Australia on Wednesday announced that it was slashing the aid it provides to the fast growing economies of India and China, even as it boosts spending in South-East Asia, the Pacific Islands, Middle East and Africa.According to a report in 'The Australian' daily, the country's Foreign Minister Kevin Rudd has announced the government's response to the first independent review of Australia's aid programme in 15 years, accepting 38 of its 39 recommendations.The review led by former Sydney Olympics boss Sandy Hollway found the aid programme was good, but could be better with some tweaks.With the aid budget set to touch to over 8 billion Australian dollars over the next five years, Rudd said Australia's nearest neighbours -- Indonesia, Papua New Guinea and East Timor -- would remain its top focus."It is the region which we believe that we can be most effective in," Rudd said.He said, "It is the region where the rest of the world often expects Australia to provide leadership. And it is the region of the world where our most direct, strategic and economic interests lie."Australia also will increase its aid to developing nations in East Asia and South Asia, but China and India no longer qualify."They are respectively the second and sixth largest economies in the world. Both have considerable economic capacity," Rudd said. "And both have begun their own international development assistance programmes," he noted.Australia may continue to provide some assistance to the countries through multilateral organisations and regional programmes.The government will also boost its aid to the Middle East and Africa.The government said any future increases to Latin America and the Caribbean will be "modest".It further added that it will make greater use of multilateral partners, civil society and Australian non-government organisations to deliver its aid.It also will develop a rolling four-year whole-of-aid budget strategy covering the aid efforts of all government agencies under a single coherent plan.The government has pledged to analyse the aid programme's progress every year and scrap programmes that are not delivering. It has also agreed to five-yearly independent reviews.The government will consider at a later date the review's recommendation that the name of the foreign affairs portfolio be extended to include the words "International Development".The government this year boosted aid by almost half a billion dollars to Australian 4.84 billion in 2011/12 -- about 0.35 per cent of gross national income (GNI).Rudd said the government remained committed to boosting aid spending to 0.5 per cent of GNI by 2015-16.(PTI)
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India's government will likely resolve a payment impasse with Tehran for buying Iranian crude by having Indian companies to open rupee accounts in Union Bank of India, local media in India reported on Thursday.Iranian officials will likely travel to India this weekend to discuss the deal, which would see Union bank make payments to Halk Bank in Turkey, the Business Standard online reported in an item with a New Delhi dateline.India and Iran have failed since December to find ways for New Delhi to pay for imports, after India's central bank stopped payments through the Asian Clearing Union (ACU) mechanism.There is no ban against buying Iranian crude, but sanctions have made financing trade with Iran tough.The central bank's move won praise from Washington and came close on the heels of a visit to India by U.S. President Barack Obama last year. Obama has endorsed India's bid for a permanent seat on the U.N. Security Council.The United States and its allies aim to isolate Iran to halt its nuclear program, which they say is to develop weapons. Iran says it needs nuclear power supplies.Iran normally supplies about 12 per cent of India's total oil demand of 3.46 million barrels per day (bpd), but several refiners have sought supples from Saudi Arabia for August to make up for the lack of Iranian crude. (Reuters)
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Telecom tower firm Viom Networks has made a 75 billion rupees ($1.69 billion) offer to buy out its competitor GTL Infrastructure, The Economic Times reported on Friday.SBI Capital Markets is advising Global Group, the parent company of GTL Infrastructure, on the possible sell out or stake dilution, the newspaper reported, quoting two executives directly aware of the development.Viom is a joint venture between telecoms carrier Tata Teleservices and tower firm Quippo.Talks are continuing, as there is a valuation mismatch - GTL promoters are learnt to be eyeing valuations of over 105 billion rupees (excluding its debt), the newspaper reported, but did not name the executives.When contacted by Reuters, a GTL Infrastructure spokesman said that the company was in talks with many aspirants, but declined to divulge further details. Reuters could not immediately reach Viom officials.An earlier rounds of talks held during first week of July had not make any headway as Viom was not keen on the merger option being proposed by bankers, the newspaper report said.Shares of GTL Infrastructure rose as much as 12 per cent in early trade after a report said telecom tower firm Viom Networks has made a 75 billion rupees ($1.69 billion) offer to buy it out.Shares opened up 5.45 per cent and at 9.22 a.m., they were up 10.91 per cent at 15.25 rupees per share in a weak Mumbai market. (Reuters)
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Moody's became the first ratings agency to cut Portugal's credit standing to junk, warning the country may need a second round of rescue funds before it can return to capital markets.The downgrade on Tuesday was not entirely unexpected and served as a reminder that Europe's debt troubles extend beyond Greece, which has dominated news headlines over its second financial bailout.Some economists think Ireland may also need additional support, and investors worry Spain and Italy could be next in line for aid."It goes to show that this whole crisis isn't over just yet," said Jay Bryson, global economist for Wells Fargo Securities in Cape Hatteras, North Carolina. "Even if they cough up some more money for Greece, and that looks like it's a done deal, it's not over."The protracted sovereign debt struggle has darkened the global economic outlook, cooling demand for Asia's exports and leaving financial markets on edge.Mohamed El-Erian, co-chief investment officer for bond fund PIMCO, said it was unlikely that Europe's troubles would constitute a "Lehman moment" that paralyses the U.S. economy, but it was a drag on an already disappointing recovery.The debt troubles add another wrinkle to the European Central Bank's interest rate decision on Thursday. Economists widely expect the ECB to raise its benchmark rate, which would be the second hike this year, to try to cool inflation.But the move could raise already high borrowing costs for Portugal and other so-called "peripheral" European countries. Yields on long-term Portuguese government bonds are well above 10 percent, more than three times higher than those of Germany.Missing TargetsMoody's Investors Service slashed Portugal's credit rating by four levels, to Ba2, causing the debt-laden Iberian country to follow Greece into junk territory below investment grade. Greece is rated much lower, at Caa1.Portugal in April became the third euro zone country to request a bailout, after Greece and Ireland.Moody's cited heightened concerns that Portugal will not be able to fully meet deficit reduction and debt stabilization targets set out in its loan agreement with the European Union and International Monetary Fund.Portugal is receiving funds from a three-year, 78-billion-euro EU/IMF bailout programme and does not need to issue long-term debt in the market until 2013.But Moody's said there is an increasing probability Portugal will not be able to borrow at sustainable rates in capital markets in the second half of 2013 and for some time thereafter.There was a "growing risk that Portugal will require a second round of official financing before it can return to the private market, and the increasing possibility that private sector creditor participation will be required as a pre-condition," Moody's said.Of the three major ratings agencies, Standard & Poor's and Fitch Ratings both have Portugal at BBB-minus, the bottom of the investment grade range.The first repercussions of the downgrade could come as early as Wednesday, when Portugal is due to place up to 1 billion euros in a 3-month Treasury bills auction. It may have to pay a higher premium to entice buyers.Portugal's new centre-right government said in a statement that Moody's did not take into account strong political backing for austerity after a June 5 election, and an extraordinary tax announced last week."Bit Extreme"Unlike the previous minority Socialist government, the new ruling coalition has a comfortable majority in parliament to pass austerity measures and reforms. It did acknowledge, though, that the rating cut "shows the vulnerability of the country's economy amid a debt crisis."It also reaffirmed commitment to deepening and speeding up austerity measures that the country vowed to implement under its bailout pact, saying a strong macroeconomic adjustment was "the only way to reverse the course and restore confidence."The country has to slash its budget deficit to 5.9 percent of gross domestic product this year after overshooting its target last year, when the gap was 9.2 percent, and then reduce it to 3 percent by the end of 2013.Anthony Thomas, Moody's analyst for Portugal, told Reuters "evidence that Portugal is meeting or indeed exceeding its deficit reduction targets" could be a positive that may lead the agency to change its outlook on the country's credit rating to stable from negative.But he also said the outlook depends a great deal on whether euro zone officials will require private-sector participation when extending new financing to the region's troubled countries. Right now, such participation is planned to be only voluntary so as not to cause ratings agencies declaring it a "credit event."Filipe Garcia, head of Informacao de Mercados Financeiros consultants in Porto, said Moody's move was "a bit extreme" and was likely to exacerbate concerns over Portugal's debt."The capacity to return to the markets after a while depends on a more global, structural solution by Europe rather than on what each troubled country does. I think it's too early to think of a second bailout for Portugal right now, not this year at least," he said.Garcia said the ratings agencies were not taking into account the European Union's political determination to avoid a euro zone member's default, despite the union's strong support for Greece, which is in a far worse shape than Portugal."Either they don't believe in the power of the political will by the European Union to avoid default, or they are underestimating this political union," he said.(Reuters)
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Mukesh Ambani is looking to sell Reliance Gas Transportation Infrastructure Ltd, a business that builds pipelines to carry natural gas across the country, the Wall Street Journal reported, citing people familiar with the matter.Ambani, chairman of energy major Reliance Industries, has contacted bankers to help him sell the business and the process is at an early stage, the newspaper said.Two people familiar with the matter said the privately-owned gas pipeline business could be worth around $1 billion, it said."We do not comment on market speculation," a Reliance spokesman told Reuters when asked about the report.In May, India's upstream regulator said Reliance was producing 48 million standard cubic metres per day of gas from the the key D6 block of Krishna-Godavari basin.In February, BP Plc agreed to buy a 30-percent stake in 23 oil and gas blocks owned by Reliance Industries, for $7.2 billion.(Reuters)
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Well, it's rumour time again. While the world's tech companies fall over themselves to get their PR right, Apple just does it by keeping mum. They won't comment, they won't answer questions, and they won't engage all warm and fuzzy with you on the social networks. And that, of course, turns out to be the perfect way to keep the world talking. Over time, this seems to have spawned off an entire Apple-rumour industry. It's made up of the tech media, "sources" who make components that go into Apple devices, and just plain avid Apple-watchers. So, what they're saying is that the iPhone 5 is coming soon. But is it the iPhone 5, really?What Is It?One school of speculation has it that the next iPhone to launch will be in September, and it will be called the iPhone 4S. Rather than going for any makeover, the smartphone will have enhancements, including a better camera (perhaps 8 megapixel) a dual-core A5 processor, and support for HSPA+ connectivity. There may also be a cheaper and smaller version of the iPhone, called the iPhone Mini, by those talking about it. There are certainly some noises from Apple about reaching out to emerging markets - I suppose that includes us. Other news sources, like The Guardian, Bloomberg and the Boy Genius Report say that while some developers have had Apple access to an improved iPhone that be considered the iPhone 4S, it's the iPhone 5 that will launch. When Is It?Bets are on the iPhone 5 releasing in September (a specific date, the 7th, is floating around) though some even say August. Apple holds an annual developers' conference in September. It's thought that Apple will change its release and selling cycle to take advantage of holiday sales in the US. Most people agree that it wouldn't be a good idea for Apple to wait any longer to launch the iPhone 5, and certainly not as late as January 2012 because this would give plenty of time to Android and other competition phones to consolidate and increase their reach.What Will It Look Like?Most intriguing of all is the rumour that the iPhone 5 will be in a new "teardrop" shape, a sloped and curved like the MacBook Air. The rumour mill calls it "radical". The 8 megapixel rear camera will sport an LED flash. There will be better-than-before resolution and sensitivity to touch. What size, is not clear.Obviously the device will run on iOS 5 and will be more powerful and make for a better experience. Tasks like messaging are said to be enhanced. Cloud based sharing will probably become quite intrinsic to the device, seeing Apple's focus on cloud services and its recent launch of iCloud.Who Wants It?Despite the amount of noise made over the iPhone, it is by no means everyone's first choice. Android devices have the larger market share, in part because so many companies are involved. Despite the troubles of RIM and Nokia, their phones shouldn't be written off either, especially in India. But die-hard Apple fans are chomping at the bit and have a wish list ready - not that it matters. A spot survey by T3 about two months ago showed iPhone fans wanted at least an 8 megapixel camera, TV streaming, flash - and Flash, Facetime that works with other phones, and NFC or Near Field Communication. Others say a bigger edge-to-edge screen and a new design wouldn't be bad either. Little is known and much is said. But that's Apple's fans for you.Mala Bhargava is a personal technology writer and media professional. Contact her at mala@pobox.com and @malabhargava on Twitter
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When the house is on fire, everyone is busy dousing the flames. Who in his right mind will think of structural improvements to it? That has been the predicament of the United Progressive Alliance (UPA) II, which came in with a thumping majority in May 2009. Since it had a decisive mandate, many expected several key reforms to be pushed through in the first two or three years of governance.On the contrary, UPA II has simply lurched from crisis to crisis (the Commonwealth Games mess, Adarsh scam, the 2G spectrum issue, Anna Hazare and Baba Ramdev and their fasts). It is hard to remember the last important policy decision or reform pushed through by this government.On some fronts, in fact, the UPA II seems to have regressed. Take for instance, the tax reforms. The goods and services tax (GST) was meant to come into force by April 2010. In December 2010, it was announced that the new tax regime would be delayed. Now, the government has promised its implementation by April 2012, but many are taking the announcement with a large dose of salt. The direct taxes code — which was designed and ready under former finance minister P. Chidambaram — is a watered down version of the initial draft, and many involved with the first draft are of the view that the country is better off without the watered down version.Bereft of headline material on the policy front, business newspapers every once in a while talk of foreign direct investment being permitted in multi-brand retail. An inter-ministerial group recently suggested that this be done. But many Congress ministers and most bureaucrats do not expect this to happen in a hurry, if at all.On banking, every once in a while there have been some noises on allowing companies in the financial sector space to set up retail banks, but there has been no action so far. There was talk of allowing the foreign banks local incorporation — another issue still hanging fire.Some sundry Bills — most of which have generated more fuel than fire — have been ready for sometime, but UPA II is yet to clear any of them. None — the food security Bill, the right to education, the women's reservation Bill — have been ratified by Parliament and become an Act. Thirty eight Bills of 2010 and eight Bills of 2011 (no Acts have been cleared in all of this year and only three Bills have been passed) are pending in Parliament as of date. Thirty five draft Bills are also gathering dust. After some initial noises, nothing further has been heard on the new Companies Bill. In aviation, airlines have been pressing the government to allow foreign airlines to invest in Indian carriers. But the matter has not even reached the proposal stage.The Congress spokesperson cited the UID (unique identification) project and MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) as big achievements of the UPA II. But neither can be classified as a reform. And sceptics say that if the UPA II did not take any bold steps within the first two years, there can be little hope it would do so as it approaches the next general elections. The policy paralysis gripping this government can only get worse.(This story was published in Businessworld Issue Dated 04-07-2011)
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One would imagine that a bumper crop would be good news for a country struggling with food inflation. But for the government, a good harvest promised by a monsoon at 95 per cent strength will only add to the host of food grain-related problems. Production is just the first step in the long supply chain that has many weak links — the most glaring being that of storage. The UPA government, despite its many attempts and resolutions, is no closer to finding a solution to store a bumper crop, or ensure a smooth supply chain for it. The crisis in food management has been underlined again and again. The latest warning comes from the Food and Agriculture Organization. In its May 2011 report, ‘Global Food Losses and Food Waste', it said the food losses during harvest and in storage translate into lost income for small farmers and into higher prices for consumers.The bureaucratic processes are in place. The Union agriculture ministry holds a regular meeting to track food production and distribution. But these confabulations have not translated into better food management.Storage is the weakest link in the supply chain. And the situation is grave. The combined grain storage capacity of Food Corporation of India (FCI), Central Warehousing Corporation and the various State Warehousing Corporation, adds up to 63.36 million tonnes. — that is even less than the 65.60 mt grain stock listed in the central pool on 1 June 2011.There have been some innovative proposals. An internal study by the Food and Consumer Affairs Ministry suggested that sports stadiums across the country can be used to store food. A more long-term solution proposed is that 25 per cent of the amount disbursed under Member of Parliament Local Area Development (MPLAD) scheme be compulsorily used for construction of warehouses in each constituency. However, both these suggestions have seen no action. Neither have the proposals of the committee of chief ministers that looked into the problem.The problem of storage is compounded as the prices are not determined by the demand and supply in the market. The government fixes a minimum support price (MSP) for key crops that is usually much higher than the open market price. For instance, in 2010-11 the open market price for wheat was less than Rs 1,000 per quintal, while the MSP was Rs 1,180 per quintal. This, of course, results in huge pile up of stocks with the government, which it finds difficult to store and manage. The inefficient public distribution system and its many leakages add to the problem. The fixed price causes problems in the export market too. According to officials in the Food and Consumer Affairs ministry, the wheat India exports is used as cattle feed abroad. Not because it is of poor quality, but because it was made available at a low cost. The situation arose as the government could not come up with alternative storage spaces. There was a proposal during the 2008 slowdown that with countries with weak foreign currencies, India could barter surplus food for cereals. But like many other suggestions, it was an option not explored.All these options would need political will and commitment to implement. That unfortunately is in short supply.(This story was published in Businessworld Issue Dated 04-07-2011)
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Yash Birla Group said on Thursday group firm Birla Surya Ltd will invest 54 billion rupees over five years to set up an integrated facility for fabrication of multi-crystalline silicon wafers and solar photovoltaic cells.The first phase of the project located in Satara district of Maharashtra will involve an investment of 14.93 billion rupees, funded through a debt of 9.7 billion rupees, the group said in a statement."It is a 10-year tenure loan with average interest rate of 14.5 percent," P.V.R. Murthy, group director, told reporters.State Bank of India, Punjab National Bank and Life Insurance Corp of India are among 11 lenders for the first phase of the project that will begin commercial production by December, Birla Surya's chief executive officer, Mohan Datari, said.Hong Kong-based Asia Pacific Capital will invest $15 million as private equity in the project and has got 15 per cent stake in the firm, Datari said.The firm is eyeing revenue of 8 billion rupees by fiscal 2012/13 and there were no plans for further equity dilution in the current project, Murthy said.It aims to make 60 megawatts (MW) of multi-crystalline solar photovoltaic cells and 125 MW of multi-crystalline silicon wafers in a year, it said in a statement.Yash Birla Group, which has interests in automobile and engineering, textiles and chemicals, education and information technology, wellness and lifestyle is exploring opportunities in the other segments of solar power generation, Chairman Yashovardhan Birla told reporters.(Reuters)
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A high powered ministerial panel is likely to meet on Friday to consider a hike in diesel and domestic LPG prices, as well as a cut in duty rates to combat the high cost of crude oil.The Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee, may meet at 1300 hours tomorrow, a sources said here.A hike of Rs 2-3 per litre in diesel prices and an increase of at least Rs 25 per domestic LPG cylinder are on the EGoM agenda. It may also consider raising kerosene prices.Besides, the high powered panel may consider lowering customs or import duty on crude oil to nill from current 5 per cent, and on diesel from 7.5 per cent to 2.5 per cent.The oil ministry is pushing for equitable sharing of the burden arising from the rise in crude oil prices among consumers, the government and state-owned companies, the source said.State-owned oil companies now lose Rs 15.44 per litre on sale of diesel.One-third of this will have to be passed on to consumers in stages, while a similar amount will have to be borne by the government by way of either providing a cash subsidy or cutting customs and excise duty. The remaining would be absorbed by upstream firms like ONGC and the fuel retailers.A similar formula would apply to the Rs 27.47 per litre loss on kerosene and Rs 381.14 under-realisation on sale of every 14.2-kg domestic LPG cylinder.The source said the ministry also wants a cut in Rs 4.60 per litre central excise duty levied on diesel to moderate the impact of high crude oil prices.(PTI)
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