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Construction in Gulf countries estimated at 1.8 trillion dollar

Fri, 25 Jul 2008 01:42:00 -0400

The value of construction projects in the oil-rich countries of the Gulf exceeds 1.8 trillion dollar, a study published in the latest issue of the Investors Magazine says.

Currently, the Gulf region is the most active in the world in terms of construction and development projects, prompted by an oil-fired boom.

Demand in all material used in construction is expected to reach unprecedented heights.

Some of the major projects being executed in the region include King Abdullah Economic City project in Saudi Arabia at a cost of USD 54 billion, Abdelaziz bin Mousaed Economic City, also in Saudi Arabia, at cost of USD 53 billion, and Khalifah City in Abu Dhabi at a cost of USD 40 billion.

A staggering 43 billion dollarwill be spent in airport construction by the Gulf countries, with the UAE alone set to spend 21 billion dollar.

Currently, at least a dozen airport runways are under construction or in planning in the Gulf region.

Today, the Gulf region’s aviation industry is the fastest growing in the world.

Such heavy funding on aviation infrastructure projects has been prompted by the projected increase in commercial air traffic and tourism to the region.

Sky-rocketing oil prices, a buoyant economy and a booming construction sector have sent tourism and business traveler figures soaring in the Gulf region, where each of the states is boosting its tourism and investment infrastructure. This in turn has called for the urgent expansion of the aviation infrastructure.

China''s growth rate may plunge to 9.9 per cent this year: ADB

Wed, 23 Jul 2008 11:29:00 -0400

China’s economic growth is likely to be 9.9 per cent this year and 9.7 per cent in 2009 due to a global economic slowdown, volatile financial markets and a sharp rise in food and energy prices, according to an Asian Development Bank (ADB) report.

According to the China Daily, the worse-than-expected US economy has fuelled global worries that the global economic slowdown may continue following revelations that government-sponsored Fannie Mae and Freddie Mac are in serious trouble. This will have an impact on the Chinese economy.

"The US economy is gloomier than people expected and it will take more time for it to recover," said Zhuang Jian, an economist from ADB in Beijing.

But, he said, even if China''s economic growth slowed to 9.9 per cent this year, it would be a "fairly good" rate.

The July issue of the Asia Economic Monitor (AEM) reported that “the region''s growth outlook is vulnerable to a higher-than-expected spike in inflation, protracted slowdown in the US and any further tremors in global financial markets.”

The AEM report also stated that the region''s policymakers were caught in the pincer grip of slowing growth and rising inflation, and that inflation will continue to pose a serious challenge to policymakers across the region, including China. (ANI)

Inflation hits poultry business in Ajmer

Wed, 23 Jul 2008 11:28:00 -0400

The poultry industry at Ajmer in Rajasthan is hit by inflation.

Due to the increasing cost of poultry feed, it has become very difficult for the poultry farmers to run their business as they are facing severe losses.

Poultry farmers complain that the feed cost has increased two to three times in the past three to four months while the price of eggs have not increased in that ratio.

According to farmers, production cost per egg in today''''s scenario amounts to one and a half rupee while it is sold for less than one rupee in the wholesale market.

"Inflation has affected our business in a big way. The poultry feed has become very costly. The price has increased two to three times. The price of poultry products has increased only by 25 per cent whereas the price of poultry feed has increased by 50 per cent. The poultry business is going through tough times," said Chandra Prakash, owner, Indra Poultry Farm.

Poultry farmers at Ajmer, one of the country''''s biggest egg production centre, have demanded that government should subsidize poultry feed.

In Ajmer, there are 20,000 families dependant on poultry farm business. On an average, Ajmer produces 21,0000 eggs per day from 24,0000 birds.

Ajmer till recently used to stand second in poultry business in northern India next to Barwala town in Punjab and as the number one egg production centre in northern India. But inflation has severely affected more than 300 poultry farms in the area.

According the National Egg Coordination Committee report, more than 150 poultry farms have been shutdown in Ajmer and thousands of people have become unemployed in the past one-year. (ANI)

UPA’s victory boosts Sensex

Wed, 23 Jul 2008 11:26:00 -0400

The United Progressive Alliance Government’s victory in yesterday’s confidence motion in the Lok Sabha gave a boost to today’s Sensex, which soared to 650 points in the early hours of the market opening.

Investors were enthusiastic on a buying spree across the board. Banking stocks were in demand followed by realty and power stocks.

At 10 am, the Bombay Stock Exchange''s Sensex soared to 14,739.79 level, up 4.5 per cent or 636 points from Tuesday''s close.

National Stock Exchange''s Nifty climbed 4.28 per cent or 181.35 points to 4421.45 level.

Midcaps and smallcaps also participated in the rally. BSE Midcap and Smallcap indices were up 3.5 per cent and 2.8 per cent respectively.

Biggest Sensex gainers were ICICI Bank (10.72 per cent), HDFC (9.98 per cent), Reliance Infrastructure (9.1 per cent), HDFC Bank (8.73 per cent), BHEL (8.17 per cent) and DLF (6.35 per cent).

Anagram Securities said, “Small and the mid-caps, which have been resting should do the best today as rising tide will raise all the stocks."

Taking a cue from the US market where stocks ended sharply higher overnight as oil prices slid further and a report from Deutsche Bank which suggested that financial companies are overcoming credit losses, the Indian investors participated in the market with a vengeance.

The S and P 500 gained 17 points, or 1.4 percent, to 1,277, the Dow Jones Industrial Average added 135.16 points, or 1.2 percent, to 11,602.5 and the Nasdaq Composite Index rose 24.43 points, or 1.1 percent, to 2,303.96.

US crude oil futures fell more than 3 dollars yesterday, ending at a six-week low as the threat of Tropical Storm Dolly to oil drillers and refineries in the Gulf of Mexico and Texas eased.

On the New York Mercantile Exchange, August crude expired and settled down 3.09 dollars, or 2.36 percent, at 127.95 dollars, the lowest since 127.79 dollars on June 5. (ANI)

Pak on the brink of massive economic crisis, says leading economic expert

Tue, 22 Jul 2008 03:26:00 -0400

A leading Pakistani economic expert has said that his country’s economy was today facing a serious risk of a full-fledged balance of payments crisis and domestic and external fiscal imbalances that had reached ‘alarming proportions’ and show no signs of self-correction or correction through policy action.

Dr Meekal Aziz Ahmed, who served senior advisor to the IMF Executive Director dealing with South Asia and as senior economist with the Pakistan Planning Commission, has written in a review that inflation had accelerated to levels “never seen before” in the country’s history and it was set to rise further, devastating the fixed income groups and the poor.

He castigated the present day PPP-led coalition government of announcing a people-oriented budget which, according to him, would further deepen the economic crisis.

“There has been criminal negligence behind the power crisis which has led to untold losses in domestic production and exports. Added to these disasters the country has a food crisis, an oil crisis, an emerging water crisis, not to mention a political crisis. There is agreement among economists, he notes, that Pakistan’s short-term prospects are grim. With economic policies likely to remain broadly unchanged, the economy will continue to slide downward until the country runs out of its foreign exchange reserves. At the point of reserve exhaustion, Pakistan will not be able to pay for its imports or meet its debt service obligations. The country, in short, will be bankrupt,” the Daily Times quoted Dr Ahmed as writing in a review of Pakistan economy.

Dr Ahmed pointed out that Pakistan’s present predicament did not happen overnight, but was the ‘direct consequence’ of the government’s “short-sighted and misguided policies” in the recent past, characterised by its single-minded obsession with producing high growth GDP rates, without consideration to the quality or sources of growth which have a crucial bearing on sustainability.

“Such an economic strategy, largely consumption driven and fuelled by cheap credit, rather than being driven by the more desirable route of investment and exports, was, sooner or later, bound to run into resource constraints. Eventually demand would outstrip available capacity, macroeconomic imbalances would widen and inflation will start to turn upwards. The view that today’s economic problems are the lagged consequence of past policies is neither conspiratorial nor does it amount to playing the blame game. There have been long lags between policy actions and policy outcomes and what the Pakistani economy is witnessing today are the lagged consequences of policy actions taken earlier,” he said and added the chickens have come home to roost.”

According to Dr Ahmed, the new government ‘missed an excellent opportunity’ to demonstrate that it was taking charge of the rapidly worsening economic situation by failing to devise a bold fiscal strategy aimed at reducing aggregate demand pressures and starting the process of restoring macroeconomic stability. “This could have been achieved through the implementation of a sound 2008-09 budget. A tight fiscal stance, desirable in its own right from a macroeconomic standpoint, would have reinforced the tight monetary policy stance,” wrote Dr Ahmed.

He said that the “awam dost” (people oriented) budget that followed showed that the PPP-led government was not aware of the crisis towards which the country was hurtling. “The budget was a major disappointment, being loose, abounding in exemptions and concessions and amnesty schemes, despite bitter experience from the past,” he said.

He said: “The poorly thought out plans to ‘help’ the poor are likely to be ill-targeted, costly, and only make matters worse. The tax revenue target is fanciful and completely out of line with what the Federal Board of Revenue (FBR) has been able to achieve in the past six decades.” (ANI)