GENEVA, Sept. 30--Global investment flows have recovered from a three-year decline, with the rebound fueled by global corporations’ operations in developing countries, AFP quoted a UN report as saying on Thursday.
Prospects are good for maintaining the trend this year and in 2006, the UN Conference on Trade and Development (UNCTAD) said in its annual study of foreign direct investment.
“The high level of FDI to developing countries is likely to be sustained,“ said Anne Miroux, who steers UNCTAD’s World Investment Report.
Multinationals “are seeking to improve their competitiveness by expanding in the fast-growing markets of emerging economies and by seeking new ways to reduce costs,“ she said.
Developing nations in Asia are the biggest winners, UNCTAD noted.
Globally, foreign direct investment flows last year reached $648 billion, 2 percent higher than in 2003.
Behind that figure lie diverging trends, said UNCTAD.
FDI in developing countries surged by 40 percent to $233 billion, the second-highest amount ever recorded. In the developed world it fell 14 percent to $380 billion, with much of the decline tied to repayments of intra-company loans and capital repatriation from western Europe by foreign parent companies.
The United States remained the top recipient of FDI, drawing $96 billion of the total, followed by Britain, mainland China, Luxembourg, Australia, Belgium, Hong Kong, France, Spain and Brazil.
Six of the 10 economies with the largest increases in FDI were in UNCTAD’s “developing“ category. The top 10 comprised, the US, Britain, Australia, Hong Kong, Brazil, China, Singapore, Mexico, South Korea and Russia.
More than half of FDI originated in the US, Britain and Luxembourg.
But developing countries are also emerging as important sources of investment for other developing nations, with the steel industry a major target.
India’s Tata Group invested $2.2 billion in Bangladesh, South Korea’s Posco Ltd. agreed a 8.4-billion-dollar steel project in India, and China’s Baosteel signed a deal to build a mill in Brazil for a total $8 billion.
UNCTAD predicted a continuing rise in FDI in resource-rich developing countries, by investors from the rich and developing world, fueled by Asian demand and high commodity prices.
Developing country investors are also eyeing opportunities in rich nations, UNCTAD noted. It pointed to the acquisition of the personal computer division of US giant IBM by China’s Lenovo.

A laboratory worker tests samples from pigs and chickens for the bird flu virus at a research center in Bogor, Indonesia. (Reuters File Photo)

MANILA, Philippines, Sept. 30--Southeast Asian nations approved the creation of a regional fund to fight bird flu and other animal diseases, officials said on Friday, as the United Nations warned the virus could mutate and kill up to 150 million people.
They said the Association of South East Asian Nations (ASEAN) will also endorse a global plan to contain avian influenza, which has killed 66 people in four Asian countries since late 2003 and led to an estimated $15 billion in losses for the poultry trade.
“The creation of the animal health trust fund has been approved,“ Philippine Agriculture Secretary Domingo Panganiban told Reuters by telephone from Tagaytay, a resort city south of Manila where ASEAN agriculture ministers were meeting.
The fund would also be used to prevent the spread of other illnesses affecting animals such as foot-and-mouth disease and hog cholera, other officials have said.
The World Health Organization (WHO), the UN health agency, said on Thursday that if the bird flu virus spreads among humans, the quality of the global response would determine whether it ends up killing 5 million people or as many as 150 million.
Experts say a lack of funds is hampering the fight against bird flu in Asian countries such as Indonesia, where a fifth victim died on Monday.
Details of the fund and other measures to curb bird flu were expected to be announced later on Friday at the end of the meeting by the ASEAN ministers and their counterparts from China, Japan and South Korea.
Philippine Agriculture Undersecretary Segfredo Serrano said ASEAN would also endorse the global bird flu plan proposed by the world animal health body OIE, the Food and Agriculture Organization (FAO) and the WHO.
The three agencies plan to hold a bird flu conference in December to try to raise the $102 million they say is needed over the next three years to contain the virus.
The proposed program needed the endorsement of ASEAN to give it credibility among donor countries and multilateral agencies, Subhash Morzaria, chief technical adviser of the FAO in Asia and the Pacific, told reporters on Thursday.
The money will be used to help affected countries and fund research, training of personnel and campaigns against bird flu.

BRUSSELS, Belgium, Sept. 30--The eurozone’s potential economic growth rate should rise above 2.0 percent in the next few years, although high oil prices could delay the bloc’s recovery, a top IMF official said Friday, AFP reported.
Although eurozone growth has been “disappointing“ compared with the United States and the rest of the world, the IMF is relatively optimistic about the area’s prospects, said its European department director, Michael Deppler.
“There is a recovery on the horizon,“ he said, adding that the timing is difficult to predict. “Oil may delay that turn,“ he cautioned.
Runaway oil prices are increasingly taking their toll on the eurozone and global economy, pushing up inflation prices and denting consumer and business confidence.
“It is clear we see a recovery going forward--not a robust one, a weak one,“ Deppler said.
Earlier this month the IMF trimmed back its economic growth forecasts for the eurozone this year and the next, estimating an expansion of 1.2 percent in 2005 and 1.8 percent in 2006.
“We would expect it to rise further in 2007, above 2.0 percent,“ he said, adding that the IMF expects the eurozone’s growth potential to exceed that level in the next few years.
On interest rates, he said that the European Central Bank’s “policy response has been appropriate to the circumstances“. “We don’t have any problems with interest rates at 2.0 percent at the moment,“ he added, referring to the current level of the ECB’s main interest rates.

BRIGHTON, England, Sept. 30--British Prime Minister Tony Blair warned Thursday that tougher economic times lie ahead, a day after the annual rate of economic growth slowed to a 12-year low, AFP reported.
Speaking to BBC radio on the final day of his Labour Party’s annual conference, Blair noted that global economic conditions had worsened of late, but stressed that Britain had “weathered the storm better“ than competitors.
“The world economy is tougher and that is what’s changing,“ Blair said, in reference to spiraling oil prices and sluggish global economic growth. “But the balance to that, if you like, is that we are also going to grow as we have been growing as an economy over the past eight years.“
His comments came a day after official data showed that the economy grew at its slowest annual rate since 1993 during the second quarter of the year, falling far short of finance minister Gordon Brown’s forecasts.
Gross domestic product growth on a 12-month basis was revised sharply downwards to 1.5 percent during the second quarter, from a previous estimate of 1.8 percent, according to National Statistics.
Blair told BBC television earlier Thursday, “Our economy is still growing. “You look at what’s happened within the world economy over the last year as a result of oil prices and factors affecting the world economy, there’s been growth forecasts for most major countries downgraded.
Chancellor of the Exchequer Brown admitted at the weekend that economic growth would not meet the 3.0-3.5 percent range forecast earlier this year, but did not change the official figure.
Britons are under increasing spending constraints. The feeling of wealth, and the spending that goes with it, has dried up with a slowdown in the housing market and increase in interest rates.
Personal bankruptcies are rising. Municipal taxes are increasingly burdensome as well.
The average annual council tax will exceed 1,000 pounds (nearly 1,500 euros) in England this year. It has risen by 121 percent since it was first imposed in 1993, compared to 36 percent for retail prices, according to the Halifax bank.
Inflation is at the highest level since January 1997, at 2.4 percent, and the number of job seekers increased for the seventh month in a row in August, though unemployment stands at 4.7 percent.

Nissan Motor's concept car "Pivo", featuring an egg-shaped cabin atop a wheeled platform that can swivel around 360 degrees in unveiled in Tokyo on Friday. (Reuters Photo)

TOKYO, Sept. 30--Tired of all those three-point turns? Nissan Motor Co. could have a solution. Japan’s second-biggest auto maker has developed a concept car featuring an egg-shaped cabin atop a wheeled platform that can swivel around 360 degrees, doing away with the need to reverse when emerging from narrow spaces, Reuters reported.
“With this feature, parking in tight spots is a cinch,“ chief designer Masato Inoue told reporters at a sneak preview of the bubble-shaped, three-seater electric car this week.
The car, named Pivo after the word “pivot“, operates on an experimental system called drive-by-wire, which eliminates the mechanical linkages between cabin and chassis to enable steering, braking and shifting through electronic signals.
The system is the car’s version of fly-by-wire technology, which has controlled commercial jets for more than a decade.
Nissan will showcase the Pivo at the Tokyo Motor Show, which opens to the public on Oct. 22.
At the preview this week in Zama city, near Tokyo, a driver slid the 2.7-meter (8-foot) long Pivo into a tight imaginary parking spot, then rotated the cabin with the push of a button to face “backwards“ to come out of the space in one motion.
“With the Pivo concept, we want to demonstrate the myriad possibilities that drive-by-wire could achieve,“ Inoue said.
Shiro Nakamura, Nissan’s celebrity design chief, said on Friday the real-world application of the concept could be but a decade away. “Who knows, in 10 years our March (or Micra, subcompact car) could look like this,“ he said at a media event at Nissan’s showroom in Tokyo’s Ginza shopping district, where the car was being prepared for display to the public.
Other auto makers such as General Motors Corp. and DaimlerChrysler AG have also developed drive-by-wire concept cars featuring cabin interiors that resemble cockpits.
Quirky concept cars are always crowd-pleasers at international motor shows, which auto makers use to show off next-generation technology and draw attention to their newest production vehicles.

JAKARTA, Indonesia, Sept. 30--Students and workers protested in Indonesian cities for a second day on Friday just hours before President Susilo Bambang Yudhoyono was due to raise fuel prices sharply to cut popular energy subsidies, Reuters reported.
Tens of thousands of Indonesians queued at petrol stations, as on Thursday, seeking a cheap tank of gasoline before the hikes took effect. Many pumps had run dry, El Shinta radio said.
The protests took place in at least 10 cities and were small, witnesses and local media said, though organizers said numbers would swell after midday Muslim prayers.
Thousands staged noisy protests on Thursday, but there was little violence. The small scale of the demonstrations by Indonesian standards and their generally peaceful nature has buoyed Jakarta stocks and also given the rupiah currency a lift.
The government said the size of the fuel price rise would be announced at 10:00 p.m. (1500 GMT) on Friday, and the planning minister has said the hikes could average at least 50 percent.
“So far the protests appear to be under control. They are not as big as the market expected,“ said Rohma Fitri, an analyst at BNI Securities. “The government will go ahead with the fuel price increase tonight, which I think is a good thing.“
Yudhoyono seems to have little choice but to gradually wean impoverished Indonesians off Asia’s cheapest gasoline, at about 20 US cents a liter, and heavily subsidized kerosene used for cooking after the rupiah’s near meltdown late last month.
The president has said higher fuel prices will help cut crippling energy subsidies and take pressure off the currency.
No one expects the protests to bring down Yudhoyono, a former general respected by many Indonesians, although the price rises will come sooner than many expected and have an immediate knock-on effect on inflation.
When Yudhoyono raised fuel prices by 29 percent last March, demonstrations fizzled after a few days.
A big rise in fuel prices in May 1998 triggered rioting that was a factor in toppling former autocrat Suharto. However, Indonesia was then in the middle of a massive economic and political crisis.

ATLANTIC CITY, USA, Sept. 30--The cardiologist for a man who sued Merck & Co. Inc., blaming Vioxx for his 2001 heart attack, testified on Thursday that the withdrawn painkiller and not heart disease was likely responsible, Reuters reported.
David Sim, an Idaho cardiologist who has treated plaintiff Frederick “Mike“ Humeston since his heart attack, said he was able to eliminate many of the most common high risk factors for causing a heart attack.
“He had a paucity of risk factors for having an event,“ said Sim at the second Vioxx trial in testimony provided through video deposition.
Sim said Humeston was not a smoker, nor a diabetic; that he did not have high blood pressure or abnormally high cholesterol levels; that he was not obese and did not appear to have a family history of heart disease.
“It appears that there was very likely something else going on in his case that caused him to have this event,“ Sim said.
Asked if there were any potential medication-related reasons that might have caused the heart attack, Sim said, “The drug that was potentially relevant for Humeston was Vioxx.“