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TOP HEADLINES 26 August 2010
1. INDONESIA: How to ensure food security?
2. PAKISTAN: Likely to seek new loan program
3. THAILAND: Economy grows 9.1 percent as exports boom
4. PRC: Expanding hydropower capacity by 50 percent
5. INDIA: Importance of dryland farming
6. PRC: Spending billions to beef up disaster prevention
7. INDONESIA: Need to make port handing more efficient
8. THAILAND: $1.97 billion airport expansion plan approved
9. BANGLADESH: FDI makes a comeback
10. INDIA: Rural-urban disparity declining in Karnataka
IN DEPTH
1. INDONESIA: How to ensure food security?
Source: Jakarta Post

"Indonesia's food production, which has traditionally been largely supported by the most fertile rice fields in Java, may change in the future as the most rapid pace of agricultural land conversion is happening in this region. The basic solution could be finding ways to improve farm household access to farming land. A viable plot of 1-2 hectares of farming land per household would have a significant impact on production efficiency, productivity and farming income.

Relocating existing industrial areas from Java seems unrealistic. However, the government should urge and provide incentives for new industries and services to be located in the outer islands. This would obviously reduce the pressure on farm land for conversion. It would also be a good strategy for the development of the outer islands, spreading the economic growth from Java as a center of growth to the whole nation. The government also should promote and offer various facilities for the development of rural industries and services. Rural infrastructure development will likely be among the key issues."



 ADBI What's New

Research publications:
Solicited and Unsolicited Credit Ratings: A Global Perspective
The authors studied long-term ratings for nonfinancial firms around the globe and found that firms with unsolicited ratings seem to have lower long-term credit ratings.



2. PAKISTAN: Likely to seek new loan program
Source: Daily Times

"Pakistan is likely to seek a new loan program from the International Monetary Fund (IMF) and a formal proposal is expected to be negotiated with fund's authorities during the ongoing fifth review of the Pakistan economy underway at Washington, official sources said.

The review would seek relaxation in performance benchmarks agreed under the Stand-By Arrangement loan program worth $11.3 billion. The review would also cover the economic performance in 2009-10 as well as priorities set in the 2010-11 budget. Successful completion of the fifth review would help gain over $3.7 billion from the IMF as the last two tranches under the SBA loan program."



3. THAILAND: Economy grows 9.1 percent as exports boom
Source: Businessweek

"Thailand's economy grew 9.1 percent in the second quarter as a recovery in global demand boosted exports, outweighing the blow from the political violence that hit the Thai capital in April and May. Exports from Southeast Asia's second-largest economy grew nearly 42 percent in the three months through June, fueled by shipments of auto parts and electrical appliances.

Growth of 10.6 percent in the first half of the year was the highest since 1997, which reflected a comparison effect because the economy shrank a year earlier amid the global recession. Household spending improved in the second quarter as Thais bought more vehicles and consumer appliances due to government economic stimulus measures and higher farm incomes. Investment also grew, snapping five consecutive quarters of contraction."



4. PRC: Expanding hydropower capacity by 50 percent
Source: China Daily

"PRC will expand its installed hydropower capacity to 300 million kilowatts by 2015 from the current 200 million in an effort to cut carbon dioxide emissions, the country's top energy official said. He said expansion is needed for China's goal to reduce its carbon dioxide emissions per unit of gross domestic product (GDP) by 40 to 45 percent by 2020.

China has long relied on coal to fuel its economic growth as about 83 percent of its electricity output is produced by coal-fired power stations. China would step up its efforts to develop hydropower projects across the country under stricter approval procedures, which focus on the protection of the environment, rights of relocated immigrants and land resources."



5. INDIA: Importance of dryland farming
Source: Hindu Businessline

"Irrigation provides greater stability to farm output than dryland production, as it also helps protect yields when the monsoon is weak. But does growth of irrigation also make dryland production more difficult? The impact of mechanization on productivity under dryland agriculture would have to be significant enough to match the advantages of irrigated agriculture, for the two systems to be equally attractive.

The diversification of farm output has not led to output or income growth in dryland production to the extent that it has in irrigated land. Irrigation helps farmers take risks, raise new crops and diversify output. Growing vegetables and flowers is far more profitable when there is water for irrigation. It presents a greater choice of crops and timing output to meet market demand. Diversification in dryland production, on the other hand, is essentially to reduce risks rather than increase income."



6. PRC: Spending billions to beef up disaster prevention
Source: Relief Web

"PRC plans to spend 2.23 billion yuan ($328 million) to improve disaster prevention systems in a mountainous northwest China town devastated by a landslide earlier this month, local officials said. The planned multi-billion yuan project to prevent further geological disasters in Zhouqu County, south of Gansu Province, is scheduled to be carried out in three phases from 2010 to 2012.

The project includes improving disaster warning systems, drawing up emergency resettlement plans, conducting a thorough study of the geological disaster hazards, and setting up a capable monitoring network. A late-night avalanche of mud and rocks roared down the mountain slopes in Zhouqu on Aug. 8, burying villages and blocking the Bailong River, a major regional river. At least 1,447 people were killed and 318 remain missing, according to the latest government information."



 DEVBlogs ROUNDUP
Cambodian exporters still face barriers that reduce shipments of goods abroad -- particularly poor infrastructure and high costs of transportation, experts say. Domestic imports have increased faster than exports, widening the country's trade deficit to nearly $800 million over the first seven months of the year, according to data. Cambodia imported $2.613 billion in the first seven months this year, while exports totaled $1.826 billion during the period, resulting in a $787 million trade deficit from January to July.


7. INDONESIA OP/ED: Need to make port handing more efficient
Source: Jakarta Post

"Gross inefficiency, corruption and uncertainty about cargo handling and arduous customs clearance procedures have caused Indonesian seaports to be classified as high-risk harbors. Seaports play a crucial role in the country's economy, as international trade accounts for more than 40 percent of gross domestic product and more than 80 percent of trade is done through sea transportation.

In addition, as a vast archipelagic country, sea transportation plays a key role in the system of logistics in enhancing economic linkages between the various islands. Efficient ports are a prerequisite to developing efficient supply chains to strengthen the overall competitiveness of the economy. But the big-bang launching in February of 24-hour, seven-day-a-week operations at the four largest seaports seemed to be largely ceremonial without concrete action."



8. THAILAND: $1.97 billion airport expansion plan approved
Source: Bangkok Post

"Thailand has approved the long-delayed expansion of Suvarnabhumi Airport, estimated to cost 62 billion baht ($1.97 billion). Thailand's entry point for most travelers must now expand after only four years of operation to prevent overcrowding. But the expansion, which will lift the passenger handling capacity of Bangkok's prime airport to 60 million a year, will not be completed until at least 2015.

Based on current trends, Airports of Thailand Plc (AoT) expects Suvarnabhumi to reach its maximum capacity of 45 million passengers this year. AoT made its first expansion proposal in late 2007, a year after Suvarnabhumi began operations. It subsequently underwent a series of reviews and revisions amid indecision by authorities and politicians."



9. BANGLADESH: FDI makes a comeback
Source: Daily Star

"A positive trend has appeared in foreign direct investment in Bangladesh, which observers see as a result of the gradual easing of the global recession and improved investor confidence. Bangladesh Bank data shows a 22.62 percent rise in FDI in the second half of the last fiscal year. During January-June, the net FDI inflow reached $439 million from $358 million in the same time a year ago.

However, the first half of the last fiscal year witnessed a 66 percent drop in FDI. Due to this negative growth, FDI fell around 34 percent during the entire fiscal year 2009-10. Rising wages in China and India may also have induced some to shift investments to Bangladesh."



10. INDIA: Rural-urban disparity declining in Karnataka
Source: Hindu Businessline

"Rural-urban disparity is declining in Karnataka in terms of access to potable water sources, education, and electricity services. The policy-makers and administrators need to focus on the poor in both urban and rural areas of the state rather than merely seeing the disparity, which is clearly on the decline, according to a study.

In a significant finding, the researchers reported that rural population growth was comparatively higher in districts that have a strong agricultural base. There was a substantial improvement in the proportion of rural households having access to electricity services."



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