ADBI E-Newsline

"Mediocre crops this year and a shift in dietary habits have strained China's traditional sufficiency in grains, leading to higher prices and large imports, according to a news report. Chinese local markets have seen record levels of wholesale corn prices, and industrial officials forecast the government would import at least 1 million tons of the grain this year, up from just 50,000 tons in 2008-09 and the highest since crop failure in 1994-95.

The country has to feed its population with limited fertile land, scarce water and relatively basic agricultural technologies. The government considers grain self-sufficiency a matter of national security and has responded to the challenges of boosting supplies by plowing a record amount of money into agriculture."

"The 8.8 percent growth in gross domestic product (GDP) in India in the first quarter of 2010-11, which comes on the heels of 8.6 percent in the last quarter of 2009-10, should put to rest any doubts about the durability of the economic recovery. It could also mean that the economy is getting back on the 9 percent growth trajectory of the pre-crisis years.

But there are some concerns. For one, the first quarter of this fiscal year was really the last of the post-crisis period to gain from a 'low base' effect that would have pushed the current year's growth rate up. As this statistical effect wanes in the coming quarters, there would be a natural tendency toward deceleration. If that is accompanied by more 'genuine' moderation, month-on-month, in some components of GDP, then the deceleration could be more acute."

"The plan by state-owned electricity company PT PLN to import around 9 million tons of coal next year when Indonesia is the world's top seaborne exporter of thermal coal with annual shipments of almost 190 million tons, implies several things, all of which are negative for the country's energy policy. PLN importing thermal coal would indeed be a very odd decision that would increase electricity rates given the high cost of transporting the resource.

Local coal is certainly much cheaper because of the lower haulage costs. The faster delivery time would also enable PLN to cut down on storage and inventory costs by arranging just-in-time delivery for its power stations. Such efficient supply-chain management would be rather difficult for imports that require much longer delivery times, not to mention the risk of PLN being exposed to foreign exchange fluctuations."

"In Celebiler and other agriculture-based villages like it throughout Azerbaijan, women maintain the household and raise children. But they are also expected to perform as much physical labor -- and sometimes more -- than that of their husbands. Many of the village men have left seeking work in Russia. Women's chores even include the backbreaking task of toting water from a distant spring back to their homes.

Azerbaijan is one of the fastest-growing economies in the former Soviet Union, fueled by the country's massive oil and gas resources. The country reportedly holds more than $20 billion in currency reserves. President Ilham Aliyev has pledged to use that wealth to diversify the economy and improve infrastructure in places like Celebiler and the surrounding Barda district, which -- remarkably for an energy-rich country -- has no water or gas lines, and still burn wood for fuel."

"Prime Minister Gilani said due to the devastating floods, the country has suffered $4-6 billion worth of damage to infrastructure, livestock and crops. Pakistan's economy grew by 4.1 percent during the last year and was expected to grow by 4.5 percent during the current fiscal year (2010-11), he said, adding, the damage caused by the floods will bring down real GDP growth to 2.5 percent for the FY 2010-11.

Gilani said approximately $200 million would be required for recovery/relief efforts whereas repair costs for damaged key infrastructure could exceed $1 billion. The economic failure will translate into massive job and income losses for thousands of families. The floods have affected over 20 million people outnumbering the figure affected in recent major disasters like the Indian Ocean Tsunami (2004) and the South Asian Quake (2005)."

"According to the latest statistics, Viet Nam's export and import revenues reach $52 billion and $61 billion a year. The Ministry of Transport also anticipated that the total volume of goods at Vietnamese seaports will be 498-590 million tons by 2015 and from 870 to 1,083 million tons by 2020, 1580 to 2100 million tons by 2030.

Viet Nam has a strong shipbuilding industry but up to 80 percent of its import-export volume is shipped by foreign vessels. Analysis shows that traders don't choose Viet Nam's cargo ships because the crew is small, with poor good maintenance conditions and less competitive prices. While foreign shipping companies have several trips to the U.S., Vietnamese shipping firms have only one because they can't gather sufficient cargo for regular trips resulting in high shipping fees."

"PRC's banking regulator has said that it is pushing mergers and acquisitions (M&A) among the country's rural credit cooperatives (RCC) in a bid to reduce their high credit risks. The M&A targets are RCCs that have a non-performing loan ratio higher than 30 percent. For a healthy RCC, the average non-performing loan ratio is 10 percent. RCCs have long been the weakest sector of the country's financial industry.

Financial experts estimate that non-performing RCC loans have reached 700 billion yuan ($102.74 billion) to 800 billion yuan. Commercial banks, cooperative financial institutions in rural areas, non-banking financial institutions and enterprises in solid financial standing could be potential buyers of RCCs that face dangerous exposure to non-performing loans."

"A sustainable solution to ease the income gap requires better accessibility to public services and education, rather than subsidies, bank research has shown. Thailand's poverty has eased slightly thanks to economic growth. If the poverty line is set at $2 per day, the number of Thais living in poverty accounted for 12 percent in 2004 from 26 percent in 1992.

The research showed that after the 1997 financial crisis, the average income also grew at a slower pace. The top 20 percent of the population earned 55 percent of the national income, while the 20 percent population in the bottom earned 4 percent. Considering the average income by profession, farmers earn the lowest, followed by construction workers, factory workers and those in the service sector."

"Myanmar has agreed to build two hydropower plants aimed at exporting around 575 megawatts (mw) of electricity to energy-starved Bangladesh, top officials said Tuesday. A Myanmar delegation would visit Dhaka shortly to sign a memorandum of understanding on the electricity trade between the two neighboring countries.

Before signing the final deal, Myanmar has sought power purchase guarantees from Bangladesh, which has never dealt in electricity with overseas countries before. The country's unprecedented electricity crisis has pushed the government to adopt a multi-pronged strategy ranging from diversifying of fuel sources to import of electricity to ease the mounting electricity demand."

"The Asian Development Bank on Thursday approved a $400-million loan to expand a Philippine government program to help keep children of poor families in school. The loan would support the government's conditional cash transfer program, which pays families to keep their children in school.

The loan would allow the project to provide a 20-per-cent boost in income to an estimated 1.37 million families, up from around 788,000 families currently served by the program. According to the bank, one in five children in the Philippines never gets to attend primary school because of financial constraints while another three out of every 10 drop out before finishing their elementary education."

"Thailand's baht rose to the strongest level since March 2008, extending a three-month rally, as the central bank said the currency's advance hasn't had a significant impact on exports. The Bank of Thailand isn't concerned by currency appreciation, the governor said. The baht advanced 3.1 percent in August, the best performance among Asia's most-traded currencies, as overseas investors stepped up purchases of local stocks.

The baht gained 0.4 percent to 31.17 per dollar as of 3:51 p.m. in Bangkok, according to data compiled by Bloomberg. It touched 31.15, its strongest level since March 20, 2008. The currency may rise to about 31 by the end of this month."

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