MOP 6.00 Vitor Quintã Editor-in-chief Tiago Azevedo
One more year for food bank
Okada weighs on Wynn rating
MUST waits on campus expansion Page 5
Hainan ‘casinos’ back with a vengeance J
ust four months after a casino bar was closed in mainland China’s Hainan, the venue has re-opened as a so-called “special entertainment facility,” Business Daily has learned. There is a similar facility poised to open at another resort, with an online advertisement looking for a ‘general manager for a casino in Sanya’. A third one is also due to open in a few months, an industry source said.
The new wave of covert gambling in the southern holiday island again raises fears over Macau’s role as China’s official casino city. Jesters’ has around 40 gaming tables and 50 slot machines, with the first buy-in an entry fee paid in cash and the players getting points when they win. But a source says ‘someone else independent of the venue management’ is trading those points to cash. More on page 2
Number 366 Monday September 9, 2013
April 19, 2013
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Lawrence Ho signs on for Russian gaming dream Macau casino developer Lawrence Ho Yau Lung pledged on Friday to invest US$700 million (5.59 billion patacas) in a gaming resort in Russia’s Far East. The Primorye region, located next to China’s northeastern Heilongjiang province and to North Korea, wants to attract millions of Asian tourists. Mr Ho says he is “very optimistic” about the potential of his new expansion venture. Page 3
Hang Seng Index 22690
HSI - Movers
Election hopefuls flout campaign rules With one week of campaigning still ahead, most of the tickets for the Legislative Assembly election have breached campaign rules by putting up posters outside designated areas, the Electoral Commission says. The authorities are investigating the incidents but judge Ip Son Sang, who heads the commission, warned there is the possibility that they might have been framed by rival candidacies. Page 8
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No free dinners could mean electoral defeat José Pereira Coutinho fears a third term in the Legislative Assembly may be out of reach as other tickets splurge on ‘so many free dinners and gifts’. The candidate slammed last year’s electoral reform while calling for the chief executive to be elected by universal suffrage in 2019. Mr Coutinho says Seac Pai Van’s public housing is only good for pigeons, not for people. Pages 6 & 7
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September 9, 2013
Macau Junket to change name as HK listing looms VIP gaming promoter Asia Entertainment & Resources Ltd (AERL) is planning to change its name as it prepares a listing in Hong Kong. The plan is up for voting on the company’s annual shareholders meeting, scheduled for September 24. The board is proposing to change the junket’s name to Iao Kun Group Holding Co Ltd. AERL operates five high roller rooms here, including Iao Kun VIP Club at Galaxy Macau resort. The company is listed in New York but it could seek a dual listing by introduction in Hong Kong within weeks, analysts say.
Hainan ‘casinos’ back – and growing One facility re-opened, second to be launched and more on way, mainland source tells Business Daily Michael Grimes
he drive to introduce casinostyle gaming on mainland China’s southern holiday island Hainan has intensified, Business Daily has learned. That’s despite the very public closure of one facility – Jesters, a casino bar at Mangrove Tree Resort World on Sanya Bay – in February after it was featured in a Reuters story. Business Daily has been told Jesters reopened as a so-called “special entertainment facility” – only four months later. Now another such facility is poised to open at a site called Ocean Sonic Resort – a hotel and tourism complex with 600 rooms about 20 minutes’ drive from Mangrove Tree Resort. Business Daily was alerted to the second gaming resort by a Hainan source after the person saw an online advertisement for a ‘general manager for a casino in Sanya’. The Hainan source told us: “After looking into this it seems the ‘special entertainment facility’ has around 40 gaming tables and 50 slot machines, and works a little bit like a pachinko parlour in Japan. I have found out how it works. The first buy-in is an entry fee paid in cash. Players get points when they win, and I’ve been told someone else independent of the venue management converts the points to cash.” A second source in the casino industry added: “The permission comes under a Special Entertainment Licence which has been sanctioned by Beijing with the paperwork approved by Hainan. The one at Ocean Sonic Resort was supposed to open at the end of August, but I think it has been slightly delayed. I understand it is backed by a group originating in Beijing.” Business Daily attempted to contact the management of Ocean Sonic Resort via phone numbers listed on its Chinese website. A hotel employee said the person in charge would not be available yesterday before press time. Our local source added: “At Jesters the players have to be guests at the hotel. I’m not sure if that will be the case at Ocean Sonic.” A third – as yet unnamed property – will also open in a few months, Business Daily has been told by the industry source. The newspaper has learned that a number of other Special Entertainment Licences may have been approved for Hainan. “The objective is to develop Hainan,” said the local source. Hainan has approximately 380 registered hotels according to
Ocean Sonic Resort, Sanya
government data, but has struggled to build visitors numbers year-onyear in the manner of Macau.
Rumours, denials As long ago as May 2012 – during the Global Gaming Expo Asia casino industry conference and trade show in Macau – Hoffman Ma Ho Man, an investor in Macau’s Ponte 16 casino hotel resort, told Business Daily that a “casino licence has actually been approved for Hainan”. At the time a spokesman for the government on Hainan – mainland China’s sub-tropical holiday island 504 kilometres (313 miles) southwest of Macau – appeared to dismiss the notion. He told us: “The chairman of Hainan’s People’s Congress Wei Liu Cheng reiterated that Hainan is not looking at opening casinos or other gambling activities such as horse racing.” It’s difficult to square those official statements with what has reportedly happened since. But a third source – an analyst familiar with China’s administrative system – told us: “You need to look at the framework for these licences. The special entertainment lounges are not
involved in gambling activities per se as they do not involve cash. That way officials can say ‘this is not casinos’, ‘this is not gambling’.” The third source has given specific details of how the quasi casino system works. Players buy entry vouchers in multiples of 500 yuan (US$82). There are no restrictions on the number of vouchers that can be purchased. There is a tax of five percent on the value of the vouchers, with the tax going to the local government. “That five percent tax may sound low until you consider that it is reportedly based on the buy-in rather than actual win/revenue,” said the second source. This newspaper understands that after the buy-in, a reward card is issued to the player. When the person bets, points are deducted. When a player wins a game, points are awarded proportionate to the size of the original bet. “The common thread with these casino-type facilities is that they are all developing large entertainment, retail and convention areas,” said the analyst. According to official central government data Hainan is the
largest Special Economic Zone in the People’s Republic of China. The local government has said it would like to build a 22.5-kilometre bridge to link the island with the Chinese mainland. The destination currently relies on air links and a ferry route connected to a high-speed rail line to Guangdong to the northeast. Despite being 1,200 times bigger than Macau, Hainan received around the same number of people in 2011 – 30 million – as China’s official casino city.
KEY POINTS Hainan resort seeks general manager ‘for casino in Sanya’ Casino-style property under ‘special entertainment facility’ Other licences may have been approved
September 9, 2013 April 19, 2013
Lawrence Ho signs Russian casino deal
Actions speak louder than sham elections
Macau businessman ‘very optimistic’ on Primorye investment prospects Vítor Quintã
acau casino developer Lawrence Ho Yau Lung pledged to invest US$700 million (5.59 billion patacas) in a gaming resort in Russia. Mr Ho signed the deal on Friday with the Primorye region administration during The Far Eastern Investment Congress in Vladivostok, state news agency RIA Rovosti reported. “I am very optimistic about the potential of our investments in the Russian Far East,” Mr Ho said at the signing ceremony. Primorye Maritime Territory governor Vladimir Miklushevsky said the gaming zone planned for the territory would bring in a new economic impetus along with Asian tourists. The authorities expect about 12 million people to visit the region – located next to China’s northeastern Heilongjiang province and to North Korea – once the casino operations begin to ramp up. Mr Ho is joining the venture via his Hong Kong investment vehicle Melco International Development Ltd and another listed entity called Summit Ascent Holdings Ltd in which he has a 37 percent stake. Melco and Summit Ascent will buy a combined 51 percent stake in a holding company called Oriental Regent Ltd that will develop one casino hotel and possibly a second property. The other partners in the project are Firich with 19 percent, and Elegant City with 30 percent. Firich is a wholly owned subsidiary of FEC, a Taiwan-listed maker of electronic gaming machines, multiplayer gaming terminals, video lottery terminals and lottery pointof-sale terminals.
2017 target Oleg Drozdov, a Russian businessman involved in the
Poker’s ACOP in Macau from Oct 18 P
okerStars LIVE Macau’s 2nd Annual Asia Championship of Poker will take place in Macau from October 18 to November 3. The flagship poker series for the Asia
After the Philippines, Lawrence Ho is also investing in Russian gaming
construction sector in Primorye, controls Elegant City. Mr Drozdov said about US$70 million dollars had already been invested in the resort. The second development phase would involve a further investment of US$130 million, followed by US$500 million in the third phase. The second phase could involve an independent casino controlled by Mr Ho, according to filings from Melco and Summit Ascent. “The investment is expected to be completed by 2017,” said Mr Drozdov. “None of the partners have any doubts that these investments are realistic,” he added. The first phase of the Russian
resort is to have a hotel with 119 rooms, approximately 800 slot machines, 25 VIP gaming tables and 40 mass-market gaming tables, according to filings. Mr Ho has recently agreed to a similar investment partnership in the Philippines, providing its experience in running gaming operations to a local developer. Melco Crown Entertainment Ltd, in which Mr Ho is the controlling shareholder, has signed a deal with Philippines developer Belle Corp for Belle Grande Manila Bay gaming rsort. In early June Business Daily reported Mr Ho’s Melco had also been invited to run a casino at a US$1 billion gaming project in Barcelona, Spain.
Pacific Poker Tour (APPT) will be at Melco Crown Entertainment Ltd’s City of Dreams resort. The event will offer HK$27 million (US$3.5 million) in guaranteed prize money across 18 tournaments. The event – known in the poker world as ACOP – includes 12 championship events. They are headlined by the HK$100,000 buyin main event, offering double last year’s guaranteed prize pool. The organisers say the HK$20 million guarantee attached to this year’s main event is the biggest in all of Asia. The opening weekend of
the ACOP will start with the HK$2,500 Rebuy Championship (with a HK$500,000 guaranteed prize pool) and the HK$11,000 Deepstack Championship (HK$1 million guaranteed). Last year’s championship had 2,757 players and more than HK$46.2 million in prize money. “Last year’s ACOP was a great success but it was still just year one,” said APPT president Danny McDonagh. “The awareness is so much greater this year and we expect the 2013 ACOP to break the previous APPT records.” M.G.
he use of functional constituencies in electing the Legislative Assembly appeals to reason, up to a point. Instead of making all candidates pretend they have answers to all of society’s most pressing problems, the system reserves seats for those pledging to cater specifically to the relevant interest groups. It is not uncommon elsewhere for parliamentary seats to be reserved for under-represented sectors of society, such as ethnic or religious minorities, or women. But, unlike many other places, in Macau the indirect election system was not set up to protect minorities, such as the Macanese. The functional constituencies were designed to protect interest groups that were already powerful, thus making sure they would support the government. As a result, the indirect elections have become the most powerful symbol of what is wrong with Macau politics: lack of transparency, disregard for public opinion and arrogance. The latest example is the absolute indifference that the 12 candidates to represent functional constituencies displayed towards a campaign by the Domestic Violence Concern Group. The group asked all candidates to make clear their positions on whether domestic violence should be a crime that anyone can report, not just the victims. Unlike the candidates for directly elected seats, who backed the group’s stance, none of the candidates for indirectly elected seats bothered even to reply. Such a display of disdain for the democratic game is only possible because the indirect election system has been perverted beyond repair. The candidates for the functional constituencies are chosen well in advance, in horse-trading behind closed doors that ensures that each of the city’s economic factions gets an uncontested seat. So elections have come and gone without any debate on the strategy these indirectly elected legislators should follow on culture, sport, business or education. Despite the emergence of vocal groups that say they speak for workers, the Macau Federation of Trade Unions continues to monopolise the labour constituency’s seats, owing to the sheer number of associations it includes. Another perverse effect has been the growing number of associations created simply for electoral purposes. After all, each association gets the same number of votes in the indirect election system, regardless of its size or activities. The sport and culture constituency, in particular, has been overrun by economic interests, which regard claiming to represent the constituency as an easy way to get a seat in the assembly. It is no surprise that the city has no policy on sport or culture. It is easy for the government to say Macau society is not mature enough to handle a more democratic system. But Macau people are intelligent enough to recognise a rigged system when they see one. No wonder they either refuse to get their hands dirty or simply seek quick benefits in the form of a free meal or a supermarket voucher.
Such a display of disdain for the democratic game is only possible because the indirect election system has been perverted beyond repair
September 9, 2013
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HOSPITALITY Meeting with disappointment Data on the meetings, incentives, conventions and exhibitions (MICE) industry for the second quarter suggest its fortunes continue to flag. The development of the MICE industry was hailed as an important part of the strategy for making the economy more diverse. The industry has failed to live up to expectations. It had a somewhat promising start. At least the figures for MICE events were going up. But since late 2010 the trend has been one of slow contraction. The number of events in the first half of this year was 10 percent lower than a year before. But the statistics cover very different types of events, and the aggregate figures may hide different situations.
The food bank has helped feed over 5,800 people in two years
Subsidy for food bank extended and raised The food parcels Caritas hands out daily will be worth 12.5 percent more Tony Lai
T Many of the events were meetings held by various sorts of organisations. A meeting can be almost anything. For instance, the peak in meetings organised by associations, in the fourth quarter of 2009, coincided with the availability of incentives to celebrate the 10th anniversary of the Macau SAR. It was also a peak period for conventions and incentive travel. Most MICE events are meetings, and the proportion of meetings has increased. About 80 percent of MICE events were meetings until the middle of 2010. Since then, the proportion has been consistently over 90 percent. The combined number of incentives, conventions and exhibitions declined steeply after 2010. This is especially worrying, as such events tend to last longer and attract more people from outside Macau – and therefore bring in more revenue for other sectors of the economy. The number of incentives, conventions and exhibitions in the fourth quarter of last year was 55 percent below its peak in the fourth quarter of 2009. The first half of this year was the quietest on record for such events, just 29 having taken place. J.I.D.
Govt meetings as a proportion of Q2 MICE events
he government will maintain its subsidy for the food bank run by the Catholic charity Caritas Macau until the end of 2014, and even increase it by 12.5 percent. “In the new phase of the shortterm food subsidy scheme, the subsidy of 32 patacas per food parcel will increase to 36 patacas owing to inflation,” Social Welfare Bureau director Iong Kong Io told reporters on Saturday. The average annual rate of inflation was 5.47 percent in each of the 12 months ended July. Mr Iong said the beneficiaries would now be allowed to receive the daily food parcels for up to eight weeks instead of six weeks. Caritas Macau secretary-general
Paul Pun Chi Meng praised the government for saying it would increase the subsidy. Mr Pun, speaking last month before the government announced the increase, said more money would make it easier for the charity to do good deals with food suppliers. He said it could also allow the food bank to give out more expensive food. Caritas has received 10 million patacas (US$1.25 million) from the government to run its food bank since September 2011. People aged 65 or more and households with a combined monthly income of no more than one and a half times the official subsistence income are eligible for help. The food bank had helped
USJ helps Mexican investors discover Asia M
exican businessmen and investors are being given an intensive drill in Asian culture, thanks to a joint programme by Macau’s University of Saint Joseph (USJ) and the Universidad Autónoma de Nuevo León (UANL). Companies are finally grasping the many business opportunities in China, said Renato Balderrama
Santander, head of UANL’s Asian Studies Centre. But “the lack of knowledge in Nuevo León, the country and the region about China, for instance, is enormous” and it can doom any commercial venture, he said in a piece published in UANL’s website. The course titled ‘China, Japan, Korea: a cultural and interdisciplinary
feed over 5,800 people or 3,027 households by September 1, Social Welfare Bureau data show. Mr Iong expects an increase of 10 percent in the number of households using the food bank next year if the government raises the official subsistence income. The income officially regarded as necessary for a person that lives alone to subsist is 3,450 patacas a month. The government usually revises the figure every January and July. Mr Pun said Caritas had spent only 8.5 million patacas of the 10 million patacas it had received to run the food bank for two years because it had the help of some 200 volunteers. Mr Pun is a candidate in Sunday’s Legislative Assembly elections.
approach’ began on August 30 and ends on October 5. It aims to overturn the situation. The businessmen will travel to Macau, Hong Kong, Beijing and Shanghai, where they will have classes with experts in history and economy, the university says. Plans for a shopping centre for Mexican products due to open this summer in the Zhuhai-Macau Cross-Border Industrial Zone were announced in April. A spokesperson for the management department of the Zhuhai side of the park told Business Daily Enlace International Group could open the mall “in July or August this year.” V.Q.
September 9, 2013
Okada overhang for Wynn ratings Fitch cites risk Nevada courts could order casino firm to pay former partner more compensation of cancelled stake Michael Grimes
itch Ratings says there’s a risk a Nevada court could order Wynn Resorts Ltd to increase the compensation payable to its former backer and shareholder Kazuo Okada. Wynn Resorts cancelled the Japanese pachinko entrepreneur’s near 20-percent stake in the casino developer in February 2012 – at a 30 percent discount to the then market price – describing him as “unsuitable” and a risk to its Nevada gaming licence. It cited the manner of his pursuit of a Philippines casino project as an important factor. In cash terms the discount on the stake’s redemption value amounted at the time to US$830 million (6.63 billion patacas). The near US$1.94 billion compensation that Wynn deemed payable to Mr Okada for unilateral cancellation of his holding was also subject to a delay, via a promissory note with a 10-year maturity. While Fitch doesn’t assert that Wynn Resorts would be held liable by Nevada to pay any or all of the US$830 million discount, it does say the issue continues “to negatively pressure the ratings” of the firm.
Kazuo Okada pursuing Steve Wynn and his firm in courts on two continents
Mr Okada has denied the unsuitability claims and sued the casino firm in Nevada – on the principal of the cancellation and because of the discount to market value. He has also sued in Japan alleging defamation over regulatory filings made by Wynn Resorts that
were based on a report prepared by Louis Freeh, a former director of the Federal Bureau of Investigation in the United States. Fitch says: “The most pertinent risk related to the legal proceedings is the possibility that the Clark County [Nevada] court may order Wynn to increase Okada’s compensation for the shares Wynn unilaterally redeemed in February 2012.” Fitch makes the point in a report on Wynn forming part of the research house’s U.S. Leveraged Finance series. Fitch refers in its paper to Mr Okada’s Wynn stakeholding being part of a trilateral agreement between his casino equipment firm Aruze USA, Wynn chairman Steve Wynn and the latter’s ex-wife Elaine. The ratings house states: “Although we think that the redemption was done in accordance with the articles and some discount attributable to trading/voting limitations of the shares is justifiable, there is a chance that the court may require Wynn to increase compensation for the redemption.” Fitch adds however that it is “now considerably less concerned about
Okada-related risks given the Nevada gaming regulators cleared Wynn of wrongdoing in February 2013” [sic]. That’s a reference to claims by Mr Okada – dismissed by the Nevada Gaming Control Board in February – that Wynn Resorts acted improperly in making a 1.1 billion patacas (US$137.7 million) donation pledge in 2011 to the University of Macau at a time the firm was seeking Macau government permission for a new casino resort on Cotai. Fitch gives Wynn Resorts and its Las Vegas and Macau units a ‘BB’ Issuer Default Rating – one notch below investment grade. The ratings agency states: “…the financial strength of the Macau subsidiary (net cash position and US$1.2 billion of property EBITDA)…offsets the weaker financial strength at the Las Vegas subsidiary (7x net leverage with US$482 million of property EBITDA).” It adds: “Management’s historically prudent balance sheet management and Wynn’s strong brand value and high asset quality are also positively factored into the ratings.”
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September 9, 2013 April 19, 2013
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Financial Monitor Young and old, unalike The labour force keeps growing steadily and relatively fast. From January 2010 to the middle of this year the number of workers dropped on only five occasions. This year, the usual drop after New Year failed to take place. The average for the three months ended July puts the labour force at 366,400 workers, about 37,000 more than at the beginning of 2010, growing at roughly 4.5 percent per year. If this trend is sustained, the labour force will reach 400,000 workers early in the second half of 2015.
Growth in the labour force is spread unevenly across the various age groups. The fastest growth in the period under review was in the number of workers between the ages of 25 and 34, which increased by 29 percent, almost three times the average increase. This seems to herald the rejuvenation of the labour force. But most of these new workers are probably migrant workers. We cannot tell exactly what proportion are migrant workers, as the data published do not break down the increases according to residential status. The resident labour force will certainly be shaped by two trends. First, the number of older workers is increasing swiftly. In the period under review the number aged between 55 and 64 rose by 17.8 percent while the number aged 65 or over rose by 23.5 percent, giving a combined total of 7,700 extra workers in these age groups. Second, the number of younger workers is increasing slowly. The number of workers under 25 is now only 1.6 percent higher than early in 2011, having risen by 600. J.I.D. The content of this column is the work of Business Daily’s journalists.
Labour force growth in the past 30 months
Legislature’s dynamo Coutinho fears defeat José Pereira Coutinho is running for a third term in the Legislative Assembly, but he fears defeat, as the number of candidates is bigger in Sunday’s elections and the spending power of many tickets is unprecedented. “With so many free dinners and gifts, I don’t know if I will be elected this time,” Mr Coutinho told Business Daily in an interview. He said the assembly had to regain the authority it once had, and that its members had to do better in protecting people’s rights. Mr Coutinho, who is also the president of the Macau Civil Servants Association, said his priorities were to hold top officials accountable, provide better public housing and have the chief executive elected by universal suffrage in 2019. Luciana Leitão firstname.lastname@example.org
Photo by Manuel Cardoso
What are your expectations in Sunday’s election? In democracy no one knows what will happen. The people will decide. We have done our best in the past eight years. We have performed quite well on the checks and balances of the government and on the work we did for the people. I foresee that maybe some changes will occur in the next Legislative Assembly. What kind of changes are you referring to? Society has developed in different ways in the past four years. Our financial resources are good, but the government failed to perform its duties in terms of stopping the quality of life from falling for the majority of the people living here. So there’s a lot of work to be done in the Legislative Assembly in the next four years. The major problems are related to the pace of democratic reform and how it
affects the accountability of top officials. As long as we don’t have democracy and as long as our chief executive is elected only by a few, this will affect the performance of government officials, especially the secretaries. It is totally unacceptable that they can be in the same post for 20 years. The former president of China, Hu Jintao, who led about 1.4 billion people, had to leave office after 10 years, but in Macau they can still be there as long as they like. If they fail in their duties, no one asks them to take responsibility. In the last election your ticket got only one candidate elected. What will you do differently to get one more elected this time? With so many free dinners and gifts, I don’t know if I will be elected this time. It’s very difficult. You have 20 tickets, more than in past elections. You have tickets that are powerful,
spending hundreds of millions of patacas. You have an Election Commission that is not working properly. You have members of the commission that are biased, and they don’t have the integrity to be there. I don’t know if I’m going to be elected, but I need to gather support from every community living here. In your programme, you call for universal suffrage by 2019. Do you think that can actually happen? Macau’s chief executive should be universally elected by the people in 2019. Also, we want the government to review the Legislative Assembly election law so that the majority of our legislators are directly elected. The changes they made last time were wrong, when they added only two directly elected seats, adding at the same time two more seats for indirectly elected legislators. In terms of democracy, we’re going
September 9, 2013 April 19, 2013
Macau backwards, and this affects the performance of the Legislative Assembly. The assembly is the people’s house, but it is becoming less transparent. For instance, the assembly has one of the best websites in Macau, where you can find everything related to the Legislative Assembly, but the votes of the legislators on various matters are not made available online. Some legislators cheat people by saying something publicly but deciding differently when it comes to voting. Another example is related to the 12 bills I’ve submitted. Most of the bills are about people’s needs, such as control of housing rents. Only four legislators voted in favour of the bill, 11 rejected it and five abstained. If 11 legislators could reject such an important bill, whom are they defending? Another bill was about trade unions and collective bargaining, and it garnered eight votes for, 12 against and four abstentions. In these elections, I see singing, dancing, flowers and policies, but nothing happens. We need action. Is it realistic to expect such democratic changes by 2019? I have a dream, and I will pursue it no matter what. We will continue, so that one day that will happen in Macau. You presented 12 bills in a very short period during the last legislative term. Why the sudden rush? They said they had no time, but how do they have time to review the bills presented by the government? The land bill, urban planning bill, cultural heritage protection bill, changes in the criminal procedure code: these are big changes and important legislation and all of them were presented at the same time. Legislators could not find time because there were meetings of the committees at the same time, so only a few legislators could see the details. But why are these meetings secret? If the Legislative Assembly is the people’s house, these sessions should be open. I know why they keep it secret: because they don’t want people to know what is going on inside. Secondly, we have been requesting
TDM to broadcast all the plenary sessions and make them available on the Internet, so people can go home and watch it, without any censorship by TDM. In the end, I got word from the president of TDM saying that he could do it, but the president of the Legislative Assembly rejected the plan. I suppose he doesn’t want people to see legislators saying bad words, laughing, reading and sleeping. There is no transparency in the Legislative Assembly. They are not serious. But why did you present so many bills right before the end? To show what the government hadn’t done during the past few years. On animal protection, the government started making promises eight years ago. The government failed for many years and no one says anything about that. I failed over a matter of months and I am castigated for not doing it sooner. It’s fine. But I promise that if I am elected each of these bills will be submitted again. The legislators cannot use the argument that they don’t have time. When I was a legislator in
As our chief executive is elected only by a few, this will affect the performance of government officials, especially the secretaries
2005, I used to work until 2am asking questions of government officials. Some of the legislators said it was a hard life, so the timetable now runs until 8pm. I dedicate my day to the assembly, having no spare time and no business to run. We need fulltime legislators.
The Legislative Assembly must oversee the government’s work. Have you seen any improvement in its performance? No. In the past four years, with president Lau Cheok Va, we have seen a downgrading of the work of the Legislative Assembly. When we request government officials to attend meetings, no secretary comes. Before, they used to come. They don’t care to come, because lately we’ve had a weak president. He doesn’t care about the issues. Susana Chou was a different president? She had a different way of running the Legislative Assembly. I hope the next president can regain some of the authority the Legislative Assembly had. Who do you think will head the assembly? Ho Iat Seng will be the next president, for sure. Is he the one you would choose for the position? Who else can we choose? But do you think he will act differently from Mr Lau? I don’t expect him to be different. I just hope. I hope that Macau will be much better served in the next Legislative Assembly. Another priority in your programme is to fight for more public housing. Do you expect it to solve the housing problems here? We need more than the 19,000 units promised. We need 40,000 more decent homes, so people can live decently, not like pigeons. Seac Pai Van is not a decent place to live in? It is for pigeons. They did that on purpose, so that these people feel like rejects of society – that if you are poor and you want public housing you will take any kind of shelter. You put in a bed and you can’t put anything more inside a room. That’s no way to treat human beings. Pandas in Seac Pai Van are living more humanely than the people in the Seac Pai Van public housing complex. How do you come up with the 40,000 figure? It’s just to cover more local people. No one can buy a house in Macau, not even a director of a public service can afford one today. The houses are so expensive that almost 50 percent to 60 percent of your monthly salary goes to repay the mortgage you get from the bank, and for 25 to 30 years. What kind of life do you have here? Why do we build houses that are not affordable to locals? Why is the government allowing this by giving permits to build houses that they know in advance will be sold to outsiders? Macau land, Macau housing: that should be our target, and we will work for that. We will have five more pieces of reclaimed land, so why not reserve part of that land for public housing? You also propose to fight to make Macau’s top officials more accountable. Aren’t there enough mechanisms to make them accountable? There are, because the chief executive enacted in 2010 legislation on the accountability of top officials. The problem is, they don’t act on it, so it is dead legislation. What are we waiting for? If you don’t enforce the laws that are made, you are just betraying the trust of the people and not living up to the
responsibilities of being chief executive. We understand that the team of secretaries do not all belong to this chief executive, so the top official does not have total power of control. That’s why so many mistakes happen. Lau Si Io should have stepped down a long time ago. Florinda Chan, with the cemetery plots incident, should have been out already. It is affecting the image of Macau in the international arena. It is becoming a joke, and people do not believe the government, because some of the officials are not performing well. Aren’t the graft buster and the Commission of Audit making the government accountable? They are not. The Commission of Audit reports what is wrong, but many times they come second, because legislators have criticised it first. Also, what is the result of that? Nothing happens. The officials continue in their positions. Nothing is revised or changed. They keep on spending and when they spend wrongly, the Commission of Audit just reports it. What are the ensuing results? What are the consequences? Regarding the Commission against Corruption, I have many recommendations and complaints from the civil servants that government departments don’t follow its recommendations, saying they are not complying with the rule of law. These two bodies have no real power to change the course of things. That leaves only the Legislative Assembly. So how do you propose to make officials accountable? We will continue to expose scandals so that they understand that they are killing the people’s trust. Secondly, the chief executive should have real power to control everything. Otherwise he must take political responsibility. We don’t have housing, health care is a mess, and social security also. If you have children, you must sign up for a kindergarten three or four years before to guarantee a place by then, otherwise you will have to rear your kid at home. Macau is losing its quality of life. Regarding healthcare, do you think building a new hospital will be enough? I don’t know if we will have one more hospital or not, because they’re talking about a 2020 deadline. I saw a documentary about the world’s biggest indoor ski resort, in Dubai. Outside it is 40 Celsius, and inside is minus 5C to 10C. They built it in two years. We, for a simple hospital on an island, need 10 years. Why? Because there are other things to take care of like drugs, beds, and everything. Where are the doctors? Some doctors are not performing well. Some of the candidates even say that we shouldn’t hire Portuguese nurses. Some of the legislators protect their private interests, or they really don’t know what the Legislative Assembly’s duties are.
In terms of democracy, we’re going backwards
September 9, 2013 April 19, 2013
I have heard many different opinions … but, overall, most support the work of the Election Commission Fernando Chui Sai On, Macau Chief Executive
People found putting up election posters outside designated areas may face charges
Most tickets suspected of disobeying the rules The Election Commission says too many campaign posters have been found outside the designated areas Tony Lai
ost tickets of candidates for the Legislative Assembly have broken the rules by putting up election posters outside the designated areas, the Election Commission says. The head of the commission, Judge Ip Son Sang, told a press conference on Friday that the Public Security Police were investigating. Judge Ip said the police investigations would take some time because they would have to question “quite a number of people”. He said that before the official
campaign period had begun the commission had set clear rules about where election posters could be put up in public. Those that break the rules may be charged and, if convicted, sent to prison for up to two years. Because they are already under investigation, judge Ip declined to identify which of the 20 tickets vying for directly elected seats in the Legislative Assembly in Sunday’s elections had broken the rules. He said some tickets might have tried to frame rival tickets.
One ticket, Breakthrough Action, has admitted that some of its posters have been put up outside the designated areas. Breakthrough Action comprises mainly young candidates. The president of the Macau Tri-decade Action Union, Kou Ngon Fong, leads it. In a written statement conveyed by online social media on Saturday, Mr Kou denied that his ticket had put up the posters and denounced what he called an attempt to frame him and his fellow-candidates.
Judge Ip reiterated that putting campaign materials on taxis or buses was prohibited. The authorities have made two tickets remove election stickers from the sides of taxis. The tickets said they had misunderstood the Election Commission’s instructions, which they described as “unclear”. Chief Executive Fernando Chui Sai On voiced his support for the Election Commission before leaving for the Pan-Pearl River Delta Regional Cooperation and Development Forum in Guizhou yesterday. “I have heard many different opinions,” Mr Chui said, “but, overall, most support the work of the Election Commission.” He said the commission regularly issued information and answered questions from the candidates and the public. Data from the commission show it had received 92 complaints by Friday. The main concern – the subject of 26 complaints – was noise made by campaign vehicles. Judge Ip said that in going about its work the commission was working closely with the police and the Commission against Corruption.
MUST urges quick expansion approval Private university applied for campus expansion, needs no more land Tony Lai
he Macau University of Science and Technology (MUST) wants the government to approve its campus expansion “as quickly as possible” in order to improve its teaching quality. The expansion plan submitted to the government last year includes a new teaching building and a student residency block, said Liu Liang, the university’s rector, on Saturday. “After the new building comes into usage, this can further ease the development of smallclass teaching,” he said on the sidelines of the university’s orientation ceremony. The expansion can also solve the current lack of accommodation for students, Mr Liu added. He expects the construction can be finished “within two or three years” after the approval is granted. Even after the expansion, the university will not accept more than
the current 3,000 students a year in order to offer quality education, said the rector. The private university sees no need to ask for more land from the government at the moment but does not rule out doing so in the future, he said. The land resources allocated to the university in the past have raised some eyebrows. In 2009 Legislative Assembly member Au Kam San slammed the government for twice granting land plots with more than 210,000 square metres to the institution without public tender. The university paid no land premium. Mr Au and his New Macau Association colleagues have also criticised the Macau Foundation for providing a large amount of subsidies for the university. Executive Council member and businessman Liu Chak Wan is the council chairman of the university.
MUST will not accept more students after expansion, says rector
September 9, 2013 April 19, 2013
China’s August exports accelerate Growth beats estimates in boost to recovery
hina’s exports increased more than estimated in August, adding to evidence the world’s second-largest economy is rebounding after a two-quarter slowdown. Overseas shipments rose 7.2 percent from a year earlier, the General Administration of Customs said yesterday. That compares with the 5.5 percent median estimate of 46 economists surveyed by Bloomberg News and July’s 5.1 percent gain. Imports rose a less-than-estimated 7 percent from a year earlier, leaving a trade surplus of more than US$28 billion. The January-to-August trade surplus widened 28 percent from a year earlier to US$154.2 billion, according to yesterday’s data, and was the highest for that period since 2007. The pickup in the surplus suggests that appreciation pressure on the yuan will continue, economists Liu Li-Gang and Hao Zhou at Australia & New Zealand Banking Group Ltd said in a note after the release. Even so, with turbulence in emerging market economies, especially India and Indonesia, the central bank is likely to maintain stability of the exchange rate, they wrote. China’s economy is showing signs of picking up after the government announced support measures such as tax cuts for small businesses and extra spending on railways, and as confidence returns after the interbank cash squeeze in June. Improvements in developed nations may support exports in coming months, with the euro-area returning to growth in the second quarter after a record-long recession. “We’re clearly seeing stronger external demand momentum as manufacturing in the U.S. and European Union recover and that’s going to become a stronger driver of China’s growth,” said Xu Gao, chief
Exports to Japan declined for the 7th straight month
economist with Everbright Securities Co Ltd in Beijing, who previously worked for the World Bank. “But if policy makers in China see this recovery as meaning they don’t need to add stimulus domestically or even withdraw stimulus, that could be bad news.”
Clearer picture Mr Xu, who last week raised his 2013 full-year economic growth estimate for China to 7.6 percent from 7.5 percent, said the moderation in momentum suggested in the August import numbers may temper optimism about the strength of domestic demand. August data for consumer and producer prices will be released today, followed by industrial output, retail sales and January-August fixed-
China’s trade surplus in August
Li calls for ‘human focus’ to urbanisation plan C
Everbright posts US$85 mln loss E
verbright Securities Co Ltd posted an unconsolidated net loss of 523 million yuan (US$85 million) last month after US$3.8 billion in erroneous trading orders that roiled China’s equity market and drew a record regulatory penalty. The country’s seventh-largest brokerage by market value incurred the unconsolidated loss, which doesn’t include contributions from its subsidiaries, after disposing of assets following the August 16 error, Everbright said in a statement to the Shanghai Stock Exchange. The figure is based on preliminary data and hasn’t been audited, the company said. The loss adds to woes at statecontrolled Everbright, which has been ordered by the China Securities Regulatory Commission to pay a record 523 million yuan for insider trading in the aftermath of the errors. The regulator, which is cracking down on misconduct, barred the company from most proprietary trading and banned four of its executives from the market for life. Everbright sold exchange-traded funds and index futures on August 16 before telling the market it had made the erroneous buy orders, the
asset investment on September 10 that will give a clearer picture of the extent of the economic rebound that started in July. The increase in August inbound shipments trailed the 11.3 percent median projection in a Bloomberg survey of 45 analysts and was lower
CSRC said on August 30. Investors in Guangzhou and Shanghai are suing for damages, claiming they suffered losses. Everbright has closed all of the short positions in index futures it built to offset the erroneous orders, resulting in a 4.3 millionyuan loss, it said in a separate statement on Friday. The watchdog’s investigation into the erroneous trades was its second probe of Everbright this year, following an investigation of alleged false information in an initial public offering. Regulators are seeking to restore confidence in a market whose benchmark index, the Shanghai Composite, has slumped 25 percent in the past four years. Bloomberg News
hina’s premier, Li Keqiang, wants his plan to turn more Chinese into city dwellers to be “humanity-centred”, focusing on quality of life and the environment and driven by job creation, the official China Daily newspaper reported yesterday. Mr Li has an ambitious plan to boost China’s urban population by 400 million over the next decade, a key plank in a reform effort to restructure the economy away from credit and export driven growth to one where consumers provide the main impetus. But the plan faces huge obstacles, including a lack of infrastructure in cities to deal with an influx of new residents and the cost of building it, which has led to concern that a spending binge could push up already high local debt levels and inflate a property bubble. The need to reform a complex system of residency registration that
than July’s 10.9 percent jump. The slowdown “reflects the weak economic recovery domestically,” said Hu Yifan, chief economist at Haitong International Securities Group in Hong Kong. “But we expect the trend to reverse in coming months, along with rising demand, on a series of supportive policies” announced by the government, she said. Exports to the U.S., China’s biggest market, and the European Union, its second-largest, rose for a second month in August after a four-month drop, yesterday’s data showed. Sales to the U.S. increased 6.1 percent from a year earlier, while those to the EU gained 2.5 percent. Exports to Japan declined for the seventh straight month, falling 2.2 percent from a year earlier. Bloomberg News
controls the benefits residents can enjoy is also a sticking point. Mr Li said the government should first identify areas of consensus, such as the redevelopment of slum communities on the edge of cities, as a base for further steps towards urbanisation, the paper said “Quality is the key and reform should be the impetus,” the paper quoted the premier as saying. “We should be guided by ordinary people’s hopes, and be active and orderly in pushing the process forward.” In July a government think-tank said the cost of settling China’s rural workers in cities could be about 650 billion yuan (US$106 billion) a year, or about 5.5 percent of fiscal revenue last year. Reuters
September 9, 2013 April 19, 2013
Greater China Xiaomi turns profit as sales to triple Xiaomi Corp, the smartphone maker that outsells Apple Inc in China, has turned profitable for the first time as market-share gains put the company on pace to almost triple handset sales this year. Sales in the first half more than doubled to 13.2 billion yuan (US$2.16 billion), and may rise to 28 billion yuan for the full year, from 12.6 billion yuan for all of last year, president Bin Lin told Bloomberg.
Taiwan justice minister resigns Taiwan Minister of Justice Tseng Yung Fu resigned after being accused of interfering in a commercial crimes case, becoming the fifth member of President Ma Ying Jeou’s cabinet to quit this year. The island’s Supreme Prosecutors Office accused Mr Tseng of illegally seeking to prevent an appeal of a judgment in favour of a lawmaker charged with breach of trust, the office said. Mr Tseng denied wrongdoing and pledged to prove his innocence.
Local debt audit ready this month Total volume of debt expected to rise slightly, vice finance minister says
hina will this month complete an audit of localgovernment debt to assess risks to its financial system, ahead of a Communist Party meeting in November to set economic policy, a government official said. China’s finance ministry will wrap up its first full audit in more than two years in September and release the results in October, Vice
Finance Minister Zhu Guangyao said yesterday at a briefing during the Group of 20 Summit in St. Petersburg, Russia. The total volume of debt is expected to rise slightly, he said. China in July ordered a nationwide review of local-government debt, which the National Audit Office said in 2011 totalled 10.7 trillion yuan (US$1.75 trillion).
Indeed there are some projects … by local governments which have very little financial return and virtually no social benefits
HSBC completes cross-border lending HSBC said it had completed a two-way cross-border yuan lending transaction for a Taiwanese company under a pilot programme China introduced in August, becoming the first foreign bank to do so. The deal was done for Kunshan President Enterprises Food Co Ltd, a subsidiary of Uni-President Group. HSBC said it had set up a master account and obtained a twoway lending quota totalling 1.49 billion yuan (US$243.5 million) for the company.
China buys into Kazakh oilfield Chinese President Xi Jinping struck a deal with Kazakhstan on Saturday giving China a stake in its giant Kashagan oil project. The US$5 billion deal further increases China’s rising clout in postSoviet Central Asia and blocks an attempt by global rival India to get a stake in the oilfield, the world’s largest oil discovery in five decades. “The two countries have agreed on China’s shareholding in the development of the Kashagan deposit,” Mr Xi said. “The two governments hail and support this agreement.”
U.S. adds China case to GSK probe U.S. authorities are investigating British drugmaker GlaxoSmithKline Plc for violations of U.S. anti-bribery laws in China after Chinese government officials accused the company of bribing doctors, three sources familiar with the probe said last week. The investigation is part of a wider probe of drugmakers’ sales practices in China, said one of the sources. A company spokesman on Friday confirmed the new line of inquiry in response to questions from Reuters.
Zhu Guangyao, Vice Finance Minister
Former Finance Minister Xiang Huaicheng said in April the amount may be more than 20 trillion yuan, underscoring the risks President Xi Jinping’s government faces as the economy slows and it tackles the effects to the financial system of a record credit boom. “The loans to local-government financing corporations are mainly used for infrastructure projects which have a relatively sound financial return,” Mr Zhu said through an interpreter. “But indeed there are some projects, the so-called image projects, by local governments which have very little financial return and virtually no social benefits.” The volume of local-government debt stood at 10.7 trillion yuan at the end of 2010, Mr Zhu said, citing an audit done that year. The second round of audits this year may see the total volume rise “a little bit,” he said. Local Chinese governments have also set up thousands of companies to sidestep regulations that bar them from directly borrowing from banks or selling debt. These financing vehicles were used to raise funding for construction of infrastructure such as roads and sewage systems. Outstanding loans by the banking system to these local-government financing vehicles totalled 9.59 trillion yuan at the end of June this year, with a bad loan ratio of 0.14 percent, Mr Zhu said. The scale of local-government debt in the world’s second largest economy is controllable and risk of default not high, Finance Minister Lou Jiwei said in an interview aired by state broadcaster China Central Television last week. The lack of transparency in local-government borrowings prompted Fitch Ratings to cut China’s long-term local-currency debt rating in April. Bloomberg News
China may cut 2014 growth target to 7pct Government should stick to annual goal set in the five-year plan, state economist says
hina’s government may cut the country’s annual growth target to 7 percent next year, although the actual pace of expansion will be higher, said Fan Jianping, chief economist at a state research institute. The drop would be in line with the goal set in the country’s 20112015 five-year plan for annual average expansion of 7 percent, Mr Fan, who works at the State Information Centre under the National Development and Reform Commission, said in an interview in Shanghai yesterday. China’s economy is set to expand 7.5 percent this year, matching the government’s target set in March and the weakest pace in 23 years, amid curbs on credit expansion, property development and overcapacity. President Xi Jinping said last week the government chose to bring down the growth rate to solve “fundamental problems” hindering long-run development. China should stick to the annual goal set in the five-year plan, Mr Fan said. “Why should the target be changed every year. It shouldn’t happen.”
Mr Fan said his forecast for a cut in the growth target was based on his own research. The country’s annual growth rate will stay in a range of 7 percent to 8 percent over the next few years and the government should use this window to speed up economic restructuring, he had said at a conference in Shanghai earlier in the day. China sets an annual average growth target for the economy in its five-year plans and the premier announces a goal for the year at the annual session of the National People’s Congress every March which may differ.
Exceed targets While the goal set in the current five-year plan through 2015 is an annual average 7 percent, the government announced a 2011 target of 8 percent in March that year and 7.5 percent goals in March 2012 and 2013. The 2006-2010 plan set an annual average target of 7.5 percent and the goal announced to the NPC every March of that
period was 8 percent. The targets were routinely exceeded, with gross domestic product rising an average 11.2 percent a year from 2006 through 2010. Barclays Plc’s Hong Kong-based China economist Chang Jian said in July she expects Premier Li Keqiang will lower the 2014 expansion target to 7 percent when parliament meets in March. China’s economic growth slowed to 7.7 percent in 2012 and may ease further to 7.5 percent this year, according to the median estimate of 52 analysts in a Bloomberg News survey last month. “It’s hard to find good reasons to be optimistic” about a recovery in China’s growth, Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong, said last week. “The economy has been pretty much supported by investment, especially property and infrastructure, but it’s hard to see how the momentum can continue.” Mr Zhang, who sees “moderate upside risks” to his third-quarter growth estimate of 7.4 percent after better-than- expected economic data, said he’s maintaining his 2014 forecast of 6.9 percent as the current recovery is unsustainable. GDP rose 7.5 percent in the April-June period from a year earlier, the second straight quarterly slowdown. Monthly purchasing managers’ indexes, industrial output and export data have strengthened since July, bolstering confidence that Premier Li’s policies have stabilised the economy. Bloomberg News
September 9, 2013 April 19, 2013
Shanghai free-trade zone to be used as a test field
Shanghai as HK rival boosts stocks Free-trade zone to have looser controls on capital flows
hina’s plans to elevate Shanghai’s role through looser controls on capital flows and expanded foreign investment drove share gains in companies tied to the city, Hong Kong’s main rival as the nation’s financial centre. Shanghai International Port Group Co rose by the 10 percent daily limit on Friday and has more than doubled over the past two weeks. The gains reflect optimism that a Shanghai free-trade zone will pull in greater investment. A draft plan for the area seen yesterday by Bloomberg News includes expanded opportunities for foreign companies in industries from banking to health insurance. The initiative is part of China’s goal of making Shanghai a world financial centre by 2020. Freeing up foreign-exchange controls in the zone would mark a deepening in policy makers’ efforts to promote international use of the yuan, which a report on September 5 showed it became the world’s ninth mostactively traded currency this year. “Financial sector innovation is expected to accelerate within the
Shanghai Free Trade Zone,” HSBC Holdings Plc China economists Qu Hongbin and Ma Xiaoping wrote in a note. If the yuan is made fully convertible and interest rates are liberalised in Shanghai, “the bold move could push China’s financial reforms forward,” they wrote. China Shipping Container Lines Co and Cosco Shipping Co also rose by the daily limit of 10 percent as the benchmark Shanghai Composite Index gained 0.8 percent. China may allow wholly foreign-owned shipping management companies in Shanghai’s trade zone, according to the draft plan. Agence FrancePresse reported on the document on September 5.
Hub status The plans for Shanghai have raised concerns in Hong Kong that the special administrative region’s status as a hub for Chinese companies to raise capital will be eroded. China’s State Council said on July 3 it approved a free-trade zone for Shanghai, and the Ministry
of Commerce reiterated the approval in an August 22 statement. “Competition is not just about how good you are or have been, but more about whether you are better than your competitors,” Norman Chan, chief executive of the Hong Kong Monetary Authority, said on Saturday at a forum in Hong Kong. “So it’s no good for Hong Kong to sit on the laurels and just hope or pray that other financial centres do not or cannot catch up.” Premier Li Keqiang and his cabinet have been considering the Shanghai policies ahead of a Communist Party meeting in November due to expand on the leadership’s plans for reducing the government’s role in the economy and financial system. “The Shanghai free-trade zone will be used as a test field for further opening-up of China’s economy and the government will reduce its administrative role in managing the economy during the trial,” said Wang Weijun, a strategist at Zheshang Securities Co in Shanghai. “Shanghai will definitely be the winner as its proportion of foreign trade in
China and even the world will see a significant increase going forward.” Concerns that the proposed Shanghai free trade zone will have a negative impact on Hong Kong investment and trade are unnecessary, Shen Danyang, a spokesman for the Ministry of Commerce, said last month. Bloomberg News
It’s no good for Hong Kong to sit on the laurels and just hope or pray that other financial centres do not or cannot catch up Norman Chan, HK Monetary Authority
Go-ahead for Shuanghui’s US$4.7 bln Smithfield deal Way cleared for largest Chinese takeover of a U.S. group
mithfield Foods Inc said U.S. regulators will allow the company to be bought by China’s Shuanghui International Holdings Ltd in what would be the biggest Chinese purchase of a U.S. firm. “This transaction will create a leading global animal protein enterprise,” Zhijun Yang, chief executive of Shuanghui International, said in a joint statement from both companies released on Friday. The Committee on Foreign Investment in the U.S., or CFIUS, approved the transaction and it will be voted on by Smithfield shareholders at the company’s annual meeting on September 24. The government of Ukraine also approved the deal, according to the statement. Shuanghui and Smithfield expect
the transaction, valued at US$7.1 billion including debt, to close shortly after that meeting. Shuanghui, based in Hong Kong, said May 29 it would buy Smithfield for US$4.72 billion in a deal that has drawn scrutiny from senior members of Congress in both U.S. political parties, who had asked for a “thorough review” of the plan. CFIUS blocked at least three transactions in the past four years that would have resulted in Chinese companies gaining control of assets near military facilities. Huawei Technologies Co and Bain Capital Partners LLC also dropped a bid to buy computer equipment maker 3Com Corp in 2008 in the face of opposition from CFIUS. The committee, led by the Treasury Department, is made up
of representatives from the Justice, Homeland Security and Defence departments and five other agencies, any of which might have particular concerns about a takeover by a given foreign buyer. Starboard Value LP, an activist
investor, has advocated a breakup of Smithfield and said on September 4 it received interest from third parties that may want to buy the individual assets of the world’s largest pork supplier. Reuters
September 9, 2013 April 19, 2013
Abe urges reset in ties in meeting with Xi J
Australia’s new govt aims to re-boot mining boom Conservative Abbott sweeps into office
Tony Abbott’s coalition ended the Labor party rule in a landslide victory
ustralia’s incoming conservative government yesterday promised to re-boot a stalled mining boom and revive an appetite for investment after leader Tony Abbott swept into office on a platform to scrap a mining tax and run a stable administration. Mr Abbott’s Liberal-National Party coalition ended six years of often turbulent Labor Party rule and three years of minority government, winning a majority of more than 30 seats in the 150-seat parliament at Saturday’s national elections. It was Labor’s worst result since 1934. Mr Abbott, a former student boxer, Rhodes scholar and trainee priest, began his first day as prime minister elect with a dawn bike ride with friends around his home on Sydney’s northern beaches, before meeting government and ministry officials. “People expect the day after an election an incoming government will be getting down to business. That’s what I’ll be doing today,” Mr Abbott told reporters. “I declare the government is under new management,” Mr Abbott said in a speech in Sydney late on Saturday, consigning Kevin Rudd’s Labor party to the shortest stint in power in almost 40 years. “Australia is once more open for business.” Mr Rudd, 55, quit as Labor leader as the party’s six years in power came to an end. Already scarred by turmoil that saw Mr Rudd ousted by Julia Gillard in 2010, only to reclaim the leadership in June, the party must now unite behind a new chief to take on Mr Abbott. “It’s time for the party to further renew its leadership for the future,” Mr Rudd told supporters. The new prime minister, who was backed by media owner Rupert Murdoch and his Australian
newspapers, takes office as Australia’s economy adjusts to the end of a mining investment boom, with slowing government revenues and rising unemployment. But Mr Abbott’s finance spokesman Andrew Robb, who may become the trade minister in the new government, said Australia’s economy and mining sector would receive a boost from the election result. “As of today, the mining boom will be rebooted,” Mr Robb told Australian television, adding Australia had become uncompetitive under the Labor government. “We will restore an appetite for risk and investment.”
Policy problems Analysts said the victory for Mr Abbott should give him at least two three-year terms in office. “The only time we’ve ever had a one-term government is during the great depression. There is no real
KEY POINTS Abbott wins clear Australian poll victory Conservatives benefit from years of govt leadership turmoil Abbott’s coalition pledged to abolish carbon price, mining tax Rudd quits Labor leadership after defeat
reason to expect they won’t go beyond the three years,” Monash University analyst Nick Economou told Reuters. The Australian Election Commission confirmed on its website that the Liberal-National coalition had won 88 seats in the House of Representatives, and Labor 57. Despite his solid victory, Mr Abbott’s government will not have a majority in the upper house Senate, where he is likely to face a disparate range of minor parties and independents with the balance of power votes from July 2014. Labor and the Greens will control a Senate majority until next July. Mr Abbott will need Senate approval to scrap the carbon and mining taxes, and to implement his landmark paid parental leave scheme which has upset big business and many in his own party. The influential Business Council of Australia, which represents the nation’s biggest listed companies, urged the Senate to recognise the government’s mandate, but continued to express concerns about the taxpayer-funded leave scheme. Final Senate results could take several weeks to determine, due to the complex nature of the preferential voting system. Mr Abbott may be forced to deal with independent Nick Xenophon, Victoria’s Motoring Enthusiast Party, and anti-immigration firebrand Pauline Hanson might also win a Senate seat and return to parliament after a 15-year absence. Perhaps the biggest surprise of the election was the showing of start-up Palmer United Party, founded just five months ago by colourful mining entrepreneur Clive Palmer, who could win a seat in both the Senate and the lower house. Reuters
apanese Prime Minister Shinzo Abe told Chinese President Xi Jinping that the “mutually beneficial strategic” relationship between their countries should be revived, the top government spokesman said. Mr Abe shook hands with Mr Xi and exchanged greetings followed by a brief discussion before a plenary session of the Group of 20 meeting in St Petersburg, Chief Cabinet Secretary Yoshihide Suga told reporters. The informal chat was the first meeting between the two leaders. Next week marks the first anniversary of Japan’s purchase of three uninhabited islands disputed with China. The move sparked rioting in China that damaged Japanese businesses and trade ties between Asia’s two largest economies. “It is highly significant that the leaders of Japan and China spoke for the first time since taking office,” Mr Suga said, adding that he believed the gap between the two countries was narrowing. He declined to give details of the conversation. Japanese and Chinese ships have been tailing one another for months through waters near the islands known as Senkaku in Japanese and Diaoyu in Chinese, and no formal bilateral summit has been held for more than a year. China’s official Xinhua news agency said Mr Xi told his Japanese counterpart that relations faced “grave difficulties” and Japan should “correctly deal with such sensitive issues as the Diaoyu Islands and history”. Mr Abe also spoke for a few minutes with South Korean President Park Geun-hye, Mr Suga said. Japan’s ties with South Korea have been chilled by a territorial dispute over another group of islands as well as by lingering resentment over Japan’s invasion and occupation of countries in the region during the first half of the 20th century. Bloomberg News
Japan PM says diplomatic ties should be repaired
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September 9, 2013 April 19, 2013
Singapore becomes Asia’s top foreign-exchange hub
Tokyo wins race to host Olympics
As government offers incentives to boost financial markets Kristine Aquino
ingapore overtook Japan as Asia’s biggest foreignexchange centre for the first time as trading surged in the past three years, the city’s central bank said, citing a survey by the Bank for International Settlements. The city’s average daily foreignexchange volume increased 44 percent to US$383 billion as of April from US$266 billion in the same month in 2010, the Monetary Authority of Singapore said in a statement. The average interestrate derivatives volume climbed 6 percent to US$37 billion over the same period, the highest in the region after Japan, it said. “Singapore has definitely established itself as a hub for foreignexchange trading,” Khoon Goh, a senior currency strategist at Australia & New Zealand Banking Group Ltd in Singapore, said before the release of the statement. “Part of this emergence is due to the increasing importance of Asian currencies, and Singapore’s time zone is well-suited for that.” The Chinese yuan entered the top 10 most-actively traded currencies, according to the Bank for International Settlements or BIS. Singapore’s increase in ranking puts it behind only the U.K. and U.S. in the US$6.67 trillion global foreignexchange trading market, the BIS said. The city’s currencies trading expanded as the government offered incentives to boost its financial markets, which also led to a surge in the nation’s fund management industry, where more than 500 asset managers oversee about US$1.1 trillion.
Growing strength “Our growing strength in foreign exchange is a key complement to the development of capital market and asset management activities,” Jacqueline Loh, deputy managing director at the Monetary Authority of Singapore, said in the statement. “It will also better position our financial center to serve the investment and risk management needs of financial institutions and corporates throughout Asia.” Foreign-exchange trading worldwide surged to an average
India, Japan extend swap line The yuan was the ninth-most traded currency
US$5.3 trillion a day in April 2013, boosted by greater yen volumes, the BIS said. Trading increased 33 percent since the same period in 2010, the organisation said, citing a survey of currency traders it runs every three years. The yen had the biggest jump in trading activity among major currencies, while the euro’s role as the second-most traded currency was reduced. The yuan was the ninth-most traded currency, up from 17th three years earlier, according to the BIS.
Our growing strength in foreign exchange is a key complement to the development of capital market and asset management activities Jacqueline Loh, Monetary Authority of Singapore
“This is the beginning of what we can expect to be a very prominent trend,” Sacha Tihanyi, a senior currency strategist at Scotiabank in Hong Kong, wrote in an e-mailed note to clients yesterday. The next survey will probably show a greater increase in yuan trading as a proportion of global turnover, according to Mr Tihanyi. While trading increased in Singapore, the city’s currency was ranked 15th, down three notches from 2010, according to the BIS. It was the seventh most-traded currency in 1998. Foreign-exchange trading in Singapore is one-seventh the size of that in the U.K. and less than a third of the U.S. total. The U.K. has 41 percent of the global market, followed by the U.S. with 19 percent, according to the BIS, which is the record-keeper of the world’s central banks. Singapore has a 5.7 percent share, followed by Japan’s 5.6 percent and Hong Kong’s 4.1 percent. “Foreign-exchange market activity has become ever more concentrated in a handful of global financial centres,” the Basel, Switzerland-based BIS said in its report. “The vast majority of global FX trading in 2013 has occurred via the intermediation of dealers’ sales desks in five jurisdictions.” Bloomberg News
Rupiah leads Asian currencies down A
sian currencies fell last week, led by the Indonesian rupiah’s decline to a four-year low, on concern signs of a U.S. economic recovery would support a reduction in stimulus that has fuelled emergingmarket inflows. U.S. service industries grew in August at the fastest pace in almost eight years, strengthening the case for tapering when the Federal Reserve meets September 17-18 to review its bond-buying programme. Barclays Plc says yields on 10-year Treasuries, which touched a two-year high, will lure investors as exchange data show global funds pulled US$141 million from Indian, Indonesian, Philippine and Thai stocks last week. Asian markets
Tokyo won the right to host the 2020 Olympics, overcoming apathy by the Japanese public and a recent nuclear accident to get the Summer Games for the second time. The Japanese capital was the bookmakers’ favourite leading into last weekend’s meeting of International Olympic Committee members in Buenos Aires, and defeated Madrid and Istanbul in a vote by the IOC. Madrid was eliminated in a first round of voting after tying for second place with Istanbul, setting up the final vote won by Tokyo 60 to 36. The winning bid to stage sports’ biggest event came on the city’s second straight attempt. While a lack of public enthusiasm doomed its bid for the 2016 Olympics, a March survey found 70 percent of Tokyo residents were in support this time. The government also billed the Olympics as a way to help Japan recover from a 2011 earthquake, tsunami and nuclear disaster. “Tokyo is eager to begin to put in place our plans,” Tsunekazu Takeda, head of the city’s bid, said in a statement. “We take on this immense responsibility both humbly and seriously, and will work hard over the next seven year to organise and host what is sure to be the world’s greatest event.” Tokyo has put aside 408.8 billion yen (US$4.1 billion) for building and upgrading facilities.
closed on Friday before a report showed U.S. payrolls rose less than expected, easing concern about the size of potential cuts to Fed bond purchases. “The battle, which all currencies in Asia are facing, is rising U.S. Treasury yields and the Fed meeting later in the month,” said Hamish Pepper, a currency strategist at Barclays in Singapore. “Ultimately, that’s going to cap any appreciation in Asian currencies in the near term.” The rupiah declined 2.3 percent last week to 11,175 per dollar and reached a four-year low of 11,205 earlier, prices from local banks show. Malaysia’s ringgit weakened 1.3 percent to 3.3290 and the Thai baht retreated 0.7 percent to 32.380.
Morgan Stanley lowered its 2013 and 2014 growth forecasts for the four largest Southeast Asian economies of Indonesia, Malaysia, Singapore and Thailand, citing a weaker-than-expected first half and an uncertain outlook, Singaporebased economist Deyi Tan wrote in a September 3 note. Indonesia’s trade deficit reached a record US$2.3 billion in July as exports fell on lower global commodity prices, official data showed on September 2. The ringgit had its biggest weekly loss in five on speculation outflows will accelerate should the Fed begin tapering stimulus this month. Bloomberg News
India reached an agreement to more than triple its bilateral currency-swap line with Japan as Prime Minister Manmohan Singh’s government seeks to stem a record slide in the rupee. The size of the swap agreement was increased to US$50 billion from US$15 billion, Japan’s Ministry of Finance said. The earlier accord was sealed in December 2011. The increased swap line is an additional support measure for the Indian rupee as policy makers battle its decline amid foreign-capital flight from emerging-market assets. The currency ended the week stronger for the first time in a month, as central bank Governor Raghuram Rajan made it more attractive for lenders to woo dollar deposits. “It is a confidence-boosting measure and provides comfort that the government is putting in place a second line of defence,” said Prasanna Ananthasubramanian, an economist at ICICI Securities Primary Dealership Ltd in Mumbai. “But the ideal outcome would be that we don’t need to tap this and money comes through normal channels.” The rupee advanced 1.3 percent to 65.25 per dollar on Friday. It touched an all-time low of 68.8450 on August 28.
Billionaire Packer and wife separate Australian gaming billionaire James Packer (pictured) and wife Erica Baxter have separated. Mrs Packer, 45, is the nation’s second-richest individual with a net worth of US$5.9 billion, according to the Bloomberg Billionaires Index. He is the largest shareholder of Crown Ltd, the country’s biggest casino operator. Ms Baxter, 36, is a former model and singer. The couple were married six years ago and have three children. It is Packer’s second marriage. “We remain deeply close friends and incredibly proud parents and our children are our priority going forward,” Mr Packer and Ms Baxter said in a joint statement. Melbourne-based Crown operates two gaming resorts in Australia, one in London and two in Macau through Melco Crown Entertainment Ltd, a joint venture with Lawrence Ho Yau Lung. Mr Packer inherited the family business at 38. In three years, he sold most of his family’s broadcasting and publishing stakes, as well as its cattle ranches, for more than US$5 billion. He increased the family’s stake in Crown, and became the company’s controlling shareholder in December 2012.
September 9, 2013 April 19, 2013
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0.9185 1.5633 0.9379 1.3178 99.11 7.9879 7.755 6.1195 65.245 32.24 1.2739 29.842 44.475 11176 91.034 1.23609 0.84308 8.0305 10.4705 130.63 1.03
0.3825 0.0832 0.0533 -0.2649 0.7971 0.005 0.0077 -0.0147 1.3334 0.1954 0.2119 -0.1307 0.1349 4.2323 0.4097 0.3034 0.3582 0.4296 0.8108 1.0411 0
-11.4955 -3.3568 -2.399 -0.091 -13.1268 -0.0588 -0.0567 1.8155 -15.71 -5.1489 -4.1212 -2.7109 -7.8021 -12.3747 -1.8751 -2.3146 -3.2808 2.3286 0.5721 -13.0598 -0.0097
1.0625 1.6381 0.9839 1.3711 103.74 8.0111 7.7664 6.3443 68.845 32.48 1.2862 30.228 44.82 11730 105.433 1.265 0.88151 8.4957 10.9254 133.8 1.032
0.8848 1.4814 0.9022 1.2662 77.13 7.9818 7.7498 6.1064 51.3863 28.56 1.2152 28.913 40.54 9448 79.408 1.20302 0.79235 7.8281 10.1113 99.52 1.0289
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September 9, 2013 April 19, 2013
India’s change of guard
Leading reports from Asia’s best business newspapers
Deutsche Bank’s Global Strategist
China Daily China’s top securities regulator is determined to improve market mechanisms and fill the gaps in the regulation system dealing with irregular transactions, after the Everbright Securities Co Ltd trading error. “We will launch official regulations soon to clarify the definition of ‘irregular transaction’, strengthen the management of the relevant transaction system, improve the pre-trading control system, establish a mechanism that can cancel mistaken deals, and launch an information disclosure system for irregular transactions,” the commission’s spokesman said.
Asahi Shimbun The Bank of Japan upgraded its assessment of the Japanese economy to the strongest levels since the global financial crisis started five years ago, mainly on the back of increased capital outlays. In a statement on monetary policy released after a Policy Board meeting, the BOJ said, “Japan’s economy is recovering moderately.” The central bank has not used that expression since the 2008 collapse of U.S. investment bank Lehman Brothers threw the world economy into a prolonged downturn.
Taipei Times Property transactions dropped 19.6 percent to a six-month low in Taiwan’s five major metropolises last month, as rainstorms and policy uncertainty weighed on the market, analysts said. A total of 16,374 residential and commercial properties changed hands last month, shrinking 19.6 percent from July and 17.5 percent from a year earlier in Taipei, New Taipei City, Greater Taichung, Greater Tainan and Greater Kaohsiung, according to official data. Talks by the Ministry of Finance on maintaining and tightening the special sales tax may have drove investors to the sidelines, analysts said.
Korea Herald South Korea and China have reached an agreement on the modality or basic guidelines for their negotiations on a bilateral free trade agreement (FTA), the Seoul government said. “At last week’s meeting, the two sides concluded the first stage negotiations for the Korea-China FTA that began in May last year,” said Woo Taehee, Seoul’s assistant trade minister and a chief negotiator for the FTA talks with China. The first phase negotiations mainly sought to decide the level of liberalisation, often the most sensitive issue in FTA negotiations.
n August, Raghuram Rajan was appointed Governor of the Reserve Bank of India. On one level, this was a routine announcement that many had anticipated – after all, Rajan is arguably the best-known Indian economist of his generation. On another level, however, his appointment can be seen as part of a broader generational shift. Rajan, just 50, will be the first RBI governor born after India became a republic in 1950. Similar changes are taking place in all walks of Indian life, including politics, the arts, sports, and social development. And India will be better for it. Although the country is one of the youngest in the world, with an average age of just 26 years, until recently ageing stalwarts incongruously dominated most fields, from politics to the arts and even business and sports. But now younger entrants are rising everywhere, bringing with them energy and new ideas. In politics, as the country prepares for next year’s general election, the leading contenders to replace 81-yearold Prime Minister Manmohan Singh are the Bharatiya Janata Party’s Narendra Modi, 62, and Rahul Gandhi, who is just 43. Either man would be the first prime minister who was not born in the British Raj.
Arts leading The arts were one of the first areas to witness this generational change. For a long time, Indian literature, especially in English, was
dominated by a clique who wrote mainly for a niche audience and literary recognition. Then, a few years ago, a group of young writers – such as Chetan Bhagat and Amish Tripathi, both former bankers – changed the rules of the game by writing for the mass market. Rather than write for literary critics, they began to use a simpler language, including Indian turns of phrase. They also chose new themes: Tripathi dipped into ancient mythology to write a trilogy about the god Shiva, while Bhagat began to write about the lives of India’s young, upwardly mobile middle class. Predictably, the purists pounced and the critics ridiculed. But people have bought their books in the
millions, and film deals have followed. As a result, the market for books has dramatically expanded and publishers have been forced to change their entire business strategies. Something similar has happened in the music industry. Previously dominated by a small cabal of singers and music directors, the market has been transformed by TV talent contests, similar to American Idol, which provide a national showcase for the wealth of India’s talent. The shows have made participants, some drawn from remote towns, into overnight stars, and many of them have gone on to sign lucrative careers. Thanks partly to this parade of new talent, the Indian music industry is experiencing a period of extraordinary innovation and expansion. The output of the U.S. and European music industries sounds stale in comparison, owing to a dearth of innovation over the last two decades.
Behind the gloom, a new generation is taking over, bringing with it fresh ideas and visions for India
Generational change has even come to India’s most popular sport – cricket. Such was the adulation once heaped upon its ageing stars that many of them remained on the national team long past their peak. But a mere two years after winning the World Cup in 2011, several members of that victorious team have been replaced – a decision that until recently would have
seemed unthinkable. India’s social sector has also been transformed. Development policy used to be dominated by career activists wedded to socialistera thinking. But the arrival of new faces from the world of business, such as Ashish Dhawan, Jayant Sinha, and Ramesh and Swati Ramanathan, has meant that development issues are at last being assessed according to the problem-solving approach of social entrepreneurs, rather than through the ideological lens of activists. Ironically, it is the world of business that remains slow to change. The growth of the IT sector in the 1990’s seemed to promise that change would be rapid and far-reaching, but the old business families still dominate. There is hope, though. Entrepreneurs like Manish Sabharwal of Teamlease, and Binny and Sachin Bansal of Flipkart, an online retailer, are fundamentally changing the way India does business. Similarly, Indian academia may be moribund, but new public intellectuals like Pratap Bhanu Mehta have emerged from outside the mainstream. Yes, India’s economy has slowed sharply, the rupee has plunged, and scandals and protests dominate the headlines. But, behind the gloom, a new generation is taking over, bringing with it fresh ideas and visions for India. © Project Syndicate
September 9, 2013
Closing Cambodia confirms ruling party’s win
Ping An Bank seeks to Raise US$2.4 bln
Cambodia’s ruling People’s Party (CPP) has officially won July’s disputed general election, the national election committee confirmed. Prime Minister Hun Sen’s CPP won 68 seats, compared with 55 for the opposition Cambodia National Rescue Party. The announcement came after thousands of people took part in a rally in the capital Phnom Penh to protest against alleged electoral fraud. Hun Sen has run Cambodia for 28 years. Opposition leader Sam Rainsy claimed there was widespread rigging in the election. The result confirmation means he will no longer be able to legally contest the vote, but Mr Rainsy said he would not give up.
Ping An Bank Co, the least-capitalised among China’s 17 publicly-traded lenders, plans to sell 14.8 billion yuan (US$2.4 billion) of shares in a private placement to its controlling shareholder to bolster its financial strength. Ping An Bank plans to sell about 1.32 billion shares at 11.17 yuan each to its largest shareholder Ping An Insurance Group Co, the Shenzhenbased insurance company said in an exchange filing yesterday. The deal is awaiting regulatory approval, Ping An Insurance said. The sale may help Ping An Bank plug its capital shortfall and speed up branch expansion to cope with growing competition.
G-20 sees stimulus exit damping growth Spotlight at summit no longer on Europe’s debt crisis
eaders from the Group of 20 nations said stimulus pullback in developed countries heightens the threat of volatile capital movement that’s hurting emerging economies as the Syrian conflict shadowed the two-day summit. “Our central banks have committed that future changes to monetary policy settings will continue to be carefully calibrated and clearly communicated,” the Group of 20 said in a communique issued after the twoday forum in St. Petersburg, Russia. “We reiterate that excess volatility of financial flows and disorderly movements in exchange rates can have adverse implications for economic and financial stability, as observed recently in some emerging markets.” Emerging markets, which helped pull the world out of a recession after the global financial crisis, face
heightened vulnerabilities after an exodus of cash and sliding currencies in anticipation of the U.S. Federal Reserve’s eventual tapering of its US$85 billion in monthly bond purchases. Leaders from emerging and advanced nations were at odds during discussions over stimulus exit in the U.S., South Korea’s Finance Ministry said in an e-mailed statement. The BRICS countries pledged to create a US$100 billion pool of currency reserves to guard against shocks even as Russia said U.S. President Barack Obama sought to ease concern about an abrupt pullback of monetary stimulus. “We recognise that strengthened and sustained growth will be accompanied by an eventual transition toward the normalisation of monetary policies,” the G-20 said in the communique. “Sound
macroeconomic policies, structural reforms and strong prudential frameworks will help address an increase in volatility. We will continue to monitor financial market conditions carefully.” After the rift over implications of the U.S. stimulus pullback, advanced economies in the G-20 agreed to carefully coordinate policies when making any changes in their monetary stance, according to South Korea’s Finance Ministry. G20 members also said they expect to begin automatically sharing tax information by the end of 2015. The system of information sharing forms part of plans to tackle global tax evasion.
War fears The prospect of U.S. military strikes against Syria is also adding
to volatility as investors gauge whether oil flows from the region will be disrupted. Chinese and Italian officials warned that military intervention in Syria would risk harming the global economy. “Any political destabilisation, an escalation of political tension always affects the mentality of investors,” Andrey Kostin, chairman of staterun VTB Group, Russia’s secondbiggest bank, said in St. Petersburg. “Investors are always afraid of war.” The G-20’s economic discussions haven’t been dwarfed by developments in Syria because of the strong “momentum for a commitment to jobs and growth agenda,” Australian Foreign Minister Bob Carr said in an interview. An exit from monetary-easing policies poses a major challenge for the world economy, Chinese Vice Finance Minister Zhu Guangyao told reporters last week as the two-day forum opened. Developed economies are turning into global growth engines as some emergingmarket counterparts decelerate, the International Monetary Fund said in a report for G-20 leaders. Bloomberg News
Greek PM sees end to recession
reece’s prime minister said he was confident his country would return to growth in 2014 after a brutal six-year recession, and pledged to push for an easing of austerity measures. Antonis Samaras said international organisations were all predicting 2014 would be the year the Greek economy began to recover, and credited unpopular austerity policies for the turnaround. “Greece is turning the page on six years of recession and the economy is becoming competitive,” said the conservative prime minister, who has headed a coalition government with the socialist party since June 2012. “Last year the international media were all talking about the ‘Grexit’ [from the euro zone], but now that has been replaced by the ‘Grecovery’,” he said. His comments, in a speech at a trade fair in the northern city of Thessaloniki where some 17,000 people protested against the government’s austerity policies, came amid signs that the extremely deep recession in Greece is easing. Revised data for gross domestic product in the second quarter of the year showed this week that the economy shrank by 3.8 percent on a 12-month comparison. This was far better than the initial estimate,
which showed the economy shrinking by 4.6 percent. The government has forecast the economy will shrink by 4.3 percent this year before returning to growth in 2014. Mr Samaras said he was optimistic that Greece would for the first time in years record a budget surplus in 2013, excluding debt repayments. During the first seven months of 2013, the surplus reached 1.1
billion euros (US$1.45 billion), he said, adding this would enable the country to negotiate with its creditors, the European Union and the International Monetary Fund. Greece has received massive rescue funding, tied to tough conditions, from the EU and the IMF to help it overcome a debt crisis which threatened the euro zone. However, the a resulting structural reforms, including an
Antonis Samaras says Greece is now an ‘island of stability’
overhaul of its public sector and its tax system, have proved unpopular. Mr Samaras promised no further austerity measures would be introduced, saying the economy “cannot take” them any more. “Debt levels will be manageable, Greece has respected its commitments... now, the creditors must also respect what was agreed,” he added. AFP