The New Nation - Internet Edition

Staff Reporter

The Department of Agriculture Extension has set up the target of producing 3.25 crore metric tonnes of food grains during the fiscal year 2007-08 against the annual demand of 2.83 crore metric tonnes. From this point, even if the amon crops to the extent of 15 lakh metric tonnes were damaged by the back-to-back floods of the month of August and the 11/15 hurricane, there is no fear of food deficit in the country, no matter whether the government imports additional rice from abroad at this moment or not. In addition, several lakh metric tonnes of rice are already in the hands of the government to meet crisis.

The problem lies elsewhere and it is that correct data on any subject is not easily available in Bangladesh.

Consequently, imaginary data and figure are quoted at seminar, symposium, indoor or outdoor meeting and press conference, and in writing essay or story. As for example, it is being repeatedly propagated that the country is in the grip of possible food shortage and the situation will take a serious turn in the month of March 2008. e tonne of amon-aus rice.

In fact, neither the back-to-back flood nor the hurricane caused any damage to this year's boro cultivation. In view thereof, why should there be dread of food shortage?

Rather, news of the imaginary food deficit has helped rise of rice price by taka two in seven days from December 7 and thereby increased the cost of living.

The production cost of paddy per kilo was taka 14 in 2006. It will verily rise as the government has increased the price of different fertilisers by nearly 50 to 100 percent. Moreover, it is learnt that the marginal and the landless farmers are not getting the diesel subsidy. But they cannot wait long for this. To keep the cultivation on, they will be compelled to buy from open market and take loan from the moneylenders at high rate of interests. Thus, the production cost will be proportionately increasing.

A rice trader at retailer level said, "There is abundance of rice in market. The news of (possible) food shortage is purely based on conjecture.

What is urgently needed to clear obscurity about the country's food position is that the government must issue a press note detailing the amount of production during the fiscal 07, present target, actual damage done to the crops by two natural calamities and stock in hand."

Through out the world, subsidy in the agricultural sector is agiven. But, that allocation is not sufficient if it does not reach the genuine farmers. Nothing is more powerful than hunger.

AFP, Washington

Eleven Asian nations facing the biggest threat from tuberculosis risk being saddled with a whopping trillion dollar economic burden over the next 10 years if they do not beef up their anti-TB strategy, a landmark study shows.

Led by China and India, the countries are already implementing a prevention and treatment strategy, popularly known as DOTS introduced by the World Health Organization (WHO) in the 1990s.

But the DOTS (the directly observed therapy) strategy was not sufficient to reduce the incidence of the disease, particularly in HIV- infected people and due to drug resistance, and had to be restructured.

A World Bank study released last week for the first time captured the economic benefits of extending the revamped DOTS strategy as proposed in the organization's Global Plan to Stop TB covering the 2006-2015 period. The research covered 22 "high- burden" tuberculosis-endemic countries, including China, India, Indonesia, Philippines, Thailand, Afghanistan, Bangladesh, Cambodia, Myanmar, Pakistan and Vietnam.

"These Asian nations have to grapple with a 1.17 trillion dollar economic cost over a 10 year period if TB prevention and control are sustained at current levels of treatment," Ramanan Laxminarayan, an economist who led the study, told AFP.

"But if they embrace WHO's global plan they could collectively save about 10 billion dollars each year or 100 billion dollars during the 10 year period," he said. "However, the costs of the global plan may be greater than these benefits in some countries."

TB is the leading infectious killer of adults in Asia. The worst affected nations are China, India and Indonesia. "This important new study shows us why TB control is a smart investment in lasting development for low-and middle-income countries," said Joy Phumaphi, the World Bank's vice-president for human development.

"This economic justification for TB control strengthens the case for governments and donors to sharply reduce TB prevalence and deaths in the name of better health and higher incomes for people living at grave risk of TB illness and death," Phumaphi said.

The economic impact of TB deaths and the benefits of TB control among the 22 high-burden countries are greatest in China and India, where the combination of growing incomes and a relatively high number of TB deaths translates into a significant economic effect, the study showed.

Laxminarayan pointed out that the 11 Asian nations accounted for one million of the 1.7 million deaths from TB in the 22 countries covered by the study, saying that extending DOTS coverage could slash mortality considerably.

"Implementing the global plan has the potential of averting about 100,000 adult deaths per year," he said.

"The burden of TB in Asia while not as large as in Africa is a serious threat to public health," said Laxminarayan, who works with Resources for the Future, a Washington-based nonprofit research group.

WHO and World Bank experts were also involved in the study, commissioned by the Washington-based bank on behalf of the Stop TB Partnership and funded by the Bill and Melinda Gates Foundation, a charity of software tycoon Bill Gates and his wife.

The study entitled "The economic benefit of global investments in tuberculosis" has attracted considerable interest from international health and development agencies, along with research and civil society groups, bank officials said.

AFP, Singapore

As concerns rise about the increasing clout of state-owned investment funds, Singaporean capital is seen as potentially less threatening than other sources of government- linked funding, analysts say.

In the latest major overseas investment by a sovereign wealth fund, the Government of Singapore Investment Corporation (GIC) said last week that it would inject 11 billion Swiss francs (9.74 billion US dollars) into UBS, Switzerland's largest bank.

UBS said a strategic investor in the Middle East, which it did not identify, is injecting an additional two billion francs into the bank, which revealed further writedowns of around 10 billion dollars due to a crisis in the US subprime mortgage sector.

The deal came two weeks after Citigroup, also stricken by the US housing downturn, said it would receive a 7.5-billion- dollar injection from the world's biggest sovereign wealth fund, Abu Dhabi Investment Authority (ADIA) of the United Arab Emirates.

ADIA would get a 4.9 percent stake in America's second- biggest bank by market worth.

For GIC, the stake in UBS is its largest-ever investment in a company, and could leave it with a total shareholding of about nine percent, said Tony Tan Keng Yam, deputy chairman and executive director.

"Sovereign wealth funds (SWFs) have recently emerged as among the most important players in global financial markets," an October report by Citigroup Global Markets said. The funds' estimated three trillion US dollars in assets are projected to more than double over the next five years, it said.

The rise of SWFs has led to concerns over a lack of transparency and has raised national security or broader strategic concerns in recipient countries, the report said.

Relations between Singapore and Thailand became strained last year after state-linked investment firm Temasek Holdings bought Thailand's Shin Corp, a deal which helped lead to the ouster of Thai Prime Minister Thaksin Shinawatra in a coup after his family got a tax-free windfall from the sale.

Temasek and GIC are the two vehicles used by Singapore to invest its massive savings globally. Despite the row with Thailand, Leon Perera, group managing director of Spire Research and Consulting, said "the more interesting story" is how the developed countries will respond to SWFs.

The Organisation for Economic Cooperation and Development said recently that many SWFs are viewed as "opaque and secretivet (and) at odds with standards applied in global financial markets". It called for codes of conduct for the funds.

"I think there is clearly a creeping backlash against sovereign wealth funds in developed countries," said Perera.

When Dubai Ports World of the UAE last year took over British-based Peninsular and Oriental Steam Navigation Company, American lawmakers fiercely blocked a US component of the deal, citing national security fears.

Perera said the potential for such political tensions are probably less when Singaporean funds are involved.

"I think Singapore may be seen to be a more safet provider of capital," he said.

Ilian Mihov, an economics professor at graduate business school INSEAD in Singapore, said that while funds from Russia and the Middle East have triggered concerns in Europe and the United States, Singaporean investment is seen as more acceptable due to the city-state's "Western model" of capitalism.

"I think that the backlash toward Singapore might be smaller and therefore it might be more welcome into negotiations for large transactions like this one," Mihov said, referring to the UBS deal.

Citigroup's report estimated the Abu Dhabi Investment Authority fund has assets of about 875 billion dollars.

GIC says it manages "well above" 100 billion dollars, but analysts say it could be as much as 300 billion dollars or more. Temasek says its net portfolio worth is more than 100 billion dollars.

"So I think a small country with a small fund is less threatening," said Annie Koh, dean of executive and professional education at Singapore Management University.

AFP, Seoul

The eyes of the world are on nuclear- armed North Korea, but south of the border there's only one issue that really matters in Wednesday's presidential election: the state of the economy.

South Korea's expected growth this year, close to five percent, would be the envy of Japan, the United States and much of Europe. But candidates are fielding plenty of grumbles along the election trail.

"Business is not good. Please revive the economy," a woman vendor at Seoul's Dongdaemun clothes market told front-runner Lee Myung-Bak this month.

"I will make it better," he promised, holding her hand tenderly.

Analysts say Lee, 65, candidate of the conservative opposition Grand National Party and with a business background, is riding a wave of discontent over slowing growth under a decade of liberal rule and is hotly tipped to win the poll.

"The prime concern of voters is the economy," Huh Chan-Guk of the Korean Economic Research Institute told AFP.

South Korea recovered strongly from the 1997 economic crisis, which forced massive corporate restructuring and left millions jobless.

But over the past decade the growth rate has still fallen to an annual average of 4.4 percent, down from the pre-crisis average of eight percent. Youth unemployment is over seven percent.

"Young people who supported the liberal government in previous elections feel frustrated. They are now more interested in growth and practical issues as they find it harder to get jobs," Huh said.

Companies have remained reluctant to invest, citing excessive regulations and an uncertain business outlook, he added.

"Many people are displeased with slower growth than before. This is a relative concept," said Sungkyunkwan University political science professor Ma In-Seok.

Income gaps have widened and the job market has not improved despite brisk exports and reviving domestic consumption, Ma noted.

Nearly eight out of 10 Koreans think wealth is shared unfairly, according to a recent government survey of 33,000 households.

And the number of household heads who are jobless and rely on income from other family members has increased to a four-year high of 2.56 million, or 15.6 percent of the total.

"The global economy has maintained a favourable tone since Roh (President Roh Moo-Hyun) took office (in February 2003). But the liberal government failed to provide incentives for companies to seize this opportunity," Ma said.

Analysts say voters believe Lee, a former construction executive and ex- mayor of Seoul, has the "can do" business background to revive the economy.

"Economy first!" is his main slogan.

"Many people expect him to create more jobs, although he is not seen as the best choice (in other respects)," said Ma, referring to allegations of past real estate speculation and tax evasion, which Lee has always denied.

He was also accused of major fraud allegedly engineered by his former business partner, although prosecutors earlier this month said Lee had no case to answer.

"The economy had never been a decisive factor in previous elections but the situation is now different," Ma added.

Lee has made a 747 pledge-achieving seven percent annual growth, increasing per capita income to 40,000 dollars and making South Korea the world's seventh largest economy by encouraging free-market forces.

Chung Dong-Young, of the pro-government United New Democratic Party, places second in most opinion polls but well behind Lee. He campaigns against what he calls Lee's "jungle capitalism, under which only the strong survive."

Chung vows to create "happy families" by creating more jobs, improving education, stabilising apartment prices and generally supporting the underprivileged.

Right-wing independent Lee Hoi-Chang, in third place, favours a drastic tax cut for small and medium-size firms.

"There are no big differences between the economic pledges of liberal and conservative candidates. Lee's (Myung-Bak) pledge has no meat but enjoys greater support because voters expect him to focus on growth," Ma said.

AFP, Frankfurt

It is time for the banks to fully disclose their US home-loan losses to prevent fear from making a tough credit crunch worse since the central banks have done about all they can to restore confidence, analysts say.

Central banks "can't do any more" to boost confidence in the financial markets, Commerzbank economist Michael Schubert warned, while Bank of America's Gilles Moec urged the private sector to state clearly "who lost what and how much."

They pointed to the vital link between information and confidence, with Monday a key test of whether the markets take a more positive view of the central bank rescue operation of last week or instead turn more sceptical still.

At stake is the possibility of ever tighter funding for businesses and even a recession in the US economy.

Clear statements by finance houses about how much damage the US home-loan crisis has done to their accounts "is really the key to the crisis," economist Moec stressed.

A solution depends on confidence because banks have stopped lending to each other since they do not know the extent of potential losses incurred by the banks they trade with.

"If you are a medium-sized bank trying to borrow for three months in the interbank market you can more or less forget it," said Investec Securities chief economist Philip Shaw, who is based in London.

"I've heard of institutions that won't lend beyond one week, to anybody, it doesn't matter who the name is."

That means banks and other major lenders are hoarding cash, diminishing the flow of credit on which business depends.

"Banks cannot borrow beyond a certain maturity and that poses a real threat to the world economy next year," Shaw said, adding that this is what had forced central banks to announce their exceptional joint action last week.

The US Federal Reserve, the European Central Bank, the Bank of England and their counterparts in Canada and Switzerland mounted a surprise joint action, last seen after September 11, 2001, to pump billions of dollars into the credit-starved markets but "this is not a cure," Schubert at Commerzbank warned.

One of the vital functions of central banks is to prevent the break of a link, or links in the banking chain from freezing the national, and potentially international, banking system.

"If Northern Rock went under you'd be faced with a house of cards," Shaw warned, referring to the troubled British mortgage lender that had to be bailed out by the Bank of England to the tune of billions of pounds.

The European, US and Swiss central banks said they would provide more than 60 billion dollars to money markets over longer periods and under easier-than-usual conditions.

"That could help unclog the money market in Europe," where banks have found it particularly hard to find dollars, Moec said.

International Monetary Fund spokesman Masood Ahmed said "central bank liquidity operations are only one part of addressing the ongoing problems" and that losses had to be evaluated and announced to remove the uncertainty that was the market's biggest enemy.

"Early and focused action to solve valuation problems is critical in moving forward to solve this crisis," Ahmed stressed.

The world's biggest bank Citigroup said late last week that it would take on board 49 billion dollars' worth of now much devalued subprime home loans in an effort to draw a line under its problems.

The bank had earlier told investors it faced investment losses of between eight and 11 billion dollars, in large part owing to the subprime market meltdown.

A leading name in European finance, UBS bank, also revealed last week an extra 10-billion-dollar hole in its balance sheet owing to losses in the subprime market. Analysts said UBS was sending a message of reassurance that it had dealt with the problem and there would be no more nasty surprises.

An ECB study estimates that 18 of the biggest eurozone banks are exposed to risks which, if handled in the same way, would require additional funding "of approximately 244 billion euros (356 billion dollars)."

Xinhua, Kathmandu

Angered over the inability of Nepal Oil Corporation to maintain adequate supply of petroleum products, Nepal Petroleum Dealers' Association (NPDA) Saturday announced a nationwide protest from December 25, The Kathmandu Post reported today.

Putting forth a 17-point demand, NPDA warned that all dealers across the country would close down operations from December 25 as part of the protest.

"The government should either adopt a liberal policy in the trade of petroleum products or provide sufficient supply of petroleum even by bearing losses," President of the NPDA Shiva Prasad Ghimire told the daily.

In addition to demanding a smooth supply of petroleum products, the association has asked for an equal pricing system for petrol, diesel and kerosene, and an amendment to the existing Petroleum Dealers Regulations, among others.

"We will not stop the protest without bringing it to a logical end," said Ghimire, "we are not in a position to bear the mounting pressure from consumers amid the shortage of petroleum products in the country."

According to the association, the demand for petroleum products in the country stands at 4.2 million liters per day, far more than the present daily supply ranging between 1.8 million to 2.5 million liters.

Most of the 2,154 petrol pumps in operation throughout the country are seeing a steep decline in their business due to the scarcity of petroleum products, the daily said.