Business

AMMAN — The Islamic Corporation for the Development of the Private Sector (ICD) announced last week in a press statement that it signed an advisory agreement with the  Ministry of Finance.

ICD, the private sector arm of IDB Group, said  the ministry has mandated it as a transaction technical support in the proposed debut domestic sukuk offering.

“The mandate letter was signed between Finance Minister. Umayya Toukan and ICD’s Chief Executive Officer Khaled Al Aboodi,” the press release said. 

“The dinar-denominated Sukuk, expected to be issued this year, would be used as an instrument to absorb excess liquidity [estimated to be 1.4 billion dinars] held by the Kingdom’s for Islamic banks,” said Toukan. ICD aims to develop member countries’ capital markets, specifically Islamic debt capital markets through Sukuk.

“By creating domestic Islamic capital market, the member country would be able to provide an alternative to its treasury bills for Islamic financial institutions to invest in. Although it is not practically common for global Sukuk arrangers, we took responsibility to fill this gap in the market which naturally falls within the developmental principals of ICD,” Aboodi said.

AMMAN — Several deals clinched in Jordan, Morocco, Egypt, Palestine, United Arab Emirates and Kuwait are expected to generate JD20 million in income for Al-Faris National Company for Investment and Export. Operating under the trade name Optimiza, Al-Faris is a public shareholding company that provides fully integrated solutions and services in four areas: consulting, technology , outsourcing and training.

The company’s operations and solutions are spread over four major units: business, infrastructure, intellectual property and healthcare. 

According to the company’s annual report, sent to the Amman Stock Exchange to fulfill a disclosure requirement, the contracts valued at JD20 million are sevenfold the business volume at the start of 2014.

Detailing some achievements, Al-Faris Chairman Rudain Kawar told the shareholders in a foreword that a single deal with Saraya Aqaba for an information technology project is double the general earnings of the company.

The project, to be completed in two years, entails supplying the mega resort in Aqaba with modern smart building systems, security and surveillance systems, and the necessary technological infrastructure in general.    

Kawar also mentioned the application of programmes, owned by Al-Faris as intellectual property rights, such as the system to manage a hospital in Kuwait.

Under an deal with Al Omooma Hospital, Al-Faris will supply the Kuwaiti maternity and pediatric hospital with the hospital management system eHOpe to support its administrative and financial operations. 

In the foreword, the chairman said that an arbitration court in Dubai awarded the company $3 million in compensation for damages, as well as interest and fees, related to its acquisition of the Saudi firm Al Royah from its previous owners Al Malaz Group (Saudi Arabia) 

A row erupted between the two entities in 2010/2011 when Al-Faris claimed it was defrauded with an inflated price it paid for a 70 per cent stake in Al Royah.

“We expect more liquidity to flow once the compensation is fully implemented,” he said, noting that most of the losses that Al-Faris incurred were due to financing fees and exceptional provisions taken to cover diminution in the value of various investments and intangible assets such as trademarks and patents.

He expressed hope that the Jordan Securities Commision will soon lift the trading suspension of Al Faris shares allowing investors to trade the company’s shares on Amman Bourse.   

The company’s balance sheet as of December 31, 2014, shows an accumulated JD8.9 million in losses. Last year, the loss amounted to JD2 million compared with a JD1.7 million loss in 2013.

“For another year we managed to achieve an operational profit in our activities in Jordan,” Kawar said, noting that the gross profit margin was higher. 

“But still, it was not enough to arrive at a net profit for the company,” he added.

According to the income statement, Al-Faris  last year generated JD1.4 million gross profit compared to JD1.5 million in 2013, although the overall earnings were lower at JD9 million, 24 per cent down from JD11.8 million recorded in 2013.

The report highlighted the increase of the company’s capital to JD16 million in 2014 indicating that Consolidated Contractors Company Ltd. Jordan, and Al Numeir Investment Company joined major shareholders with a 25 per cent and 37.85 per cent stake as they invested JD4 million and JD6 million respectively last year.

The financial support  will contribute to lowering debts, settling obligations to banks, and enabling the company to manage its operations.

Notes to the consolidated financial statements showed Al-Faris owing JD10.3 million to seven banks compared to JD8.7 million at the end of 2013.

Of the total amount, JD1.6 million is current and JD8.7 million is long-term.

The report listed the lack of sufficient liquidity as the top impediment hampering the company from carrying out its operations as expected.

Detailing the risks that the company faced in 2014 or could face this year with material consequences, the report mentioned inability to expand operations and increasing profits needed to implement plans for spreading out in some Arab markets.

It also mentioned delays in repaying banking dues which overburden the company with high interest rates besides inability to meet obligations towards suppliers or to find mechanisms for financing new purchases.

“These constraints make it difficult to easy payment terms from key suppliers and leave the company with no option but to buy from local distributors at higher prices,” the report explained.

Besides the uncertainties related to supplies, marketing and sales, liquidity shortage heightens risks of a freeze on banking facilities, a loss of highly qualified personnel if their work is not timely compensated financially, and inability to launch promotional campaigns.  

Al-Faris lamented regional turbulence for its negative impact on the company’s growth, describing neighbouring countries as main markets for its sales of programmes and technological solutions which mostly provide a high profit margin and good return on investments.

Financially, the balance sheet as of December 31, 2014, showed total assets at JD29.9 million (JD31.9 milliion in 2013) and total liabilities at JD22.7 million (JD28.7 million in 2013).   

According to the annual report, the company’s capital investment was JD19.3 million at the end of last year spread over eight subsidiaries, some of which are inoperative.

The subsidiaries are AlAhlia for Computers Company (100.00 per cent), Gulf Electronic for Technical Solutions Company (100.00 per cent), Foster Electronics Company (100.00 per cent), Optmiza Morocco LL (100.00 per cent), Arigon Bermuda (Optimiza Consulting) (100.00 per cent), Optimiza for Computer Systems (100.00 per cent), Advanced Training Company ( Optimiza Academy) (100.00 per cent), Alliance Software Inc (92.00 per cent), and Royah (70.00 per cent).

GUANGZHOU, China — More than half of China’s exporters expect a trade slowdown to last at least six months as production costs climb and European demand weakens, according to a Reuters survey at the country’s biggest trade fair.

On the opening day of the biannual Canton Fair in the Pearl River Delta, the workshop of the world, the cavernous halls were filled with international buyers, but many, especially Europeans hit by a weaker euro, appeared to be ordering fewer goods and haggling hard with manufacturers.

The fair is taking place just after economic data showed China’s exports unexpectedly fell 15 per cent in March and its economy grew at its slowest pace in six years in the first quarter.

A Reuters survey of 90 mostly small to medium-sized manufacturers of goods from consumer electronics to heavy machinery and car parts showed many at the fair are expecting tough times.

On average respondents expected their orders to rise just 3.1 per cent in 2015, while production costs, mostly labour and materials, would climb 6.5 per cent.

While 43 per cent of those polled said they expected an export rebound within six months, 24 per cent said the downturn would continue for at least six months, and a further 33 per cent put the timeframe at more than a year.

The fair has long been a barometer for the economy of China, which has been the world’s biggest exporter since 2009, but the country’s dominance is under threat as the currency strengthens, labour costs soar and authorities shift from an excessive reliance on exports.

Many respondents reported a continued tightness in the  labour market as skilled young workers become harder to find and the economy rebalances towards consumption and services.

Hard bargain

Some European buyers, hit by a sharp depreciation in the euro against the dollar and China’s yuan, were pushing for discounts, despite exporters looking to raise prices an average of 4.6 per cent this year, the poll showed.

“There are still buyers,” said Zhu Xiangkui, a manager at a stall selling batteries, as he shook his head. “[But] most of them have the mentality of bargaining when they arrive.”

Juan Banovio, a veteran buyer from Spain with a retail business in Madrid, said some Chinese manufacturers had agreed to slash prices by 8-10 per cent as price competition intensifies and buyers become more discerning.

“They understand the pressure we face in Europe... and they’re trying to help, but not much. Most European buyers are ordering less,” said Banovia at a stall selling brightly coloured vacuum cleaners.

Since the 2008/09 financial crisis, China’s exporters have struggled with a strengthening currency and rising labour costs, with global supply chains shifting increasingly inland or to cheaper hubs such as Vietnam and Bangladesh.

While many factories said the impact of yuan appreciation was not as significant over the past 12 months compared with previous years, the poll found that on average manufacturers said they would be in the red if the yuan hit 5.6 to the greenback, compared with about 6.2 now.

“Right now the exchange rate [the yuan] is stable, and that’s good,” said George Chen, a factory manager with Qiyun Audio that manufactures amplifiers. “But if it goes below 6 [to the dollar] that would mean all factories would have nowhere to go, or at least 80 per cent of factories couldn’t survive.”

Recent currency fluctuations, however, have offset some costs for Chinese factories, making some imports cheaper, including raw materials and precision parts from Europe or Japan.

Some 40 per cent said they were pessimistic about their factory’s prospects, while 59 per cent were neutral.

“We all have a kind of pessimism,” said Lu Jie, a vice general manager of YSD, a metal-forming machinery factory in the lower-cost area of Hubei in central China. “We have orders, but the environment is still so tough.” 

NEW YORK — Global oil prices edged back from a 2015 high on Thursday as traders took some profits from a weeks-long rally and the Organisation of the Petroleum Exporting Countries (OPEC) reported a sudden surge in March production.

US crude retraced some of the previous day’s nearly 6 per cent gains that followed government data showing the smallest weekly inventory build since the week ending January 2, suggesting that months of oversupply may be starting to ease.

But on Thursday, OPEC said in its monthly report that its own output surged by 810,000 barrels per day (bpd) in March, even as low prices start to weigh on US production.

Brent crude for June delivery fell 49 cents to $62.83 a barrel by 1606 GMT, after opening at $63.29, posting a front-month Brent peak price for the year.

The June contract settled the previous session at a $3 premium to the May Brent contract, which expired on Wednesday.

US May crude fell 57 cents to $55.82, having dropped to $55.07 intraday.

“There is some profit taking, but the confirmed OPEC production increase... has to weigh on prices to some degree,” said John Kilduff, partner at Again Capital LLC in New York.

Brent’s premium to US crude was back above $5 a barrel, now comparing June contracts, after the spread narrowed to $3.34 intraday on Wednesday.

Disappointing US economic data also helped pressure oil. US housing starts rose far less than expected in March and permits recorded their biggest drop since last May, while initial jobless claims rose last week.

Wednesday’s data showing the small build in US crude oil stocks followed reports indicating production in the United States, including in shale play powerhouse North Dakota, was beginning to pull back as the price retreat since June weighs on producers.

Talks between OPEC and other major producers triggered speculation about deals to cut production and supported oil prices on Wednesday, though most analysts said an agreement was unlikely.

Reuters technical analyst Wang Tao told Reuters Global Oil Forum that Brent could rise towards $70 a barrel in the near term, but that a sharp downturn could happen after that.

Separately, the International Energy Agency (IEA) on Wednesday cut its supply forecast for non-OPEC countries, citing downturns in North America and the “worsening conflict” in Yemen.

The Paris-based agency cut its 2015 forecast for non-OPEC output by 120,000 bpd to 630,000 bpd “on the back of a slightly more negative outlook for the US LTO (light tight oil) production and Canadian non-oil sands output, and of the fallout from the worsening conflict in Yemen.”

“According to our latest estimates, fighting in Yemen has halved production to about
60,000bpd in April, from an already depressed level of roughly 120,000bpd,” the IEA indicated in its monthly report.

Although Yemen is a small oil producer accounting for a fraction of global output with negligible effect on prices, it borders Saudi Arabia and affects other Gulf markets.

“Recently launched Saudi air strikes, while not targeting energy infrastructure directly, have led international oil companies active in the country...  to practically halt operations and pull out expatriate staff,” the report said.

“The start of a Saudi-led military campaign against Yemen in late March sparked concern of possible supply disruptions through the area’s vital sea lanes,” it added.

In North America, the IEA cited “signs that US LTO production month-on-month growth will grind to a halt as early as May”, and noted a “continued drop in the number of oil rigs... reductions in capital expenditures, and a credit crunch among LTO producers in the US”.

In Canada, the IEA pointed to “falling drilling rates and an increasing backlog of uncompleted wells”.

Even though oil prices have more than halved in just six months, the OPEC oil group has refused to cut its supply volume. 

Analysts believe this is because the organisation wants to use cheaper prices to force new US shale producers off the market.

The effects of plunging oil prices on demand and supply will continue to leave the market out of kilter, the agency predicted, saying: “In some ways, the outlook is only getting murkier.”

Notably, it said uncertainty persists over whether and when Iran will regain its status as a key player, since the international deal curbing Tehran’s nuclear programme is yet to be finalised, the deadline is June 30, and the speed at which sanctions against Daesh will be lifted is unclear.

While Iranian Supreme Leader Ayatollah Ali Khamenei says all sanctions must be removed immediately upon a final agreement, Washington wants them to be lifted gradually.

Iran back by 2016

In any case, the breakthrough in negotiations “may already have encouraged other producers to hike supply and stake out market share ahead of Iran’s potential return”, the IEA said, adding that the industry consensus was that “significantly higher volumes” of Iran oil will be flowing back into the market in 2016.

Iran is itching to return to OPEC’s number two slot after Saudi Arabia as soon as sanctions are removed, the agency remarked.

“Billions of dollars worth of spending on its vast oil fields could enable Tehran to boost capacity to around 4 million bpd towards the end of the decade,” the report indicated.

It noted that the ink was not yet dry on the framework agreement when Tehran sent a high-level delegation to China for talks on oil sales and investment opportunities.

The IEA also raised its forecast for world demand by 90,000 bpd to 93.6 million bpd.

It attributed “the notable acceleration” on 2014’s 700,000 bpd growth to cold temperatures in the first quarter of this year “and a steadily improving global economic backdrop”.

Elsewhere, Russia has been holding active, “unprecedented” consultations with OPEC, a senior  official said on Wednesday, a clear signal of Moscow’s strive for higher oil prices.

Russia has stepped up contacts with OPEC after oil prices plunged last year, however it has dismissed any suggestion it might cut output to prop up prices, saying it is technically impossible to idle production due to the harsh climate in Siberia, the heartland of Russian oil production.

Russia, one of the world’s top oil producers, expects its economy to shrink by 3 per cent this year, following an almost 50 per cent drop in oil prices since their $115 per barrel peak in last June.

The fall in price of oil, which together with natural gas account for over a half of Russia’s state budget revenue, has been compounded by a refusal by OPEC and its kingpin Saudi Arabia to cut output.

“The Russian energy ministry has been in consultations with  OPEC and Latin America countries, the recent consultations have been unprecedentedly active. This work should continue,” Deputy Prime Minister Arkady Dvorkovich told a meeting at the energy ministry.

Alexander Novak, Russia’s energy minister, told reporters he had spoken to OPEC Secretary General Abdullah Al Badri several days ago.

“On the whole, we are in a dialogue, it has been formalised. As you know, we meet twice a year, discuss the perspectives for oil market development. We discuss various issues, local [issues], the ones which relate to shale oil production, oil refining, tax changes in different countries,” he said.

But an OPEC delegate from a Gulf oil producer poured cold water on Moscow’s statements on cooperation.

“The Russian comment does not mean a joint cut in production. It just means that there is concern over price, but in the end, there might be no action taken,” the official said.

Another Gulf delegate dismissed the idea of a joint cut.

Last month, Russia’s Novak told Reuters he would meet OPEC in June to discuss the impact of shale oil on global markets,  days before the group decides whether its policy of high output is sufficient to stifle the US energy boom.

Saudi state news agency SPA reported on Tuesday that Saudi Arabian Oil Minister Ali Al Naimi discussed oil markets with Russia’s ambassador to Riyadh, Oleg Ozerov.

OPEC’s headquarters in Vienna had no comment on Wednesday.

In November, Russia said after meeting with a number of OPEC ministers that it would not cut output even if prices fell below $40 per barrel. Novak said the current oil price of $60 per barrel was comfortable for Russian producers.

OPEC has been annoyed by the Russian position and has said it will not cut its production unless non-OPEC producers make similar moves first.

PARIS — Nokia has struck a 15.6-billion-euro deal to buy its rival Alcatel-Lucent to create the world's biggest supplier of mobile phone network equipment, both firms said Wednesday.

The merger of two companies that were once new technology stars but have since lost some of their lustre will produce a European champion able to take on Nokia's Swedish rival Ericsson or fierce Chinese competition.

The announcement sent shares in Alcatel-Lucent plunging 15 per cent on Paris's stock market, while Nokia's stocks were down 1.2 per cent to 7.4 euros on the Helsinki market.

Finland's Nokia said it had agreed to give shareholders in its Franco-American rival 0.55 shares in the new merged company for every one of their own.

"This transaction comes at the right time to strengthen the European technology industry," said Alcatel-Lucent boss Michel Combes. "The global scale and footprint of the new company will reinforce its presence in the United States and China." 

The two firms have "highly complementary portfolios and geographies, with particular strength in the United States, China, Europe and Asia-Pacific”, Nokia's statement said.

The new firm will go by the name Nokia, be based in Finland and be run by Nokia's current management team, it added.

The group is targeting savings of 900 million euros ($960 million) in costs by the end of 2019 without further job cuts on top of the restructuring already taking place in Alcatel-Lucent, both companies indicated.

This is likely to appease the French government, which had expressed concern about jobs disappearing in the country if the merger were to go through.

It has also in the past blocked takeovers of companies it considers national jewels.

The government caused a furore in 2013 when it blocked a bid by US giant Yahoo! to acquire Dailymotion, and then again this month when it thwarted attempts by a Hong Kong telecoms giants to acquire the video-sharing site.

Not 'losing Alcatel' 

Jean-Marie Le Guen, a member of the Socialist government, told French radio that France was not "losing Alcatel" and told employees that the government would make sure they kept their jobs.

But "they must also know that if this merger didn't happen, then maybe one day, Alcatel would not have been big enough to take on the international [market]," he said.

"If you watch the trains go by, you stay on the platform," Le Guen added.

Both companies said that the merger should save an additional 200 million euros in financial charges.

Combes told French TV channel BFM Business that the new group was committed to "increasing research and development activities in France by 25 per cent" by hiring 500 additional researchers, bringing the total research and development workforce in the country to 2,500.

"The new group's innovation and research capabilities on a global scale will be spearheaded in France," he said.

Rumours have swirled since December of a possible deal between the two firms, with France's Les Echos daily reporting on Monday that executives had been in negotiations since January.

Nokia was the world's biggest mobile phone maker for more than a decade until it was overtaken by South Korea's Samsung in 2012.

Then in 2014, Nokia sold its mobile phone and tablet division to US software giant Microsoft, and the company now develops mobile and Internet network infrastructures for operators.

Nokia is now set for a significant boost in market share. 

The deal will also help Nokia bolster its mobile infrastructure business against Swedish arch-rival Ericsson and China's Huawei, profiting from Alcatel's position as a leading supplier of 4G and LTE mobile networks and related services.

Deutsche Bank analyst Johannes Schaller said: "We see several risks for Nokia from this deal, if concluded, and believe integration could be challenging both from a product and culture perspective."

"We believe Ericsson could be the indirect beneficiary of this possible consolidation," added Schaller.

TOKYO — The head of the Organisation for Economic Cooperation and Development (OECD) on Wednesday credited a wave of loose monetary policy for preventing a global economic collapse, but warned it was now up to governments to lift growth and safeguard their economies.

Angel Gurria, secretary general of the OECD, made the comments in Tokyo where the 34-member club of rich nations was presenting its latest report on the Japanese economy.

The world owes a "debt of gratitude to central bankers" for supplying easy money that brought the global economy back from the brink after the 2008 financial crisis, Gurria said.

"They have done a great job. Without central bankers...we would be in a bigger problem," Gurria told reporters.

"But the problem is now structural changes [that] are not in the hands of central banks. Education, innovation, more competition, better regulations...These have nothing to do with central banks," he added.

While the Bank of Japan's massive monetary easing programme has boosted growth, Gurria said the country's living standards lag the OECD average and Tokyo must press on with an overhaul of the highly regulated economy, including luring more women into the workforce, shaking up a rigid labour market, and lifting productivity.

A string of central banks, including the European Central Bank, the Reserve Bank of India and the Bank of Korea, have launched monetary easing schemes or cut interest rates to prop up their ailing economies.

Meanwhile, the US Federal Reserve announced it was ending its own six-year quantitative easing scheme as the world's top economy gets back on track.

Gurria also warned that Japan had to get a handle on its massive national debt, the heaviest burden among OECD members at more than twice the size of the economy.

Tokyo raised the national sales tax in April 2014 to 8 per cent from 5 per cent to help pay down that debt load, but the move slammed the brakes on growth and sent the economy into a brief recession.

Prime Minister Shinzo Abe delayed a second tax rise to 10 per cent scheduled for this year, but that rate is still only about half the OECD average of 20 per cent, Gurria said.

A day after the International Monetary Fund raised its growth projections for Japan, the OECD on Wednesday hiked its forecasts to a 1 per cent expansion this year and 1.4 per cent next, up from an earlier 0.8 per cent and 1 per cent, respectively.

Abe launched his economic growth blitz in 2013, dubbed Abenomics, combining huge monetary easing, big government spending and promises to overhaul Japan's economy.

But there is still a lot of work to do on the so-called third arrow of his plan — reforms.

"The third arrow of Abenomics is its most crucial component, without which the unprecedented monetary expansion and the fiscal effort will not succeed in putting Japan on a path to faster growth and fiscal sustainability," the OECD's report said.

Separately, latest OECD data showed growth momentum is strengthening in the eurozone, while China's economic expansion is slowing.

"In Italy and France, the signs of a positive change in momentum, which were assessed as tentative in March, have now been confirmed," the OECD said in a statement.

The OECD's composite leading indicators (CLIs), designed to anticipate turning points in economic activity, also showed a positive change in momentum for Germany.

The figures will come as a relief to the European Central Bank, which recently launched a 1.1-trillion-euro ($1.2-trillion) bond buying programme to boost sluggish growth and ward off deflation.

Of particular concern have been France and Italy, the eurozone's second- and third-largest economies, which have been stagnating.

In Italy, which saw its economy contract 0.3 per cent last year, the government is forecasting 0.7 per cent growth this year.

France's government is forecasting 1 per cent growth this year, after a meagre 0.4 per cent expansion in 2014.

The Paris-based organisation which provides economic analysis and advice to its 34 industrialised country members, said the growth outlook was stable in the OECD area as a whole as well as for the United States, Britain and Japan.

Meanwhile, "CLIs signal growth easing in China and Canada, albeit from relatively high levels”.

China, not an OECD member, has been a major source of global growth, but the world's second-largest economy has been experiencing a broad slowdown in recent years. 

Purchasing manager surveys, one leading indicator, have recently shown Chinese manufacturing steady, while official data released earlier this month showed output, retail and investment growth have all fallen to multi-year lows.

China's economy expanded 7.4 per cent last year, the worst result since 1990, and earlier this month leaders lowered this year's target to approximately 7 per cent.

For other emerging markets, the CLIs point to slowing growth momentum in Brazil and Russia, and firming growth in India.

AMMAN –– Jordan Chamber of Industry (JCI) and the Islamic International Arab Bank (IIAB) on Tuesday signed a memorandum of understanding to boost cooperation between the two organisations.

The agreement, signed by JCI Director Maher Mahrouq and IIAB Chief Business Officer Mohsen Abu Awad, seeks to facilitate Islamic financing to the industrial sector, particularly small and medium-sized establishments.

Abu Awad said the bank is targeting the industrial sector through a variety of financial products that are based on the provisions of Islamic Sharia.

LONDON — British Conservative Prime Minister David Cameron launched his party’s manifesto on Tuesday, promising a return to the “good life” and the revival of a housing policy associated with Margaret Thatcher if he wins May’s election.

Cameron announced an extension of the 1980s “right-to-buy” housing policy of Conservative “Iron Lady” Thatcher, revealed plans for free childcare and pledged that minimum-wage workers will pay no income tax.

With opinion polls putting the centre-right Tories neck-and-neck with the opposition Labour Party, he tried to play on Labour’s weak reputation on the economy in a bid to put his side ahead in the last few weeks of campaigning.

“We’re on the brink of something special,” he told activists at a school in Swindon, southwest England. “Let’s not let Labour drag us back to square one.”

“We can turn the good news in the economy into a good life for you and your family. Britain can be this buccaneering, world-beating, can-do country again,” the prime minister said.

The Conservatives blame Labour for running up a budget deficit of some £90 billion (124 billion euros, $130 billion) during 13 years in government before they were voted out in 2010 and replaced by a Tory-Liberal Democrat coalition.

Neither main party looks set to win an outright parliamentary majority on May 7, raising the prospect of another coalition or a minority government.

Iconic Thatcherite policy 

The “right-to-buy” scheme will extend home purchase discounts already enjoyed by some tenants to 1.3 million more tenants of housing associations, private non-profits that provide low-rent accommodation that often receive public subsidy.

“Conservatives have dreamed of building a property-owning democracy for generations, and today I can tell you what this generation of Conservatives is going to do,” Cameron said.

Aimed at tackling Britain’s housing crisis, a hot political issue as house prices and rents soar, the pledge will extend an iconic policy first introduced by then prime minister Thatcher in 1980 and popular with aspirational lower income voters.

Critics claim the original “right-to-buy” policy fuelled Britain’s housing crisis by reducing the amount of affordable housing available.

But Cameron insisted this would not be the case this time as his plan would require each property sold to be replaced on a one-for-one basis.

Liberal Democrat leader and Deputy Prime Minister Nick Clegg said the policy was a “measure of how the Conservatives have run out of ideas”.

“It is not affordable and the figures do not add up,” he added. 

‘Unfunded promises’?       

At the manifesto launch, the prime minister also announced two other key policies.

Facing accusations that his party serves only the rich, Cameron unveiled plans which would mean no one working 30 hours a week or less on the minimum wage, currently £6.50 an hour, would pay tax.

His announcement came the day after centre-left Labour’s leader Ed Miliband promised to increase the minimum wage and again promised to end “zero-hours contracts”, which guarantee no minimum number of work hours.

Miliband dismissed Cameron’s claims that the Tories were the “party of working people”, saying they only looked after “the richest and most powerful in our society”.

Cameron also announced plans to provide 30 hours of free childcare a week, which he claimed would save families £5,000 a year.

But the Conservatives faced criticism that they had not revealed how they would fund their promises.

Paul Johnson, director of respected think tank Institute for Fiscal Studies (IFS), told the BBC: “We got a very clear sense that the Conservatives are going to have to do an enormous amount over the next three or four years, but almost no sense at all about actually how they are going to do it.”

Separately, a survey published by accountancy firm Deloitte on Tuesday showed that British companies are chiefly concerned about uncertainties over next month’s general election leading to caution over investment.

Deloitte released its findings from a quarterly survey of 108 chief financial officers (CFOs), including those at 21 companies listed on the FTSE 100, who listed their top risks to the outlook.

“Uncertainty over post-election policy change represents the greatest threat to UK business according to the chief financial officers of the UK’s largest companies,” Deloitte said in a report.

The group added that a net 53 per cent of executives are expected to increase capital expenditure over the next 12 months.

That contrasted with a peak of 80 per cent at the same stage one year ago.

“CFOs think the general election poses risks to what is seen as a benign policy environment,” Deloitte indicated. “A clear majority of CFOs see the potential for adverse changes on regulation and taxation. And, on balance, the expectation is that post-election changes will be negative for fiscal, monetary and labour market policies.”

The second biggest risk, according to the survey, was uncertainty surrounding a future referendum on Britain’s membership of the European Union.

Deloitte added that the third biggest risk was given as deflation and economic weakness in the eurozone — and the possibility of a renewed eurozone crisis.     

PARIS — Growth in emerging markets will slow for a fifth consecutive year, the International Monetary Fund (IMF) said Tuesday, as exchange rate swings and oil prices plunge, and China’s economic growth slows.

The IMF expects the emerging markets to post growth of 4.3 per cent in 2015, down from 4.6 per cent in 2014 and 5 per cent in 2013.

“In emerging markets, negative growth surprises for the past four years have led to diminished expectations regarding medium-term growth prospects,” the IMF said.

The slowdown, if not outright contractions, is evident in most of the major emerging markets, known as the BRICS. 

Only India and South Africa are expected to see growth increase this year. Brazil and Russia are to contract.

Meanwhile growth is to slow in China, which has been the driver of global growth in recent years.

The IMF expects the expansion of the Chinese economy to slow from 7.4 per cent last year to 6.8 per cent this year and 6.3 per cent next year.

“The gradual slowdown in China and the partly related decline in commodity prices [which also reflected a sizable supply response] weakened the growth momentum to some extent in commodity-exporting countries and others with close trade links to China,” the fund said.

Oil, greenback big risks       

Although the IMF, which is holding its twice-annual meeting this week in Washington, expects emerging market growth to rebound to 4.7 per cent next year, it remains concerned about the risks that sharp changes in currency exchange rates and oil prices could act as a drag.

While oil prices have fallen by around half since hitting a peak last June, that is not universally good news for emerging countries, particularly oil exporters facing other economic difficulties like Russia and Venezuela.

The drop in other commodity prices will hurt in particular Latin America and the Caribbean region, which is heavily dependent on exports of raw materials. The IMF now expects the region will muster only 0.9 per cent growth this year, down from the 1.2 per cent growth it had forecasted in January.

The rise of the dollar against emerging market currencies complicates the situation as many have debts denominated in dollars.

“There are balance sheet and funding risks, especially in emerging market economies, if dollar appreciation continues,” the IMF report indicated.

Another worry is US monetary policy. 

The US Federal Reserve is nearing a first hike in policy interest rates from the near zero levels they have been stuck at for years. Market interest rates have been increasing in expectation, which could provoke a shift of investment funds.

“Emerging market economies are particularly exposed: they could face a reversal in capital flows, particularly if US long-term interest rates increase rapidly, as they did during May-August 2013” when several countries faced difficulties, the fund said.

This time around, with the sharp fall in oil prices, oil exporters are more vulnerable while importers have better buffers.  

IMF wants reforms       

“Several years of downgraded medium-term growth prospects suggest that it is also time for major emerging market economies to turn to important structural reforms to raise productivity and growth in a lasting way,” added the fund, which has regularly called on countries to take steps to improve performance. 

The IMF identified three priority areas: improving infrastructure, notably to remove bottlenecks in the power sector; easing limits on trade and investment and improving business conditions; and raising competitiveness and productivity through reforms to education, labour and product markets.

“In India, the post-election recovery of confidence and lower oil prices offer an opportunity to pursue such structural reforms,” the IMF said.

It upgraded its forecasts for India, which it now sees expanding by 7.5 per cent this year and next, after having grown by 7.2 per cent last year.

South Africa’s growth is expected to pick up from 1.5 per cent last year to 2 per cent, but that forecast has been trimmed by 0.1 percentage points from the last forecasts in January.

The IMF said it sees Russia’s economy, hit hard by the fall in oil prices and Western sanctions over the Ukraine crisis, contracting by 3.8 per cent this year, worse than the 3 per cent it forecast in January.

The fund also switched its forecast for commodity exporter Brazil from growth to a contraction of 1 per cent this year. 

In its latest World Economic Outlook report, the IMF hiked its eurozone growth forecasts but warned the outlook was fragile, with the Ukraine crisis and uncertainty over Greece’s future in the single currency bloc adding to concerns.

“A Greek crisis cannot be ruled out, an event that could unsettle financial markets,” IMF chief economist Olivier Blanchard warned.

But while “an exit from the euro would be extremely costly for Greece, extremely painful... the rest of the eurozone is in a better position to deal with a Greek exit”, he said.

“It would still not be smooth sailing but it could probably be done,” he added, stressing economy and governance reforms adopted since the debt crisis to put the euro on a sounder base.

According to the latest World Economic Outlook report, the 19-nation bloc is meanwhile getting a boost from lower oil prices, record low interest rates and the European Central Bank’s (ECB) massive stimulus programme.

“There are signs of a pickup and some positive momentum in the euro area, reflecting lower oil prices and supportive financial conditions but risks of prolonged low growth and low inflation remain,” the IMF said.

The eurozone should grow 1.5 per cent this year, up from the 1.2 per cent estimated in January, gaining 1.6 per cent in 2016, up from 1.4 per cent.

This is a solid improvement but still well short of the IMF’s global growth estimate of 3.5 per cent for this year and 3.8 per cent next.

Consumer prices meanwhile are expected to edge up a minimal 0.1 per cent this year and by a still historically low 1 per cent in 2016, the IMF said.

The ECB has an annual inflation target of just under 2 per cent.

The economy grew 0.9 per cent in 2014, recovering in the last quarter from a soft patch which had stoked fears of deflation, when prices fall outright prompting consumers to put off purchases, which in turn weakens demand and undercuts activity.

“The priority is to boost growth and inflation through a comprehensive approach,” the IMF indicated, citing the ECB’s stimulus measures, changes in tax policy to favour investment, structural reforms and strengthening the banks to put the economy back on track after the upheavals of the debt crisis.

The focus has to be on investment and jobs in an effort to get the economy growing, it said.

Investment, jobs priority       

The ECB has cut interest rates to record lows but the banks remain reluctant to lend to business, preferring instead to repair the debt crisis damage to their balance sheets as the authorities press them to bolster their capital reserves.

The ECB has also begun a “quantitative easing” or QE programme to pump more than 1 trillion euros ($1.1 trillion) into the economy through to next year to stimulate credit and demand.

The IMF described the QE programme as “decisive”, larger than expected and a welcome stimulus given the wider weaknesses in the economy.

“Both core and headline inflation have been well below the ECB’s medium-term [target] for some time, with headline inflation turning negative in December,” the IMF said, although the move appears to have “stalled the decline in inflation expectations”.

Additionally, it has weakened the euro which should boost exports if for the moment there is little prospect of a strong turnaround.

“The medium-term outlook of modest growth and subdued inflation in the euro area is driven largely by crisis legacies, notwithstanding the positive effects of the ECB’s actions,” the IMF said.

“High real debt burdens, impaired balance sheets, high unemployment and investor pessimism about prospects for a robust recovery will continue to weigh on demand,” it indicated.

“Uncertainty and pessimism regarding the euro area’s resolve to address its economic challenges are likely to dampen confidence,” it said.

The continued crisis in Ukraine plus an agonising renegotiation of Greece’s debt rescue programme will weigh on sentiment too, adding to the downside risks posed by persistently low inflation.

“Economic shocks, from slower global growth, geopolitical events, faltering euro area reforms, political and policy uncertainty, and policy reversals, could lower inflation expectations and trigger a debt deflation dynamic,” the IMF concluded.

MANCHESTER, United Kingdom — Opposition leader Ed Miliband insisted he was ready to be Britain's next prime minister as he launched a manifesto Monday designed to boost his party's reputation on the economy before the May 7 election.

Miliband sought to reassure voters that his centre-left Labour Party would manage the economy responsibly while outlining "a plan to change our country" by handing more wealth to low and middle income families.

Labour has been virtually tied with Prime Minister David Cameron's Conservatives in opinion polls ahead of next month's general election which looks set to yield another coalition or minority government.

But with 24 days to go, the economy remains one of the party's main weak spots and polling suggests voters trust Labour less on the issue than the centre-right Conservatives.

Labour's record on the economy while in government between 1997 and 2010 under Tony Blair and Gordon Brown is also frequently attacked by the Conservatives, who blame the party for running up a budget deficit of some £90 billion (124 billion euros, $130 billion).

"I'm ready. Ready to put an end to the tired old idea that as long as we look after the rich and powerful, we will all be OK," Miliband told activists during a speech in Manchester, northwest England. "I know Britain can be better."

'Like an alcoholic
with vodka' 

Labour is promising to cut the deficit every year until it is eradicated, although it has not said exactly when this will be. 

It is also detailing how each manifesto pledge will be paid for, with no extra borrowing.

The Conservatives said Miliband's plan lacked credibility while the leader of the Liberal Democrats (lib Dem), junior partners in Cameron's coalition government, compared Labour's relationship with debt to an alcoholic's with vodka.

"The Labour Party saying they have no plans for additional borrowing is like an alcoholic who consumes a bottle of vodka every day saying they have no plans to drink more vodka," Lib Dem leader Nick Clegg told reporters. "It's a dangerous addiction."

Clegg later insisted he had not intended to "cast aspersions on people who are grappling with alcoholism".

Labour says its plans for reducing the debt would hurt ordinary, middle-income families less than the cuts to public services announced by Cameron's Conservatives, who have been in power as the coalition's senior partners since 2010.

Instead, it intends to make wealthier taxpayers shoulder more of the burden through policies such as the "mansion tax", which would hit homes worth £2 million or more, and increasing income tax for those earning more than £150,000 a year.

Trouble in Scotland 

Some business leaders warn that a Labour government could damage Britain's economic recovery.

Earlier this month, over 100 signed an open letter backing the Conservatives, including some who had previously backed Labour under Blair and Brown, who took a more business-friendly approach.

Commentators say Miliband, who has struggled with a geeky public image since defeating his brother David to become Labour leader in 2010, has turned in some strong personal performances on the campaign trail.

But his hopes of moving into Downing Street after the election could be dashed by an expected collapse for the party in Scotland, one of its traditional strongholds, due to surging support for the Scottish National Party (SNP).

The pro-independence SNP is expected to take the majority of Scottish seats and its leader Nicola Sturgeon is talking up the prospect of a post-election deal with Labour to prop it up in a minority government.