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The global financial crisis might take its toll on Bangladesh’s economy by way of squeezing overseas job opportunities and dipping export earning, a government official said here on Tuesday.

Talking to the journalists after a meeting, Akbar Ali Khan, chairman of Regulatory Reforms Commission, said the government should take all necessary measures to safeguard the country’s economy from the shocks of the ongoing financial tempest.

“The government should consider the demands of the local exporters and accordingly set the next course of action to protect the country’s economy,” he said.

Khan said there should not be any interference in the current exchange rate of foreign currency against taka.

“Determination of exchange rate of foreign currency against taka by market forces is better,” he said, answering to a reporters’ question that a number of countries including India devaluated their currency against dollar to safeguard the local exporters.

The Bangladeshi caretaker government has already formed a high-powered advisory committee to tackle the impact of the world economic crisis.

The committee would watch the global economic trends and make recommendations to the government for implementation every 15 days.

The Beijing municipal construction committee issued a circular on Saturday to this effect as part of its effort to encourage spending to boost the housing market and tackle the economic downturn.

For example, if a person buys a 120-sq-m apartment in the Wangjing area at the existing average price of 13,000 yuan per sq m, he/she has to pay a contract tax at the rate of 1.5 percent, instead of 3 percent because the total cost would be 1.56 million yuan.

The municipal government has made that possible by raising the tax benefit threshold to 1.65 million yuan.
Last month, the Ministry of Finance, too, cut the contract tax rate for apartments smaller than 90 sq m from 3 percent to 1 percent.

According to a 2006 municipal government rule, only people buying apartments smaller than 120 sq m for less than 9,300 yuan per sq m (in the Wangjing area), for example, were eligible to pay 1.5 percent contract tax.

But property prices have risen dramatically in Beijing in the past two years. It has become almost impossible for homebuyers to get a preferential tax treatment.

The move is aimed at rescuing the property market, said Li Wenjie, general manager of property agency Centaline China (North China region). But it may not be enough to make more people buy houses because the contract tax is only a small part of the cost.

“Especially when many developers are offering more than 10 percent discount, the tax reduction would hardly help,” he said.

Xie Yiming, an advertising company employee, has been looking for an apartment. He plans to get married next year but would still prefer to watch the market for a while.

“The price trend is important for me and friends have told me the downward trend could continue for some time,” he said.

The Beijing municipal bureau of statistics said on Saturday that the average price of apartments in October fell by 0.2 percent month-on-month, the first time since 2005. And investment in apartments in the first three quarters of this year dropped 15.7 percent year-on-year.

Malaysia’s insurance sector is expected to have a better prospect despite the weak global economy, targeting at a growth of 8 percent to 9 percent next year.

The premium income of the Malaysian insurance industry has been growing these years, reaching 27.1 billion ringgit (7.5 billion U.S. dollars in 2007 from 22.0 billion ringgit (6.1 billion U.S. dollars) in 2004.

In 2007, the premium income of the country’s insurance industry advanced 8.8 percent from the previous year, according to the country’s central bank.

The Malaysian Life insurance Association expected this year’s insurance industry growth, in terms of annual new business premiums, to be around 7 percent to 8 percent compared with 9.4 percent in 2007.

Normally, the averaged growth of the country’s life insurance industry will outpace the growth of the country’s gross domestic product (GDP) by two or three times, said Ng Lian Lu, president of the association.

Since the government has revised the country’s GDP growth projection for 2009 to 3.5 percent, the country’s insurance industry is expected to see a growth of 8 percent to 9 percent next year, he said.

However, Ng noted, the financial turmoil and the credit crunch coupled with massive retrenchment of funds and recession in overseas countries had dampened consumer confidence.

He expected that protection products, such as whole life, term and medical life, and long-term savings products, such as saving for education and retirement, would be less affected.

Investment-linked products might lose favor with consumers and traditional products could make a comeback, he noted.

The gross written premium of the industry posted 5.8 billion ringgit (1.6 billion U.S. dollars nearly up 8 percent year on year.

Some industry players in the country praised the measures taken by the country’s central bank to strengthen the country’s financial system, which include offers of bank deposit guarantees, the establishment of a 200 million ringgit Micro Enterprise Fund and a relaxed access of insurance companies to liquidity facilities.

These measures would boost public and investor confidence, they said.

The implementation of the risk-based capital framework next month would further strengthen the local insurance industry and raise the confidence level among policyholders, they added.

Allianz Malaysia Bhd chief executive Alexander Ankel said that effective and sustainable cost management was vital for the success of insurers in these trouble times.

The trends that would most likely surface ahead would hinge on cash before cover (CBC) and collection, Ankel said.

Ankel urged the industry players, associations and the central bank to strive to strengthen CBC compliance and introduce it for all other personal lines of businesses.

CBC refers to making payment before getting covered.

CF Lim, executive director of the General Insurance Association of Malaysia (PIAM), urged insurers to assess the impact of inflation in the country on the underwriting and claims performance.

In property insurance, he said, policyholders and intermediaries needed to conduct thorough reviews of the insured values of their policies as cost of reconstruction, reinstatement and replacement have been severely impacted by higher materials, labor and even transport costs.

Despite the rosy prospect for the country’s insurance industry in the coming year, the industry’s share of the country’s gross national income (GNI) has been lowering over the past years.

The premium income of Malaysia’s insurance industry accounted for 4.9 percent of the country’s GNI in 2004, then dropped all the way to 4.8 percent in 2005, 4.5 percent in 2006, and 4.3 percent in 2007.

Some industry players in the country held cautious optimism about the growth prospects of the country’s insurance industry.

The prospects would go forward in tandem with the general economic growth, they said.

The growth in the general insurance industry would moderate in the second half of next year, they added.

The world has lost almost 20 percent of its coral reefs due to carbon dioxide emissions, according to a report released here Wednesday.

The report, released by the Global Coral Reef Monitoring Network on the sidelines of the Poznan talks, is trying to exert pressure on delegates at the UN climate talks in Poznan to make progress in fighting rising temperatures.

“If current trends in carbon dioxide emissions continue, many of the reefs may be lost over the next 20 to 40 years, and this will have alarming consequences for some 500 million people who depend on coral reefs for their livelihoods,” the report said.

“If nothing changes, we are looking at a doubling of atmospheric carbon dioxide in less than 50 years,” said Carl Gustaf Lundin, head of the global marine program of the International Union for Conservation of Nature, one of the organizations behind the Global Coral Reef Monitoring Network.

“As this carbon is absorbed, the oceans will become more acidic, which is seriously damaging a wide range of marine life from corals to plankton communities and from lobsters to sea grasses,” he said.

At present, climate change is considered the biggest threat to coral reefs. The main climate threats, such as increasing sea surface temperatures and seawater acidification, are being exacerbated by other threats including over fishing, pollution and invasive species.

Encouragingly, the report said 45 percent of the world’s reefs are currently healthy. Another sign of hope is the ability of some corals to recover after major bleaching events caused by warming waters, and to adapt to climate change.

“The report details the strong scientific consensus that climate change must be limited to the absolute minimum,” said Clive Wilkinson, coordinator of the Global Coral Reef Monitoring Network.

The report also said that corals have a higher chance of survival in times of climate change if other stress factors related to human activity are minimized.

It is a good phenomenon for China’s mammoth foreign exchange reserves to diminish for the timebeing, some experts believed.

China’s forex reserves peaked at 1.9 trillion U.S. dollars at the end of September, now they were below that figure, Tuesday’s Shanghai Securities Journal quoted Cai Qiusheng, head of the foreign debts section under the capital-account management department of the State Administration of Foreign Exchange, as saying.

This was the first decline in China’s forex reserves since the end of 2003.

Cai made the remarks at the 7th annual meeting of China’s import and export enterprises held over the weekend. But Cai did not reveal in which month, October or November, the country’s foreign reserves fell below the 1.9-trillion-dollar level, nor did he disclose the exact size of the forex reserves at present.

Central Bank data show that at the end of September, China’s forex reserves stood at 1.9056 trillion U.S. dollars, a growth of 32.92 percent over the same period of last year. The reserves increased 377.3 billion dollars in the first nine months of this year, 10 billion dollars more than the year-earlier increment. The total increase included 21.4 billion dollars recorded in September, 3.6 billion dollars less than the increment for the same month of last year.

Qu Hongbin, chief economist with HSBC China operations, analyzed that since growth of China’s exports and imports had slowed down, China’s trade surplus kept increasing and that foreign direct investment (FDI) had been rising though at a slower pace. Therefore he considered trade and FDI were not the factors behind the forex reserves decrease.

Yuan Yuedong, a senior researcher with the global financial market department of the Bank of China, believed the reduction for the time being would not affect the Chinese economy adversely.

He attributed the reduction to the recent slower appreciation and a short-term depreciation of the Chinese currency, renminbi, against the U.S. dollar. He reckoned that possible increasing offshore investment by Chinese companies also contribute to the downward trend of the forex reserves. But he said data were not yet available to support the estimate.

Qu Hongbin believed the renminbi’s depreciation against the euro, which was also a major currency in China’s forex reserves, was another important factor.

An investment-bank analyst who declined to be named, said the forex reserves decrease might be related to capital withdrawal from China by some foreign institutions whose liquidity was tight.

But Commerce Minister Chen Deming said earlier that there was no sign of large amounts of capital flowing out of China and that China remained a good target for FDI.

To combat the impact from huge capital outflows in the short-term, the foreign exchange administration has taken a string of measures, including a registration management system for offshore equities under the corporate cargo trade accounts.

Baosteel has abandoned a proposed joint venture to build a steel mill with Brazilian mining firm CIA Vale do Rio Doce due to weak market demand and local opposition.

Last Friday, the Brazilian company said it had agreed with the Chinese steelmaker to drop the project and liquidate Companhia Siderrgica Vitria (CSV), the joint venture set up for the project.

The Brazilian steelmaker said in a market filing that the Chinese steelmaker decided to exit the venture due to the weak market trends.

Chen Ying, board secretary, Baosteel Ltd, said she could not comment as the decision was made by the parent company Baosteel Group.

Baosteel and Vale had signed a plan in August 2007 to build a five-million-ton steel slab plant in the southeastern Brazilian state of Espirito Santo. Baosteel was supposed to hold an 80 percent stake in the joint venture. As per plans, construction on the plant was expected to start early this year with production slated for the end of 2011.

“The advantage of building a plant in Brazil is the proximity to local iron ore resources and the advantage of not having to ship raw materials to the plant,” said Yang Baofeng, analyst, Dongfang Securities.

Shipping costs from Brazil soared as much as 108 U.S. dollars per ton in June 2008, but the price slid to 14.07 dollars per ton by last week.

The falling demand for steel worldwide has been seen as the main reason for the project’s failure. “We’ve seen an output drop across the world since August as downstream users are all cutting their budget, and less than 80 percent of Chinese steel capacity is running,” said Nie Xiuxin, analyst, Ping An Securities.

Hu Hao, analyst, Centaline Securities, expects a stagnant steel demand throughout the next two years. But he was of the view that the failure might not prove that costly for Baosteel.

“Since the investment decision is made by Baosteel Group, it will not affect the overall domestic market or Baosteel as a listed corporation,” said Hu.

The short-lived project, which would have generated 4,500 jobs, has also encountered Brazilian opposition due to its possible threat to local environment. Media reports had said that the Espirito Santo government had wanted the two companies to relocate CSV for environmental concerns.

Nie, however, argues that it is not the end of the road for Baosteel’s overseas dreams. “Despite the setback, Baosteel would continue to explore premium mergers and acquisitions both at home and abroad,” said Nie.

Hong Kong stocks rose 115.01 points, or 0.88 percent, to close at 13,178.90 on Thursday, on hopes that the mainland will announce new stimulus measures to boost the economy.

Turnover jumped to 52.83 billion HK dollars (6.8 billion U.S. dollars) from 36.48 billion HK dollars (4.7 billion U.S. dollars) on Wednesday.

The market had risen sharply on continued hopes the mainland will announce new stimulus measures to boost the economy, and analysts said these hopes will help support the blue-chip index in the coming weeks.

However, investors viewed the disappointing earnings of computer maker Lenovo and retailer Esprit as a sign that other Hong Kong firms will also report worse-than-expected results, trimming gains in the benchmark index after it surged to a high of 13,492.53 points earlier in the session.

Lenovo’s net loss was wider than the average 58 million U.S. dollars loss forecast by analysts surveyed by Dow Jones Newswires. Lenovo ended the session down 2.7 percent at 1.46 HK dollars, reversing a gain of 2.7 percent earlier in the session. Still, analysts said hopes for fresh market-boosting measures in the mainland will likely drive investor demand in coming sessions, giving the Hang Seng Index more room for further gains.

Conglomerate Citic Pacific was among the day’s biggest blue-chip gainers after several newspapers reported that it approached China’s sovereign wealth fund to take a 50 percent stake in its unit, Citic Capital Holdings Ltd., to raise funds for the company. It ended up 5.4 percent at 9.70 HK dollars.

Property developers continued to suffer from concerns of weakening housing demand and negative homeowner equity. DBS Vickers Director Peter Lai said he expects the sector to under perform the broad market in the near term.

India’s inflation rate dropped to its 14-month low of 3.92 percent at the first week of February, which could lead to the cut of interest rates, said the semi-official news agency Press Trust of India on Thursday.

The news agency quoted official statistics as saying inflation declined by 0.47 percentage points during the first week of the month from 4.39 in the previous week.

Apparently the result of economic slowdown, the falling inflation rates in India can lead to deflation of prices, the news agency quoted local economists as saying.

But continuous drop of inflation to a certain level can force banks to lower interests rates to stimulate demand, said the news agency.

Most manufactured items turned cheaper as demand continued to “slow down”, while food and fuel items “represented a mixed trend,” said the news agency.

India measures inflation rate on a weekly basis.

The weekly average prices of the Organization of Petroleum Exporting Countries (OPEC) rebounded above 40 dollars again to 40.01 U.S. dollars per barrel last week, the Vienna-based oil cartel said on Monday.

The prices saw an overall upward tendency last week, with an increase of about 9.7 percent within the week, reaching a daily average price of 43.30 dollars per barrel on Friday. The daily OPEC oil prices rose on four trading days of last week except Tuesday.

Apart from a natural rebound after prices dive, another important factor is that evidence has shown the crude oil supply tends to be tight. Recently, high ranking oil officials of Qatar, Venezuela and Iraq have all confirmed that OPEC will decide on a further oil output cut at the next Ministerial Conference to be held in Vienna on March 15.

Experience shows that before OPEC’s meeting on production cut, the oil prices on the international market will see certain rises. According to the current situation of international oil prices, market generally predicted that OPEC will further slash output. Therefore, the international oil prices will hopefully stop falling temporarily.

However, the overall economic situation influences the trend of international oil prices to a large extent. According to the latest forecast of the International Energy Agency (IEA), the worldwide oil demand will see an average daily decrease of one million barrels this year, the biggest downturn since 1982. Therefore, before the world economy, particularly the U.S. economy, show fundamental improvements, another OPEC production cut is unlikely to drive a complete rebound of oil prices.

U.S. President Barack Obama issued on Saturday new measures to strengthen food safety control as he named new officials to head the Food and Drug Administration(FDA).

In his weekly radio speech, the president announced the appointments of Margaret Hamburg as commissioner of the Food and Drug Administration, and Joshua Sharfstein as the principal deputy commissioner, as well as the creation of a new Food Safety Working Group.

According to the White House, the working group, co-chaired by the Secretaries of Health and Human Services and the Department of Agriculture, will coordinate with other agencies and senior officials to advise the president on improving coordination throughout the government, examining and upgrading food safety laws, and enforcing laws that will keep the American people safe.

Obama noted a number of problems that have been found in recent years with the food, including contaminated spinach in 2006 and salmonella in peppers and possibly tomatoes in 2008 as well as bad peanut products this year that have left nine killed and hundreds of others sick.

“Worse, these incidents reflect a troubling trend that’s seen the average number of outbreaks from contaminated produce and other foods grow to nearly 350 a year — up from 100 a year in the early 1990s,” he said.

He attributed incidents to out-of-date laws and regulations governing food safety in America that were written during former President Teddy Roosevelt’s administration, and inefficient system of inspection and enforcement that are difficult for different parts of government to share information, work together, and solve problems.

“It’s also because the FDA has been under funded and understaffed in recent years, leaving the agency with the resources to inspect just 7,000 of our 150,000 food processing plants and warehouses each year,” he said. “That is a hazard to public health. It is unacceptable.”

Obama also announced that the Department of Agriculture will close a loophole to prevent diseased cows from entering the food supply.

The government will also invest in the FDA to substantially increase the number of food inspectors and modernize food safety labs, he added.