Alexei Kudrin

MOSCOW, Oct. 27--Macroeconomic stability has become the main factor making it possible to build up investment in the economy and draw more capital from abroad, Russian Finance Minister Alexei Kudrin said Friday as he addressed an international conference on new horizons in Russia’s social and economic development, Itar-Tass reported.
“The main factors stand apart from the volumes of budgetary allocations for the country’s development,“ he said. “They are found in economic stability.“
Some ten years ago, the inflation reaching 100 percent a year put up the main obstacle to investment.
“When I became finance minister in 2000, the inflation parameter totaled 36 percent a year,“ Kudrin said. “This upsetted business people and forced them to chase after prices and delegate risks to consumers. Each businessman tried to find a niche for himself in the permanently changing demand, and this in turn entailed an unending revaluation of assets in the banking sector.“ “That is why a reduction of inflation rates is the key factor for reduction of the interest rates at which banks offer loans to businesses,“ he said.
“The arrival of macroeconomic stability made it possible for the business community to forecast opportunities and draw up business plans and thus to increase the inflow of capitals,“ Kudrin said. “While in the 1990’s money fled this country at a rate of 24 billion US dollars, its outflow slowed down as of 2000 and reversed into an inflow in 2005 for the first time.“
“A landmark financial event occurred last year, when economic stability allowed us to fully liberalize the flows of money and lift all the barriers to the entry/exit of finances,“ he said. “As a result, freedom of business is observed in any circumstances.“
He illustrated the result by saying the inflow of capital in the private sector stood at 40 billion US dollars last year and is expected to reach 70 billion US dollars by the end of this year.

CARACAS, Venezuela, Oct. 27--Venezuela said Friday it is ready for international arbitration if it fails to reach an agreement with ConocoPhillips on compensation for the company’s multibillion-dollar
(multibillion-euro) investment in the South American country.
“We have always been ready for arbitration,“ Oil Minister Rafael Ramirez said in a statement. “We are ready and we hope to resolve this situation in the short term.“
Houston-based ConocoPhillips, along with Exxon Mobil Corp., refused to sign deals in May with Venezuela to keep pumping oil in the petroleum-rich Orinoco Basin under tougher terms imposed by President Hugo Chavez’s government, AP wrote.
Exxon Mobil Corp. announced in September that it was turning to international arbitration to reach an agreement with Venezuela’s government.
The Venezuelan government took majority control of country’s last privately run oil projects May 1. It gave the companies until June to decide whether they would accept new terms as junior partners.
Four major oil companies--US-based Chevron Corp., Britain’s BP PLC, France’s Total SA and Norway’s Statoil ASA--accepted. But ConocoPhillips and Exxon Mobil balked at the new terms and walked away. It remains unclear how any of the companies are being compensated for their losses.
The six companies invested more than US$17 billion (11.8 billion euros) in the Orinoco projects and hold some US$4 billion (2.8 billion euros) in outstanding debts. Ramirez has said that Venezuela’s state-run oil company--Petroleos de Venezuela SA--would not take on those obligations.

ROME, Oct. 27--International energy experts, industry representatives and government officials will gather in Rome in November to discuss ways to improve cooperation between energy importers and exporters.
Energy tensions rose in recent years when Europe saw its oil and gas supplies disrupted by disputes between Russia, a major energy exporter, and countries through which energy supplies pass on their way to Germany, Poland and elsewhere, AP wrote.
Ministry officials from Qatar, China, Algeria, Russia and the United States, as well as European Commission’s president Jose Manuel Barroso and World Trade Organization director-general Pascal Lamy are expected to attend the four-day congress, which opens Nov. 11.
“Today there’s a risk that the relations between producers and consumers can become harsh,“ Chicco Testa, the chairman of the organizing committee told reporters at the meeting’s presentation Friday. “Energy should not bring (countries) to a confrontation but should be the source of well-being for everyone.“
Testa said participants will discuss how to improve cooperation and respond to increased demand for energy in developing countries. Technical panels are also scheduled to discuss climate change and sustainable energy policies.
The meeting is mainly a forum for the industry to brainstorm.
Italian Industry Minister Pierluigi Bersani, who will chair a ministerial forum during the congress, said exporting countries should open up to investment. “There should be a reciprocity to enable our companies to invest in production sites and to allow supplying countries to enter our markets, within certain rules,“ Bersani said.
The EU is the world’s largest importer of oil and gas, with Russia currently providing 30 percent of EU energy imports, including 44 percent of natural gas imports.
The World Energy Congress is held every three years and was hosted in 2004 in Sydney, Australia. It is returning to Europe for the first time in 15 years.

Some of IndiaÕs poorest people march on the road which links Agra and New Delhi, at Palwal in Haryana on Friday.

PALWAL, India,
Oct. 27--A serpentine column of India’s poorest of the poor is moving across cities, determined to reclaim their land taken over in the name of the country’s heady economic boom.
About 25,000 landless farmers, many of them using plastic bags for shoes, are on the final leg of a march which will take them to their goal, the Indian capital New Delhi, on Sunday, AFP reported.
“Let’s not be angry. Let’s sing,“ came a shout as the marchers settled down for the night just south of the city. Women immediately crooned in dialects representing different parts of India, while volunteers worked tirelessly to find food and dig roadside toilets.
Some squatted with their clenched fists raised in protest against what some experts are now warning is a growing chasm between the drivers of India’s galloping economic engine and the neglected farming community.
“Non-violent direct action has never been tried so effectively before and these people are living, walking and sleeping on highways since we set out,“ said Puthan Vithal Rajgopal, chief organizer of the rally.
The protest march, swelling each time it passes a town or village, began in the central India city of Gwalior on October 2--the day India celebrates the birth anniversary of its independence leader and peace icon Mahatma Gandhi.
Seven people have died of fatigue or illness during the 600-kilometre (372-mile) trek, doctors tending to the rally said.
Rajgopal, a 59-year-old engineer, said he and the people following him believed the lack of land reforms was creating “tiny pockets of vast wealth“ in billion-plus India, where 73 percent of the population lives off the land.
The marchers want India to introduce iron-clad legislation on holdings, deeds and tenancy rights--replacing the current system where ownership can easily be disputed and taken by the rich and powerful.
“Forty percent of Indians are now landless and 23 percent of them are in abject poverty,“ said Rajgopal, who heads a campaign group called Ekta Parishad, or Unity Forum.
Many of the marchers say debt-ridden farmers or those who lost their land did so because of the absence of clear-cut land rules.
“Such conditions have bred Maoist insurgency in 172 of India’s 600 districts and farmers are killing themselves in 100 other districts,“ Rajgopal told AFP as the mass of misery reached Palwal, 70 kilometers from New Delhi.

MADRID, Spain,
Oct. 27--China will pursue exchange rate reform, the deputy head of the Chinese central bank pledged here Friday in the face of mounting pressure in the West for Beijing to ease restrictions on its currency. “We will continue to promote exchange rate reforms,“ Liu Shiyu told the closing session of a Spanish-Chinese financial forum, AFP reported.
The United States and other key trading powers have repeatedly complained that the Chinese currency, the yuan, has been artificially undervalued by Beijing’s relatively inflexible exchange rate policies, giving Chinese exports an unfair advantage.
Group of Seven finance chiefs meeting in Washington last week hailed China’s stated willingness to allow the yuan to float more freely but said that “in view of its rising current account surplus and domestic inflation we stress its need to allow an accelerated appreciation of its effective exchange rate.“
US Treasury Secretary Henry Paulson on Tuesday reiterated the G7 appeal, arguing that “prospects for achieving sustained, balanced growth in China and in the world economy (would be) much greater, if the Chinese increase the pace of appreciation in the short term and implement a fully market-determined currency in the medium-term.“
The following day the yuan broke through the key 7.5-to-the-dollar level for the first time in Wednesday trade but there was little expectation the rise would allay concerns in the United States.
“Psychologically this has a rather large impact, but technically the impact isn’t huge,“ said Cai Sijuan, a forex dealer with Guangzhou Commercial Bank.
Speaking in Madrid Friday, Liu Shiyu also insisted that “China doesn’t deliberately look for a trade surplus.“
China routinely records large trade surpluses with the United States, which are seen in some of its trading partners as contributing to imbalances in the global economy, notably in light of Washington’s huge trade deficit.

NEW YORK, Oct. 27--In all phases of the mortgage industry this week, from the people who make the loans to the people who insure them, the news was bad--and most of them expect it to get worse.
Things have gotten so tough, title insurer Stewart Information Services Corp. said it could not cut costs fast enough in August and September to keep up with the plummeting market. The company has already made “significant reductions“ in its work force in October. Its insurance reimburses a homeowner or a lender if there is an error in the deed transferring property, AP wrote.
The market turned quickly for mortgage insurer MGIC Investment Corp. as well, as the rising delinquencies forced the company to pay out more in claims in the third quarter. MGIC said it expects to lose money through 2008 because it estimates it will pay billions in claims. MGIC Investment already posted a loss of $372.5 million in the third quarter.
And Countrywide Financial Corp., the nation’s largest mortgage lender, said it lost $1.2 billion over the summer, as the amount of money it set aside to cover losses from loans gone bad skyrocketed.
Angelo Mozilo, the chairman and chief executive of Countrywide, said the changes in the mortgage market over the summer were “unprecedented,“ and the company is eliminating nearly all but the safest loans from its product menu. It is also in the midst of cutting 12,000 jobs.
For potential mortgage borrowers, the comments paint a sobering picture of the difficulty in getting a new home loan in the coming months.
“If your credit scores are low, your access to mortgage money has all but vanished,“ said Dan Green, a certified mortgage planning specialist and author of TheMortgageReports.com.

PRAGUE, Czech Republic, Oct. 27--EU officials reached a tentative agreement on the date that nine of the bloc’s new members would join the borderless travel zone, setting it for Dec. 21, a Portuguese official said Friday.
Slovakia, Slovenia, Estonia, Hungary, Latvia, Lithuania, Malta, Poland and the Czech Republic meet all requirements for joining the so-called “Schengen Zone,“ Portuguese Deputy Interior Minister Jose Magalhaes said, AP reported.
Magalhaes, whose country holds the rotating EU presidency, made the announcement during a meeting in Prague of officials from 18 EU nations. Previously, EU officials said the nine would join either Dec. 21 or 22.
Land and sea checks along their common borders will be abolished, but airport controls could remain in place until March.
EU justice ministers were expected to give final approval to the expansion of Schengen during a meeting Nov. 8.
Cyprus, the 10th nation to join the EU in 2004, has opted to keep some border checks for a further year.
The Schengen Zone takes its name from the village in Luxembourg where a treaty authorizing the abolition of border controls was signed in 1985.
The Schengen zone currently consists of 15 European countries including Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain and Sweden.