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Posts Tagged ‘faces’

Vietnamese pharmaceutical firm faces patent lawsuit

In Uncategorized on December 24, 2010 at 4:37 am

A Vietnamese company based in Ho Chi Minh City which makes drugs for the cure of Hepatitis B, has for the first time in Vietnam produced a drug for Hepatitis C in an injection form.

Hepatitis drug made by Nanogen Company, whose amount is the same with foreign’s but much cheaper (Photo: Tuoi tre)

However, the Vietnamese company Nanogen Biopharmaceutical Ltd faces a lawsuit after the new medication was recently registered by authorities.

Freshview Intellectual Property Law Company in Hanoi, a representative of F.Hoffmann-La Roche AG in Vietnam has filed a complaint in a letter to the Nanogen Biopharmaceutical Ltd Company accusing the company of violating the patent protection law under which Roche is sole owner of Peginterferon alfa 2a the drug they have patented in Vietnam.

Roche claims the patent No. 2611 for the mentioned drug was granted by the National Office of Intellectual Property of Vietnam in 2002 and is valid until May 2017. Therefore no company in Vietnam can manufacture the interferon compound without permission from Roche.

Roche affirmed that the Nanogen Company was violating their  patent rights and requested the company to immediately stop producing, marketing and advertising its Pegnano drug from December 30.

Roche also demanded the registration of Pegnano drugs be revoked by the relevant authorities.

On September 30, Truong Quoc Cuong, head of the Drug Administration of Vietnam, a division of the Ministry of Health turned down Nanogen’s request to register and sell its Pegnano drug after Roche protested.

However, Cao Minh Quang, deputy health minister, authorized the registration of three products on December 8 as Nanogen Company assured him that it had not violated the patent law.
In a talk with Tuoi Tre newspaper, Ho Nhan the Nanogen Company director denied that the company had violated the patent law stating that he had respected all intellectual property rights.

According to Mr. Nhan, Pegnano is a hi tech product which the Vietnamese government had encouraged and supported.

Workers are making hepatitis B at Nanogen Company’s factory (Photo: Tuoi tre)

Moreover, the company had dedicated 9 years to making the drug accessible and within reach for poor Vietnamese hepatitis patients. Pegnano is sold for VND1.5 million-1.9 million per 180mcg (USD77) compared to Roche’s selling price of VND4.3 million for the same amount.

Mr. Nhan cited article 7 of the Vietnamese Intellectual Property Law which was revised in 2009 where it is clearly stated that the government can ban or limit the exercise of intellectual rights in cases where such rights harm national defense, welfare of the people or affects other crucial national interests.

Dr. Tran Tinh Hien, deputy director of the Ho Chi Minh City based Tropical Disease Hospital supported Pegnano manufacture in Vietnam as he believed that many countries would be willing to revoke intellectual patent rights in order to have cheap HIV medicine.
Hoang Huu Doan, former director of the state-run Central Pharmaceutical Factory No. 1 has also backed Pegnano as he believed that drug manufacturing monopoly must end.

Source: SGGP

Irish bailout talks accelerate as PM faces new setback

In Uncategorized on November 26, 2010 at 11:21 am

DUBLIN, Nov 26, 2010 (AFP) – Ireland’s government was Friday awaiting the results of a by-election expected to cut its already slim majority, as talks on an international bailout for the country’s ailing economy gathered pace.

As polls closed Thursday, Prime Minister Brian Cowen’s Fianna Fail party was widely expected to lose its seat in County Donegal in northwest Ireland to the nationalist Sinn Fein party.

Protesters hold a demonstration in Dublin on November 24.(AFP)

If they did lose the seat it would cut the coalition government’s majority to just two seats.

A day after publishing a four-year package of austerity measures designed to smooth the way towards huge loans from the EU and IMF, Cowen warned Thursday that everyone would have to tighten their belts if Ireland was to recover.

Cowen told parliament the plan — unprecedented in Irish history — gave people a chance to see the sharp “adjustment” necessary to shore up the national finances and “plan ahead for the future”.

“People in their own household experience know that you can’t go on with a situation if your revenues are back to what you were earning in 2003 and that your spend is right up to date in 2010 terms.

“People know that is not a sustainable position,” he said.

Having built up a deficit equivalent to 32 percent of gross domestic product this year, Ireland is in talks to borrow about 85 billion euros (114 billion dollars) from the European Union and the International Monetary Fund.

Negotiations on the bailout are set to wrap up on Sunday, diplomatic sources in Brussels told AFP.

The international intervention to help Ireland has failed to remove doubts about its ability to stabilise its shattered finances.

That concern, and fears of contagion spreading to Portugal and the far larger Spanish economy, continued to hurt the euro, which was worth 1.3360 dollars at 0100 GMT.

Nor was the austerity plan enough to calm the bond markets: the yield on benchmark 10-year government bonds jumped to record highs above 9.0 percent as markets remained nervous.

The draconian austerity plan and a budget on December 7 are crucial steps to show Ireland’s fellow eurozone members that it is putting its finances in order.

The 15-billion-euro series of austerity measures include slashing 25,000 jobs, raising VAT, or sales tax, to 23 percent, and cutting the minimum wage.

Ireland has however managed to preserve its ultra-low 12.5 percent corporation tax rate, a key reason that foreign companies have invested there.

Economists supported Ireland’s tax stance.

“This will send out a clear statement that Ireland, despite its economic difficulties, is still very committed to incentivising the creation and maintenance of high value jobs,” Ernst and Young’s Kevin McLoughlin said.

The government’s decision to turn to the EU and IMF has enraged Cowen’s opponents, who accused him of humiliating the country.

The anger surfaced in the by-election in Donegal South West, a rural area of northwest Ireland where resentment towards the EU runs high. Polls opened at 0600 GMT and closed at 2200 GMT with the result set to be declared late Friday.

Turnout for the poll was expected to be well down on the 66 percent seen in the last election as mistrust in the political system convinced voters to stay at home.

In Donegal town, butcher Ernan McGettigan said he saw a grim future ahead.

“The way our country is going at the moment we will have to declare ourselves bankrupt.

“There are only four million people and we have incurred a debt of around 4,000 euros for every person.”

President Mary McAleese recognised the nation’s rage. “I want to acknowledge the understandable distress and dismay being experienced by people all around the country who feel fearful about their future,” she said.

Finance Minister Brian Lenihan acknowledged there was “no denying the reputational damage Ireland has endured” in the economic crisis.

But writing in the Financial Times, he argued that the country had the attributes to pick itself up and stressed that the country still ranked second in Europe for productivity.

“The government faces many challenges but we have the necessary support to pass the budget in December,” Lenihan insisted.

Source: SGGP

Badminton: Top seeds faces tough task at Asian Games

In Uncategorized on November 2, 2010 at 1:44 pm

Japan faces ‘more severe’ security situation: PM

In Uncategorized on October 24, 2010 at 11:59 am

TOKYO, Oct 24, 2010 (AFP) – Japan is facing growing security challenges due to China’s flexing of its military might and North Korea’s missile development programme and nuclear status, Prime Minister Naoto Kan said Sunday.

Kan’s comments come amid heightened tensions with China over disputed islands and growing military activities by the rapidly developing Asian giant and follow a report that North Korea may be preparing for a third nuclear test.

Troops of Japan Ground Self-Defense Force (GSDF) attend an inspection parade at the Asaka military base in suburban Tokyo on October 24, 2010. AFP

Ties between Tokyo and Beijing were badly strained after Japan arrested a Chinese trawler captain near the island chain in the East China Sea last month, sparking a barrage of protests from Beijing.

“The security situation surrounding Japan is becoming more severe, seen in concerns over North Korea’s missile and nuclear arms development and in China’s increasing naval activity along with its military modernisation,” Kan said at an inspection parade of troops in suburban Tokyo.

“The Self-Defence Forces need to be poised to deal with various situations effectively,” Kan said, using the official name of the Japanese troops.

Kan also stressed the importance of strengthening the decades-long alliance with the United States, saying: “I’d like to deepen the alliance into an appropriate form for the 21st century.”

The prime minister attended the parade for the first time as the premier of the government led by the centre-left Democratic Party of Japan, which ousted a conservative government last year.

In the latest development in the bitter spat between China and Japan, Tokyo on Sunday urged Beijing to normalise rare earth exports that are crucial for high-tech Japan after shipments were blocked last month.

Japanese trade minister Trade Minister Akihiro Ohata said he had urged Chinese Vice Minister of Commerce Jiang Yaoping to “make improvements so that exports of rare earths will be carried out smoothly,” amid continued interruptions caused by strict inspections by Chinese customs officials.

The Chinese navy has increasingly been deployed to areas near Japanese territorial waters in a show of force by China.

In an incident in April this year, a large Chinese flotilla ventured near a group of Japanese islands in the East China Sea and sent out a helicopter that buzzed Japanese navy ships monitoring their movement.

The increased Chinese activity in its southern waters has sparked a defence rethink in which Japan plans to deploy more forces to its scattered southern islands and away from Cold War-era locations in the north near Russia.

Beijing’s increased assertiveness, particularly in the South China Sea, has caused jitters among other neighbouring nations as well as the United States, which is also at odds with China over trade and currency issues.

Meanwhile Chosun Ilbo, South Korea’s biggest-selling newspaper, reported Thursday that North Korea appeared to be preparing for a third nuclear test, citing an unidentified government source.

South Korea’s Unification Minister Hyun In-Taek said Friday the chances of another nuclear test by the communist North could not be ruled out, although the likelihood was low.

Source: SGGP

Thai PM in court as party faces ban threat

In Uncategorized on October 18, 2010 at 6:24 am

BANGKOK, Oct 18, 2010 (AFP) – Thai Prime Minister Abhisit Vejjajiva arrived at court amid tight security Monday as his ruling party fights to avoid a political ban that could bring fresh upheaval to the deeply divided kingdom.

Abhisit will be a witness for the defence at the Constitutional Court in what could be the final hearing in the case, which centres on accusations of misuse of a 29-million-baht (900,000 dollar) state grant in 2005.

Thai Prime Minister Abhisit Vejjajiva (C) arrives at the Constitutional Court in Bangkok on October 18, 2010. AFP

The Democrat Party — Thailand’s oldest party — could be dissolved if found guilty, while the premier, who was its deputy leader at the time, could be handed a five-year ban from politics, alongside other executives.

Abhisit looked relaxed as he arrived but made no comment to the throngs of reporters gathered outside the court, where there was a heavy police presence.

Thailand’s Election Commission (EC) in April called for the ruling party to be abolished over the accusations, as well as a separate case alleging an undeclared political donation.

The call coincided with the country’s worst political violence in decades, which ultimately left 91 people dead and almost 1,900 wounded in a series of street clashes between opposition protesters and armed troops.

The Democrats are accused of paying 23 million baht to advertising firms, despite only having permission to spend 19 million on billboard marketing.

Abhisit has rejected accusations that a member of his party had attempted to influence the judiciary over the case.

The opposition’s allegations that a Democrat lawmaker met an aide of a Constitutional Court judge ahead of the hearing — and was captured on video — were splashed on the front pages of local media Monday.

Judicial rulings have played a pivotal role in shaping Thailand’s political landscape in the past.

The Democrats came to power two years ago after court decisions ousted allies of fugitive ex-premier Thaksin Shinawatra, who was himself unseated in a 2006 military coup.

Two premiers were forced from office by the judiciary in 2008 — one of whom, Samak Sundaravej, was removed for taking payments for hosting TV cooking shows.

Uncertainty over the government comes at a difficult stage for the country, which remains bitterly torn in the wake of deadly opposition protests by the opposition “Red Shirt” movement.

The Reds accuse Abhisit’s government of being undemocratic because it came to power with army backing in a parliamentary vote after the controversial court rulings, and their protests have called for immediate elections.

Some observers questioned whether Abhisit’s backers in the military and Bangkok-based elite would allow the Democrats to be toppled.

Former Thai diplomat Pavin Chachavalpongpun, an author and fellow at the Institute of Southeast Asian Studies, said he did not believe the party would be disbanded.

However, he said one potential motive for dissolution would be as a gesture to the Reds to rebuff allegations of double standards in the legal system.

Pavin said “even then, they will have a plan B”, with rumours that a new party would swiftly rise from the ashes of the old.

Source: SGGP

Flood-stricken Pakistan faces economic catastrophe

In Uncategorized on August 18, 2010 at 7:26 am

KARACHI, Aug 18, 2010 (AFP) – Pakistan faces economic catastrophe after the devastating floods that have wiped out farmland and ruined infrastructure, with feared losses of billions of dollars likely to set back growth by years.

The country’s worst ever humanitarian disaster has ravaged an area roughly the size of England, affected 20 million people, exacerbated a crippling energy crisis and raising fears of social unrest.

Pakistani flood survivors take shleter in a destroyed structure on the banks of Kabul River in Nowshera. AFP

“It seems we’re doomed to walking through a dark tunnel. We’re on an unending path of misery,” said Morio Pahore, a farmer from small town Thul in southern Pakistan who is now living in a tent on a highway.

Shirtless, his face burnt dark by the sun, the greying 50-year-old said he lost everything when the rains fell and the river burst its banks.

“We had goats and buffalo and a wooden hut. We had grain to eat. The river ate everything, leaving the whole family hungry and empty-handed.

“I don’t think we can start again for many years. Everything is under water and even if the river recedes, the water will be there for a long time.”

It is a tragedy repeated millions of times over for farmers and peasants across the country who saw their livelihoods washed away in minutes after the floods first hit three weeks ago.

Agriculture accounts for 20 percent of Pakistan’s gross domestic product. President Asif Ali Zardari said it would take two years to provide farmers with crops, fertilisers, seeds and food. Experts say it will take far longer.

On top of that, floods have inflicted widespread damage on infrastructure. In cities, flood waters have destroyed electricity installations, roads and phone lines.

The World Bank, which has announced a 900 million dollar loan for Pakistan, expects the economic impact to be huge, indicating that direct damage was greatest in housing, roads, irrigation and agriculture.

It estimated crop loss at one billion dollars, saying the full impact on soil erosion and agriculture could only be assessed when the water recedes around mid-September.

“We have lost around 20 percent of our cotton crops. The destruction of corn, rice, sugarcane, vegetable crops and fish farms are enormous as well,” Ibrahim Mughal, who heads the independent Agri Forum organisation, told AFP.

Damage to cotton, rice, sugarcane and maize will hit the export sector, the main source for Pakistan’s forex reserves. Textiles and agriculture account for about three quarters of Pakistan’s 21 billion dollar export target this year.

“The floods have eaten three million tons of cotton — over 20 percent of our 14 million bales for this year. It will negatively affect by 25 percent large-scale manufacturing and ultimately impact on exports,” Ashfaq Hasan Khan, a former government economic adviser, told AFP.

There are fears that Pakistan risks running up a higher fiscal deficit which would lead to increased government borrowing.

Before the floods, the country had a healthy forex reserve of 16.45 billion dollars, thanks to a 11.3 billion dollar IMF rescue package meant to stave off Pakistan’s worst balance of payment crisis and 30-year-high inflation in 2008.

After recording its lowest growth in a decade, GDP had been expected to grow by 4.5 percent in the fiscal year ending June 30, 2011, but the floods could shave at least one percent off growth estimates.

“Our assessment suggests Pakistan could achieve about 3.5 percent GDP growth rate this fiscal year,” Khan said. “It means a loss of around two billion dollars.”

Pakistan’s UN envoy in Geneva, Zamir Akram, has said reconstruction in northern areas alone could cost 2.5 billion dollars.

Food prices are already rising and there are fuel shortages in some areas.

The director general of the Pakistan Electric Power Company, Muhammad Khalid, told AFP they faced losses of more than four billion rupees (47 million dollars) due to the floods with some grid stations wiped out.

Around 1,000 villages in flood-hit districts of southern Punjab are without power, said Jamshaid Niazi, spokesman for Multan Electricity Supply Company. “Our two grid stations are badly affected,” he said.

“The loss is huge. We have to install new poles, wires, feeders etc.”

Experts have urged the government — already weak and unpopular — to move quickly, warning that the losses could fan unemployment and social unrest.

“The peasants are our lifeline, so by not helping them we are in fact committing suicide,” Agri Forum’s Mughal said.

“Jobless people can become criminals if they can’t get employment. In this case the number of such people is in the millions.”

Source: SGGP

Delta faces obstacles implementing Mekong 1,000 project

In Uncategorized on August 13, 2010 at 11:21 am

The Mekong 1000 project to sponsor students in the Mekong Delta to pursue their graduate studies abroad has become stagnant due to candidates’ poor English language skills and disagreement between localities and the State Audit of Vietnam.

This undated file photo shows Can Tho University’s principal Nguyen Anh Tuan (R) give flowers to candidates sent abroad to study under the Mekong 1,000 project (Photo: SGGP)

The project aims to promote the Mekong Delta’s industrialization and modernization process, and international integration through improving human resources for the region.

Under the program, as many as 1,115 students will be sent to foreign countries from 2006 to 2015, with a total budget of US$50 million funded by 13 regional provinces. 907 students of them will pursue master’s degrees and 208 will progress towards obtaining their doctorate degrees.

Currently, 200 of 508 candidates are studying abroad, majoring in international business administration, banking, international relations, biological technology, food technology, information technology, aquaculture, and construction management.

According to Can Tho University, the project has become stagnant because some universities have raised the English skill level required for their applicants to 6.0 or 6.5 from 5.5 points scored on the IEL TS test, or due to increased school fees.

A representative from the university said candidates’ poor English skills have obstructed them from applying to foreign schools.

Nguyen Khai Hoan, deputy director of Can Tho City’s Department of Home Affairs, said the project has faced difficulties and become stagnant due to the State Auditor’s inspection.

Mekong Delta provinces have proposed to use the local budget for the training, but the State Auditor has not agreed.

Tran Thi Tuyet, director of Soc Trang Province’s Department of Home Affairs, said, “The province has spent VND20 billion (US$1.05 million) implementing the project, but the State Auditor didn’t approve the spending, saying that it was improper to spend the local budget to send students abroad, and that schools where students have pursued their studies are not in the list of 100 leading schools in the world.”

Source: SGGP

Northern Vietnam faces super typhoon

In Uncategorized on July 17, 2010 at 8:46 am

Deputy Prime Minister Hoang Trung Hai chaired an urgent meeting on July 16 to instruct ministries, agencies and localities to prepare for super typhonn Conson as it suddenly changed its course southward and is now heading for the northern delta, instead of towards the Vietnam-China border as was previously forecast.

The forecasted path of tropical storm Conson, the first storm of the season

Deputy PM Hai warned this is a powerful storm, which has caused huge losses of human life and property in the Philippines. 

There is no room for complacency, as the storm is forecast to directly hit coastal areas from Quang Ninh to Thanh Hoa provinces, which accommodate many fishermen, he said.

He asked these provinces to ban vessels from setting sail in case of emergency. He also asked the National Steering Committee for Flood and Storm Control and the Ministry of Agriculture and Rural Development to dispatch inspection teams to areas vulnerable to floods.

On the same day, Prime Minister Nguyen Tan Dung also sent an urgent message to ask localities that are in the storm’s path to prepare for its arrival.

The message says the PM instructs officials in coastal provinces and cities from Quang Ninh to Quang Tri to prevent vessels from going out to sea if necessary. Evacuation and any other procedures that will guarantee the safety of people, and infrastructure are also required.

According to the National Hydro Meteorological Forecasting Center, with the current moving direction and rapid speed, the storm, the first of the season, is traveling to the Red River Delta.
In which province the storm center will make landfall has yet to be determined, but northern coastal provinces from Quang Ninh to Thanh Hoa will be affected severely.
At the meeting, the center’s director Bui Minh Tang said the storm is heading for the Gulf of Tonkin with sustained winds of 125kph near its center. Conson has been forecast to enter the gulf the morning of July 17, striking the northern coastal area by afternoon.
The storm will be off the coast from northern Hai Phong to central Nghe An Province today.
He said the strongest winds near the storm center would peak at 89-117 kilometers an hour with gusts topping 118-149 kilometers per hour.
Strong winds and heavy rains are likely in coastal provinces from Quang Ninh to Thanh Hoa and northern provinces, including Bac Ninh and Hoa Binh, as well as in Hanoi.
Forecasters predict the storm will generate waves of between 6-8 meters and tides of between 2-4 meters.
Mr. Tang said the storm is expected to weaken into a tropical low-pressure system by the morning of July 18, when it moves through areas from northwestern provinces of Son La to Lai Chau.
Hai Phong, Hai Duong, Hung Yen, Hanoi, Bac Ninh, Bac Giang and Hoa Binh may be struck by the storm center or merely affected by heavy floods.

Mr. Tang warned that northern provinces would have high rainfall of between 100-200mm, even 400mm in Hoa Binh and Thanh Hoa provinces.

Preparations for Conson

The afternoon of July 16, residents in northern Nam Dinh Province and Hanoi rushed to buy dry provisions to store for the storm and possible floods.

Authorities of coastal districts of Nghia Hung and Giao Thuy in Nam Dinh Province called sea bound clam breeders to return to shore.

The province has prepared evacuation plans for 3,400 residents in the two districts.

Le Han Hien, deputy head of Hai Phong’s Steering Committee for Flood and Storm Prevention and Control, said 12,000 fishing boats have been anchored at Cat Ba Port, Cat Hai Island and Do Son peninsula to avoid the storm.

The People’s Committee of Hai Phong’s Cat Hai District, together with 100 soldiers, helped thousands of residents living in coastal villages evacuate the afternoon of July 16.

Fishing boats

According to central Quang Tri Province’s Steering Committee for Flood and Storm Prevention, until afternoon of July 16, about 800 boats returned to shore or were in safe anchorage areas.
Northern Quang Ninh Province also called over 10,000 boats ashore.

Over 3,000 boats in Quang Binh Province returned from sea, while 500 boats with about 3,000 fishermen are on their way back to the shore.

As of the afternoon of July 16, 443 fishermen aboard 43 boats from Da Nang Province were still at sea, with one boat and 27 fishermen working in the Truong Sa (Spratly).

In central Quang Ngai Province, 6 boats with 78 fishermen that had been in accidents in the Hoang Sa (Paracel) Archipelago were towed to the shore.

The Border Guard High Command reported that it has been unable to contact 237 fishermen aboard 17 ships from the province working in the Hoang Sa Archipelago.

At least six vessels have been reported sunk and another five ones are missing.
Border guards in coastal provinces have fired signals at 28 fixed and 15 mobile points to warn ships operating offshore.

Due to the storm, national flag carrier Vietnam Airlines has announced the cancellation of four domestic flights on July 17.

Source: SGGP

US recovery faces litmus test

In Uncategorized on July 2, 2010 at 2:20 pm

WASHINGTON (AFP) – The patchy US economic recovery faces a crucial litmus test Friday when fresh unemployment figures are released, but few expect positive results.

(AFP file) A trader reacts during trading at the New York Stock Exchange.

Most analysts say the ranks of jobless Americans are likely to have swollen to more than 15 million, pushing the unemployment rate from 9.7 percent to 9.8 percent.

That would be bad news for President Barack Obama, who is running out of time to put the economy back on track before Congressional elections in November.

Although the White House has repeatedly warned that unemployment will remain high for the rest of the year, polls show it is still a crucial issue with voters.

The drop would also be bad news for markets, which have been convulsed by worry about a double dip recession in recent weeks.

The last quarter has been tortuous for the top 30 US companies, with the Dow Jones Industrial Average losing more than ten percent of its value, in large part over fears about the fate of the US economy.

“This Friday’s employment report will provide an important gauge on the robustness of the recovery underway,” Goldman Sachs analysts warned.

Goldman predicts that payrolls shrunk by 100,000 last month, the first negative figure this year.

One reason for the skepticism is the continued weakness of the private sector, which created just 41,000 jobs in May.

Faced with an uncertain outlook and poor access to credit, US firms have been reluctant to rehire workers.

Analysts fear the June figures will also see the evaporation of hiring for the 2010 Census, which accounted for 95 percent of new jobs in May.

And on Thursday the Labor Department reported yet more people claimed unemployment benefits last week, when new jobless claims rose to 472,000, an increase of 13,000 from the week before.

“Claims drifted higher still over the course of June… suggesting the labor market has not regained the traction that appeared to be building in the first four months of the year,” said Deutsche Bank analysts.

The weakness has sparked calls for Obama to provide more government spending to restart the recovery.

But proponents of this plan admit it is nearly impossible as Washington zeroes in on elections in which the national debt is also likely to feature prominently.

Congress is currently locked in a bitter debate over extending unemployment insurance for over one million workers and is likely to balk at a wider spending package.

The US House of Representatives extended federal unemployment benefits through November 30 on Thursday, but now the Senate has to take up the controversial measure.

Without the extension, some 1.7 million unemployed would be unable to receive their benefits after July 3, according to the House Financial Services Committee.

A new vote on the measure is not expected until Congress returns from its week-long July 4 Independence Day holiday recess.

“I think this report will show that really we need to do more,” said Heidi Shierholz of the Economic Policy Institute, a Washington-based think tank. “The private sector is not yet poised to takeover and sustain a robust recovery.”

With state governments cutting jobs to balance their books, Shierholz said there was a strong case for extending unemployment benefits and aid to states, despite the political difficulties.

“This is one of those cases where the political realities are completely at odds with economic sense,” she said advocating fresh stimulus of around 400 billion dollars.

“I don’t know what is going on in the heads of these people, the economic case is so cut and dry, it is so clear what needs to be done.”

Source: SGGP

G20 faces balancing act to safeguard recovery

In Uncategorized on June 4, 2010 at 10:13 am

BUSAN, South Korea (AFP) – Finance ministers from the world’s biggest economies were urged to balance efforts to shore up a fragile global recovery with the need to slash deficits when a G20 meeting begins Friday.

With the sovereign-debt crisis in Europe forcing countries there to accelerate debt-reduction measures, fears are growing that moves towards tough austerity could hit growth and derail a recovery whose durability is at risk.

(L-R) IMF Managing Director Dominique Strauss-Kahn chats with US Treasury Secretary Tim Geithner and France’s Finance Minister Christine Lagarde following their meeting at IMF Headquarters in Washington, DC in April 2010. AFP file

Officials said the meeting was also unlikely to reach a conclusion on the contentious issue of tighter banking regulation as viewpoints diverge.

“It’s important that we understand just how fragile the recovery is,” said Trevor Manuel, minister in the presidency for South Africa and former finance minister.

“Economies around the world are raising the spectre of a double-dip recession and this presents the opportunity to take decisions to prevent the world from going into a fresh recession.”

Officials are wary of shifting too quickly towards emphasising deficit cuts at the cost of growth despite the threat of bond markets hammering debt-hit governments, as witnessed recently with Greece’s soaring borrowing costs.

“We shall have to achieve economic recovery, at the same time we cannot give up fiscal prudence,” India’s Finance Minister Pranab Mukherjee told AFP.

“So striking a balance between two apparently contradictory situations is to be achieved. That is the challenge.”

Europe’s debt crisis will dominate the talks. But ministers are unlikely to single out either the euro or the yuan — which China is under pressure to let appreciate — for specific discussions in Busan, a G20 official said Friday.

“This issue may come up but I don’t think, as separate individual actions, it will be on agenda items,” said Sakong Il, chairman of Seoul’s presidential committee for the G20 summit.

As ministers start two days of meetings in Busan, there were also indications that they would struggle to carve out a consensus on how to impose tougher restrictions on the banking sector.

“Further deliberation of this issue” was needed, said Sakong.

The International Monetary Fund is expected to present a revised draft proposal on a bank levy at the meeting, an IMF spokeswoman said Friday.

A final proposal will go to a G20 meeting in Toronto later this month for review, but US officials say it is unlikely that the summit will reach an agreement on a unified approach.

A global banking tax is supported by European powers and the United States but resisted by some developing nations plus Canada and Australia, who argue that they should not have to pay to clear up a mess they did not create.

“Our banking system could withstand the trouble which counterparts in Europe and America had to face, mainly because of well-placed regulations,” said Mukherjee.

“Well-placed regulations can achieve the job… we are not in favour of taxing the banks.”

Economies such as the US that are largely financed by markets want banks to be required to hold more assets on their balance sheets to protect against any future crises.

But policymakers in continental Europe, where banks provide more financing, worry that higher reserve requirements may hit growth.

Stricter capital rules being devised by Basel regulators are supposed to be ready by the end of 2010 and the G20 says it aims to implement them by the end of 2012 if the global economy has emerged from the downturn.

Sakong also said the group must work to narrow the development gap between rich and poor nations to ensure sustained growth in efforts to rebalance the global economy.

“It is just not possible for the world to achieve sustainable and balanced growth as long as there’s a persistent gap in development,” he said.

The meeting Friday and Saturday will prepare for a G20 summit in Toronto on June 26-27 of the top developed and developing nations.

Source: SGGP