Economic news

N.Arveladze

The Issue of India and China is the Main Topic of davos meeting It was clearly seen at the annual meeting of world political leaders and businessman in Davos that intensive economic growth of China and India was the main topic.

Two years ago the US economy was challenged by four economically powerful countries: China, India, Russia and Brazil. Last year China held a leading position, but this year India found itself in the center of attention along with China. These two countries are the most populated ones in the world and have progressing economies , which attracts foreign investments. The former President of the World Bank James Wolfenson said at the session of the world economic forum that China and India are very important for the world redistribution. A representative of the Chinese bank says that this year, in accordance with the plan, the Chinese economy will grow by from 8.8% to 9. %. The Eu will Present a Plan of the reform The European Commission will for the first time present a plan of the national reforms. They require from the EU member-countries to reemploy 19 million people. On January 25, the President of the EU Executive Commission Jose Manuel Barroso presented sate plans for each EU member-country in which their priorities were listed. It is outlined in the plan how they have to solve the unemployment problem, and how the countries with unstable economies should act. “We should clearly say in what issues some countries are strong and in what ones they are weak.” The president stresses that energy will be a priority over the next two years, the sphere in which the EU is behind the US and Japan, while India and China are developing fast. Experts criticize the President’s plan and say that more concrete steps are necessary in order to solve the problems. For instance, assistance to small and medium firms, which will promote employment. Construction of Five Industrial Cities in Abu-Dhabi is Planned The Chairman of the Ministry of Planning and Economy of Abu-Dhabi said that the Emirates are planning to construct five industrial cities in order to use its potential and become the region’s industrial center. The construction of cities will contribute to using in the Emirates of capital, energy and modern infrastructure. He signed a contract with an Italian company on the enlargement of iron and steel plant in the Emirates. The Chairman says that these industrial cities, that are to be built within the period of five years, will attract foreign investors. As to privatization of the iron and steel plant, according to him, the government is still considering this issue. He also points out that, in accordance with this contract, the plant annually produces 4 million tons of steel. Nakheel Promotes Projects at Dubai Property Show in uk Dubai representative office decided to arrange a property (of Dubai Palm City) show in London. The name of the show is “Palm”. The UK is an important market for Dubai both in the sphere of tourism and in commerce. 650 000 British tourists visited Dubai last year. One of the show’s goals is attraction of British tourists to the artificially created island where 25 highly comfortable hotels are located. Nakheel chief executive says that Britain is the main market for them. The British know that Dubai offers them a perfect climate and wonderful beaches, a wide choice of goods, luxurious hotels and tax-free environment. That is why they visit this country with pleasure. This time the offer us a novelty – the “palm”. It is the third largest island among the ones created by humankind, and it attracts people from all over the world. The middle East Economy is growing moderately Studies have shown that high economic demand for oil will remain, and the Middle East and north Africa will become most rapidly developing regions in the world. Average GDP indicator will make up 5%. However, not only oil contributes to the success of Middle East. Other investments in the region are being made as well. The expected GDP indicator in MENA region in 2006 makes up 5.1% Consumer Prices Consumer prices in the US decreased by 0.1% in December. Throughout 2005 the average inflation indicator was 3.4%, in 2004 – 2,7%. In 2005 the highest inflation indicator since 2000 was observed in the US. Federals expected a high inflation indicator by the beginning of 2006, and are going to increase the interest rate in credits, but professor of business of Maryland University warns them that if they raise the rate again, they will have to struggle against deflation and not inflation. Investment Problem in Russia Russia attracts money as a magnet. Statistics shows that during the whole post-soviet period the Russian Central Bank attracted the largest amount of private capital in 2005. Inflow of capital in large quantities shows that foreign investors have interest in Russia and they invest large sums in Russian loans, insurances and other investments. Last year private capital inflow made up just 300 million USD, or 0.1% lower than Russia’s GDP. Israel’s market – No Panic but Business Israeli financial market directly reacts to the condition of health of the Prime Minister Ariel Sharon. After spreading of information on Sharon’s disease, anxiety was observed on Tel-Aviv Exchange. The exchange rate of Israeli currency – shekel decreased by 1.5% against the USD. Over the past years, foreign investors play a considerable role on the local markets. Now, Israel’s main goal is not to allow panic and reassure foreign investors. The growth of Philippine Economy is Slowing down against the background ofOil and Political Tension In 2005 the indicator of Philippine economy’s growth was lower than it was planned. According to the plan, the economy was to grow by 6%, but it has grown by 5.1% only. Record high oil prices and wrong political course of the country’s President Gloria Arroyo reduced consumers’ expenditures and businessmen have lost confidence in the country. The growth of farmers’ production have reduced almost by half because of bad weather, global demand for electronics goods has decreased, which reduces export revenues. The country’s investments have decreased by %. However, the government’s economists say that the economic situation will improve by the end of year.