauled in two or three years," Kim said. In a separate conference, Vice Minister of Finance and Economy Kim Gwang-lim echoed the commitment. "We will complete the much-needed restructuring and re-privatization of the non-banking sector, especially investment trust companies, as soon as possible," he told participants at the Third Forum for Asian Insolvency Reform in Seoul on Monday. The two-day meeting is hosted by the Organization for Economic Cooperation and Development. The official stressed that coping effectively with insolvency is critical for a sound economy and an efficient legal system handling non-performing loans (NPLs) is a key to maintaining solid economic growth. South Korea has poured billions of won into financial restructuring in the wake of the 1997 economic crisis, taking advantage of the Korea Asset Management Corp. As a result, the country's NPL ratio has fallen from 13 percent in 1999 to 2.3 percent.

From http://search.korea.net:9000/ 11/11/2003

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Foreigners Control 26 Percent of Domestic Banking Institutions

Foreign investors' stake in Korean banks has been surging over the past five years. The proportion of foreign investors' holdings in local banks came to 26.2 percent in 2002, compared with the government's 46.4 percent, individual investors' 14.3 percent, financial institutions' 7.9 percent and corporations' 5.3 percent, according to the Bank of Korea. After reaching 7 percent in 1997, the foreign stake in domestic banks steadily increased to 15 percent in 1999, 23.5 percent in 2000 and 23.9 percent in 2001. The central bank pointed out that foreigners' stronger presence is thanks to their successful restructuring following the 1997 financial crisis. Korean banks posted a combined loss of 25 trillion won between 1997 and 2000, but recorded a net profit of more than 3 trillion won in both 2001 and 2002. Their average return on assets (ROA) thus surged to 0.76 percent in 2001 and 0.59 percent in 2002 from 0.32 percent and 0.38 percent in 1995 and 1996, respectively. Korean banks' ROA in 2001 and 2002 was lower than the 1.3 percent of American banks but far higher than Germany's 0.2 percent and Japan's minus 0.6 percent. However, the central bank said domestic banks had weak profit bases because they depended too heavily on interest incomes. The ratio of local banks' non-interest incomes to assets came to 1 percent in 2002, much lower than the United States' 2.6 percent and Britain's 1.4 percent. (by Kim Jae-kyoung)

From http://times.hankooki.com/ 11/17/2003

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Analysts Search for Themes to Power Stock Market

Despite the temporary consolidation currently underway and ongoing weaknesses in global markets, Samsung Securities is reporting that four major factors will push the domestic market toward strong growth in the coming months. Increased momentum from China's growth, a turnaround in domestic consumption, the seasonality of the IT industry and asset rebalancing by retail investors will all play a crucial role in the Korea stock market for the remainder of this year and well into the next, the local brokerage firm said. ``China is currently Asia's growth engine and it has become the main driving force behind the large increase in exports around the region. Korea has benefited from China's growth as exports to China have surpassed those to the U.S.,'' said Oh Hyun-suk, a Samsung analyst said. Despite concerns that Chinese economic growth may slow considerably after 2004, the growth potential of its domestic market is likely to sustain its current expansion rate,'' Oh said. Regarding the prospects for a recover of domestic demand, Samsung Securities believes that private consumption will pick up from the first quarter of next year at the latest on the back of export growth. ``We expect a moderate recovery in consumption thanks to better earnings and employment conditions from exporters, which is likely to support an increase in wages. In addition, the stimulus measures announced in the second quarter are likely to bring about some real results next year,'' it said. Samsung Securities also expected domestic players to return to the stock market due to favorable government policies, a decline in the attractiveness of the property market and general optimism of an economic recovery. ``Existing investors in equities are likely to become net buyers of stocks again by actively participating in the market and this will spark other investors to turn to the stock market instead of safer assets,'' Oh said. ``Once local investors gain a different perception of the equity market and reallocate their assets into equities, financial stocks are expected to outperform the market,'' Oh noted. Finally, Samsung is arguing that the pickup of the IT industry in the U.S. and seasonal demand for IT products at the end of the year will help spur exports to the U.S. ``Even though exports to the U.S. has only risen 1.9 percent in the first three quarters compared to last year, a gradual increase in U.S. exports together with exports to China are likely to lead domestic growth until first half of next year,'' Oh said. Samsung Securities said companies such as POSCO, Hanjin Shipping and LG Chem would benefit from China while recommending Samsung SDI, LG Micron, Shinsegae and KorAm Bank as other stocks who may benefit. (by Cho Hyung-kwon)

From http://search.hankooki.com/ 11/19/2003

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INDONESIA: Govt Launches Third Bond Issue, This Time a Successful One

The government has issued Rp 2.5 trillion worth of 7-year bonds, the third issue this year, drawing the interest of more than twice the amount offered, the Ministry of Finance said on Tuesday.Fuad Rachmany, head of the debt management unit at the ministry, said that investors had bid for about Rp 5.4 trillion through an auction, meaning that the issue was 2.17 times oversubscribed. The successful issue, he added, might have something to do with the bonds carrying a shorter maturity profile and higher yield than those of the previous issues. The bonds issued on Tuesday, which will fully mature in 2010, carried a 12 percent fixed-rate coupon payable twice a year and was priced at a weighted average yield of 12.92 percent, a discount from the previous bond issues. In the first two bond issues this year, conducted in April and September, the bonds were priced at the weighted average yield of 12.1 percent and 11.6 percent, respectively. The government had to come up with such a move following its failure in its second bond issue. Low demand at that time forced the government to scale back to around Rp 4 trillion, from the initial target of Rp 5 trillion. The eight-year tenor bonds with an average yield of 12.99 percent were believed to be less attractive to investors. Tuesday's bond issue formed part of the government's plans to issue a total of Rp 11.7 trillion in bonds this year, to help refinance part of the huge number of bonds maturing this year, thus helping reduce the 2003 state budget deficit. Some Rp 55 trillion worth of bonds are expected to mature this year. After the third issue, the government still has to issue another Rp 3.2 trillion of bonds before Dec. 31. Previously, the size of the bond issue this year was targeted at Rp 7.7 trillion, but the government decided to increase the size of the bond issue to Rp 11.7 trillion. Asked whether the same approach would be applied in the next bond issue, Fuad said the government would leave it all to the market. "From the government's point of view, we certainly want long-term bonds, but the market seems to be more fond of medium-term ones. So, we'll have to take a closer look at those factors as well," he said. Bond issues are a scheme the government has used recently in a bid to reduce the burden resulting from its huge domestic debts -all in the form of bonds, both principal and interest. The state budget has been heavily burdened by the payment of maturing bonds totaling about Rp 450 trillion that were issued in the late 1990s to bail out troubled banks. To ease that burden on the cash-strapped state budget, the government has launched more bonds to refinance the maturing ones.

From http://www.thejakartapost.com/ 11/05/2003

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Govt Seek Ways to Ease Debt Burden

Minister of Finance Boediono said on Wednesday the government would seek ways to help ease the burden of the 2004 state budget in repaying government debts, including foreign ones. "Every effort to reduce the debt burden will be made," he was quoted by Antara as saying, but quickly added that any measures taken, particularly in relation to foreign debts, must be acceptable to international creditors. The minister said that if creditor nations offered schemes to reduce the debt burden, the government would consider the options after studying them carefully. He did not elaborate. The Ministry of Finance and the House of Representatives state budget committee are currently deliberating the government proposed 2004 state budget. The budget talks were supposed to have been completed last week, but legislators decided to extend them considering the fact that the two sides have yet to agree on a number of issues, including the amount allocated for debt repayments as it was deemed too high. The House is set to resume the talks with the Ministry of Finance immediately. Under the proposed budget, some Rp 113.3 trillion, or around 27 percent of the total budget, will be allocated to repay domestic and foreign debts. However, such a huge amount limits the funds allocated for development programs. Some legislators have said that the government should seek ways to reduce the repayment of foreign debts. The country next year will no longer be eligible for the debt rescheduling facility provided by the Paris Club of creditor nations as the current International Monetary Fund economic reform program will end later this year. The country has enjoyed some $3 billion worth of debt rescheduling facilities from the club over the past couple of years. Earlier reports said that the Paris Club had offered its Avian Approach for Non-Highly Indebted Poor Countries (Non-HIPC), a category in which Indonesia is included, to reduce its foreign debt burden. Debt forgiveness is normally given to the HIPC debtor category. "We'll study this possibility too," Boediono said. Several analysts, however, have said that without the active presence of the IMF, the country would not be able to benefit from the Avian approach, a system under which an eligible debtor country can seek bilateral talks with individual creditors to negotiate a debt relief facility. In addition to the foreign debts, the government also has a huge domestic debt, resulting from the cost of bailing out banks in the wake of the late 1990s financial crisis. Among of the measures taken by the government so far are issuing new bonds to refinance maturing debts and selling assets.

From http://www.thejakartapost.com/ 11/06/2003

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MALAYSIA: PM Directs Treasury to Settle Bills With Suppliers

The Treasury has been directed to take immediate measures to settle all outstanding payments to government suppliers and ensure that future payments be made within 30 days of the delivery of goods or services. Prime Minister Datuk Seri Abdullah Ahmad Badawi said the Government must be a good paymaster and not delay payments for goods supplied and services rendered. There have been cases where goods have been delivered and services rendered yet payment is not made. I have directed the Treasury to take steps to start paying these suppliers immediately so that outstanding payments can be settled by the end of the year. They have also asked for a full report on the status of payments so that I will know the outstanding balance. For future payments, it should be made upon delivery except for certain payments that will take some time to process, especially for bill verification, but this should not take longer than 30 days, he told reporters after attending his first briefing at the Finance Ministry yesterday. Abdullah, who assumed the post of Finance Minister after the retirement of Tun Dr Mahathir Mohamad last month, also announced that with immediate effect, companies applying to be registered with the Government for participation in the tender process would know the status of their applications within two weeks. If these companies did not receive any response from the Government within two weeks, he said, it would mean that they had automatically been registered as government suppliers and would be issued with interim certificates allowing them to bid for government jobs for a year.

From http://thestar.com.my/ 11/12/2003

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Merchant Banks Look to Equity Market for Growth

With the corporate bond market slowing down in the second half of the year, merchant bankers are expecting equity-related activities to drive their growth next year. Industry players said although the bond market was negatively correlated to the equity market, the increased activities in the latter, particularly in the area of mergers and acquisitions (M&As) and initial public offerings (IPOs), would likely drive earnings growth for merchant banks in the year ahead. The industry will be very much driven by the equity market next year, given the higher number of M&As and IPOs expected, Aseambankers Bhd deputy chief executive officer T. Jeyaratnam said. As for the corporate debt market, industry players see the current weakness in the bond market continuing. The slowdown, which was caused by the sell-off in US Treasure bonds in the second half, may result in fewer bond issues next year, unless some proposed infrastructure projects called for fresh funding, they said. According to Jeyaratnam, large corporate restructuring exercises similar to the recent Island & Peninsular Bhd and Golden Hope Plantation Bhd merger will likely dominate corporate advisory activities of merchant bankers. As for IPOs, the listing of the Federal Land Development Authority and petrochemicals giant Titan Petrochemical Sdn Bhd is expected to add to the vibrancy of the equity market next year. In addition, the planned re-listing of Celcom Bhd, which was privatised this year, may also increase equity- related activities. Given the encouraging response from foreign investors to new listings such as All Asia Networks plc (Astro) and the proposed flotation of Malaysian Bulk Carrier Bhd, large IPOs are expected to garner a lot of interest. CIMB Bhd group chief executive Datuk Nazir Razak said there were also signs that foreign investors were interested in investing in new companies, which augur well for other new firms planning to tap the equity market to raise capital. think conditions in the equity market will improve next year and that will be attractive for companies seeking to float their shares, he said. But while the corporate debt market has seen a seversal of fortunes in the second half this year vis-a-vis the vibrant first half, all is not lost for the industry, which is expected to see its growth come from new projects or infrastructure deals that may require additional funding. Aseambankers' Jeyaratnam said investor interest in bonds was still strong, but that would depend on the kind of issues to be placed in the market. He said investors would likely place more emphasis on bond issues for projects with clear cash flow potential. The success of certain issues would also depend on the way they are packaged for investors. It is also a question of whether the placees are able to package the bond issues to whet investors' appetite, he said, adding that the outcome of certain bond issues would also be determined by the method in which they were placed in the market, such as book-building or tender placement. While fine-tuning a bond issue would help the issuer to successfully tap the bond market, some external factors would also contribute to the growth of the corporate debt market. For instance, the recent move by Bank Negara to allow insurance companies to increase their investment in bonds to 50% from 40% of their portfolios is expected to free up some RM7bil for the bond market. (by Sidek Kamiso)

From http://thestar.com.my/ 11/13/2003

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PHILIPPINES: Banks Must Improve Lending Practices

Banks in the country need to improve their lending practices, are still expensive to run, and require more capital, according to the Bangko Sentral ng Pilipinas (BSP). "Banks will need to stay focused on basic reforms particularly improvements in internal credit process, the lowering of overhead costs, and further capital build-up. These elements are especially key to full recovery of the banking system," the BSP said in its First Semester 2003 Status Report on the Philippine Financial System. Banking system profitability rose at a slower pace compared to the same period last year, based on data furnished in the report, which monetary authorities submit to Malaca?ang and Congress every six months. The BSP noted that the banking system's after-tax profits went up to P16.4 billion in the January to June period from P14.1 billion last year. However, system profits grew by just 16.5 percent as of end-June compared with the 100.8-percent profit expansion a year ago. Bank owners on average earned only slightly more from each banking stock they held than from holding a short-term government debt paper as banks' return-on-equity inched up to 6.1 percent in the first half from 4.7 percent last year. Holding a 91-day Treasury bill, on the other hand, yielded 6.05 percent interest on average. Weaker growth in bank profitability was due to a slowdown in the non-interest income of banks, or income derived from service fees, trading, and trust operations, among others. Accounting for almost 43 centavos out of every peso income from operations, non-interest earnings grew by just 4.9 percent in the first six months of this year from 35.8 percent last year. Despite its moderate rise, non-interest income more than made up for the continued contraction of banks' interest income, which slid to P99.9 billion as of end-June from P103.3 billion a year ago. As a result, banks' operating income in the first half rose at a slower pace of 4.4 percent to P86 billion. Earnings from operations last year grew by 13.7 percent to P82.4 billion. Operating expenses, on the other hand, rose by a slower 0.9 percent as of end-June, as against the 2.4-percent increase in expenditures the year before. Although the slower rise, bank expenses inched up to P71.1 billion in the first semester compared with the P70.5 billion a year ago. Consequently, banks' cost-to-income ratio went down to 70 percent from 76.4 percent over the same period. This means that it costs a bank 70 centavos-or 6.4 centavos less than a year ago-to generate each peso earning. Although representing a decline, banks' cost-to-income ratio as of end-June "is still a far cry" from the preasian crisis ratio of 58.3 percent, the BSP said. With a cost-to-income ratio of 60.6 percent, foreign banks were more efficient than their local counterparts. Rural and cooperative banks, with a cost-to-income ratio of 87.1 percent, were the least efficient. Banks' low earnings were largely due to the burden of carrying bad loans in their books. Apart from earning no interest, bad or nonperforming loans (NPLs) require banks to set aside a part of their assets as cover. Setting aside these loan loss reserves would mean a bank has to make do with less assets in running the business. "As a whole, the high nonperforming loans and nonperforming assets ratios of the banking system were still a source of concern, in spite of the year-on-year reduction in NPLs and NPAs (nonperforming assets)," the BSP said. As of end-June, 15 percent of the banking system's loans and 13.7 percent of its total assets were non-performing. At 17.8 percent and 15.3 percent, private domestic commercial banks had the highest NPL and NPA ratios. Foreign banks, in contrast, had the lowest bad loan and bad asset ratios of 5.1 percent and 3.2 percent. The banking system's total capital rose by 5 percent to P476 billion in the January to June period from P453.2-billion in the same period in 2002. Domestic universal banks accounted for 93.3 percent of the P22.7 billion rise in banks' capital, according to the BSP. The system's capital, however, represented just 13.5 percent of its total assets of P3.529 trillion as of end-June. This was a slight decline from 13.6-percent share of capital to assets a year ago. Banks' asset expansion largely owed to the 9.4-percent growth in the resources of private domestic universal banks. Assets of government, rural and foreign banks, meanwhile, grew by 8.3 percent, 10 percent and 0.6 percent, respectively. (by Arnold S. Tenorio)

From http://www.manilatimes.net 11/03/2003

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Gov't to Limit Constructive Cash to Trim Budget Deficit

Government authorities will prohibit implementing agencies of foreign-assisted projects from constructive cash availments without prior clearance from the Department of Budget and Management, a move designed to keep track of government's expenditures with an end view of keeping the budget deficit within tolerable limits. This as Budget and Management Secretary Emilia Boncodin warned implementing government agencies of FAPs against non-compliance as such actions constitute malversation of public funds. Boncodin disclosed the government has incurred an un-programmed expenditures of roughly P8 billion early this year because of the delay in the reporting of constructive cash availments by implementing agencies. "I have incurred an P8 billion excess spending due to constructive cash, which has not even been included in our programming this year," Boncodin admitted. The un-programmed availments or delayed in reporting by government agencies was one of the key elements which pushed the budget deficit in 2002 to widen by about 80 percent to P210 billion against an original target of P130 billion. To avoid the availments from exerting upward pressure on the budget deficit for this year, Boncodin disclosed a tri-partite agreement will be signed within the next few days, mandating FAPs implementing government agencies to check with the DBM the availability of constructive cash before any availments can be done. (by Fil C. Sionil)

From http://www.mb.com.ph/ 11/11/2003

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Govt Spent Within Budget in October, Says Budget Chief

THE Philippine government spent within its monthly budget for the first time in four months in October, boosting chances of keeping the deficit within the P202-billion forecast for the year. "We are within the indicative targets," Budget Secretary Emilia Boncodin said in a telephone interview with Bloomberg News, without giving figures. Reports said October spending was within the P70-billion monthly budget. President Arroyo's administration spent more than budgeted from July through September to boost a stagnating economy. That resulted in a deficit of P63.1 billion in the previous quarter, higher than the P47.2-billion forecast for the three-month period. Spending will continue to be within target in the next two months, Boncodin said. The deficit reached P143 billion in the first nine months, 71 percent of the full-year official estimate of P202 billion. Arroyo's plan to seek another term in May 2004 may make it harder for the government to tighten spending in coming months, said Julian Wee, an analyst at IDEAglobal in Singapore, who forecast a deficit of P210 billion by year-end. "Obviously there is pressure to spend to boost her (Arroyo's) election chances," Wee said. Finance Secretary Jose Isidro N. Camacho expects to exceed this year's revenue goal of P584.1 billion because of higher collections by the Bureau of Internal Revenue, which account for about 70 percent of total state income. "October revenue looks good,'' Camacho said in a telephone interview with Bloomberg News. "That gives me confidence that we will exceed our target for this year." Revenue reached P457 billion in the first nine months, 6 percent above the forecast. Tax collection rose to P35.7 billion last month, beating a P33.9-billion target and a lower figure reported last week. The bureau collected a tenth less than its target in September. The government, which has been posting deficits since 1998, plans to eliminate them by 2009 to avoid borrowing more and limit a rise in interest payments. The country will spend a third of its budget paying interest on its 3.1 trillion pesos of debt, leaving less funds for other spending that will boost the economy.

From http://www.manilatimes.net/ 11/14/2003

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Public Expenditure in Philippines Reaches US$1.39 BIN

The Philippines' public expenditure in October 2003 reached P77.324 billion (US$1.39 billion), up 19 per cent compared to P64.647 billion during the same period in 2002 and P4 billion higher than the target. This brought the January to October expenditure level to P676.673 billion, or an increase of 5.6 per cent from last year's figure. Finance Secretary Jose Isidro Camacho blamed the overshooting on disbursements to constructive cash. He said these are unprogrammed spendings that occur whenever the government draws on foreign loans that come in the form of equipment, materials or supplies, where the overseas donor pays the suppliers directly. Higher interest payments were also blamed.

From http://www.asiapulse.com/ 11/20/2003

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SINGAPORE: Government May Take Stake in Business Financial Centre Project

National Development Minister Mah Bow Tan says the government is open to taking a stake in the Business Financial Centre in Singapore's new downtown. And he says the government will decide next month whether to proceed or delay the massive project, which has drawn strong opposition from private developers who fear it could worsen the current overhang in the office sector. This is because the project could add 4.3 million square feet of gross floor area to the already saturated office property market. But speaking at the Real Estate Developers' Association of Singapore annual dinner on Wednesday night, Mr Mah says he understands there has been considerable interest in the project from local and overseas developers. Mr Mah said: "Some developers have asked if they invite the government to take a stake, would the government be interested. The answer is yes, we are prepared to talk about it...it could be Temasek itself or Temasek-linked companies, depending on what the developers are looking for. This is all still in the discussion stage, nothing has been finalised yet. "Separately, CapitaLand told Channel NewsAsia earlier that it is studying an investment in the Business Financial Centre.Liew Mun Leong, Chief Executive, CapitaLand, said: "If the timing is right we will certainly be a major player, a major bidder. It's likely that we will form some partnership. It's a huge undertaking, we're talking about a few million square feet so it's likely we'll form a consortium."Mr Mah also says the Government is studying two key projects to make the new Downtown a more accessible and attractive place. One is the extension of the existing promenade from One Fullerton around Marina Bay to Marina Centre. The other project is a new, low-level bridge for pedestrians and vehicles to connect Marina Centre to the Bayfront. (by Katherine Tay)

From http://www.channelnewsasia.com/ 11/12/2003

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THAILAND: IFCT to Tie Up With BT

Industrial Finance Corporation of Thailand Plc (IFCT) will celebrate its 45th anniversary this year by merging with BankThai Plc (BT) to form a new bank, the IFCT chairman announced at a press conference yesterday. A name for the new bank is yet to be created, but special legislation is being drafted to legalise the merger plan, which will be submitted to Cabinet by early December, said IFCT chairman Sommai Phasee. "The new bank will be a universal institution serving all types of businesses, but we will still focus on customers in the industrial sector," Sommai said. The progress of the merger will largely depend on whether the special law is issued as an executive decree or an act of Parliament, said Sommai. The former would allow the merger to be concluded in January or February, whereas the latter would take at least three to four months more, he said. The Finance Ministry decided to merge the state-owned institutions a few months ago, reasoning that the two have perfect synergy, said Sommai. The IFCT, currently run under special legislation, lends large amounts to the industrial sector without accepting deposits. BT can accept low-funding-cost deposits from the public, though its lending so far has not been very aggressive, said Sommai. Sommai, also the IFCT's executive chairman, said a 10-member "shadow board" comprising five directors and a chairman from both parties had recently been formed as a temporary body to supervise the entire merger process. IFCT and BT have assets of about Bt190 billion and Bt240 billion, respectively. With those assets combined, the new bank will rank as the seventh-largest in Thailand. Though neither of the state-owned institutions would say which of the two was weaker or would be the biggest burden on the new entity, the IFCT said that it had better financial results and efficiency in terms of its assets-per-staff ratio. "The benefit for us is that the merger allows deposits from the public. But the disadvantage is that we have to bear the burden of creating earning assets to offset incomes shared with BT and its staff," Sommai said. IFCT recorded profit of Bt308 million for the first nine months of this year, up 517 per cent on year. Bt80 million of this was derived from its investment portfolio in the current bull market. BT, however, recorded a net profit of Bt244 million, a decline of Bt1.59 billion from profits made during the same period last year. With BankThai's cleaner balance sheet, the new bank will have less non-performing loans (NPL) than the IFCT, which currently has NPLs of 12.5 per cent of its Bt150.60 billion in total lending. IFCT aims to cut NPLs to less than 10 per cent by the end of the year, he said.

From http://www.nationmultimedia.com/ 11/18/2003

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VIETNAM: Ha Noi Mulls Stock Market to Serve Smaller Enterprises

Ha Noi would create a new stock market for small and medium sized enterprises to allow them to raise capital, the State Securities Commission (SSC) said. SSC deputy chairman Vu Bang said those firms were worth up to VND10 billion (US$641,000) each and needed access to more capital for investment. "They can not raise capital via the current securities trading centre because they don't meet the centre's conditions," said Bang at a recent meeting with firms in Ha Noi. Bang said the stock market would be established next year. It would trade shares and government bonds. Ha Noi has 10,000 enterprises registered under the Law on Enterprises. They are expected to need VND122.9 trillion ($7.89 billion) in investment over the 2001-05 period. According to a recent SSC survey, almost all of them agreed to the prospect of a stock market for them. The commission said listed companies must provide business results and audited accounting information if they are to participate. The market is to be developed under the common principles of trading, the SSC said.

From http://vietnamnews.vnagency.com.vn/ 11/19/2003

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BHUTAN: RICB & BOB Reduce Interest on Housing Loan

Following the national pension and provident fund's (NPPF) launch of housing loan scheme at 10 percent, the two largest financial institutions in the country, the royal insurance corporation of Bhutan (RICB) and the bank of Bhutan (BOB), have announced the reduction of their housing loan interest from 13 percent to 10 percent beginning January 2004. Unlike Bhutan national bank and NPPF, there will be no ceiling and loans will be available for all their clients. "There is no discrimination as long as clients can repay the loan," said RICB's Tshering Gyeltshen. Tshering Gyeltshen said that the decision was taken to provide its client the same facilities which their counterparts were giving. "Clients will leave for cheaper interest loans if we do not reduce ours," he said. BOB officials said that it was not desirable for the bank to lose its clients because of a mere three percent difference. With the rates now at par in all the major institutions, except Bhutan development and finance corporation, officials feel that it will spur the economy. "There is a sense of competition among the financial institutes and it will solve the shortage of loans on housing," a BOB credit official said. Housing loan is RICB's largest loan portfolio and forms about 34 percent of the total portfolios. With the reduction, the corporation will lose about Nu 12.5 million in revenue. BOB will also lose about Nu 10.238 million in revenue. Housing loan is the second largest loan portfolio in BOB. The financial institutions are confident about recovery of loans with the interest rates reduced. Tshering Gyeltshen of RICB said that it would reduce the repayment burden of its clients, besides it would help those in the construction business who were facing the escalating cost of raw materials. BOB credit officials added that with lower interest and long term of repayment, 15 to 20 years, loan repayment capacity of clients would be "drastically improved". Meanwhile people welcome the news. "It's simply beautiful," said one. (by Ugyen Penjor)

From http://www.kuenselonline.com/ 11/08/2003

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INDIA: RBI Leaves Bank Rate, CRR Unchanged

Reserve Bank of India has left bank rate and cash reserve ratio unchanged at six per cent and 4.5 per cent respectively. The RBI also left repo rate unchanged at 4.5 per cent. Announcing the mid-term monetary and credit policy on Monday, the RBI has revised the GDP growth from six per cent to 6.57-seven per cent for 2003-04. Stating that inflation outlook remains benign, RBI has projected an inflation rate of four-4.5 per cent with a possible downward bias as compared to the earlier projection of five-5.5 per cent. RBI Governor YV Reddy, who announced his maiden policy, said the apex bank will continue with the present stance of preference for a soft and flexible interest environment. On the borrowing programme, RBI said: "the persistence of large aggregate borrowings of the Central and state governments continues to be a matter of concern." It is essential to pursue, promptly and with resolve, fiscal consolidation from a medium term perspective, Reddy said. "There is a need for efforts in the direction of widening the revenue base, rationalisation of expenditure and enhancing productivity of public investment already made or to be made in both commercial and social sectors," the apex bank said. Referring to the foreign exchange market, RBI said all foreign currency loans above $10 million by banks can be extended only on the basis of a well laid policy of the bank boards on hedging, except in some cases. These cases are where forex loans are extended to finance exports and banks may not insist on hedging but assure themselves that such customers have uncovered receivables to cover the loan amount and secondly where such loans are extended for meeting of forex expenditure, the apex bank said. RBI said in order to facilitate deepening of the Government securities market, it has proposed to permit sale of g-secs, already contracted for purchase, provided such purchase contract was either guaranteed by an approved central counterparty like Clearing Corporation of India Ltd (CCIL) or the apex bank. On the investment fluctuation reserve (IFR), RBI has urged banks to build up IFR so that they are better positioned to meet interest rate risks. RBI has also proposed to adopt the 90 days norm for recognition for impairment for financial institutions with effect from year ending March 31, 2006.

From http://hindustantimes.com/ 11/03/2003

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SRI LANKA: New Loan Scheme of Sub Development Bank will Save Rural Folk from Shylocks

Aranayaka special correspondent The move adopted by the Minister of Rural Economic Affairs Bandula Gunawardena to take the Development Banks under the wings of the Ministry of Rural Economic Affairs has paved the way for a unique loan scheme to be implemented through Development Banks to save the poor rural folk from Shylocks who deal out on the spot quick loans at Rs. 20% per month. The poor rural men and women when in desperate need for money, fall prey to these Shylocks, and ultimately end up paying through their noses, falling from frying pan to the fire. The new loan scheme of the Sabaragamuwa Development Bank will provide loans up to Rs. 25,000 or less, as the need may be, to finance small scale industries or traders involved in day to day buying and selling businesses in locally available agricultural produce, said the Chairman of the Sabaragamwua Development Bank Terence Wickramasingha. He was speaking at a function held by the Aranayaka Branch of the Sabaragamuwa Development Bank to mark the inaugural granting of loans to five selected accountholders at the rate of Rs. 25,000 each. The Chairman said that the Minister was fully aware of the plight of the poor, that fall into the clutches of money lenders, and has validated his sincere vision to redress their plight by creating this unique loan scheme, that charges a very nominal interest of 9.5% per annum. Much of the red tape has been done away with in comparison to loans granted by Commercial Banks. Loan settlement procedure is spaced in easy installments to suit customer convenience, the Chairman said. Manager, Kegalle District Development Bank I.D. Premathilaka, Aranayaka Divisional Secretary U. Jayarathna and many others spoke.

From http://www.dailynews.lk/ 11/01/2003

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Budget Takes Government Deeper into IMF Fold

The Lanka Sama Samaja Party (LSSP) in a press release issued yesterday said the government's budget proposals for 2004 take still further the UNP's commitments to the IMF. It said: "The LSSP recognises that the UNF Government's Budget proposals for 2004 take still further the UNP's commitments to the IMF. The modification of the VAT proposed in this Budget can be taken as a case in point to support our position. The last Budget which imposed for the first time the VAT, said this tax will cover the retail and wholesale trade from July 2003. On this the IMF observed publicly that the VAT has not gone far enough. In July 2003 it was only the VAT on the wholesale trade that was put into effect and that on the retail trade was allowed to lapse because the revenue authorities had said that given the almost chaotic character of this trade the tax on it cannot be collected. By this the government had certainly lost a sizeable portion of estimated tax revenue. But in this budget it has made up for this. With its raising of the earlier 10 percent tax to a 15 percent it has estimated for an additional Rs. 2000 million thus satisfying the IMF on the earlier shortfall. Though this is shown as a benefit given to the consumer its impact is bound to effect drastic cuts in the living standards of the mass of the people. In the area of the state welfare services too, this budget will have the same malefic effect. Linked to the low 10 percent salary hike is the proposal to cut down the number of people in the Public Service. Incentives are proposed to motivate public servants to retire. It fulfills the IMF condition that the public service must be reduced in numbers. A 35 percent reduction was what the IMF had always pushed for. What this will mean in fact is that there will be a cut back in the public services such as the provision of free education and health services: a large portion of the welfare sector in this country will be drastically affected. The UNP Government has further kept to the IMF 'conditionalities' of old just at the time the IMF top men have been forced to concede that in the past this organisation has mishandled Third World countries on their inherent economic problems and imposed on them conditions and stipulations that did them no good. It is a fatality of Third World capitalist regimes to drive their countries and peoples to untold suffering and disaster by adhering to the impositions of the IMF. Taking this background into consideration the LSSP reiterates that it sees no credibility or good faith in parties criticising budgets of this nature without renouncing their fictions mainsprings - the assumption that the private sector is the engine of growth deregulation and the privatisation of state owned enterprises and leaving the local agriculturist and people's sector and the small and medium scale commercial and manufacturing entrepreneurs to the mercy of market forces in an open economy. The LSSP calls upon all progressive forces to ensure that parties aspiring to governmental power on their behalf commit themselves to positions that are a rejection of IMF 'conditionalities' as are now well recognised."

From http://www.dailynews.lk/ 11/21/2003

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Treasury Withholds Rs. 65.1m due to RVSA

The Treasury has not sent to the Ranaviru Seva Authority a sum of Rs. 65.1 million being proceeds from the sale of the Jayaviru Sampatha lottery, for the period January 1 to August 31, 2003. Jayaviru Sampatha lottery was launched in June 2002 mainly as a fund raiser to the housing and welfare projects of the Authority. But the "Daily News" understands that the project work of the RVSA has been delayed now due to lack of funds. According to the Treasury regulations, 18 per cent of the lottery sales should go to the RVSA through the Treasury. The Lotteries Board has sent this amount to the Treasury by way of four cheques from January to July as follows. 1). Rs.24,526,710, 2) Rs. 13,832,028, 3) Rs. 7,461,306, 4) Rs.19,325,322. All what the RVSA has received this year was Rs. 17 million which was an arrears from 2002. The RVSA has inquired about this money on several occasions but there had been no response, Sarath Chandrasiri Vithana, Chief Executive Officer of the RVSA said. The Ranaviru Seva Authority was established in June 2002 by the President under a Parliamentary Act, to attend to the psycho-social and welfare needs of the MIA/KIA families, disabled in action and the combatants. The projects under the RVSA are Housing, Education, Skills, Disabled persons, Transit Camp, and the National Remembrance Park Trust. Nearly 33000, war heroes are benifited by these projects. So far, 856 houses have been completed, 281 are being built 1,539 scholarships have been provided, 3,992 placements for vocational training found under this projects, the RVSA said. Rs. 125 million has been so far received by the RVSA from the Lotteries Board towards these welfare projects from the sale of Jayaviru Sampatha. President Chandrika Bandaranaike Kumaratunga has allocated funds from the President's Fund several times too. (by Ramani Kangaraarachchi )

From http://www.dailynews.lk/ 11/21/2003

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PAKISTAN: SBP Receives $245m from the IMF

KARACHI - The State Bank of Pakistan said Thursday that it has received a fund inflow of $245 million from the International Monetary Fund, which has boosted the country's foreign exchange reserves to a new high. "We have received $245 million from the IMF and our reserves are now at $11.75 billion," said Syed Wasimuddin, a spokesman for the State Bank of Pakistan. The reserves in total consist of $10.28 billion in central bank reserves and $1.47 billion in foreign currency deposits of banks. On Nov. 1, overall reserves stood at $11.47 billion. The inflow constituted the seventh and eighth tranche of a $1.46 billion IMF loan program that began in December 2000, said the central bank. Last month, the IMF approved the fresh loan to Pakistan under its poverty reduction assistance program, acknowledging the country's strong economic performance and steady progress in structural reforms. Pakistan has so far received $985 million under the program, which was launched in 2001 to help Islamabad fight poverty and minimize the adverse effects from the war in neighboring Afghani-stan. (by Dow Jones Newswires)

From http://www.dailytimes.com.pk/ 11/14/2003

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Recovery Plan Launched Against Sales Tax Dodgers

ISLAMABAD - The Central Board of Revenue (CBR) has chalked out a plan to recover huge amounts of sales tax arrears from tax dodgers, sources told Business Recorder here on Sunday. The officials have divided the business community into two segments for the recovery of arrears. One category covers those persons whose cases are pending in appellate tribunals. The other category covers registered units who have not paid the principal amount of sales tax. The CBR has directed all collectorates of sales tax to initiate recovery proceedings against the units whose cases are not under review of judicial fora. Similarly, recovery proceedings would also be carried out in cases where stay orders obtained by the units have expired. In this regard, the CBR has asked the regional officials to use powers under section 48 of the Sales Tax Act, 1990. This empowers the collectors to stop removal of goods from business premises of tax evaders, seal the business premises and attach and sell without attachment movable or immovable property of the registered person from whom tax is due. The sales tax officials would have all the powers which under Code of Civil Procedure 1908, a Civil Court has for the purpose of recovery of amount due under a decree. Under the plan, the CBR has decided to move applications in all cases where stay has been granted. For making the recovery drive effective the registered persons who are operative may be identified in terms of amount of arrears in descending order for early recovery. Pending recovery, input tax adjustment or refund against the invoices issued by the defaulters would be withheld by the collectorates. The CBR has directed collectors to make concerted efforts to recover arrears, sources said. While giving incentives to collectors, the CBR has told regional authorities that Collectorates achieving high percentage of recovery will be dully acknowledged in Sales Tax Gazette. (by Sohail Sarfraz)

From http://www.brecorder.com/ 11/24/2003

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AZERBAIJAN: New Shipment of PRGF Credit Can Be Allocated to Azerbaijan

The Azerbaijan Government and the International Monetary Fund (IMF) have reached understanding on the issues topical and important for the allocation of a new shipment of $18 million of the PRGF credit to Azerbaijan, John Wakeman-Linn, head of the IMF mission, stated at the news conference in Baku. He said the sides had agreed that the state would work out short-term and long-term programs of non-oil sector development at the cost of incomes from oil. The money will be allocated to the Oil Fund and to the State Oil Company. The issue of indirect subsidies has also been coordinated. The government has already included it into the draft summary state budget of 2004. But the IMF mission's leader believes many efforts should be made to decrease the volume of the subsidy. He said the agreement on intensions would be submitted to the Azerbaijan Government on 4 December. Then the mission will recommend allocation of the fourth shipment of the credit to Azerbaijan at the IMF Board meeting on 19 December. If the Board approves the agreement on intensions, the credit can be allocated in a few days. However, the matter can be delayed a little because of the Christmas holidays. John Wakeman-Linn also said John Odling Smee, Vice-Director of the newly established Middle East and Asia Department, would visit Baku next week. It is connected with the dismissal of the Europe II Department and the formation of the Middle East and Asia Department. The delegation will discuss the further cooperation and reforms with the authorities of Azerbaijan. The implementation of the PRGF program of poverty reduction and economic growth facilitation totaling 80.45 million SDR (nearly $100 million) started in July 2001. Azerbaijan received 16.1 million SDR in two shipments from IMF before the middle of 2002 and the third shipment of 12.87 million SDR ($16 million) in May 2003.

From http://www.bakutoday.net/ 11/15/2003

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IRAQ: State Bank Resumes Loan Offering

Baghdad - A state-run bank has began offering loans for projects designed to boost sectors like housing, agriculture and industry, the bank's manager said. Abdulhadi Sadiq, director-general of the al-Rashid Bank, one of two state-controlled commercial banks in the country, said he has already issued instructions on how to extend these loans. In addition to the two state-governed banks there are about a dozen private banks in Iraq. Banks throughout the country were target of looting and sabotage shortly after the fall of Saddam Hussein's government and all had suspended their services temporarily. Most have resumed services but al-Rashid is the first to have decided to resume lending money to the public. The move comes as the Central Bank is still busy replacing banknotes that carried the image of Saddam Hussein with new bills. Iraqis have three months to exchange their old money. The exchange, bank officials say, is moving ahead smoothly and the new Iraqi dinar has begun to circulate across the country. Unlike the old notes, which were printed on substandard paper and easy to forge, the new bills are extremely hard to fake. The old notes, which all carried image-24 of Saddam Hussein, were printed locally. The new dinars are made in Britain at a factory in Basingstoke, Hampshire. Iraq had one of the most backward banking systems in the region. But Sadiq, the al-Rashid Bank chairman, said new technologies were being introduced and hoped to have all of his bank's operations fully automated by the end of 2004.

From http://www.iraqpress.org/ 11/10/2003

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KYRGYZSTAN: IMF Supports the Project of the Circulation of State Securities in the Open Stock Market of KR

November 5, 2003, in Bishkek the negotiation between the member of State commission of KR on securities market A.Kenenbayev with the main expert of department of financial sector, financial institutions and markets of money and share sector management at the International Monetary Fund Kenneth Sullivan were held.

From http://www.akipress.org/ 11/06/2003

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KAZAKHSTAN: Parliament Approves New Tax on Oil Investors

ALMATY (AFP) - Kazakhstan's lower house of parliament has approved new oil export taxes likely to be seen as an extra squeeze on foreign investors considering new projects in the country, media in the ex-Soviet republic said on Saturday. The legislation establishes a flexible export taxation system pegged to oil prices and is intended to "perfect the extraction of excess profits from oil companies," Kairat Kelimbetov, minister of budgeting and economics, was quoted by the Kazakhstan Today news agency as saying. Prime Minister Danial Akhmetov has repeatedly warned of the danger he sees of giving too much away to Western investors who have a large role in the exploitation of the country's on and off-shore Caspian Shelf oil and gas fields. The new taxation would apply to future contracts rather than existing ones, officials have said. The proposals have still to get approval from the upper house, but this is likely by the end of this year. Kazakhstan already derives profits from its foreign-operated oil fields through a complex and far from transparent system of royalties and taxes. The region is home to vast oil and gas reserves but also represents an unprecedented technical challenge for investors due to climatic and geological conditions. There have been cries of protest at the conditions set by Kazakshtan from Western investors such as Shell, which has questioned the Kazakh side's readiness to efficiently and transparently handle the vast capital investments required. For its part Kazakhstan has for months been urging an Eni-led consortium working on the giant offshore Kashagan field to speed up the start of production -- originally set for 2005 but likely to be closer to 2007. The Kazakh side is reportedly set to impose a 150 million-dollar fine on the consortium, which also includes ExxonMobil, Shell and TotalFinaElf, over the delay. Meanwhile allegations that President Nursultan Nazarbayev's leadership was involved in major bribe-taking in the course of signing contracts with Western investors have been leant credence by indictments issued by the United States against a number of US citizens allegedly involved.

From http://story.news.yahoo.com/ 11/22/2003

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TURKEY: Taxes to Increase 28.5 Pct Next Year

ANKARA - Taxes will be hiked by 28.5 percent in 2004, in line with the revaluation rate used to set tax hikes. The revaluation rate for 2004 is expected to be announced as 28.5 percent in line with the yearly October inflation for this year. According to the Tax Procedures Law, the revaluation rate is determined in line with the yearly wholesale inflation as of October. The State Institute of Statistics announced yearly wholesale inflation in October as 28.5 percent on Monday. Revaluation rate is taken as a basis for hiking certain taxes, levies and fines. The revaluation rate had been set as 59 percent in 2003. Accordingly, vehicle taxes, levies, stamp tax, and fines, except for environment tax known as "garbage tax", will be increased 28.5 percent in 2004 unless the government uses its power to change the revaluation rate. The lowest motor vehicle tax for cars between 1-3 years old, will increase to TL 228.5 million from the current TL 117.8 million in 2004. The revaluation rate also carries importance in terms of the cost of the cancellation of additional motor vehicle tax. The top court annulled an additional motor vehicle tax, through which the government targeted to obtain extra revenue in 2004 as well. Following the annulment of this tax, the government was expected to hike the revaluation rate for motor vehicle tax for 2004. Environment tax will be hiked by 14.3 percent next year. Environment tax will be a minimum of TL 439,000 and maximum TL 92.4 million next year. The Finance Ministry will officially announce the revaluation rate as 28.5 percent via a communique to be published in the Official Gazette if the government does not re-determine it. Government aims to raise TL 99.173 trillion in tax revenue in 2004. Basically aiming to maintain economic growth, pull down inflation further and preserve the tight fiscal discipline, the 2004 budget targets five percent growth and 12 percent inflation. The budget envisages a budget deficit of TL 46.399 trillion in 2004, amounting to 11 percent of GNP, while it shows that budget revenues in 2004 are targeted to total TL 114.539 trillion. Budget expenditure in 2004 is expected to total TL 160.938 trillion.

From http://www.turkishdailynews.com/ 11/05/2003

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UZBEKISTAN: Uzbekistan Introduces Advance Payments for Natural Gas

Tashkent - Uzbekistan started charging obligatory advance payments on natural gas starting from November 1 on all categories of consumers, excluding the population, the Uzbekneftegaz national holding company told Interfax. The government resolution aimed at improving management of the country's gas supplies system has set advance payment at 15% of the monthly volume of natural gas consumption. Deliveries will be stopped to wholesale natural gas consumers who fail to make advance payments before gas supplies start to arrive or do not make final settlements in due time. Uzbekneftegaz said that these steps are intended to improve the financial situation for companies involved in supplying natural gas to the domestic market, as well as to reduce debts on natural gas shipments.

From http://www.interfax.com/ 11/03/2003

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AUSTRALIA: Banks Lift Loan Rates Amid Talk of Cooling

Australia's biggest home lender, the Commonwealth Bank, yesterday urged borrowers to take stock of their finances as the four big banks and other lenders announced they were passing on this week's increase in official interest rates. Commonwealth, ANZ, Westpac and non-bank lender Wizard Home Loans all lifted variable rates by 0.25 of a percentage point, in line with the Reserve's Bank's rate increase this week. National Australia Bank lifted its variable rates by 0.26 of a percentage point but its standard variable rate is now in line with the other majors at 6.82 per cent. The discount variable loans that lenders offer also rose in step with the Reserve's increase. All the new rates will apply by next Friday. Commonwealth said the changes would increase payments on a $150,000 loan over 25 years by $24 a month. "The bank encourages customers to regularly review their circumstances and to contact us if they are concerned about their financial circumstances," it said in a statement. ANZ also lifted its fixed-rate loans by 0.25 of a percentage point , taking its five-year fixed rate to 7 per cent. ANZ interest rates on credit cards are under review. Economists believe the reaction of rental property investors - who have accounted for almost half of new home borrowing recently - will be a key factor in the future of the housing market and the magnitude of future interest rate increases. A Macquarie Property Research analyst, Rod Cornish, said the rate rise would cement a downward trend in investor confidence, particularly for off-the-plan speculative buyers. Mr Cornish said this time last year there was a "fair bit of speculative buying and that has come right down. "It's a realisation that the gains that we've had won't be as strong but the thought of looming interest rates also had an impact. It's going to solidify the trend." Peter Lansky, of Raine and Horne Investment Property Sales, Sydney, said investors had already switched to Brisbane and Darwin, where yields were as high as 5 and 7 per cent respectively, compared with 2.5 to 3 per cent in Sydney. "A quarter of a per cent doesn't really disturb any of our investors," Mr Lansky said. "They get a much higher rental return in Brisbane and Darwin than they would in Sydney and therefore in many cases they are not even subsidising property." Nick Separovich, director of Laing & Simmons Chatswood, said investors were already using the rate rise as "an excuse to negotiate" down house prices. Mr Separovich said relatively new investors would be most affected. "I think a lot of people will be a lot more wary about things if it goes to one percentage point," he said. "They think that a quarter of a per cent rise is depressing. But older [more experienced] investors know a quarter of a per cent is nothing." Andrew Hunter, managing director of property consultancy Chesterton International, said mum-and-dad investors would suffer most. "They're in a lot of trouble and I know that rentals are coming back down again because there is a good oversupply," he said. "They've got to either fund the difference or . . . they might have to sell." He said the impact would hit if predictions the Reserve will lift rates by up to 0.75 percentage points over the next year were correct. This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited.

From http://www.smh.com.au/ 11/08/2003

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Easy Ride Must End: RBA Chief

Reserve Bank governor Ian Macfarlane has warned of a looming "intergenerational conflict" and put baby-boomers on notice that they must prepare themselves to give way economically to the succeeding generations. Mr Macfarlane warned last night that the generations now approaching retirement age did not have an automatic right to welfare subsidised by younger workers. "If we are not careful, there is a potential for conflict between generations," he said. "The young may resent the tax burden imposed on them to pay for pension and health expenditure on the old. This will particularly be the case if they see the old as owning most of the community's assets. Housing is the most obvious example, where people of my generation have benefited from 30 years of asset price inflation, while new entrants to the workforce struggle to buy their first home." Mr Macfarlane told the Pursuing Opportunity and Prosperity conference that national priority must be given to curbing the burden of taxation on the working population and to investment in education and science. "The potential for intergenerational conflict exists in all countries, and their future economic success depends in some sense on how they handle it," he said. "At the very least (in Australia), we should question the assumption that age and poverty are positively related and that concessions to alleviate the latter should be directed at the former. "In fact, I think we will have to go further and be pre-emptive in conditioning the public, particularly the grey-headed part, to accept that policy must be forward looking and directed to ensuring a vigorous Australian economy and society 20 years hence. "This will mean giving priority to tomorrow's working-age population, rather than satisfying the demands of yesterday's." Mr Macfarlane gave a blunt warning to governments not to avoid short-term changes that might be painful but that were vital for the nation's long-term interests. Greater labour flexibility and a concerted effort to boost skilled education, particularly in science, were priorities. "There are no short cuts here," he said. "The thing we know is that profitable opportunities will only be found if we have a culture of inquiry and innovation. This, in turn, can only happen if we have a vigorous education an scientific environment." Reinforcing a theme outlined by Treasury secretary Ken Henry at the start of the conference yesterday, Mr Macfarlane said Australians must not delude themselves about the challenges of an ageing population. Dr Henry told the opening session that unless Australia boosted its average annual economic growth by half a percentage point, the costs of the ageing population would continue to mount. He said the solution remained improving participation in the workforce, singling out those on welfare who were given insufficient encouragement to take up work. While he referred to the attempt to move some people off the disability support pension -- a move still stalled in the Senate -- his comments appeared to urge a a broader approach. Dr Henry said two-thirds of those on income support were not required to do anything in return for payments, and one in six were not required to seek work. For some there was good reason, because of incapacity or their role caring for others, such as women with children or elderly relatives, Dr Henry noted. "However, for the majority, the passivity of the system probably delivers far from optimal outcomes." On the long-term economic outlook, Mr Macfarlane said Australia enjoyed two advantages: a geographical position that puts us close to the still-dynamic Asian region; and a still-valuable and productive resources sector. Australia must assume that over the next decade it would still be a major exporter of resources-based products, but the nation should be comforted that that was not the disadvantage it once seemed, he said. "A lot of people would object to this line of reasoning, as they would say that I seem to be accepting that we will remain a quarry and a farm," he said. "That is not true. I thoroughly applaud our success in broadening our export base into elaborately transformed manufactures and service. "But with the best will in the world, most of our exports will still be resource based in a decade's time and probably two decades' time." Mr Macfarlane said Australia still had less flexibility and a more expensive social welfare system than many competitors, particularly in Asia. "While the latter makes for a better and fairer society, it has to be financed by relatively high taxes, a combination of factors which means that our savings rate is low by Asian standards," he said. "This means that we will continue to rely on foreign savings to augment our own, and hence we need to remain an attractive place for foreigners to invest." (by Sid Marris)

From http://www.theaustralian.news.com.au/ 11/14/2003

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Negative Gearing Put on Notice

Negative gearing is under threat, with the Reserve Bank identifying far-reaching changes to the taxation of property investment to fix the housing bubble by dampening investor interest. In a submission to the Productivity Commission inquiry into housing affordability, the bank yesterday identified low interest rates, easy bank lending and the boom in investment property purchases as the source of the bubble. It said the favourable tax treatment of property investment in Australia, compared with other countries, had led to a flood of investment money into property, despite extremely low yields. And the bank has linked investors' thirst for tax breaks to the "relatively low income" at which Australia's top marginal tax rate cuts in. It paints first-home buyers as collateral damage in a property market driven sharply up by tax-driven property investors. Older Australians had benefited from 30 years of asset-price inflation, "while new entrants to the workforce struggle to buy their first home", Reserve Bank governor Ian Macfarlane told The Australian's Pursuing Opportunity and Prosperity Conference in Melbourne on Thursday night. The bold bank submission to the housing affordability inquiry poses a challenge for the Howard Government, which is unlikely to welcome anything that unsettles property investor sentiment in the run-up to next year's federal election. The bank was at pains to say that it was not its place to recommend changes to the tax system. However, its forceful and controversial analysis and critique of negative gearing's role in the property boom demands careful attention from the Productivity Commission and a robust response from government. Opposition Treasury spokesman Mark Latham, under political pressure shortly after taking over the role mid-year, ruled out changes to negative gearing. The bank urged the Productivity Commission to look at tax changes in three areas to improve housing affordability and bring the tax treatment of investment property into line with international standards. First, the bank questioned whether negative gearing should be allowed on property investments where there was little prospect of its being cashflow-positive for many years. Second, it said the ability to claim depreciation on loss-making investments should be reconsidered. Third, it said that the interaction between depreciation allowances and the capital gains tax, which led to lower effective tax rates than intended, should be looked at. "For every new dollar lent for housing purposes, around 40c now goes to investors -- a figure much higher than we have ever experienced before," the bank said in its submission. "The stock of credit outstanding is rising at nearly 20 per cent for owner-occupiers -- an exceptionally rapid pace -- but for investors the growth rate is closer to 30 per cent a year." Extremely low rental yields were the result, -- 3.5 per cent in Australia, compared with 7-10 per cent in comparable countries overseas. This fell to around 2.5 per cent and less in Australia after rates, strata levies and the like were deducted. "Thus, we find support for the view that investors have been contributing disproportionately to the increase in housing demand over recent years, with the effect that affordability, especially by first-home buyers, has been reduced," the bank said. "We accept that owner-occupiers moving to more expensive and better houses is also an important influence on prices, but it is the investor demand that is growing most rapidly." The bank linked the attraction of property investment to the top marginal tax rate, which cut in at the "relatively low income" of $62,501, leading to a "large proportion of taxpayers who are attracted to investments which will lighten their tax burden". The bank said it did not challenge the validity of negative gearing or claim the tax system singled out property for favourable treatment. However, compared with overseas tax regimes, property was more attractively taxed and "resources and finance are being disproportionately channelled into this area". "The most sensible area to look for moderation of demand is among investors," the bank said. "...the work undertaken in preparing this submission has highlighted a number of areas in which the taxation treatment in Australia is more favourable to investors than is the case in other countries."

From http://www.theaustralian.news.com.au/ 11/15/2003

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NEW ZEALAND: Government Bill to Deal With Tax Deduction Schemes

A tax bill which the Government hopes will complete the final stages in its passage through Parliament within the next few weeks includes measures intended to deal with Actonz-style schemes. The "deferred deduction rule" the bill introduces is aimed at aggressive tax arrangements, many of which are widely marketed, that result in investors receiving more in tax deductions than invested in the arrangement. Such arrangements typically involve a high-risk activity with unrealistic sales projections. They include a transfer of property difficult to value with precision, and typically at a price which amplifies the available tax deductions. They are financed in such a way that the investor is not at any real risk of having to pay the purported purchase price. In an issues paper early last year, Inland Revenue said that the tax revenue at risk in schemes it was then aware of was $436 million. The Actonz scheme would account for about half of that. (by Brian Fallow)

From http://www.nzherald.co.nz/ 1/18/2003

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NEW ZEALAND: Banking System Strong But Debt Too High

Stress-testing New Zealand banks' vulnerability to various hypothetical shocks has shown the banking system overall to be resilient, says the head of an International Monetary Fund team which has been assessing the health of the country's financial system. The Reserve Bank had co-ordinated a far-reaching stress testing exercise looking at the banks' ability to cope with scenarios such as a foot-and-mouth outbreak or a sharp rise in the funding costs of debt, Anne-Marie Gulde said. "This was a very thorough exercise and it showed the system overall is very resilient. That is partly because of a good starting base - the banks have been very profitable for a long period and are very well capitalised - and partly because of good conservative practices," she said. "The exposure to housing, for instance, is not excessive in terms of loan-to-value ratios. So there is a wide margin of price changes or interest changes that can be accommodated." But one area of vulnerability the IMF has been looking at is New Zealand's high level of international indebtedness. New Zealand's net liability position to the rest of the world is around $100 billion or 75 per cent of GDP, half of which is in the banking system. About 30 per cent of New Zealand banks' balance sheets is funded by non-residents. "There's a macro-economic issue about the longer-term sustainability of household debt which we are aware of but which goes somewhat beyond the mandate of FSAP [IMF's financial sector assessment programme]," she said. "But the overall vulnerability is not as much as in other countries with a similar debt structure because the debt goes to households, not the Government. It is market-driven." Also the foreign-exchange risk - the risk that exchange rates will have moved against the borrower by the time the loan has to be repaid - is generally peeled off the incoming credit and hedged. That risk had found quite a diversified market, Gulde said: New York hedge funds and retail investors in both Europe and Asia. "There seems to be quite a steady appetite for New Zealand dollar risk. So the idea of funds drying up is not something I would think is imminent." And a lot of the capital inflow is through the parent banks of New Zealand banks, which makes it somewhat less flighty than other sorts of capital. "Overall we would say that New Zealand has a very stable, profitable financial system, no obvious short-term risks, and the areas in the medium term we feel should be addressed are being addressed." Chief among them is preparing for a potential crisis, which, given the Australian ownership of all of New Zealand's major banks, is an issue of transtasman co-operation. The issues are: "How do the regulators communicate with each other? How can the issue of Australian depositor preference be addressed? How can the hollowing out [of back office functions] of New Zealand subsidiaries and branches be addressed? So how likely is it that in the event of a systemic crisis the system can be stabilised in the short term?" The IMF had had "very constructive" discussions with the Reserve Bank - which has been working on these issues for a couple of years - and with the Australian Prudential Regulatory Authority and the Reserve Bank of Australia. "We found a good deal of interest in Australia on optimising the co-operation on these issues," Gulde said. Now was the time to be working on these issues, when things were stable and the markets would not mistake it for a sign of weakness. The FSAP report, which also looks at securities market regulation ("could be better funded") and transparency ("a model of best practice"), is expected to be completed by mid-2004. It will be up to the Government whether it is made public. (by Brian Fallow)

From http://www.nzherald.co.nz/ 11/19/2003

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SOLOMON ISLANDS: Banks on Aust, NZ Aid

The newly-delivered Solomon Islands budget for next year depends on significant cash injections from the Australian and New Zealand governments. Solomon Islands Finance Minister Francis Zama has told the Parliament that with the help of Australian Treasury advisers his 2004 Budget is realistic. He said the 2003 Solomon Islands Budget was destroyed very early in the year. Funds were extorted, finance staff were terrorised and vital areas of service delivery suffered immensely. However, with the arrival of the Regional Assistance Mission just over 100 days ago, law and order had been restored and the Government's finances stabilised. The 2004 recurrent budget provided the spending of $SI480 million (about $A90 million), with exactly the same figure forecast for revenue. About one-quarter of that will be provided in grants by Australia and New Zealand.

From http://www.abc.net.au/ 11/19/2000

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CHINA: China to Sponsor Forum on Private Economy

The Chinese government is to sponsor a special forum to discuss its fast-growing private economy sector on Nov. 10-11 in Wuhan, capital of central China's Hubei province. Government officials, economists and business leaders would attend the forum, said a spokesperson for the organizing committee Tuesday. China's non-public economy accounts for over a third of the nation's gross domestic product. At present, China has 23.77 million individual industrial and commercial businesses with a total workforce of 47.42 million, and 2.43 million private enterprises, employing 34 million people. China also boasts approximately 200,000 enterprises funded by overseas businessmen, employing more than 23 million people. The forum would discuss, among other issues, the establishment of the market system, the opening of market system and private economy's market access, economic structural reforms and the growth of private economy, and the legal status and protection of the private economy in China, said the spokesperson. The Donghu Forum for China's Private Economy is sponsored jointly by the All-China Federation of Industry and Commerce, the China Association for the Promotion of the Glorious Cause and the Wuhan municipal government.

From http://english.peopledaily.com.cn/ 11/04/2003

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Liaoning Hopes Private Firms Move In

Northeast China's Liaoning Province will foster private businesses and foreign investments to enhance the economic structure of its perennial heavy industrial base, Liaoning Governor Bo Xilai said. The move echoes the release of the central government's plan in August to turn the northeastern region into a new powerhouse for the country's economic growth. Bo said development of the non-State sector will be a key link in Liaoning's effort to cultivate an open and market-oriented economy. "The market system does not come at officials' will. When more and more private and foreign-funded businesses grow up, an open market will take shape as a natural result,'' Bo said at a press conference recently in Shenyang, Liaoning Province. Liaoning is planning to introduce some 1,000 foreign-funded projects within the next five years with each absorbing more than US$10 million in foreign capital. The province aims to procure US$30 billion in foreign investment by 2007. Bo has suggested the central government delegate the approval of foreign-funded projects worth less than US$200 million down to the provincial government level. Liaoning is also trying to double the number of non-State companies with a sales income above 100 million yuan (US$12 million) to 570 million yuan (US$68.7 million) in five years. The provincial government expects non-State businesses to take up 47 per cent in local gross domestic product (GDP), and generate 7.7 million jobs by 2007. Local administrations will assume guiding roles in Liaoning's economic restructuring, but will try to avoid interfering in the market, Bo said. The northeastern region, which covers three provinces -- Heilongjiang, Jilin and Liaoning -- is a traditional heavy industrial base habouring the country's most important steel plants, metal mines and oil fineries, as well as war factories. The region gradually lost its past glory after China introduced a market system a decade ago, largely because of heavy taxation duties and an overstaffed State sector. Yet its upper-reach industrial products still play a central role in the lifeline of China's economy. It is generally believed the region will soon rise from its nadir with its unique industrial infrastructure and the central government's latest "northeastern rejuvenation'' scheme, a strategic move paralleling the opening-up of coastal areas and the development of the less affluent western region in past years. Liaoning accounts for nearly half of the GDP and more than 70 per cent of the export and foreign investment in Northeast China. The Chinese Government plans to make Liaoning a world-class supplier of equipment and new materials, such as precision machine tools, large crude carriers and diesel locomotives. Many companies based in Liaoning expect the government plan to expand their business prospects in the future. "Liaoning's heavy industrial infrastructure is peerless in China, and investment in industrial fields will be rewarding,'' said Wang Shoubin, the general manager of Qinghua Group, a private company making refractory magnesia bricks in port city Yingkou. Although the province has long been dominated by the State sector, the local government has offered many favourable policies to create an atmosphere that is friendly to non-State businesses, he said.

From http://www.chinadaily.com.cn/ 11/07/2003

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China to Offer Preferential Policies for Enterprises Entering Public Service

Minister of Civil Affairs Li Xuejü says his ministry will offer preferential policies and support for enterprises from home and abroad who engage in China's public service industry. Speaking at the first multinationals and public service forum in Beijing, Li Xuejü says China will study the experiences of other countries and work hard to expand its own public service. The forum aims at increasing contacts between domestic non-official institutions and multinationals.

From CRIENGLISH.com 11/09/2003

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Investors Encouraged to Buy China's Big State Firms

China is accelerating selling of tens of thousands of state-owned firms, and recently has decided to let foreign and private investors buy majority stakes in large enterprises. A State Council minister confirmed the policy shift - from state ownership to private ownership -- during a news conference on Nov.11 in Beijing, citing a decision by the Chinese Communist Party's powerful Central Committee last month that used stronger language to encourage the transfer of state-owned factories and other enterprises into private hands. Li Rongrong, minister in charge of the agency that manages all China's state assets, said the government planned to remain in strategic industries critical to the Chinese economy and national security, but added that it was no longer necessary for the state to hold a majority stake in a business to maintain a "controlling, influencing and driving force." Li said that only "very, very few enterprises" would remain wholly state-owned. He predicted China was entering a "a peak period of mergers and acquisitions" because local governments, which manage about 90 percent of China's state firms, have been granted more authority to dispose of the businesses. The new push to privatize China's vast and inefficient state industries represents another step by the Chinese Communist Party away from the socialist principles which it set while gaining power in 1949. At present, officials consent to use "ownership transformation" in stead of the one magic word of "privatization." The privatization campaign also ushers in a new phase in China's transition from a planned economy in which workers were guaranteed employment to a market economy in which they are forced to fend for themselves. As many as 20 million inefficient state workers have lost their jobs in the transition. The government hopes private owners can help turn around money-losing companies that have been a drain on the nation's booming economy. In addition, some officials have said proceeds from the sales could be used to repair China's tattered social safety net, including under-funded health care, pension and welfare systems. China began experimenting with privatization in the early 1990s, and the process accelerated after 1997. According to official statistics, the number of state-owned enterprises (SOEs) fell from 262,000 in 1997 to 159,000 last year. But a "powerful momentum was injected into the process" after China completed a leadership handover in November last year, Li Rongrong said. And on October 14, the Communist Party's Central Committee passed a resolution that quietly called on the party to push ahead with privatization and cleared the way for the sale of medium and large state-owned enterprises. For the first time, the party said it would "vigorously develop a mixed economy" with stock ownership playing a dominant role. "Before the policy was 'Grasp the Large, Release the Small,' but now the large enterprises can be sold too," said Zhang Wenkui, a researcher in the State Council Development Research Center, which advises the leadership. He said the resolution also opened the door for the state to sell majority stakes in strategic industries. "This is a major ideological breakthrough. It's essentially a declaration of mass privatization," said Fred Hu, a managing director of the Goldman Sachs investment bank. "In my own discussions with a lot of senior policymakers, my impression is they've made up their mind. The word strategic is becoming less and less meaningful, and the basic approach is, whatever the private sector can do better, the government should get out." Many localities have moved faster than Beijing and sold large state enterprises under their control. In the southern city of Shenzhen, for example, the government is negotiating to sell a big stake in its water company to the French conglomerate Veolia, formerly known as Vivendi, and in September the city sold a majority stake in a major foodstuffs firm to a Hong Kong company. Privatization in China has been marked by local corruption and insider deals in which government officials and factory managers acquire the companies at low cost. Beijing has ordered all provinces to establish new agencies to monitor state assets and regulate the process, but some have rushed to sell enterprises before the regulations can be put in place. Still, Zhang said the process is becoming more fair and transparent as bigger enterprises are being sold to private Chinese companies and foreign investors. He said the results in the localities have convinced the leadership to begin selling stakes in the 190 state conglomerates under the control of the central government, which have assets of more than $300 billion. "I think the center has looked at the local experiences and discovered that selling state enterprises doesn't affect the party's political power," Zhang said. Li said state enterprises must rank in the top three in their industry within two years or face restructuring. "Falling short of the goal will deprive them of the right to say that we need to maintain a controlling force," he said. In a sign of the government's enthusiasm, China is scheduled to host an international conference on mergers and acquisitions with a U.N. agency next week inside the Great Hall of the People. Li said the government hoped foreign investors would take stakes in state enterprises and bring technology and better management to the companies.

From People's Daily 11/12/2003

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Legalization of Private Lending Urged

Private lending and fund raising among enterprises and individuals are supplementary to China's financial system and it is time to legalize them, some economists have said. Such financial activities, which are conducted behind regulators' backs, have played a key role in funding the country's millions of small- and medium-sized enterprises (SMEs) that generally have difficulty borrowing from banks or tapping the capital market. "Although SMEs find it very tough to get listed and have difficulty obtaining bank loans, they have been developing very fast," said Li Yang, a member of the central People's Bank of China's (PBOC) Monetary Policy Committee. "There must be financing channels other than the current official categories," he said. The legitimate funding channels are bank loans, corporate bonds and stocks. The value added at industrial SMEs rose by 17.9 per cent on a year-on-year basis to 1.4 trillion yuan (US$168 billion) in the first half of the year, outstripping the growth of gross domestic product by 7.9 percentage points, official statistics indicated. "We need to give it (private funding) legal status," Li said. Private money-lending is commonplace in many parts of China, especially in coastal provinces like Zhejiang where the non-State economy prospers. In a recent Ministry of Agriculture survey that polled 217 families in 18 villages in East China's Anhui Province, as much as 79 per cent of loans were privately obtained with the rest from rural credit co-operatives. "Indeed, private money-lending has never been a small amount (in recent years)," said Yuan Gangming, an economist with the Chinese Academy of Social Sciences. "In some places, they just depend on private funds." Unofficial estimates have put the size of underground private fund-raising in Zhejiang alone at some 800 billion yuan (US$96.6 billion). Xie Ping, director of the PBOC's research bureau, said such lending and fund-raising have developed to such levels where efficient intermediaries and unique punitive measures for loan defaults are in place. Private lenders set interest rates by adding basis points to the official interest rate on one-year loans. And such loans are less prone to default due to the strong credibility constraints within small communities. "It's very convenient and highly efficient," Xie said.

From China Daily 11/12/2003

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Shanghai to Support Private-run Medical Establishments

It is learned from the press conference recently held by the Shanghai Municipal Government that Shanghai will promulgate related policies to promote the development of "Socialized Medial Establishments"- medial institutions run by private sectors, and encourage private capital to participate in the reform of the public medial institutions. Sources say, the "Socialized medial establishments" refer to the medial institutions run by private sectors rather than the medial health institutions invested and run by the governments at various levels in Shanghai. This reform effort will focus on the development of the medial institutions run by private sectors. The policies to be promulgated give priority to supports of social investment in construction of medial institutions, i.e. supporting and encouraging all social sectors to donate funds to construct medical institutions, and supporting and encouraging enterprises, foundations, individuals and foreign investors to participate in construction of medial institutions. Social investors who construct new medial institutions or acquire and merge the existed medial institutions shall file applications based on different principles for different kinds of medial institutions. The medial institutions that meet the requirements on regional layout, the qualifications for medial practice, focus on provision of commonweal basic medial services, do not aim for profit, and implement the prices of medial services set forth by the government shall be deemed as commonweal medial institutions. Those that provide business and non-basic medial services and special medial services, and independently set prices of medial services based on the market demand and their own technical conditions shall be deemed as operational medical institutions. Social investors or foreign investors may join hands with the secondary and third-level commonweal medial institutions run by the government to set up operational medial institutions with the status of independent legal persons and business sites by using of the latters' human resources and technical resources. However, the medial institutions run by the government shall provide the original commonweal basic medial services.

From FDI 11/14/2003

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INDONESIA: Government to Raise Rp 8t in Privatization Proceeds

The government said on Tuesday it could rake in around Rp 8 trillion (US$946.74 million) in privatization proceeds this year, higher than its target of Rp 6.1 trillion."... We can get Rp 8 trillion by the end of this year," Mahmudin Yassin, deputy for privatization and restructuring at the Office of the State Minister for State Enterprises, said. He said the higher privatization revenue was due to the successful initial public offering (IPO) of state-owned Bank Rakyat Indonesia (BRI). The upcoming IPO of state-owned gas utility PT Perusahaan Gas Negara (PGN) in December was also expected to be successfully completed, he said. The government has sold stakes in a number of state-owned enterprises as part of a privatization program to raise cash to help finance this year's state budget deficit. At present, the government has collected a total of Rp 3.6 trillion. Some Rp 2.5 trillion came from the IPO of state-owned Bank Mandiri in August, while the remaining Rp 1.1 trillion was from the sale of shares in publicly-listed cement producer PT Indocement. The IPO of Bank BRI, which started on Monday and would be completed on Wednesday, is expected to raise a record Rp 4.17 trillion in proceeds, of which Rp 2.6 trillion would go into the state coffers, while the remainder would go to the bank. The IPO, which is the country's largest since the 1997 economic crisis, has received strong interest from investors both at home and overseas. The government is now preparing to sell shares in PGN, hoping to raise between Rp 1.5 trillion and Rp 2 trillion. The relatively successful IPO of the state-owned companies was in contrast to last year's privatization program, which generally failed to garner sufficient interest due to various factors such as strong opposition from the public and poor preparation. The government has insisted that privatization of state-owned companies was a crucial program not only to provide cash for the state budget, but also to boost good corporate governance in the companies, which had long been treated as the cash cows of well-connected people. Privatization proceeds will become a more important source of revenue for the government in the future, particularly as the country would no longer be eligible to certain financing facilities from the Paris Club of creditor nations after the International Monetary Fund ends its program here by the end of this year. In 2004, the government hopes to raise Rp 10 trillion from selling state-owned enterprises, as stated in its draft 2004 state budget. Elsewhere, Mahmudin said the government might approve a proposal from the PGN management to raise the size of the IPO to 39 percent of total shares from the initial plan of 30 percent to ensure sufficient proceeds for the company to help finance its gas pipeline construction projects. The House of Representatives has previously only approved the sale of 30 percent shares in PGN. (by Fitri Wulandari)

From http://www.thejakartapost.com/ 11/05/2003

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Indosat Units Merger Plan Approved

The country's second largest telecommunications company, PT Indonesian Satellite Corp. (Indosat), has secured approval from its shareholders for a plan to vertically merge three of its telecoms subsidiaries this year. Indosat president Widya Purnama said that 98 percent of Indosat's shareholders had approved the plan, which would pave the way for the company to start the merger process on November 20. "This approval is an important step forward for us. The next step will be to sign the merger deed at the end of November, after the Investment Coordinating Board approves the plan," said Widya during a press briefing on Tuesday. The three subsidiaries to be merged were two cellular providers, PT Satellite Palapa Indonesia (Satelindo) and PT Indosat Mobile Multi Media (IM3), and telecommunications operator PT Bimagraha Telekomindo. Indosat would integrate them as a division of the company instead of separate subsidiaries, with the integration process itself scheduled to be concluded in 2005, Widya said. He explained that all business operations, assets and liabilities would be transferred to Indosat as the parent company, and that there would be no changes in capital or the composition of the company's shareholders. According to Widya, the merger will allow Indosat to save 15 percent on its operational costs and 20 percent on capital expenditure over the next five years. The merger would also allow Indosat to consolidate the debts of its three units, help the company develop its cellular business and integrate its marketing and sales strategy. Analysts said the merger was part of Indosat's efforts to catch up with its arch rival, PT Telekomunikasi Indonesia (Telkom), in the cellular business. They said Indosat was lagging behind in developing its cellular business because of its huge debt, which prevented the company from allocating adequate investment for its telecommunication facilities. As of September, Indosat's consolidated debt amounted to a total of Rp 8.81 trillion (US$1.03 billion). The merger was also part of Indosat's strategy for facing increased competitive pressure with the entry of Telkom into its international direct dialing market, which is expected by the end of 2003 or early 2004. International long distance is mostly controlled by Indosat, while local and domestic long distance is controlled by Telkom. Elsewhere, Indosat's cellular marketing director Hasnul Suhaimi said that by the end of this year, the company's cellular subscribers would reach around 5.5 million, up from 3.5 million last year, with market share to reach around 31 percent. Indosat was expecting its cellular subscribers to increase by around 2 million next year, along with the company's plan to allocate around $400 million for investment in its cellular business, said Hasnul. He explained that investment in the cellular business would account for 75 percent of the company's total capital expenditure next year. The remaining expenditure would be allocated to the fixed line and multimedia business. Meanwhile, Indosat shares ended down Rp 500, or 4 percent, at Rp 11,950 on profit-taking by investors after the announcement of the merger's approval. Indosat shares had risen as much as 57 percent since the company announced its merger plan in August. (by Rendi A. Witular)

From http://www.thejakartapost.com/ 11/12/2003

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MALAYSIA: Seremban-PD Highway to Be Run by Government

The Government will be taking over the Seremban-Port Dickson Highway because the concessionaire, SPDH Sdn Bhd, is losing money due to poor toll collection. Works Minister Datuk Seri S. Samy Vellu said the Finance Ministry would procure the highway while the management would be handed over to the Malaysian Highway Authority (MHA). "The Government will assume full responsibility for the highway from March next year and the toll collection will be managed by MHA," he told reporters after attending a buka puasa function organised by the Teluk Kemang MIC division at the Bayu Beach Resort here on Tuesday. Negri Sembilan Mentri Besar Tan Sri Mohamed Isa Abdul Samad was the guest of honour at the function. Samy Vellu said the Government was negotiating the quantum to be given to the current concessionaire before taking over the highway. "We are still negotiating the purchase price and this matter is expected to be resolved within the next few months," he said. The RM250mil highway, which started operations in August 1997, cuts travelling time between Seremban and Port Dickson by half. However, the 30km-long highway failed to attract a high volume of motorists as the toll rate of RM2.60 was considered high, particularly for those using the 15km stretch from Seremban to the Lukut interchange. On the toll rate after the takeover exercise, Samy Vellu said the Government would review it based on the volume of vehicles using the highway. "We will have to gauge its usage before working out a formula on the new rates," he said. He added that the Government had just completed a new stretch costing some RM25mil connecting the highway to beach resorts in Teluk Kemang.

From http://thestar.com.my/ 11/13/2003

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THAILAND: Media Firm Fears TRT Involved in Buyout

The Campaign for Popular Media Reform will today issue a statement of concern about the ruling Thai Rak Thai Party's latest apparent attempt to interfere in the media, this time in Nation Multimedia Group. The move follows the acquisition of big stakes in the media firm by relatives of TRT secretarygeneral Suriya Jungrungreangkit in recent months. Together they now form the biggest shareholder, with nearly 20 per cent of the company's shares. "We're afraid the Nation Group will end up like iTV if Thai Rak Thai people own the firm," said campaign member Supinya Klangnarong. Concern was first expressed last week when Suriya's sisterinlaw Somporn bought an additional 5.6percent stake in NMG, raising her shareholding to 10.51 per cent. That figure is all the more worrying when combined with the nearly 10 per cent of the company held by Somporn's children and Suriya's nephew Thaweechat Churangkurn, critics said. By contrast, NMG chairman Thanachai Theerapatvong holds just 8.72 per cent of the company and group editorinchief Suthichai Yoon 8.19 per cent. The quiet accumulation of NMG shares by Suriya's relatives has aroused concern that NMG will become the latest entity to fall to a tactic employed repeatedly by Prime Minister Thaksin Shinawatra to silence his perceived opponents: buy them out or marginalise them. Several years ago television station iTV was renowned for its hard criticism and scrutiny of all political issues, no matter whether they involved the government or the opposition. But when Shin Corp, owned by Thaksin's family, took over the station in 2000, its staff started to complain that they were being blocked from reporting stories damaging to the image of Thaksin's newly founded TRT party. Some editors and reporters left the station, saying they couldn't do their work because of the constant interference. NGM is the publisher of The Nation, Krungthep Turakij and Kom Chad Luek newspapers. It is also a contentprovider for television and radio.

From http://www.nationmultimedia.com/ 11/13/2003

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Govt Seeks to Promote Company Ownership

The Industry Ministry has come up with a five-year plan to stop Thais focusing on simply seeking salaried jobs and encourage them to own their own companies. The ministry drew up integrated long-term plans with the Commerce, Finance and Justice ministries as part of a bureaucratic reform policy. Tossaporn Sirisampan, secretary-general of the Bureaucratic Development Commission, said the ministries had come up with their own five-year pilot schemes to reform bureaucracy and integrated them to increase efficiency and curb government red tape. The ministries will start evaluation methods that effectively indicate the success of each work process. "The principles of reform are similar to the CEO-governor policy, which measures success as the key factor," Tossaporn said. The ministries will submit their plans to the seven deputy prime ministers today at Government House. If they are approved, the ministries will incorporate the suggestions of the deputy premiers and the plans will go for Cabinet approval at the end of the month. The plans will be implemented early next year. Padetpai Meekun-iam, deputy permanent secretary at the Industry Ministry, said the five-year plan was designed to increase business owners from one in 40 to one in 24. "We want to see changes in Thai behaviour and attitudes from wanting to work in government agencies, companies and state enterprises to wanting to own business," he said. The ministry drew up its five-year plan by looking at public demand, world market demand and technological changes. The Finance Ministry's five-year plan was aimed at strengthening the banking sector. State-owned banks still play a key role in economic development, and more investment is to be made in infrastructure projects.

From http://www.nationmultimedia.com/ 11/20/2003

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Privatised State Enterprises: Boi to Allow Firms Full Tax Priveliges

The Board of Investment (BoI) said yesterday that privatised state enterprises would become eligible for tax breaks just like private companies in order to stimulate further privatisation. The announcement followed yesterday's BoI meeting chaired by Deputy Prime Minister Somkid Jatusripitak. Industry Minister Pinij Charusombat said the investment promotion agency had agreed to offer incentives to projects from state enterprise that have gone through privatisation. "The government would like to promote privatisation among state enterprises. Once these enterprises have been privatised and become a public company, they will be subject to normal taxation. "But to create a level playing field, these privatised companies should be entitled to similar tax incentives if they make investments and apply for promotional privileges from the BoI," Pinij said. The BoI would propose this measure so that the Cabinet can revise its resolution of May 26, 1998, which deemed that "any investment projects of state enterprises are not entitled to tax privileges". The BoI also agreed to offer promotional privileges to technology and innovation enterprises in three fields - fashion, automobiles, and information and communications technology. The BoI awarded incentives to five projects worth a combined Bt25 billion. Siam Toyota Industry Co plans to invest Bt1.92 billion to produce aluminium cylinder heads, with a capacity of 180,000 pieces a year. This project, located at the Amata Nakorn Industrial Estate in Chon Buri, will create 96 jobs and buy Bt203 million worth of local materials. It will supply the products to Toyota. Siam Toyota Industry Co will invest another Bt2.48 billion to produce 2,500cc3,000cc diesel engines for small pickup trucks. It will have a capacity of 141,600 units a year. This project will create 396 jobs and buy Bt6.61 billion in raw materials from the local market. HewlettPackard of the United States will invest Bt3.08 billion to produce 15.2 million printers a year in a joint venture with CalComp Electronics Thailand. The plant will be located in Phetchaburi. Gulf Yala Green, a power company, will build a Bt1.50 billion biomass power plant with a capacity of 20.2 megawatts. It will use parawood from rubber trees and other wood products as fuel.

From http://www.nationmultimedia.com/ 11/20/2003

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VIETNAM: Govt Decision Sets Telecoms Buzzing

The Government has announced a floating of telecom rates, allowing operators freedom to fix tariffs, and an unshackled industry has hailed the move as "revolutionary". The Ministry of Post and Telematics (MPT) decision, signed last Monday, has done away with the price bands for all telecom services like mobile, domestic long-distance, international and internet telephony. The ministry was earlier fixing floor and ceiling rates for all services. Telecom firms said immediately they would cut prices. "We will now be able to provide services at more competitive prices," said Trinh Dinh Khuong, vice director of Sai Gon Postel, the Vietnamese partner in the Korean-invested S-Fone mobile network. S-Fone has already waived charges for calls lasting less than 10 seconds to its subscribers. Another S-Fone officer said the company will again look at billing calls in 10-second blocks, a plan for which it failed earlier to get MPT permission. Khuong said Sai Gon Postel will also cut charges for internet telephony and Voice over Internet Protocol (VoIP) services. Truong Dinh Anh, director of FPT Communication, said, "the new decision will enable us to cut our internet telephony tariffs by 50 per cent." But with the internet connection tariffs already quite competitive, he said they will not see further cuts. "Earlier, new-comers had no chance to compete because they were not allowed to decide prices," Anh admitted. A director at a telecom provider, who asked for anonymity, said, "it is a revolutionary move by the MPT but I think it will hurt Viet Nam Post and Telecommunication (VNPT) co-oporation, the dominant player in the market for a long time." A ministry official said the move conformed with the international practice of liberalising the telecom market. "The MPT will ensure the effectiveness of the move," he assured. The Government has massively cut back on telecom charges in recent years to cut the cost of doing business in the country, lure foreign investment and enable lower-income residents to have access to telecom services. Since April this year, tariffs on 12 telecom services have fallen by up to 40 per cent. These cuts have led to an increased number of telephone users with, in the January - September period alone, 1.3 million new subscribers signing on. With nearly 7 million telephone connections, the density is now 8.4 phones/100 residents, exceeding the target set for 2005. There are also 2.5 million mobile phone subscribers. While prior to 1995, VNPT was the sole service-provider in the country, there are now five others in the telecom infrastructure and services business. Also, since April 2003, the MPT has licensed six enterprises to provide network infrastructure. There are 13 companies permitted to provide telecom and internet services.

From http://vietnamnews.vnagency.com.vn/ 11/04/2003

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BANGLADESH: 13 SOEs Await Privatization

Thirteen state-owned enterprises (SOEs) are waiting for being handed over to their respective buyers who have already made full payment. Of those at least six SOEs are likely to be handed over by December this year, Privatisation Commission sources said. The commission, it is learnt will get pace by disposing of these SOEs and end the slow pace since the four-party alliance took power. Only two SOEs were privatised during the last two years. A total of 95 SOEs were referred to the commission for disposal step by step as the government in principle decided not to do business rather render services to the people. Earlier, the PC has also agreed to sell out another four SOEs after finishing all necessary formalities, but the Cabinet Committee on Economic Affairs (CCEA) did not give approval considering the lower price. Besides, the PC at its meeting on November 17 would consider the bidding proposals of other two SOEs including Textile Facilities Centre, Chowmuhani, Noakhali and Sangu Valley Timber Industries, Chittagong. We are ready to hand over six SOEs by December. These include: Baowa Jute Mills Ltd, Narayanganj; Kaliachapra Sugar Mills, Kishorganj; Fish Export Ltd; Cabinet Manufacture Plant ltd; Wood Treating Plant Ltd and Mangrove Tenin Plant Ltd, Khulna,?said a commission official. Payment of the prices like these six SOEs, another seven SOEs have also been paid. These are: Nabarun Jute Mills Ltd, Narayanganj; Kokil Textile Mills Ltd, Brahmanbaria; Services Facilities Centre Ltd, Sirajganj; Bangladesh Oil Mills Ltd, Khulna; Kohinoor Battery Manufactures Ltd and Lira Industries Enterprise Ltd, Tongi and Uzala Match Factory Ltd, Narayanganj. Out of them disposal of Lira Industries Enterprise Ltd, Kohinoor Battery Manufactures Ltd and Uzala Match Factory Ltd have been hindered because of cases pending in the courts, the commission sources said. Sale of two textile mills, one jute mills and one leather mills were finalised by the Privatisation Commission, which failed in getting green signal from the CCEA. These were: Chisti Textile Mills Ltd, Comilla; Bangladesh Textile Mills Ltd, Chittagong; Doulatpur Jute Mills Ltd, Khulna and Dhaka Leather Company Ltd, Savar. (by Sagar Sagir)

From http://nation.ittefaq.com/ 11/10/2003

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Govt to Open Up VOIP for Private Sector

In a big boost for the country"s fledgling ICT and telecom sector, the cabinet decided Monday to open up the Voice over Internet Protocol (VOIP) for the private sector. In its regular meeting chaired by Prime Minister Khaleda Zia, the cabinet approved the BTRC proposal for allowing the VOIP service provided the service providers fulfil some criteria to be set by the Bangladesh Telecommunication Regulatory Commission (BTRC). Some strict criteria would be imposed so that the number of companies operating the VOIP service could be kept to the minimum and the quality of the service healthy, meeting sources said. They further said the cabinet has also decided to regulate the companies providing VOIP services and it would be made mandatory to terminate and generate the VOIP calls through international gateway of the Bangladesh Telegraph and Telephone Board (BTTB). The decision on VOIP legalisation came fourteen months after the PM-led National Information and Communication Technology Taskforce asked the BTRC to send proposal for legalising the thriving telecom service in the country. Though, in the meantime, the BTRC sent proposal on three occasions for legalising the service, the government dilly-dallied owing largely to pressure from an influential quarter, sources said. In association with some corrupt engineers of the BTTB, the quarter ran the VOIP business illegally in the city, causing annual loss worth Tk 2.00 billion to the state-owned telecom operator. VOIP service has been going on in the country since 2000 and some companies with blessings from the influential quarters made millions selling international calling cards and providing covert services to hundreds of PABX booths. "It"s a historic day for the Internet Service Providers (ISP) and we hope the VOIP service will drastically reduce the international call charges across the country," Akhtaruzzman Monju, President of the ISP Association of Bangladesh (ISPAB), told the FE Monday. The ISPAB has been calling for opening up the business as they said VOIP would boost up their growth and reduce the international call charges to as low as possible. "At least ten big ISP operators are ready to take Internet and VOIP services to any part of the country," Ershad Shafi Chowdhury, General Secretary of the ISPAB, told the FE recently. Chowdhury, also the Chief Information Officer of country"s leading ISP, Bangladesh Online Limited (BOL), said the market of VOIP is worth several billion taka and the legalisation of the service would reduce the international call rate to even Tk 3.00 per minute in the near future. According to the sources, the BTRC would now set the modalities for VOIP services and the licensing fees. Welcoming the cabinet approval, BTRC chairman Syed Marghub Morshed told the FE Monday that they would set the modalities soon so that the VOIP could be opened up by the end of this year. Morshed said the cabinet has approved the BTRC proposal in its entirety and they would set up an Internet Exchange to regulate and manage the VOIP traffic. "We are in favour of free licensing and opening up the service to as many providers as possible so that the benefits could be reaped by the general people," Morshed said. "Any ISP and telecom company with a good financial strength and service record of at least one year would be allowed to provide the VOIP services," a BTRC source said.

From http://www.bangladesh-web.com/ 11/11/2003

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Collateral-free Loans for Small Entrepreneurs

The Government is contemplating providing collateral-free loans to the small and medium entrepreneurs in a bid to bolster the rural non-farm sector. This was disclosed by Finance Secretary Dr Zakir Ahmed Khan while addressing as chief guest a launching workshop on micro-finance and technical support (MFTS) project. The GoB and IFAD have undertaken the seven-year-long MFTS project with a total cost of US$ 20.17 million aiming to eradicate poverty through providing training and assistance engaging rural people in livestock and other income-generating activities. Of the total amount, IFAD will provide $16.30 million as funding. Palli Karma Shahayak Foundation, an apex body of micro-finance institutions, organised the workshop yesterday in the city with its managing director Dr Salehuddin Ahmed in the chair. Among others, economist of international fund for agricultural development (IFAD) Edward Mallorie, Deputy Managing Director of PKSF Mosharraf Hossain Khan and project coordinator of MFTS Jebun Nahar spoke at the launching workshop. In his speech, Dr Khan emphasised on rural non-farm sector, saying that it was difficult to achieve higher economic growth ignoring this arena. "Fisheries and livestock have tremendous potential," he said, also laying stress on diversifying the rural activities to ensure pro-poor growth. Livestock has remained a focus on the part of the government, he said. He also stressed the need for empowerment of women. Referring to the MFTS project, Dr Khan said that this is an example of partnership between the government and non-government organisations and hoped that this will continue in future. He, however, urged upon all concerned to ensure sustainability of the project once donor support was withdrawn. He also called upon PKSF to "come up in a big way" to finance the micro-entrepreneurs for the development of small and medium enterprises.

From http://www.bangladesh-web.com/ 11/23/2003

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INDIA: Private Bank Staff Protest Higher FDI

KOCHI - The All Indian Bank Employees Association has threatened to launch an all-India strike if the Government goes ahead with its proposed move to hike the foreign direct investment in private banks to 74 per cent. Mr V.J. Johny, General-Secretary of the All Kerala Bank Employees Federation, affiliated to the AIBEA, said in a statement that the Government's move to hand over peoples savings to multi-national groups is highly objectionable. The total deposits in the banking sector was Rs 14 lakh crore and 70 per cent of this came from the domestic segment comprising agriculturists, pensioners and housewives. Foreign owners will be interested only in profits and not in the development of the country. Moreover, the banks under foreign ownership will close down rural branches in the name of non-viability, he said.

From http://www.thehindubusinessline.com/ 11/24/2003

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AZERBAIJAN: United Universal Bank to Get More Expensive Before Privatization

The United Joint Stock Universal Bank (UUB) will increase its authorized capital by 9 billion AZM to 31 billion AZM before the end of the year. The only shareholder of the bank, i.e. the Ministry of Finance, will pay the additional authorized capital at the expense of the past years' profit. The authorized capital is to rise by 9 billion AZM again and to reach 40 billion AZM next year. It is reported that these plans have been included into the draft state budget for 2004. The bank's credit portfolio will expand to 2 billion AZM or 5% of the authorized capital, i.e. to the limit set up by the National Bank of Azerbaijan. It is believed that the increase of the capitalization is a part of the pre-privatization measures. The President of Azerbaijan ordered on 17 April 2003 to get UUB sold before the end of 2004.

From http://www.bakutoday.net/ 11/08/2003

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IRAQ: Plan to Privatize National Grid

Baghdad - The Electricity Ministry intends to privatize the national grid in three years as power supplies improve across the country. "We are with the national industry but want the private sector to play its role without the state interference. "The privatization of electricity and its plants will not take place quickly but perhaps in three years," he said in an interview. Samarrai's remarks come as some Iraqi cities have begun having electricity almost round the clock. The minister's announcement to open the vital sector to private investors will only take place when the country's devastated national grid is restored and new ones plants installed to generate enough power to meet growing needs, the minister said. Samarrai has pledged to produce enough electricity to meet the country's needs next summer when temperatures brush 50 degrees centigrade in many Iraqi cities. "We hope that we will be able to produce 10,000 megawatts by the end of 2004," he said. Samarrai said the national grid currently generates 5000 megawatts, slightly more than what the country produced during the last two months under the ousted leader Saddam Hussein. "We are prepared to boost production rates and accelerate supply to much higher levels," he said. The US-educated Samarrai has a PhD in electrical engineering. He was chief of the electricity grid in Illinois before assuming his cabinet post in the interim government in September. Samarrai blamed violent unrest and lack of security for the erratic power supplies particularly in the months after the fall of Baghdad to US troops. "The situation with regard to power supply would have been much, much better if we had better security and complete protection of pylons and plants," he said. The ministry is scheduled to receive 1.5 billion dollars in three years in the light of the donations made at the international donor conference last month in Madrid. The United Nations says rehabilitating the decrepit national grid may cost up to 5 billion dollars. But Samarrai said his ministry is in talks with neighboring countries to supply Iraq with electricity. He said plans were in the pipeline to build cables and pylons to upgrade the country's national grid and link it with that of Turkey, Iran, Jordan and even Egypt. The ministry has stopped collecting electricity fees since the downfall of Saddam Hussein. Samarrai said the free-for-all power supply will continue until the end of this year. But he said his ministry will start charging customers at the start of 2004.

From http://www.iraqpress.org/ 11/17/2003

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IRAN: 9 Banks, 4 Insurance Firms Up for Grabs

TEHRAN - Minister of Economy and Finance Tahmasb Mazaheri has said that the shares of four state owned insurance firms as well as nine state banks will be ceded to the public gradually, press reported here on Wednesday. According to the Persian daily Hayat-e Nau, the minister further said that a draft bill seeking privatization of state companies and banks has been submitted to the parliament. "This is an urgent bill because moves to privatize insurance firms and some banks has already begun and we only need to remove the existing ambiguities concerning certain cases," he said, adding that if these ambiguities are not removed as per the schedule, the privatization trend will come to a standstill. This will lead to, for instance, the Bank Refah (Welfare), which has been ceded to the Social Security Organization, returning to the government, he stressed without elaborating. Mazaheri doubted that Bank Melli Iran and the Iran Insurance Firm will be privatized in the near future, saying, however, the Khatami administration is in charge of making the crucial decision. He added that the Third Development Plan (2000-2005) has excluded public institutions such as banks and insurance firms from the list of state organizations, whose shares must be offered on the Tehran Stock Exchange.

From http://www.iran-daily.com/ 11/12/2003

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Private Sector Involved in No Power Station Project

TEHRAN - The private sector has hitherto been deprived of even one single power plant project to generate electricity, a lawmaker said Wednesday. "Our country is developing and we need to boost our electricity generation to m eet growing demands," Ali Yari, deputy head of Majlis Energy Committee, told PIN. He said that Energy Ministry was tasked with power production, adding: "The Energy Ministry has counted on private sector investment to build 12,000 Megawatts of power plants." Putting the current power production at 33,000 Megawatts, Yari said the Energy Ministry ought to bring the figure to 60,000 in five years. The MP reiterated that construction of power plants should come out of the state monopoly. He touched on red tape and intransigence of certain directors for offering the projects to the private sector as the problems for monopolized power plant construction.

From http://www.tehrantimes.com/ 11/20/2003

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TURKEY: Turkey Launches Private Pension System: Sector Expects 200,000 Clients in First Year

ISTANBUL - Enterprising Turks wanting to save for their retirement have never been spoiled for choice of investment vehicles. Traditionally options have been limited to the low paying state social security scheme, life insurance policies, property or the volatile Turkish equity markets. Although the need for alternatives has long been recognized it was only last week - after five years of negotiations between the private insurance sector and the Turkish treasury - that the necessary legal changes were implemented to allow Turks the option of taking out their own private pension plans. "It has certainly been a challenge to get everything to this stage," said William Lamb, managing director of the Turkish operations of leading international insurer Commercial Union, which has been operating in Turkey since 1992. "The law has been drafted especially to bring Turkey in line with Europe - and overall it's a very positive step." Initially six companies have been issued licenses to begin offering pension schemes. These include subsidiaries of three of Turkey's biggest banks, Ak Bank and Garanti Bank, and Yapi Kredi Bank, two of the country's largest insurance companies Anadolu Hayatt and Koc-Allianz and the semi-autonomous state military pension fund Oyak, which also has retail banking and insurance interests. Another five companies, including Commercial Union, are awaiting their licenses from the Treasury. With Turkey boasting a population of 70 million, 50 percent of which is under 30 and a workforce of 24 million, hopes are high that the market will expand rapidly, with some estimates claiming that by 2014 the Turkish pension sector could be worth as much as $15 billion. "By the end of the first year we expect that around 200,000 people will have taken out pension schemes, and that over the next 10 years this will have increased to around 20 million" said Ayse Sezik Turkolmez, head of life services at Koc Allianz. Life policy holders whose insurance company also offers pensions are able to convert their policies into pension schemes without paying a penalty. Indeed, both analysts and pension companies are warning that if Turks are to reach levels of superannuation enjoyed in the West then the government will have to take steps to widen the appeal of private pension schemes. A new draft law governing insurance and pensions is currently being discussed and the newly create pensions industry is already lobbying for tax incentives to be broadened. However, the reality is that with some estimates putting the size of the black economy in Turkey as high 50 percent, the Turkish treasury relies heavily on the income tax it collects from those working in the regulated sector. (by David O'Byrne)

From http://www.dailystar.com.lb/ 11/03/2003

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Tender on Privatization of Cigarette Enterprises of Tekel Cancelled

ANKARA - The tender regarding the sale of cigarette enterprises of state-run Tobacco and Liquor Administration (TEKEL) has been cancelled. Privatization Administration said on Tuesday that the cigarette enterprises of TEKEL was put out to tender on June 7, 2003 and the offers were received on October 24, 2003. ''Tender Commission evaluated the offers on November 5, 2003 and it has been decided to cancel the tender,'' the Administration added. Japon Tobacco International (JTI) had offered 1,15 billion U.S. dollars for the sale of cigarette enterprises of TEKEL.

From http://turkishpress.com/ 11/11/2003

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AUSTRALIA: ALP Torn As Its Voters Choose Private Schools

Sydney is leading the stampede to private high schools, and Labor's heartland is joining the rush. More than 40 per cent of students attend non-government high schools in 16 of the city's 23 federal electorates - and half of these seats are held by the ALP. In a troubling sign for Labor federally, the 84 electorates nationally with more students in private schools than the average are most likely held by the ALP, including a raft of marginal seats. All capital cities except Darwin have far more students in private schools than the national average of 31.6 per cent, but the drift is most evident in Sydney. In wealthy Wentworth in the eastern suburbs, 81.4 per cent of students attend non-government schools, but in the working-class Blaxland electorate, around Bankstown, the ratio is still 40 per cent. The research by the Independent Education Union (IEU), based on the 2001 census, coincides with record intakes at in NSW Catholic schools, whose 236,591 students now account for 21.3 per cent of all enrolments. Labor is yet to release its schools funding policy, but its education spokeswoman, Jenny Macklin, has signalled a redistribution of funding from the high fee-paying schools to cash-strapped non-government schools, where annual fees can be as low as $1500. "Very wealthy schools are getting very significant increases and we don't think they are needy schools. But there are non-government schools that are needy and they should get federal government support." Public schools also warranted more federal funding. Catholic organisations and all teacher unions oppose the Howard Government's funding model. Introduced in 2001, it bases funding for students on the wealth of their home town or suburb. The executive director of the NSW Catholic Education Commission, Brian Croke, said the electoral analysis showed that no party could "rob Peter to pay Paul" in its school funding policies for next year's federal election. "The real issue is how we can focus our combined energy on encouraging governments to grow the educational pie and not let ourselves be distracted into squabbling over different slices of it," Dr Croke said. Dick Shearman, general secretary of the IEU, representing non-government school teachers, said more money was needed for struggling schools in both the public and private sectors. "The Federal Government policy simply emphasises choice over need." A spokesman for the federal Education Minister, Brendan Nelson, said Labor would slash funding to non-government schools "because it is ideologically opposed to such schools". "At the same time it threatens independent and Catholic schools, federal Labor never raises any objections to the failure of the NSW Labor Government to properly fund its own state schools," he said. This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited.

From http://www.smh.com.au/ 11/07/2003

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AUSTRALIA: Airport Sell-off Pulls in $211m

The federal Government's ambitious airport privatisation program ended yesterday with the sale of three Sydney basin airports for $211 million to a consortium including Paul Little's Toll Holdings. The program, which has seen the nation's major airports move from public to private hands since 1997, is a world leader that has netted the Government more than $8.5 billion. Yesterday's sale to a consortium of Australian infrastructure and property investors, BACH, will see increased development of Sydney's second airport at Bankstown. But it will not see Bankstown turned into an overflow facility for Sydney airport, according to the new owners and Transport Minister John Anderson. "As was indicated at the commencement of the sale process, there is no longer a need for Bankstown airport to develop as an overflow facility for Sydney airport, and there will be no requirement for regional services to move there," Mr Anderson said. An airport on Sydney's southern outskirts at Camden will be retained as a general and sports aviation field but the third airport, at Hoxton Park, will revert to freehold title after five years and is likely to be redeveloped as a commercial property site. The winning bid was sponsored by the Commonwealth Bank, property group James Fielding and the rapidly expanding logistics group Toll Holdings. Equity for the airports deal came from the bank, James Fielding and Westscheme Pty Ltd. Shares in Toll, which recently raised $250 million in a share issue, fell 2c to $8.45 on news of the company's latest deal. Toll is in the throes of taking over New Zealand's Tranz Rail and has expressed interest in bidding for the Victorian private rail operator Freight Australia through its joint venture with Patrick Corp. The new owners estimate the development of property and aeronautical operations at Bankstown has the potential to create more than 15,000 direct and 22,000 indirect jobs over the next decade. Requirements under the regulatory scheme governing privatised airports means they will have to prepare a master plan for all three airports within 12 months. The plans are subject to public consultation and can be rejected by the Government. James Fielding infrastructure director Alan O'Sullivan said the owners saw opportunities to boost overnight parcels air freight out of Bankstown and for small-scale regional passenger operations. It was also looking at a mixture of commercial and light industrial development. "There's a lot of land out there that is completely unutilised and which, on any conceivable scenario, is just not necessary for operating an airport," Mr O'Sullivan said. Bankstown Airport Out Tourism In, a community group opposed to the airport, accused the Government of underselling the airports and said Bankstown alone should be valued at $1.5 billion. But peak infrastructure and tourism group TTF Australia described the $211 million sale as "a wonderful result" that would provide a welcome investment injection. (by Steve Creedy)

From http://www.theaustralian.news.com.au/ 11/15/2003

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NEW ZEALAND: Pay-up Time Looms for Government

The Government will soon have to contribute $25 million for the new University of Auckland Business School as private fundraising nears the halfway mark. The site, on the corner of Wynyard St and Grafton Rd, was blessed and the ground broken at a dawn ceremony yesterday. The occasion coincided with the signing of corporate sponsor ASB Bank, bringing the private funds raised to $20 million. Once this reaches $25 million, the Government's matching contribution can be claimed. The university will contribute the balance of the $110 million project. Of this, $80 million will be spent on the facility and $30 million on programmes and staff, including 12 new professorships. Two contracts will be awarded for the construction. One, for excavating the site and building a retaining wall, is close to being announced, and the other, for constructing the buildings, is several months away. The new six-storey building, which will bring the school's departments and students under one roof, should be completed in 2006. "At the moment we're spread across seven buildings up to a kilometre apart," said dean Barry Spicer. The school has more than 200 academic staff and about 5000 equivalent full-time students each year. Plans were announced two years ago to develop a research-led school teaching entrepreneurship, innovation and technology management alongside accounting, finance and economics. (by Ellen Read)

From http://www.nzherald.co.nz/ 11/21/2003

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VANUATU: ADB Seeks Private Sector Help

The Asian Development Bank says it will focus on promoting an increased role for the private sector in Vanuatu. The bank ranks Vanuatu as the third poorest country among its regional Pacific island neighbors with 40 percent of its population are living below the poverty line. The bank says its strategy in Vanuatu is to address constraints on economic development and increase growth, noting there?is a lack of transparency in government decision-making and an uncertain business environment.

From http://www.pacificislands.cc/ 11/13/2003

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