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2005/04/06
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Economy News in Brief
Microsoft Offers More Concessions on EU Server Ruling
Boeing Set on Airbus No.1 Spot
Funding Proposed for Bird Flu Vaccine
Malaysia to Import 169,000 Workers
Airline Profits Hit By Oil Prices
Afghanistan Wants to Be Master of Own Aid
PGCC Hopeful Talks Will Speed EU Free Trade Accord

Microsoft Offers More Concessions on EU Server Ruling
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BRUSSELS, Belgium, April 5--US software giant Microsoft Corp has offered further concessions to concerns raised by the European Commission concerning the implementation of the EU’s antitrust ruling regarding the servers market, a company spokesman said, adding there were six issues still unresolved, AFP reported.
A company spokesman told AFX News, AFP’s financial news subsidiary, “There were 26 issues where the European Commission had concerns. Microsoft has made or accepted proposals on 20 of them. On the remaining six there is a need for further discussions for us to get absolute clarity.“
In March last year, the company was found to have abused its dominant position in the market for servers by keeping information about its ubiquitous Windows operating system secret, thereby pushing rival server makers out of the market. The company’s initial proposals to resolve this were rejected by the commission.
The commission announced that it had four areas of concern regarding the implementation by Microsoft of the server ruling. It had told Microsoft it had to give information about how its servers interoperate to rival server makers. Microsoft’s offering to these rivals was inadequate, according to the commission.
It said that rivals did not have enough time to evaluate the technical documentation regarding the interoperability information and that they had to pay high fees to do so. Rivals would also have to take out a license for everything, forcing them to pay for information they might not need.
The commission also disagreed with the royalties structure, and the fact that open-source manufacturers could not get access.
Asked what impact these further concessions will have on the company, the spokesman said, “There is a full expectation at Microsoft that there would be changes.“
Commission spokesman Jonathan Todd, said, “For the moment nothing is resolved. We are still discussing. We are still studying the letter about interoperability. We will take the time necessary.“

Boeing Set on Airbus No.1 Spot
SEATTLE, USA, April 4--Boeing Co. will reclaim world market share leadership over European rival Airbus this year, the new head of commercial aircraft sales for the No. 1 US aerospace group predicted on Monday, Reuters reported.
“We’ll beat them this year,“ said Scott Carson in his first appearance before the media since being appointed in December to reinvigorate marketing at the United States’ top export firm.
The last year Boeing won more orders than Airbus was 2000, but in the first quarter of this year, the US firm has won some major orders, including recent multibillion dollar deals with low cost Irish carrier Ryanair and leading Chinese airlines.
Carson vowed to keep up the pressure throughout the year on Airbus, whose aggressive push to expand its product range with a diverse family of jets, including the A380 superjumbo, has at times caught Boeing flat-footed.
Airbus overtook Boeing by aircraft deliveries in 2003, and repeated the feat in 2004. By orders, Airbus has outsold Boeing every year since 2001.
“We will reverse market share on orders very quickly, I’m confident of that,“ Carson said.
In 2004, when Airbus won 366 orders against Boeing’s 272, the Chicago-based aerospace and defense group was particularly embarrassed, falling way short of its publicly heralded target for winning 200 orders for its latest airliner, the super-efficient 787.
Carson said disclosing any kind of order target for the plane had been a mistake since some airlines held off on orders because they thought the pressure to reach the sales goal would prompt Boeing to offer them a better deal.
He said the 787, which Boeing is betting will eventually become its best-selling wide-body jet, outpacing the 777, “is doing incredibly well in the marketplace.“
And he insisted Airbus’s A350, the European aircraft manufacturer’s competitor for 787--whose emergence as a rival some analysts have blamed for Boeing’s missing last year’s target--was a “non factor.“

Funding Proposed for Bird Flu Vaccine
WASHINGTON, April 5--The world’s governments should set aside 5 percent of their spending on influenza vaccines to help get ready for the next big flu epidemic, a World Health Organization expert proposed on Monday, Reuters reported.
The money could be used to research quicker ways to make influenza vaccine--notably one that would work against avian flu, which threatens to kill hundreds of millions around the world if it mutates enough, said Klaus Stohr, WHO’s top influenza expert.
More research is also needed on who may have some natural immunity to avian flu and if so whether study of such people can help fight the virus, experts told a meeting sponsored by the Institute of Medicine in Washington.
The H5N1 flu has killed 49 people in Asia since late 2003 and killed or forced the destruction of tens of millions of chickens and other birds.
Yet the world relies on old-fashioned methods for making influenza vaccines that require the use of specially grown chicken eggs and months of culturing. Each year the vaccine cocktail must be changed to follow the mutations of the flu virus and each year people must be re-vaccinated.
This same painstaking method is being used to make a new vaccine against H5N1 flu. WHO estimates it would take a year to produce enough vaccine to protect substantial numbers of people against avian flu, by which time it could have swept the globe, Stohr said.
What is needed, several experts told the conference, is a vaccine that works against multiple strains, can be produced quickly in lab dishes instead of in eggs and that produces immunity for years.
Stohr estimated that 300 million doses of seasonal influenza vaccine are produced every year around the world, at an average cost of $7.50 a dose. Public health authorities in 40 countries will spend $28.3 billion over the next 10 years on vaccinating people against influenza, he predicted.
Setting aside 5 percent of the spending would make $1.4 billion available to create a better influenza vaccine Ð one that could be formulated quickly and that could work against various strains of influenza, Stohr said.
Such a vaccine could be stockpiled, and production could be stepped up quickly if needed.

Malaysia to Import 169,000 Workers
PUTRAJAYA, Malaysia, April 5--Malaysia plans to hire 169,000 foreign workers to overcome an acute labor shortage after a crackdown on illegal migrants, a minister said on Monday.
Under a revolving-door immigration policy, Malaysia recently shooed out 382,000 illegal foreign workers, most of them Indonesians who left under a four-month amnesty against prosecution, and promised to let them return if they applied for work visas.
Malaysia’s ties with Indonesia were strained by the crackdown and by a dispute over a maritime border that the neighbors have decided to settle through talks.
Deputy Prime Minister Najib Razak told reporters only 11,000 Indonesians had returned so far.
“We have approved an intake of 75,000 to enable more Indonesians to return,“ he said in Malaysia’s administrative capital, Putrajaya. “This is on top of an intake of 94,000 approved earlier.
“We hope the Indonesian authorities will take note of this
and hope they will send their workers as soon as possible,“ he
said, adding the Indonesians would be exempted from induction courses that are usually mandatory ahead of employment.
Malaysia has blamed Indonesian red tape and processing fees for an administrative bottle-neck. Positions not taken up by Indonesian workers could be filled with workers from other Asian countries, such as India, Myanmar, Nepal, Pakistan and Vietnam, officials said.
Malaysia has arrested 4,200 illegal migrants since the sweep began on March 1, Najib said. They face a fine and jail, and men younger than 50 may also be whipped.
Malaysia relies on foreign unskilled labor to do dirty, poorly paid work that locals shun, but the numerous illegal workers cause government a fiscal and administrative headache, since they pay no tax and live in unregulated shanty towns.
The growing shortage of workers has hit a range of industries, from construction to plantations, as well as many small businesses, such as restaurants and telephone kiosks.
Najib said Malaysia’s move to diversify its sources of labor was not politically motivated. “We are being practical. We require the workers and are giving every avenue to Indonesia to supply their workers but at the same time we have to source from other countries,“ he said.

Airline Profits Hit By Oil Prices
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High oil prices could cost airlines $5.5 billion this year.
NEW YORK, April 5--High oil prices could cost airlines $5.5 billion this year and cause business failures, the International Air Transport Association has warned, BBC reported.
At the AirFinance conference in New York on Monday, IATA said that total losses for the industry could be as high as $40 billion from 2001 to 2005.
The forecast 2005 loss is based on an average price for Brent Crude of $43 a barrel. On Monday, Brent hit $57.10.
The high costs threaten the survival of several airlines, especially in the US.
United Airlines and US Airways are still trying to emerge from bankruptcy protection.
Giovanni Bisignani, chief executive of IATA, told the conference the air transport industry was “fragmented, constrained and quite frankly in many places a disaster“.
However, he suggested a number of measures could improve the situation. He said governments should reduce regulation for the airlines but increase it for the monopolies they are forced to use, such as airports and air traffic control systems.
“We see record profits at airports, when airlines have record losses,“ Bisignani said. “Airlines do the flying and everybody else makes the money.“
He also argued that governments should cut taxes for airlines, which despite their difficulties in making money are seeing passenger traffic rise 6 percent a year.

Afghanistan Wants to Be Master of Own Aid
KABUL, Afghanistan, April 5--An annual meeting of donor countries contributing billions of dollars to Afghanistan’s reconstruction opened on Monday with a plea from President Hamid Karzai to let his three-month-old government take a leading role, AFP reported.
A fierce debate is raging over slow progress in making Afghans’ everyday life easier. Karzai accused non-government organizations (NG+Os) of squandering funds channeled through them.
Karzai skirted the NGO controversy at the outset of the Afghan Development Forum on Monday, and instead pitched for more control over the way money is spent.
“The Afghan Government, as the ultimate body accountable to the Afghan people, must also be better informed about, and play its due role in, steering the development process,“ Karzai told an audience including representatives from some 40 donor nations.
“The government must become the anchor for a more integrated, transparent and accountable development effort,“ said Karzai, who had led an interim government for three years before winning a presidential election in October.
Finance Minister Anwar-ul-Haq Ahady urged donors to “channel most of your resources through“ the Afghan government.
Afghans are impatient for change, and many are cynical over the role played by some NGOs, but they don’t completely trust their government either. “The government should channel the aid,“ said Amin, a construction engineer in his early thirties. “But it has to be said not all people in the government are as good as Karzai. So there has to be a monitoring mechanism.“
The forum, due to end on Wednesday, is very much focused on strategy rather than raising money. Pledges of $8.3 billion covering two to three years were made at last year’s forum in Berlin, so there is no need to top up funds until next year.
Economic growth was estimated at 29 percent last year, but it is coming off a low base, and will need to keep up this pace
if Karzai is to fulfil an election promise to raise Afghanistan’s income per capita from $200 to at least $500 within five years.

PGCC Hopeful Talks Will Speed EU Free Trade Accord
MANAMA, Bahrain, April 5--The Persian Gulf Cooperation Council (PGCC) hopes to conclude a long-stalled free trade agreement with the European Union (EU) later this year, the PGCC’s chief said in Bahrain on Monday on the eve of the two blocs’ annual meeting.
“PGCC states have high hopes that the Manama meeting will speed up negotiations with a view to signing the free trade agreement in the course of the year,“ secretary general Abdulrahman al-Attiyah told AFP.
European Commissioner for External Relations and European Neighborhood Policy Benita Ferrero-Waldner and Commissioner for Trade Peter Mandelson will attend the meeting on Tuesday.
“What we gathered from Commissioner Mandelson suggests the EU (too) wants to accelerate the negotiations... The Persian Gulf side has demonstrated the (required) flexibility on many occasions,“ Attiyah said.
The oil-rich PGCC and the EU signed a framework economic cooperation agreement in 1988 but have failed to strike a free trade pact.
The PGCC states met one of the EU requirements when they launched a customs union in January 2003, but implementation has hit serious snags.
In principle, they plan a common market in 2007 and a monetary union and single currency by the start of 2010.
Attiyah said the talks on Tuesday would cover human rights and reforms, in addition to weapons of mass destruction. The two sides would also exchange views on the situation in Iraq and the Middle East.
Attiyah said the PGCC was currently the EU’s fifth largest export market, while the EU ranked as the main trade partner of the six Persian Gulf states collectively.
EU exports to the oil-rich Persian Gulf monarchies were around 36 billion euros ($46 billion) in 2002, while imports amounted to around 18 billion euros ($23 billion), according to EU figures.

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Pak-China Talks
ISLAMABAD--Chinese Premier Wen Jiabao is due to begin his first visit to Pakistan Tuesday, during which the close allies will sign a raft of economic, trade and investment agreements, officials said. Wen is making his maiden South Asian tour as premier, a week-long swing through the economically important region that will also include trips to India, Bangladesh and Sri Lanka.

New Minister
KUWAIT CITY--Kuwait’s Emir Sheikh Jaber al-Ahmed al-Sabah on Monday appointed long-serving bureaucrat Bader Mishari al-Humaidhi as new finance minister of the small but immensely wealthy emirate.

Trade Deficit
SYDNEY--Australia’s trade deficit shrank marginally in February to $2.2 billion (1.7 billion US) following a rise in agricultural exports, officials figures showed Tuesday.

Job Cut
DETROIT--Ford may cut 1,000 white-collar jobs in the United States. Ford president for the Americas Greg Smith said in the letter that Ford was struggling to cope “with some serious challenges,“ including tough competition, slipping sales and skyrocketing costs.