A young boy plays amongst the rubbish along a railway line in a slum area of Jakarta. (AFP File Photo)

JAKARTA, Indonesia, Aug. 3--Indonesian President Susilo Bambang Yudhoyono on Wednesday called on the world to remember that the Asia-Pacific region, with some of the world’s fastest growing economies, was also home to most of its poor, Reuters reported.
Speaking at the start of an international conference on development, Yudhoyono urged rich nations to meet a United Nations goal of setting aside 0.7 percent of their Gross Domestic Product for development assistance.
“In our region, there are some 700 million people, or nearly two-thirds of the world’s poorest people, who live on less than $1 per day,“ Yudhoyono told ministers and officials from some 40 countries in Asia and the Pacific.
“We may find it ironic that while our region is gaining a reputation for economic dynamism, at the same time it is still home to the majority of the world’s poor.“
China has been growing at 9 percent per year and India joins the Group of Eight summit of rich nations for the first time this year. Even Indonesia, once an economic laggard in the region, has bounced back after years in the doldrums.
China, India and Indonesia are also three of the world’s four most populous countries.
“Most Asia-Pacific countries are on track, but the Asia-Pacific is the most populated region in the world. Looking at the numbers, the Asia-Pacific has the largest poverty problem,“ Indonesian Planning Minister Sri Mulyani Indrawati said.
Officials at the meeting said the world had been focused on poverty in Africa, neglecting the Asia-Pacific.
Leaders of industrialized countries under the G8 group last month agreed in Scotland to double aid for Africa to $50 billion in a bid to end chronic poverty there.
In his speech opening the meeting, Yudhoyono reminded delegates of the region’s pledges under the Millennium Development Goals to halve poverty by 2015, using the global definition of earning less dollar a day.

Palaniappan Chidambaram

NEW DELHI, India, Aug. 3--India’s Finance Minister Palaniappan Chidambaram said Tuesday the government should continue to consider selling shares in state companies despite opposition from crucial communist allies, AFP reported.
In May the government proposed selling 10 percent of its shares in Bharat Heavy Electricals to raise as much as 4.91 billion rupees ($114 million).
It was the first such move by the Congress Party-led coalition which came to office in May last year.
The coalition’s parliamentary majority depends on the communists, who opposed the planned sale--saying it violated an agreement not to sell shares in profitable state-owned companies.
“Monetising a part of ownership at an appropriate time and price is good economics. There can be an opposite point of view,“ Chidambaram told parliament, according to the Press Trust of India news agency.
“But I would not agree that it (privatization) is bad economics,“ he said responding to comments by Communist Party of India legislator Gurudas Dasgupta.
The proceeds from state asset sales would go into a special fund which would be invested in public sector mutual funds to enable the government to earn returns, Chidambaram said.
The sale of 10 percent of Bharat Heavy would mean private investors would hold 43 percent of the company.
At the moment the government holds 67 percent of the company while the remaining 33 percent is with foreign and domestic institutional investors, private companies and mutual funds.
Chidambaram said the government had “not taken any further decisions“ in the matter amid opposition from unions and others.
India is under pressure to reduce chronic budget deficits. In the last fiscal year ended March 31, the fiscal deficit was estimated at 4.5 percent of gross domestic product, compared to 4.8 percent the previous year.
The government is required by a fiscal responsibility law to shave 0.3 percentage points off the deficit annually.
For the current year, the government estimates it will fall by only 0.2 percentage points to 4.3 percent.

LONDON, Aug. 3--The Bank of England is nearly certain to cut British interest rates on Thursday for the first time in two years as policymakers seek to prevent an economic slowdown from deepening, Reuters reported.
Forty-three out of 47 economists polled by Reuters last week predicted the Monetary Policy Committee would cut benchmark short-term interest rates to 4.5 percent from 4.75 percent, where they have remained for a year.
The MPC’s 100th meeting since its inception comes amid a sea-change in expectations for rates, which earlier this year still looked set to rise. A sharp slowdown in consumer spending has changed all that.
Deadly bomb attacks on London in the last few hours of the MPC’s July meeting and then a botched plot two weeks later had also boosted calls for a move to shore up confidence although so far there appears to have been little economic impact.
What is not clear is how many more cuts, if any, the MPC is prepared to deliver. A few analysts are even questioning the need for an immediate move following a sharp fall in the pound and the fact that inflation is now at the 2 percent target. This means that quarterly inflation and growth forecasts which the MPC will use at its August meeting will be crucial in determining whether a slim majority to hold rates in July will change to a majority in favor of an easing. Only one policymaker needs a change of heart as five voted for no change and four for a cut last month.
“A 25 basis point cut on August 4 seems to be a done deal,“ said Ross Walker, UK Economist at RBS Financial Markets. “With two quarter point rate cuts by the end of this year fully priced in by the markets, the main interest is in developments beyond August.“
Weak retail sales for most of this year, alongside evidence from the high street that a slowing property market has led at least some consumers to become much more frugal have all boosted expectations for a cut.
Overall, the economy grew at its weakest annual pace in 12 years in the second quarter. The labor market also appears to be turning, with jobless claims up for the fifth month running in June.

KUALA LUMPUR, Malaysia, Aug. 3--Malaysia’s trade surplus in June grew 16.1 percent from May, the Ministry of International Trade and Industry said Wednesday, AFP reported.
The trade surplus in June of 7.74 billion ringgit ($2.06 billion) was a significant increase of 49.6 percent from June 2004, the ministry said, attributing the rise to strong export growth over the past six months.
Total exports in June rose 4.4 percent from May to 44.52 billion ringgit and were also up 11.7 percent year-on-year, the ministry said in a statement.
The year-on-year increase was due mainly to increased exports of electrical and electronic products, crude petroleum, refined petroleum products, liquefied natural gas and machinery, appliances and parts.
Major export destinations were the United States, Southeast Asian countries, the European Union, Japan, China and Hong Kong, which took a combined 79.6 percent of Malaysia’s exports in June.
Imports in June 2.2 percent from May to 36.78 billion ringgit and were also up 6.0 percent year-on-year, the ministry added.
It attributed the increase in imports to a greater intake of intermediate goods such as chemical products and capital goods such as transport equipment and machinery.
For the six months to June, total exports stood at 253.30 billion ringgit, while imports were at 205.43 billion, resulting in a trade surplus of 47.88 billion ringgit.

SINGAPORE, Aug. 3--The credit quality of most insurers in the Asia-Pacific region will remain stable until 2006 despite periodic disasters and other industry risks, Standard and Poor’s (S and P) said Wednesday, AFP reported.
“This prognosis is predicated largely on the strengthened balance sheet of the insurance industry in recent years although there are challenges ahead for life and non-life insurance players in the region,“ analyst Paul Clarkson said in a press statement.
The Philippines, however, received a “negative“ outlook in both the life and non-life sectors from the global credit watchdog, which monitors nearly 250 of the leading insurance players in the region.
China received a “developing“ outlook in both sectors, which suggests it could either improve or deteriorate in a few years.
In a report, S and P stressed the importance of favorable investment markets, sensible regulatory reform, level of competition versus consolidation, and appropriate pricing and reserving in determining the outlook of specific firms from now until 2006.
It noted wide variations in the industry, from “totally open“ markets like Singapore and Hong Kong to tightly regulated Taiwan and China, and said ratings of Asian players ranged from the highest possible “AAA“ to the very weak “CCC“.
“(In) some of the markets, in particular New Zealand and Malaysia, non-life are strong performers and generate relatively stable profits. Others, including Taiwan, Philippines and Japan, are volatile, catastrophe-prone, or beleaguered by negative spreads and soft pricing,“ S and P said.
It said many of the insurance markets in Asia tend to feature “a leading group of companies of sound financial strength“ below which there is “a rapid deterioration in strength“ among smaller players.
Consolidation can help weed out the weaker players and enhance financial stability, as shown in Japan and Australia.
“However, for many Asian countries, there is an over-abundance of insurance underwriters, leaving a significant number of smaller non-viable riskier companies. With a high degree of private ownership in many Asian countries, consolidation could take several years,“ it said.
In the life insurance sector, China and India, the largest and most dynamic developing economies in Asia, were said to have the highest growth potential because of low penetration rates.
“The exception is Japan, where recently the in-force book has been declining through the effects of an aging population,“ S and P said.

MANILA, Philippines, Aug. 3--The Philippines on Wednesday drastically revised its trade deficit figures for the past three years painting a far worse picture for the country’s economy and trading position than first thought, AFP reported.
According to the National Statistics Office (NSO) the 2004 trade deficit was $4.36 billion from the previously stated $713 million.
The 2003 deficit was revised to $4.24 billion, up from $1.27 billion while for 2002 the trade deficit was revised to $4.03 billion from the previously reported $218 million.
NSO administrator Carmelita Ericta said in a statement the adjusted import data were based on a new methodology of computation and also covered documents received after cut-off dates.
The final export figures covered documents that were received after the cut-off dates and other data that were missed in previous reports, she said.
No further comment was available.
Embattled Philippine President Gloria Arroyo has warned of a looming fiscal crisis as she struggles to introduce economic reform.
The Supreme Court suspended the collection of an expanded value-added tax on the day that it came into effect on July 1, denying the government much needed extra revenues.
The government has since threatened to raise tariffs on imports from ASEAN countries, another potential impact on the country’s trading position, by a percentage point to compensate if the legal impasse is not resolved.

TOKYO, Aug. 3--Toyota Motor said Wednesday its net profit slipped slightly in the June quarter as it focused on research but its sales hit a new record and would steer the world’s second-largest automaker through the year, AFP reported.
Japan’s biggest carmaker said net profit fell 6.9 percent year-on-year to 266.9 billion yen ($2.4 billion) but quarterly sales rose 10.5 percent from a year earlier to hit a record 4.98 trillion yen.
An increase in research and development costs and related expenses of 86.8 billion yen and foreign exchange losses of 10 billion yen impacted earnings but Takeshi Suzuki, senior managing director, said the company’s profits would pick up as it introduces new vehicles.
Cost cuts and improved marketing contributed to boosting operating income by 60 billion yen, the company said.
“We expect improvement from the latter half of this fiscal year (to March 2006) through next year, with the planned introduction of the Lexus (in Japan) and other models,“ Suzuki said in a statement.
“In order to realize future growth, annual expenses of 770 billion yen in R and D and 1.25 trillion yen in capital investment has been made continuously and strategically,“ he said.
The company did not provide consolidated forecasts for the year to March 2006.
But it said the firm estimated that consolidated vehicle sales for the fiscal year will be 7.97 million vehicles.
“As production and sales of vehicles have been increasing steadily, and with the
current levels of exchange rates, we will strive to achieve an increase in
revenues and profit compared with last year,“ Suzuki said.
In the June quarter, vehicle sales grew in all regions to a total of 1.95 million units, up 157,000 units or 8.8 percent from the same period last year.
In Japan, where Toyota enjoys 45 percent of the domestic market, sales increased by 12,082 to 550,347 vehicles.
Sales in North America reached 641,248 vehicles, up 69,202 vehicles due to the strong popularity of the new Avalon, Prius and the Scion lineup, the firm said.
In Europe, locally-built models such as the Corolla and Yaris contributed to a sales increase of 8,327 vehicles to 256,143 units.
Sales in Asia rose by 26,799 to 229,000 vehicles, Toyota said.