http://www.domain-b.com/finance/general/20081226_yuan_global_currency.html
26 December 2008
Armed with a staggering $1,89 trillion in foreign exchange reserves, the Chinese government announced the first step towards making the yuan, its currency, an international currency, by allowing it to be used as a mode of payment in business deals with some neighboring countries. The move would also curb the effect of the volatility of the dollar on trade settlements.
With trade settlements being done mainly with the dollar and also the euro, the yuan, currently not a freely convertible currency, this pilot project will be first tested by allowing the yuan to be used to settle trade payments between the delta regions of China's Pearl and Yangtze rivers and the special administrative regions of Hong Kong and Macau.
The Guangxi Zhuang autonomous region and Yunnan province will be allowed to use the yuan to settle trade payments with ASEAN countries like Thailand, Laos, Burma, Malaysia, the Philippines, Singapore, Cambodia, Brunei, Vietnam and Indonesia.
However, the Chinese government did not specify how and when the pilot project would start.
The recession in the US, Japan and many EU nations, led to decline of China's exports declined by 2.2 per cent in November, the first decline in more than seven years. Chin now plans to boost its sagging export sector by allowing the yuan to settle trade payments with neighboring countries along with a series of other measures.
After a meeting of China's State Council yesterday, the cabinet released a document announcing a raft of more measures to encourage domestic spending by doling out more subsidies for buying household appliances and other merchandise to the rural people and increasing the number of stores and distribution centres in the hinterland.
The government will also renovate the urban food markets, provide more variety of goods, build new second-hand markets, encourage distribution companies to merge and consolidate by giving them more incentives, and shore up small and medium-sized business.
Export tax rebates for high-technology products will be hiked, foreign investment will be encouraged and lower the inspection fee for exports.
As ASEAN countries, Hong Kong and Macau constitute 20 per cent of mainland China's total trade volume and has reached $402.7 billion last year, Zhou Xiaochuan, governor of the central bank said last month that trade settlements using the dollar is not feasible due to the high volatility of the dollar and once the yuan is accepted in Asia, then it would be easier for China to make the yuan an international currency in the future.
In its effort to boost the appeal of the yuan among other countries as a currency to hold as foreign exchange reserves, China had already signed trade settlement agreements with Mongolia, Vietnam, Myanmar and Russia among others to voluntarily use the yuan as a currency of choice to settle trade payments and had let Chinese banks issue yuan-denominated bonds in Hong Kong earlier this year.
With China's foreign exchange reserves rising at a rapid pace and standing at $1.89 trillion, the yuan had been getting greater acceptance from its neighbours in recent years and there has been many Chinese economist who were advocating making the yuan an international currency, with the weakening dollar having caused a decline in China's foreign exchange reserves.
China is now looking towards expanding the yuan to other financial markets by make the yuan fully convertible and giving yuan holder's investment channels and also allow the currency to enter the country freely for investment in stock or real estate.
Some Chinese experts are hesitant on fully converting the yuan citing the Asian crisis of 1998 where the country came unscathed because the yuan was not fully convertible under capital accounts and was also the main reason why it has not been affected fully in the current global financial crisis.
They also believe that by liberalizing the fund flow, the economy will be susceptible during regional or global economic crisis.
Saturday, December 27, 2008
China moves to make yuan global currency
Recession, militancy hit Indo-Myanmar trade
http://www.assamtribune.com/scripts/details.asp?id=dec2608/at06
SURAJIT KHaUND
GUWAHATI, Dec 25 – Global financial crisis, poor infrastructure and law-and-order problem have made a huge impact on Indo-Myanmar border trade in 2007-08. Though the Commerce Ministry has taken a slew of measures in order to increase the volume of trade, yet bilateral trade across the border has not witnessed any significant improvement. According to official statistics available with the Manipur Government, border trade between North-east and Myanmar has plummeted causing concern for the traders. What is more alarming is that the quantum of export has dipped significantly compared to import during the last fiscal. In 2007-08, export and import figures had been recorded at Rs 6.02 crore and Rs 416.30 crore respectively whereas in 2006-07, the figures stood at Rs 62.13 crore and Rs 178 crore.
The fall in volume of trade is apparently due to poor law-and-order situation and lack of infrastructure. Worried over the situation, many traders have withdrawn their business from Moreh.
Moreh, the main trade point of the North-east with Myanmar, remained closed on 15 occasions following bandhs called by the militant groups and other social organisations operating in the area, causing major disappointment among the traders. Traders of the region involved in export and import had to face a tough time while pursuing business with Myanmar. “We need proper storage facilities at Moreh while exporting our goods to Myanmar. Despite demands, we have not been able to convince the Centre in this regard”, a group of traders told this correspondent. To substantiate their claims, the traders alleged that they had apprised of the situation to the Manipur and Mizoram governments urging them to take appropriate steps for smooth conduct of trade which has not materialize so far.
Perennial militancy problem was one the reasons for poor trade between North-east and Myanmar. Frequent incidents of firing between security forces and underground members had a big impact on border trade between the countries.
Similarly, illegal trade was a matter of concern for the Manipur Government and the Union Commerce Ministry as well. The volume of illegal trade has reached such a magnitude that the Indian Government had decided to set up a composite checkpost at the Moreh trade point.
The Indo-Myanmar Border Traders’ Union (IMBTU), the main trade body of Manipur which has been pursuing trade with Myanmar, has blamed the Centre for poor trade volume.
“The Centre recently increased the tradeable items from 22 to 42, but unfortunately proper notification is yet to be made in this regard,” WN Singh, a senior member of IMBTU told this correspondent today. He also alleged that the Commerce Ministry is not at all sincere as far as bilateral trade is concerned. “Despite our repeated demands the ministry has turned a blind eye in this regard,” he added.
At UN, Nigeria Gives Myanmar $500,000, Bypassing UN Programs, Also UN-Transparent
http://www.innercitypress.com/joy1myanmar122508.html
Byline: Matthew Russell Lee of Inner City Press at the UN: Exclusive
UNITED NATIONS, December 25 -- Two days before Christmas, Myanmar's mission to the UN got a gift with no strings attached. In the dimly-lit Indonesia Lounge next to the General Assembly chamber, Nigeria's Permanent Representative Joy Ogwu handed her counterpart from Myanmar Kyaw Tint Swe a check for $500,000. This was Nigeria's response to the UN's plea for funds to continue to respond to Cyclone Nargis, which hit in May.
The UN has been exposed, first by Inner City Press, for allowing the military government of Myanmar to take 25% of aid funds through currency exchange. Nigeria gave its money directly, in U.S. dollars, and apparently with no requirement to report back on how the funds are used. This is the type of hard currency for which Senior General Than Shwe is desperate.
Later on December 23, Inner City Press asked a South Asian diplomat active on the UN budget why he thought Nigeria gave direct. "You make more friends that way," he said. "If you give through the UN, you don't know how your money's used. If you give it direct, you can ask for reports if you want. And if you don't want, that's fine to. You just have a new friend."
There are at least two possible explanations of Nigeria's direct "south to south" contribution. One is that there's a lack of confidence in the UN system as a transmitter of funds. For example, the UN has not even committed to disclosing, in the Consolidated Appeals that it issues, how much it loses in government-required currency exchange. The second is that Nigeria wants a friend in Myanmar, perhaps even a piece of the resources for which China and India, along firms such as Total and even Lloyds, and South Korea's Daewoo, are competing.
Ambassador Ogwu's statement, a copy of which Inner City Press obtained and puts online here, professes Nigeria's "unflinching support for the government" of Myanmar.
Kyaw Tint Swe and Joy Ogwu, check in foreground, oversight not shown (c) M.Lee
In the half-light on December 23, there were only two reporters present. Inner City Press asked Ambassador Ogwu if the UN's envoy to Myanmar, fellow Nigerian Ibrahim Gambari, had played any role in this donation. No, she insisted. She had previous told Inner City Press that her government had invited Gambari to try to mediate the Niger Delta conflict not as a UN official -- that would "internationalize" the conflict, she said -- but rather as a Nigerian personality.
The Myanmar government, too, opposes internationalization, not only in the form of UN peacekeepers, but even election monitors. Ban Ki-moon was told to leave the country when voting in the run-up to the controversial elections, which exclude Aung San Suu Kyi, was held.
The other reporter asked a aide to Kyaw Tint Swe how much the check was for. "None of your business," he replied. Hardly an auspicious beginning to transparency in aid use.
MYANMAR: WFP to launch food-for-work programme
http://www.irinnews.org/Report.aspx?ReportId=82100
YANGON, 26 December 2008 (IRIN) -
The UN World Food Programme (WFP), in collaboration with its implementing partners, will soon begin an ambitious food-for-work programme for thousands of Cyclone Nargis survivors.
The programme aims to rehabilitate local assets and restore livelihoods in affected communities, and will target 40,000 participants and 200,000 beneficiaries in Myanmar’s badly affected Ayeyarwady Delta.
“Food-for-work activities can make a significant difference to food-insecure residents of the delta, and at the same time help households rebuild their individual and community assets,” Chris Kaye, WFP country director for Myanmar, told IRIN in Yangon, the former Burmese capital.
WFP is currently screening projects proposed by its partners, with expected project sites to be announced soon.
The programme is set to begin at the end of January and run till the end of April, with a focus on the construction, repair and maintenance of roads, and the construction of wells, dykes, dams, ponds and drainage ditches.
Reforestation, land clearance and irrigation projects will also be included. Individual projects will last 15-45 days.
These activities will play a critical role in restoring food security in the wake of Nargis, which left close to 140,000 people dead or missing in May 2008.
“From this programme, each participant will receive 4kg of rice per day as family rations,” Zin Aung Swe, a WFP programme assistant, explained.
Participants will include those left particularly vulnerable by Nargis, including landless farmers, jobless day labourers and female-headed households.
Cash-for-work
Plans are also under way to implement a cash-for-work programme in a few months time in the cyclone-affected townships of Yangon Division, including Kunchangone Township.
Under the scheme, some 500 people will participate, with around 2,500 beneficiaries.
Programme participants will receive 2,000 kyat (US$1.6) per day in return for labour intensive activities to benefit local communities.
“We’ll evaluate our [food-for-work and cash-for-work] activities, and then will decide whether to expand our programmes or not,” Zin Aung Swe said when asked whether the programmes would be extended after April.
“Pockets of concern”
Studies conducted in the delta now show positive results of the food aid provided thus far.
Photo: Lynn Maung/IRIN
Road-repairing will generate household income for thousands of landless farmers in Myanmar's cyclone-affected Ayeyarwady Delta
According to preliminary results of the UN Food and Agriculture Organization (FAO)/WFP Crop and Food Supply Assessment Mission, overall food security in the area was improving, and humanitarian agencies were making progress in helping cyclone-affected people restore their livelihoods.
“However, there are pockets of concern where food and other assistance continue to be needed,” said Kaye, adding: “WFP will carry on responding to these needs by implementing both relief and recovery activities.”
Seven months after the cyclone, the agency has begun shifting its focus from relief food provision to early recovery, as well as helping to rebuild livelihoods in the delta, once the country’s rice bowl.
Food-for-work activities, along with a supplementary feeding programme targeting vulnerable populations, would be a pillar of WFP’s recovery activities in 2009, Kaye said.
The Periodic Review, the first of three such assessments released on 19 December by the Tripartite Core Group (comprising the Myanmar government, the Association of Southeast Asian Nations and the UN) said food aid had reached every surveyed community along the path of the cyclone. Indicators of food vulnerability showed a clear impact in areas where food aid efforts had been concentrated.
Nonetheless, it said food insecurity persisted in some areas.
“The problems facing the recovery of food production [including seed quality and harvest] and purchasing power may take some years to address. Food insecurity around Yangon and Pathein [a township in the delta] may be a result of chronic problems, rather than directly from Cyclone Nargis,” it said.
Trees won't stop tsunamis, scientists warn
http://www.genengnews.com/news/bnitem.aspx?name=47611410
EUREKALERT
Contact: Andrew Baird
Andrew.Baird@jcu.edu.au
61-040-028-9770
ARC Centre of Excellence in Coral Reef Studies
Claims that coastal tree barriers can halt the might of a tsunami are false and dangerous, a team of international marine scientists said today.
There are many reasons for preserving the world's dwindling stocks of mangroves, but protecting people from tsunamis is not one of them, they say.
On the eve of the anniversary of the devastating 2004 Boxing Day Tsunami, which claimed nearly a quarter of a million lives around the eastern Indian Ocean, researchers have issued a strong warning against coastal communities and governments putting their trust in mangrove and tree barriers erected as a means of protection from earthquake-driven tidal waves.
"Following the Boxing Day Tsunami scientific studies were released which claimed that the damage to coastal communities had been less in places where there was a barrier of trees or coastal vegetation," explains Dr Andrew Baird of the ARC Centre of Excellence for Coral Reef Studies and James Cook University.
"As a result there has been a lot of tree planting in coastal areas affected by the tsunami, in the hope it will protect coastal communities in future from such events.
"However these studies looked only at the presence or absence of vegetation and the extent of damage and did not take account of other important variables, like the distance of a village from the shore, the height of the village above sea level or the shape of the seabed in concentrating the tsunami's power."
The study by Dr Alexander Kerr of the University of Guam, Dr Baird, Ravi Bhalla and V. Srinivas of the Foundation for Ecological Research, Advocacy and Learning India concludes there is, as yet, no evidence that coastal tree belts can provide meaningful protection against a tsunami or, for that matter storm surges produced by cyclones, such as the surge that followed Cyclone Nargis in Myanmar early this year which killed over 150,000 people.
As a result it would be extremely dangerous to rely on tree planting alone to shield coastal communities in the event of future tsunami or storm surges, they warn and doing so could lead to further tragedies.
The team's analysis of the pattern of damage of the Boxing Day 2004 tsunami shows that many variables were at work in determining how the force of the water affected people and structures on land, and these all need to be taken into account not just a few of them.
The findings have major implications for civil defence and emergency planning, the cost of restoring affected regions and in minimizing the death and destruction suffered by some of the poorest communities in the world, the team says.
"The idea that planting 'green belts' can both protect coastal communities and enhance their environment has been widely accepted," Dr Baird explains. "As a result a number of governments, aid agencies and scientists have been promoting it enthusiastically.
"However this could place the communities shielded in this way at future risk. Mangroves should be protected for their conservation value, and for the goods and services they provide to people even if they don't protect coastal dwellers from extreme events."
"In my own visits to the tsunami-ravaged areas, I saw places where quite heavy vegetation had provided absolutely no protection at all against the force of the ocean, and this led us to investigate the assumption more deeply. It turns out it was not well founded."
To fully explore what drives the flooding following tsunami like the Boxing Day Tsunami, and storm surges, like those that could accompany any of the many cyclones that hit northern Australia each year, an extensive, statistically-sound analysis needs to be carried out of all the factors which may act on the force of the waves driving inland.
These include the height of the settlement above the sea, its distance, the shape of the sea bottom and local land uses. These make the difficulty of accurately predicting tsunami damage much harder and a problem requiring rigorous analysis for multiple factors and their interaction.
In the meantime, there is much that can be done to limit the loss of life in future tsunami, in particular, early warning systems need to be installed, the population must be educated to recognise the signs of an imminent tsunami and evacuation plans need to put in place and practised. All these preparations are current in Japan, and should serve as an example to the rest of the world.
Their research report Roles of coastal bio-shields and their putative role in protecting coasts from large weather related disturbance events is soon to be published by the United Nations Environment Program.
Japan-Mekong exchange year to be launched in Myanmar
http://news.xinhuanet.com/english/2008-12/25/content_10559476.htm
YANGON, Dec. 25 (Xinhua) -- A Japan-Mekong exchange year will be launched in Myanmar's former capital Yangon early next February to showcase the cooperation and friendship between Japan and Myanmar, one of the Mekong River valley countries, the local Biweekly Eleven News reported Thursday.
The opening ceremony on Feb. 6, 2009 will be attached with joint performance by Japanese and Myanmar artists to mark the event. The performance will involve that of Myanmar traditional musician U Hlaing Win Maung, the Japanese embassy was quoted as saying.
In previous cultural exchange programs between Myanmar and Japan, Japanese film shows were held annually in Yangon and Mandalay in the past few years, introducing Japanese movies to Myanmar audiences which featured comedy, cartoon, romance, samuraiand detective.
The two countries also launched joint shooting of movie with the movie "Thway" (blood) representing as a joint production.
The film, which marked a symbol of Japan-Myanmar friendship andcontributes to the promotion of the two countries' friendly relations, was created by Japanese producer and director Koji Chino and was based on a famous Myanmar novel of the same title written by Journal Gyaw Ma Ma Lay.
The movie involved both Myanmar and Japanese actors and actress.
Meanwhile, the Greater Mekong Subregion (GMS)-Economic Cooperation has worked out a plan for development of tourism as part of its economic cooperation in the subregion, designating the year 2009-2010 as GMS tourism year.
The Mekong River is shared by six countries -- China, Cambodia, Laos, Myanmar, Thailand and Vietnam.
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