Business

ISLAMABAD — Pakistan's parliament has adopted a law that will convert the cash-strapped national airline into a limited company but bar the government from giving up its management control, officials said on Tuesday.

The passage of the law, which blocks selling off a majority share in Pakistan International Airlines (PIA), late on Monday, was a major setback for Prime Minister Nawaz Sharif who made the privatisation of the company a top goal when he came to power in 2013.

The privatisation of 68 state-owned companies, which include loss-making enterprises like PIA and Pakistan Steel Mills, is also a major element in a $6.7 billion international Monetary Fund (IMF) package that helped Pakistan stave off a default in 2013.

The government had struggled to meet its deadline to sell PIA, which has accumulated losses of more than $3 billion, after a delay of many months in amending a 1956 law that barred it from being privately owned.

After months of legal wrangling between government and opposition representatives, a joint session of the upper and lower houses of parliament unanimously passed a bill that blocks the privatisation of the airline.

"Management control of the company and any of its subsidiary companies... shall continue to vest in majority shareholders, which shall be the federal government and whose share shall not be less than 51 per cent," the law reads.

The IMF did not respond to e-mails and calls seeking comment.

Privatisation Commission Chairman Mohammad Zubair, who is a member of Sharif's ruling party, said the government would remain the major shareholder.

"We have agreed with the opposition parties that PIA will not be privatised," he told Reuters. "It is only being converted into a private entity to ensure more efficient running."

He said the bill was a compromise because resistance from unions and opposition parties was "too strong".

The government has struggled to restructure loss-making companies, which cost it an estimated $5 billion a year, and which include power distribution companies and steel giant Pakistan Steel Mills.

In February, the government shelved plans to privatise power supply companies. It has, however, made some progress, including raising more than $1 billion by selling its stake in Habib Bank Ltd.

But while the loss-making firms are a drain on resources, about an eighth of the government's fiscal revenue last year, few fear Pakistan will slide into crisis.

The IMF has released instalments of its package despite the missed targets, and the government is exploring other sources of support, like ally China, which plans to invest $46 billion in an economic corridor through Pakistan.

Separately, A multi-million dollar port being developed by China in Pakistan is set to be at "full operation" by the end of the year, a Chinese official said Tuesday, part of Beijing's ambitious economic plans in the region.

Gwadar port, on Pakistan's southwest coast, will see roughly one million tonnes of cargo going through it by 2017, said Zhang Baozhong, chairman of the Chinese public company in charge of the development. 

Current trade there is "basically nothing", he told reporters on the sidelines of a seminar about the port's development Tuesday. 

"We hope a big jump will take place... Our dream is to make Gwadar a regional trading centre," he added.

Gwadar, in Balochistan province, forms what officials call the "heart" of the China Pakistan Economic Corridor, a grand $46 billion project giving Beijing greater access to the Middle East, Africa and Europe through Pakistan. 

The port was built in 2007 with technical help from Beijing as well as Chinese financial assistance of about $248 million. 

Zhang said the tonnage will initially comprise "quite a number" of construction materials for the city's development, which Pakistani officials envision turning into another Dubai. 

Exports will at first focus on the local fishing industry, he continued, with a modern processing plant planned for the area, though he would not give a timeline for the plant. 

"We shall try to process it here... So that the locals can benefit," he told reporters after the seminar.

Desperately poor Balochistan has been roiled since 2004 by a separatist insurgency aimed at seeking greater control over the province's resources.

Some Baloch nationalists have accused the Chinese of conspiring with the Pakistani elite to plunder the province while doing little to share profits and create jobs for local people.

RIYADH — Fitch Ratings on Tuesday lowered Saudi Arabia's long-term credit rating, saying the plunge in oil prices had "major negative implications" for the world's biggest crude exporter.

The agency also noted increased tensions with long-time rival Iran and greater uncertainty over economic policy, now overseen by Deputy Crown Prince Mohammed Bin Salman.

Fitch downgraded the kingdom's credit rating to AA- from AA, which still denotes expectations of very low default risk.

The outlook remains negative, indicating a further cut is likely.

Fitch said it had revised downwards its oil price assumptions for this year and next, to $35 and $45 a barrel, which "has major negative implications for Saudi Arabia's fiscal and external balances".

In February, another agency, Standard and Poor's, cut the kingdom's credit rating by two notches, to A-, citing the impact of lower oil prices on the kingdom's finances.

Last month, Moody's placed Saudi Arabia and other Gulf oil producers on review for downgrades.

Oil prices have collapsed from above $100 in early 2014, and on Tuesday traded at just over $40.

The government has said oil income made up 73 per cent of revenue in 2015, compared with an average of 90 per cent in the previous decade.

The kingdom reported a record budget deficit of $98 billion last year and projects a shortfall of $87 billion in 2016.

To cope with the gap, it raised retail fuel prices by up to 80 per cent in December and cut subsidies to electricity, water and other services.

It has also delayed some major projects under King Salman, who acceded to the throne last year.

King Salman named his son Prince Mohammed to posts including defence minister and head of the Council of Economic and Development Affairs.

"Control over economic policy making has been concentrated in the hands of Prince Mohammed," Fitch said. "This may have contributed to an acceleration of the economic policymaking process, but has also reduced the predictability of decision-making."

The agency also noted that Saudi Arabia faces high geopolitical risks relative to AA-rated peers.

"Tensions have risen between Saudi Arabia and its long-standing regional rival Iran, and are expected to persist, although a direct confrontation is highly unlikely. Saudi Arabia's military intervention in Yemen and in Syria shows a greater assertiveness in foreign policy," it added.

Separately, a report indicated this week that the oil-rich Gulf states are expected to borrow between $285 billion and $390 billion through 2020 to finance budget deficits resulting from low oil price.

The six Gulf Cooperation Council (GCC) states, which heavily rely on oil earnings, are expected to post a shortfall of $318 billion in 2015 and 2016, Kuwait Financial Centre (Markaz) said in a report.

The GCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.

Their public finances have been hit hard since oil prices shed more than two thirds of their value since mid-2014.

Oil income made up over 80 per cent of public revenues in GCC states before the price decline.

Markaz said GCC states will finance their deficits partly through borrowing and the rest by tapping their huge fiscal reserves.

OPEC kingpin Saudi Arabia last year borrowed $26 billion from local banks and used over $100 billion of its reserves that stood at $732 billion at the end of 2014, the report added.

With the exception of Oman and Bahrain, GCC states have huge fiscal reserves and a low level of public debt allowing them to raise large volumes of domestic and international debt, the report said. 

The GCC states posted a combined deficit of $160 billion last year compared to a surplus of $220 billion in 2012.

In an earlier report in February, Markaz expected GCC public debt to rise to 59 per cent of gross domestic product in five years, from 30 per cent at the end of 2015.

According to sources familiar with financing, Saudi Arabia is seeking a bank loan of between $6 billion and $8 billion, in what would be the first significant foreign borrowing by the kingdom's government for over a decade.

Riyadh has asked lenders to submit proposals to extend it a five-year US dollar loan of that size, with an option to increase it, the sources said, to help plug a record budget deficit caused by low oil prices.

The sources declined to be named because the matter is not public. Calls to the Saudi finance ministry and central bank seeking comment were not answered.

Reuters reported that Saudi Arabia had asked banks to discuss the idea of an international loan, but details such as the size and lifespan were not specified.

The kingdom's budget deficit reached nearly $100 billion last year. The government is currently bridging the gap by drawing down its massive store of foreign assets and issuing domestic bonds. But the assets will only last a few more years at their current rate of decline, while the bond issues have started to strain liquidity in the banking system.

London-based boutique advisory firm Verus Partners, set up by former Citigroup bankers Mark Aplin and Andrew Elliot, is advising the Saudi government on the loan, the sources added.

The firm has sent requests for proposals to a small group of banks on behalf of the Saudi ministry of finance, the sources continued. They noted that banks participating in the loan would have a better chance of being chosen to arrange an international bond issue that Saudi Arabia may conduct as soon as this year.

A spokesman for Verus Partners was not immediately available to comment.

Rating cut

Analysts say sovereign borrowing by the six wealthy Gulf Arab oil exporters could total $20 billion or more in 2016, a big shift from years past, when the region had a surfeit of funds and was lending to the rest of the world.

All of the six states have either launched borrowing programmes in response to low oil prices or are laying plans to do so. With money becoming scarcer at home, Gulf companies are also expected to borrow more from abroad.

Bankers said a sovereign loan from Saudi Arabia could attract considerable demand, given the kingdom's wealth; its net foreign assets still total nearly $600 billion, while its public debt levels are among the world's lowest.

The pricing of the loan is likely to be benchmarked against international loans taken out by the governments of Qatar and Oman in the last few months, according to bankers.

Because of banks' concern about the Gulf region's ability to cope with an era of cheap oil, those two loans took considerable time to arrange and the pricing was raised during that period.

Oman's $1 billion loan was ultimately priced at 120 basis points over the London Inter Bank Offered Rate (LIBOR), while Qatar's $5.5 billion loan was priced at 110 basis points over, with both concluded in January.

"The indications are that a Saudi deal would have to price higher than that, as the world has changed significantly since those deals," one Middle East-based banker said, referring to the rating agencies' actions.

TOKYO — After losing some $3 billion overseas in nearly six years, Japan's Nomura Holdings Inc., is axing a brokerage unit and hundreds of jobs in Europe and the Americas, sounding a partial retreat from its latest drive to become a global player.

Announcing changes in its wholesale operations, Japan's biggest brokerage said in a statement on Tuesday it will "close certain businesses" in its Europe, Middle East and Africa region and "rationalise" unspecified operations in the Americas. 

It didn't say exactly which units are involved, nor how many jobs affected, but said it would disclose full details on April 27.

People with direct knowledge of the matter said Nomura's European equities research team will close. In total, 500-600 jobs would go in Europe, with other cuts in the Americas, separate people familiar with the matter said, declining to be named because they were not authorised to speak to the media.

The retreat signals the latest blow for Nomura management's international aspirations. The brokerage bought Lehman Brothers equities and investment banking business in Europe and Asia in 2008, at the height of the global financial crisis, as part of a concerted strategy to expand from its domestic stronghold and become a major force in international finance.

An earlier US push in the 1990s, selling commercial mortgage-backed securities, suffered heavy losses after the 1998 Russian debt crisis. 

Nomura's London-based cash equities execution platform Instinet will be unaffected by the cuts, people with knowledge of the matter said, as will its Europe-based Asian equities sales and trading business.

With Nomura's overseas business set to report a sixth straight annual pretax loss for the year ended March 2016, investors welcomed news of the cuts. Nomura spokeswoman Joey Wu declined to comment on the job loss figures.

Nomura shares gained as much as 8.7 per cent in Tokyo trading before closing up 7.4 per cent, while the benchmark Nikkei average  gained 1.1 per cent. The shares were languishing near three-year lows last week.

"By restructuring some of its businesses, Nomura can stop the bleeding and, in the long run, move towards profitability in its international division," said Masayuki Otani, chief market analyst at Securities Japan, Inc. 

From April 2010 to December 2015 alone, Nomura's overseas business lost 325 billion yen ($3.01 billion).

Regional divide

The move comes as investment banks globally review their trading operations, with new regulations making it harder to turn a profit. But equities business has provided one of the few growth areas for investment banks in Europe, despite Nomura's problems in the region.

Reuters reported last month that Deutsche Bank is hiring 100 people to boost its share trading operations. Meanwhile Credit Suisse has said that it will continue to expand its equities business, despite making deep cuts across the rest of its global markets division.

Moves by other banks away from their home regions, however, highlight the struggle to stay competitive. Britain's Barclays has closed its cash equities business in Asia, Asia-focused Standard Chartered closed its equities franchise, and France's Societe Generale has shut its India equities research desk.

Nomura's announcement comes five months after the brokerage said it will invest further in its Americas operations over the next two to three years, seeking to strengthen mergers and acquisitions advisory services and primary equity and debt businesses in the region.

As of December 31, Nomura had 3,433 employees in Europe and 2,501 in the Americas, company data shows. Over half of its total 29,069 employees are based in Japan.

LONDON — Tata Steel agreed to sell one of its main British steelworks to investment firm Greybull Capital for £1 on Monday, saving a third of the 15,000 jobs placed in jeopardy by the Indian conglomerate's decision to sell up in Britain.

Prime Minister David Cameron has been under pressure to keep the plants open to save jobs after Tata, one of the world's biggest steelmakers, said on March 30 it would sell its loss-making British business.

As Tata formally announced the sale of its steel assets in Britain, turnaround specialist Greybull Capital LLP. said it would buy the Indian company's Long Products Europe division in Scunthorpe, northern England, which employs 4,400. It declined to rule out further purchases of Tata's British steel assets, including its plant at Port Talbot in Wales.

The sale to Greybull, for a nominal pound or 1 euro, includes a £400 million ($570 million) investment and financing package for the Scunthorpe business, as well as agreements with suppliers and unions on cutting costs.

"We're expecting no redundancies going forward, the business plan calls for no redundancies," Greybull cofounder Marc Meyohas told reporters on a conference call.

The Greybull deal, which is subject to a ballot by union members, includes two additional mills, an engineering workshop and a design consultancy in Britain, plus a mill in Hayange, in northeast France.

The purchase will see the business renamed “British Steel”, in a revival of a historic name last used almost two decades ago.

Cameron, already grappling with a divided ruling party ahead of a June 23 referendum on membership of the European Union (EU), has been scrambling to try to find buyers for Tata's Scunthorpe plant and its other main plant at Port Talbot, to save jobs.

Britain's eurosceptic media has blamed Brussels for preventing London from taking greater steps to protect the steel industry while the opposition Labour Party has called on Cameron to do more to save the plants.

Tata, which owns iconic brands such as Jaguar Land Rover and Tetley Tea, is offloading its British steel operations, citing a global oversupply of steel and cheap imports from China, high costs and weak domestic demand.

British Steel?

The deal for the Scunthorpe plant, which Tata had been trying to sell since 2014 before revealing talks with Greybull were underway in December, is expected to complete in eight weeks subject to certain conditions being met.

Greybull, which is not taking on pension liabilities, said about half of the £400 million package would come from shareholders of Greybull and half from banks and government loans.

"We're expecting the company to be profitable in year one and that's very much the management plan," said Meyohas, who co-founded Greybull in 2008 after 12 years as chief executive officer of technology services company Cityspace.

Though the deal is positive for the Scunthorpe workers, there is deep unease in Port Talbot, Britain's biggest steel plant, where 4,000 people could be out of a job if Tata fails to find a buyer.

"While very welcome, it does not mean that we are out of the woods yet," said Gareth Stace, director of trade association UK Steel.

"A long-term investor is needed, in the very short term, for the remainder of the whole of the Tata Steel UK business, including Port Talbot," added Stace.

Scunthorpe produces steel mainly used in construction and infrastructure projects, whereas Port Talbot produces slab, hot rolled, cold rolled and galvanised coil which is used in products from cars to washing machines to food cans.

Finding buyers for Port Talbot and Tata's other assets, could take some time given the complexity of any deal, including negotiations over everything from pensions liabilities to energy subsidies.

Greybull said to date it had been wholly focused on the Scunthorpe deal, but declined to rule out future interest in the Port Talbot plant.

"Whether it's Tata or any other assets, we'll review it as and when is appropriate," Meyohas said.

Another potential bidder for the Port Talbot plant is Sanjeev Gupta, the boss of metals trader Liberty House Group.

‘Loss-making’

Gupta told Reuters on Friday that he was serious about making an offer and had the backing of a group with $7 billion of revenues, hitting back at critics who have questioned his capacity to take on a business dragged down by heavy debt and weak sales.

However, much will depend on how much any potential investor is willing to pay to even hope of turning around the business.

"It's a loss-making business and a loss-making business is not worth a lot in itself to buy," Gupta indicated. "It's more of a question of what are the resources required in turning it around."

Tata, under former Chairman Ratan Tata, bought its UK steel operations in 2007 after outbidding Brazil's CSN to buy Anglo-Dutch steelmaker Corus for $12 billion as a way to access the European market.

But the Indian conglomerate, controlled by philanthropic trusts endowed by the Tata family, struggled to turn the steelmaker around.

Like competitors such as ArcelorMittal, the world's top steel producer, Tata has been hit by plunging prices due to overcapacity in China, the world's biggest market for the alloy.

China said on Monday it wants to work with the rest of the world to find an appropriate resolution to overcapacity in the steel sector, after Britain asked Beijing to hurry up and tackle the problem.

Tata Steel is the second-largest steel producer in Europe with a diversified presence across the continent. It has a crude steel production capacity of over 18 million tonnes per annum (mtpa) in Europe, but only 14mtpa is operational.

The closure of Tata Steel's operations in Britain would leave a hole in manufacturers' supply chains, dealing a blow to thousands of smaller firms across the country and creating a logistical headache for the car industry.

Some of Tata's customers are already looking for new sources of steel which is used in everything from car roofs to Heinz baked bean cans, cladding on Ikea buildings and some of the country's coins.

While bigger names have the luxury of a global supply chain to fall back on, smaller companies, which account for around 95 per cent of British manufacturing firms, face a tougher task if Port Talbot in south Wales closes.

Tata sells around half of its products into the domestic market, the firm said in 2014.

"It would be entirely undesirable from my point of view," said Tony Mullins, executive chairman of QRL Radiators Group, a Tata Steel customer that makes heating radiators near the Welsh town of Newport, employing around 150 staff.

Looking abroad for steel would leave firms like QRL that use British steel exposed to swings in the currency exchange rate and higher transportation costs. It might also need to hold more stock if it is buying from the other side of the world, having an impact on working capital.

"We have to be competitive, we have to produce quality products and historically with Tata that has been possible for us," Mullins added.

Driving force

Britain, the birthplace of the modern steel industry, has been struggling to compete since its post-war heyday and has shed thousands of jobs in recent years.

Since 2001 imported supplies have met more than half of its domestic demand, according to the International Steel Statistics Bureau (ISSB), as local producers struggled with high energy costs, green taxes and fierce competition.

Germany is the biggest foreign supplier of steel to British manufacturers and construction firms, followed by China, Spain, Belgium and the Netherlands, the ISSB indicated.

The government maintains that the main problem is the collapse in the price of steel. China has flooded European markets with relatively cheap steel as a result of its own falling demand.

Britain imported 826,000 tonnes of Chinese steel in 2015, up from 361,000 two years earlier, according to industry data.

According to the ISSB, China has produced more steel in the last three years than Britain has since the industrial revolution.

Those British steelmakers that remain have been kept going by local manufacturers, a resurgent car industry and foreign demand.

"Hot-rolled coil is produced [at Port Talbot] and that predominately goes into the automotive sector... that's the bodywork," Dominic King, head of policy and representation at industry group UK Steel, told Reuters.

Five carmakers built almost 99 per cent of Britain's 1.6 million cars last year and all source steel from Port Talbot, with some already looking for alternatives should the site shut.

The country's biggest carmaker Jaguar Land Rover (JLR) , which made just under a third of national output last year, gets around 30 per cent of its steel from the site while Nissan, which operates Britain's biggest single car plant in northern England, buys 45 per cent from there.

Showing the cost constraints within the industry, John Leech, who heads up the automotive team at KPMG and works with some of the country's biggest carmakers, said JLR could not afford to give preferential treatment to a more expensive product even though it is owned by Tata Motors, part of the same family of companies as Tata Steel.

"To compete against BMW and Mercedes, Jaguar Land Rover needs to makes sure its cars are cost-competitive and that means using materials that are sourced cheaply and competitively," he added.

JLR said: "Like all other independent businesses, we make our own purchasing decisions based on the right commercial reasons." The firm added that it continued to use Tata Steel and did not see any short term impact on its business.

A spokesman at General Motors-owned Vauxhall, which uses Tata's high-strength lightweight steel in its Astra hatchback model said it was "considering the scenario of UK steel plant closures on supply sources".

"There are a number of sources of steel in Europe that are used by our plants in Spain, Germany and Poland," the spokesman said, when asked whether the firm was looking elsewhere.

Leech said timing could be key, with Tata Steel saying it wants to exit Britain as soon as possible.

"It will mean a lot of fast footwork behind the scenes but... the ability to get the same steel from other European or Chinese plants in [a one to three-month] time frame is a possibility," he added.

Buy British

For many of the workers leaving the Port Talbot plant at the end of their shift last week the news has come as a shock, given the investment made under Tata's ownership.

"Tata certainly have influenced training more than the old regime..." said Dave Bowyer, 59, a steelworker for 40 years and Unite union representative, whose ancestors were steelworkers.

"The workforce itself has become far more technical. Our craftsman and production guys, even the guys on the shop floor — a number of them have got degrees," he added

UK Steel's King said there were many advantages to the British product which continue to attract buyers.

"One is customer service, that you have that close link with the manufacturer... you know in the UK that they are going to be meeting the energy targets, the environmental targets that are out there [and] that engineering skill," he added.

The industry is also known for its highly-skilled flexible workforce with no strike action in 30 years.

Rollo Reid, technical director and grandson of the founder of REIDsteel, one of Britain's largest steel construction companies which sources almost 90 per cent of its steel from Tata, worries that if Port Talbot closes, prices will rise.

"There will be one less competitor and when the other European ones go out of business, there will be less competitors and then the price will go up and we'll be completely within the hands of the Chinese," he said.  

WASHINGTON — Lending to needy countries by the World Bank surged to a level last year normally only seen during financial crises, the bank said Monday.

Facing slowing growth and low commodity prices, developing countries borrowed the most money from the World Bank in 2015 since the 2008-2009 crisis.

“As developing countries continue to face strong economic headwinds, demand for lending from the World Bank has risen to levels never seen outside a financial crisis,” the World Bank indicated in a statement.

During its 2015 fiscal year, lending to emerging-market and low-income economies totalled $42.4 billion, up from $40.8 billion in 2014.

Of that total, lending for emerging, or middle-income countries, was $23.5 billion in 2015, compared with only $14 billion in 2006. The bank projects that lending for emerging economies this year will surpass $25 billion.

Hit particularly hard by the sharp fall in oil and other commodity prices and China’s cooling economy, a number of developing countries are suffering from strained finances and economic difficulties.

“Developing country governments are feeling the pressure to find additional ways to accelerate growth, in the current downturn,” said Jan Walliser, a World Bank vice president, in the statement.

A large part of its support has been to help countries diversify sources of growth and buffer themselves against future shocks, the bank said.

The World Bank, which holds its spring meetings with the International Monetary Fund this week in Washington, has set a goal of ending extreme poverty by 2030.

“We are in a global economy where growth is expected to remain weak, so it is critically important that the World Bank play our traditional role of helping developing countries accelerate growth,” World Bank President Jim Yong Kim said in the statement.

Separately, the World Bank said Monday that China’s economic slowdown will hit growth in developing East Asia and the Pacific from this year until at least 2018, warning of volatile global markets and urging caution.

Regional growth is forecast to slow from 6.5 per cent in 2015 to 6.3 per cent this year and 6.2 per cent in 2017 and 2018, the bank indicated in its latest outlook.

However, Southeast Asian economies led by Vietnam and the Philippines are still expected to see healthy expansion, with both forecast to see growth rates of more than 6 per cent, it added.

According to the bank, the regional outlook reflected China’s gradual shift to slower, more sustainable growth, expected at 6.7 per cent this year and 6.5 per cent in 2017 and 2018, from 6.9 per cent in 2015.

China is in the midst of reforms as it moves to make domestic consumption a key economic growth driver instead of exports and as manufacturing gives way to services taking on a bigger role in the economy.

“Continued implementation of reforms should support the continued rebalancing of domestic demand,” the report said on the Chinese economy.

“In particular, growth in investment and industrial output will moderate, reflecting measures to contain local government debt, reduce excess industrial capacity and reorient fiscal stimulus toward social sectors,” it added.

Victoria Kwakwa, incoming World Bank East Asia and Pacific vice president, indicated in a statement that the region’s developing countries accounted for “almost two-fifths of global growth” last year.

“The region has benefited from careful macroeconomic policies, including efforts to boost domestic revenue in some commodity-exporting countries. But sustaining growth amid challenging global conditions will require continued progress on structural reforms,” she said.

Major drag       

The forecasts were made against a backdrop of slowing world growth, weak global trade, low commodity prices and volatile financial markets, with China’s economic slowdown a major drag.

Excluding China, regional growth is projected to pick up from 4.7 per cent last year to 4.8 per cent this year and 4.9 per cent in 2017 and 2018, powered by Southeast Asia’s robust economies, the bank indicated.

“Among the large developing Southeast Asian economies, the Philippines and Vietnam have the strongest growth prospects, both expected to grow by more than 6 per cent in 2016,” it said.

“In Indonesia, growth is forecast at 5.1 per cent in 2016 and 5.3 per cent in 2017, contingent on the success of recent reforms and implementation of an ambitious public investment programme,” the bank added.

Vietnam is forecast to grow 6.5 per cent this year, 6.4 per cent in 2017 and 6.3 per cent in 2018, down from 6.7 per cent last year.

Expansion for the Philippines is seen at 6.4 per cent this year and 6.2 per cent in 2017 and 2018 from 5.8 per cent in 2015.

The region, however, faces “elevated risks” from a weaker-than-expected recovery in advanced economies and from the possibility of China’s slowdown being steeper than anticipated, said World Bank chief regional economist Sudhir Shetty.

“This is a very volatile time for the global economy. This is a time for all countries to be cautious,” he told reporters in Asia during a video conference call from Washington.

“There is not a lot of room to manoeuvre on the macroeconomic side,” he warned.

Countries should “rebuild fiscal buffers because... there’s going to be bad shocks down the road, which will require the use of fiscal policy,” he said.

Shetty also called on countries to continue with flexible exchange rates “to adjust to whatever shocks there are” and to push through with needed structural reforms.

East Asia and the Pacific under the World Bank covers China, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, Cambodia, Laos, Myanmar, Mongolia, Fiji, Papua New Guinea, the Solomon Islands and East Timor.

AMMAN — The Jordanian Construction Contractors Association (JCCA) on Monday expressed willingness to participate in rebuilding Syria. 

At a meeting with a World Bank (WB) delegation, the association called for easy conditions on tenders funded by the bank, so as to enable more Jordanian contractors to take part in implementing Syria reconstruction schemes. 

JCCA’s representatives Abdullah Khalifeh and Abbad Isbitan said Jordanian contractors are best qualified for the job, due to the geographical closeness between Amman and Damascus, historical harmony between the Jordanian and Syrian peoples and the availability of Syrian workforce in the Kingdom.

Khalifeh noted that some 95 per cent of Jordanian construction companies cannot participate in tenders funded by the bank and the United States Assistance International Development   because of the difficult rehabilitation terms.

Head of the World Bank delegation, Alan Moody, presented a proposal to manufacture reconstruction equipment and to store them, to ensure full readiness to implement projects once security conditions are restored in Syria.

Also on Monday, the JCCA council called on the government to amend the 2015 tax disclosures, file, document and profit rate by-law, according to association vice-president Ahmad Yakub.

Yakub called for abiding by contracts signed with the state and business owners through keeping the tax rate on projects whose offers were filed before January 1, 2015 at 1.4 per cent, especially that the deadline for presenting tax statements is April 30.

In this regard, he said the state does not have the right to issue laws that would exempt it from its legal responsibility.

The council criticised an Income and Sales Tax Department decision stipulating calculating a 10 per cent rate of net profit from revenues for projects the sector won their tenders or started implementing earlier than January 1, 2015, and condemned increasing the income tax on such schemes from 1.4 to 2 per cent. 

He noted that the instability of laws confuses contractors, business owners and investors, in addition to delaying the accomplishment of projects at their due times, and contributing to losing local and foreign investments.

Yakub also said that facilities and incentives given to foreign contractors are better than those granted to local counterparts, which encourages foreign investments on the expense of local one, resulting in the migration of local investors to Egypt and the United Arab Emirates.

AMMAN — Representatives of the Kingdom's commercial sector on Sunday asked officials from the Industry, Trade and Supply Ministry to address several issues so as to help develop the market.

The national economy is going through several challenges caused by regional circumstances and border closures with Syria and Iraq, said Jordan Chamber Commerce (JCC) President Nael Kabariti, adding that these factors weakened the purchase power at the internal and external levels. 

In this regard, Kabariti highlighted that the economic slowdown is a global issue that many countries suffer from, and the problem is not limited to Jordan, noting that the Kingdom's "distinguished" external relations played an important role in penetrating non-neighbouring countries' markets.

As for registering companies, the JCC president said "Jordan is among the fastest countries in registering companies if they present complete documents to licensing bodies," refuting some allegations that registration transactions take long time.

Also speaking at the meeting, attended by commercial sector representatives, relevant government officials and media, Industry, Trade and Supply Minister Maha Ali expressed keenness to communicate and exchange views with the private sector.

Such gatherings are important to assess accomplishments and listen to demands of the sector, Ali said, adding that the government is aware of current economic circumstances and their negative impacts on the national economy, which call for exerting more efforts to overcome these difficulties.

"The Kingdom's exports in 2015 dropped by 7.1 per cent compared to the year before," the minister indicated, noting that the government offered incentives to the construction, tourism, industrial, ICT and transportation sectors, among others, to motivate the economy. 

The government also worked on penetrating alternative markets, especially in Africa, and drew a joint plan with the private sector to increase Jordanian exports to these markets and enhance commercial exchange with African countries.

As for simplifying the rules of origin with the Europeaan Union (EU), Ali expected the issue to go into effect in June, commending the step in improving the investment environment and opening European markets for national products.

She called on the commercial sector to provide enough quantities of foodstuff and maintain prices, due to the approach of Ramadan, and to import  items early to avoid piling in Aqaba Port, noting the ministry met with Aqaba Special Economic Zone Authority officials to facilitate import procedures.

Amman Chamber of Commerce President Issa Murad criticised a recent decision to increase tax on the commercial sector from 14 to 20 per cent, describing the decision as negative because it would increase the tax evasion.

Jordan Standards and Metrology Organisation Director General Haydar Zaben said that if importers bring a test report from an internationally-accredited laboratory, they receive entry permission within four hours, noting that the organisation's personnel work round the clock to ensure transactions are completed quickly, due to time differences around the world. 

Other members of national chambers of commerce reviewed their demands which included ambiguity in licensing procedures, lowering taxes on fabrics, facilitating clearance measures, unifying inspection institutions.

Ali said the ministry would study the sector's demands with relevant public institutions and work on solving them.

DUBAI — Dubai's Emaar Properties  plans to build a new tower in the emirate to surpass the Burj Khalifa, currently the world's tallest building, Chairman Mohammed Alabbar told reporters on Sunday.

The new project comes as Dubai developers continue to announce new schemes despite a softening real estate sector, with the Emaar-built Burj Khalifa expected to be usurped by a tower currently under construction in Saudi Arabia.

Alabbar would not confirm the height of the proposed new tower, saying only that it would be "a notch" taller than the Burj Khalifa, which stands at more than 828 metres.

Supported by a matrix of cables, the futuristic tower will anchor the redevelopment of the Dubai Creek, the heart of old Dubai where traditional dhow boats continue to ferry goods.

The tower, designed by Spanish-Swiss neo-futuristic architect Santiago Calatrava Valls, is slated to have a rooftop courtyard, residential units and a link to a retail plaza.

The building is expected to be completed for the Dubai Expo trade fair in 2020, the same year that the kilometre-high Kingdom Tower in Jeddah is due to overtake the Burj Khalifa as the world's tallest building.

Funding for the $1 billion project will be 50 per cent equity and 50 per cent debt, Alabbar indicated, undeterred by a residential property market that consultancy Cluttons says has softened for at least five quarters.

The balance between supply and demand is very encouraging, Alabbar remarked. He declined to give figures, but said: "I don't see a pullback. We are doing better than 2015.”

CAIRO — Egypt will reduce spending on fuel subsidies by nearly 43 per cent in the 2016/17 budget due mainly to lower global energy costs, officials said on Saturday.

Finance Minister Amr Al Garhy told a news conference state energy subsidies would fall to 35 billion Egyptian pounds ($3.94 billion) from about 61 billion pounds in the 2015/16 budget.

Consumers reacted angrily when the government cut spending on energy subsidies in mid-2014, a measure that caused domestic prices of natural gas, diesel and other fuels to rise by as much as 78 per cent. They were reduced again in the current budget.

However, the deputy finance minister for fiscal policy said a decline in international oil prices would account for the bulk of the reduced subsidy spending in the next fiscal year.

"Most of the savings in petroleum product subsidies will be a result of lower global oil prices," the deputy minister, Ahmed Kojak, told Reuters.

"There is also a saving of about 8-10 billion [Egyptian] pounds that will come as a result of new reforms that the petroleum ministry will outline in agreement with us," he added.

Egypt is struggling to revive its economy since a popular uprising in 2011 shook investor confidence and drove tourists and foreign investors away. Its foreign currency reserves stood at $16.56 billion in March, down from about $36 billion in 2011.

The government has been trying to cut subsidies, which eat up a big chunk of the budget.

President Abdul Fattah Al Sisi has approved a draft state budget that reduces the budget deficit in the 2016/17 fiscal year to 9.8 per cent of gross domestic product (GDP) from the current 11.5 per cent.

Separately, Egypt is confident of luring back millions of foreign visitors and putting a smile on their faces, according to its new tourism minister, despite heavy first quarter losses and setbacks including a bomb that brought down a Russian passenger plane.

Yehia Rashed said the ancient land of the pyramids and Red Sea resorts was determined to secure a strong recovery even though the number of foreign tourists fell by 40 per cent in the first quarter of 2016, compared with the same period last year.

The most populous Arab nation aims to attract 12 million tourists by the end of 2017 with a six-point plan, he added.

"I am very hopeful, optimistic about the future of tourism into Egypt," Rashed told Reuters in an interview. "I want to get that smile that you are smiling into the faces of everybody. We want to stay positive."

Egypt tourism revenue has taken a heavy hit since a Russian plane crashed in the Sinai last October, killing all 224 people on board in what President Sisi called an act of terrorism. 

Rashed assured that Egypt had improved airport security since the crash. 

"These people have worked day and night," he stressed. "Egypt is safe."

The torture of Italian graduate student Giulio Regeni, whose body was dumped on the side of a road in February, has also hurt Egypt's image.

"We care big time about human rights. The best way, actually, is to create positive vibes in the mind of people that Egypt is safe and it is worth visiting," he said.

Hurting earner

Egypt's tourism industry, a cornerstone of the economy and critical source of hard currency, has been struggling to rebound after the political and economic upheaval triggered by the 2011 uprising.

More than 14.7 million tourists visited Egypt in 2010, dropping to 9.8 million in 2011.

"The first quarter is down about 40 per cent compared to last year. However, there is a positive with every negative. The Gulf business is up about 45 per cent from last year," Rashed indicated.

Egyptian tourism has survived hard times in the past.

In 1997 militants killed tourists at a temple in Luxor, on the Nile.

Rashed seemed optimistic. He said the new six-point plan to boost tourism would include increasing the presence of national carrier EgyptAir abroad, working with low-cost airlines and the improvement of services.

Asked how the state would fund these projects, he said:

"We are not doing new things what we are doing is stimulation programmes. Taking from the current funding and putting it into where our bread and butter is," Rashed explained. "We don't have the figures of the total cost of this. We are currently working on the costing." 

LONDON/BEIJING — Britain asked China on Saturday to hurry up in tackling overcapacity in its steel industry, hoping to stem the flood of cheap imports into Europe which India's Tata Steel has blamed for its decision to pull out of the United Kingdom, putting 15,000 jobs at risk.

Tata put its entire UK business up for sale last month, including its flagship production plant at Port Talbot in south Wales, saying it could no longer endure mounting losses caused by increased imports to Europe from countries like China, high manufacturing costs and domestic market weakness.

"I urged China to accelerate its efforts to reduce levels of steel production," Britain's Foreign Secretary Philip Hammond said in a statement issued after he met with his Chinese counterpart Wang Yi in Beijing.

"The UK's focus is on finding a long-term sustainable future for steelmaking at Port Talbot and across the UK and I welcomed the potential interest of Chinese companies in investment in UK steelmaking," Hammond added.

The global steel industry is suffering from overcapacity as a slowdown in growth in the Chinese economy has reduced domestic demand.

China, which produces half of the world's steel, as well as Russia have responded by diverting more of their output to markets like Europe, sending prices plummeting.

The European Union opened three anti-dumping investigations into Chinese steel products in February and imposed new duties on imports after the European steel industry said thousands of jobs were at stake.

China said earlier on Saturday that plans to shut steel mills over the next five years would cut capacity to an estimated 1.13 billion tonnes by 2020, which is still far in excess of the country's needs.

Britain said last week that UK steel producers must be considered for infrastructure and other government contracts involving steel supplies, as part of plans to find a long-term solution to a crisis in the industry.

As the government looks for ways to support domestic steel producers, Prime Minister David Cameron said there was no guarantee of a buyer for Britain's biggest steel producer, and that a state takeover was not the answer.

Under its support measures, the government will create an approved supplier list for steel companies wanting to bid for public sector projects, such as Britain's £55 million ($78.25 million) high-speed rail link, which will need 2 million tonnes of steel.

"By changing the procurement rules on these major infrastructure projects we are backing the future of UK steel — opening up significant opportunities for UK suppliers and allowing them to compete more effectively with international companies," Business Secretary SajidJavid said in a statement.

The introduction of measures to ensure British steelmakers are considered for government contracts could take six to nine months, a spokeswoman for Javid's department said.

The government has faced criticism over its response to Tata's decision to sell its UK plant in south Wales, which employs 15,000, with opposition politicians saying it was "asleep at the wheel".

The government has said it is working to broker a deal with potential buyers.

Liberty House Group, which produces steel in Britain, has begun talks with the government over a potential partnership but does not want to buy all of Tata's UK operations, its Executive Chairman Sanjeev Gupta was quoted as saying by the Sunday Telegraph.

Javid told the BBC he would not talk about specific offers but said he wanted to find a buyer for the whole business and the government would engage with any willing and serious buyer.

He added that the government was looking at how it could help with issues such as Tata's pension burden and costly energy supplies.

"These are the kind of things we have already thought of, we have already started working on and what I hope is that you will have the offer document from Tata, overlay on top of the help the British government can provide and then you have the makings of a successful deal," he elaborated.

Cheap Chinese imports have hit Britain's steel industry. Britain imported 826,000 tonnes of Chinese steel in 2015, up from 361,000 two years earlier, according to the International Steel Statistic bureau.

Cameron has said he wants Britain and China to work together to tackle overcapacity in steel. 

Last month, however, China imposed anti-dumping duties of up to 46 per cent on specialist steel products from Japan, South Korea and the European Union.