Category Archives: Asia

Europe announces a fresh, ‘credible’ Greek rescue deal

Deutsche Welle, 22 July 2011 

Greece's second aid package is
larger than the first
European leaders say the eurozone, the International Monetary Fund and the private sector will all contribute towards a second package of emergency loans for Greece, as a debt-dominated summit concludes in Brussels.

European Union President Herman van Rompuy said after Thursday's summit in Brussels that the bloc had reached three important decisions which had unanimous support within eurozone.

"We improved the Greek debt sustainability, we took measures to stop the risk of contagion, and finally, we committed to improve the eurozone's crisis management," Rompuy said in the opening moments of his official address.

The EU president said that the instability of the Greek economy, coupled with the resultant jitters on international markets, ultimately could have threatened the single European currency and the economic recovery in Europe and the wider world.

"Convening this meeting focused the minds and accelerated finding a solution. I could not allow a difficult situation to become a dangerous one," Rompuy said.

The nuts and bolts

European leaders in conjunction with the International Monetary Fund (IMF) agreed to lend Greece an additional 109 billion euros (157 billion dollars) in order to cover its financing shortfalls and prevent Athens from defaulting on its sovereign debt.

The program will include lower interest rates and extended maturities as well as a voluntary contribution from private sector financial institutions amounting to 37 billion euros, according to a statement released by the leaders after the summit.

Merkel and Sarkozy struck an
agreement before the summit
European Central Bank chief Jean-Claude Trichet reacted coolly to concerns that even voluntary participation by the private sector could provoke rating agencies to downgrade Greece's credit worthiness.

"I don't think experts consider that what has been done would trigger a credit event," Trichet said after the summit.

'European package'

Greece's second aid package, including private contributions, will total at least 146 billion euros. The package comes in addition to the 110 billion euros Athens was promised as part of its first bailout in 2010.

"The only thing we're asking for is the right to make deep changes in our country to make our country a viable one, one of growth and jobs creations," Greek Prime Minister George Papandreou said. "This is a European success, a European package."

The breakthrough deal was made possible after German Chancellor Angela Merkel and French President Nicolas Sarkozy came to an agreement in Berlin on Wednesday.

Sarkozy said that Europe was prepared to stand with Athens and guarantee its credit worthiness in the event that credit agencies declare Greece in limited default.

"We have agreed to create the beginnings of a European Monetary Fund," he said.

Author: Spencer Kimball, Mark Hallam (AFP, Reuters, dpa)
Editor: Joanna Impey

Paul Hellyer - Abolishing Fed and new energy disclosure key to US survival

Chinese FM calls for further ASEAN Plus Three cooperation for regional prosperity

Foreign ministers and delegates of ASEAN and China, Japan and the
 Republic of Korea, pose for group photos during the ASEAN and China,
Japan and the Republic of Korea foreign ministers' meeting held in Bali,
Indonesia, July 21, 2011. (Xinhua/Chen Duo)

A crisis as big as the subprime one is brewing in Asia

In 2009 and 2010, Asia was the apple of the investor’s eye as countries in the region recovered strongly from the global financial crisis to post healthy growth rates. But loose monetary policies in the West and high inflation have posed its own set of problems for the Asian economies. The biggest problem that Asia has been witnessing in recent times is the surge in food prices. And this issue could end up being more chronic rather than cyclical in the years to come. For starters, weather patterns have become unpredictable which in turn has hampered agricultural production of late. Then there is the issue of population. Asia alone, for example, will have another 140 million mouths to feed over the next four years. That is in addition to the almost 3 billion people in the fast-growing region currently. This means that demand will remain high in the future and supply may not always catch up.

The other big fallout of soaring food prices for the Asian region is likely to be a significant rise in debt. So far, it was believed that bloated debt was a problem that only Europe and the US were facing on account of the global crisis. But Asia is also likely to join this bandwagon. Take India for instance. It still has one of the highest proportion of poor in the world. This obviously means that most will not be able to afford food at such high rates. As a result, the Indian government would most certainly increase subsidies sharply and cut import taxes, which would put an additional strain on its finances.

Indeed, the crisis in Egypt was a product of the inability of the Egyptian government to tackle the problem of high inflation. And though extreme, noted economist Nouriel Roubini believes that persistently high food prices and inflation could raise the risk of more governments getting toppled. Certainly, Asian governments including India will have to give serious thought to some long term reforms if such shocks are to be avoided in the future.

Do you think that rising food prices will lead to a bigger crisis in Asia in the future?

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Obama : RI new rising economic power

Antara News, Tuesday, November 9, 2010 22:26 WIB

U.S. President Barack Obama shakes hands with Indonesia's President Susilo Bambang Yudhoyono alongside first ladies Michelle Obama (L) and Kristiani Herawati at an arrival ceremony at Istana Merdeka in Jakarta, November 9, 2010. (Xinhua/Reuters Photo)

Jakarta (ANTARA News) - Visiting US President Barack Obama said he believed Indonesia was a new rising economic power in the region as well as in the world.

"I believe Indonesia is not only a rising regional power but also a global power," he said at the opening of a bilateral meeting between the two countries` governments at Merdeka Palace here on Tuesday evening.

The meeting was attended by a number of ministers and officials concerned of the two countries.

President Obama said he had already held talks several times with President Susilo Bambang Yudhoyono. He said he had already had wonderful talks with President Yudhyono.

Obama said he was grateful he could visit Indonesia which would be for the finalization of a comprehensive partnership agreement between the two countries.

On the occasion President Yudhoyono expressed hope that the cooperation between the two countries could be expanded and deepened so that the two countries could further progress.

It was a closed-door meeting but journalists were allowed to cover its opening.

Among the Indonesian cabinet ministers attending the meeting were Coordinating Minister for Economic Affairs Hatta Radjasa, Coordinating Minister for Political, Security and Legal Affairs Djoko Suyanto, Minister/State Secretary Sudi Silalahi, Education Minister M Nuh and Trade Minister Marie Elka Pangestu.

On the US side the officials attending the meeting were Senior Advisor Valerie Jarrett, Press Secretary Robert Gibbs and several other officials.

Before the large-format meeting President Susilo Bambang Yudhoyono and President Barack Obama held a private meeting at the Merdeka Palace`s Jepara Room.

The meeting lasted almost half an hour and was held soon after President Obama arrived at the palace.

President Obama flanked by First Lady Michelle Obama were welcomed upon arrival at the Merdeka Palace at 5pm by President Yudhoyono and First Lady Ani Yudhoyono.

The two leaders greeted each other warmly and thereafter moved to the palace`s verandah for an official welcome where the two countries` national anthems were played.

Foreign funds will not create bubble: WB

The Jakarta Post, Jakarta | Wed, 10/20/2010 9:52 AM

Indonesia remains safe from the dangers of an economic bubble despite growing concerns that the currently large inflow of foreign funds into the country could push up asset prices to an unrealistic level, a World Bank economist says.

World Bank (WB) senior economist in Jakarta Enrique Blanco Armas said Tuesday that the large amount of foreign capital inflow into Indonesia’s debt and equity market had not yet posed a threat to the country’s economy.

“Whether [the capital inflow] will make a bubble in the Indonesian economy, it will be very little,” he told journalists after the launching of the WB’s latest East Asia and Pacific economic update titled “Robust Recovery, Rising Risks”.

However, he said, the central bank should avoid using an interest rate instrument to curb the inflation resulting from the increase in the liquidity as the consequence of the foreign capital influx. “An increase of the interest rate would attract more capital inflow,” he said. 

The central bank’s recent move to raise the reserve requirement in order to ease the liquidity was the right decision, he said. “It’s a correct one,” he stressed.

Driven by massive global liquidity resulting from a recovered global economy, capital inflows to developing countries have risen sharply this year. 

In Indonesia alone, foreign holdings of government bonds climbed by Rp 78.8 trillion (US$8.8 billion) this year to Rp 186.8 trillion as of Oct. 5. In addition, the foreign funds have pumped a net $2.4 billion into Indonesian shares so far in 2010.

“We have to keep a careful eye, because the volatility of capital flows may bring risks to the sustainability of the country’s economy,” Vikram Nehru, WB chief economist for the East Asia and Pacific Region, said in a teleconference from Tokyo.

A large amount of capital from developed countries had flowed to the East Asian countries to seek higher returns, he said.

“It’s complicating the policy makers. They have to manage the capital inflows to maintain the economic stability while, at the same time, they have to make sure that the economic growth is maintained,” he said.

To cope with the massive capital inflows, he said, the East Asian authorities would bear tough challenges in balancing the inflows by, among others, ensuring competitiveness, financial sector stability and low inflation.

He said East Asian growth was not only robust but also pretty wide spread because five countries in the region had their growth rates at about 7 percent. The growth was no longer driven by fiscal stimulus packages, since it was now driven by the private sector.

“Private investment is coming back, as well as consumption. So [the economic growth] will be more sustainable,” he said. (ebf)

The Jakarta Globe Garners 5 SOPA Awards in Hong Kong, Best Journalist

Jakarta Globe, June 08, 2010

Jakarta Globe photographer Yudhi received first prize for news photography at the SOPA awards in Hong Kong. This is only one of three awards The Jakarta Globe has received. (JG Photo/Yudhi)

Hong Kong. The Society of Publishers in Asia Awards for Editorial Excellence (SOPA) has recognized the strength of The Jakarta Globe's feature writing, news photography, supplemental coverage and breaking news by bestowing five awards, including Best Journalist, upon the newspaper in a gala dinner in the JW Marriott Hotel, Hong Kong.

Dewi Kurniawati received first prize for her feature writing about the Orang Rimba tribe of Jambi. In her writing she illustrated the life of the tribe faced with the destruction of their environment through deforestation and the poisoning of rivers by industry. She then made it a brace of awards by receiving the Best Journalist award.

In the category of news photography, The Jakarta Globe also took first place with the judges deciding that Yudhi's harrowing image of Min on a filthy bed in a makeshift hut in Kebun Melati, Tanah Abang, was the best of the entrants.

The Jakarta Globe also picked up a third award for Excellence in Special Coverage for the "Water Worries" special supplement. The same special supplement also received an honorable mention in the Environmental Reporting category.

Keeping readers up to date with the events that can affect them is one of The Jakarta Globe's priorities and its breaking news coverage was recognized with yet another first prize. The Situ Gintung reservoir disaster was judged to be the most effectively covered piece of breaking news.

The up-to-date, dynamic layout of the newspaper also received an honorable mention in the Newspaper Layout category.

The Jakarta Globe won seven awards at the SOPA Awards for Editorial Excellence in Hong Kong including Best Journalist. (JG Photo)

Related Article:

Globe Golden in Asian Reporting Awards

China ex-police boss Wen Qiang sentenced to death

Security was tight as Wen Qiang arrived for sentencing

A former senior police officer in China has been sentenced to death for corruption and rape.

Wen Qiang was charged with accepting vast sums of money from criminal gangs in the southern city of Chongqing in exchange for protection from the law.

He was also found guilty of rape and failing to account for his assets, says state news agency Xinhua.

Wen is the most senior official to be charged under a major corruption probe in the city.

His wife, Zhou Xiaoya, was tried at the same time and sentenced to eight years in jail for taking bribes, the Chongqing News newspaper reported.

Three other senior Chongqing police officials received sentences ranging from six months to 20 years, reports said.

Wen was convicted of taking more than 16m yuan ($2.3m; £1.5m) in bribes to turn a blind eye to crime.

Xie Caiping was known as the Godmother of Chongqing

He also was found guilty of raping a university student in 2007 and 2008, Chongqing News reported.

The case has attracted huge media attention across China.

The investigation began last summer and more than 780 people have been prosecuted.

Wen's sister-in-law, Xie Caiping - described as the Godmother of Chongqing - was jailed for 18 years last November for crimes including running gambling dens and protecting drug users.

She was reported to have earned more than 2m yuan ($292,000; £179,000) from crime.

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Indonesia Could Be Asia Portal: World Bank

Jakarta Globe, April 14, 2010

Indonesia already has enough potential, geographically, economically and socially, to become a gateway not only between Europe and Asia but between the rest of the world and the Middle East, according to Juan Jose Daboub, managing director of the World Bank.

But Daboub said that to achieve such a prominent international position, the country must ensure a healthy investment climate and develop its infrastructure.

And to be able to draw investment in infrastructure projects, which are long-term, riskier investments, he said the right regulatory framework, the right contracts and the right financial and guarantee instruments needed to be in place.

Daboub said the World Bank estimated that some $250 billion was needed in infrastructure investment in Indonesia over the next five years.

Full article here

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