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Sun, Sep 12, 2004
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Economy News in Brief
German Far Right May Scare Off Investors
Egypt Increases Diesel Price
Poland Seeking Closer Arab Ties
China Mulls Copycat AIDS Drugs
New Software for On-Line Shopping
Greece Eyeing 2008 Global Trade Fair
Turkish Cypriots to Restrict Foreign Property Ownership
Canadian Farmers Will Receive Aid
Volvo in Largest Ever Recall

German Far Right May Scare Off Investors
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Gerhard Schroeder
BERLIN, Sept. 11--Chancellor Gerhard Schroeder said on Saturday the rising popularity of right-wing extremist parties was a "great problem" for Germany and could frighten off foreign investors, Reuters reported.
In an interview with Berlin's Inforadio, Schroeder said he was alarmed by strong gains made by the far-right NPD in a regional election last Sunday and by the prospect of the party scoring even better results in two elections on September 19.
"It's truly a great problem--and one that we don't need for international political reasons," Schroeder said, according to an advance text of the interview.
"Germany is a free, democratic nation. And everything connecting us to the brown (Nazi) cesspool damages us, damages Germany, and damages our standing with international investors. I hope voters won't give right-wing extremists a chance."
The National Democratic Party (NPD) came from nowhere to score a shock four percent in the election last Sunday in the western state of Saarland. The far-right fringe has appealed to voters frustrated by cutbacks in unemployment benefits.
The NPD, which Schroeder's government tried unsuccessfully to outlaw, is projected to win five percent to nine percent in the eastern state of Saxony next Sunday, enough to win seats in the state assembly.
In another election on September 19 in the eastern state of Brandenburg, the rival far-right party DVU is expected to win six percent. The DVU has held seats in Brandenburg since 1999.
"I hope for domestic political considerations, but also for the foreign policy reasons, that we don't ever allow something like that to happen again," Schroeder added in the interview, which will be broadcast on Inforadio on Sunday.

Egypt Increases Diesel Price
CAIRO, Egypt,
Sept. 11--The Egyptian government raised the long heavily subsidized price of diesel fuel by 50 percent from Friday, a press report quoted a spokesman for the prime minister as saying. The increase, from 0.4 Egyptian pounds (6.4 US cents, 5.2 euro cents) a liter to 0.6 pounds, Magdi Radi said in the governmental daily Al-Ahram.
"The government spends some five billion pounds ($806 million) annually on subsidizing diesel and its price has remained unchanged for the past 10 years," Radi said, adding that the true cost per liter is around two pounds.
Most Egyptians use diesel for powering heavy duty vehicles, generators and for operating industry machines, AFP said.
He said those affected by the hikes, such as the transport, may be compensated by the reductions in custom tariffs announced by the government on a variety of vehicles.
Finance Minister Youssef Butrous Ghali announced Wednesday huge reductions in custom tariffs on private and commuter vehicles.
Most private buses, a common form of transport for many commuters, trucks and taxis run on diesel.
The liberal opposition Al-Wafd accused the government of increasing the price of diesel in order to boost state coffers after cutting the tariffs, a move expected to deprive the government of about three billion pounds over the next 18 months.
The paper estimated that the new hikes would add some 25 billion pounds ($4 billion) to state coffers annually.
Al-Wafd added that owners of industries running on diesel have "warned about the negative impact of the increase on the production process", saying it would increase production costs and the prices of end products.

Poland Seeking Closer Arab Ties
KRYNICA, Poland,
Sept. 11--Poland signaled Friday it wants to rekindle trade ties with the Arab world by hosting Arab countries at a major economic forum here for central and eastern European states, AFP reported.
About 50 representatives from Arab countries such as Saudi Arabia, Jordan and Iraq participated Friday in the first Arab Day organized by the Economic Forum Poland-East.
The annual forum, dubbed the Davos of central and eastern Europe, draws together the political and business elite for three days in the southern city of Krynica.
"The level of trade isn't satisfactory and Arab investors are practically non-existent in Poland," Polish Foreign Minister Wlodzimierz Cimoszewicz said.
"It's also difficult to speak of Polish investments in Arab countries," he acknowledged, with trade "practically collapsed in recent years."
Arab countries barely represents 0.8 percent of Poland's trade. The forum's Arab Day "is aimed at reversing this negative trend...and Poland's foreign policy direction toward the Middle East and its diplomatic efforts," the foreign minister said.
In 2003, Poland joined the US-led military intervention in Iraq, where it has deployed 2,500 troops and administers an area. According to Cimoszewicz, "this engagement has not had negative consequences for economic relations" with other countries in the region."
But he noted: "The stabilization of the situation in Iraq will have generally speaking a positive impact to stimulate trade in the zone."
At the Krynica forum, Saudi Arabia had the largest delegation, led by Saudi Trade Minister Hashem Al-Yamani. "The lack of information is the biggest handicap blocking the development of trade, which has an enormous potential," Yamani said.
Syrian vice minister of the planning bureau, Mohammed Balsam Al-Sibai, also attended. For Abdelrahman Al-Zamil of major Saudi industrial conglomerate Zamil Group, Poland "could become an excellent base for his company for all of Europe."
Among its wide-ranging businesses, the group manufactures prefabricated steel used in building hangars in China, Egypt, India and Vietnam.

China Mulls Copycat AIDS Drugs
LONDON, Sept. 11--China is mulling whether to invoke a controversial World Trade Organization (WTO) deal on branded HIV drugs in order to combat its fast-growing AIDS epidemic, a top Chinese health official said here Friday.
Shao Yiming, chief expert at China's National Center for AIDS/STD Control and Prevention, said China would shortly decide whether to pursue its policy of negotiating low prices for these drugs from pharmaceutical giants or, instead, copy patented medications, which is permitted by the WTO if there is a national emergency.
"I think a decision will be made before the end of the year about whether to go with the reduced price of brand drugs or with the compulsory licensing," Shao told AFP in an interview on the sidelines of an AIDS conference here.
The World Trade Organization (WTO) agreed on August 30, 2003 that poor countries stricken by AIDS or other mortal epidemics can issue compulsory licences entitling domestic firms to copy a foreign-patented drug.
China estimates that, as at the end of last year, it had around 859,000 people living with AIDS or the human immunodeficiency virus (HIV) that causes it.
But the country is so big and the statistics so sketchy that some experts believe the figure could be two or three times as much.
Shao said it was possible that the toll could reach 10 million cases by 2010.
Epidemiologists are hard at work in badly affected regions trying to get a fix on the numbers, and their report would in turn be a factor on the decision on compulsory licensing, he said. In a two-week stretch this summer, 100,000 blood donors were tested for HIV in Henan, the central province that is reeling from an explosion in infection rates triggered by illegal blood donations in the 1990s, Shao said.
The drugs decision lies with the National Executive Committee, which is chaired by the vice premier and includes the ministers and vice ministers of about 22 ministries.
In addition to buying the imported HIV drug 3TC from GlaxoSmithKline, China already makes five generic HIV drugs whose patents has either expired or is not legally protected in China. They are AZT, ddI, nevirapine, D40 and indinavir.

New Software for On-Line Shopping
LONDON, Sept. 11--Internet shopping looks set to enter a new era with a new software that enables consumers to use a mouse to "feel" the textures of different fabrics through their computer screens, AFP reported.
The program, which uses a series of interactive virtual-reality animations to mimic the movement of various fabrics, was devised by Nicola Davison at Nottingham Trent University, central England.
Davison, who gained a master's degree in fashion and textiles, is convinced it will help slash the number of online shopping returns, which currently stands at almost 40 percent.
Called "Click 2 Touch," the software is expected to be available within a year after Davison, who is now in talks with retailers, won a research development grant from the British government's trade and industry department.
"The Internet only appeals to two of our five senses-sight and sound--but clothing requires the sense of touch," Davison told Britain's domestic Press Association news agency.
"Almost half of all garments bought online are returned, but less than three percent of items such as CDs, DVDs and books are sent back," she said.
"The number of people buying online is growing, but when it comes to fashion the inability to feel garments is deterring potential customers," she added.
"The program is also designed to make shopping online fun and rewarding rather than just clicking through pages. In the future I plan to develop the software to include home furnishings such as carpets, curtains and sofas."
The software provides realistic sensations for 10 feelings--softness, fullness, smoothness, hairiness, prickliness, drape, thickness, elasticity, rigidity and warmth.

Greece Eyeing 2008 Global Trade Fair
SALONICA, Greece, Sept. 11--Just two weeks after the completion of the costly Athens Olympics, Greek Prime Minister Costas Karamanlis pledged Friday that the country will throw all its weight behind the bid of its second biggest city Salonica to host the 2008 global trade fair Expo, AFP said.
Vast public infrastructure projects in and around the northern port city are scheduled to be completed by 2008, said Karamanlis during the opening the 69th Salonica International Trade Fair.
These include a new subway system, an undersea tunnel, the overhaul of Salonica airport and new underground parking lots to improve the city's poor transport system. Unfinished mountain
stretches of the Egnatia Road, an existing, 600-kilometer high-speed motorway that crosses northern Greece to link Turkey with the Adriatic sea and further west by ferry to Italy, would also be completed, Karamanlis said.
"Salonica can promote the entire region (of southeastern Europe). It is with this certainty that we compete for Expo 2008 ...all Greeks, of all political stripes, are mobilized to achieve that goal," he said.
Salonica's rivals for the global trade fair are Spain's Saragossa and Italy's Trieste. The International Exhibitions Bureau, known by its French acronym BIE, will pick a winner on December 31 in Paris.
Salonica, located 500 kilometers north of the Greek capital Athens, numbers one million inhabitants. The city has poor infrastructure. Early September, half the city was effectively left without water for three days when its main water pipeline burst.
Karamanlis put no price tag on Greece's new wave of public projects, a large part of which are co-financed by the European Union, which Greece joined in 1981.
The August 13-29 Athens Olympics have pushed Greece's public deficit and debt to alarming levels. The country spent around 7 billion euros on security and infrastructure for the Games, mostly financed out of taxpayer money and new borrowing.
But the Olympics also boosted Greece's sizeable construction industry and helped sustaining the country's high economic growth rate--one of the eurozone's highest.

Turkish Cypriots to Restrict Foreign Property Ownership
NICOSIA, Cyprus, Sept. 11--The Turkish Cypriot parliament is to debate draft legislation next week that would limit foreign property ownership in the breakaway north of the island to a 125-year lease, AFP reported.
The bill, which has already been approved by the breakaway leadership, applies to both land with Turkish Cypriot title deed and property owned by Greek Cypriots displaced by Turkey's 1974 invasion.
"Property ownership will default to the state after 125 years," interior minister Ozkan Murat told a press conference Thursday.
A longstanding prohibition on alienation of property in the north to Greek Cypriots would also remain in force, he added.
The rejection by Greek Cypriot voters in April of a UN reunification plan for the divided island has sparked a quickening property boom in the breakaway north.
The UN plan would have seen many property-owners from both communities restored to lands they left in 1974.
Figures released by the Turkish Cypriot authorities indicate there have been 1,700 requests from foreigners so far this year to buy properties in the north, compared to 208 in the whole of 2000.
Of a total of 958 authorizations so far granted to foreigners, 54 were issued this year.
The quickening boom prompted the Greek Cypriot leadership to protest to the United Nations last month, warning that failure to respect the rights of landowners displaced by Turkey's 1974 invasion would undermine a future peace deal.
In a letter to UN Secretary General Kofi Annan, Greek Cypriot Leader Tassos Papadopoulos expressed "strong concern over the unfavorable repercussions" of any appropriation of absentee Greek Cypriot land.
As a result of the large population movements that followed the Turkish invasion, there are substantial numbers of properties on both sides of the island that are still legally owned by members of the rival community.

Canadian Farmers Will Receive Aid
OTTAWA, Sept. 11--Canada on Friday announced $488 million (376 million US dollars) in additional financial aid to help cattle farmers recover from the economic fallout of a single case of mad cow disease in Alberta in May 2003 that shut down exports to the United States, AFP reported.
"What we are seeking to do with today's announcement is to reposition the beef industry so that it can return to profitability with or without a border opening," said Agriculture Minister Andy Mitchell.
The Alberta provincial government has already said it would add $230 million (177 million US) to whatever aid was announced by Ottawa, and several other provinces say they are considering similar action.
Canada exported $4 billion (2.8 billion US) worth of beef in 2002, 80 percent of it to the United States, according to government figures.
Washington slapped a total ban on Canadian beef imports after the discovery of the Alberta case of mad cow, a ban which is still partially in force. Still banned are the import from Canada of live cattle, and meat from animals older than 30 months.

Volvo in Largest Ever Recall
STOCKHOLM, Sept. 11--Volvo Cars, the Swedish car-making unit of Ford Motors, has recalled some 460,000 cars worldwide because of motor problems, a company spokesman said on Friday, AFP reported.
Volvo's largest ever recall concerns the S60, V70 and XC70 models from 2000 and 2001, where problems have arisen with the electronic fan control module inside the radiator, which if overheated could lead to a short circuit and possibly a fire.
Car owners will be informed of the recall by letter, spokesman Bo Larsen said.
Around 150,000 Volvo cars will be recalled from the United States and 75,000 from Sweden. Other countries affected include Germany, where 40,000 cars will be recalled, and Britain with 35,000 vehicles.
The problem has primarily arisen in areas with warm temperatures and slow driving, for example in rush-hour traffic. As a result, the problem has been most acute on the Japanese market, where nearly 14,000 cars will be recalled.

iEconomyCol1
Debt Mediation
BUENOS AIRES--Spain will act as a facilitator between Argentina and the International Monetary Fund to help the two sides reach an agreement on the South American nation's debt, Spanish Foreign Minister Miguel Angel Moratinos said here Friday.

More Development Aid
STOCKHOLM--Sweden will increase its development aid to one percent of its gross national product (GNP) in 2006, compared to 0.868 percent this year, the Social Democratic government said on Friday.

Hungary Tax Rise
BUDAPEST--Hungary will raise capital gains taxes next year to 25 percent from 20 percent in an effort to boost state revenues and reduce the public deficit, prime minister-elect Ferenc Gyurcsany said here on Friday.