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					                                                                                                                                                                                                                           ARAB TIMES, THURSDAY, MAY 19, 2011
    BUSINESS                                                                                                                                                                                                                                                              45


                  Airbus ruling overturned                                                                                                                                                         bribery rife across EU top firms

   The World Trade Organization’s appeal body on Wednesday                              More than one third of employees at large European        across 25 European countries agreed that bribery              which can make businesses with any UK interest
   overturned part of its ruling on Washington’s complaint against                      companies are prepared to offer cash or lavish gifts      and corruption was widespread on their turf — and             criminally liable if staff, subsidiaries or “associated
   the European Union over aid for aviation giant Airbus.                               and entertainment to win business as the economic         nearly half were unaware of any company anti-                 persons” offer bribes anywhere in the world.
     While the appellate body upheld findings that some subsidies                       downturn prompts firms to cut corners to stay             bribery policy.                                                  It also clamps down on so-called “facilitation pay-
   provided by Brussels “have caused serious prejudice to the inter-                    ahead.                                                       “Complacency about fraud, bribery and corrup-              ments” — often used to oil the wheels of business
   ests of the United States,” it reversed a key finding that financing                    In its 2011 European fraud survey, consultants         tion, combined with cost cutting initiatives at many          by speeding up services such as visa applications
   by Germany, Spain and Britain for the development of the A380                        Ernst & Young said on Wednesday that Greek and            companies, creates additional exposure,” said                 — and “disporportionate” hospitality.
   superjumbo amounted to a export subsidy.                                             Russian staff were most likely to offer cash bribes,      David Stulb, who leads Ernst & Young’s global fraud              After polling employees from the factory floor to
     “As a consequence, the appellate body reversed the                                 with Greece also topping the chart for the most like-     investigation & disputes services.                            top executives, Ernst & Young said over 40 percent
   panel’s recommendation that the European Union withdraw                              ly to offer personal gifts.                                  Britain’s Bribery Act, which comes into force from         acknowledged that bribery and corruption had wors-
   prohibited subsidies within 90 days,” the WTO said on its                               France and Norway had the cleanest slates,             July, unsettled business leaders in part because of           ened over the last two years of the economic crisis.
   website. (AFP)                                                                       although two thirds of the 2,365 people quizzed           an onerous new offence of failure to prevent bribery,         (RTRS)



                                                                                                         Emirate wants more discipline


Abu Dhabi to rein in state firms’ bond binge
ABU DHABI, May 18, (RTRS): Abu                  Top officials are keen to improve          International Petroleum Investment Co       bond may be issued later this year or early       “The basic premise of the process is to   comment. A TDIC spokeswoman said she
Dhabi plans to curtail bond sales by state   accountability and discipline in state-       (IPIC), Aabar, Tourism Development and      2012. It may be followed by the United         have a look at the (global) investments      was unable to immediately comment.
companies and review the investments         owned firms, some of which have been          Investment Co (TDIC), the sources said.     Arab Emirates’ first federal sovereign bond.   made by these firms and assess if they          Abu Dhabi’s investment firms are
they hold to ease through the sale of sov-   described as “mini-fiefdoms”.                    “(Government officials) feel a vacuum       The part of the review that looks at        make sense to the economic development       among the most high-profile issuers in
ereign bonds and ensure the firms’              That means the Department of Finance       exists between them and the people run-     investments will be reassessing the value      of Abu Dhabi,” said a second source          the Gulf Arab region and regularly tap
actions benefit the economy.                 will become forceful in exercising its        ning the show,” said a banking source.      of the state-linked firms’ holdings, some      involved in the discussions. “In whether     bond markets to fund their ambitious
   The plan to centralise fundraising and    authority — until now often bypassed by          Abu Dhabi has been unable to print       of which are household names.                  they help create jobs, build local expert-   investment plans.
crack down on undisciplined issuance in      companies — and control over purse            another sovereign bond since its $3 bil-       Currently, portfolio assets at              ise. If that doesn’t happen, these assets       But Abu Dhabi has been concerned
the biggest of the seven United Arab         strings. The debt management office           lion, five and 10-year April 2009 debut     Mubadala, IPIC and Aabar, which recent-        will be eventually sold.”                    about the arbitrage trade across bonds
Emirates has been in the works for at        (DMO), part of the finance department,        issue because its state-linked firms have   ly bought in as a cornerstone investor in         The Abu Dhabi government did not          issued by these firms and believes that
least six months and may take another        will direct bond issuances from Abu Dhabi.    accessed markets, draining away limited     Glencore’s IPO, range from stakes in           respond to requests for comment. Mubadala    streamlining issuance through a single
year to complete, several people familiar       The review will affect Abu Dhabi’s high-   liquidity, bankers said.                    Daimler and Virgin Galactic to General         declined to comment. Officials at IPIC and   window will make it easier for the emi-
with official discussions told Reuters.      profile investment vehicles Mubadala,            The banking source said the Abu Dhabi    Electric and Spain’s Cepsa.                    Aabar were not immediately available for     rate to issue debt in the near future.



                    Data leaves BoE in spot
                                                                                           Republicans will own responsibility
    UK jobs mkt improve
    but doubts still linger
                                                                                           for the ‘first’ US default – Geithner
    LONDON, May 18, (Agencies):              est rates for a few more months,                                                                   ‘Gang of Six’ budget talks founder
    Britain’s labour market continued        amid uncertainty over the faltering
    to show modest signs of improve-         economy, according to analysts.
    ment in March, although a jump in           Britain’s unemployment rate and            NEW YORK, May 18, (Agencies): Treasury Secretary                                         “If Republicans try to impose that plan on this country as a condition for raising
                                                                                           Timothy Geithner said Tuesday that if Republicans insist on                           the debt limit, then they will own the responsibility for the first default in our his-
    the number of benefits claimants         jobless total fell in the first quarter
                                                                                                                                                                                 tory, with devastating consequences,” Geithner said in a speech to the Harvard
    last month raised doubts about the       of the year, but the number of peo-           passage of their budget plan as a condition for approving an                          Club of New York.
    prospect for any further strengthen-     ple claiming benefits rose between            increase in the nation’s borrowing limit, they will be respon-
    ing.                                     March and April, the Office for                                                                                                        Geithner noted that the country reached the current borrowing limit of $14.29 tril-
       The Office for National Statistics    National Statistics (ONS) said.               sible for the consequences.                                                           lion on Monday. He said he has begun deploying a series of bookkeeping maneuvers
    said the number of people without           Also on Wednesday, the Bank of               Speaking to a New York audience, Geithner said that Republicans would to avoid a debt default but that he will run out of maneuvering room around Aug 2.
    a job on the ILO measure fell by         England revealed that its monetary            bear responsibility for the first debt default in the nation’s history if they insist    “As I have said before, Congress must meet its responsibility to protect the
    36,000 in the three months to            policy committee (MPC) voted 6-3              they will not vote for an increase in the $14.3 billion borrowing limit unless nation’s full faith and credit by increasing the debt limit,” Geithner said.
    March, taking the jobless rate           in May to keep interest rates at a            they win approval of a House Republican budget plan.                                     He said while the borrowing costs on the national debt have remained low, that
    down to 7.7 percent. That was            record low level of 0.50 percent, as                                                                                                                                             could change quickly if financial mar-
    below forecasts for a reading of 7.8     it balanced high inflation and                                                                                                                                                   kets begin to doubt America’s ability to
    percent and the lowest since the         anaemic economic recovery.                                                                                                                                                       deal with its financial difficulties.
    three months to September 2010.             “May’s MPC minutes and the                                                                                                                                                       He said the cost of debt default,
       The number of people in               latest labour market data have done                                                                                                                                              something that has never occurred in
    employment rose by 118,000 in the        little to... the interest rate outlook,”                                                                                                                                         the country’s history, would be as dev-
    three-month period to its highest in     said economist Jonathan Loynes at                                                                                                                                                astating as the financial crisis that hit in
    more than two years.                     consultancy Capital Economics.                                                                                                                                                   2008.
       “The UK labour market data is            The ONS announced that the                                                                                                                                                       “As we saw in the fall of 2008, when
    actually fairly encouraging,” said       unemployment rate fell unexpect-                                                                                                                                                 confidence turns, it can turn with brutal
    James Knightley, economist at            edly to 7.7 percent in the first quar-                                                                                                                                           force and with a momentum that is very
    ING.                                     ter, from 7.8 percent during the                                                                                                                                                 difficult and costly to arrest,” Geithner
       The government is banking on          final three months of 2010.                                                                                                                                                      said. “That is a threat we should pre-
    the private sector to create enough         Market expectations had been                                                                                                                                                  empt.”
    jobs to offset heavy losses in the       for an unchanged reading of 7.8                                                                                                                                                     Geithner called on lawmakers to
    public sector as spending cuts start     percent between January and                                                                                                                                                      work on a credible deficit-cutting plan
    to bite.                                 March.                                                                                                                                                                           that could be accepted by both
       Recent surveys such as the               And, while the jobless total fell                                                                                                                                             Republicans and Democrats.
    Purchasing Managers’ Indices have        by 36,000 to 2.46 million people in                                                                                                                                                 House Speaker John Boehner said
    shown that British firms are hiring      the first quarter, the ONS added                                                                                                                                                 again on Monday that Republicans will
    more staff.                              that the number of people claiming                                                                                                                                               not support an increase in the debt limit
       And a study by the Chartered          jobless benefits increased by                                                                                                                                                    “without serious budget reforms and
    Institute of Personnel and               12,400 between March and April to                                                                                                                                                significant spending cuts.”
    Development (CIPD) and consul-           reach 1.47 million.                                                                                                                                                                 Republicans have ruled out any tax
    tancy KPMG on Wednesday sug-                “Today’s labour market figures                                                                                                                                                increases, including any plans to end
    gested overall employment levels         are in truth unlikely to challenge                                                                                                                                               tax cuts for high earners enacted in
    may improve slightly in the second       the perception of fairly static con-                                                                                                                                             2001 and 2003.
    quarter of 2011.                         ditions across the labour market,”                                                                                                                                                  The Treasury Department confirmed
       However, they also said that the      said HSBC economist Stuart                                                                                                                                                       that the debt ceiling was reached on
    small increase in private sector         Green.                                                                                                                                                                           Monday with the debt now totaling
    recruitment was still being can-            Britain is still struggling to                                                                                                                                                $14.293 trillion, $25 million under the
    celled out by large-scale public         recover from recession amid the                                                                                                                                                  current ceiling of $14.294 trillion.
    sector job losses.                       coalition government’s deep spend-                                                                                                                                                  Treasury will maintain that level
       “The jobs market appears to be        ing cuts, while weak economic                                                                                                                                                    over the next 11 weeks through a series
    taking baby steps on the long path       growth has caused the Bank of                                                                                                                                                    of maneuvers that began Monday when
    to pre-recession levels,” Gerwyn         England to avoid a rate hike despite                                                                                                                                             Geithner informed Congress he had
    Davies, Public Policy Adviser at         soaring consumer price inflation.                                                                                                                                                halted investments in two pension
    the CIPD, said.                             Interest rates, which were                                                                                                                                                    plans for federal employees.
       “There are many sectors, such as      slashed to 0.50 percent in March                                                                                                                                                    Treasury will begin reducing the
    manufacturing, that are taking large     2009 amid a record-length reces-                                                                                                                                                 debt holdings in those accounts over
    strides forward. But consumer-fac-       sion, have remained on hold ever                                                                                                                                                 the next few weeks to make room for
    ing industries are simply edging         since.                                        US Treasury Secretary Timothy F. Geithner speaks on President Obama’s approach to deficit reduction at the Joan                    its regular auctions of debt.
    forwards due to a fear of another           The minutes of the Bank of                 Shorenstein Center on Press, Politics, and Public Policy at the Harvard Club of New York City on May 17, in New York                  A push to overhaul the US corporate
    consumer slowdown.”                      England’s rate-setting meeting ear-           City. ‘If a fiscal agreement is not reached in the coming weeks, in advance of Aug 2, then the debt limit must still be
                                                                                           increased,’ said Geithner of the federal government’s debt limit, which was reached yesterday. ‘It simply is not an option         tax code will take a back seat to negotia-
       The ONS data showed that the          lier this month showed that policy-                            for Congress to evade the basic responsibility to protect America’s creditworthiness.’ (AFP)                      tions on the deficit and debt ceiling over
    number of people claiming jobless        makers Martin Weale and Spencer                                                                                                                                                  the next two months, Treasury Secretary
    benefit rose by 12,400 last month        Dale again called for an increase in                                                                                                                                             Timothy Geithner said on Tuesday.
    — the biggest rise in more than a
    year and following an upwardly
                                             the rate to 0.75 percent.
                                                Andrew Sentance voted for a
                                                                                                                                UK intellectual property laws fail                                                               Geithner said the Obama administra-
                                                                                                                                                                                                                              tion hopes to take up the issue of tax
    revised increase of 6,400 in March.      bigger increase in the rate to 1.0                                                                                                                                               simplification before the presidential
                  Skewed
       But it said the figures were being
                                             percent, as he had done at the pre-
                                             vious three meetings.
                                                Meanwhile, official data pub-
                                                                                           Copyright shakeup may boost economy                                                                                                election in 2012 but he signaled the
                                                                                                                                                                                                                              issue is on hold for now.
    skewed by recent changes in bene-                                                                                                                                                                                                          Also:
                                             lished Tuesday showed that annual
    fits rules for lone parents — main-      inflation soared to 4.5 percent in            LONDON, May 18, (RTRS): A shake-               “The recommendations of the                 al, but said it was relieved the review      WASHINGTON: Deficit-reduction talks
    ly women — which had led to a            April, hitting a two-and-a-half-year          up of copyright laws could add nearly 8     review are designed to enhance the             focused on promoting market access           among a high-profile group of US sen-
    rise in the number of people seek-       high above the BoE’s official 2.0-            billion pounds to the economy by put-       economic potential of the UK’s cre-            rather than more radical reform such as      ators foundered on Tuesday in a bleak
    ing employment and therefore eli-        percent target.                               ting it on par with international com-      ative industries and to ensure that the        the adoption of fair use principles used     sign for other lawmakers trying to
    gible to claim jobseekers                                                              petitors, an independent report wel-        emergence of high technology busi-             in the United States.                        hammer out a deal to tackle the coun-
    allowance.                                              Muted                          comed by government ministers said          nesses, especially smaller businesses,            “The Exchange should make it easi-        try’s budget woes.
       Nonetheless, some analysts took          “The mixed unemployment                    on Wednesday.                               in other sectors is not impeded by our         er for businesses and individuals to            Republican Tom Coburn, one of the
    these figures as a warning sign for      news, ongoing muted wage growth                  The Digital Opportunity review was       IP laws.”                                      legitimately access and pay for copy-        Senate’s leading fiscal conservatives,
    the months ahead.                        and general tone of the MPC min-              commissioned to address concerns that          The review estimated the impact on          righted material, while allowing rights      told reporters he was dropping out of
       “The pick-up in the claimant          utes suggest that the Bank of                 Britain’s “archaic” intellectual property   growth of adopting each of its recom-          owners to retain control of how their        the bipartisan “Gang of Six” after
    count is a bit of a surprise. It’s       England is currently unlikely to              laws have failed to keep pace with how      mendations and predicted it would be           content is used and sold,” said CBI          months of meetings.
    showing a slightly weaker picture,”      tighten monetary policy before                music and media are used around the         between 5.5 and 7.9 billion pounds a           chief policy director Katja Hall.               “We can’t bridge the gap between
    said Marchel Alexandrovich, econ-        November,” said economist                     world in the Internet age.                  year.                                             “Firms will now be looking for reas-      what actually needs to happen and
    omist at Jeffries International.         Howard Archer at IHS Global                                                                  “The team’s estimate is that if the         surance from the government that it          what people will allow to happen,”
       “We know what the story is: pri-      Insight consultancy.                                   Recommendations
                                                                                                                                       review’s recommendations are imple-            will champion international enforce-         Coburn said.
    vate sector adding jobs, public sec-        And Hetal Mehta, economist at                 Led by Professor Ian Hargreaves of       mented in full, they will add between          ment, which is so critical to an export-        A source familiar with the talks said
    tor shedding them. So it’s a matter      Daiwa Capital Markets Europe,                 Cardiff University, its key recommen-       0.3 and 0.6 percent to the UK’s annual         led economic recovery.”                      Coburn had pushed for deep and imme-
    of which one of those wins out.”         forecast “no move from the MPC                dations included a Digital Copyright        GDP growth, not counting significant              The review also calls for the wide-       diate cuts to Medicare, the healthcare
       Average weekly earnings growth        this year as it continues to assess           Exchange where licences in copyright        reductions in transaction costs for the        spread practice of format shifting for       program for the elderly, which were
    including bonuses unexpectedly           the progress of household balance-            can be bought and sold, and legislation     public and private sectors, which the          personal use — copying CDs or DVDs           rejected by other members of the
    accelerated to 2.3 percent in the        sheet restructuring and the full              to permit access to orphan works            team puts at 750 million a year,” it said.     onto digital music players or computers      group. Coburn’s proposal was
    three months to March from 2.1           impact of fiscal tightening”.                 whose owners cannot be traced.              British copyright laws have been criti-        — to be legalised, in a move it says         described as more dramatic than a plan
    percent in the three months to              “In the highly uncertain environ-             Under current laws, if one owner out     cised in the past for hampering creativ-       could help academics draw on wider           that passed the Republican-controlled
    February, but is still well below the    ment, it seems the best that MPC              of hundreds on a film or TV pro-            ity and investment.                            research.                                    House of Representatives last month.
    current rate of inflation.               members can do is remain in wait-             gramme cannot be traced they effec-                                                           It has already been legalised in all         Richard Durbin, the second-rank-
       “Earnings growth remains              and-see mode,” said Hetal Mehta at            tively hold the others to ransom as it                       Review                        European countries with the exception        ing Democrat in the Democratic-led
    deeply negative in real terms, and       Daiwa Capital Markets.                        becomes a criminal offence to exploit         Prime Minister David Cameron                 of Britain, the Republic of Ireland and      Senate, told reporters the five remain-
    will continue to act as a major con-        The biggest proponent of higher            that work commercially, the review          called for a review in a speech last           Malta.                                       ing senators in the bipartisan group
    straint on household spending,”          rates, Andrew Sentance, leaves the            said.                                       autumn, when he told his audience:                “The report highlights real scope for     would meet on Wednesday and “I hope
    said Jonathan Loynes of Capital          MPC at the end of this month and                 “In recent years, the UK has failed to   “The founders of Google have said              changes to copyright laws which could        we can finish this and present it (rec-
    Economics.                               will be replaced by former                    make the changes needed to modernise        they could never have started their            add enormous value to the UK econo-          ommendations) to the Senate.”
       Mixed British unemployment            Goldman Sachs economist Ben                   copyright law, for which we will pay an     company in Britain.”                           my,” said business secretary Vince              While he said Coburn had made a
    data will push the Bank of England       Broadbent who on Tuesday struck               increasing economic price as we make          The Confederation of British                 Cable, who gave a speech welcoming           “valuable contribution” to the group, “I
    into maintaining record-low inter-       a distinctly less hawkish tone.               our way into the third decade of the        Industry (CBI) employers’ group wel-           the review at a conference in London         am not reaching out to him” for further
                                                                                           commercial Internet,” Hargreaves said.      comed the copyright exchange propos-           on Wednesday.                                discussions, Durbin added.

				
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