* Business In Asia Today * FOCUS-Indonesia boosts food imports to feed hungry ---------------------- Business In Asia Today 08:26 a.m. Jul 31, 1998 Eastern Sydney, July 31 /PRNewsire/ -- The following summary of business in Asia was prepared by Asia Pulse, the real-time, Asia-based wire with exclusive news, market intelligence and business opportunities: COMMERCIAL BANK OF KOREA, HANIL BANK TO MERGE SEOUL - Commercial Bank of Korea (KSE:00030) and Hanil Bank (KSE:00130) have announced their merger to create a super bank with assets of 102.3 trillion won (US$85.25 billion). The new entity will initially be known as Commercial-Hanil Bank. The merger marks the first concluded by city banks since the government initiated the financial restructuring drive. KDD, SINGAPORE TELECOM CONSIDER ASIA-PACIFIC CONSORTIUM TOKYO - Kokusai Denshin Denwa Co (TSE:9431) and Singapore Telecom Ltd may set up a consortium to provide high-capacity communications networks in the Asia-Pacific region, KDD President Tadashi Nishimoto said. He said the two partners will then ask other major players in the region, including Hong Kong Telecom, a company in the Cable and Wireless Ltd. group, and Telstra Corp. of Australia to join the consortium. KDD and Singapore Telecom were core members in the World Partners global telecom consortium, which was terminated after British Telecommunications Plc and AT&T Corp. decided to join forces. MALAYSIA'S MMC TO STICK TO MINING, INFRASTRUCTURE SECTORS KUALA LUMPUR - Malaysia Mining Corporation (MMC) Bhd plans to stick to its core activities of mining and infrastructure development despite current economic uncertainties, group chief executive Ibrahim Menudin said. He said MMC made profits from the operations and had RM500 million (US$121 million) in the bank earning interest. MMC posted an operating profit of more than RM100 million (US$24.2 million) for the financial year ended Jan 31, 1998, up from RM91.9 million (US$22.3 million) profit in 1997. INDONESIA TO RECEIVE US$14.2 BLN FOREIGN AID IN FY1998-99 JAKARTA - Indonesia will receive foreign aid worth US$14.2 billion in the 1998/99 fiscal year, consisting of US$7.9 billion from the Consultative Group on Indonesia (CGI) and US$6.3 billion under the International Monetary Fund (IMF) scheme. "The assistance from the CGI will be disbursed in the current fiscal year and it is not a pledge," Industry and Trade Minister Rahardi Ramelan told newsmen after reporting the result of the CGI meeting in Paris on July 29-30 to President BJ Habibie Thursday evening. Among the lenders, the US will provide US$250 million, Germany US$300 million and the Islamic Development Bank (IDB) US$400 million. PHILIPPINES' CEBU MITSUMI TO EXPAND ELECTRONICS OUTPUT CEBU CITY - Cebu Mitsumi Inc, which exported US$53.78 million worth of products last year, has firmed up plans to expand production of electronic components at its facility in Davao City, the Board of Investments (BOI) said. Cebu Mitsumi Inc, one of the nation's top producers of electronic components, has opted to produce the basic raw materials locally instead of importing them, the BOI said. The company has spent P43.58 million (US$1 million) on new investments and P464.3 million (US$11.1 million) on a new plant to produce pressed and moulded parts of electronic components. CHINA'S NANNING CHEMICAL CO TO ISSUE FIRST CONVERTIBLE BONDS BEIJING - Nanning Chemical Co. Ltd in Guangxi Zhuang Autonomous Region will be the first company in China to issue convertible bonds worth 150 million yuan (US$18.1 million). The company will issue 1.5 million units of the bonds at a unit price of 100 yuan. Public offering is expected to begin in a few days. The bonds will be listed on the Shanghai Stock Exchange. The bond issue is expected to further expand the capital market, raise funds for cash-strapped Chinese enterprises, and facilitate the reform of state enterprise. CONSTRUCTION OF VIETNAM'S MY THUAN BRIDGE ON SCHEDULE HANOI - Construction of the 800-metre My Thuan bridge spanning the Mekong river on Highway 1A (southern section) has progressed on schedule. Baulderstone Hornibrook Engineering of Australia and the Transport Project Building Corporation 6 under the Ministry of Transport and Communications of Vietnam are building the bridge with non-refundable aid from the Australian government. The bridge is expected to open to traffic in June 2000. ISLAMIC BANK, KUWAIT TO PROVIDE AID TO PAKISTAN ISLAMABAD - The Jeddah-based Islamic Development Bank (IDB) has promised US$700 million in direct and indirect assistance to Pakistan while Kuwait will provide a US$250 million short term loan to the government. Commerce Minister Ishaq Dar said US$400 million of the aid from the IDB would be direct assistance, while another US$200 million would be in the form of guarantees for the delivery of palm oil from Malaysia, and another US$100 million would be for funding the sale of Pakistani rice to Indonesia. Finance Minister Sartaj Aziz said Pakistan will receive a US$250 million short-term loan from Kuwait on August 3 to help the country improve its weak foreign exchange reserves position. KOREA'S HANSOL TO SET UP JV PAPER CO IN HK WITH 2 PARTNERS SEOUL - South Korea's Hansol Paper Co said it has agreed with Canada's Abitibi Consolidated Co. and Norway's Norske Skog to set up a joint venture in Hong Kong. Under the deal, the Korean partner will sell its plant in Chonju, Korea, and a joint venture plant in Shanghai, China to the new firm. The Hong Kong company will wholly own the Chonju plant, with annual production capacity of 1.04 million tons, and hold a 53-percent stake in newsprint operations in the Shanghai plant. WORLD BANK TO PROVIDE US$130 MLN ASSISTANCE TO UTTAR PRADESH NEW DELHI - The World Bank is to provide assistance worth US$129.9 million for the northern Indian province of Uttar Pradesh diversified support programme (UPDASP). The project will help in increasing agriculture productivity in the state, promote private sector development and improve infrastructure, an official statement said. The project will also support diversification and intensification of agriculture by introducing new crops and better farming and animal husbandry practices. (C) Asia Pulse Pte Ltd. Each day Asia Pulse creates up to 250 items of news, business opportunities, expert commentary and industry profiles. Asia Pulse is a unique joint venture involving the resources of Asia's major news and information groups: (AAP) - AAP Information Services Pty Ltd (Australia) (ANTARA) - LKBN ANTARA (Indonesia) (Bernama) - Bernama (Malaysia) (Nikkei) - Nihon Keizai Shimbun Inc (Japan) (ONA) - Oman News Agency (Oman) (PNA) - Philippines News Agency (Philippines) (PPI) - Pakistan Press International (Pakistan) (PTI) - The Press Trust of India Ltd (India) (Yonhap) - Yonhap News Agency (Korea) (VNA) - Vietnam News Agency (Vietnam) (XIC) - Xinhua Information Centre (China) Copyright 1998, PR Newswire ------------------------- FOCUS-Indonesia boosts food imports to feed hungry 07:19 a.m. Jul 31, 1998 Eastern JAKARTA, July 31 (Reuters) - Crisis-racked Indonesia has been a hive of activity to ensure enough food supply to feed its hungry millions by boosting purchases of basic commodities, government officials said on Friday. ``The government has shown its commitment to ensure the food supply. The purchase of basic commodities through tenders is the proof,'' said an official with the state commodity agency Bulog. ``We want to guarantee that Indonesians have enough food to eat,'' the official said. A tumbling currency and a severe drought which trimmed output of important commodities have made life even harder for the country's increasingly impoverished people. The rupiah has dived about 80 percent against the dollar since July last year, triggering sharp rises in prices of essentials. Indonesia still imports commodities such as rice, sugar, soybean, corn and wheat, which are made more expensive by a falling rupiah. The rupiah stood around 2,400 per dollar when the currency crisis started. It was trading at 13,000/13,200 at 0745 GMT on Friday. Indonesia said this month that 95.8 million of its 200 million people would be living below the poverty line by the end of 1998. Indonesia on Thursday bought 745,000 tonnes of the grain from the United States, Canada and Australia for August, September and October shipments at between $129.24 and $171 per tonne, on a cost-and-freight (c-and-f) basis. The tender, conducted through Bulog, is the first under the new Habibie government's policy of transparency in acquiring commodities. Under the previous Suharto administration, Bulog bought food through private deals with foreign governments and companies in order not to trigger price rises. It also bought 30,000 tonnes of raw sugar at $218.45 and $253.70 per tonne for August and September deliveries, on a c-and-f basis, and 202,000 tonnes of white sugar for August, September and October shipments at $270.30, $272.35 and $270.60 a tonne, c-and-f. Indonesia plans to issue a tender for a further 500,000 tonnes of raw sugar on August 11. It also plans to buy 120,000 tonnes of U.S. soybeans by tender slated for Monday. This week, Vietnam approved a deal to sell 100,000 tonnes of rice to Indonesia on terms of one-year deferred payment and to donate another 10,000 tonnes. Indonesia is also seeking between 100,000 and 300,000 tonnes of 25 percent grade rice from Thailand under a government-to-government deal. Jakarta said this month it would import 3.1 million tonnes of rice, 1.3 million tonnes of sugar, 1.1 million tonnes of soybeans and 500,000 tonnes of corn in the current fiscal year to end-March. Bulog says it plans to import 4.25 million tonnes of wheat in 1998/99. In an effort to ensure domestic supply, Indonesia has also imposed a ban on the export of selected subsidised commodities and fuel, such as unhusked and milled rice, wheat flour, wheat soybeans, sugar and kerosene. It has also raised taxes on crude palm oil to slow down exports. International donors to Indonesia meeting in Paris on Thursday have pledged food aid to the country. The United States said it would donate up to 1.5 million tonnes of wheat over the next eight months and Japan announced a rice loan of 500,000 tonnes. U.S. Secretary of State Madeleine Albright on Thursday said 100 million Indonesians are living in poverty. She said food distribution is a great problem ``and we don't want unrest to come as a result of the lack of food.'' The International Monetary Fund, which has put together a bail-out package of more than $45 billion for Indonesia, had previously insisted that food subsidies be scrapped. But its latest accord with Indonesia, signed in June, said that subsidies could remain until the economy improved. A sudden removal of subsidies risks sparking unrest -- the Sumatran city of Medan was jolted by riots in early May after fuel subsidies were scrapped. -- Jakarta newsroom (6221) 384-6364; Fax (6221) 344-8404 -- Email: jakarta.newsroom+reuters.com ----------------------------------- AUG 1 1998 Obuchi vows to revive economy Japan's new Prime Minister says he is prepared to put his administration on the line to do this. His time frame: Within the next one to two years By KWAN WENG KIN JAPAN CORRESPONDENT TOKYO -- Japan's Prime Minister Keizo Obuchi yesterday promised to do his utmost to get the country's recession-mired economy back on its feet, as reports that a record 4.3 per cent of Japanese workers were unemployed cast a pall over his first full day in office. "I want to take the lead and do my best to discharge my responsibility as head of my 'economic reconstruction Cabinet'... so as to answer the people's expectations," he said at his maiden press conference. Revitalising the economy and clearing up a massive bad-loans problem in the financial sector are the two most immediate tasks facing his government. Referring to the tax-cut promise he made when running for the presidency of the ruling Liberal Democratic Party, he pledged to revise the tax structure to bring in permanent reductions worth over six trillion yen (S$72 billion). To offset the reductions by deficit-financing bonds, he said he intended to freeze the fiscal-structure reform law passed last year, which obliges the government to minimise the issuing of such bonds. Mr Obuchi described the next one or two years as "crucial" for the economy and said he was prepared to stake his administration's life on his pledge to achieve economic recovery within that time frame. He appeared slightly irritated only once during the hour-long conference, when he was forced to defend his choice of former Prime Minister Kiichi Miyazawa as Finance Minister. Critics have pointed to Mr Miyazawa's poor record of policy implementation, to his role in creating Japan's bubble economy and his failure to stem the bad-loans problem in the early 1990s. But Mr Obuchi gave him credit for drawing attention to the problem in 1992, saying no one had realised then just how serious it was. "I still think he is the best person for the job," he said. The Japanese leader said he would appoint former bureaucrat and finance expert Toyoo Gyohten as his adviser. A 10-man economic strategic council will also be set up next week. Underlining the dire straits of the Japanese economy, news came that Japan's unemployment rate had soared to a record 4.3 per cent in June, up 0.2 points over May. For the first time in over 22 years, over one million Japanese are receiving unemployment insurance. Meanwhile, the United States has warned Tokyo that it was running out of time to solve its pressing economic problems. US Treasury Secretary Robert Rubin said Tokyo needed to act promptly and effectively to deal with its debt-ridden banking sector. "The key now is for Japan to do what it needs to do and to do it quickly, because there is no time to be lost." US Secretary of State Madeleine Albright also kept up the pressure, saying Mr Obuchi had only a short time to take steps needed to reform the economy. "We are going to be watching (Tokyo) very carefully," she told Reuters in an interview. ------------------------------------- AUG 1 1998 Yangtze dykes crumble in rains TONGLING (Anhui province) -- Dykes along China's Yangtze River began collapsing yesterday as officials warned the month-long fight against the worst flooding in four decades had stretched defences to breaking point. "Water levels are still high, and people and materials have been stretched to breaking point after the month-long battle against the flood," Vice-Premier Wen Jiabao told troops and officials during a tour of flood defences. Meanwhile, "seemingly endless" rainfall had caused dykes in the central Chinese province of Hubei to crumble in hundreds of places, the official Xinhua news agency reported. Millions of peasants, officials and volunteers from the city were camping out in makeshift shacks on the dykes watching for leaks, as soldiers sandbagged potential weak spots frantically. In Jiujiang in eastern Jiangxi province, Saicheng Lake burst its banks despite the efforts of millions of people and engulfed a wide area of farmland, said an officer. The Yangtze River level had risen one cm in six hours to 22.97 m as at 2 pm yesterday as the third flood crest passed, but the dyke held despite leaks in various places. "We have people taking charge of every kilometre of the dyke, equipped with technical and engineering resources," the officer said. Heavy rains continued to drench cities further down the Yangtze in Hunan and Anhui provinces yesterday, causing flooding in city streets as drainage systems were overwhelmed. A Foreign Ministry officer in Hefei, the provincial capital of Anhui, said about 300,000 people were mobilised to defend dykes, mainly at Anqing, which would be hit first by the third flood crest. AFP ------------------------------- AUG 1 1998 Sole woman minister has $5 trillion portfolio TOKYO -- The youngest Cabinet member in Japanese history, 37-year-old Seiko Noda, is taking charge of Japan's staggering US$3 trillion (S$5.2 trillion) in post-office savings. Ms Noda, elected as the only woman in the Cabinet of new Prime Minister Keizo Obuchi, is the Posts and Telecommunications Minister who will supervise the country's largest institutional investor. She entered politics in 1987 as a member of the local Gifu prefecture in central Japan. Now in her second term in the House of Representatives after entering in 1993, Ms Noda's sudden rise to the Cabinet defied the Japanese convention that Lower House members serve five terms before gaining one of the top posts. Asked how she felt about being chosen as an "eye-catcher" for an unpopular government, she said: "Luckily, I have studied postal administration as vice-minister. "I want to become a minister of substance rather than an eye-catcher." She graduated from Sofia University in Tokyo and worked for four years in Tokyo's Imperial Hotel. AFP
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