Ray S. Eñano, Editor business@manilastandardtoday.com extrastory2000@gmail.com
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MONDAY, AUGUST 29, 2016
India to double mining output INDIA expects to woo 1 trillion rupees ($15 billion) of investment over five years to double mining output and cut mineral imports. The government’s goal is to fast-track exploration, including upfront payments for discovered deposits when the mines are auctioned, Mines Minister Piyush Goyal said in an interview. The administration will invite foreign companies to participate, he said, while acknowledging challenges such as land acquisition and environmental hurdles. “We’re working to change the rules of the game from doing small amounts of exploration in an incremental fashion to doing it on a fast-track, one-shot, bigpicture way,” Goyal, 52, said on Saturday in New Delhi. There’s “easily” scope to pour 50 billion rupees into the search for deposits, he said. The world’s fastest-growing major economy will need increasing supplies of everything from iron ore to coal to achieve Prime Minister Narendra Modi’s objective of faster development powered by more manufacturing. Rio Tinto Group and steelmaker Posco are among foreign companies that have put Indian plans on hold because of red tape and difficulties in acquiring land, an indication of the challenges Goyal’s agenda faces. India in 2015 embraced competitive auctions as the best longterm approach to resource allocation after bruising corruption scandals over discretionary or free allotments. The nation auctions exploration and mining rights. Officials earlier had worked out a policy of paying explorers a royalty over the life of a mine, rather than upfront, after critics said there wasn’t enough incentive for companies to scour for minerals. Goyal, who is energy minister and added mining to his portfolio when Modi reshuffled his Cabinet in July, said mineral exploration in India is “nascent.” He recommended that overseas explorers and miners consider ventures with local partners— and install largely Indian management—to increase their chances of success in the $2-trillion economy. Bloomberg
Business
Japanese Prime Minister Shinzo Abe (right) stands up next Kenya’s President Uhuru Kenyatta (left) during the opening of the TICAD (Tokyo International Conference on African Development) in August 27, 2016 Nairobi. Japan will pour $30 billion in investment in Africa by 2018, including $10 billion in infrastructure development, Prime Minister Shinzo Abe said on Saturday at a summit in Nairobi. AFP
Asian currencies face more volatile trading A
sian currencies look set for a bumpy ride over the next three months after Federal Reserve chair Janet Yellen said Friday that the case for an interest-rate rise has strengthened, amid growing speculation the hike could come as early as next month. Yellen’s statement will create some volatility over the next three months, Raymond Yeung, chief economist at ANZ Banking Group in Hong Kong, said by phone. “The cost of the US funding will increase, and Asian currencies will be under downward pressure.” Still, some Asian nations would be willing to sacrifice capital outflows in exchange for the boost in export competitiveness that a
weaker currency would provide, Yeung said. The Fed next meets Sept. 20-21 just hours after the Bank of Japan announces the results of its comprehensive review and decides policy, with Bank of Japan Governor Haruhiko Kuroda saying the review wouldn’t lead to a shrinking of policy. “A rate move in the short term may not be that welcome by the equities side but from a global growth perspective, it does anchor US as the engine of growth,” said Song Seng Wun, an economist at CIMB Private Banking in Singapore. “A stronger US would be beneficial for global confidence and in turn for export-oriented economies like Singapore and other Asian economies.” Goldman Sachs Group Inc. sees increased odds of an rise next month―with a 40 percent chance now compared with an earlier 30 percent―economists led by Jan Hatzius wrote in a note the primary dealer published Friday. ANZ expects an interest rate hike in December, but there’s also very high chance
that a rate may come in September given Yellen and other board member’s comments, Yeung said. One market that will be watching the Fed decision closely is Hong Kong, which pegs its currency to the US dollar. The Hong Kong Monetary Authority raised its base rate for the first time in nine years and flagged the risk of rising capital outflows from the city immediately after the Fed hiked rates in December 2015. A rate increase was one factor that could lead to capital outflows, Bank of Korea Governor Lee Ju Yeol said this month, before noting that this was dependent not only on the rate gap between the US and South Korea but also on other countries monetary policies and the outlook for Korea’s economy. The Bangko Sentral ng Pilipinas “will not necessarily have to move in sync with the Fed,” though it is mindful of near-term volatility, Governor Amando Tetangco said in a text message after Yellen’s speech. Bloomberg
Ambitious projects to help ‘build future of Istanbul’ ISTANBUL, Turkey―Turkey is seeking to “build the future of Istanbul” with a brace of ambitious projects including a third bridge spanning the Bosphorus Strait linking Europe and Asia, Transport Minister Ahmet Arslan told AFP. The bridge―once hailed by President Recep Tayyip Erdogan as “star project” and opened on Friday―is only one of the grandiose projects aimed at modernizing the face of Istanbul and transforming the city of 16 million people. A former mayor of Istanbul, Erdogan has often boasted of pet mega projects under his rule that also include a new airport and even a Panama-style canal to relieve pressure from the Bosphorus. “Everyone should know that we are building the future of Istanbul and in the same way we protect its history,” Arslan told AFP ahead of the opening of the bridge, named after sixteenth century Ottoman Sultan Selim the Grim. The bridge includes an eightlane road and twin railway tracks to create a new highway linking Asia and Europe in the north of Istanbul, Turkey’s largest city. “It is another record that we had completed it within 27 months,” Arslan said. The bridge aims to ease traffic problems on the two existing bridges over the Bosphorus and relieve pressure on the vessel-
A picture taken on August 26, 2016 shows red and white air-balloons flying in the skye next to the Yavuz Sultan Selim bridge in Istanbul during the inauguration of the Yavuz Sultan Selim bridge. It is the widest suspension bridge in the world with a width of 58.5 meters. Its span of 1,408 meters is the longest in the world between the supporting pylons. AFP
clogged waterway, the minister said. “The bridge will take about 30 percent of Istanbul’s burden, the traffic pressure on the other two bridges will be eased,” he added. There are already two other bridges across the Bosphorus: the First Bosphorus Bridge, which opened in 1973, and the
Fatih Sultan Mehmet Bridge, which was completed in 1988. Critics argue Erdogan’s selfstyled “crazy projects” are excessive and damaging to the environment. Up to four million trees were chopped during the construction of the third bridge alone, environmentalists have claimed. But Arslan, however,
said about 382,000 trees had been relocated. “In return for those 382,000 trees we have planted 2.5 million. That’s not all,” he said. “We will plant a total of 5.1 million trees―15 times as many as we relocated.” In order to preserve nature, he noted, Turkey has also built “ecological bridges” to facili-
tate the crossing of wild animals on both sides of the Bosphorus. The government’s other grandiose projects for the city include the Eurasia tunnel― a road passage underneath the Bosphorus―expected to be inaugurated on December 20, the minister said. This will complement the undersea Marmaray railway tunnel opened in 2013 that was the first such successful project beneath the Bosphorus in the history of the city. Potentially the most significant development for visitors to Istanbul will be a gargantuan third airport meant to rival mega-hubs like Dubai. Even though construction only began just over a year ago, Arslan said it was already 35 percent finished. “In the first quarter of 2018 we will open the first phase of the airport that will serve 90 million passengers and in next stage that will increase to 200 million,” Arslan said. The minister noted that the third airport and third bridge are complementary because the bridge and connected highways are also linked to Sabiha Gokcen airport on the Asian side of the city. The government is currently working on a separate project to build “Kanal Istanbul,” an artificial strait to bypass the Bosphorus to ease the boat traffic in the narrow waterway. AFP
Japan pledges $30b to Africa JAPAN will invest $30 billion to boost Africa’s economic growth and infrastructure over the next three years, Prime Minister Shinzo Abe said as he sought to win over national leaders already being wooed by China and the US. The Asian economy’s planned investment in the continent of 1.2 billion people shows it has “faith in Africa’s future,” Abe told the heads of states gathered in Kenya’s capital, Nairobi, for the sixth Tokyo International International Conference on African Development. Thirty-four heads from across the 54-nation continent, including those from South Africa, Nigeria, Ivory Coast and Uganda, are attending the highlevel gathering being held outside Japan for the first time. The amount pledged includes private sector investment and $11 billion left over from a $32-billion commitment made at the previous meeting in 2013. In pledging more support, Japan is competing for influence in the continent with the US, China and former European colonial powers such as Britain and France. China, whose investments in sub-Saharan nations have increased 40-fold since 2003, pledged $60 billion for the continent at a similar summit by President Xi Ping in South Africa last year. The money was to be spent on interest-free loans, preferential financing and funding to support development. The US, on the hand, said it would give $14 billion at the US-Africa Leaders Summit in 2014. About $10 billion of Japan’s planned investment is earmarked for electricity-generation projects and upgrading urban transport systems and ports, Abe said. The nation will work with the African Development Bank to boost private sector investment on the continent struggling with intermittent power outages, dilapidated infrastructure, poor sanitation and grinding poverty. Bloomberg
Guptas selling all firms in S. Africa JOHANNESBURG, South Africa—South Africa’s wealthy Gupta family with influential ties to President Jacob Zuma said Saturday they plan to sell all their business interests in the country by the end of the year. The family, who had immigrated from India in the 1990s and owns a business empire with interests ranging from media to mining, said it was already in talks with “several international prospective buyers.” “As a family, we now believe that the time is right for us to exit our shareholding of the South African businesses which we believe will benefit our existing employees, and lead to further growth in the businesses,” said a statement issued by their holding company Oakbay Investments. The Gupta family companies led by brothers Atul, Ajay and Rajesh, have over the years been embroiled in scandals, including accusations of having undue influence over Zuma. Some members of Zuma’s family were once employed in Gupta companies, including his son Duduzane who used to be their business partner. In April, the Guptas stepped down from all executive and non-executive positions in Oakbay Investments, following intense scrutiny over their dealings with the government. The move was also reportedly linked to the closure of the firm’s accounts by two major banks. The extent of the Guptas’ political influence came to light early this year when a deputy minister revealed that the family had offered him the position of finance minister before Zuma suddenly removed then minister Nhlanhla Nene in December 2015. AFP