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10 New
Enrichment Plants to Be Constructed
TEHRAN (Mojnews) - The Islamic Republic of Iran plans to
build 10 new uranium enrichment facilities during the next
Iranian year, atomic energy chief said.
The statement by Ali Akbar Salehi on Sunday evening comes
after President Mahmoud Ahmadinejad earlier in the day
instructed Iran's Atomic Energy Organization to start work
on producing higher-grade nuclear fuel for a Tehran reactor.
Salehi, also on Sunday said Iran would start producing
uranium enriched to a level of 20 percent on Tuesday, in the
presence of inspectors from the International Atomic Energy
Agency (IAEA).
He said Iran will formally inform the Vienna-based U.N.
agency about the move in a letter on Monday. He earlier said
production would take place at Iran's Natanz site.
But Salehi also suggested production would be halted if Iran
received fuel enriched to 20 percent from abroad. Iran has
expressed readiness to exchange its low-enriched uranium for
higher-grade fuel, but wants amendments to the U.N.-drafted
plan.
"Iran would halt its enrichment process for the Tehran
research reactor any time it receives the necessary fuel for
it," Salehi said.
FM: Iran Keen on Economic Projects
in Bosnia
TEHRAN (FNA) - Iranian Foreign Minister
Manouchehr Mottaki on Monday voiced Tehran's preparedness to
involve in economic projects in Bosnia and Herzegovina.
Speaking at a meeting with new Bosnian Ambassador to Tehran
Amir Haji Kadonij here in Tehran today, Mottaki underlined
that Tehran is ready to expand its relations with the
Balkans in trade and economic fields.
"The foreign policy of the Islamic Republic of Iran is based
on expansion and consolidation of ties with independent
states and Bosnia has a special place in this regard," he
added.
Mottaki pointed to Iran's aids and assistance with the
Bosnian nation during the war in the Balkans, and underlined
that friendship at times of hardship for a nation paves the
way for close friendship in time of peace.
The Bosnian ambassador, who submitted a copy of his
credentials to Mottaki during the session thanked the
Iranian nation and government's support for the Bosnian
nation, and stressed that the Bosnian people will never
forget Iran's help and assistance.
FDI to Reach $2b
TEHRAN (Mojnews) - The Islamic Republic of Iran
has absorbed $1.7 billion of foreign direct investment (FDI)
in the first 10 months of the current Iranian fiscal year
(started March 20, 2009), head of Iran Foreign Investment
Organization said.
Announcing the above, Behrooz Alishiri said that the figure
will reach $2 billion by the end of the year (March 20,
2010).
He said that the FDI made in Iran this year shows 30 percent
growth over the last year.
Iran sets to absorb $12 billion of FDI by the end of its 5th
Development Plan (starting in 2010 and ending in 2015), he
added.
Exports to Afghanistan Rise
TEHRAN (Mojnews) - The Islamic Republic of Iran's
non-oil exports to Afghanistan increased 56 percent during
the first 9 months of the current Iranian fiscal year
(started March 20, 2009), a Trade Promotion Organization
official said.
Iran has exported $709 million of various products to
Afghanistan from March to December 2009, Amir Talebi said
adding that the exports "are on rise."
Iran is one of major exporters of foodstuffs, construction
materials and machineries to Afghanistan, Talebi said.
He said that Iran-Afghanistan joint economic commission will
hold second meeting within next few months.
Iran and Afghanistan also tend to establish a joint chamber
of commerce in Kabul in the near future, he added.
Kuwait to Post $24b Budget Surplus
 KUWAIT CITY (AFP) – Kuwait is set to post a surplus of $24
billion in the current fiscal year on the back of higher oil
prices, despite projecting a shortfall, an economic report
forecast on Sunday.
Revenues for the oil-rich emirate are expected to hit $61.8
billion in the year to March 31, far above budget
projections of $28.1 billion, said the report by the private
National Bank of Kuwait.
Oil income, which makes up about 94 percent of total
revenue, is expected to reach $57.8 billion, also
considerably higher than the budget forecast of just $24.1
billion.
Kuwait calculated oil income at a conservative price of $35
a barrel, while average price for the year is expected to be
double that at around $69.5, according to the report.
Spending is forecast to reach $37.8 billion, about 10
percent below budget projections of $42.1 billion, the bank
said.
Kuwait, the fourth largest producer in the oil cartel OPEC,
posted a preliminary budget surplus of $25.2 billion in the
first nine months of the fiscal year, according to the
finance ministry's website.
The huge surplus is expected to fall in the final quarter
due to end-of-year accounting adjustments when pledged
expenditure not included so far will be added to the closing
statements.
Kuwait had projected a deficit of $13.8 billion for the
current fiscal year.
The Gulf state has projected shortfalls in the past 10
fiscal years but eventually ended with a massive surplus in
all of them.
It finished last fiscal year with a surplus of $9.6 billion
despite making a one-off payment of $19 billion to the state
pension fund.
This would be Kuwait's 11th straight year of budget surplus.
In the past decade, it has accumulated about $123 billion of
budget surplus, based on available official data.
The emirate, which transfers 10 percent of revenues every
year into its sovereign wealth fund run by the Kuwait
Investment Authority, is estimated to have assets worth
about $230 billion.
Kuwait says it sits on 10 percent of global crude reserves
and pumps about 2.2 million barrels per day. It has a
population of 1.1 million of its own citizens, and 2.34
million foreign residents.
Kuwait City's banking complex is decorated with lights and
the national flag
Greece Readies Tax Change to Fight
Crisis
ATHENS (Dispatches) – Greek officials put the
final touches Monday on an overhaul of the country's
ineffective tax system — part of their urgent effort to fix
a debt crisis that has shaken the entire eurozone.
The center-left government, elected in October, has pledged
to fight endemic tax evasion and increase taxes on the rich,
as well as taxes on fuel, cigarettes and alcohol.
Finance Minister George Papaconstantinou says a new tax bill
to be presented this week will expand the top 40 percent tax
bracket to incomes below the current euro75,000 ($102,000)
threshold. In an interview in Ta Nea newspaper,
Papaconstantinou also insisted that middle- and low-income
earners would pay less tax.
Greece's budget deficit reached 12.7 percent of annual
economic output last year — four times over the EU limit —
while the national debt was more than 113 percent of GDP.
This alarmed Greece's European Union partners and
international markets, forcing a spike in borrowing costs
for Greece and other weak European economies and pushing
down the euro exchange rate.
The Greek crisis highlights one of the vulnerabilities of
the euro currency. It has one central bank, the European
Central Bank, to set interest rates, but no central fiscal
authority. Instead, the monetary union depends on all 16
governments following rules to keep their deficits within a
limit of 3 percent of gross domestic product each year — and
those limits have been widely breached during the world
economic turbulence of the last three years.
EU officials have put intense pressure on Greek to get back
within the deficit limits. The government says it will do so
by 2012, but markets remain skeptical that it can force
through such extreme cuts, which could be highly unpopular.
A newspaper poll Sunday found that most Greeks back Prime
Minister George Papandreou's plans to freeze civil servants'
wages and cut their bonuses. But the majority of respondents
also opposed a hike in the fuel tax and the introduction of
new taxes.
Euro Trades Above 8-Month Low
LONDON (AFP) – The European single currency held above an
eight-month low on Monday after eurozone finance chiefs
reassured their Group of Seven counterparts on Greece's
deepening debt troubles, dealers said.
In morning London trade, the euro firmed to $1.3695 compared
with $1.3673 late in New York on Friday, when it had tumbled
to $1.3586 -- the lowest level since May 20, 2009.
Against the Japanese currency on Monday, the dollar rose to
89.43 yen from 89.20 late Friday.
"As a new week dawns, the euro continues to remain under
pressure after the weekend's G7 meeting failed to deliver
little more than rhetoric with respect to measures to deal
with the ongoing problems of how to tackle European
sovereign debt issues," said CMC Markets analyst Michael
Hewson.
"The European finance ministers merely confirmed the
substance and significance of Greece's attempts to deal with
its deficit on its own without outside interference, amid
market fears that politicians are sleep walking into a
full-blown debt crisis," he added.
The euro received only a slight lift from remarks by
eurozone finance officials at the G7 talks in Canada on
Greece's efforts to rein in its public debt of more than 294
billion euros ($412 billion).
"The European members of the G7 have confirmed to the other
partners of the G7 the substance and the significance of the
(debt-reduction) plan put together by Greece, and that they
are confident that it will be managed," French Economy
Minister Christine Lagarde said.
In recent weeks, the euro has been hammered by worries that
debt-ridden countries such as Greece, Spain and Portugal may
be unable to restore stability to their public finances,
having spent heavily to combat recession.
"In our view, European leaders would do whatever they can
eventually to avoid that the sovereign (debt)-related stress
spreads to a point where the euro could really be
endangered," said Credit Agricole CIB economist Sebastien
Barbe.
"And this would, at the end of the day, provide more support
to the euro. However, in the short term, the market stress
could remain fairly high."
In London on Monday, the euro was changing hands at $1.3695
against $1.3673 late on Friday, at 122.47 yen (122.01),
0.8790 pounds (0.8739) and 1.4683 Swiss francs (1.4672).
The dollar stood at 89.43 yen (89.20) and 1.0722 Swiss
francs (1.0725).
The pound was at $1.5577 (1.5641).
On the London Bullion Market, the price of gold rose to
$1,070.18 an ounce from $1,058 an ounce late on Friday.
Air India Gets $1.1b Structured
Trade Loan
NEW DELHI (Dispatches) - Beleaguered Air India
has obtained $1.1 billion of structured trade financing,
provided by J.P. Morgan and guaranteed by the Export-Import
Bank of the US (US Ex-Im).
The export credit agency financing will be used to fund the
purchase of 11 Boeing aircraft that the state-owned airline
received in 2009 and is supported by the full faith and
credit of the Indian government. US Ex-Im initially approved
the loans in June 2009 but they were not paid out until last
month.
Arvind Jadhav, chairman and managing director of the
National Aviation Company of India (Air India's parent
company), said in a statement that US Ex-Im's backing has
enabled the airline to "raise finances for acquiring these
latest state-of-the-art technology aircraft at competitive
rates of interest as compared to commercial financing".
That Air India cannot receive a competitive rate of
financing in the private sector is not surprising. In an
interview last year, Paul Ng, global head of aviation at law
firm Stephenson Harwood, told FinanceAsia that in the first
half of 2009, the cost of aircraft financing rose "a few
hundred basis points". While the increase is not on the
level of, say, financing Dubai's debt, the additional
percentage points do add up in terms of annual interest
payments on a multi-billion dollar aircraft order.
Export credit agency-backed financing comes at comparatively
lower interest rates because a government assumes the risk
of a transaction. These structures increased in popularity
after the September 2008 collapse of Lehman Brothers and the
ensuing lack of commercially available trade financing in
the global marketplace.
US Ex-Im backed $70 billion worth of loans in 2009, the
highest in the agency's 75-year history, according to its
own account.
The increase in aircraft financing costs aside, Air India's
own financial woes likely also deterred creditors. Since the
2003 deregulation of India's airline industry, Air India has
lost market share to its competitors, Jet Airways and
Kingfisher, and at the same time has been forced to deal
with inadequate infrastructure and high legacy operating
costs. Even after the government-backed 2007 merger between
Air India and Indian Airlines, the country's state-owned
domestic carrier, the company has fared no better; it posted
a net loss of Rs55.48 billion ($1.19 billion) for the fiscal
year ending March 31, 2009, which was more than double its
2008 net loss of Rs22.26 billion, and continues to bleed red
ink.
The Center for Asia-Pacific Aviation (CAPA) estimated in a
recent statement that Air India's losses for the current
fiscal year could top $800 million -- more than $2 million
per day. The Sydney-based airline consultancy has said that
the airline is on track to receive a $430 million cash
infusion from the Indian government by March 31.
However, an Air India representative said the airline had
not had any issues financing aircraft and the reason it used
US Ex-Im-backed funding for its latest order was because it
had used the agency before.
One reason behind the airline's continuing high costs is the
fact that Air India's international flights and Indian
Airlines' domestic flights are run as separate operations.
In theory, synergies should be produced by combining staff
and management but, except for the customer front-end, the
two airlines continue to operate as two entities in spite of
the fact that the merger has been completed. Some experts
even consider the merger a failure and there are rumours of
a demerger of the two carriers.
This is the third time the Indian flag carrier has used US
Ex-Im credit guarantees to purchase aircraft since 2007. The
airline received $548.6 million and $1.2 billion from the
agency in 2008 and 2007 respectively. Standard Chartered
Bank and ABN AMRO were the lenders behind those structured
trade deals.
The latest $1.1 billion provided by J.P. Morgan goes towards
the purchase of three Boeing 777-200LR, four Boeing
777-300ER and four Boeing 737-800 aircraft.
World's Tallest Tower Shuts Viewing
Deck
DUBAI (Dispatches) - Dubai's Emaar Properties said Monday
that the observation deck of the world's tallest tower, the
Burj Khalifa, has been temporarily closed for maintenance
just weeks after opening.
"Due to unexpected high traffic, the observation deck
experience at the BurjKhalifa, At the Top, has been
temporarily closed for maintenance and upgrade," a Burj
Khalifa spokesperson said in an emailed statement to Zawya
Dow Jones. "Technical issues with the power supply are being
worked on by the main and subcontractors."
The spokesperson didn't say when the observation deck, which
is located on the 124th floor of the building, will reopen
to the public. "Guests who hold valid tickets to the
experience will be offered the option to rebook or receive
an immediate refund," they said.
Burj Khalifa, formerly known as Burj Dubai, officially
opened to the public on Jan. 4. Dubai's ruler Sheik Mohammed
bin Rashid al Maktoum surprised spectators by renaming the
world's tallest skyscraper after his counterpart in Abu
Dhabi at a lavish opening ceremony in the emirate.
Burj Khalifa, the world's tallest tower.
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