Lending to businesses still weak in Europe

FRANKFURT, Germany (AP) — Bank loans to companies fell again in Europe, another sign that the economy remains slack in the 17 European Union countries that use the euro.
The European Central Bank said Thursday that loans to non-financial corporations fell by 1.4 percent in November from the year before.
It's a sign that businesses remain reluctant to take on risk and borrow, despite the ECB's record low benchmark interest rate of 0.75 percent. The ECB expects the eurozone economy to shrink 0.3 percent in 2013 and only start to recover in the later part of the year.
Howard Archer, an analyst at IHS Global Insight, said the figures indicate "households and firms are reluctant to take on new debt amid weak economic activity levels and still appreciable uncertainty regarding the economic outlook."

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German jobless rate up to 6.7 percent

Germany's unemployment rate crept up to 6.7 percent in December due to seasonal factors and a more sluggish economy, but the labor market remained robust and the average number of people out of work last year was the lowest in more than two decades.
The unadjusted jobless rate rose from 6.5 percent in November, the Federal Labor Agency said Thursday. Some 2.84 million people were registered unemployed in Germany, Europe's biggest economy — 80,000 more than the previous month and 60,000 higher than a year earlier.
Germany's economy has enjoyed robust growth that kept down unemployment even as many debt-troubled European partners have seen output shrink and joblessness soar — to about 25 percent in the cases of Spain and Greece.
Still, the economy saw slower growth in 2012 than in previous years. Official growth figures for 2012 are due on Jan. 15; the government has forecast growth of 0.8 percent.
Excluding seasonal factors such as the Christmas holidays, Germany's unemployment rate was static at 6.9 percent in December, while the number of jobless was a modest 3,000 higher than the previous month.
Germany's labor market remains healthier than that of most other European countries, but "ramifications of the eurozone debt crisis ... have at least halted any further improvement for the time being," said Timo Klein, an economist at IHS Global Insight in Frankfurt.
Still, he noted that the upturn in unemployment figures "remains extremely subdued" and in fact slowed in the final months of 2012. German business confidence has rebounded lately, and Klein said he doesn't expect "any major deterioration with large increases in joblessness during the coming months."
The labor agency said that the number of people out of work averaged just under 2.9 million last year — 79,000 lower than in 2011 and the lowest figure since 1991, shortly after German reunification. The average unadjusted unemployment rate was 6.8 percent, down from 7.1 percent the previous year.

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Japan's finance minister in Myanmar with development pledges

NAYPYITAW, Myanmar (Reuters) - Japan's new government confirmed its support for the emerging democracy in Myanmar on Thursday when Finance Minister Taro Aso visited the country to reaffirm Japan's intention to cancel debt and help develop a big industrial zone.
Myanmar has implemented rapid economic and political reforms since President Thein Sein's quasi-civilian government took over from a long-ruling military junta in March 2011 and Japan has moved quickly to cement business ties.
Aso, also deputy prime minister, had already arranged the visit, prior to his ministerial appointment after an election last month, in his capacity as a senior member of the Japan-Myanmar Association, a lobby group set up to advance Japanese business interests in the Southeast Asian country.
"Following the change of government in Japan, just like the previous government, we want to maintain a good relationship with Myanmar," Aso told reporters after meeting the president at his palace in the new capital, Naypyitaw.
Senior members of the association with established ties to the former junta have been central to securing a debt waiver and fresh loans for the Thilawa industrial zone.
Thein Sein told Aso his government was delighted a "long-standing and sincere friend of Myanmar" has taken key posts in the cabinet.
Aso reaffirmed Japan's intention to waive part of the 500 billion yen ($5.74 billion) Myanmar owes it in debt.
About 300 billion yen would be waived in two stages in 2013 while a consortium of private Japanese banks led by Mitsubishi UFJ Financial Group was working on a bridging loan for the remaining 200 billion, sources familiar with the matter said.
On top of these pledges, Japan's government-linked Bank for International Cooperation will provide a $900 million bridge loan to clear Myanmar's debt arrears with the World Bank and the Asian Development Bank in January, allowing them to restart lending.
Myanmar owes nearly $400 million to the Washington-based World Bank and almost $500 million to the Manila-based ADB.
STRATEGIC INVESTMENT
Japan is Myanmar's largest creditor and the arrears of 300 billion yen had to be cleared before a fresh 50 billion yen loan could be given to develop the planned 2,400-hectare (5,930-acre) Thilawa special economic zone, renovate the country's ailing power plants and develop its regions.
With a land mass as large as Britain and France combined, Myanmar lies in a strategic location, sharing borders with 40 percent of the world's population in India, China, Bangladesh and Thailand.
Thilawa has grown into a flagship project for both Japan and Myanmar and could become a magnet for Japanese manufacturers that have started rethinking investment plans in China after a flare-up in a territorial dispute between Tokyo and Beijing.
A chunk of the 50 billion yen loan, which Japan hopes to implement by the end of March, is likely to mark the first tranche of its lending for infrastructure in Thilawa, which is to be developed by Japanese construction companies.
Over several years Tokyo's lending may add up to $12.6 billion, according to officials familiar with the project.
Mitsubishi Corp., Marubeni Corp. and Sumitomo Corp. form the Japanese side of the joint venture developing the industrial park. The plan is to build the first 400 hectares of the park by 2015 and start luring Japanese and global manufacturers.
Aso will visit Thilawa on Friday.
This is the first overseas trip by a member of the Japanese government that took office last month. Prime Minister Shinzo Abe plans to visit Washington around the end of January. ($1 = 87.1700 yen)

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Uganda holds key rate with eye on growth, inflation

KAMPALA (Reuters) - Uganda's central bank held interest rates on Thursday, treading a path between managing inflation and supporting an economic upturn it said would likely lead it to cut borrowing costs in the coming year.
With the country's currency under pressure, traders and analysts had mostly expected the Central Bank of Uganda to leave the key lending rate at 12 percent - ending a run of growth-boosting cuts that began last June when the base rate was 21 percent.
The bank said leaving rates unchanged would allow it to encourage economic growth while keeping inflation - which ticked up in December - around its medium-term target of 5 percent.
The bank also said the economy had grown faster than projected since the first quarter of 2012.
The Ugandan shilling weakened slightly after the rate announcement, falling 0.1 percent to 2697/2707 per dollar, a day after the central bank intervened to prop it up after it fell to a five-week low against the dollar.
Annual inflation rose last month to 5.5 percent from 4.9 percent in November, which the bank said was due to seasonal demand.
The bank's policy stance was "accommodative and supportive of economic growth as well as anchoring inflation expectations around the medium-term target," its acting deputy governor Justine Bagyenda told a news conference.
It had cut rates by 50 basis points in early December, citing sluggish economic growth.
Bagyenda said on Thursday that annualised economic growth in the last three quarters of 2012 had, at 5.2 percent, been "much higher than previously projected".
However, private sector credit growth remained subdued partly on account of the high lending rates on shilling loans, he said.
With rates of economic and credit growth likely to pick up later in 2013, "I expect a further reduction in lending rates," he added.
Analysts also saw room for further easing, and said the decision to hold rates this time was not surprising.
"The decision was in line with our expectations," said Mark Bohlund, a senior economist for IHS Global Insight.
"We still see potential for further monetary easing in the first half of 2013 as we are forecasting inflation to dip again amid sluggish domestic demand and limited pressure from food and energy prices."

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Botswana GDP growth at 1.1 pct q/q in Q3 2012

JOHANNESBURG (Reuters) - Botswana's economy grew by 1.1 percent quarter-on-quarter in the third quarter of 2012 after rising by a revised 0.3 percent in the second quarter, data from the Central Statistics Office showed on Thursday.
On a year-on-year basis growth was at 5.7 percent in the third quarter compared with a revised 8.5 percent in the previous quarter.

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Benazir Bhutto's son takes up the family trade in Pakistan

Five years after the assassination of Pakistan’s former Prime Minister Benazir Bhutto, her son Bilawal Bhutto Zardari made his first major speech today aimed at galvanizing supporters of the Bhutto family-led Pakistan Peoples Party.
The speech, delivered in the family’s hometown of Garhi Khuda Bux in Pakistan’s Sindh Province, was attended by thousands of party supporters gathered to mark the anniversary of Benazir Bhutto’s death. Days after her 2007 assassination, the then 19-year-old Bilawal was elected as the party’s chairperson, though his role has been largely symbolic until now.
As Mr. Bhutto Zardari takes a more active role in his party, it is a reminder that Pakistani politics have long been dominated by influential families and that one's position in government is often determined by family ties.
While many of the Pakistan Peoples Party's voters, particularly in rural areas, are happy that the party is led by Benazir's son, nepotism in politics and government has increasingly become a sore point for urban, middle class voters who are less supportive of the PPP. Of late, most political scandals in Pakistan have involved family members of leading politicians, including the Chief Justice's son, who is accused of taking money from a prominent businessman.
“If you look at any mainstream political party in Pakistan, it is seen as a family business at every level, passed down from father to son – and occasionally daughter – to grandson,” says Cyril Almeida, an assistant editor at Pakistan’s leading daily Dawn. “It is the nature of politics out here. Society puts a premium on personality rather than performance; and so last names matter.”
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The Pakistan Peoples Party was founded in 1967 by Zulfikar Ali Bhutto, a charismatic yet controversial leader, who was deposed in a military coup and executed on charges of abetting murder. After he was imprisoned, his widow Nusrat Bhutto led the party, followed by his daughter Benazir, who chaired the party until her death. Though grandson Bilawal was elected to lead the Pakistan Peoples Party, his father Asif Ali Zardari was also elected co-chairperson before he became president of Pakistan in 2008, and has largely run party affairs.
The trend of family-dominated politics is prevalent across the subcontinent.
In India, members of the Gandhi/Nehru dynasty have led the Congress Party and the country as prime ministers for decades. Sheikh Hasina, the twice-elected prime minister of Bangladesh, is the daughter of the country’s founder, and her leading rival Khaleda Zia is the widow of a former president. The other leading political party in Pakistan, the Pakistan Muslim League, features a number of members of the Sharif family in prominent positions, and many major politicians in Pakistan have a similarly strong lineage.
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Mr. Almeida points out that in the case of Sindh Province, where the Pakistan Peoples Party has long held sway, there is a “cult of personality and a client-patron relationship in politics,” and Bilawal leading the party was a “a connection to the original person who energized political support.” In some way, he says, the parties are just trying to capture that original energy the name still garners to affect political change.
In his speech, Bhutto Zardari did mention his bloodline, but also reaffirmed the party’s vision, including providing basic needs to every citizen and opposition to terrorist groups. He recalled the assassinations of prominent party leaders such as Punjab Governor Salmaan Taseer and Federal Minister for Minorities Affairs Shahbaz Bhatti, who were killed in 2011 for their opposition to misuse of the country’s controversial blasphemy laws.
Still, says journalist Sohail Warraich, the author of an extensive tome on the assassination of Benazir Bhutto and who was on stage as Bhutto Zardari spoke on Thursday, “You have to know how to handle people. Both Zulfikar Ali Bhutto and Benazir Bhutto made their way [in] politics” by proving they had what it took to govern, he says.
Mr. Warraich acknowledges there are many challenges ahead for the aspiring politician, despite his name and because of his name: He still has to answer for the PPP-led government’s failures in governance.
“Even abroad, you see the Kennedy family etc, people do have these feelings of attachment toward them [family names]. But the real test is in politics. Benazir, after 1988 [when she became prime minister], was assessed on how she conducted politics, not just because of Zulfikar Ali Bhutto,” he says. “Bilawal will also be tested on the same.

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India gang rape spurs national dialogue

The Indian government’s crackdown on the anti-rape protests that have continued for nearly two weeks in New Delhi has only aggravated public anger and concern about women’s safety.
The protests were sparked by the gang rape and brutal assault of a 23-year-old student on a bus in the elite South Delhi district on Dec. 16.
As the girl battles for her life in a Singapore hospital, Indians are debating how to make the country safer for women. Ten days after the incident, it dominates newspaper headlines and op-ed pages, pushing to the margins stories like the retirement of cricketer Sachin Tendulkar, the popular Indian sportsperson, highlighting just how much the case has affected people.
Sexual harassment is rampant in India, and the public has been largely apathetic to women’s plight, but many are hoping the attack could be a turning point in the way India treats women.
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Calls for capital punishment, including the chemical castration of rapists, have died down, with various women’s groups decrying them. Given that in 94 percent of rape cases the rapist is known to the victim, Nilanjana S. Roy, writing in the Hindu, she wonders if the protestors would be okay with death penalty for fathers, uncles, neighbors, and Indian security forces in conflict zones.
The Monitor reported that India is considering a fast-track court process to expedite rape cases and step up punishment for sexual violence on the heels of the bus rape incident.
Beyond the law, what needs to happen, writes Shilpa Phadke, author of a book on women’s safety in Mumbai, has to do with how Indians use their streets: “We are safer when there are more women (and more men) on the streets. When shops are open, when restaurants are open, when there are hawkers and yes, even sex workers on the street, the street is a safer space for us all.”
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The outrage that this case has spurred might finally bring about a cultural change in India, Stephanie Nolen of The Globe and Mail suggests in a report:
Women assaulted leaving bars or late at night or while wearing Western clothes have been chastised by police, judges and politicians for bringing their misfortune on themselves. This time, however, there is a current of defiance in the protests, noted Subhashini Ali of the All India Democratic Women’s Association. A young woman in central Delhi on Tuesday carried a sign saying, “Stop telling me how to dress, start telling your sons not to rape.”
But rape is still not seen as a men’s issue, Ms. Ali said. “I don’t think many people are asking that question yet [of how men are being brought up and how it shapes their attitude toward rape].”
“But that’s where we have to go.”
And that should start with using sexual education in schools as a means to counter systemic patriarchal attitudes, writes Ketaki Chowkhani in Kafila, a collaborative blog that I work with.
That need for an emphasis on social change rather than law enforcement was also highlighted by Praveen Swami in The Hindu newspaper. India could learn a lot from the United States, he writes, where the incidence of rapes have fallen:
“The decline in rape in the U.S. has mainly come about not because policing has become god-like in its deterrent value, but because of hard political and cultural battles to teach men that when a woman says no, she means no.”
Meanwhile, the crackdown on the protests in Delhi has drawn sharp reactions and much anger across the Internet. On Facebook, graphic designer Sangeeta Das narrated her experience of the protests on Dec. 23, republished on the Kafila blog:
“There were many volunteers distributing biscuits and water to every protestor. We were talking ... on how to tackle the violence on women and children starting from ourselves, our homes, and communities. We were simply talking ... when the police, hundreds of them ... charged at us from behind, without any warning.”
Meanwhile, the media have drawn the government’s ire. On Sunday, the same day one journalist was killed in Manipur when police opened fire on protestors, the government issued an advisory to news channels to show “maturity and responsibility” in their coverage of protests:
No programme should be carried in the cable service which is likely to encourage or incite violence or contains anything against maintenance of law and order or which promotes anti-national attitude.

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