Exchane Rates Flexibility

Last week's article identified two price change drivers on the supply side of goods and services. These are "economic" changes, e.g. increases in the prices of raw materials in a production process, and fiscal, changes in the money supply in the country. Today we in T&T and even in the region are suffering from increases in prices in the local markets of food (imported and local). We need to disaggregate the proportion of these supply side price changes caused by increases in our money supply.

We are all well aware that the price of food on the global market is driven by increased demand for more sophisticated food by China and India, Peak Oil, i.e. the inability of the world's petroleum production system to meet demand, hence the increasing cost of transportation and production costs of food, salination and erosion of soils, the movement of land away from food production to that of alternative fuels, failure of crop production in certain countries due to poor weather and climate change.

This price increase is affecting all of the countries in the world whether they import food or not, and they, as we, are experiencing increasing food prices. However, the corresponding current annual food price increases in say India is ten per cent, Nigeria - 36 per cent, US - 3.5 per cent, Europe - 2.5 per cent, Singapore - 2.9 per cent, China - 18.2 per cent and T&T - 20 per cent.

Surely, then, the price increases of imported and local food in T&T stands out in stark contrast to the other countries with the exception of China and Nigeria. In China we see that its currency is undervalued, there is a large positive balance of trade and the liquidity in the country is very high. Its Central Bank is again poised to increase interest rates so as to reduce credit, liquidity and even exports.

T&T is in a similar boat with good balance of trade due to its petroleum exports, massive government spending and, based on the Real Economic Exchange Rate, an undervalued local currency. Hence, food prices in T&T are not simply driven by economic supply constraints but, like China, also the increase in money supply in the country.


Core inflation in these other countries is also well below what we have in T&T, again demonstrating the more general push on prices by high liquidity. But should we, like Singapore, allow the nominal exchange rate of the T&T dollar to appreciate, which as stated in last week's article could reduce the liquidity in the country and also put more purchasing power in the hands of the consumer particularly with respect to imported food?

If our economy was sustainable - i.e. did not depend almost solely on the exploitation of the depleting petroleum resource then the obvious monetary solution would include an appreciation of the TT dollar. The other variable in the equation is that we have to save foreign exchange earned given the volatility of petroleum prices, the ensuing depletion of reserves and the fundamental need to reconstruct the on-shore economy, i.e. reverse the effects of the Dutch Disease. It is encouraging that our new Minister of Finance has accepted the use of part of the RSF for economic diversification - development of the on-shore sector, a song I have sung for ages in the Senate.

It is impossible, like Norway, to use only the earnings of the RSF at this time. Instead we have to live as though, say, the price of oil was US$30. In order to prevent inflation in domestic prices our fiscal and monetary policies have to be in step. The Central Bank Governor is calling on the Government to reduce spending, as is the IMF.


Government's budget spending has to be restricted to that based on the revenues that would have accrued if the petroleum price were actually US$30 i.e. the liquidity has to be controlled at the source - Government spending.

The present Budget allocation by law is not based on the desire to save but on the "error" in the Government's expected price of petroleum. The Central Bank with its monetary policy must release just enough US dollars into the local market so as to maintain and manage the exchange rate at a value consistent with the US$30 price - and allow it to float when necessary to compensate for higher import prices by compatible monetary and fiscal policies.

The present model, however, sees the Executive rapidly expanding its spending to increase GDP, based on rising petroleum revenues with the TT dollar pegged to the depreciating US dollar. The Central Bank, to the detriment of our need to save, is struggling to prevent a depreciation of the exchange rate by increasing its sale of US dollars into the local economy - from US$700 million to US$2.09 billion in five years. Controlling inflation then becomes virtually impossible.

US permits import of Markhor Conservation Hunting Trophy from Pakistan

PESHAWAR, Dec 16 (APP): The US Fish & Wildlife Service (USFWS) has recognized and rewarded Pakistan’s world-class Markhor Conservation program by issuing the first Markhor Sports Hunting Trophy import permit in 15 years.

The permit was received by Conservation Force which handled it, said a press released issued here on Sunday by Anchan Ali Mirza, Managing Director of Karakurum Treks & Tours who is associated with this project.

The first trophy will be received in US by hunter, Wayne Lau, who took the male flare-horned Markhor from Gaharet Markhor Conservancy in Chitral district of North West Frontier Province (NWFP) in March 2006.

Gaharet conservancy is part of the Mountain Areas Conservation Program (MACP), aims to protect the rich biological heritage of the Karakuram, Hindukush and the Western Himalayan Mountain Ranges through a community based conservation approach.

Dr. Mohammad Mumtaz Malik, Chief Conservator of the NWFP Wildlife Department, Dr. Mumtaz Malik when contact expressed contentment over the development. We are exceptionally pleased that US authorities have recognized the success of our programs in bringing back a highly endangered species from the brink of extinction, remarked Mumtaz Malik.

The development which will strengthen Pakistan’s trophy hunting programme and conservation efforts, he added.

Dr. Richard Garstang, WWF-P’s Conservation Advisor and National Programme Manager of the Pakistan Wetlands Programme explains, Participation by international sports hunters is vital to the success of this innovative conservation initiative. I hope that this leads to a greater level of participation in Pakistan’s officially sanctioned hunting programme’s by members of the international sports hunting community.

The flare-horned markhor trophy is the first markhor of any kind to be imported in to the United States since all markhor were listed on Appendix I of CITIES at COP8 in Kyoto, Japan in 1992, 15 years ago.

It is also the first new US import of any game trophy listed on Appendix I of CITIES since 1996 when the USFWS began permitting import of Botswana elephant hunting trophies 11 years ago.

The real beneficiaries of the USFWS permit are the markhor themselves as well as the local Gaharet communities who will ultimately determine the fate of the markhor.

Credit is due to the Pakistan government and its Wildlife Departments for their support for the conservation program. Credit is also due to the US Fish & Wildlife Service for their wisdom in granting the permit. In effect, they are rewarding all those instrumental in conserving the markhor, and for setting a positive example for others, concludes the press release.

China talks introduce world of import controls

BEIJING : A toy dog, an electric train and a blond-haired doll would bring smiles to most American homes this Christmas. When the giver is the Chinese government, and the recipients are visiting U.S. trade officials, the meaning is more pointed than simple festive cheer.
"It's a lot of fun. The gift is very nice," said U.S. Commerce Secretary Carlos Gutierrez in Beijing Monday, according to state news agency Xinhua, when he accepted a life-size toy dog from the chief of China's product quality watchdog.


Worries about the safety of Chinese imports have defined the booming but often fraught Chinese-U.S. trading relationship in 2007. On Tuesday, during bilateral talks with Gutierrez that she described as "heated," Chinese Vice Premier Wu Yi, leader of a nationwide quality-raising campaign, complained that U.S. media had "hyped the product safety issue, causing serious damage to the image of Chinese products and China's national reputation."

Tensions surfaced in the spring, when thousands of American dogs and cats were poisoned by eating pet food made with tainted ingredients imported from China. A subsequent cascade of quality problems has included toxic toothpaste, unsafe tires, chemical-laden seafood and millions of lead-painted toys. On Thursday, Home Depot (HD) recalled about 64,000 Chinese-made festive figurines because of the lead paint hazard, the U.S. Consumer Product Safety Commission says.

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Product safety "engages at a deeper, more visceral level than other issues," said U.S. Secretary of Health and Human Services Mike Leavitt, who was also in the Chinese capital Monday.

The globalized marketplace, in which the USA imported $2 trillion worth of goods last year, means "you can't inspect your way to product safety. There's just too much of it," Leavitt said. "We are not just scaling up existing processes, we are inventing them."

On Tuesday, Leavitt unveiled what he sees as the new world of import controls. With Chinese counterparts, he signed two "strong and action-oriented" agreements to enhance the safety of food and feed, plus medical devices and drugs, that the USA imports from China.

Leavitt promised the new pacts would "enhance the safety and quality of products that Americans use every day" and "form the framework for agreements that will exist all over the world."

What's new:

•New registration and certification requirements. Chinese exporters of food, feed, medical devices and drugs must register with the Chinese government and achieve certification that they meet U.S. standards.

•Greater information-sharing. Within 24 hours (for drugs and medical devices) or 48 hours (for food and feed) of determining a health risk, each side commits to inform the other and provide necessary tracking information.

•Increased access to production facilities. U.S. officials "will be capacity-building, not just inspecting," Leavitt said, without giving specifics. China has resisted giving U.S. regulators such access in the past.

Feeling confident

Visiting Huiyuan Juice Group in the Beijing suburbs Tuesday, Leavitt promised that the new system, supported by China's growing use of bar codes and tracking systems, "will provide great comfort to American consumers. If there is a problem, they can trace (a bottle of juice) back to the grower who picked it off the tree," he said.

Juice was rarely found in China just 20 years ago. Today, Huiyuan, China's largest juicemaker, is listed on the Hong Kong stock exchange and exports $10 million worth of goods to the USA each year, including the kids-oriented BellyWashers and TummyTickler brands sold at Wal-Mart (WMT) and 7-Eleven stores, export manager Rainbow Wang said.

"American parents can feel confident buying our products, as we have a strict quality system and monitor 100 critical points throughout the production process," Wang said.

Mass campaigns

Poisonous pet food sparked this year's burning debate about cheap, low-quality goods shipped from China.

"There will be no more problems with pet food," promised Li Chunfeng, deputy head of China's import and export food-safety bureau, on Tuesday.

One-party states are generally adept at crackdowns. China has been busier than ever this year with a series of old-style campaigns to assuage both foreign critics and domestic concern. The key initiative came in August, when Vice Premier Wu began a four-month "special battle" to improve the quality of goods and food safety.

The campaign has mobilized hundreds of thousands of inspectors, distributed millions of brochures and delivered success, said Wei Chuanzhong, deputy minister of quality supervision. "This has been the biggest campaign to improve product quality in the history of (China)," Wei said.

Highlights include shutting down 47,000 illegal food factories and confiscating 500 tons of highly poisonous pesticides, according to ministry figures.

"American consumers can trust made-in-China products. The problems with melamine-laced pet food were caused by only a few companies, and we have tackled this through the new food and feed agreement with the USA and also by our own campaign these last few months," Li said.

Despite the government's claims, U.S. retailers should still be cautious, visit their suppliers frequently and help them improve their ability to guarantee the sources of all raw materials, suggested Liu Kaiming, head of The Institute of Contemporary Observation in south China's Shenzhen City.

"There are too many factories in China. Quality is a long-term problem and cannot be solved in just four months," said Liu, who is concerned that many Chinese firms lack the "concept of quality control and the habit of observing the law."

On Wednesday, the Chinese and U.S. governments begin their third Strategic Economic Dialogue, designed to bring the two sides closer together on key issues such as the value of the yuan, China's currency, which Washington believes is deliberately undervalued to favor Chinese exporters.

Treasury Secretary Henry Paulson, who is chairing the talks for the U.S. side, has said that product safety will be a key agenda item during the talks near Beijing.

Sort out the imports now

Trans-Tasman board general manager Tony Holding says talks with the New Zealand Players' Association have not "stalled" but confirmed that the contentious import rule was still "a topic for discussion".
It shouldn't be.
The TT board should increase the number of imports allowed in each team to three, adding the proviso that two must have New Zealand residency, unlike Wellington Pulse's English defender, Sonia Mkoloma.
It's obvious why that franchise wanted her: Central netball hasn't had a pulse for years and needed an ER-PR boost.
Yet a loyal servant like former Wellington Shakers captain Frances Solia is on the outer because she played for Samoa at November's world champs. And standout Northern Force shooter Catherine Latu is in the same outrigger.
Holding and his board maintain that the one import rule will prevent a flood of foreigners (Aussies, Jamaicans and English) taking the place of Kiwi players. Fair enough. But why penalise Pacific Island stars after the decades of service they have given netball here both at the elite level and, more importantly, at the coal face.
Names like Margharet Matenga, Rita Fatialofa and Vilimaina Davu hold special places in the game here. As in rugby and league, Island players are interwoven into the rich cultural fabric of Kiwi sport.
Holding still hopes to have a collective contract in place by Christmas. That's five working days. Santa Claus will also rock up to his place with a shiny Aston Martin.
Respected former Silver Ferns defender and current Samoa coach Linda Vagana calls the current one-import ruling "stupid" and it's hard to argue when we're living in a multi-cultural country where there are scores of international-class netballers and only one team to play for the Silver Ferns.
That may change at the next world champs, when Aotearoa Maori hope to have a team accepted, but a sprinkling of NZ-based netballers turning out for their spiritual Pacific Island homes has been vital for the world champs over the past decade, saving them from a complete meltdown. Wales versus Botswana, anyone?
The delay has angered all five Kiwi franchises, who argue that fringe players fighting for contracts in the new restricted market are being mucked around badly.
The first game is scheduled for April 5, when the Pulse host Sharelle McMahon and the Melbourne Vixens.
The Aussies, who have had a players' agreement for 12 months, have named their five squads and, as they go to the holiday break with training schedules locked in, they must be laughing like kookaburras at our tweety birds.

World grain prospects may improve in 2008-09

Mumbai, Dec 16 Examining the global outlook for food supplies in the current tight global market, the London-based International Grains Council (IGC) during its biannual session in Tokyo early this month, concluded that the global ending stocks would be further drawn down in 2007-08, as consumption will remain unmatched by even the highest ever global output.

By far the biggest increase in consumption would be in biofuels sector, with the amount of grain (mainly corn/maize) used to produce ethanol set to reach100 million tonnes, an increase of 44 per cent from the previous year.

With wheat supplies especially tight due to disappointing 2007 crops in several countries including Australia, prices had hit record highs. Some exporters had taken measures to protect domestic consumers, including new or additional export taxes.

Ocean freight


Recent surges in ocean freight rates had added further to the burden of importers, especially developing countries, although the expected decline in wheat trade in 2007-08 would be largely due to improved crops in some leading importers rather than the high import prices, IGC pointed out.

Growers were expected to respond to the much higher prices and expand the global wheat area by around four per cent for the 2008-09 crop. Based on average yields, output in 2008 could increase to around 645 million tonnes, experts forecast.

This could result in some recovery in world stocks at the end of 2008-09.

A huge rise in maize output in the US, more than offsetting the expected increase in ethanol use, prevented maize prices from rising as sharply as those of wheat.

Maize prices


However, this year’s substantially higher international demand for this grain, especially in the EU, will lift trade to a new record, it is believed.

Although maize supplies appear adequate, there were concerns about outlook for 2008-09 when a significant shift in plantings back to soyabean was likely to occur in the US.

With respect to rice, noting the firmness in international prices, the Council saw prospects for trade in calendar year 2008 dependent on the outcome of harvest between now and mid-2008. But there were indications that world shipments could se an increase even if Indonesia is a less significant buyer, IGC pointed out.

Dollar Crisis: Economic Pearl Harbor?

What do Brazilian supermodel Gisele Bündchen and the People's Republic of China have in common? The answer, as of last week, is that both distrust the dollar.

Patricia Bündchen, the twin sister and manager of the world's top model, announced that Gisele now prefers to be paid in euros rather than dollars. Almost simultaneously, the Chinese central bank predicted that the dollar is likely to lose its status as the world's leading currency.

One could easily overlook a supermodel's currency preferences, but China is a different story. It's the beast breathing down America's neck.

The most important country in the world for the United States isn't Great Britain, Germany, Saudi Arabia, Russia or Iraq. China holds that dubious distinction, because it is also the country the US can least do without. Without its willingness to buy an almost unlimited supply of US treasury bonds, there would be no American spending miracle. Without a spending miracle there would be no economic growth. In other words, without China the US superpower would lose a significant share of its economic clout.

So far Beijing has behaved like the benevolent shopkeeper who willingly extends credit to his customers. The Americans receive shipments of Chinese-made television sets, toys and underwear, but the Chinese do not import a comparable volume of US goods. The gap between buying and selling amounts to about $5 billion every week.

The Chinese are satisfied with buying US treasury bonds, partly to keep their most important customer afloat. The central bank in Beijing already holds currency reserves of $1.4 trillion.

The Chinese have looked on with great patience as their best customer has gradually lost its ability to supply goods.

But the men in power in Beijing cannot be indifferent to the dollar's decline. It devalues their central bank's dollar reserves, the monetary embodiment of some of the fruits of China's export machine.

For the United States, a Chinese decision to abandon the dollar would be tantamount to Pearl Harbor without the war. It would represent a challenge to the world's biggest economy by the world's fastest growing economy. Millions of people would see their standard of living suffer as a result, and American self-confidence, already shaky, would crumble even further. The United States would suffer a serious blow on its very own turf, the economy.

Americans can hardly blame Beijing for their troubles. The Chinese aren't exactly kamikaze politicians, concocting some secret plan to attack the dollar. On the contrary, the preparations are taking place in full view. Translated into Texan, what the Chinese politely told the Americans last week simply means: Unless something happens, all hell will break loose.

For years the US economy has suffered one dramatic setback after another. A historic trend reversal began with the rise of the Asian economies -- first Japan, then China and now India. The United States, a once-proud exporting nation, became the world's biggest importer. In only 15 years, from 1992 to 2007, the US balance of trade deficit has surged from $84 billion to $700 billion.

Within a single generation, the world's biggest lender has become its biggest borrower, a circumstance the United States has made no serious attempts to change. And what has been Washington's standard take on the shift? The dollar is our currency, but it's your problem.

Thus, the tone of the US government's callous and thick-skinned reaction to China's announcement last week came as no surprise. There was a reason the dollar became the world's reserve currency, US Treasury Secretary Hank Paulson said in a slightly offended tone.

But the truth is that the United States would be better off if Paulson and the administration of President George W. Bush would take decisive action instead of sulking. The US's ability to deliver goods should be increased and its industrial base should be reinvigorated. Government and consumer spending, which in reality is doing nothing but eating away at the country's future, should be curbed. Although growth would decline as a result, it would be a more sustainable form of growth.

Last week's remark by a Chinese central bank official should be interpreted as a warning, not a threat. Indeed, China has no choice but to respond, given the dollar's ongoing weakness.

For these reasons, an attack on the US economy is probably the most easily predictable event of the coming years. And if it happens, the attacker will even be able to justify its actions as self-defense.

What is the difference between the US government in 1941 and the administration in Washington today? Perhaps there is none. A Japanese attack on the US Pacific Fleet at Pearl Harbor was unimaginable, even though US intelligence had picked up clues that it could happen. Washington, at the time, was convinced that the Japanese wouldn't dare stage an attack on a target 5,000 miles away, and that they wouldn't succeed if they did.

The crews on America's ships were sleeping as the Japanese bombers approached Pearl Harbor.

Another British import finds running success at Butler

Like so many runners before him, Andy Baker arrived from England without ever having seen the Butler campus or met the coach. Baker was ambitious, though.


"I wanted to prove I'm a better runner than what it looks like I am," said Baker, who is in only his fourth year of serious running.
He made his U.S. cross country debut Sept. 28 at the Notre Dame Invitational. He finished 97th.
What that proved to coach Matt Roe was that something was wrong. Roe was right. Baker was diagnosed with iron deficiency, a condition that improved with supplements and change of diet.
"Now, he's just like a freight train," Roe said.
Baker won the Horizon League race by more than a minute. He finished third in last week's Great Lakes Regional, one of the toughest of nine regionals nationwide. That qualified him for the NCAA Championships, set for Monday at Terre Haute.
Notre Dame's Patrick Smyth was first on Bloomington's 10,000-meter course in 30 minutes, 22.44 seconds. Big Ten champion Matt Withrow, Wisconsin, finished second in 30:38.42. Baker followed about two seconds later.
Baker said he wasn't familiar with the names, and that might have been advantageous.
"They didn't really mean anything to me," he said.
Now it is Baker making a name for himself. Butler has a legacy of top finishers in NCAA cross country -- Victoria Mitchell was fourth in 2005, Mark Tucker fourth in 2002, Fraser Thompson 14th in 2000 and Julius Mwangi third in 1998.
Baker, 22, is a transfer from Loughborough College, where two-time Olympic gold medalist Sebastian Coe and former Butler runner Becky Lyne attended. Butler's pipeline from the United Kingdom was built by former coach Joe Franklin, who left for New Mexico.
Baker conceded there was initial concern but that the transition has been easy. Roe wants to intensify recruiting in the Midwest but said Butler would continue to seek foreign athletes. Baker, in particular, has become valuable as a teammate.
"To have somebody like that who's an international athlete, who's a little bit older, really provides a great dynamic and structure for our program," Roe said.
Butler did not qualify its men's or women's teams for the NCAAs, but it has another British representative in senior Genni Gardner, 23, who was ninth in the women's regional race.
No. 19 Notre Dame and No. 28 Indiana made the men's field as at-large teams. Also advancing were two Hoosiers from Stanford, Nef Araia (Lawrence North) and Katie Harrington (Carmel). Araia, the 2006 NCAA runner-up, was sixth in the West Regional. Harrington, the No. 5 runner for Stanford's top-ranked women, was 14th in the regional.
Sports of all sorts

Gymnastics: Pittsboro gymnast Bridget Sloan, an alternate on the U.S. team that won a gold medal at the World Championships, has been selected to compete in a pre-Olympics test event later this month at Beijing. . . . Samantha Peszek, McCordsville, is narrator for an online episode of "USA Gymnastics: Behind the Team." A video behind-the-scenes look at a visit by Peszek and her U.S. teammates to New York City can be accessed at usa-gymnastics.org or attblueroom.com/teamusa.
Running: IU has constructed a tribute to cross country and track greats at Running Legends Park, a collection of limestone slabs on IU's cross country course. . . . Cindy Harris, 38, Indianapolis, won the women's division of a race to the top of Chicago's Sears Tower for the sixth straight year Sunday. She ran 103 flights of stairs -- 2,109 steps -- in 15 minutes, 1 second. . . . Desiree Davila won a special women's 10,000-meter track race in 33:20.7 Saturday at IUPUI. Erin Nehus of the Indiana Invaders was seventh in 34:14.1.
Trampoline and tumbling: A Fortville 11-year-old, Tristan Van Natta, won a silver medal in women's double-mini trampoline in the age-group world championships at Quebec City, Quebec.

S. Korean firms demand EU's early lowering of import duties

SEOUL, Nov. 15 (Yonhap) -- South Korean companies called on the government Thursday to push for the early lowering of the European Union's (EU) import duties on cars and electronic goods at free trade talks scheduled for next week.

Representatives from such industry umbrella groups as the Korea Automobile Manufacturers Association (KAMA) and the Korea Display Industry Association (KDIA) said it is imperative that local companies be allowed to export goods without paying import duties if a free trade agreement (FTA) is reached.

In four previous FTA talks held between South Korea and the EU, European negotiators said they want to maintain tariffs on cars and some electronic products for up to seven years.

Cars and electronics account for a large part of South Korea's exports to the 27-nation economic bloc, which totaled US$48.45 billion last year. The EU is the second-largest destination for South Korean products after China.

South Korean companies also said that Seoul must get the EU to soften its stance on its country of origin rules for components that go into products.

"Because EU countries can get cheap parts from East European members, they are insisting on higher percentages of so-called locally made parts than even the United States," said one businessman. He said that since South Korea imports many of its components from countries like China, the EU's position places local companies at a disadvantage if a FTA is signed.

The request by KAMA, KDIA, and other interest groups including the Korea Chamber of Commerce and Industry and the Federation of Korean Industries comes as the trading partners get ready for the fifth round of talks in Brussels from Monday to Friday.

Local businesses have held six previous talks beginning in February to coordinate their requests to government negotiators and to exchange views on how best to maximize benefits from the FTA.

The government, meanwhile, said the upcoming talks will determine whether the trade talks will proceed on track or take longer than anticipated. Seoul said it wants to conclude negotiations within the year.

"Policymakers will reflect requests made by businesses at the upcoming talks," said Hong Suk-woo, the deputy minister for trade at the Ministry of Commerce, Industry and Energy.

He said that while Seoul will do its best to help companies, businessmen should do their part to aggressively make inroads into the world's single largest economic block.

World Bank Raises East Asia's Growth Forecast as China Expands

Nov. 15 (Bloomberg) -- East Asia's economies will expand at the fastest pace in more than a decade in 2007 as China's accelerating growth offsets a slowdown in U.S. demand for the region's goods, the World Bank said.

East Asia, which excludes Japan and the Indian subcontinent, will grow 8.4 percent this year, faster than the 7.3 percent rate the World Bank predicted in April. Economic growth will slow to 8.2 percent next year, the Washington-based lender said its semi-annual report today.

``This year's pickup in East Asia has occurred despite an already substantial decline in U.S. import growth, and some slowing in the region's own exports,'' the bank said. ``Capacity utilization is at much higher levels now than it was in the last global downturn and the region's corporations are also stronger.''

Surging exports and business investment have driven China's trade surplus to a record and boosted its foreign-exchange holdings to the highest globally. In turn, China's appetite for raw materials and other goods purchased from its Asian neighbors is helping the region weather a slowdown in demand from the U.S., which is mired in the worst housing slump in 16 years.

The World Bank has raised its forecasts for China twice this year, predicting Asia's second-largest economy will grow 11.3 percent, before easing to 10.8 percent in 2008. It maintained that forecast in today's report. The country's inflation rate, which rose at the fastest pace in more than a decade last month, is expected to ``gradually ease'' later this year, the lender said.

No Serious Risk

China needs to address its rising trade surplus, which has forced the central bank to mop up the inflow of cash by selling bills, raising interest rates and ordering banks to set aside larger reserves, the World Bank said.

``Although there are some macroeconomic and financial trends that could pose a risk to this strong growth forecast, none appears serious enough at present to derail the current momentum or to cause authorities to make major policy changes that would lead to a marked slowing in the near term,'' the bank's report said.

China's government can rebalance growth by implementing policies including allowing more appreciation and flexibility in the yuan, as well as raising borrowing costs, it said.

Still, risks remain a decade after the Asian financial crisis, which led the International Monetary Fund to arrange more than $90 billion of loans to Thailand, Indonesia and South Korea after their currencies collapsed, the World Bank said.

Threats to the region's growth have increased in the past six months amid turmoil in financial markets and record oil prices, the lender said.

The price of crude oil prices has risen 54 percent this year. It reached $98.62 a barrel on the New York Mercantile Exchange on Nov. 7, the highest price since trading began in 1983.

`Substantial Downturn'

``There is a significant probability the subprime crisis, the associated credit squeeze and rising oil prices could force a more substantial downturn in the developed world, in particular in the U.S.,'' the World Bank said. ``If a U.S. recession were to materialize, it would likely be accompanied by a significant but not severe decline in East Asian growth.''

The collapse of the subprime market in the U.S., where borrowers with impaired credit got mortgages before home foreclosures rose to a record, spread to global credit markets and triggered about $45 billion in writedowns among the world's largest banks.

``The outbreak of the U.S. subprime crisis has had little adverse impact on East Asia so far,'' the report said. ``Risks may increase if the global instability and tightening of credit markets intensifies and leads to further declines in prices of various other structured assets held by banks.''

Investment Climate

The World Bank also raised its forecasts for Southeast Asia's middle-income countries including Malaysia and the Philippines, plus the newly-industrialized economies of South Korea, Singapore, Hong Kong and Taiwan.

Investment in Indonesia is expected to ``remain strong,'' while the country's fiscal deficit may widen further this year, the World Bank said. Growth in the Philippines may reach or exceed the government's targets, it added.

In Thailand, where domestic consumption and investment have languished amid political turmoil following a military coup, elections later this year may spur growth in 2008, the report said.

``Clearer policy direction from the new government after the December elections should help improve investor sentiment and raise investment growth next year,'' the lender said. ``Exports of goods and services remain the key driver of growth this year and will remain so next year.''

The following table contains the World Bank's April estimates of growth, as well as revised forecasts for 2007 and projections for 2008.



April's Nov.'s Estimates
Estimates & Forecasts
2007 2008 2007 2008

East Asia 7.3 7.1 8.4 8.2
China 9.6 8.7 11.3 10.8
Southeast Asia 5.5 5.7 5.7 5.8
Indonesia 6.3 6.5 6.3 6.4
Malaysia 5.6 5.8 5.7 5.9
Philippines 5.6 6.0 6.7 6.2
Thailand 4.3 4.5 4.3 4.6
Newly Industrialized 4.6 5.0 5.1 5.1
Hong Kong (SAR) 5.3 5.1 5.8 5.2
Singapore 5.5 5.6 7.4 6.4
South Korea 4.5 5.0 4.8 5.1
Taiwan (China) 4.1 4.6 4.6 4.6
Small Economies 6.0 5.8 6.4 6.2
Vietnam 8.0 8.0 8.3 8.2

Turning a phone call into import business

VANCOUVER -- Helen Zhao found out that sometimes you just have to pick up the phone to make your fortune. That's essentially how she got off employment insurance and became the exclusive Canadian importer of China's second-best-selling beer.

Of course, other factors came into play before Pearl River Zhu Jiang Beer arrived in liquor stores and Chinese restaurants as a long overdue alternative to the familiar Tsingtao -- factors such as vision, research, hard work, luck, bravado and persistence.

Even the Canadian government contributed by financing a program for would-be entrepreneurs administered by S.u.c.c.e.s.s., Vancouver's non-profit immigrant services agency. Ms. Zhao enrolled after the computer company where she worked as a bookkeeper went belly up during the high-tech meltdown of the late 1990s.


But the moment of truth came in 2003 when Ms. Zhao, who doesn't drink, boldly called the export manager at Guangzhou Zhu Jiang Brewery in Guangdong -- otherwise known as Canton province -- and asked if he wanted to sell his beer into Canada.

When he said yes, the next step was to get some samples and try to persuade the B.C. Liquor Distribution Branch to list the product. Unfortunately, in the wake of the terrorist attacks of Sept. 11, it was virtually impossible to get air freight or courier companies to ship small quantities of liquid.

The solution was for Ms. Zhao to go to China and bring back the samples.

"At the time, I didn't have any money," Ms. Zhao said. "I was on EI and out of a job for a while. So I said, 'Yes, I could come, but if you want me to import your beer, you should offer me an airplane ticket.' And they did."

Wasn't that a bit cheeky?

"I know, I know," Ms. Zhao said. "It's amazing, but I did it anyway, and they flew me over and I picked up some samples."

Zhu Jiang Brewery was established in 1985 with guidance from InBev, the Belgian brewing conglomerate owning international beer brands that now include Canada's Labatt and Alexander Keith's. The Guangzhou plant is described as the world's single largest brewing facility, producing 48,000 bottles an hour.

"They make over 20 different kinds of beer," Ms. Zhao said. "Because I don't drink, I don't know which is which, so I showed the liquor board everything and they chose one."

The board selected Zhu Jiang Gold Lager, which Ms. Zhao renamed Pearl River Zhu Jiang Beer for the Canadian market. "At first I thought it would just go into a few Chinese restaurants, but it took off. It's in almost every province except Ontario, and it's mostly Caucasians who drink it because it's a premium import beer and people just love it."

To her surprise, women enjoy Pearl River beer, which she describes as similar to Corona in taste but a little stronger at 5.3% alcohol by volume.

While she is reluctant to disclose financial details of her business, which she operates as Richmond's Omega Trading Group Ltd., she acknowledges that volumes have tripled since the first year when Pearl River was available only in British Columbia and Alberta. The beer is now one of the top 10 imports in Quebec, where it is in more than 400 stores, and approval is pending in Manitoba. Only Ontario's Liquor Control Board is holding out. "We keep on applying, but they've turned me down three times because they say they already have one Chinese beer and that's good enough."


Thanks to the growing strength of the Canadian dollar against the U.S. and Chinese currencies, she says she will be able to discount Pearl River beer to $8.99 for six bottles from its current $10.25, starting on Oct. 28.


"We want to thank the customers for their loyalty," she said. "We made some extra money and we want to pass it on to the customers."

And for would-be entrepreneurs she offers this advice: "If you have a dream and you want to do something, just don't give up. Keep on trying. I had lots of hard times and I cried so many times, but after all this work, you have success."

India may retain top slot in vegetable oil imports

MUMBAI: India is expected to continue as the largest importer of vegetable oil for at least the next 10 years, owing to slow growth of domestic output as compared to the demand, a top industry official said.
The size of the Indian oilseeds sector is estimated at $16.5 billion inclusive of exports and imports. India is the world’s fourth largest vegetable oil economy, the Solvent Extractors’ Association of India’s executive director BV Mehta said at a presentation on India’s Vegetable Oil Market in Kuala Lumpur.

India is a leading importer of vegetable oil in the world. During FY07, the EU was the world’s largest importers of 17 oils at 10 million tonne, followed by China at 8.6 million tonne and India in the third place at 5.4 million tonne. Each year, India consumes around 12-12.5 million tonne of various edible oils.

Currently, India accounts for 7.4% of the world oilseeds output, 6.1% of oilmeal production, 3.9% of oilmeal export, 5.8% of vegetable oil production, 11.2% of vegetable oil import and 9.3% of edible oil consumption.

Although edible oils are widely consumed, the per capita consumption is around 11 kg a year, considerably lower than in most developed countries. Palm oil and soyabean oil account for almost half of the country’s total edible oil consumption, followed by mustard oil, groundnut oil, cottonseed oil, rice bran oil and sunflower seed oil.

Mr Mehta said that the domestic vegetable oil production of 7-8 million tonne is not sufficient to meet the domestic demand. The trade policy reforms in the mid-1990s fuelled increase in edible oil imports, which now meet 40-45% of the country’s consumption requirement.

The composition of the import basket will, however, depend on relative prices of oils. Currently, crude palm oil/palmolein and crude soyabean oil are the favourites as they provide the lowest price option.

The demand for edible oils is expected to increase from the current level of 12 million tonne to 15.6 million tonne in FY10 and further to 21.3 million tonne by FY15. This assumes a per capita consumption increase of 4% and a population growth of 1.8%, which translates to an overall growth in demand at 6% per annum, Mr Mehta added. He said India will continue its dependence on imports to the extent of about 40% of its consumption requirement. The improvement in yields and the increase in area under cultivation will ensure that the domestic oilseed production is sufficient to meet 60% of consumption requirement.

Commenting on the current scenario of edible oil import by India, Mr Mehta said that from November 2006 to July 2007, India imported close to 3.3 million tonne of edible oils consisting of 2.2 million tonne of palm products and 1.1 million tonne of soft oils.

"The import volume increased by 8% over the same period of previous year. It is expected that during the three months (August-October), arrivals would be 500,000-600,000 tonne per month and the total imports would be 4.7 to 4.8 million tonne for the whole year compared to 4.4 million tonne last year (2005-06)."

“India imports mainly crude oil to utilise its own processing capacity and practically 97%-98% import is in crude form,” he said.

World business briefs: Thomson seeks OK for Reuters takeover

Thomson Corp. has asked European Union regulators to clear its $17.5 billion takeover of Reuters Group PLC, a deal that faces intense regulatory review because of competitive issues.

The European Commission set an initial deadline of Oct. 8 to examine the deal.

A merger would cut from three to two the number of major companies that sell information and trading systems to the financial services industry — a combined Reuters and Thomson and privately owned Bloomberg LP.

Bones found in beef

South Korea said it found bones in the latest shipment of American beef and will revoke import approval for the U.S. facility that processed it.

South Korea has banned bones in beef because of fears of mad cow disease. The meatpacking plant belongs to JBS Swift & Co. of Greeley, Colo., and is one of 36 U.S. plants originally authorized to handle meat for export to South Korea.

The South Korean ban affected the JBS Swift plant in Grand Island, Neb. The company will serve South Korean customers with meat processed at its plants in Utah and Texas.

Hyundai, union agree

Hyundai Motor Co. and its labor union agreed on a wage deal Tuesday, possibly averting a strike over annual salary negotiations for the first time in a decade.

Union leaders accepted Hyundai’s offer of a 5.8 percent increase in basic monthly salary for each worker, an increase in the annual bonus and a pair of separate lump-sum payments, the two sides said.

The deal is tentative and must be voted on Thursday by the union rank-and-file. The union has gone on strike every year but one since it was founded in 1987. Workers had walked off the job twice this year.

Iraqi oil pipeline opens

Iraq’s oil minister said crude oil began to flow from the country’s northern oil-rich Kirkuk region to a Turkish export terminal last week — for the first time since Saddam Hussein was toppled in 2003.

“We’re pumping between 300,000 to 400,000 barrels a day of Kirkuk crude to the Turkish export terminal of Ceyhan,” Hussain al-Shahristani told Dow Jones Newswires.

The pipeline — Iraq’s main export route from Kirkuk to the Turkish Mediterranean port of Ceyhan — has been mostly closed because of sabotage since the U.S.-led war.

Howard Signs Up To Take World's Nuclear Waste

Howard signs Australia up to take world's nuclear waste with Global Nuclear Partnership
Prime Minister John Howard has signed Australia up to take the world's nuclear waste with the announcement this morning that the US will support Australia's bid to join the Global Nuclear Energy Partnership.

GNEP involves a small number of countries enriching uranium, leasing the nuclear fuel to other countries eager to develop nuclear power and taking back the radioactive spent fuel for reprocessing and disposal.

Howard signs Australia up to take world's nuclear waste with Global Nuclear Partnership

Prime Minister John Howard has signed Australia up to take the world's nuclear waste with the announcement this morning that the US will support Australia's bid to join the Global Nuclear Energy Partnership. will leave a toxic legacy for generations of Australians without solving dangerous climate change," said Greenpeace CEO Steve Shallhorn.

"Nuclear energy is not the solution to climate change.

"Nuclear energy still produces a significant greenhouse pollution and it will be at least ten years before new nuclear plants can be built when we need action on climate change now.

"Even in the extremely unlikely event that the world could double nuclear power output by 2050, it would only reduce greenhouse pollution by about 5%.

"It is more than 60 years since the first atom bomb was made but there is still no safe, long term solution to nuclear waste anywhere in the world.

"By signing us up to GNEP John Howard is taking the first step towards the imposition of an international nuclear waste dump in Australia," said Wilderness Society Acting Director Virginia Young.

"The entire purpose of GNEP is for countries to take back nuclear waste. It is simply not believable for the Government to claim that we could join GNEP but rule out an international nuclear waste dump.

"The United States desperately needs somewhere to put their nuclear waste after public opposition stopped their proposed dump at Yucca Mountain.

"The Australian Government has already rushed through legislation that for the first time allows Australia to import radioactive waste from overseas.

Will the world economy collapse?

I don’t spend much time in blogosphere. It was purely by accident that I came across The Big Picture blog, where Chris Laudani has posted interesting predictions by the world’s leading economists in the 1920s.


John Maynard Keynes said in 1927. “We will not have any crashes in our time.” Dr Irving Fisher, another distinguished economist, said on October 17, 1929. “Stock prices have reached what looks like a permanently high plateau.” US Treasury Secretary and Harvard Economic Society, among others, publicly shared their confidence.

They were reflecting on the state of the economy that was booming. It was a time when drivers and window cleaners eves-dropped on the conversations of their patrons to collect tips on shares. The DJ Index doubled from little less than 200 when Keynes made his prediction to almost 400 when Dr Fisher announced the high plateau of the state of the market. Within two weeks of Dr Fisher’s forecast, it had crashed by over 40% to reach 200 again. All those who had invested their savings from 1927 to 1929 were impoverished overnight. Several of them committed suicide. By 1933, the DJ Index lost 90% of its value from the day of Dr Fisher’s ‘high plateau’ proclamation to reach 40. Industrial production declined by two-thirds. The prices of farm land collapsed to nothing. The United States imposed high trade barriers, inviting retaliation by 25 other countries. Since Europe was dependent on exports to pay its World War I debts and Japan to be able to import the most basic necessities of life, high trade barriers devastated their economies. The Germans elected Hitler, a failed artist, to lead them. In Japan, too, nationalist extremism grew at a fast pace. The World War II followed from 1939 to 1945.

Why should one recall those dreadful days when the US economy has been growing at 3.5-4% almost since the beginning of this decade? Moreover aren’t these boom times in Asia, with China and India growing at 9%? Finally Germany and Japan are also on the recovery path. There is a big party going on. The bars of Pudong, Ginza and Colaba are packed with young people high on martinis. Housemaids in Asia and taxi drivers in Europe and North America can be seen soliciting stock market tips from their patrons. Housing prices are moving up, up and up. If Dr Fisher were alive, he would proclaim this time that the stock markets all over the world have not yet reached their plateau. There are miles to climb before they reach their peak.

The problem is that much of US recovery is made possible by high consumer spending, financed by debt, except in Q2 of 2007 when exports contributed significantly to growth. The US public debt has increased from $5.5 trillion at the time of President Bush’s first election to $9 trillion now and perhaps $10-11 trillion by the time he leaves. The US currency has been depreciated by 0.9 at the end of 2000 to almost 1.40 by the end of 2007 against Euro. If the US current account balance and external debt continue to expand, at some stage the fall of dollar, rise in interest rates and recession may prove to be difficult to avoid. The critical question is if the dollar will fall below 1.5 against Euro, and if it does, at what rate of dollar the creditors will press the panic button.

If the President who succeeds George Bush in January 2009 accords top priority to restoring order in trade and current account balances in well-coordinated steps with main trading partners and Fed holds the interest rates at the current level, it should be possible for the United States to restructure its economy slowly. It will be in the interest of China, Japan, India, Europe and main oil exporters to cooperate with the US to protect dollar and their export prospects in the long run. We can expect them to provide a rational response.

However, if the new President gets too trapped in a war to sort the economy out, the dollar can collapse in an unpredictable and violent manner. As most central banks have two third of their foreign exchange reserves in dollars– and the Chinese have already lost $300 billion for this sin – they will have no option but to switch from dollar holdings to other currencies or gold. This will create a run on the dollar, forcing individuals around the world with dollar holdings to lose their savings, leaving Federal Reserve with no option but to hike interest rates, inviting collapse of thousands of banks and recession in the United States. The failure of Doha talks is a clear indication that a strong recession in the United States (with reduction in demand for Chinese and European exports) will lead to a trade war. China’s fragile banking system may come under pressure, creating a spate of bankruptcies in that country. At such a time, if the leaders of Iran, Russia, and Venezuela decide not to quote oil contracts in dollars, there will be a complete collapse of the American economy also causing a severe damage to European and Asian economies.

Will the world economy collapse? The rational economic answer is – unlikely but not impossible. However, politics can be irrational and therein lays the danger. There is no consensus among economists about why the crash of 1927 took place. So, we may not have strong economic lessons to learn from that experience. However, lessons from politics that preceded and followed the crash are clear. If we want to avert a crash in the next decade or half, which can have several times more horrendous consequences than the one in the last century, we will need to get both our politics and economics right.

Alibaba's genie is out of the bottle

WHILE Australia congratulates itself on riding the China boom by digging resources out of the ground, the Asian giant has spawned a new generation of nimble-thinking, fast-paced entrepreneurs who are making history as they go.

One of the poster boys for the new China is Jack Ma, the founder of the world's largest business-to-business internet commerce company Alibaba, who is visiting Sydney this week as part of China's delegation to APEC.

Alibaba.com is the cyber version of the Canton Trade Fair - a giant internet import-export marketplace for businesses looking to source materials in China and around the world.

Selling anything from wedding gowns and toys to steel coils, ball bearings and Chinese garlic, Alibaba has 3.6 million users in 200 countries. The site covers 30 industries and more than 5000 different product categories.

Its corporate motto is "global trade starts here".

Ma has also extended his business into a Chinese version of eBay, called Taobao.com, which dominates consumer internet trading in China and has about 50 million customers throughout Asia, and has set up his own internet payment system, Ali.pal, which has 48 million customers. He has just launched another business selling cheap software for small businesses.

Along the way he also bought Yahoo's China business in a $1.2 billion deal in 2005 that saw Yahoo take a 40 per cent stake in his company, with Japan's Softbank taking another 28 per cent.

To understand Ma you have to understand where he comes from.

He lives in Hangzhou, the scenic capital of Zhejiang province, a region of 46 million people on the coast of China, just south of Shanghai, which has become one of the hothouses of the new Chinese entrepreneurs.

The birthplace of Chiang Kai-Shek, Zhejiang province has few natural resources but does have access to coastal shipping. It was traditionally regarded with some suspicion by the Communist leaders in Beijing, who didn't favour it with any great investment by state-owned industries.

Never dependent on the state, its hard-working citizens have thrived as China opened up to the world, providing opportunities for a rapidly growing manufacturing and textile base.

Hangzhou itself is consistently listed by Forbes magazine as one of the top places to do business in China. The Commonwealth Bank has had a 19.9 per cent stake in the Hangzhou City Commercial Bank since April 2005.

The young Jack Ma wanted to be a teacher and was keen to learn English. He would hang around the hotels of Hangzhou and offer free tours of the city to foreign visitors.

One of these was a young Australian from Newcastle, north of Sydney. They became friends and Ma, whose plan was still to become a teacher, eventually visited Australia in 1985.

The visit, he says, opened his eyes to the fact that China was not the centre of the world and that there were opportunities to learn from the West.

With his sophisticated English skills, he was sent to the US in the early 90s by a Chinese company wanting to collect money owed by an American company.

That visit opened his eyes to the internet. He came back to China and tried to tell his mates back home in Hangzhou it was time to get aboard this amazing new invention.

They thought he was mad but he went ahead and founded what he thinks is China's first commercial internet business, the China Pages, which contained websites of small businesses in the region.

"I decided to try it although I knew nothing about the technology and had no people," he said in an interview with The Australian this week. "I called myself like a blind man riding the back of a blind tiger," says Ma, an unassuming man with an impish face.

He sold that business and worked in Beijing for a while, heading an internet company for the Government, before deciding to go out on his own again in 1999 with Alibaba. This was the first internet site that allowed businesses from around the world to look for sourcing partners in China.

As the business thrived, he did not hesitate to expand into other areas, taking on eBay with his own company, Taobao.

When he found that payment for online trading was an issue in a country where there are only about 30 million credit card users, he founded his version of Pay.pal, called Ali.pal.

Then there was the Yahoo deal.

Like other new Chinese entrepreneurs, Ma did not let anything constrain him: not history, his lack of formal training in the internet business, or the fact that the net was a foreign invention that he knew nothing about.

Ma is typical of many very successful self-made Asian entrepreneurs who approach life from a very different point of view than the more hidebound Western businesspeople.

They don't bother about defining themselves or acquiring the right skills to approach a task. They don't seek the advice of high-priced consultants or "experts" or take years formulating plans. They don't worry about pay and bonuses and complex share option deals.

They just go and do it. And keep on going, riding the blind tiger, like Ma, on the cutting edge of the China boom.

While Western businesses love to limit their operations - seeking to concentrate on narrowly defined markets - self-made Asian business people often operate conglomerates, cheerfully moving into a whole range of businesses, from trading and manufacturing to property and restaurants and travel.

In China today, particularly, there's a fast-moving open-mindedness and a freedom from tradition that leaps beyond the thinking of "New World" countries such as Australia and America.

Ma wants Alibaba, which is set to list its B2B business on the Hong Kong Stock Exchange, to become the world's largest internet company and a member of the Fortune 500.

Ma's assistant during his Australian trip is Brian Junling Li, Alibaba's vice-president of corporate strategy. He was working in Beijing for Motorola a few years ago before he was swept up in the Ma story and joined the Alibaba group.

Brian is proud of the fact that he was born in Hunan Province, the birthplace of Chairman Mao. He also has a PhD in manufacturing from Stanford University in California.

These are the business leaders of the New New World.

Catch them if you can.

Import Dependency Threatens Food Security

Tajikistan looks set to meet its target for this year’s grain harvest, but NBCentralAsia analysts say that it will still not be enough to meet domestic needs and the government must reduce its dependence on imports by reforming agriculture at home.

The agriculture ministry has said farmers are on course to meet this year’s state target of around 500,000 tons of grain, according to reports from the Asia Plus news agency.

But official statistics show that Tajikistan needs 800,000 tons of grain to feed its people, plus a further 700,000 tons for livestock fodder.

Domestic harvests do not even meet half of the country’s needs and some 700,000 tons of grain is imported every year, mainly from Kazakhstan.

More than 60 per cent of the population lives on less than one US dollar a day, and cheap bread and other grain products make up the bulk of people’s diet.

This summer, a general rise in world grain prices and a lull in flour milling during the harvest season forced up the price of flour in Tajikistan by almost 40 per cent, leaving many families without enough food.

Analysts polled by NBCentralAsia say that Tajikistan must reduce its dependency on food imports and bring domestic agriculture up to modern standards to guarantee affordable food supplies.

Farrukh Abduvaseyev, an expert from Tajikistan’s Academy of Agricultural Sciences, says the country’s heavy reliance on imports is making the domestic food crisis worse. Imports are seen as an alternative to domestic production and so very little is being done to develop the agricultural sector.
Saodat Soibnazarova, an analyst at the Centre for Strategic Studies, explains that the quality of people’s diet has declined since staple foodstuffs like bread became more expensive.

The state lacks the resources to increase grain production, and this is unlikely to increase in the next few years, she said.

Murod Aminjanov, an analyst with a European Union project supporting state agricultural policy, explains that grain from Tajikistan is poor quality because of the hot climate, declining milling industry and backward farming methods. Even so, he argues that local producers could grow enough good quality grain to feed the whole country if the entire sector underwent reform.

Many farmers do not know how to tend crops properly or have enough experienced hands to help, explains NBCentralAsia economic analyst Hojimahmad Umarov. The irrigation system is also poor in many areas and farmers do not always have access to fertilisers.

Aminjanov says farmers need to be taught how to use modern farming methods, and to be given better machinery, irrigation and higher quality seeds to work with.

The estimated cost of the kind of agricultural reforms that could allow Tajikistan to meet its own food needs is put at at least a billion dollars.

(NBCentralAsia draws comment and analysis from a broad range of political observers across the region)

Australia urges 'powerful signal' from US on trade talks

SYDNEY (AFP) — Australia called Tuesday on the United States to send a "powerful signal" on cutting farm subsidies to break a six-year deadlock in talks on freeing up global trade.

Australian Trade Minister Warren Truss issued the call after meeting with US Trade Representative Susan Schwab ahead of a summit of 21 Asia-Pacific economies that make up nearly 50 percent of world trade.

Truss, who also separately met with other regional counterparts, said a US farm bill that will be considered by the Democrat-dominated US Congress in the next few months was a concern.

His comments came as World Trade Organisation (WTO) envoys meet in Geneva over the next three weeks in a bid to break the long-standing deadlock in the so-called Doha round of negotiations on cutting tariffs and subsidies.

"Other countries, particularly agricultural producing countries, would like to see the United States make positive steps toward reducing its farm support and that would send a very powerful signal for the rest of the world," Truss told reporters.

"So yes we want the US to take action in relation to farm subisidies both in the context of its current farm bill but also in relation to the Doha round."

Truss said a US farm bill that "increases support or one which maintains some of the existing levels of farm subsidies is an unhelpful signal."

However, he said he was encouraged that Washington "knows that a Doha round would have to involve reductions in US farm support in return for improved market access in other parts of the world."

Truss said it was also important that other countries and trading blocs made corresponding concessions to Washington.

"It's unreasonable to expect one country to do all the heavy lifting.

"The US has got a right to expect that other countries will make appropriate concessions and also address the other non-agricultural market access issues which are important to concluding the round."

Schwab is in Sydney for a meeting of trade ministers of the Asia Pacific Economic Cooperation (APEC) forum ahead of the weekend leaders' summit.

Trading nations have spent the past month mulling over compromise proposals on farm subsidies and import tariffs, a key stumbling block in WTO talks which also encompass global trade in industrial goods and services.

The Doha round, launched in the Qatari capital in 2001, seek to cut import duties and subsidies primarily to help developing countries take advantage of expanding global trade.

WTO members are at odds over the extent of new cuts in barriers to trade in agriculture, industrial goods and services amid cross-cutting disagreements between rich and poor countries over the concessions they need to make.

"Because we represent 50 percent of the world's trade we have a key role to provide impetus and encouragement to the negotiations," Truss said.

"If we demonstrate that we remain politically resolved to achieve a good outcome at Doha then that will certainly fire up the negotiations and ensure people take a constructive view to the tasks ahead."

While "we all know that it will be difficult," he said, "if there is a firm commitment and a vision towards what can be achieved, that outcome is still achievable."

Truss said a raft of bilateral and and other trade deals in various stages of discussion among APEC members were useful "building blocks," but could not constitute a "Plan B" in case the Doha round fails.

World Energy Solutions Signs Research Agreement with University of Florida to Commercialize Air Purification System

ST. PETERSBURG, Fla., Sept. 4, 2007 (PRIME NEWSWIRE) -- World Energy Solutions, Inc. (OTCBB:WEGY), a company focused on energy conservation technologies and environmental sustainability, reports that it has signed a Research Agreement with the University of Florida for the design of the company's 'Pure Air' filtration system. Early prototypes of the 'Pure Air' technology have shown to remove 99% of all targeted compounds.


The Research Agreement is being sponsored by the University's Environmental Systems Commercial Space Technology Center (ES-CSTC) at Gainesville, FL, under the initiative of its Director, Mr. William Sheehan. Mr. Sheehan and his team have agreed to assist the company in identifying and pursuing the commercialization of the 'Pure Air' technology. ES-CSTC member, Ms. Kristen Riley, formerly of NASA, will be in charge of identifying industrial and commercial applications for the technology and leading its marketing efforts. The 'Pure Air' technology is a derivative of NASA-sponsored research at the University.

The NASA Johnson Space Center funded the effort through its Advanced Life Support program which focuses on the need to revitalize air for long-duration space flights.

"This technology has the potential to become a market leader. It will be an efficient and economical unit which can remove 99.9% of all biological and chemical contaminants in air, as well as filtering normally occurring dust and smoke particles. The treated air will be almost 100% sterile," stated World Energy Solutions Inc. CEO Ben Croxton.

Dr. David Mazyck of the University of Florida and Technical Lead for the ES-CSTC will provide the design details based on pre-production units and previous experimental models. After production, the University will evaluate the commercial readiness of the 'Pure Air' technology.

The 'Pure Air' prototype is expected to be completed within 3 weeks and be ready for trials by September 25, 2007. Assembly will be carried out at World Energy Solutions' Research & Development laboratory, adjacent to the company's Head Office in St Petersburg, FL. Testing is estimated to take an additional 1-2 months at which time the prototype will be exhibited to manufacturers of 'pure air' equipment.

About World Energy Solutions

World Energy Solutions, Inc. (OTCBB:WEGY) is an Energy Services Company and electronics manufacturer. WES's primary business focus is the development of technology for lowering electrical, gas and water usage for commercial, government and residential facilities. As a pioneer in the manufacturing of the finest TVSS systems available in the market today, WES uses cutting-edge technologies and unsurpassed design standards to provide its customers with full lifetime warranties on its products.

For more information about WES please visit its website at www.wesinc.net

Forward-Looking Statements Certain matters discussed in this press release are "forward-looking statements." These forward-looking statements can generally be identified as such because the context of the statement will include words such as "expects," "should," "believes," "anticipates" or words of similar import. Similarly, statements that describe World Energy Solutions' future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, including the financial performance of World Energy Solutions, which could cause actual results to differ materially from those currently anticipated. Although World Energy Solutions believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, they cannot give any assurance that their expectations will be attained. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating any forward-looking statements. Certain factors could cause results and conditions to differ materially from those projected in these forward-looking statements, and some of these factors are discussed below. These factors are not exhaustive. New factors, risks and uncertainties may emerge from time to time that may affect the forward-looking statements made herein. These forward-looking statements are only made as of the date of this press release and World Energy Solutions does not undertake any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

India may import Australian gold

MUMBAI: Australian gold mining firm Citigold Corporation plans to export 40,000 ounces (over 1,134 kg) of gold to India in the next one year. Citigold currently has over 3 lakh kg gold deposits in its mines. The company also plans to launch its own financial instruments.

“In next one year Citigold plans to approximately export 40,000 ounces of gold to India,” the company head international office Manan YR Desai told ET on sidelines of a gold convention here. He said that they will also be the first mining company to launch their own financial instruments that would be customised.

However, he did not reveal any further details. The company is also scouting for a joint venture partner in the area of gold mining since last year, where it will be a minority shareholder.

Managing director, Mark Joseph Lynch said that talks are underway with possible partners and the company expects to announce further development in the next few months. “Getting hold of new grounds is a competitive area. Who we are partnering with and how we are going is subject to confidentiality. In a few months time we will be able to come back and talk to you,” he said.

India, historically, was a major gold producer and most of the world’s new gold comes out of old gold fields, said Mr Lynch, adding “If you have old gold fields you still have lots of gold remaining.”

Gold is not an easily found metal and all that was easily mineable has already been found. He said, “If you find a big copper mine it might produce 10% of the world’s copper but the biggest mine in the world doesn’t produce even 1% of the world’s gold.”

“If the Indian gold industry is developed, in five years time the country could be a big gold producer,” Mr Lynch added.

India does not have too many refining capacities and all the existing ones are very small. Regarding this Mr Lynch said that all jewellery recycling requires some sort of refining but in India gold is usually bought from other big producing countries.

Also, in the value chain, refineries add little value because it is not remunerative. Nearly 50% value addition is done at the stage of gold mining, while refining amounts to only 1%. Manufacturing amounts to about 10-15%, so the biggest value-addition is in the mining process, he added.

All big producers refine gold in their own country because it is most economical but for a country like India importing finished gold is easier and cheaper than importing raw.

S. Korea to resume import quarantine inspections on U.S. beef

South Korea will resume quarantine inspections on U.S. beef shipments next week after effectively halting them earlier this month, a government official said Friday.


The decision comes after the Ministry of Agriculture and Forestry carefully examined official U.S. explanations on several thousand tons of U.S. beef that included cow backbones and ribs in violation of an agreement reached earlier.


An official at the Agriculture Ministry said quarantine inspections will resume on Monday for newly arrived beef shipments from the U.S. as well as 6,832 tons that have been held in customs.


Under a deal reached in January 2006, South Korea agreed to allow the import of boneless beef from cattle under 30 months old.




This pack permits Seoul to impose an import ban if parts like backbones that were classified as specified risk materials (SRMs) are found. SRMs are blacklisted because they pose the greatest risk of transmitting mad cow disease to humans.


South Korea had banned all American beef after a case of mad cow disease case was confirmed at a U.S. ranch in late 2003.


"While quarantine inspections on American beef are to start again, the current ban will be maintained on the four meat processing centers that shipped ribs, while Seoul has revoked its export permit from the one that shipped backbones," said Lee Sang-kil, head of the ministry's livestock bureau.


Of the five meat processing centers affected, three are run by Cargill Inc. and two by Swift & Co. Both are major exporters of American beef to South Korea.


If more bone-in beef and SRMs are found in future shipments, Lee said a "two-track" approach will be made to ensure that sanitary and phytosanitary (SPS) negotiations can move forward regardless of any future discovery of ribs or backbones.


"If non-SRM meat like ribs are found in future packages, the meat concerned processing plant will be barred from shipping meat until a new SPS deal is signed," he said. If SRM materials are discovered, the export permit of the meat processing plant will be revoked, while a blanket ban will be reinstated.


He, however, said negotiations on a new SPS will not be put on hold even if no American beef reaches consumers. For bone chips, only the packages that have them will be sent back, he said.


He said South Korea has no immediate plan to conduct on-site inspections of U.S. slaughterhouses to ensure safety. However, he hinted that a visit may be arranged before a new import arrangement is signed.


"At present Seoul accepts Washingto's pledge to increase the number of inspectors, introduce tougher labelling rules and use computerized weight measurements to determine if bones have been mistakenly put into a package destined for exports," the policymaker said.


The decision is expected to allow progress to be made on negotiations aimed at revising South Korea's SPS that prohibit bone-in beef, such as ribs and backbones from being imported.


Washington has been calling on Seoul since late May to change its SPS rules to permit the import of bone-in beef as well.


The World Organization for Animal Health (OIE) has granted the United States a mad cow "risk controlled status" that technically opens the door for exports of most cow parts as long as they are from animals under 30 months old.

Brazil to import more Arab leather

São Paulo – Brazilian imports of goat and sheep hides and skins, destined to the shoe industry, should increase in the next half of the year. The reason for that is the tax exemption for imports of those items, which was approved this week. Foreign suppliers of Brazil include the Arab countries. "The leading suppliers of goat and sheep hides are the African countries, and those include some Arab countries," said the executive director at the Confederation of Brazilian Hides and Skins Industries (CICB), Luiz Bittencourt.

From January until July this year, Brazilian imports of skins and hides in general from the Arab countries totalled US$ 1.34 million. The main Arab suppliers include Egypt, Saudi Arabia, and Algeria, from where Brazil imports bovine, sheep and goat leather. In the first seven months of 2007, imports of the latter two items totalled US$ 390,000. "Brazilian imports are going to increase for certain," said Bittencourt.

According to him, the Brazilian production of sheep and goat leather is not enough to meet the domestic demand. Currently, the national production capacity is 12 million units per year, but raisers are only able to supply 7 million tonnes, therefore there is a need to import. These types of leathers account for 15% to 20% of the market, and virtually the entire production is in the northeastern states. "Leather from the northeast region has no wool, therefore it is applied to shoes because it looks like some sort of bovine leather. The skins of the southern region, on the other hand, cannot be used in this sector," said Bittencourt.

In previous years, Brazil also imported leather from the United Arab Emirates and Somalia, which may occur again in the face of the tax exemption. In total, Brazilian imports of leather in general in the first seven months of this yaer totalled US$ 89.76 million, an 11.8% increase over the same period of 2006. The data were supplied by the Foreign Trade Secretariat (Secex) of the Brazilian federal government.

Exports

Although Brazil needs to import sheep and goat skins and hides, the country is one of the world's leading producers of leather, with a processing capacity for around 45 million tonnes. Furthermore, Brazil is the world's largest exporter of leather, at 35 million pieces a year. One of the main reasons for this leadership is the abundance of raw material supply, as the country has more than 200 million heads of bovine cattle heads, the world's largest commercial herd.

Leather ranks among the main products exported by Brazil. From January until July, the country exported the equivalent of US$ 1.28 billion, an increase of 26.5% compared with the same period of last year. Just to have an idea, foreign sales of bovine meat yielded US$ 2.5 billion in the accumulated result for the first seven months in 2007.

The industrial complex in the sector is comprised of 800 companies that operate in leather production and processing. The activity generates a turnover of around US$ 3 billion in the country and employs 45,000 people, according to the CICB.

Cubs hope import from Detroit supplies fuel

SAN FRANCISCO -- Will Craig Monroe become the Randall Simon of the 2007 Cubs?

General manager Jim Hendry can only hope his latest acquisition contributes as much as Simon did during the '03 stretch run and postseason.

Like Simon, Monroe wasn't having much of a season when the Cubs came calling. He was hitting .222 when Detroit designated him for assignment last week, but the Cubs were looking at his .302 average in 96 at-bats against left-handers.

"He's not having a great year, numbers-wise, against the righties (.190 average)," Hendry said. "But he's still swinging the bat great against the lefties, and still has (55) RBIs. I was looking for a little more veteran help against lefties."

The Cubs are 12-19 against left-handed starters, including Wednesday night's win against Giants lefty Barry Zito, who left with a no-decision despite throwing eight solid innings. They began Thursday ranked 13th in the NL with a .253 average against left-handed pitching.

Monroe, 30, hit 28 home runs and drove in 92 runs with the Tigers in '06, including 15 homers and 50 RBIs after the All-Star break. He also hit five home runs in the postseason, helping the Tigers into the World Series.

"He's a good athlete, a good outfielder and he's got some pop," Cubs manager Lou Piniella said.

"The teams we're playing here, they all have left-handed starters in their rotation. He'll be a valuable addition."

The Cubs hope he's as valuable as Simon was in 2003. Acquired in an August trade from Pittsburgh, Simon hit .282 with six home runs and 21 RBIs in 33 games. He hit .333 with a homer and six RBIs in the playoffs.

Monroe is arbitration-eligible in '08 and is likely to be non-tendered in November since he makes $4.8 million and the Cubs already are scheduled to pay Alfonso Soriano and Jacque Jones a combined $18 million in '08.

Detroit will pay around $600,000 of the remaining $900,000 of Monroe's '07 salary and receive a player to be named later.

The Tigers reportedly are seeking a left-handed pitcher on the Cubs' 40-man roster, which suggests either Clay Rapada or Neal Cotts.

The move shows the Cubs aren't satisfied with the play of Matt Murton, hitting .246 since his call-up from Triple-A Iowa. Monroe will platoon in right with Cliff Floyd but will also play some left until Soriano returns from his quad injury.

"This gives Lou some options here we didn't have before," Hendry said.

Cubs bench coach Alan Trammell, who had Monroe for three years when he managed in Detroit, said the outfielder could always hit and plays well defensively in the corner spots.

"He's a great guy and will fit in very, very well," Trammell said. "He gives us some experience, and a guy that's produced at the major-league level."

The Cubs designated Triple-A Iowa outfielder Buck Coats for assignment, giving them room on the 40-man roster to add Monroe, who will join the team in Arizona on Friday. Jake Fox is likely to be sent to Iowa on Friday, and probably will be recalled after Sept. 1, when the rosters expand.

Wheat Price Reaches Record as India, Taiwan, Japan Seek Imports

Aug. 23 (Bloomberg) -- Wheat prices in Chicago rose to a record, extending gains for a fifth day, as importers, including India, Taiwan and Japan, sought to buy the grain and adverse weather reduced supply in major exporting countries.

India, the world's biggest wheat consumer after China, plans to buy cargoes of 25,000 to 75,000 metric tons each for delivery from October to December, the New Delhi-based company said on the government Web site. The company will decide how much to import by Sept. 3.

Unfavorable weather has damaged crops in major producers including Australia, Europe, Russia and Ukraine. Global inventories of the commodity used to make bread, pastries and biscuits are expected to fall to the lowest in 26 years by May 31, according to the U.S. Department of Agriculture.

``We may see wheat futures go up further as buyers are rushing to secure more and global supplies are very tight,'' said Takaki Shigemoto, an analyst at commodity broker Okachi & Co., by phone from Tokyo. ``We anticipate a higher-than-expected number for weekly U.S. export sales later today.''

Wheat for December delivery gained 11.25 cents, or 1.5 percent, to $7.43 a bushel by 7 p.m. Singapore time in electronic trading on the Chicago Board of Trade. Prices more than doubled in the past year.

Overseas orders for U.S. wheat supplies are up 86 percent since June 1 compared with a year earlier, USDA data show.

Taiwan, Japan

The Taiwan Flour Millers Association, which represents 34 grain users, issued a tender tomorrow to import 92,000 tons of U.S. wheat after it failed to buy grain on Aug. 21.

Japan's Ministry of Agriculture, Forestry and Fisheries said it bought 30,000 tons of Canadian durum wheat today in a tender under the so-called simultaneous buy and sell system, introduced to loosen government controls over imports.

Grain-growing regions in Australia, the world's third- largest wheat and canola exporter, may have warmer-than-average temperatures in spring, potentially crimping crop development.

There's a 60 percent to 75 percent chance of higher-than- average minimum temperatures from September to November, the bureau of meteorology said on its Web site today.

``There's a shortage of the grain worldwide,'' Pramod Kumar, executive director of Sunil Agro Foods Ltd., said by phone from Bangalore. ``Indian imports will fuel the wheat market globally.''

Record Price

State Trading Corp., run by the government, bought 511,000 tons from Cargill Inc., Toepfer International and Riaz Trading for a record $317 a ton to $330 a ton on July 10 to ensure sufficient supplies and curb inflation.

India may receive offers of $375 to $400 a ton in the new tender, Sunil Agro's Kumar said.

State Trading Corp. is seeking wheat in bulk carriers or containers at eight Indian ports including Mumbai, Kandla, Mundra, Chennai and Tuticorin. Suppliers are required to quote prices on the basis of the port and month of delivery.

India was the world's third-biggest wheat importer in the year ended June 1, with purchases of 6.7 million tons, according to the U.S. Foreign Agricultural Service.

China's shoes exports expand in first half

China, the world's largest shoes producer and exporter, saw a 17.5 percent rise in the value of its shoes exports in the first half of 2007, but prices per pair were lower than that for the previous year.

In the January-June period, China exported 4.4 billion pairs of shoes, worth $12 billion, said Wang Hanjiang, president of the China Chamber of Commerce for Import and Export of Light Industrial Products, Arts and Crafts.

The shoes were priced at an average of $2.7 per pair, down from $2.8 for the whole of 2006 when China sold 7.8 billion pairs of shoes abroad.

Two billion of them, worth $7.6 billion, were sold to the United States, the largest importer of Chinese-made shoes, at an average price less than a third of that of made-in-Italy shoes, said Wang.

Despite rapid development of China's shoemaking industry, most local manufacturers were small, exporting low-end products and earning low profits, said Wang.

iPhone sparks counter measures from Verizon, RealNetworks and MTV

Whenever a single monolithic company has launched against the globe spanning iTunes, Apple has been able to move the goalposts and push further and further towards a monopolistic market share of online music, but this week a genuine challenge has emerged, one that we are certain will dent the success of Apple, and we suspect that it will be reflected in the company’s share price before too long.

The move, to bring RealNetwork’s Rhapsody to Verizon handsets, with the support of Viacom’s MTV, was attributable almost entirely to Apple’s launch of the iPhone with an exclusive relationship with AT&T. In short Verizon HAD to do something, and this is that something. Rhapsody becomes the music service behind Verizon’s VCast Music service, while MTV’s URGE music service will be merged into Rhapsody, which will become Rhapsody America, and be run by the current General Manager of MTV Network's URGE, Michael Bloom.

Existing user names for URGE will work straight off in Rhapsody. Viacom’s MTV Networks will put in some of its own cash, but also back a $230 million five year note for the venture, giving it a 49% stake, and leaving RealNetworks which will also contribute some cash, with 51%.

It’s a fairly compelling picture and is the first major step towards consolidation of online and cellular music services which will polarize the world. When kids watch MTV they will be pointed towards it, when people subscribe to cellular handsets through Verizon they will be reminded of it, and it drops ARPU right into the palm of the hands of Verizon Wireless.

The simple truth is that we all predicted that Apple iTunes would be eaten alive by little bites from the cellular industry, over a long period of time, and Apple with its typical foresight said let’s take the game to them and launched its own phone on its own terms. But that just meant that serious players are now taking Apple more seriously, sooner, and there are multiple advantages here that are not initially obvious.

First off this pitches Apple’s MP3 and Flash memory enemies, Samsung and LG Electronics, which make many of the first line Verizon handsets, directly against Apple. Samsung is probably the only company in the world that can get its hands on flash memory to store songs more cheaply than even Apple, which two years ago bought up around 30% of global NAND Flash production for its iPods.

Verizon Wireless has no love of Apple and is still smarting after it had to pay Broadcom through the nose to import handsets for its new EV DO rev A network which will also do the job of competing head on with the touchscreen interface of the iPhone. This was because of an indiscretion by supplier Qualcomm, which the court believes used power saving patents that belonged to Broadcom. Verizon will now do whatever it has to, to make these new devices successful.

Secondly Verizon will deliver all of this on handsets which are CDMA enabled, so instead of the waning powers of GSM, the technology that Apple aimed its first iPhone at, Verizon will have the latest, hottest phones from the CDMA community to deliver the service on. Apple is already up against the subscription based Rhapsody service through RealNetworks’ partners, including Best Buy, SanDisk and TiVo. SanDisk is the second biggest retailer of MP3 players in the US, and they could all become further integrated into the service and the new brand.

But with news services around Europe all pre-announcing new Apple partners this week, which include T-Mobile in Germany, Orange in France and O2 in the UK, it is pretty clear that 45 per cent owner of Verizon Wireless, Vodafone is NOT among them.

My friend's enemy
We had always thought that Vodafone would not align itself with the enemies of Verizon, and that also it likes to cut profitable and easy to work deals, and would not accept the kind of terms that Apple was rumored to be insisting upon. There will be some immediate betting that the 232 million customers that use Vodafone's service, the largest outside of China, could be tempted to become part of this "get iPhone" initiative.

Back in January 2006 Vodafone, launched its own interactive music service in conjunction with Sony NetServices called Vodafone Radio DJ. The service streams music to both 3G mobile phones and PCs for a flat monthly subscription, identical as a business model to Rhapsody. But the service is really a radio service with little control over what you listen to.

So Vodafone may well come to believe that the new US initiative could seriously damage the iPhone, and iTunes, and then it might shutter this service or add to it and join the push to build Rhapsody America into perhaps Rhapsody Global, assuming that it can sign overseas versions of its content deals. But even if Vodafone does not come on board, the global distribution of MTV, which can recommend the service, will have huge appeal to other operators, because MTV Networks operates on 135 television networks, and can be seen from 171 websites and reaches 496 million people around the world.

With that kind of support, this deal can internationalize to the benefit of all the partners. This pretty much leaves online and cellular music controlled by a handful of services lead by iTunes. Musicnet powers many of the smaller music services around the world including many that are Microsoft compatible such as the Zune device and can work with its new PlayReady DRM system.

But Musicnet will have lost at least one customer since until now it numbers MTV’s URGE among its clients; Nokia can still provide several millions songs through its purchase of Loudeye over a year ago, and Sony’s Connect collection is still operating, such as through Vodafone. If I’ve forgotten anybody, it's because they are, as of now, forgettable and that perhaps includes Wal-Mart, Amazon, eMusic and Napster, because without the support of a cellular operator, most services are doomed, if not to closure, then to irrelevance, over time.

Finally there is the issue of video. Verizon is just one customer for MediaFLO mobile TV, and it has launched in some markets already under the VCast TV brand. It already had a VCast cellular streaming business that is relatively successful. This will now line up against Apple iTunes on a Video iPod as a source of portable video, but can increasingly target deals with MTV and its parent Viacom, majority owner of the Paramount studio.

The cellular music war in the US is sure to spill over into the rest of the world during the remainder of this year, and that can only mean one thing, that the Apple franchise will begin to erode in percentage terms, but that the market for music on handsets will go through the roof over the coming 18 months to two years.

Tasteless import

Directed by Steve Bendelack. Stars Rowan Atkinson, Emma de Caunes. Opens Friday at theaters throughout New Jersey.


For a silly kids movie about an accident-prone man on a trip to the beach, "Mr. Bean's Holiday" is actually quite mean-spirited and pretentious.

There are laughs for kids as the title character (Rowan Atkinson) has a variety of misadventures in transit from Britain to southern France, but the picture also has an off-putting insider vibe, setting its closing scene at the Cannes Film Festival.

The hero crashes the event and plays pranks on an arthouse director (Willem Dafoe) who's premiering a ponderous movie to yawns from the crowd. The film within a film seems to be a parody of Vincent Gallo's "The Brown Bunny," a misunderstood road movie that was booed when it screened at Cannes four years ago. The reference is pretty obscure given the preschool demographic.

The film pokes unfair fun at Gallo's work when it has its own questionable segments. During one particularly long, misguided set piece, the protagonist wanders onto a World War II film set where a faux French village is being attacked by German soldiers. Mr. Bean is put into costume as an extra and performs a mock goosestep march. It's always nice to see children's movies with Nazi jokes.

A belated follow-up to 1997's "Bean," the film contains distasteful scenes that make you feel guilty for laughing at the amusing ones. Highlights include a roadside outhouse mishap, a crisis involving a coffee-splashed laptop and an adventurous lunch of cold shellfish at a snooty restaurant. Yes, those are the highights.

Director Steve Bendelack, who has a lengthy résumé of Britcom credits, stages unfortunate incidents on French trains and highways. Occasionally, Mr. Bean is the victim of circumstance. Most of the time, however, he drags innocent bystanders down into his world of disorder. At one point, he unwittingly prompts a suicidal man to jump to his death from a bridge. Good times.

The journey begins when Bean wins a Cannes vacation and a digital camcorder in a raffle. En route, he loses everything, tickets, luggage and travel documents, but finds a few new friends. He teams up with a mischievous Russian boy (Max Baldry) separated from his father (Karel Roden), who's heading to Cannes to serve on the judging panel. Bean also inexplicably charms a beautiful actress (Emma de Caunes) on the road to the film fest for the premiere of her latest picture, "Playback Time" from an American auteur named Carson Clay (Dafoe).

Along the way, the hero captures his vacation on a camcorder and winds up accidentally creating a hit movie at the festival. Although "Mr. Bean's Holiday" takes a few swipes at Euro snobs, ultimately the most ridiculous character is the arrogant American. It's no surprise the comedy is already an international hit.