Diamond-rich Botswana woos jewellery makers

AFP, GABORONE, April 5: Botswana, the world's largest producer of diamonds, told international jewellery makers Monday it was ready to create conditions to entice them to set up shop in the country.

Botswana is committed to slashing red tape for cutting, polishing and manufacturing jewellery, acting minerals minister Ponatshego Kedikilwe told a meeting of the International Diamond Manufacturing Association.

'Our aspirations are to see as much beneficiation as possible done locally and on a sustainable basis,' he said. 'We are willing to do what it takes to ensure that an environment that enables beneficiation is created.'

'Beneficiation' has long been part of government efforts to diversify the economy by encouraging the growth of businesses that add value to diamonds, rather than simply exporting uncut stones.

Investors have complained about landlocked Botswana's infrastructure, including weak Internet access, and a shortage of skilled labour for the jewellery trade.

Kedikilwe said government was working to simplify the visa process for foreigners seeking to open jewellery businesses.

A new factory is expected to open in December, once final government clearance is received, operated by Shrenuj, an Indian company that is one of the 16 polishing and cutting firms already working in Botswana.

The firm says it will employ 70 people to start, with plans to grow to 300 employees, mainly making jewellery for the United States. Botswana has preferential access to the US market under an African trade deal.

Botswana's downstream diamond industry currently employs nearly 3,000 people.

The country's economy was hard-hit by the global recession as diamond demand plunged. The economy shrank by 4.9 per cent in 2009, but turned around with 7.6 per cent growth last year.

Eurozone economic activity survey gives mixed signals

AFP, BRUSSELS, April 5: A closely-watched survey indicating the pace of growth across the eurozone logged a 43-month high for the services sector in March, upwardly-revised EU data showed on Tuesday.

The composite eurozone index for manufacturing and services output compiled by the London-based Markit research firm fell 0.6 points from February to 57.6 points in March, a slight improvement from a previous estimate of 57.5 points.

Any reading above 50 indicates activity is expanding.

Markit said the latest reading signalled an expansion in economic activity for the 20^th consecutive month and emphasised that the acceleration in services sector activity was the strongest since August 2007.

Manufacturing output growth, however, eased to a three-month low and once again sharp divergences in economic performance could be seen between France and Germany, and the rest.

'Signs of weakness remained very much in evidence' outside the big two, with Spain falling back into a 'services-led contraction and the downturn in Greek manufacturing continued,' the survey said.

'Although the debt crisis in the periphery was affecting confidence, there was no evidence that the crisis in Japan had affected business materially,' said Markit chief economist Chris Williamson.

'The unrest in the Middle East and North Africa, on the other hand, continued to have an impact via higher oil prices,' he warned, highlighting rising input costs 'at a rate approaching the near eight-year highs seen in 2008.'

According to London-based IHS Global Insight analyst Howard Archer 'the key question is can the Eurozone sustain this apparent improved growth in the early months of 2011 as fiscal tightening increasingly kicks in across the region?'

He added: 'There can be little doubt that the European Central Bank will deliver a 25 basis point interest rate hike from 1.00 per cent to 1.25 per cent on Thursday—even though higher interest rates threaten to add to the problems of Greece, Ireland, Portugal and, even Spain.'

China’s central bank raises interest rates

AFP, Beijing, April 5: China's central bank said Tuesday it would raise one-year deposit and lending rates by 25 basis points in its latest effort to curb rampant lending and bring inflation under control.

The People's Bank of China said the interest rate hikes—the fourth since late last year—would take effect Wednesday.

The latest move takes the one-year deposit and lending rates to 3.25 per cent and 6.31 per cent respectively.

Authorities have been pulling on a variety of policy levers to rein in consumer prices and housing costs but inflation remains stubbornly high.

The country's consumer price index rose 4.9 per cent in February, well above the government's full-year target of four per cent, despite persistent efforts to reduce household costs and ease growing consumer anxiety.

Premier Wen Jiabao told the country's legislature last month that reining in prices was the government's 'top priority' in 2011, as China strives for a more balanced eight per cent growth rate.

Two guilty pleas in $880 mln US Ponzi scheme

AFP, Washington, April 4: A father and son who created fake earnings documents to dupe clients in an $880 million Ponzi scheme both pleaded guilty Monday to one count of securities fraud, US prosecutors said.

Roberto Torres, 76, and his son, Alejandro Torres, 39, both face up to 20 years in prison for helping Nevin Shapiro, the former chief executive of Capitol Investments USA, who pleaded guilty last September to one count of securities fraud and one count of money laundering.

Roberto Torres was Capitol's chief financial officer and his son was an accountant with the company—their sentencing is scheduled for July 12.

Shapiro ran a fake wholesale grocery distribution business in Florida, taking in $880 million between 2005 and 2009, using new investor funds to make principal and interest payments to existing investors, authorities said.

The father and son admitted to creating false documents including profit and loss reports, invoices for Capitol transactions and tax returns for Shapiro, who spent millions of dollars on a 'lavish lifestyle,' prosecutors said.

They admitted that more than 50 investors lost a total of between $50 million to $100 million, prosecutors said.

The Torres father and son pleaded guilty in a federal court in Newark, in the eastern state of New Jersey.

Japan seen heading into recession: survey

AFP, Tokyo, April 5: The economic fallout from Japan's biggest ever recorded earthquake, a tsunami and a nuclear crisis will push the nation into recession in the coming months, a survey of economists said Tuesday.

The triple disaster has lanced business confidence, reduced exports and discouraged consumer spending, the Nikkei business newspaper said after reviewing analysis from 11 major private economic institutions.

Recovery is not expected until the July-September quarter, the Nikkei said.

On average, the world's number three economy was seen shrinking 0.6 per cent in the January-March quarter from the previous three months, it said.

For the following three months to June, the economy was seen contracting 2.6 per cent on average, with the most pessimistic economist expecting a 7.1 per cent drop, the daily said.

'Most believe that personal consumption and exports will fall (in April-June) from the previous quarter,' the Nikkei said.

The Japanese economy shrank 0.3 per cent in October-December 2010, according to the Cabinet Office. A recession is commonly defined as two consecutive quarters of contraction.

Exports of automobiles and IT products are seen falling especially sharply due to decreased production, according to SMBC Nikko Securities Inc., the Nikkei said. Power shortages and supply chain disruptions have hit production.

Before the March natural disaster, economists believed the Japanese economy was going to enjoy a moderate upswing in the January-March quarter, as exports were likely to be lifted by a gradual rebound of the global economy.

Almost all of the economists said the economy will start to grow again in the July-September quarter on public works spending in response to reconstruction demand and a recovery in exports.

They project that the economy will expand 1.2 per cent in the July-September quarter and 5.6 per cent the following quarter, the Nikkei said.

Japan has said the cost of the March 11 earthquake and tsunami could hit 25 trillion yen ($297 billion).

The total cost from collapsed or damaged houses, factories and infrastructure such as roads and bridges is estimated at 16-25 trillion yen over the next three fiscal years, according to the Cabinet Office.

The estimate does not account for wider issues such as how radiation from the stricken Fukushima nuclear plant will affect food and water supply, amid an ongoing food scare.

The upper estimate would put the disaster's financial impact at more than double the 9.6 trillion yen of the 1995 Kobe earthquake, which killed more than 6,400 people.

Australia posts first trade deficit in a year

AFP, Sydney, April 5: Australia posted its first monthly trade deficit in almost a year in February as exports fell after floods hurt coal production and imports rose steeply, figures showed Tuesday.

Seasonally adjusted figures from the Australian Bureau of Statistics revealed a deficit of Aus$205 million from a downwardly revised surplus of $1.433 billion in January.

Exports fell two per cent while imports jumped five per cent as the country posted its first deficit since March 2010.

Key factors influencing the change between January and February were a fall of $543 million in exports of metal ores and minerals and a bounce of $561 million in imports of fuels and lubricants, economists said.

Analysts had expected a drop off in exports due to the wild weather in coal-producing Queensland state in January, but were caught out by the spike in imports.

'It's a bit of surprise with the first deficit in nearly one year,' St George Bank chief economist Besa Deda said.

'We've been recording very large trade surpluses for some time and we did think that surpluses would narrow in coming months, but we weren't predicting the deficit.'

The floods that hit Queensland caused significant damage, halting mining and cutting key transport infrastructure, with business forecasting the disaster could cost the economy up to $8.3 billion in lost coal production.

Economists, though, said the trade balance should quickly swing back into surplus once coal exports are restored.

'The impact of the disasters in Queensland will be temporary, and temporary on the impact on the trade balance and the impact on the (economic) growth numbers of first quarter GDP,' said JP Morgan's Helen Kevans.