D-8 Calls on World Nations to Grow More United against Economic

MARCH 9, 2015
D-8 Calls on World
Nations to Grow
More United against
Economic Inequality
TEHRAN (FNA) - SecretaryGeneral of the D-8 Organization for
Economic Cooperation Ali Mohammad Moussavi voiced regret over
worldwide economic inequality, and
called for international coordination and cooperation to eradicate
global economic injustice.
Addressing the sixth meeting of
the think-tanks of Muslim countries in Islamabad on Sunday,
Moussavi said injustice and extremism would increase the spread
of poverty across the world.
The official stressed the need
for entire world nations to expand
their cooperation to achieve sustainable economic equality.
He noted that the organization
spent the first decade of its life on
developing policies and enhancing coordination.
Moussavi stressed that eliminating deprivation and inequality
called for expanding free markets
and further deepening of economic relations.
The secretary-general said the
D-8 organization has been consistently working to exchange
the economies of its member
states into dynamic ones.
The D-8 is a group of developing countries with large Muslim
populations that have formed an
economic development alliance.
It consists of Bangladesh, Egypt,
Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey.
The objectives of D-8 Organization for Economic Cooperation are to improve member
states’ position in the global
economy, diversify and create
new opportunities in trade relations, enhance participation in
decision-making at international
level, and improve standards of
D-8 is a global arrangement
rather than a regional one, as the
composition of its members reflects.
China February Exports
Climbed Sharply as Imports
Extend Slump
BEIJING (Financial Times)—
China’s exports posted a strong
rebound in February after a weak
showing in January, as a steep
upturn in shipments to major
markets suggested a lift for Chinese factories.
Still, the data painted a mixed
picture for the world’s No. 2
economy, as imports extended
a slide amid slack Chinese demand and slowing economic
growth. Economists also cautioned that the data were likely
affected by the Lunar New Year
“These were good export numbers but we can’t say this is a
huge help to the economy,” said
Andrew Polk, economist at The
Conference Board. Referring to
China’s leaders, he said, “It’s
just one less fire they have to
Outbound shipments in U.S.
dollar terms surged 48.3% in
February from a year earlier, data
from the General Administration
of Customs showed Sunday. This
reversed January’s decline of
3.3% and far outpaced market expectations for a 13.3% rise.
That helped China chalk up
another record trade surplus of
$60.6 billion in February, outstripping market expectations and
topping the previous $60 billion
record posted in January. A growing trade surplus generally puts
pressure on China’s currency, the
yuan, to appreciate—though the
currency is also facing downward
pressure, such as capital leaving
the country as of the end of last
China’s economy grew 7.4%
last year, its weakest performance in 24 years. On Thursday,
the government set an even lower
growth target of about 7% for this
Policy makers have used an array of measures to boost growth,
offering tax breaks to businesses,
cutting red tape on project approvals and stepping up spending
on rail, subway and water projects.
The central bank last week cut
interest rates for the second time
in less than four months to give
the economy another shot in the
The trade figures did contain
some bright spots. In February
alone, exports to the European
Union were up 44%, a particularly welcome tally as the currency bloc has been recovering
at a relatively slow pace. Meanwhile, exports to the U.S. surged
48%, defying a labor dispute that
had disrupted shipments to West
Coast ports.
China’s Commerce Minister
Gao Hucheng told reporters Sat-
ahead of last year’s holiday, when
workers usually return home and
factories close for the most important holiday on the Chinese
Other analysts said that it was
too soon to say the country’s exporters were out of the woods.
“We still see strong headwinds
facing China’s exports this year,”
wrote ANZ economists Li-Gang
Liu and Hao Zhou in a note to
Meanwhile, imports slumped
20.5% from a year earlier in February, surpassing the 19.9% fall
in January and exceeding market
US Firms Signing Deals With Iran
TEHRAN (Press TV) - Reports
emerged on Saturday that said American enterprises have already started
taking initial steps to enter the Iranian
market in case the current nuclear
talks with the country succeed and
sanctions against it are lifted.
The Economist has quoted unnamed foreign businessmen as saying that American companies are
using local front men to seal deals
in Iran. Even in one instance, the
Economist has quoted an unnamed
middleman acting on behalf of an
American firm in the oil and banking business as saying that some
“prime contracts have already been
snapped up.”
“If there is a nuclear deal, you
will find overnight that the Ameri-
cans have signed one-year options
on the best projects,” he has been
quoted as saying.
“The Europeans will be queuing
up, but they will end up negotiating
with Exxon Mobil and Chevron,
just as happened in Libya.”
Such talk is particularly galling
to companies from Western countries that were reluctantly pulled
into applying sanctions, the Economist added. “We can’t help but
think we have been played by the
Americans,” it quoted an unnamed
European business leader as complaining.
Iran is currently negotiating with
the P5+1 group of countries – the
five permanent members of the
Security Council plus Germany –
over a final agreement on its nuclear energy program.
The agreement - that has a deadline of July 1 – could lead to the
lifting of sanctions that have been
imposed on Iran over its nuclear
energy activities.
The sanctions – that Tehran has
repeatedly criticized as illegal and
called for their immediate removal
– are believed to be the harshest in
modern history that have been put
into effect by the United States, the
European Union and the United
Nations. They comprise a series of
punitive measures against Iran that
include asset freezes, investment
bans, trade embargoes, and individual/companies blacklisting among
other measures.
to buy the debt that countries issue
to pay their bills. That pushes down
interest rates on bonds and other
financial assets, making it cheaper
for companies to borrow and invest,
increasing spending and employment.
To bring that about, the ECB will
snap up bonds issued by euro member states on secondary markets
used by private banks, investment
and pension funds, insurance companies and other major investors of
sovereign debt.
However, the bond purchasing
and risk exposure under the ECB’s
controversial plan has involved a
large dose of political massaging.
In an attempt to address stiff opposition to QE from Germany and
several other northern European nations, the bulk of the debt security
purchases under the scheme will be
made by national central banks.
And in another blow to the formerly-touted notion of debt mutualisation across the eurozone,
national central banks will almost
exclusively be buying bonds issued
by their own governments -- placating Germany, Europe’s paymaster,
who then will be off the hook to bail
out another country.
As the 18-month-long ECB program is poised to begin, some observers warn that US and British
successes with QE do not guarantee
it will be a sure-fire remedy for Europe.
“(We) doubt very much that the
new policy will prompt a meaningful economic recovery or counter
the threat of deflation as the ECB
hopes,” said a recent weekly report
by Capital Economics.
“There is still a large degree of
slack in the labour market despite
recent falls in the number of unemployed and the business surveys
remain consistent with only weak
growth, raising the chances of a
sustained bout of deflation.”
On the positive side, Neil MacKinnon of VTB Capital said that “the
credit cycle is turning up, admittedly from a low base, and the QE programme might have some effect in
promoting money supply growth.”
He added however that “the ECB
faces a number of economic challenges and monetary policy might
only be able to fix some of them.”
Draghi has dismissed those kinds
of doubts, and noted in his announcement on Thursday that
markets have already reacted with
some optimism to the approach of
QE in Europe.
“We have already seen a significant number of positive effects
from these monetary policy decisions,” he said.
Draghi has similarly waved off
concerns that private banks facing
increasingly stiff post-crisis capital
requirements may not want to part
with bonds the ECB will need in
huge quantities come Monday.
In reply, Draghi noted that those same
banks did not hesitate to sell bonds on
their books when the Fed and BoE
rolled out QE policies whose success
the ECB and entire eurozone now desperately need to replicate.
ECB to Launch Long-Awaited QE Gambit
BERLIN (AFP) - In what may be
its best and last chance to stimulate
growth and ward off deflation across
the eurozone, the European Central
Bank on Monday will launch its longawaited 1.1 trillion euro ($1.2 trillion) quantitative easing program.
The kickoff was announced
Thursday by ECB President Mario Draghi, who confirmed the
eurozone central bank will begin
its program of buying around 60
billion euros of public and private
bonds each month starting March 9
-- a policy it will apply until at least
September 2016.
The move comes as traditional
efforts to boost sluggish economic
activity in the 19-nation eurozone
have been exhausted through rate
cuts that have brought borrowing
costs to nearly zero.
The policy known as quantitative
easing or QE is also being adopted as the eurozone faces growing
threats of deflation, in which falling prices lead consumers to put off
purchases in expectation they will
drop further, sparking a damaging
cycle of falling production, job creation and prices.
The strategy behind the ECB’s
QE program is similar to that of
earlier schemes introduced by the
US Federal Reserve and the Bank
of England to pump money into the
economy with massive purchases
of government bonds, aiming to
foster easier credit and rising economic activity.
Under QE, a central bank creates
money electronically and uses it
China and Russia Set to Finalize gas Deal
LONDON (Financial Times) -
China’s trade surplus hit a fresh record high last month, as strong demand
from the US lifted exports while sharp drops in commodity prices shrunk
the value of imports.
urday he was confident the nation could reach its target of 6%
growth in combined exports and
imports this year. He also said
that based on preliminary indications, March figures should show
improvement over February.
Analysts cautioned, however,
that the February trade figures
were distorted by a number of
factors, including comparisons
with a weak tally a year ago as authorities cracked down on export
fraud, as well as the timing of
the Lunar New Year holiday. The
holiday began at the end of January last year but in the middle of
February this year.
They said that there might have
been front-loading of shipments
expectations of a 10% decrease.
The February slide was the fourth
consecutive month of lower yearover-year imports.
The import decline was partly
due to the sharp fall in prices for
key commodities such as oil and
metals. Crude-oil imports fell
46% in value but were up 11% in
volume. Iron-ore imports showed
a similar trend, losing 39% in
value but gaining 11% in volume.
Analysts said that low commodities prices coupled with generally weak domestic demand should
ensure further trade surpluses
for China in the coming months.
The nation had a trade surplus of
$382.46 billion in 2014, up from
$259.75 billion in 2013.
China and Russia will seal an agreement later this year on piped gas
from Western Siberia, China’s foreign minister said on Sunday, a deal
that will continue Russia’s economic
shift towards Asia and away from
Western Europe.
Russia’s split with the west over
Ukraine has pushed it closer to
China, which is eager to develop
overland energy supply lines that
reduce its dependence on vulnerable sea lanes. China has taken
a carefully neutral stance on the
Ukraine conflict, while more
broadly expressing its support for
The relationship between the
two on-again, off-again Cold War
allies is “mature and stable,” Chinese foreign minister Wang Yi
told a press conference on Sunday.
“There is enormous internal impetus and room for expansion.”
Much of that expansion will be
in oil, gas and nuclear energy co-
operation, he added. “We will fully
begin construction of the eastern
gas line and sign a co-operation
agreement for the western line,”
he said.
During a visit to Beijing in November, Russian president Vladimir Putin reached a preliminary
agreement for Gazprom, the
Kremlin-controlled energy group,
to supply China’s state oil company CNPC with 30bn cubic meters
of gas per year from the Altai region of western Siberia. However,
most of the details — including the
price of the gas — are still to be
worked out.
Beijing expects the deal to be finalized later this year, leading to a
pipeline that will, for the first time,
allow Russia to choose between
exporting gas to Asia or to Europe.
Russia has also committed to sell
gas from its far east to China, but
gas from that area of Siberia can
only be sold economically to Asia.
In a $400bn agreement signed dur-
ing Mr Putin’s visit to Shanghai in
May, Russia agreed to sell up to
38bn cubic meters a year to China.
Chinese and Russian leaders officially inaugurated construction of
the Power of Siberia pipeline in September last year, but little work can
be done during the harsh Siberian
winter. The two sides have also disagreed over financing for the massive projects, with Russia strapped
for cash amid sanctions imposed by
the West. To sweeten the deal for
China, Russia has offered Chinese
oil firms the chance to invest directly
in its upstream operations. Russia’s
deputy premier Arkardy Dvorkovich said at an investment forum last
month that there are no longer political barriers to China controlling strategic assets.
Increased economic ties with Russia, particularly the Russian Far East,
fall under the broader One Belt, One
Road strategy of increasing exports
and investment in Central Asia, Mr
Wang said.