Asia eyes mid-2009 launch for $80 billion emergency reserve

East Asian nations Friday committed to form an US$80 billion multilateral swap scheme by mid-2009 to shield the region from financial turmoil and agreed to aggressively pursue a regional surveillance agency.
Thirteen Asian countries, comprising the so-called ASEAN+3, also agreed to develop Asian bond markets by boosting a regional bond settlement mechanism as the region has been seeking to reduce dependence on western buyers of their debt.
“Leaders at the meeting agreed to hold a gathering of finance ministers and central bank governors before the December ASEAN+3 meeting to draw up detailed measures for financial cooperation within the region,” South Korea’s presidential office said in a statement.
“They also shared the view of expanding the existing bilateral currency swaps to prepare against various financial crises, and the need for nursing Asian bonds markets.”
Leaders of the Association of Southeast Asian Nations (ASEAN), grouping 10 Southeast Asian nations, held a breakfast meeting with China, Japan and South Korea just ahead of the October 24-25 Asia-Europe Meeting in Beijing.
A Japanese government official said separately that the leaders largely agreed that Asian economies are coping relatively well with the global financial crisis.
“But they said since the global financial turmoil could continue, they will need to continue monitoring closely whether there will be a further impact on Asia,” the official added.
At the informal gathering, called ad-hoc because of growing concerns about the worldwide financial crisis, Asian leaders agreed to speed up cooperation to form the widened pooling scheme by the first half of next year, South Korea said.
The 13 nations agreed in May to expand the reserve pooling scheme, taking them a step closer to creating an Asian monetary fund, which has gained support in the region as the financial sector turmoil dampens growth.
The multilateral scheme will replace the existing arrangement of mainly bilateral currency swaps, called the Chiang Mai Initiative.
The agreement will give participating nations access to a foreign exchange reserve pool of at least $80 billion in the event of a financial emergency.
South Korea, China and Japan have agreed to provide 80 percent of the money, with ASEAN pooling the remainder. They are discussing each country’s contribution ratio and how to manage it.
ASEAN groups Cambodia, Malaysia, Indonesia, Singapore, Vietnam, the Philippines, Laos, Thailand, Myanmar and Brunei.
Source: Reuters

Indonesia to hold talks with Malaysia, Vietnam on commodities

Indonesia, the world’s biggest producer of palm oil and Asia’s second-largest for coffee, plans to hold more talks with Malaysia and Vietnam in a bid to stem price declines.
“We have discussed this on a bilateral basis,” Indonesian Agriculture Minister Anton Apriyantono told reporters on Sunday, referring to measures to support commodity prices.
Robusta coffee is down 41 percent from its US$2,815 a ton peak on March 6. Vietnam is the world’s largest grower of robusta coffee.
Palm oil, used for cooking and as an alternative fuel, plunged 69 percent from its record 4,486 ringgit ($1,253) a ton on March 4 as crude oil slumped and on concern the world was heading toward recession, which would reduce demand for raw materials.
Malaysia is the world’s second-biggest producer of palm oil.
Apriyantono met counterparts from members of Association of Southeast Asian Nations (ASEAN) in Hanoi last week. He invited Malaysian Plantation Industries and Commodities Minister Peter Chin Fah Kui to Jakarta “to solve the problems of palm oil and rubber,” he said.
Indonesia and Malaysia are promoting biofuel use to support palm oil prices.
Source: Bloomberg

Working women hold key to world prosperity

A pitbull with lipstick may not be every woman's idea of a role model.
Indeed, many liberal women hate everything arch-Republican U.S. vice presidential candidate and self-proclaimed hockey mom Sarah Palin stands for, even as conservatives are enamored by her down-to-earth leadership style and jokes such as one comparing hockey moms to attack dogs with lipstick.
But like her or loathe her, women around the globe are fascinated by Palin's juggling act as an aspiring Vice President, governor of Alaska and mother of five.
Combining a career with motherhood is a battle familiar to millions of working women who are often accused of failing to look after their children properly.
"It's seriously stressful having a family and holding down a career. I often feel guilty," said Gill Thomas, a 43-year-old lawyer with a 2-year-old daughter and 5-year-old son.
"Childcare is alright until the kids are sick. That's when it's a nightmare and I do feel as if colleagues, family and friends sometimes disapprove of my lifestyle."
Getting women to have children and work poses a conundrum for governments who have begun to realize that women hold the answer to the dual challenges of achieving long-term economic growth and boosting sagging birth rates.
Closing the gap between male and female employment would dramatically boost the economies of OECD countries -- by up to 13 percent in the euro zone and even more in Japan, say Goldman Sachs economists.
"This is an issue that is agitating policymakers across the world," said Alison Maitland, a UK-based academic and writer specializing in women in business.
"There is a huge gap between women's talents and skills and the use of that potential. It requires a concerted effort by governments and the private sector in collaboration," she said.
What's more, nations with a high proportion of women in work, such as the Nordic States and France, tend to have high birth rates. Meanwhile, countries with fewer working women, such as Italy and Japan, often have lower birth rates.
"RAVEN MOTHERS"
On the face of it, Germany, which three years ago elected Angela Merkel as its first female chancellor, is a positive example, as it has a relatively high share of women in the labor force compared to other OECD nations.
But a deeper look tells a different story.
Not only do 20 percent of women aged 25 to 54 work less than 20 hours a week but the maternal employment rate is below the OECD average, says Frankfurt-based Deutsche Bank analyst Claire Schaffnit-Chatterjee.
Merkel, who has no children, exemplifies this trend which may help explain why women account for only a quarter of Germany's senior managers and a third of its federal lawmakers.
On top of that, Germany's birth rate is one of the lowest in the EU.
The government, alarmed at the demographics which mean a shrinking labor force and growing dependence on immigrant workers plus ballooning pension and healthcare costs, now offers financial incentives for women to have more babies.
But changing entrenched attitudes poses perhaps an even bigger challenge to the government.
Until 1957, married German women needed their husband's permission to take paid employment, and working mothers are often derided as "Rabenmuetter" or "raven mothers," suggesting they push their young out of the nest too early.
"It is deeply engrained in German culture that the mother should mainly look after childcare," said Deutsche Bank analyst Schaffnit-Chatterjee, who had to delay returning to work due to a lack of appropriate childcare.
Women who plan to return to their careers when their children start school are stymied by a school system that makes it hard for mothers to hold down full-time jobs.
"Mothers get a real shock when children start school as they mainly finish in time for lunch at home," Schaffnit-Chatterjee added, noting also that schools sometimes send children home if their teacher is sick, assuming mothers are on hand.
The old adage about the role of women: "Children, Church, Kitchen" still rings true for a large number of Germans, men and women alike.
In the last few years, Germany has raised the number of nursery places on offer and provided higher child benefits, but the steps have mainly been aimed at getting women to have more babies rather than encouraging mothers back to work.
Experts say this is the wrong approach and governments need a comprehensive range of policies that do both.
SUBSIDISED CHILDREARING
"Governments throwing money at subsidized childrearing does not work," said Maitland, noting that Japan had also tried that path and failed.
"It's not what women want to do. These governments just don't get that women want to work."
Forced to choose, women in developed countries tend to opt for work over children, say economists, and those who do not work have less money, itself an obstacle to having a family.
"I enjoy my job, which involves a lot of travel, and although there hasn't been a conscious choice, I have focused on work over the years and now I doubt I'll have children," said Lucy Ward, 39, who works at a marketing company in London.
Andrea Bassanini, senior economist at the OECD in Paris, says, however, that governments can change attitudes.
"Policy can certainly affect culture," he says, citing Nordic countries, which have the highest proportions of working women and have recently stabilized falling birth rates.
"These countries decided their tax system would work better with two earners in a family rather than with one breadwinner and they developed a system that put women into work," he said.
"At the start there wasn't total support for the system, now the changes are deeply entrenched."
The culture has changed so much that Iceland has just appointed women to head two of its main banks after the collapse of its male-dominated financial system.
First, governments have to make sure good and affordable childcare is available as without that, few mothers will even consider leaving their offspring to go to work.
Tax is also important. Bassanini says countries need at least a tax-neutral system for second earners. Some experts even advocate a gender-based system to encourage women to work more.
FRENCH BABIES
It is not only the Nordic countries that are a model.
France, with a relatively high birth rate, has family policies that are conducive to getting women working, including generous parental allowances and good, state-subsidized childcare.
Experts say that system could be a model for the 27-nation EU which is trying to extend fully paid maternity leave and protect jobs for women who take leave.
More women in the prime of their life now work in France than in Germany, the United States and Britain, says the OECD.
But women who successfully juggle work and children still contend with criticism for, on the one hand, devoting too little time to their children, and on the other, not taking their jobs seriously enough when they stay home to look after sick children.
Even Palin faced stinging criticism for running for the vice presidency when she has a baby with Down's syndrome.
"When I talk about something my kids have got up to, my male boss crack jokes about how I'd be better off at home. It's offputting," said a female professional in Germany who requested anonymity.
Nevertheless, campaigners are mostly heartened by developments in the last few decades and by the wealth of role models young women now have -- from Hillary Clinton and Sarah Palin in the United States to Germany's Merkel, former French presidential candidate Segolene Royal and French Justice Minister Rachida Dati, who is a pregnant single-mother-to-be.
"Whatever kind of models they are, the main thing is that they are there and our daughters are seeing them," said Avivah Wittenberg-Cox, head of gender consultants 20-First.
"These days, girls have models to choose from -- a few years ago we had (former British Prime Minister) Margaret Thatcher -- but no young women wanted to emulate her."
Source: Reuters

Global rice demand tipped to rise

Demand for rice will increase because the economic slowdown will force poor people to eat more in place of meat, said Robert Zeigler, director-general of the International Rice Research Institute.
Increasing consumption will keep pushing up prices, he said in an interview with Bloomberg Television Tuesday.
Rice, the staple food for three billion people, has climbed 29 percent in the past year to US$15.38 per 100 pounds. The price reached a record $25.07 on April 24 as Vietnam, India and Egypt curbed exports to protect domestic stockpiles and cool prices. The gains contributed to food riots around the globe, from Haiti to Egypt.
“When the global economy is in recession, buyers get more frugal,” said Kiattisak Kanlayasirivat, Managing Director of I.C.C. Trading (Thailand) Ltd., which sells rice to Africa. “They will likely turn to rice as it’s cheaper than meat.”
The credit crunch is compounding a profit squeeze for farmers that may curb global harvests and worsen a food crisis for developing countries, analysts say.
“The price has been rising steadily” since 2000 because “we’ve failed to invest,” Zeigler said. “The financial crisis suggests we may not turn those investments around and that leads me to the inescapable conclusion that upward pressure” on prices will continue, he said.
More hunger
The number of hungry around the world is at risk of increasing as the lending slump cuts investment in agriculture and crops, according to Abdolreza Abbassian, secretary of the Intergovernmental Group on Grains at the United Nations Food and Agriculture Organization in Rome.
“If fertilizer remains expensive and importers are unable to get credit to buy it, that has an immediate impact on production,” Zeigler said. “If credit is not available for infrastructure, such as maintaining irrigation, the long-term impact is very negative.”
Thailand Wednesday cut the benchmark export price of white rice by 5.9 percent to the lowest since March 26, according to Sompetch Anuchon, an official with the Thai Rice Exporters Association.
The price of 100 percent grade B rice was set at $625 a ton, compared with $664 last week, Sompetch said. The rice fetched an average $336 a ton in October last year.
Still, supplies have been increasing in producing countries as farmers plant more in response to rising prices.
Thai sale
Thailand, the world’s biggest exporter, may sell rice from state reserves at a loss because it must empty warehouses before the next crop arrives, Commerce Minister Chaiya Sasomsup told reporters last Friday. The country began stockpiling rice earlier this year to secure supplies as prices reached records.
Vietnam, the world’s second-largest shipper of rice, has proposed slashing export duties to zero, Ha Noi Moi newspaper said on October 21, citing an unidentified official. The country imposed a tax on exports in July on concern there would be a shortage.
Indonesia may export as much as 2 million tons of rice in 2009 as production increases because of better seeds, Agriculture Minister Anton Apriyantono said in an interview on October 13. That would be the most in at least 50 years, according to US Department of Agriculture figures.
Source: Bloomberg

Palin remains focused on November 4: report

Republican presidential candidate John McCain may be down in the polls, but running mate Sarah Palin remains focused on winning the White House, ABC News said Wednesday.
Asked about 2012, whether she was discouraged by daily campaign attacks and whether she would return home to Alaska, the Republican vice presidential nominee said she was focused on defeating Democrat Barack Obama next week.
"I think that, if I were to give up and wave a white flag of surrender against some of the political shots that we've taken ... I'm not doing this for naught," Palin told ABC News in a taped interview airing on Thursday.
A campaign spokesperson said Palin was talking about being focused on winning the White House this year and is not going to quit despite her critics.
In its initial report on the interview, ABC said Palin was looking ahead to the 2012 election cycle, regardless of the outcome of the November 4 vote.
ABC issued a revised release after the McCain campaign clarified Palin's comment.
With less than a week before Election Day, Palin told ABC she believes in the current Republican presidential ticket and that she thinks "it's going to go our way on Tuesday, November 4."
"I truly believe that the wisdom of the people will be revealed on that day," she said.
Palin has energized the Republican base of supporters. But she has come under withering criticism on a variety of issues, including whether she is qualified to become vice president.
Source: Reuters

Obama keeps five-point lead on McCain

Democrat Barack Obama holds a five-point lead over Republican John McCain, with little immediate indication their final public debate did much to sway the presidential race, a Reuters/C-SPAN/ZOGBY poll showed Friday.
Obama's edge over McCain held steady at 49 percent to 44 percent among likely U.S. voters in the four-day tracking poll, unchanged from results before the two men met on Wednesday for their third and last debate before the November 4 election.
The poll of 1,210 likely voters had a margin of error of 2.9 percentage points.
Pollster John Zogby said Friday's results -- in which the most recent day's results are added and the oldest day's results are dropped in an effort to measure changing momentum -- may not reflect the full impact of the debate.
"Only one-quarter of this sample is post-debate, so we'll have to wait a few more days to see," he said. "We'll have to look tomorrow to see if there was any McCain boost at all."
Quick polls taken after Wednesday's debate judged Obama the victor, joining a string of surveys that show him ahead both in national polls and in most of the battleground states where the presidential election will be decided.
Obama, 47, has focused on the economy while on the campaign trail, appealing to voters buffeted by the global credit crisis and wild stock market swings on Wall Street.
McCain, 72, has sought to deliver his own economic message, along with aggressive attacks on Obama, but has failed to gain traction among crucial independent voters.
Obama held a 19-point lead in this group on Friday, up 5 points from Thursday's figures.
"It would seem the independents are solidifying around Obama, which would be important," Zogby said.
Other national polls have given Obama a double-digit overall lead, although most have him in a range of 2 to 9 points ahead.
Both candidates continue to do well with their core supporters, with Obama winning nine of every 10 black voters and a holding a 10-point lead among women voters.
McCain held a narrow 1-point lead among male voters and a larger 12-point lead among whites.
Independent Ralph Nader drew 2 percent support in the poll, while Libertarian Bob Barr got 1 percent, both unchanged from Thursday.
The U.S. president is determined not by the most votes nationally but by a majority of the Electoral College, which has 538 members allotted to all 50 states and the District of Columbia in proportion to their representation in Congress.
Source: Reuters

Buffett's 'buy now' call gets lukewarm reception

Warren Buffett tried to persuade demoralized investors the U.S. stock market is not falling off a cliff. Not everyone was immediately convinced.
The second-richest American and perhaps the world's most revered investor, says he is buying U.S. stocks for his personal account.
"A simple rule dictates my buying: Be fearful when others are greedy and be greedy when others are fearful," Buffett, 78, said in an opinion piece published Friday in The New York Times. "Most certainly, fear is now widespread."
As usual, he did not identify the stocks he is buying.
The piece -- titled "Buy American. I Am" -- called for confidence in U.S. business, something in short supply after the credit crisis spiraled into something resembling a market crash. Buffett has been relatively unscathed by the turmoil.
His buying excludes his stake in his insurance and investment company Berkshire Hathaway Inc (BRKa.N)(BRKb.N), which is committed to philanthropies and constitutes the bulk of his estimated $50 billion net worth.
He said if equities stay cheap, his non-Berkshire net worth will soon be 100 percent in U.S. stocks from 100 percent in government bonds.
In better times, such a clarion call from Buffett -- amplified Friday by repeated commentary on CNBC -- might spark a big stock market rally. Yet stocks ended another volatile session lower on Friday, after fresh economic data elevated worries about a potentially deep recession.
Buffett said he is not calling a market bottom. He may have company, including prominent investors such as GMO's Jeremy Grantham and BlackRock Inc's (BLK.N) Bob Doll who are betting equities have fallen below their intrinsic values.
HUGE STATEMENT
Yet equity investors appear resistant to efforts to unlock credit markets and shore up economies, which if they work could help extract stocks from their abyss.
Almost daily reassurances from President George W. Bush and Treasury Secretary Henry Paulson often seem to fall on deaf ears. A reworking of a $700 billion emergency U.S. rescue failed to soothe frazzled nerves. The Wall Street Journal said even prominent hedge fund managers are hoarding cash.
Ordinary Americans are worried, too. U.S. consumer confidence in October suffered its steepest monthly drop ever, the Reuters/University of Michigan Surveys of Consumers released on Friday shows.
The longer-term impact of Buffett's new approach to investing for himself remains to be seen.
"It is a huge statement. He does not come out and make statements of this kind very often," said James Armstrong, president of Henry H. Armstrong Associates in Pittsburgh, which invests one-fifth of its assets in Berkshire.
"Stock market volatility, demonstrated by lemming-like behavior of investors who drive the Dow Jones average down 700 one day and up 700 some other day, is patently stupid," he said. "If you have a time horizon measured in years rather than hours, you will do very well with U.S. equity investments."
ATYPICAL DOWNTURN
Buffett said stocks should turn higher before sentiment or the economy do. That is what happened in the summers of 1932 during the Great Depression and 1982 during a deep recession.
Like virtually all investors, Buffett said he cannot forecast short-term stock movements. But he said equities will probably substantially outperform cash in the next decade.
Still, going 100 percent into stocks is not wise for a typical 78-year-old, especially one who depends on investment income for living expenses. Buffett is, of course, not the typical 78-year-old and lives more than comfortably.
Even Berkshire's own equity portfolio is no model of diversity. About 42 percent was tied up as of June 30 in just four stocks: American Express Co (AXP.N), Coca-Cola Co (KO.N), Procter & Gamble Co (PG.N) and Wells Fargo & Co (WFC.N).
And stocks do not always go up over extended periods. Bearish investors might point to the 1929-1954 period, when U.S. stocks essentially gained nothing.
"His position is probably the opposite of what someone close to his age should be doing: keep more of their money in Treasuries," said Charles Geisst, a finance professor at Manhattan College and the author of "Wall Street: A History."
"I understand the sentiment, but this situation is unlike anything we've seen since 1932," he added. "In downturns such as 1987 and early this decade, we never had a real clear view of what caused markets to go down. In this case, we have much too clear a view. This is the first time we've seen systemic problems affect the markets since the Great Depression."
OUT OF STEP?
Buffett often appears out of step with the market.
For example, at the height of the technology bubble, Berkshire shares fell 20 percent in 1999, while the Nasdaq (.IXIC) rose 86 percent. Berkshire's book value per share barely budged, while the Standard & Poor's 500 index (.SPX) rose 21 percent. In his annual letter to Berkshire shareholders, Buffett gave himself a "D" for capital allocation.
In moving to stocks, Buffett is aligning his own holdings with some of the moves he has already made at Berkshire.
The Omaha, Nebraska-based company has derivative contracts that require payouts only if the S&P 500 is lower more than a decade from now than when the contracts were written.
In the last month, Berkshire invested a total of $8 billion in General Electric Co (GE.N) and Goldman Sachs Group Inc (GS.N) preferred stock, all with a 10 percent dividend, and got warrants to buy an equal amount of common stock at a discount. Given the attractive terms, some saw these as opportunistic investments rather than a signal of a market bottom.
Berkshire has also made several multibillion dollar commitments this year for acquisitions and corporate buyouts.
Geisst said many investors have much shorter time horizons than they once did and expect bad markets to be followed by stronger ones very quickly. That may not happen this time, given the potential for a long economic recession, he said.
But Buffett said buying stocks now is better than trying to time markets and guess when a turnaround will happen.
Referring to arguably the greatest hockey player ever, he wrote: "In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: 'I skate to where the puck is going to be, not to where it has been.'"
Source: Reuters