Adnan Shihab-Eldin

SYDNEY, Australia,, April 10--US oil at $50 a barrel might be a realistic upper limit for producer group OPEC’s new price target as it did not appear to be endangering global economic growth, the group’s acting secretary-general was quoted as saying on Sunday, Reuters reported.
Adnan Shihab-Eldin also told the Australian Broadcasting Corporation’s “Inside Business“ program in a pre-recorded interview that the group could agree upon its new preferred price range as soon as September.
OPEC abandoned its defunct $22-$28 a barrel price target for its basket of crudes in January after oil prices had exceeded it for more than a year, but the group is anxious to keep prices below $50 to protect economic growth--and oil demand--in its biggest markets.
“I can tell you that a more realistic (level) would be above $28 or $30,“ Shihab-Eldin said, noting that producers needed a price that would finance additional investment and provide steady revenues.
“...On the upper side it has to be acceptable to the global economic growth and maybe $50 WTI (US West Texas Intermediate crude) seems to be in that direction, but we are still continuing our studies,“ he said.
Shihab-Eldin has said before that OPEC members and others outside the organization are converging on a consensus view of about $40-$50 a barrel as a stable medium-term price range. Saudi Arabia’s oil minister has said he expects oil to trade in this range throughout the year.
US crude at $50 equates to a price of about $43-$45 a barrel for OPEC’s heavier, more sour basket of crudes.
OPEC raised output by 500,000 barrels per day (bpd) in mid-March in an attempt to cool prices and said it would consider a second increase if US crude remained above $55 a barrel.
US crude oil futures closed on Friday at $53.32 a barrel, up nearly a quarter since the start of the year, but sharply lower than the all-time high of $58.28 a barrel set on April 4.
Shihab-Eldin also repeated that a shortage of global refining capacity--not a lack of crude oil--was a major factor supporting prices.
“That is the critical factor right now, there is not enough refining capacity in the consuming countries,“ he said.

Wen Jiabao walks with officials and security personnel after arriving in Banglore, India on Saturday. (AFP Photo)

BANGALORE, India, April 10--China’s premier on Saturday signaled his country’s readiness to resolve a longstanding border dispute and boost trade with India as he arrived at the start of a four-day visit in the fellow Asian giant, Reuters reported.
Wen Jiabao, who visited Sri Lanka’s tsunami-ravaged areas earlier on Saturday, arrived on the local Hindu New Year day in festive Bangalore, whose software campuses have helped India join China among the world’s fastest-growing economies.
Relations between the world’s most populous countries are warmer than ever before, with both emerging as economic and diplomatic heavyweights on the world stage and discovering the language of cooperation rather than competition.
Wen is due to meet Prime Minister Manmohan Singh on Monday.
The premier, who arrived from Colombo after stops in Pakistan and Bangladesh on a South Asia tour, is due to visit a leading software facility and scientific establishments in Bangalore on Sunday before leaving for Delhi.
Wen and his 150-member delegation will discuss ways to expand trade between two of the world’s fastest-growing economies, with the eventual establishment of a free trade area on the agenda during his trip.
The two nations, one a one-party communist republic and the other the world’s largest democracy, are politically apart but are expanding trade fast.
Two-way trade has been growing at 30 percent a year for the past eight years and could surpass $30 billion by 2010 from the current $13 billion. That would see China overtaking the United States as India’s largest trading partner.
India is also wary of cheap Chinese goods flooding its economy, while Beijing is trying to build a challenge to India’s outsourcing revolution based on English-speaking workers who are available at a fraction of Western salaries.

KUWAIT CITY,
April 10--Kuwaiti MPs are questioning the need for large-scale foreign involvement in a government-proposed multi-billion dollar project to develop the emirate’s northern oilfields, one lawmaker said Sunday, AFP reported.
At a meeting with the energy minister and top oil executives in parliament late Saturday, MPs urged the government to consider other options to implement the project that would minimize participation by foreign oil majors, Nasser al-Sane said.
The controversial 8.5-billion-dollar Project Kuwait has been stalled for more than a decade by resistance from MPs who fear that the Persian Gulf emirate’s oil resources could be surrendered to international oil companies. They believe that the proposed increase in production from four oilfields bordering Iraq is so small that it does not warrant major foreign investment for a proposed two-decade period.
The investment aims at increasing production from secondary reservoirs of the oilfields as part of Kuwait’s strategic plan to boost output from a current 2.6 million barrels per day (bpd) to four million bpd in 2020.
Sane said some MPs left the meeting feeling “more convinced that we should not go for the project. MPs opposed to the project have questioned the very idea of the investment.“
Some MPs instead suggested “hiring experts from major oil companies... to help our oil sector do the job themselves,“ especially since the proposed increase in production is not high, Sane said. Others called for extending agreements Kuwait signed with foreign companies in 1995 to help in technical aspects, he said.
The head of parliament’s finance and economic committee, Abdulwahab al-Harun, said MPs raised concerns regarding control over foreign companies and whether the deal will take the form of a partnership or service contracts, in addition to other details.
In February, Energy Minister Sheikh Ahmed Fahd al-Sabah submitted to parliament new draft legislation to regulate the plan, stipulating that “all oil wealth and resources are the property of the state.“ The minister told reporters after Saturday’s meeting that lawmakers have not rejected the “principle of seeking the help of foreign companies,“ but he acknowledged that differences remain concerning the details.
Project Kuwait aims at increasing daily output in the four fields from the current 530,000 bpd to 900,000 bpd.

BUDAPEST, Hungary, April 10--After the “big bang“ investments by major multinational companies in central and eastern Europe following its transition from communism in 1989, smaller firms are now moving into the newly joined member-states of the European Union, AFP reported.
A wave of investment by small- and medium-sized enterprises (SMEs) has been spurred, officials say, by the EU integration last May 1 of eight countries in the region.
EU enlargement eliminated trade barriers and opened up new markets for businesses.
“After May 1 a psychological barrier was broken down,“ Peter Spanyik, vice president of the Hungarian Investment and Trade Development Agency, told AFP.
“We see a significant rise in interest on the part of smaller foreign companies, especially from the EU, to invest in our region now that the borders are open and there is a free movement of goods,“ Spanyik said.
“While the major multinationals like IBM have been around from the outset after transition, due to their size and good contacts, the smaller companies needed a push to come and the EU integration provided just that,“ he said.
In Hungary, SMEs by far outnumber the largest multinational investors but are still dwarfed when it comes to their contribution to the local economy.
There are 27,000 foreign SMEs in Hungary, compared to 40 major multinational like Audi and IBM.
However, the big-40 generate 51 percent of the country’s Gross Domestic Product and 74 percent of its total exports, according to ITDH figures.
But that is bound to change as smaller companies looking for new markets or cheaper production costs venture into the region.
Manutan International, a France-based leading catalogue and web-based supplier of office equipment, on May 1 set up shop simultaneously in the Czech Republic, Hungary, Poland and Slovakia. The company has 50 employees in the four countries altogether.
“For us the open borders of the EU meant everything,“ said Maxence Dutat, director of Manutan’s Budapest office.

Migrant workers carry out their jobs at a construction site in Kuala Lumpur, Malaysia. (AFP File Photo)

KUALA LUMPUR, Malaysia, April 10--An acute labor crunch threatening Malaysia’s economy after the government expelled hundreds of thousands of illegal immigrants highlights a failure to plan for long-term manpower needs, analysts and industry experts say, AFP reported.
“There is no medium to long-term approach to address the twin problem of illegal immigrants and a labor shortage,“ said Abdul Razak Baginda of the Malaysian Strategic Research Centre.
“Malaysia is firefighting on a daily basis, and it appears to be haphazard. We put bricks and mortar at the centerpiece of our economic development but pay little attention to developing human resources.“
The repatriation of some 400,000 illegal immigrants has left a yawning labor gap in Malaysia’s agricultural, construction, manufacturing and services sectors.
The government announced last week it would immediately begin recruiting workers from Pakistan, India, Myanmar, Nepal and Vietnam to plug the vacuum. But industry experts say what Malaysia really needs to do is change its tactics. Such an ad hoc response will not end illegal employment nor meet the country’s long-term need for guest workers, they say. “Foreign workers are here to stay but we have been flip-flop in our policy. The government must formulate a long-term strategy on manpower and immigration,“ said Paul Low, vice-president of the Federation of Malaysian Manufacturers. Low said the government should give incentives for companies to upgrade productivity and modernize, and issue a clear deadline for them to begin gradually reducing their dependence on foreigners.
Some employers say they prefer cheap illegal labor because recruiting foreign workers through the proper channels is a tedious and costly process. And despite large-scale operations to flush out illegal workers and stricter penalties for both the migrants and their employers, a culture of bribery has also made it possible for the black market to flourish. “As long as there is corruption, there will be illegal workers. There is a lot of money-making, it has become like an industry by itself,“ said Agile Fernandez of Tenanganita, a local women’s and workers’ rights group.
Deputy human resources minister Abdul Rahman Bakar has conceded that Malaysia may be forced to continue to rely on foreign labor because locals--including some 18,000 unemployed graduatesÑshun jobs that are considered “dangerous, dirty and demeaning.“

BRUSSELS, Belgium, April 10--The European Union and the United States are anxious for a deal to end a row over government aid to aircraft makers Boeing and Airbus, but strained relations between the two top negotiators--EU Trade Commissioner Peter Mandelson and senior US official Robert Zoellick--are keeping a solution at bay, AFP reported
Even though both sides say they prefer a negotiated settlement rather than having to do battle at the WTO, a January cease-fire in the transatlantic dogfight expires Monday without any sign that it will be extended or that a deal will be reached in time.
With the Monday deadline fast approaching, Mandelson stressed last week that it would be better to get a deal rather than go before the World Trade Organization.
“It behoves us all to try harder, to intensify our efforts and get the sort of negotiated, amicable solution that I continue to believe very firmly is far preferable than seeing this go to the WTO,“ he told a news conference.
Zoellick, the number two at the US State department and until recently US trade representative, said he was “willing“ to extend the 90-day cease-fire period to try to reach a deal.
But he also maintained the threat of bringing the dispute before the WTO if Europe refused to abandon aid for the launch of Airbus’ new long-range, mid-sized A350, destined to rival Boeing’s new 787 Dreamliner.
“I’ve heard many voices in Europe saying they want to move ahead with the launch aid for the 350,“ Zoellick said.
“Then, we should go to the WTO and it doesn’t have to be acrimonious, it’s just a difference of opinion.“
But an EU source said that “such a demand is unrealistic“. Challenging the US argument, he maintained that European aid took the form of loans to fund investment while US assistance to Boeing was spread out over time. “We have two very different systems,“ said EU Transport Commissioner Jacques Barrot.
Airbus received aid in the form of “reimbursable advances“ while Boeing benefited from “the close link between military and civil research programs that are largely financed with public money,“ he added.
Brussels and Washington will need “a lot of patience“ to resolve the dispute, he warned.

LUSAKA, Zambia, April 10--The International Monetary Fund (IMF) said on Saturday it had approved a $3.9 billion debt relief plan for Zambia, lifting a crippling debt burden on the impoverished southern African country, Reuters reported.
The IMF board approved the debt relief deal under the Highly Indebted Poor Countries (HIPC) initiative, aimed at reducing crippling debt loads shouldered by developing nations, it said in a joint statement with the World Bank.
The decision came as Zambia’s ruling party suspended a former vice president for accusing President Levy Mwanawasa of corruption, in an apparent bid to shore up the leader’s position against a potential rival.
The government in Lusaka has said the debt relief package would enable it to shift funds currently earmarked for debt servicing to the battle against poverty.
“Debt relief under the enhanced HIPC initiative will surpass US $3.9 billion over time,“ the statement said.
Zambia has said it spends an average of $123 million annually to service its foreign debt. Its total debt is estimated at $6.8 billion--equal to about 170 percent of gross domestic product.
“Our credit rating has improved as a result of our attaining the HIPC completion point and the government will only be borrowing money to support private sector production and development,“ Zambia’s Finance Minister Peter Magande told a news conference.