NEWS,25.07.2013

Protesters block gas drilling site

Protesters blocked access to a drilling site in southern England on Thursday as part of a campaign against the controversial "fracking" process used in shale gas exploration, illustrating the potential battle ahead for Britain's nascent shale industry.
Estimates have said Britain may have major shale reserves which could help reverse a rising dependency on energy imports, but the industry is having to tread carefully in order to reassure a sceptical public and vocal environmental lobby.
Cuadrilla Resources is readying a site to drill a well near the village of Balcombe in West Sussex. The well is a conventional one that will not use fracking, but Cuadrilla has fracked elsewhere, and is one of a handful of companies with access to shale acreage that might be fracked in future, and so its activities have become a target for anti-fracking protests.
A spokesman for the privately-owned company said on Thursday that protesters had stopped vehicles from accessing the site.
Hydraulic fracturing or fracking retrieves gas and oil trapped in tight layered rock formations by injecting high-pressure water, sand and chemicals.
The protest has been organised by campaign group 'Frack Off'. They fear that Cuadrilla, the only company to have fracked a well exploring for shale gas in Britain at its Lancashire site, could seek to frack in Sussex at a later date.
"We have tried other methods. We now have no choice but to take matters into our own hands and protect ourselves from the threat fracking poses to our health and environment," said protester Alex Griffiths in an email from Frack Off.
Drilling and fracking wells will in the next few years be critical to establish whether shale gas can be commercially produced in Britain, where fracking is controversial. It was banned for a year in 2011 after triggering small earthquakes, and concerns remain amongst environmental groups that chemicals used could reach water supplies.
The Cuadrilla spokesman said that the company hoped to begin drilling at the site early next week and that the vehicles were carrying parts for the drilling rig.
UK utility Centrica recently bought a quarter stake in Cuadrilla's northern England shale licences. French oil company Total has also said it would like to explore for shale gas in Britain.

Eurozone credit slump deepens

Loans to the euro zone's private sector shrank by more than expected in June, starving the economy of the funds needed to sustain recovery and piling pressure on the European Central Bank to take fresh action.
Loans to the private sector shrank by 1.6% from the same month a year ago, ECB data released on Thursday showed, a bigger fall than even the lowest forecast in a poll of economists, which gave a mid-range reading of -1.1%.
The latest weak lending figures highlight one of main obstacles to recovery in the eurozone, where purchasing manager indexes (PMI) showed private industry expanded for the first time in more than a year in July.
Lacklustre demand is dragging on the appetite for credit, while banks restrain lending to repair their balance sheets.
In a step to reviving lending to the bloc's struggling small and mid-sized businesses, the ECB said last week it would let banks use more of the assets once blamed for triggering the financial crisis as collateral for cheap loans.
Howard Archer, economist at Global Insight, said the weak lending figures heaped pressure on the ECB to do more.
"The further marked fall in lending to eurozone businesses in June maintains pressure on the ECB to come up with concrete measures aimed at improving credit availability to companies, especially small and medium-sized ones," he said.
"We think it is very possible that the ECB will eventually take its key policy rate down from 0.50% to 0.25% as we anticipate that the euro zone will continue to find it very tough to develop clear growth," he added.
The ECB holds a policy meeting next Thursday. No change in interest rates is expected.
An ECB survey released on Wednesday showed that eurozone banks, facing tougher capital requirements, tightened lending standards for both companies and home loans in the second quarter even though their access to funding eased.
Seeking to reassure markets unnerved by the US Federal Reserve's exit plan from money printing, the ECB said earlier this month it would keep interest rates at record lows for an extended period and may yet cut further.
ECB policymakers have since qualified this forward guidance, with Bundesbank chief Jens Weidmann said on July 11 the ECB had not "tied itself to the mast".
A poll of 70 economists published on Wednesday showed the ECB is probably done cutting interest rates but may still take other measures to stimulate an economy that may soon creep out of recession.
The survey was conducted before the PMI survey suggested the euro zone private sector grew this month for the first time since January 2012 news that will ease pressure on the ECB to further loosen monetary policy.
Banks granted non-financial firms €12bn ($16bn) less in loans in June than in the previous month, data adjusted for sales and securitisations showed, after a fall of €18bn in May.
Euro zone M3 money supply a more general measure of cash in the economy grew at an annual pace of 2.3% in June, slowing from 2.9% in May and below the consensus forecast of 3.0% in a poll of analysts.

EU lagging behind on 4G

EU member states should do more, and faster, to introduce next-generation 4G mobile phone services if Europe is to reap the benefits of the new technology.
About 75% of the European Union population of about 500 million has no access to 4G services, EU Digital Agenda Commissioner Neelie Kroes said on Thursday.
In stark contrast, in the United States more than 90% of the population had 4G access, she said.
Kroes said that of the 28 member states, three - Cyprus, Ireland and Malta - had no 4G at all while only Germany, Estonia and Sweden had advanced systems in place.
There was virtually no 4G coverage in rural areas across the EU, Kroes said, with the EU accounting for only five percent of global 4G connections.
"This is no way to run an economy. It means ... that Europeans living in rural areas and those on holiday get treated like second-class citizens," Kroes said.
"It doesn't matter where you are, you pay money for a device and mobile subscription and it should work."
4G operates five times faster than the current 3G network and allows users to download large e-mail attachments quickly, watch live television without buffering, make high-quality video calls and play live games on the go.
It is seen as the next essential step in the telecommunications revolution and Kroes has repeatedly lambasted EU countries for lagging behind.
Earlier this week, she said she had to reluctantly agree to delays in nine out of 14 member states who had committed to free up 800 megahertz bandwidth for 4G use by January this year but had failed to make the deadline.

Detroit bankruptcy hearings begin

A judge is considering what to do with challenges to Detroit's bankruptcy from retirees who claim their pensions are protected by the Michigan Constitution.

US Bankruptcy Judge Steven Rhodes settled into his chair shortly after  14:00 GMT. The city wants him to put a stop to lawsuits in other courts, especially after an Ingham County judge said state officials ignored the constitution and acted illegally in approving the bankruptcy last week.
The state appeals court temporarily stopped three lawsuits challenging the bankruptcy process on Tuesday.
As lawyers for some of the thousands of creditors arrived Wednesday, they passed protesters holding a banner saying: "Cancel Detroit's debt. The banks owe us."
The case is expected to last at least a year.

Britain's economy picks up speed

Britain's economy sped up between April and June on the back of stronger spending by consumers and businesses and giving a boost to the government less than two years before an election.
It came at the same time as a raft of UK company earnings reports showing growth picking up.
Gross domestic product rose 0.6% in the second quarter compared with the previous three months, in line with forecasts, preliminary data from the Office for National Statistics showed.
That was double the pace of growth in the first three months of the year but the economy still remains smaller than before the 2008-09 recession, suggesting to some economists that it still needs nurturing by the Bank of England.
The numbers were a boost for finance minister George Osborne, who has fended off calls from the International Monetary Fund and the opposition Labour party to spend more to speed up growth.
"Britain is holding its nerve, we are sticking to our plan, and the British economy is on the mend - but there is still a long way to go and I know things are still tough for families," Osborne said in a statement.
"So I will not let up in my determination to make sure we put right all that went wrong in our economy."
Growing signs of a pick-up in the British economy have coincided with a narrowing of Labour's lead over the Conservatives in some opinion polls.
The recovery also comes as other countries in Europe are struggling to show any growth at all.
Compared with a year earlier, Britain's economy expanded 1.4%, faster than 0.3% in the first quarter. It was the fastest increase since early 2011 although it was boosted by an extra working day in the April-June period this year.
Sterling weakened after the data and British government bond prices pared losses as some investors had been betting on stronger growth which would have reduced further the chance of the Bank of England pumping more money into the economy.
It was the first time that all sectors of the economy  agriculture, production, construction and services - grew since the third quarter of 2010.
The Bank of England's new governor, Mark Carney, may see the data as a sign that the economy is edging closer to what he has termed "escape velocity" or sustainable growth, though he is still likely to judge it needs extra help to get there.
From next month, Carney is widely expected to start providing detailed guidance on how long interest rates will remain low, in an effort to encourage consumers to spend and businesses to borrow and invest.
Still smaller
Britain's economy remains 3.3% smaller than in the first quarter of 2008 which was its peak before the financial crisis plunged the country into recession, tempering the good news about the growth in the second quarter.
"This confirms our view that we are heading down the road to recovery, even if there are likely to still be a few bumps ahead," said Neil Bentley, deputy director-general of British employers group CBI.
"Underlying conditions are quite weak as consumers are still saddled with debt and despite the global economy picking up, the potential for getting knocked off course remains."
Thursday's data showed that output in Britain's service sector - which makes up 78% of GDP - rose by 0.6% in the second quarter after ticking up 0.5% in the first three months of the year.
Services provided the strongest contribution to overall growth, adding 0.5 percentage points, with the retail, hotels and restaurants and the business services and finance components accounting for the bulk of the increase.
Industrial output was 0.6 percent higher while construction - which now accounts for around 6% of GDP after shrinking sharply after the financial crisis - expanded by 0.9%.
Upbeat company news reinforced the sense of an economy on the mend. Telecoms operator BT, for example, posted first quarter profits comfortably ahead of forecasts driven in part by a good performance from the retail division.
Improving construction and housing markets helped two of the biggest trade suppliers, Travis Perkins and Howden Joinery post increased first-half profits.
Consumers, a key engine of Britain's economy, are perking up too. They are now more optimistic about the economy than at any point since April 2010, as measured by a new consumer confidence index by market researchers YouGov and the Centre for Economics and Business Research.
The ONS's preliminary estimates of GDP are among the first released in the European Union, and are based partly on estimated data. On average, they are revised by 0.1 percentage points up or down by the time a second revision is published two months later, but bigger moves are not uncommon.

Obama: Our economy can be stronger

US President Barack Obama sought to inject momentum into his economic and domestic policy agenda on Wednesday with a speech designed to clarify his vision for his second term and hammer Republicans in the House of Representatives for getting in his way.
Obama defended his government's record managing the economy through the recession in his first term and said new spending on infrastructure and education were needed now to grow the middle class, which he argued would boost the nation's economy.
"As Washington prepares to enter another budget debate, the stakes for our middle class could not be higher," Obama said in remarks prepared for a crowd of cheering supporters in a gymnasium at Knox College in Galesburg, Illinois.
Galesburg left a lasting impression on Obama, a former Illinois state senator, early in his political career when the town struggled after it lost its factories.
Obama faces a battle this fall with Republicans in Congress over the budget and raising the debt ceiling.
While the president wants to increase investment in areas he argues would spur economic growth, Republicans want to cut spending and try to force the administration to scale back its signature healthcare program.
"We'll need Republicans in Congress to set aside short-term politics and work with me to find common ground," Obama said.
"It may seem hard today, but if we are willing to take a few bold steps - if Washington will just shake off its complacency and set aside the kind of slash-and-burn partisanship we've seen these past few years  our economy will be stronger a year from now," he said.
Obama plans to expound on his ideas in speeches across the country in the weeks ahead. His address on Wednesday did not include major new policy proposals, but new ideas are expected to be sprinkled in future remarks.
Obama has said he doesn't believe his speech will change minds in Congress, but he hopes to reach their constituents to exert pressure on lawmakers from their home states.
The buildup to Obama's speech has been relentless, as the White House seeks to get past a rough start to his second term, which has been dominated by a series of thorny domestic and foreign issues.
An early push to toughen gun laws failed in Congress, and the Republican-led House of Representatives has said it will not move ahead on sweeping immigration reforms passed by the Senate.
The White House has also been thrown off-message by controversies over phone and internet surveillance, and over the Internal Revenue Service's targeting of conservatives groups seeking tax-exempt status.
Republicans dismissed the speech as being long on rhetoric and short on ideas.
"Americans aren't asking the question 'where are the speeches?' They're asking 'where are the jobs?'" said John Boehner, Speaker of the House of Representatives.

Don't discount the EU

THE 6th South Africa-European Union (EU) summit was held on July 18 and this was, perhaps, well overdue. Tensions between South Africa and the EU have been high since South Africa joined the Brics bloc, comprising Brazil, Russia, India, China and South Africa.

The theme of the summit was ‘Job creation through inward investment’ and aptly so, since several European countries, along with South Africa, are battling unemployment.

The situation worsened through European investors being wary of developments in South Africa after the country cut bilateral investment treaties with Belgium, Luxembourg and Spain and will do so with a total of roughly 12 EU countries.

South Africa’s joining of the Brics and the cutting of bilateral investment treaties has raised fears that these moves will be at the expense of its long-standing ties to Europe’s developed economies.

As an economic region, the EU remains South Africa's leading trade partner and, perhaps even more importantly, three-quarters of our foreign direct investment (FDI) stock originates from the EU.

Given the traditionally and current strong ties between us and the EU, any changes in the EU can consequently have a significant impact on the local economy.

For example, if the EU can turn around its 18 months of economic contraction, South African exports to the region might start to increase again and its contribution toward FDI might become even more substantial.

On the other hand, EU regulations impacting our exports to the region can just as easily hinder local manufacturers and exacerbate the trade deficit.

For example, in the week before the summit, the EU notified the World Trade Organisation (WTO) of a draft commission regulation on food.

As one of our major exports to the EU, this regulation will affect far more than just the agricultural sector. Consider the minimum wage for farmworkers, the rising petrol price and now the mandatory compliance to this regulation.

These costs, of whatever nature, all contribute to the already struggling economy through impacting the farmers and workers, the packaging, distribution and export companies.

The difference among the three costs (wages, petrol and regulation) is that we have a say in what the final EU regulation looks like. In other words, before the regulation comes into effect, we are allowed to review and comment on the draft regulation.

If the comments are of a national interest, the department of trade and industry takes a national stance on the regulation and engages the EU through the WTO. This formally initiates a dispute in the WTO.

If the consultations prove fruitless after 60 days, South Africa can request adjudication by a panel.

While it appears as though we are moving to favour the Brics nations, we cannot simply ignore developments in the EU.

Should it recover from its current slump, the EU still offers a significant market for our exports and a large source of investment for our development.

NEWS,22.07.2013

Japan's Abe says he will focus on economy

Japanese Prime Minister Shinzo Abe, fresh from a strong election victory, vowed on Monday to stay focused on reviving the stagnant economy and sought to counter suspicions he might instead shift emphasis to his nationalist agenda.
The victory in parliament's upper house election on Sunday cemented Abe's hold on power and gave him a stronger mandate for his prescription for reviving the world's third-biggest economy.
At the same time, it could also give lawmakers in his Liberal Democratic Party (LDP), some with little appetite for painful but vital reforms, more clout to resist change.
"If we retreat from reforms and return to the old Liberal Democratic Party, we will lose the confidence of the people," Abe told a news conference on Monday.
He emphasized that his priority remains proceeding with his "Abenomics" programme of hyper-easy monetary policy, government spending and economic reform, describing it as the cornerstone of other policy goals.
"It is not easy to overcome 15 years of deflation," Abe said.
"It is a historic project. We will concentrate on that. We won't be able to strengthen the financial base for social security without a strong economy. The same goes for security and diplomacy."
Abe's LDP and its coalition partner, New Komeito, won 76 of the 121 seats contested. Along with seats that weren't up for election, the bloc now has a commanding 135 seats in the 242-seat upper chamber.
The win also raises the chances of a long-term Japanese leader for the first time since the reformist Junichiro Koizumi's rare five-year term ended in 2006.
It also ends a parliamentary deadlock that began in 2007 when Abe, then in his first term as premier, led his party to a humiliating upper house defeat that later forced him to resign. The LDP remains short of a majority on its own.
Ever since Abe stormed back to power with a big win in a December lower house poll, some - including Japanese businesses with a big stake in the matter - have worried the hawkish leader will shift focus to the conservative agenda that has long been central to his ideology.
That agenda includes revising the post-war pacifist constitution, strengthening Japan's defence posture and recasting Tokyo's wartime history with a less apologetic tone.
Despite the hefty win, Abe's mandate was undercut by low voter turnout, with 52.61% of eligible voters casting ballots, more than 5 percentage points below the turnout in the last upper house poll in 2010. That could keep up pressure to stay focused on the economy.
"Three faces"
For now, many experts suggest, Abe will stick with economic matters as he tries to beef up his so-far disappointing economic reform plans. He also confronts a decision on whether to go ahead with raising the 5% sales tax to 8% next April, part of a planned doubling by October 2015 aimed at reining in Japan's massive public debt.
"My understanding is that Abe-san has three faces: Abe as right-wing, Abe as a pragmatist, Abe as the economic reformer," said Shinichi Kitaoka, president of the International University of Japan.
"He has been showing the third face so far and will try to do the same after the election."
Still, Abe is moving towards security policy changes that mark a big shift in a country that has prided itself on pacifist ideals even as it built up a military bigger than Britain's.
Abe reiterated on Monday that he wants to debate changing a self-imposed ban on exercising the right of "collective self-defence", or aiding an ally under attack.
The ban means Japan would be unable to intercept an enemy missile fired at a US navy ship, Abe noted, which he said would call into question the US alliance itself.
Abe's government is also reviewing the possibility of acquiring a preemptive strike capability and creating a Marine force to protect remote islands such as those at the core of a territorial row with China.
One clue to how Abe intends to proceed on the touchy topic of wartime history will be whether he visits the Yasukuni Shrine for war dead, where Japanese leaders convicted as war criminals by an Allied tribunal are also honoured, on the emotive Aug. 15 anniversary of Japan's defeat in World War Two.
A pilgrimage to the shrine would outrage China, where bitter memories of Japan's past militarism run deep, and upset Washington, which fears a further fraying of Tokyo's already fraught relations with its neighbours.
Abe moved quickly to improve ties with China and South Korea at the start of his first 2006-2007 term but it is unclear whether he will repeat that success in his second.
He has since taken a tougher stance towards Beijing, but reiterated on Monday his "door is always open" to diplomacy.
Ties between China and Japan have been seriously strained by territorial rows and feuds over wartime history.
Concerns are simmering about the risk of an unintended clash near disputed isles in the East China Sea where Japanese and Chinese vessels have been playing a cat-and-mouse game for months.
"In that environment, something could go wrong," said Michael Green, Japan Chair at the Washington-based Center for Strategic and International Studies. "That's the Black Swan."
Abe again said he wants to revise the 1947 constitution, drafted by US occupation forces after Japan's defeat and not altered since, although he made clear that was a long-term goal.
Conservatives see the constitution as not only restricting Japan's right to defend itself but as responsible for eroding traditional mores such as duty to the state.
The LDP and smaller parties that also favour revising the constitution failed to obtain the two-thirds majority required in both houses before a constitutional revision can be put before the government in a referendum.
The LDP's coalition partner is cautious about changing the charter's signature war-renouncing Article 9 which, if taken literally, bans maintenance of armed forces.
Sunday's election also left many wondering about the future of a competitive two-party democracy in Japan.
The opposition Democratic Party of Japan, which surged to power in 2009 only to be ousted last year, suffered its worst drubbing since its founding in 1998. 

Japan ruling party wins elections

Japanese Prime Minister Shinzo Abe's ruling Liberal Democratic Party (LDP) won an overwhelming victory in elections for the upper house of parliament, recapturing control of the chamber, final returns showed on Monday.

The conservative LDP won 65 seats and its ally, the New Komeito, captured 11 seats in Sunday's voting. The ruling coalition had needed 63 for a majority.

"I must respond to people's hopes that I will bring about [an economic recovery] that they can actually feel," the premier said on Sunday night.

Abe, who took office in December, promoted aggressive monetary easing to prop up the economy and appealed to voters to support his economic policies as he vowed to pull the country out of 15 years of deflation.

On Sunday, the main opposition Democratic Party of Japan grabbed only 17 seats, its worst showing in an upper house election since its foundation in 1996, while the Japanese Communist Party made significant leaps, winning 8 seats, the biggest number since 1998.

"It is a crucial step forward for us to take the offensive" against the LDP, JCP leader Kazuo Shii told a news conference.

"Citizens are concerned that the LDP will go out of control," he said.

In the 2007 upper house elections, the LDP led by then-premier Abe suffered a crushing defeat, losing a majority for the first time in its history.

The upper house has elections for half of its 242 seats every three years, and this year 433 candidates competed for the 121 seats.

Voter turnout in Sunday's elections was estimated at 51.57%, the lowest since the 1995 race, according to a tally by the Kyodo news agency.

Detroit not banking on Fed help - city

Detroit must dig itself out of the hole it created and cannot wait to see if the federal government will come to its rescue, the city's emergency manager said on Sunday.
Kevyn Orr, charged with guiding the collapsed Motor City out of the largest municipal bankruptcy in US history, said any outside assistance would be "great" but he is not banking on it.
"Hope is not a strategy from my perspective. I can't plan on the basis of what may or may not happen or what help may or may not come," Orr said on "Fox News Sunday."
"We are not expecting the cavalry to come charging in," he said. "We have to fix it because we dug the hole."
Detroit filed for bankruptcy on Thursday, setting the stage for a costly court battle with creditors and opening a new chapter in the long struggle to revive the cradle of America's auto industry.
If approved by a federal judge, the bankruptcy would force Detroit's thousands of creditors into negotiations with Orr to resolve an estimated $18.5bn in debt.
Detroit Mayor Dave Bing said he was talking to officials in Washington about what they could do to help.
"I'm not sure exactly what to ask for. I mean, money is going (to) help, no doubt about that, but how much?" Bing said on ABC's "This Week."
The mayor has had no executive authority since Orr's appointment as emergency manager in March.
Michigan Governor Rick Snyder told CBS' "Face the Nation" the city's problems had been 60 years in the making and he saw no prospect of a federal or state bailout.
Detroit has been hit hard by the move away from industrial manufacturing in America since the 1950s, its problems compounded by chronic mismanagement and a dwindling population. Retirees now far outnumber active workers among the city's 700 000 residents, and unfunded pension liabilities are a key source of its problems.
After the economic collapse of 2008, Washington injected billions of dollars into automakers General Motors and Chrysler as the first step of a quick bankruptcy process. But the federal government made no promises this time.
Vice President Joe Biden said on Friday said it was unclear whether Washington could help.
Steven Rattner, who led the auto industry restructuring in 2009, said it would be a mistake for Michigan and the federal government not to provide funds for the city.
"America is just as much about aiding those less fortunate as it is about personal responsibility. Government does this in so many ways; why shouldn't it help Detroit rebuild itself?" Rattner wrote in an opinion piece Friday in The New York Times.
The bankruptcy led investors to dump the city's municipal bonds on Friday but Orr deflected criticism that it will be hard for investors to lend the city money again.
"The reality is, they are going to look at the credit rating of a rehabilitated city. And if that city is capable, they're going to make rational decisions because they are financial institutions," Orr said on the Fox programme.

"After some time, after this little kerfuffle, we'll be back in business."

Biden on visit to fire up US-India ties

US Vice President Joe Biden was due in India on Monday at the start of a four-day visit designed to revive momentum in flagging diplomatic ties and fire up bilateral trade.
Biden, the first vice president to visit India in three decades, will meet senior leaders including Prime Minister Manmohan Singh in New Delhi before heading to the financial hub Mumbai to deliver a keynote speech on the economy.
In an interview published in Monday's Times of India newspaper, Biden said the world's two biggest democracies had a "tremendous capability to work together" but should be doing more.
He also emphasised that he wanted to see an acceleration in bilateral trade, which he said was on track to meet $100bn this year.
Emerging market
"The United States has welcomed India's emergence and both nations have profited from it," the vice president said.
"India's rise as a global economic power is one of the most powerful stories of the 21st century," he added.
The announcement of Biden's visit was made during a trip to India last month by Secretary of State John Kerry, who sought to assuage Indian fears about the aftermath of next year's withdrawal of US troops from Afghanistan.
India, which has spent more than two billion dollars of aid in Afghanistan, fears any return of the Taliban, hard-line Islamists who were strong allies of Pakistan before being toppled in 2001.
Nascent talks between the US and Taliban were due to start last month after the Islamists opened an office in Doha, but they collapsed before even getting off the ground.
Renounce violence
In his meeting with Indian leaders, Biden is expected to reiterate that the US will not back any peace process involving the Taliban unless they renounce violence.
"If the Taliban are to have any role in Afghanistan's political future, they will need to break ties with al-Qaeda, stop supporting violence and accept the Afghan constitution as part of the outcomes of any negotiated peace settlement," he told the Times of India.
"We strongly support the role India has played in Afghanistan, leveraging its economic strength to improve Afghanistan's economy ...in projects that will help to ensure our common goal of a stable and prosperous future for the Afghan people," he added.
Biden will fly on Wednesday to Mumbai where he is expected to hold a roundtable with business leaders and press for stronger intellectual property protection.
While bilateral trade has grown in recent years, there is still widespread frustration among US business leaders over what they see as unfair trading practices.
Among the points of contention is India's championing of generic drugs - which advocates say save lives in poor nations - despite protests from Western drug firms.
India in turn has been alarmed by proposals in the US Congress to curb visas for high-tech workers.
Insecurities
India's Finance Minister P Chidambaram and Commerce Minister Anand Sharma were both in Washington last week to pitch for investment and discuss India's readiness to open talks on a bilateral investment treaty.
"Economic engagement in both trade and investment, though robust, is well below potential, given the opportunities a growing economy like India offers and the opportunities in the largest economy of the United States," Sharma said.
Biden will be the most senior administration official to visit India since President Barack Obama visited in 2010.
While the US has been among the world powers calling for India to be given a permanent seat at the UN Security Council, observers detect a sense of drift in ties.
"India is a natural ally of the US but... relations require greasing occasionally because insecurities have crept in, especially on the Indian side," Subhash Agrawal, of the Delhi-based think tank India Focus, told AFP.
Biden will head from India to Singapore on Thursday, where officials say he will tackle tensions over the disputed South China Sea.

NEWS,19. AND 20.7.2013

G20 wary of scaring markets

The Group of 20 nations, wary of renewed market volatility, pledged on Friday to shift policy carefully and communicate clearly as they seek to chart a course to recovery.
A final draft communique prepared for G20 finance ministers and central bankers meeting in Moscow said an action plan to boost jobs and growth, while rebalancing global demand and debt, would be readied for their leaders in September.
"We remain mindful of the risks and unintended negative side effects of extended periods of monetary easing," the draft, obtained. "Future changes to monetary policy settings will continue to be carefully calibrated and clearly communicated."
Ministers will review the text over dinner with the global sell-off in stocks and bonds and a flight to the dollar, caused by a plan to withdraw US monetary stimulus, uppermost in their minds.
G20 leaders will meet in St Petersburg in September.
A paper that International Monetary Fund staff prepared for the Moscow meeting warned financial market turmoil could deepen unless policymakers were careful.
"The current market turbulence could continue and deepen. Growth could be lower than projected due to a protracted period of stagnation in the euro area, and risks of a longer slowdown in emerging markets have increased."
"The eventual exit from low rates and unconventional monetary policy in advanced economies could pose challenges for emerging economies, especially if it proceeds too fast or is not well communicated."
Ben Bernanke's announcement two months ago that the Fed may start to wind down its $85bn in monthly bond purchases sparked a panicky sell-off, particularly in emerging markets.
Investors were calmed by testimony to Congress this week by Bernanke, who is not in Moscow, although he said the exit plan from money-printing remained on the cards.
"Clearly there is a fear among emerging market economies that after being flooded by capital inflows ... we could be on the verge of a reversal of that flood," a European Central Bank official said. "So it is important to dispel that worry."
China shift
G20 sources said China would be urged to encourage domestic demand-driven growth and allow greater exchange-rate flexibility as part of wider efforts to rebalance the global economy which features a huge Chinese surplus and matching US deficit.
"We are determined to continue progress with rebalancing of global demand, which requires internal rebalancing through structural reforms and exchange rate flexibility," the draft said.
Beijing offered an early olive branch, removing a floor on the rates banks can charge clients for loans, which in turn should reduce the cost of borrowing for companies and households.
The G20 took the lead in the 2008-09 financial crisis and now faces a multi-speed global economy in which only the United States appears to be nearing a self-sustaining recovery.
China, for years the engine of global growth, is suffering a slowdown amid doubts over the stability of its financial system, Japan has only recently embarked on a radical fiscal and monetary stimulus experiment, and Europe's economy is more stop than go.
Bank of Japan Governor Haruhiko Kuroda said he would "strongly pursue" quantitative policies to lift growth and end deflation.
"Japan has just started qualitative and quantitative easing on April 4. It's been only 3-1/2 months, and we need to proceed with it to achieve our 2% price stability target," he said.
Tokyo has so far been given a free pass at international gatherings from countries which had previously urged it to get growth going. But there is growing disquiet about the lack of progress on structural reforms that were promised in tandem.
The Brics emerging markets caucus  Brazil, Russia, India, China also met on Friday but joint measures to limit the fallout of a stronger dollar remained on the drawing board.
More to boost growth
Washington is putting increasing pressure on Europe to do more to foster growth. Germany, in contrast, is seeking internationally agreed debt reduction goals.
The communique referred to credible medium-term fiscal strategies but said they should be flexible. On growth, it was more definite, saying:
"Large surplus economies should consider taking further steps to boost domestic sources of growth, while deficit economies should implement measures to improve competitiveness."
G20 labour ministers held a joint session with finance ministers earlier, putting the jobs crisis in Europe where youth unemployment is above 50% in debt-strapped Greece and Spain at the centre of the debate.
The communique pledged to boost jobs and growth via a "comprehensive" series of reforms to raise employment and productivity.
The G20 also backed a fundamental tax rethink that takes aim at the loopholes used by multinational firms and responds to widespread anger among voters hit with higher tax bills to cover soaring national debts.
The group endorsed a tax action plan drawn up by the Organisation for Economic Co-operation and Development (OECD) that said the existing system didn't work, especially when it came to taxing companies that trade online.
The plan is one of the major 'deliverables' that will go to the St. Petersburg summit hosted by President Vladimir Putin.

G20 backs reform of corporate taxation

The G20 backed a fundamental rethink of the rules on taxing multinational corporations on Friday, taking aim at loopholes used by companies such as Apple and Google to avoid billions of dollars in taxes.
The group of leading economies released an action plan drawn up by the Organisation for Economic Co-operation and Development (OECD) that said the existing system didn't work, especially when it came to taxing companies that trade online.
Large budget deficits and public anger at inter-company structures designed to channel profits into tax havens has prodded governments to act.
Google, Apple and others say they follow the law wherever they operate and pay what tax is due, while tax specialists point out that companies have a duty to shareholders to organise their affairs in a tax-efficient way within the laws set by politicians.
Pascal Saint-Amans, Director of the OECD's Centre for Tax Policy, said governments' frustration with companies' aggressive tax avoidance had created a "once in a century" opportunity to overhaul the rules, which date back to the League of Nations in the 1930s.
Currently, tax systems respect inter-company contracts even if they evidently seek to shift profits out of countries where they are earned into low or no-tax jurisdictions. New rules will seek to put more emphasis on economic substance, the Paris-based think tank said.
"We clearly have reached the point where the governments don't care any more about taboos, and they just say we cannot be bound by pure contractual arrangements. It's not possible to only allocate the profit through only contractual arrangements," Saint-Amans told reporters.
The OECD, which advises its mainly rich members on tax and economic policy, has two years to come up with specific measures that can be adopted internationally.
Business concerned
Business lobby groups such as the United States Council for International Business (USCIB) and Britain's CBI dispute that there is a broad problem with tax avoidance and say measures to address it could hit job creation, trade and innovation.
Yet non-governmental organisations and those representing smaller or domestically focused companies support the OECD project.
"EEF welcomes today's report and urges the UK and the G20 generally to respond positively to its central recommendations," said Steve Radley, Director of Policy at EEF, which represents many small and medium-sized British manufacturers.
Saint-Amans noted that all OECD members including Switzerland, Ireland and the Netherlands, which have been described as tax havens by lawmakers on both sides of the Atlantic, had backed the action plan.
The report identified a raft of loopholes used by companies in the technology, pharmaceutical and consumer goods sectors.
These include the practice of companies not creating tax residences or 'permanent establishments' in countries where they have major operations.
The OECD also criticised the corporate practice of designating units in tax havens as holders of group funds, patents or brands that can then be lent or licensed, for generous fees, to affiliates in countries where customers or factories are located.
International treaties designed to avoid double taxation of profits earned from cross-border activities but which have been used to avoid any taxation, are also under scrutiny. Saint-Amans said protocols to amend existing treaties could be developed to stop such "double non-taxation".
He added that representatives of OECD and G20 members who helped draft the plan had rejected an idea favoured by some non-governmental groups that would split multinationals' profits among the different countries where they operate, according to an agreed formula, with each country assessing its share of profit.
Such a system exists in the United States for the application of state taxes, but countries agreed it was too complex to adopt internationally.
Some countries had proposed a reform of corporate income tax whereby companies would be taxed where their customers were based, but the group did not accept this idea.

China in $5bn Sea gas drive

Chinese state-run oil companies hope to develop seven new gas fields in the East China Sea, possibly siphoning gas from the seabed beneath waters claimed by Japan, a move that could further inflame tensions with Tokyo over the disputed area.
Beijing had slowed exploration in the energy-rich East China Sea, one of Asia's biggest security risks due to competing territorial claims, but is now rapidly expanding its hunt for gas, a cheaper and cleaner energy to coal and oil imports.
State-run Chinese oil and gas firm CNOOC Ltd will soon submit for state approval a plan to develop Huangyan phase II and Pingbei, totalling seven new fields, two industry officials with direct knowledge of the projects.
The approval would bring the total number of fields in what is called the Huangyan project to nine.
China is already working on Huangyan I which has two fields approved. The Huangyan project is expected to cost more than 30bn yuan ($4.9bn), including 11 production platforms now under construction at Chinese shipyards.
If approved, the seven new gas fields would not see a big jump in China's total gas output, supplying only a fraction of last year's 106 billion cubic metres (bcm) and dwarfed by operations in the disputed South China Sea and Bohai Bay off north China. Chinese geologists said gas deposits in the East China Sea region were much smaller and more scattered.
The greater issue is the political risk if Beijing approves the new gas fields. Tensions over the East China Sea have escalated this year, with Beijing and Tokyo scrambling fighter jets and ordering patrol ships to shadow each other, raising the fear that a miscalculation could lead to a broader clash.
"It's a sign of impatience on the side of the Chinese, stemming from a lack of movement on the Japanese side on the gas fields issue," said Koichi Nakano, associate professor of political science at Sophia University in Tokyo.
China and Japan in 2008 agreed to jointly develop hydrocarbons in the area, but Tokyo wishes to settle the issue of maritime boundaries before developing the gas fields.
"The question is what will be Japan's response and whether they would be able to talk China out of a unilateral move," said Nakano. "But escalation of tensions leading to a war? I don't think so. The Americans will be watching this situation with grave concern and may play a role of a mediator here."
A spokesperson for Japanese Prime Minister Shinzo Abe said: "Our understanding is that Japan and China should continue to have dialogue on the issue of joint exploitation of this area, so any unilateral action should not be accepted".
Even if the National Development Reform Commission gives approval for the new gas fields, the pace of the development could be determined by China's Foreign Ministry which requests oil companies to seek its approval before every drilling. Such permission may be influenced by tensions with Japan at the time.
Major east china sea expansion
China and Japan disagree on where the maritime boundary between them lies in the East China Sea. Beijing says its activities are in the Chinese territories, while Tokyo is worried the Chinese drilling near the disputed median line would tap into geological structures in its waters.
Japan lodged a protest early this month after detecting well construction works at Huangyan I about 26 kms (16 miles) west of the disputed median line. China's foreign ministry rejected the protest as a baseless, saying Beijing had the right to drill in its sovereign waters.
U.S. Energy Information Administration estimated in 2012 that the East China Sea has between 1 and 2 trillion cubic feet (28-57 bcm) of proven and probable natural gas reserves, a modest gauge versus estimates by Chinese sources at up to 250 tcf in undiscovered gas resource.
If approved, the new gas fields would supply China's manufacturing hub of Zhejiang province, about 400 km (249 miles) away on the east coast, with production slated to start in the fourth quarter of 2015, said the officials.
The fields would have a combined annual production capacity of nearly 4 bcm, up from the region's current output of less than 1 bcm, and would account for about 2 percent of China's estimated gas output by the end of 2016.
CNOOC and partner Sinopec Corp are already developing Huangyan I, which was officially approved by the National Development & Reform Commission in June 2012 and is due to start producing gas in September next year. Also on the planning board is Pingbei II, expected to come on line in 2016.
CNOOC media officials declined to comment on the new developments and industry sources quoted for the story declined to be identified due to the sensitive nature of the topic.
China fast-tracking hunt for gas
China, the world's top energy user, is on a fast track to boost the use of natural gas, with demand for gas forecast to grow more than four fold by 2030 from the 147 bcm last year. China is the world's fourth biggest gas consumer.
China first started pumping gas in early 2006 from the Chunxiao field, part of the massive Xihu trough, but territorial disputes have hindered an industry keen to explore and develop the region, Chinese industry experts said.
"China has made compromise, having slowed down the works quite a few years," said a state oil official, "The cards are in the hands of Chinese, as companies are capable of developing (this area) after all the explorations done over the years."
China's plan to expand East China Sea operations comes after a near six-year lull in investment in the area, since the 2008 agreement to jointly develop hydrocarbons in the area.
"Since 2008 when the two nations reached a consensus for joint development, Japan has barely made any sincere diplomatic moves towards that direction...It seems that Japan wants to settle the boundaries first before moving to cooperations, which is totally unrealistic," said Liu Junhong, research fellow at China Institutes of Contemporary International Relations.
Under the proposed expansion plan, Huangyan II, which is adjacent to the disputed maritime border, would consist of two gas fields. Huangyan I has two fields.
Pingbei, an uncontested area located in the western side of the Xihu trough, would have three fields under phase I and another two under phase II.

Wall Street wary as firm bets on dagga

In the sparse Seattle offices of Privateer Holdings, Brendan Kennedy grabs an iPad to show how his bet on legal marijuana is already paying dividends in the form of a Google results page for "blue cheese."
When Web users search that term, high on the list is a link to reviews of the pot strain "blue cheese" on Leafly.com, the medical cannabis website Privateer bought a year-and-a-half ago and which it calls the Yelp of weed.
"We've got Wikipedia blue cheese and pictures of blue cheese, and the third thing you see is the 'blue cheese' strain on Leafly," Kennedy said as he displayed the Google results page. He says Leafly produces revenue of over $100 000 a month.
Popular interest in marijuana and moves by Washington state and Colorado to legalise recreational pot have led Kennedy's two-year-old private equity firm and a handful of politically connected investors to dive into the pot business. The drug remains illegal under federal law.
Privateer this week said it closed a $7m first round of fundraising. It also named to its board of directors Michael Auerbach, an investor with ties to former US secretary of state Madeleine Albright.
A next round of Privateer fundraising to begin in the fall will be not less than $25m, Kennedy and Auerbach said.
With annual marijuana sales both on the black market and in 18 states that allow the drug as medicine estimated at $20bn nationally, according to Harvard economist Jeffrey Miron, businesses are seeking legal avenues to enter the industry.
Still, the $7m raised by Privateer is small by the standards of private equity firms, which typically raise hundreds of millions of dollars per fund.
"The obstacle is it's not a legal product yet... It's not legal under federal law," Miron said. "That's a huge impediment to being able to earn a profit or keep a profit."
Apart from Privateer, the only other fund raising money with the sole purpose of capitalising on the fast-growing pot industry is Emerald Ocean Capital, a division of Southern California-based venture capital firm Ghost Group, said Josh Rosen, a former analyst at Credit Suisse who co-founded cannabis retailer consultant 4Front Advisors.
Rosen said Privateer appears to be the larger of the two.
2014 start
Washington state and Colorado are still tweaking their rules for the recreational-use pot business, which is slated to be up and running in both states next year.
Privateer says it will insulate itself from the risk of federal prosecution by investing in pot-related businesses not directly tied to US production, distribution or sale of the drug.
"I'm not about to invest my personal funds in something that could get shut down tomorrow," said Auerbach, a senior adviser to global strategy firm Albright Stonebridge Group, which is co-chaired by Albright.
Auerbach said he has not spoken to Albright about pot, but both he and Kennedy, a Yale MBA graduate, have lobbied members of Congress for a more tolerant federal stand on cannabis.
A US department of justice representative declined to comment on groups investing in pot-related businesses.
Kennedy said Privateer, which has raised funds from family offices and high net worth individuals, will look at investing in everything from light designers for indoor cannabis growing to makers of harvesting equipment and trimmers.
Others are making bolder choices. A senior political aide in Washington state, who declined to be named, hopes to leave his job to build a marijuana farm in wine-producing Walla Walla. He said he and several co-investors had pooled $250 000 and hoped for $2.3m more from a venture capitalist.
In May, former Microsoft executive Jamen Shively announced plans, criticised as unrealistic because of the federal ban, to create a US marijuana brand. He drew attention for winning political support from former Mexican president Vicente Fox.
Kevin Sabet, co-founder of Project SAM which opposes pot legalisation, said the entry of large investors in the market was worrisome. "This is about profit maximisation based on addiction," he said.

More men happy to be ‘house husbands’

More and more men seem to be happy to be “house husbands”.

It is estimated that more than four in ten women are now the main breadwinner in their home. They claim more of the men in their lives are happy to merely stay at home.

A survey done in the UK by an insurance company LV= shows that about 26% of women earned more than the men in their lives twenty years ago. This figure has now increased to 41%.

The survey found that more than 70% of women believe more men are happy to take on the role of house husband or stay-at-home dad.

At the same time, it turns out 6% of men openly resent earning less than their female partners. About 10% of those men who earn less than than their partners, actually still tell other people that they earn more.

About 30% of the women surveyed indicated that their partner was unemployed due to the economic crisis.

According to Mark Jones of LV= it is a good thing that antiquated stereotypes are changing.

Recent official figures in the UK showed that the number of stay-at-home mothers had fallen to a record low in 2012. There are now about two million women in the UK in this category.

The overall number of working women has increased a lot since the start of the financial crisis in 2008. Over the same period the number of stay-at-home fathers has almost doubled to 209 000.

In the US four in ten households have women are the main earners, according to The Guardian. The majority of these are single mothers and not well-off.

In South Africa the 2011 Census showed the number of women breadwinners is increasing, but  the average South African household is still headed by a man.

Britain plans tax breaks for shale gas

The British government unveiled what it described as the world's most generous incentives for shale gas on Friday, offering tax breaks to drive investment in a sector that has already transformed the US energy market.
Finance minister George Osborne said the government wanted to create the right conditions in Britain for industry to unlock the potential of shale gas.
"This new tax regime, which I want to make the most generous for shale in the world, will contribute to that," he said.
The government is looking to shale gas to reduce Britain's reliance on natural gas imports and hopes it will also lower consumers' energy bills.
The British shale industry is still in its infancy, however.
Experts say it is difficult to estimate how much shale could be developed commercially, and their estimates vary widely.
Utilities analyst Peter Atherton at Liberum Capital said the new tax allowance could attract more companies.
"It (shale exploration and production) is a tough thing for industry to do, costing from tens to hundreds of millions of pounds, and with a fair amount of technical risk and reputational aggravation in the early years," he said.
Infant industry
The proposed allowance for shale gas, subject to consultation for three months, would reduce the tax payable on income from shale production to 30% from 62% for oil and gas.
The tax break is based on existing allowances for oil and gas production aimed at supporting almost £14bn ($21bn) of investment next year.
Called the shale gas "pad" allowance, it would likely go into the finance bill next year and last for the lifetime of the shale well, a UK Treasury spokesperson said.
British exploration firms IGas and Cuadrilla are at the exploration stage in shale gas, while other energy firms such as France's Total are watching developments with interest.
Shares in Alkane Energy, which has extraction licences in the Bowland area, were up 4.6% at 40.4 pence at 13:42, while IGas was 5.58% higher at 123 pence.
Shares in Centrica, which has a stake in one of Cuadrilla's exploration licences, was down 0.2 pence to 380.9 pence.
Shale gas is natural gas trapped in dense rock formations. The process of fracking, in which water and chemicals are pumped deep underground to break open the rocks, has led to fears it could cause earthquakes and contaminate drinking water.
Last month, the British Geological Survey estimated the rocks of the Bowland shale area in northern England held 1 300 trillion cubic feet of gas, double the amount previously forecast.
However, it is still uncertain how much gas can be extracted and how many shale wells developed.
A report by the House of Commons' Energy and Climate Change Committee said this week: "It is impossible to determine reliable estimates of shale gas in the UK unless and until we have practical production experience."
Experts say there should be a period of at least two years of exploratory drilling to see whether UK shale is a viable business.
Jenny Banks, energy and climate change specialist at WWF-UK, said encouraging more fossil fuel investment was at odds with tackling climate change.
To help placate local opposition to shale, the industry will have to provide communities near exploratory wells with £100 000 sterling ($152,000) in benefits and 1% of the revenue from each production site, the government said last month.

Detroit files for bankruptcy

Detroit on Thursday became the largest city in US history to file for bankruptcy protection after decades of decline and mismanagement rendered the home of the nation's auto industry insolvent.
The bankruptcy is expected to make it harder for municipalities in Michigan - and across the country - to borrow money by undermining confidence in what used to be among the most trusted bonds available.
Michigan Governor Rick Snyder said there was no other option.
"The fiscal realities confronting Detroit have been ignored for too long," Snyder said in a press release.
"I'm making this tough decision so the people of Detroit will have the basic services they deserve and so we can start to put Detroit on a solid financial footing that will allow it to grow and prosper in the future."
Once the fourth largest US city, Detroit has seen its population shrink by more than half - from 1.8 million in 1950 to 685 000 today - as crime, flight to the suburbs and the hollowing out of the auto industry ate away at its foundations.
"The citizens of Detroit need and deserve a clear road out of the cycle of ever-decreasing services," Snyder said in a letter accompanying the court filing.
"The only feasible path to a stable and solid Detroit is to file for bankruptcy protection."
Earlier this year Snyder appointed an emergency manager with a background in bankruptcy to restructure the Motor City's finances.
He said he had "very much hoped" the move would help Detroit avoid bankruptcy, but that now it is time to "face the fact that the City cannot and is not paying its debts as they become due and is insolvent."
Detroit stopped making payments on some of its $18.5 billion of debt and obligations last month as the emergency manager sought relief from creditors.
But the city's employee pension plans - which are owed some nine billion dollars  filed a lawsuit to prevent any cuts to retirement benefits.
The bankruptcy filing places that case on hold and comes days before what could have been a key hearing.
It will be up to a federal judge to determine if Detroit is allowed to restructure and even shed  its obligations in a Chapter 9 bankruptcy.
"You can expect challenges right out of the box," said bankruptcy lawyer Douglas Bernstein of Michigan-based Plunkett Cooney.
It could take years for the case to be resolved, he warned.
"One of the biggest challenges is that there haven't been very many municipal bankruptcies in the history of the bankruptcy code so there's not a lot of guidance," Bernstein told AFP.
Pension funds are protected by the state constitution, but filing for bankruptcy in federal court ought to give Detroit a way out of its pension obligations because federal laws have precedence.
Snyder listed a host of problems that prove Detroit cannot meet its obligations to its citizens while weighed down by debt.
The homicide rate is the highest in nearly 40 years and, for more than two decades, Detroit has been on the list of the most dangerous cities in the United States.
People have to wait an average of 58 minutes for the police to respond to their calls, compared with an average of 11 minutes nationwide.
There are 78 000 abandoned buildings scattered across the city, and 40% of the streetlights don't work.
A lack of funds for maintenance and repairs means only a third of the city's ambulances work and police cars and fire trucks are also in poor condition.
The city has been borrowing money to pay its bills for more than a decade, a short-sighted move that raised costs.
Some 38 cents of every city dollar was going to debt repayment and obligations like pensions, and that was projected to hit 65 cents on the dollar by 2017.
The city's tax rate has reached its legal limit and even if it could raise rates, residents can't afford to pay more, Snyder said.

Chevron gets green light for shale gas

US oil giant Chevron has obtained permits to explore for shale gas in Eastern Romania, the Romanian environmental agency said on Friday, despite strong local opposition to the technique known as fracking.
"The environment protection agency of Vaslui county, in north-eastern Romania, has delivered an environmental permit to Chevron to build exploration wells," the agency said.
The permits will allow Chevron to prospect in three villages in this impoverished rural area.
Thousands of people took to the streets of Barlad in the last few months to say "no to shale gas".
In May, the company was granted permits to explore for shale gas on Romania's Black Sea coast.
Shale gas drilling has fuelled controversy around the world, and the technique used, hydraulic fraction or fracking, has been banned in France and Bulgaria.
Fracking is a process whereby liquid products, including water and chemicals, are pumped deep into oil or gas-bearing rock to cause fractures and release hydrocarbons.
A 2012 study by Duke University in the US state of North Carolina showed that drinking water wells are at risk of contamination from fracking.
Chevron maintains that all its activities "have, and will continue to be conducted in compliance with Romanian laws, EU (European Union) requirements and stringent industry standards."
Romania's centre-left coalition, in power since May 2012, had attacked the previous government's decision to grant Chevron and other oil groups concessions to prospect for shale gas.
But Ponta changed his opinion this year and said he was in favour of exploration.