Greek Suffers Trauma

Amid a debt crisis, a crippling recession and ugly levels of unemployment, Greece is now struggling with a rise in suicides and an HIV outbreak.

The role of the economic crisis in the rise in human immunodeficiency virus isn’t clear, Greek officials say, but the ability to fight it is hampered by fewer resources.

Greece’s debt troubles have raged for about three years now, prompting its governments to take severe austerity measures that are choking the economy and driving up unemployment, which now stands at 25 per cent. About half of its young people can’t find work, and social unrest is widespread.

Amid these troubles, Reuters reported last week, attempts of suicide climbed to more than 925 last year. By the end of August, this year’s rate was already at 690.

Today, authorities cited the outbreak of HIV in Greece, particularly in Athens, and warned that the economic troubles plaguing the region will hamper prevention across Europe.

“Since 2011, Greece has been experiencing a significant outbreak of HIV among people who inject drugs in Athens,” the European Centre for Disease Prevention and Control said in a lengthy report.

“In the first eight months of 2012, for the first time the number of new cases reported among people who inject drugs exceeded the number of new cases reported among men who have sex with men. The outbreak among people who inject drugs is likely due to a combination of factors, the most important being low levels of preventive services prior to the outbreak.”

HIV in Greece has been “a pattern of low-level, concentrated epidemic,” the agency said.

Since it was first reported in the 1980s, infections climbed by 2011 to 7.3 per 100,000 people.

“The ongoing HIV outbreak is occurring at a time when Greece is experiencing a severe financial crisis,” the group noted.

“Although the extent to which the financial crisis has contributed to the outbreak is unclear, it is evident that the crisis has a significant social and health impact on the population of Greece. In addition, the response to the HIV outbreak by public authorities and NGOs is being managed in the context of social uncertainty, with exceedingly scarce financial resources.”

Prevention could be hurt in other parts of Europe by the “economic turmoil,” the agency added.

“There is a continuous need to keep public health and preventative services on the agenda even in challenging economic times so that long-term, high-cost burden to the health system can be averted.”

Posted on: December 4th, 2012 in International Business     No Comments »     Continue reading

Eurozone Unemployment Rate Goes High

Mario Draghi

The Eurozone’s unemployment rate hit a new record high in October, while consumer price rises slowed sharply.

The jobless rate in the recessionary euro area rose to 11.7%. Inflation fell from 2.5% to 2.2% in November.

The data came as European Central Bank president Mario Draghi warned the euro would not emerge from its crisis until the second half of next year.

Government spending cuts would continue to hurt growth in the short-term, Mr Draghi said.

The unemployment rate continued its steady rise, reaching 11.7% in October, up from 11.6% the month before and 10.4% a year ago.

A further 173,000 were out of work across the single currency area, bringing the total to 18.7 million.

The respective fortunes of northern and southern Europe diverged further. In Spain, the jobless rate rose to 26.2% from 25.8% the previous month, and in Italy it rose to 11.1% from 10.8%.

In contrast, unemployment in Germany held steady at 5.4% of the labour force while in Austria it fell from 4.4% to just 4.3%.

“The real problem is that we have a two-speed Europe,” economist Alberto Gallo of Royal Bank of Scotland told the BBC. “The biggest increase in unemployment is being driven by Italy and Spain.

“It is the same as you are seeing in financial markets,” he explained. “The periphery [Spain and Italy] is the area where the banks are the least capitalized and need the most help, and the loan rates are the highest.”

Data earlier this month showed that the eurozone had returned to a shallow recession in the three months to September shrinking 0.1% during the quarter following a 0.2% contraction the previous quarter.

The less competitive southern European economies, such as Spain and Italy – where governments have had to push through hefty spending cuts to get their borrowing under control, and crisis-struck banks have been cutting back their lending – have been in recession for over a year.

But the economies of Germany and France have also begun to weaken. Growth in the eurozone’s two biggest economies came in at a disappointing 0.2%.

And more recent data suggests that both core eurozone economies have continued to skirt recession during the autumn.

Retail sales in Germany shrank 2.8% in October versus the previous month, down 0.8% from a year earlier, according to data released on Friday. Analysts had expected the country to record unchanged or moderately growing sales.

Meanwhile, separate data showed consumer spending in France shrank 0.2% in October versus the previous month, with spending on cars and other durable goods hardest hit.

Posted on: December 4th, 2012 in International Business     No Comments »     Continue reading

US Travel Market Tops $300bn

Lorraine Sileo

The US travel market remains strong despite a murky economic outlook for 2013. Aided by rising prices and corporate travel demand, the industry will grow 8% in 2012 to reach a record US$303 billion, travel industry research authority PhoCusWright has indicated.

In its new report: ‘US Online Travel Overview Twelfth Edition’, PhoCusWright projects sustained but slowing growth through 2014.

“With uncertainty surrounding the fiscal cliff, European debt crisis, and a slowing China economy, the travel industry outlook for the coming year is guarded,” said Lorraine Sileo, Vice President of Research.

“But after recovering from the recessionary losses of 2009 in less than 2 years, the US travel market continues to show remarkable resilience.”

Led by air and hotel, the online leisure/unmanaged business travel market is growing faster than the industry as a whole, jumping 11% in 2012. However, online growth is expected to slow to 7% annually for 2013 and 2014. Supplier websites are growing faster than online travel agencies in every segment, with total online supplier bookings jumping 14% in 2012, versus 6% growth for OTAs. By 2014, two-thirds of online bookings will be made via supplier websites.

PhoCusWright’s US Online Travel Overview Twelfth Edition is a comprehensive analysis of the US travel industry, providing market sizing and growth forecasts through 2014.

Posted on: November 20th, 2012 in International Business     No Comments »     Continue reading

Breather For African Airlines

Some South African Airways staff

One of the world’s most contentious regulations, the European Union’s Emission Trading Scheme, has been suspended for foreign airlines flying into EU airspace at least until September next year, according to reports received from a Brussels-based aviation source.

The issue, with EU Commissioner Connie Hedegaard and her staff stubbornly insisting that it was legal to impose EU rules on foreign jurisdictions, caused the start of serious trade wars brought upon the EU by such countries as China, which expressly forbid Chinese airlines to pay, Russia, India, and the United States, with Gulf states joining into that growing coalition, too.

African governments in turn failed to make any significant noises on behalf of their key airlines like Kenya Airways, Ethiopian, South African, or Egypt Air, drawing the wrath to AFRAA, the African Airlines Association, which accused their governments of bending over and failing to unite.

IATA and ICAO have been working hand in hand in recent months to defuse the situation, and backed by countries opposed to the ETS rule, proposed that a global solution be found through a negotiated settlement rather than imposing unsustainable regulations introduced by one member block on all others.

Hedegaard has reportedly already warned the rest of the world that unless ICAO finds a common ground acceptable to the EU by September next year when the next ICAO convention has taken place, the charges would be re-introduced for non-EU airlines, come what may, showing once more a total lack of understanding of how international diplomacy and negotiations work before being globally adopted.

It was also pointed out that European airlines will continue to pay under the ETS scheme, prompting roars of outrage among European carriers which now have to carry the extra cost while competing in an already overregulated and increasingly restrictive regime with growing capacity limitations and night flight bans against American legacy carriers and in particular against the Gulf giants which have risen to be the new movers and shakers of the aviation industry in the 21st century.

Kenya Airways and Ethiopian, the two Eastern African airlines flying to Europe from their hubs in Nairobi and Addis Ababa, as well as Air Mauritius, will be relieved by the news, sparing them significant expenses the EU administration would otherwise have siphoned out of their pockets.

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Posted on: November 20th, 2012 in International Business     No Comments »     Continue reading

Tullow Strikes More Oil in Kenya

Exploration firm Tullow Oil plc on Wednesday announced a fresh discovery of oil deposits at Twiga South-1 exploration well, on Block 13T in Northern Kenya.

The well is about 30 kilometres west of Ngamia-1 well where Tullow struck oil earlier this year.

“Following media speculation in Kenya, Tullow Oil plc (Tullow) announces that the Twiga South-1 exploration well has successfully encountered oil,” a statement by the company read on Wednesday.

The statement said details of the find would be revealed in November by Tullow officials in partnership with Africa Oil Corp. Tullow has a 50 percent operated interest in the Twiga South-1 well with Africa Oil holding the remaining 50 percent interest.

“Drilling is ongoing and an announcement of the drilling result is expected in early to mid November after target depth has been achieved and necessary sampling and analysis has been completed,” the company said.

The results of the well had initially been expected by late October, but experienced delay which was attributed to minor mechanical problems on the drilling rig.

The Twiga South-1 structure is the second prospect to be tested as part of a multi-well drilling campaign in Kenya and Ethiopia and is the first discovery in block 13T following the Ngamia-1 discovery earlier this year in Block 10BB.

The new drilling is expected to continue to a total depth of 3,114 meters in the next 14 days and targets the same structural layers and reservoirs as the Ngamia-1 oil well. The company is also drilling another well, Paipai-1, which has a planned total depth of 4,112 metres, in northern Kenya’s Marsabit County on Block 10 A.

Tullow Oil has seven licensed blocks in Northern and Western Kenya, which it operates together with Africa Oil.

The new development now increases hopes for Kenya to soon become a petroleum producer and exporter especially after the oil is found to be commercially viable.

To ensure that Kenya does not experience the ‘oil curse’ associated with most of the oil producing countries the economic analysts have said the Kenyan government will have to ensure transparency in how the extraction will be done and how the revenues will be utilised.

“I know Kenya has discovered oil, but the government should not at any time let it be the major driving sector of the economy. That is what clever countries have done,” Professor Banji Oyeyinka, United Nation Habitat Director in Nairobi, told Capital Business.

Posted on: November 6th, 2012 in International Business     No Comments »     Continue reading

Euro Zone’s Single Currency Faces Test

Greek PM Antonis Samaris

European leaders’ determination to keep Greece in the euro area will be tested this week as Prime Minister Antonis Samaras struggles to secure political support for measures to assure the country’s financial lifeline.

Samaras pledged yesterday that the raft of wage and pension cuts in the latest austerity package will be the last and that Greek society won’t tolerate any more, according to comments made to lawmakers of his New Democracy party.

The first parliamentary vote in Athens may come as early as Nov. 7.

“The Greek risk could come to a head this week,” Holger Schmieding, chief economist at Berenberg Bank AG, wrote in a Nov. 2 note. “Greece matters as a trigger of potential contagion to the much bigger economies of Italy and Spain.”

Negotiations between Greece and its troika of international creditors have sought to keep the country inside the 17-member monetary union. In Athens, coalition leaders are squabbling over the terms of the latest package, while in other European capitals politicians are debating how to ease the country’s debt burden.

As Samaras delivered his warning, he urged lawmakers to cast their votes with the nation in mind. An exit from the euro area would lead to an 80 percent drop in living standards from 2009 levels, while passage of the measures will free Greece from an investment “quarantine,” the prime minister said.

“Those betting that we would fail, those betting on the drachma, for the first time are seeing that they are losing that bet,” he said, according to an e-mailed transcript.

As Greece seeks a 31 billion-euro ($40 billion) financing tranche this month, Samaras is facing down a revolt in his three-party coalition as the country records a fifth year of recession. The leader of the Democratic Left yesterday reiterated his party’s opposition to changes in the labor law demanded by international creditors.

No date has been set for a vote on that bill, though it may come as soon as November 7. The budget vote is slated for November 11, this year.

Posted on: November 6th, 2012 in International Business     No Comments »     Continue reading

Sinopec Profits Decline 9.4%

Sinopec chairman Fu Chengyu

China Petroleum & Chemical Corp (Sinopec) Asia’s largest refiner has posted a decline in profits, as demand for petrochemicals suffered in China’s slowing economy.

The company saw its net profits drop 9.4% to 18.3bn yuan ($2.92bn; £1.82bn) in the three months to 30 September from 20.2bn yuan a year earlier.

The higher cost of crude oil also hurt Sinopec’s refining margins.

China’s economic growth has slowed for seven straight quarters.

“In light of the market situation, we have actively lowered the operation utilization of our chemical facilities,” Sinopec said.

Analysts said Sinopec’s petrochemical business swung to a loss in the July to September period.

In its earnings report to the Hong Kong Stock Exchange, Sinopec said output of ethylene, used to make plastic, decreased 4.5% to 7.02 million tonnes in the first nine months of the year.

Synthetic resin production also fell 1.1% to 9.96 million tonnes.

That has offset the benefit to the refiners from the recent rises in gasoline and diesel prices.

China’s government tightly controls the cost of fuel to keep inflation in check.

The fuel-pricing system prevents companies from fully passing the higher crude costs on to customers.

In September, China’s government allowed a 6.1-6.5% rise in the price of refined petroleum products to reflect higher global oil prices.

Analysts said that if inflation stays low the government could have greater flexibility to raise fuel prices again, which would benefit refiners such as Sinopec.

Posted on: October 30th, 2012 in International Business     No Comments »     Continue reading

Hurricane Sandy Disrupts US Air Travel

Hurricane Sandy

Hurricane Sandy’s grounding of more than 6,800 commercial flights, including all departures and arrivals at metropolitan New York’s three major airports, will disrupt air-travel networks throughout the U.S. and beyond.

 

Scrubbed flights include about 1,200 yesterday and more than 5,500 today, said Daniel Baker, Chief Executive Officer (CEO) of Houston-based FlighAware, a flight-tracking company.

Airlines will begin canceling flights for Oct. 30 and Oct. 31 as the weather forecast becomes clearer, he said.

While carriers are halting operations at LaGuardia, John F. Kennedy and Newark Liberty airports, flights to and from other areas will also be affected. New York’s airports together represent a linchpin in the U.S. network, serving more than 52 million departing passengers last year and outstripping the world’s busiest airport, Hartsfield-Jackson in Atlanta.

“This is a time period that’s relatively slow for travel, so it’s mostly going to affect business travelers,” Rick Seaney, chief executive officer of website Farecompare, said in a telephone interview yesterday. “If this was happening during Thanksgiving week, it would just be a nightmare.”

Cancellations, which may continue through Nov. 1, will curb fourth-quarter earnings, said Robert Mann, president of aviation consultant R.W. Mann & Co. in Port Washington, New York. Even so, the airlines may be able to retain most revenue as passengers reschedule travel.

“You’ve got essentially a three-day period where you’re canceling thousands of flights a day and trying to re-accommodate passengers,” Mann said.

Carriers from United Continental Holdings Inc. (UAL) to AMR Corp. (AAMRQ)’s American and Delta Air Lines Inc. (DAL) scrubbed flights, waived rebooking fees and offered refunds on cancellations in advance of the storm’s landfall.

Concessions were offered to United passengers traveling via airports from Portland, Maine, to Charleston, South Carolina, according to the carrier’s website. US Airways said it was canceling flights today between Europe and Philadelphia, where the airport is shut down.

Posted on: October 30th, 2012 in International Business     No Comments »     Continue reading

‘Nigeria’s Investment Climate Friendlier Now’

Mr Cooter (middle) and some officials of Nigeria’s trade ministry

Canadian investors now consider Nigeria a friendly environment to do business compared to 25 years ago when they held a different view, says the Canadian High Commissioner to Nigeria, Chris Cooter.

Cooter, who revealed this during a meeting with Nigeria’s Minister of Trade and Investment, Olusegun Aganga, recalled that they were in Nigeria 25 years ago and concluded it was not the best place to invest.

He said that Canada is currently working on strategies aimed at increasing its foreign direct investment in Nigeria within the next few years due to enhanced confidence in the Nigerian economy.

Cooter noted that as part of efforts to strengthen trade and investment relationship between the two countries, more Canadian companies had already indicated their willingness to invest in infrastructural projects across Nigeria.

“Two weeks ago, the Nigeria –Canada Bi-National Commission met in Abuja and the centerpiece of that Bi-National Commission was how to build and strengthen economic relationships between Nigeria and Canada. This is one of the reasons we have brought the senior executives of SNC Lavalin, one of the leading engineering and Construction Company in Canada and one of the top five in the world to invest in key infrastructural projects in Nigeria.

Responding, Aganga said: “The Federal Government would partner genuine investors who are willing to invest in critical sectors of the Nigerian economy such as infrastructure, mining, petrochemical and agri-business in order to create jobs for the Nigerian people.

“We have a big infrastructure deficit in Nigeria and that is why the Federal Government is very concerned to bridge the gap by developing the critical infrastructure required to drive our industrial development, especially in those areas where we have comparative and competitive advantage such as mining, petrochemical, agri-business and even the Small and Medium Enterprises sector.

Posted on: October 30th, 2012 in International Business     No Comments »     Continue reading

Egypt Discusses $2bn Algerian Aid

Hisham Kandil

Egypt’s government will discuss gaining assistance worth $2 billion from Algeria during a visit to the country by Prime Minister Hisham Kandil on Monday, an Egyptian newspaper reported, citing an unnamed official.

Egypt needs help from foreign donors to rein in its budget deficit and avert a balance of payments crisis until it can secure a $4.8 billion loan from the International Monetary Fund.

Two official sources confirmed to Reuters that Cairo was seeking aid from the fellow north African state although they said it was not clear what form the assistance would take. One said the amount in question was around $2 billion.

Newspaper al-Masry al-Youm did not give a direct quote from its source, but wrote: “An official source said that Egypt will negotiate a deposit worth $2 billion to be put in the central bank and that negotiations that prime minister Hisham Kandil will do today with Algerian prime minister Abdelmalek Sellal will involve this subject.”

It gave no indication if the money was to be a loan or some form of grant, or of any conditions attached.

Transfers from Saudi Arabia and Qatar since June have helped shore up state finances weakened by more than a year of economic turmoil since the overthrow of Hosni Mubarak in February 2011.

Strong demand for natural gas and relatively high world energy prices have helped Algeria add this year to a foreign exchange reserve pile that was worth more than $186 billion at the end of June.

The newspaper said Kandil’s visit was also aimed at solving a shortage of butane cooking gas in Egypt, which counts Algeria among its top suppliers.

One Egyptian official told Reuters that Egypt was seeking about $2 billion in assistance from Algeria but did not have details on what form the assistance would take.

Another official said Egypt was seeking support from Algeria and that it would likely be a topic for discussion during Kandil’s visit. But he said the amount or form of any support was not determined.

Posted on: October 24th, 2012 in International Business     No Comments »     Continue reading