IMF to develop sovereign
(AFP) - The International Monetary Fund
Thursday gathered 25 of its member states to develop guidelines
for state-controlled sovereign wealth funds, whose skyrocketing
foreign investments are raising concerns about political
At the end of a two-day meeting, the new group, the
International Working Group of Sovereign Wealth Funds, issued a
statement outlining its plan to agree on voluntary guidelines
for best practices for SWFs by October.
“The IWG aims to agree on a common set of voluntary principles
for SWFs, drawing on the existing body of principles and
practices, to help maintain the free flow of cross-border
investment and open and stable financial systems,” the group
The working group is co-chaired by Jaime Caruana, director of
the IMF’s Monetary and Capital Markets Department, and Hamad al
Suwaidi, an Abu Dhabi finance official and director of the Abu
Dhabi Investment Authority, the SWF that invested 7.5 billion
dollars in US bank Citigroup in November.
The 25 member countries include Australia, Azerbaidjan, Bahrain,
China, Iran, Libya, Norway, Qatar, Russia, Singapore, the United
States and the United Arab Emirates.
Sovereign wealth funds today manage between two and three
billion dollars in investments, according to the IMF, an amount
that is projected to grow to up to 10 trillion dollars in the
next five years.
The rapid rise in investment by SWFs, state-run investment funds
mainly found in oil-exporting countries and Asian exporters, has
raised concerns that governments could use them as political
The IMF is expected to discuss a draft document on SWFs before
the 2008 annual meetings of the IMF and the World Bank in
Asian art market booms
seek status, style and smart investments
- A pioneering art fair in Hong Kong is expected to attract
15,000 potential buyers, reflecting how modern art has become as
desirable for many Asian consumers as the latest luxury-brand
The fair, which opens May 14, will assemble 100 international
galleries under one roof selling works ranging from Picasso
masterpieces to prints by emerging local artists.
With the Asian art market booming, organisers hope the inaugural
event will prove that owning art is not just for expert
connoisseurs but can be hugely satisfying, and even profitable,
for first-time buyers too.
Such an attempt to increase the number of collectors in Asia
comes as the region’s auction rooms enjoy unprecedented interest
in contemporary art produced in Asia and elsewhere.
At the Sotheby’s Contemporary Chinese Art sale in Hong Kong in
early April, an oil painting by Zhang Xiaogang sold to a private
Asian collector for more than six million US dollars, twice its
It was one of several records set during the sale, and was the
highest auction price paid for Zhang, a successful artist from
China who has exhibited around the world for 20 years.
“Contemporary art is developing into the ultimate luxury brand,”
said Magnus Renfrew, director of the fair, which will be held in
the dramatic harbourside exhibition centre.
“A fair like this can be a fixture for the international jet
set: somewhere people come to see and be seen.
“Many of the ‘new rich’ in China and elsewhere in Asia are now
looking to contemporary art because they have their cars, their
beautiful houses and yachts. So what’s next to buy? What way can
you next express your wealth?
“We’re not seeing any weakness in the art market despite
problems in the global economy, and the timing could not be
better. We are expecting visitors from Taiwan, Korea, mainland
China and Japan, as well as from outside Asia.”
While a Picasso might still be beyond the means of most of
Asia’s newly wealthy, the Hong Kong International Art Fair has
been carefully tailored to match their various wallet sizes and
The fair aims to cater for all budgets, with minimum prices of
around 2,000 US dollars, while at the upper end of the scale one
or two museum-quality pieces will add a touch of essential
glamour and extravagance to the event.
The Picasso, a 1955 nude portrait, is likely to sell for several
million dollars, while a Francis Bacon work from London’s
Marlborough gallery tops the price list at 35 million dollars.
A Damien Hirst “spot” painting and a 1962 Andy Warhol silkscreen
could also fetch millions, organisers say.
“With so many top calibre galleries exhibiting a huge range of
20th and 21st century art there will be something for everyone,”
“If people are looking for a young artist whose work they might
fall in love with, buying a piece at the fair should not be
“People collect for a variety of reasons: to express their
cultured nature, for passion, and for investment,” he said.
-- “Buy for yourself -- and it should hurt financially” --
But David Tang, Hong Kong’s most colourful businessman and a
major collector of modern Asian art, issued some frank advice to
profit-seekers as he welcomed the fair’s launch.
“The art market is very economically sensitive,” he said at his
China Club in central Hong Kong.
“People should only buy if they love a piece so much that they
feel they just can’t live without it hanging over their bed.
“It is a wonderful feeling to own art you love. And it should
hurt a bit financially: that means you really want it.
“I can’t stand people who go into art just for investment,” said
Tang, founder of the Shanghai Tang fashion brand. “That is no
longer art, it is just commodities and you may as well trade
pork bellies or tin.
“Buy for yourself. The last thing you want to worry about with
art is the price always going up and down.”
Katie de Tilly’s Hong Kong gallery 10 Chancery Lane will sell
pieces for between 5,000 and 250,000 US dollars at the five-day
She said the modern art market in Asia is in unchartered
Chinese export hub at centre of
child labour scandal
(AFP) - An
area in southern China renowned as a major export hub is at the
centre of a child labour scandal after more than 1,000 children
were found toiling away in factories.
The children, aged from nine to 16, worked long hours in
factories for about 35 cents an hour, the state-run China Daily
and other media said Wednesday, in echoes of a brick kiln
slavery ring that made world headlines last year.
The news came as workers in communist-ruled China prepared to
celebrate May 1, Labour Day, as a national holiday.
But the latest incident showed that labour abuse remained a
major problem in China, where many poor people remain vulnerable
to exploitation despite the nation’s phenomenal economic growth,
according to one workers’ rights group.
“They (labour scandals) get exposed from time to time. If they
become a big story, then the government usually promises to
crack down and investigate,” Geoffrey Crothall of the Hong
Kong-based China Labour Bulletin told AFP.
“But the underlying problems that give rise to these incidents
just continue. The situation never seems to improve noticeably
in terms of poverty relief and in terms of keeping kids in
Police have so far rescued 167 children in Dongguan, one of the
cities at the centre of the latest scandal, the Hong Kong-based
Wen Wei Po newspaper said.
The China Daily carried a photo of a young girl crying after
emerging from her place of work in Dongguan, which has sought
for many years to attract foreign investment and is an export
The children were also found working in factories in nearby
Shenzhen and Huizhou, which are also key to Chinese exports,
according to the China Daily.
Authorities have set up a task force to rescue all the other
children, local authorities in Dongguan were quoted as saying.
“Our labour enforcement and trade union will investigate all
companies in the town, the labour market and agencies,” said
Wang Yongquan, a spokesman for Shipai town in Dongguan,
according to the China Daily.
An underground organisation had lured the children from
Liangshan, a poor farming area in Sichuan province thousands of
kilometres away, the China Daily said.
The factories paid the children between 2.5 yuan and 3.8 yuan
(35 and 55 cents) an hour.
The , the first to report the scandal, quoted a factory foreman
as saying that all the children were passed off as 18 to pass
the labour department’s inspections.
“We have absolute management control over them -- we can adopt
any measure,” another foreman named Pan Ajie told the
newspaper’s reporter before the crackdown began.
Last year, China approved a long-awaited labour law aimed at
better protecting workers’ rights, amid outrage over the brick
kiln slavery scandal that highlighted endemic abuse behind the
nation’s economic boom.
Hundreds of workers, some of them children and others mentally
disabled, were found to be working as slaves in the brick kilns
in Shanxi and Henan provinces in June last year.
The law, which came into effect in January, stipulates that
employees can now face criminal prosecution if their neglect
results in serious harm to workers.
However, even before the new law went into effect, communist
China in theory already had many legal protections for workers
that were routinely ignored.
And even with the new law, workers can still be seen building
new skyscrapers in Beijing and elsewhere without protective
equipment and other safeguards that would normally be seen in
faces glut of staff seeking buyouts
(AFP) - The International Monetary Fund said
Tuesday it has a glut of employees seeking buyout packages as
its member nations overwhelmingly approved major voting and
The IMF said it had received requests from 591 of the 2,900
eligible employees for redundancy packages that were offered in
a cost-cutting restructuring aimed at shoring up its shaky
That represented roughly one in five employees, about half more
The IMF had targeted 380 job cuts in a bid to trim operating
expenses 13.5 percent over the next three years.
Managing director Dominique Strauss-Kahn told AFP that
higher-than-expected demand for buyouts reflects the
attractiveness of the buyout packages and early retirements.
The IMF management offered buyouts equivalent to about a year
and a half of salary, a source close to the fund said.
Strauss-Kahn welcomed the demand for exits from the 185-nation
“The good news is that avoids any phase of outright layoffs and
provides room to hire those with new qualifications,” he said.
The high number of buyout volunteers, who had until March 21 to
submit their requests, will allow the IMF to “substantially”
increase the initial target of 380 job cuts, he said, without
disclosing a specific figure.
The IMF said in a statement that from the total of 591 buyout
volunteers, between 100 to 125 from the middle level of the
organization will not be approved for the packages.
The proportion of voluntary separations sought by senior staff
and support staff will allow the IMF “to achieve the needed
rebalancing in its structure.”
However, the number of mid-level economists volunteering to go
was higher than anticipated, IMF spokesman Masood Ahmed said.
Strauss-Kahn said the additional staff departures will allow the
IMF to begin hiring “in September” financial markets specialists
as part of a strategy to build the institution’s strenghth’s in
As part of the restructuring, the IMF said six of its department
heads had decided to leave.
Departing will be Mark Allen, director of the Policy Development
and Review Department; Shailendra Anjaria, the IMF secretary;
David Burton, director of the Asia and Pacific Department; Bert
Keuppens, director of the Office of Internal Audit; Mohsin Khan,
director of the Middle East and Central Asia Department; and
Michael Kuhn, director of the Finance Department.
Earlier, the IMF said that member nations overwhelmingly
approved vote and quota reform measures that strengthen the role
of developing and emerging market countries.
The reform measures were approved Monday by 175 of the 185 IMF
member nations, representing 92.98 percent of the total fund
voting power, well ahead of the minimum 85 percent required for
The reform, criticized as inadequate by a number of analysts,
calls for developed countries to give up a small fraction of
their voting rights -- equivalent to 1.6 percentage points -- to
the benefit of emerging and developing countries.
The reallocation of voting power, which is supposed to occur
every five years, extends more weight to countries experiencing
strong economic growth, such as China, India, Brazil, South
Korea and Mexico.
The main losers in the reshuffling are Britain, followed by
France, Saudi Arabia, Canada and Russia.
The reform measures ultimately depend on member nations’
legislatures to take effect.
India’s IT industry to more
than double revenues by 2012
- India’s information technology and IT-enabled services
industry will more than double in size by 2012, led by a
fast-expanding domestic market, according to a report released
The industry’s revenues, including those from export markets,
will reach 5.3 trillion rupees (132 billion dollars) in 2012,
from 2.46 trillion rupees last year, said the report by
market-research firm IDC India.
Two trillion rupees of that will come from a domestic market,
which is growing at an average annual rate of 18.4 percent,
outpacing overall industry growth of 16.5 percent, it said.
India’s expanding economy, growing annually by nearly nine
percent, is spurring domestic IT spending as companies upgrade
technologies to stay competitive and consumers log onto the
Internet on personal computers and mobile devices.
The forecast growth rates will be achieved on the back of the
industry offering “innovative services to the evolving domestic
buyers,” said IDC India country manager Kapil Dev Singh in a
statement.The domestic market has largely been ignored by an
industry that has boomed on work from Western firms trying to
cut costs by taking advantage of India’s English-speaking,
computer-savvy graduates who work for lower salaries.
Last year, India’s overall IT and IT-enabled services industry
logged 22.4 percent growth in revenue to 2.46 trillion rupees,
of which the domestic market contributed 900 billion rupees,
according to IDC India.
In 2008, the market researcher expects the overall industry to
grow 20 percent, with the Indian market expanding 22.4 percent,
maintaining its growth rate last year.
Indian IT companies, including software makers, are grappling
with a slowdown in demand from the United States, their biggest
market. US companies are paring technology budgets in the wake
of a downturn in the world’s biggest economy.
The slowdown follows a more than 12 percent appreciation last
year in the value of the rupee against the dollar, which reduced
the local equivalent of every dollar earned by exporters such as
software makers Tata Consultancy and Wipro.
That has forced exporters to look at non-American geographies
and the home market to diversify risk and maintain growth.
hold extraordinary meeting over prices: Kuwait
(AFP) - OPEC might hold an extraordinary meeting over
skyrocketing oil prices, Kuwaiti Oil Minister Mohammad al-Olaim
said on Wednesday.
“If there is any requirement for a meeting, we will not hesitate
to meet,” Olaim said.
He was responding to a question of whether there were plans to
hold talks ahead of a regularly scheduled meeting in September
after prices peaked at almost 120 dollars (77 euros) a barrel on
“OPEC is always looking for the stability of the oil market,”
added the minister.
“But it is not the fundamentals that are driving the prices
(higher) ... The prices are led by other reasons -- speculation,
limitation of refinery and weakening of the dollar.”
retail tycoon plans stock giveaways
- The founder of one of Japan’s top retail groups marked his
84th birthday Wednesday with news he plans to give
57-million-dollars’ worth of group shares to employees to thank
Masatoshi Ito, who is currently honorary chairman of the group
operating Seven-Eleven convenience stores, is the biggest
individual shareholder in Seven and i Holdings Co., having a
2.2-percent stake at the end of February.
“Ito has offered to give part of his stockholding to employees
who have contributed to the group’s development,” Seven and i
Holdings spokesman Noriyuki Habano said.
“He wants to express his gratitude while hoping they will make
the group bigger,” the official said, adding this year marks the
50th anniversary of the Ito-Yokado supermarket chain Ito
The charity comes amid growing concern in Japan about a
burgeoning income gap in a country that once prided itself on
being entirely middle class.
The Nikkei economic daily said Ito would give up 10 percent of
The gift could cover more than 5,000 senior managers and be
worth some six billion yen (57 million dollars) in terms of the
market value of the group’s share, the daily said.
The gift shares would be worth at least 300,000 yen per person,
it said. The spokesman declined to confirm the figures.
Seven and i Holdings, launched in 2005, embraces Seven-Eleven,
the global convenience store chain originally founded in the
United States, as well as Ito-Yokado supermarkets.
Japan’s retail industry is suffering hard times amid slack
personal spending and a shrinking population.
in EU economy falls
Confidence in the European economy fell more sharply than
expected in April, slumping to the lowest point in
two-and-a-half years, according to an EU survey on Wednesday.
The European Commission’s eurozone economic sentiment indicator
slid in April to 97.1 points from 99.6 in March, hitting the
lowest point since August 2005 and falling short of economists
forecast for 99.0 points.
The commission’s economic sentiment indicator for the 27-nation
European Union also fell to the weakest level since August 2005,
dropping to 98.1 points in April from from 101.9 points in
Confidence was broadly weaker across all sectors of the economy,
with only the outlook among consumers in the eurozone stable,
albeit at a low level, the survey showed.
Although confidence weakened only moderately in regional
heavyweight Germany, bigger declines were seen in other big
European economies and plunged sharply in Britain.
Separately, the commission’s monthly business climate survey
also painted a dismal picture, falling to the lowest point since
“The current level of the indicator still continues to suggest
above historical average industrial production growth but the
decline points to a weakening of the monthly growth rates in the
second quarter,” the commission said.
Not enough regulation in some
(AFP) - There is too
little regulation of financial services industries in British
overseas territories like Bermuda and the British Virgin
Islands, an official report said Wednesday.
The study, by the influential House of Commons Public Accounts
Committee, looked at Foreign Office activity in Britain’s 14
overseas territories, including the two low-tax financial
“Regulatory standards in most territories are not yet up to
those in the crown dependencies” such as the Channel Island of
Jersey, the report said.
“Limited capacity also reduces the ability of territories to
investigate and prosecute money laundering.”
It added that standards of governance and financial reporting
are “variable” and can drop below levels in Britain.
“There is a serious risk of money laundering in the territories,
particularly in the smaller territories which lack the critical
mass of regulatory and investigative experience,” it said.
In Bermuda, anti-money laundering measures were 22 percent
materially non-compliant in 2005, while banking measures in the
British Virgin Islands were 50 percent non-compliant or
materially so in 2004, it said.
The report called on the Foreign Office to do more to help
territories strengthen regulation, where necessary by sending in
more investigators or prosecutors from Britain.
But it noted that regulators in Bermuda, the British Virgin
Islands and the Cayman Islands had increased their capacity
The Foreign Office is trying to increase its ability to monitor
financial service industries in the territories, the report