Business

SYDNEY — Australia's economy strengthened last year supported by consumer and government spending, data showed Wednesday, with the better-than-expected figures raising hopes the resources-dependent nation is emerging out of a recent slump.

Economic growth expanded by 0.6 per cent in October to December to take the annual rate of expansion to a surprise 3 per cent, figures released by the Australian Bureau of Statistics showed.

The figures beat market expectations of fourth-quarter growth of 0.4 per cent for year-on-year growth of 2.5 per cent, and sent the Australian dollar jumping almost half a cent to 72.19 US cents.

"Today's December quarter national accounts show once again that Australia continues to successfully manage the transition from the largest resources investment boom in our history to broader-based growth," Treasurer Scott Morrison told reporters in Canberra.

"We are growing faster than every economy in the group of 7, growing well above the average of countries in the Organisation for Economic Cooperation and Development. We are growing faster than the United States and the United Kingdom, more than twice the pace of comparable resource-based economies like Canada," he said.

The healthy figures were further supported by an upwards revision of the September quarter growth rate from 0.9 per cent to 1.1 per cent, the strongest three-month reading since March 2012.

Household spending contributed 0.4 percentage points to the December quarter growth while public gross fixed capital formation, which includes construction and infrastructure spending, added 0.2 percentage points to gross domestic product (GDP), the data showed.

The gains were offset by a fall in business spending, which weakened the quarterly growth reading by 0.2 percentage points, as investment in the mining sector continued to soften.

Central bank on hold 

The Australian economy has slowed as the country exits an unprecedented mining investment boom that has helped it avoid a recession for 24 years, with the jobless rate hovering around a decade high and wage growth and business investment outside the resources sector both tepid.

The central Reserve Bank of Australia (RBA) has been trimming interest rates since November 2011, with the last cut in May 2015 taking it to a record-low of 2 per cent, as it sought to boost growth in non-mining sectors.

But the labour market showed signs of strengthening in late 2015, while consumers appeared to be more willing to open their wallets amid a booming residential housing sector.

The central bank kept the cash rate on hold on Tuesday, saying it was monitoring the improvement in the jobs market and that there were "reasonable prospects for continued growth in the economy, with inflation close to target".

The latest readings are better than the RBA's forecast of 2.5 per cent for the year to December 2015 and reinforces its stance to stay on the sidelines at this time, economists said.

"The latter half of last year looks a fair bit stronger than was realised at that time," JP Morgan senior economist Ben Jarman said.  "A lot of the most recent strength comes from consumer spending."

"With other things equal, this means that the RBA can have a bit more confidence in the domestic demand side of things. This helps their on-hold stance," he added.

While the headline figures were healthy, the income side of the economy remained weak, with nominal GDP, which is not adjusted for inflation, at 0.4 per cent for the quarter and 2.4 per cent year-on-year.

The terms of trade, a ratio that measures export prices to import prices, fell 3.2 per cent for the fourth quarter to decline 12 per cent on-year, amid weakening commodity prices.

"Income growth is soft. We've got a measure of living standards, and this is the fourth year of decline in that measure," Deutsche Bank economist Phil O'Donaghoe said.

"The cost of having strong employment in an economy like this is that income growth is so weak," he added.

Separately, Australia followed major world powers by lifting sanctions on Iran on Wednesday, after confirmation from the United Nations that Tehran had taken steps required to curb its disputed nuclear programme.

Under changes announced by the Australian government, businesses will no longer need to seek approval for transactions of more than A$20,000 ($14,436) involving entities from Iran.

While Australia has suspended some of the sanctions imposed on Iran autonomously in 2008 because of the Islamic republic's nuclear programme, some non-nuclear sanctions remain in place, the Department of Foreign Affairs and Trade said in a statement.

Sanctions still in force against Iran include restrictions on the transfer of proliferation sensitive goods, the arms and ballistic missiles embargoes and sanctions against some designated persons and entities.

Australia's anti-money laundering watchdog AUSTRAC expects reporting entities to scrutinise all payments that are routed via third-party countries to Iran or North Korea, which is also subject to sanctions due to its nuclear programme.

AUSTRAC says all transactions to those two countries should be considered as "high risk".

MOSCOW — "If you don't die by yourself, we'll help you," threaten the phone messages that Natalya, a 69-year-old Russian pensioner, has been receiving for months after falling further behind on her credit card payments.

Resorting to harassment and threats of violence, debt collectors sent out by banks to recover money have become notorious in Russia and, many complain, usually face no punishment.

But as Russia's unpaid debt soars to dramatic levels due to an economic crisis, authorities are now seeking to regulate the cowboy sector.

For Natalya, who declined to give her full name due to fear of reprisal, the problems began last summer.

She had to go into hospital and was forced to stop the part-time car park supervisor's job that supplements her monthly pension of around 150 euros ($164) plus the 70-euro disability benefit of her son, who lives with her.

It became impossible for Natalya, who lives in the region outside Moscow, to cover the monthly bills for her credit card which she says come to about 5,000 rubles (60 euros, $66), although she does not understand exactly what the amount represents.

Interest rates can reach as high as 20 per cent for longer term loans such as mortgages, and much higher for short term ones.

The menacing phone calls have become increasingly frequent, "day and night", she said.

Noting the telephone numbers used by the debt collectors, she has listed up to 18 calls per day.

The callers' tone has also grown more menacing, with threats of violence.

"We will come to your home to see if you have any gold teeth," or "we will confiscate your property", and "we will make you run for the cemetery" — just some of the threats she received.

"They got me into such a state that I didn't have the strength to leave my flat. I begged them but to no avail. They just kept on shouting and insulting me," she said, fighting back tears.

She finally went to a lawyers' association to attempt to get her repayments cut to a manageable level.

Mounting unpaid loans

Natalya's case is far from unusual, as are the tactics used against her. 

Russian media has carried reports of bailiffs beating up people with debts, posting insults in the entrance halls of their apartment blocks and threatening to attack their children.

"Over the last year, we have seen a wave of complaints," said Irina Malinina, a lawyer who heads a group helping people with unpaid loans.

"Delays or failures to make payments have increased so visits and phone calls from debt collectors have gone up," she added.

Collapsing oil prices and sanctions on Russia due to the conflict in Ukraine have plunged the country into recession, prompting a drop in spending power that caught out many Russians who had taken loans during the boom years when credit was available with almost no background cheques.

Payments were late on nearly 18 per cent of personal loans on January 1, up from 10.3 per cent a year earlier, according to the National Bureau of Credit Histories, a company that holds a large database of credit history records.

Exacerbating the situation, banks have sought to unload their bad loans by selling them to debt collector agencies.

Banks have also tightened the criteria for granting loans, pushing Russians towards small microcredit organisations offering short-term "payday" loans.

The situation is particularly difficult in the provinces, where the standard of living is low and people are ill-informed about their legal rights.

Anti-debt collector app

Siberian programmer Yevgeny Pyatkovsky, who is in his 30s, has created a smartphone app that allows users to add numbers of debt collectors to a database and block their calls. 

Designed initially for his own family, the Antikollektor app now has 300,000 users, he said.

He explained that the app has a dual aim: to protect relatives of debtors, who are sometimes also targeted, and to spare people who owe money from the "enormous stress" of harassment by debt collectors.

After long ignoring the issue, the authorities finally took notice as media reports of abuses by debt collectors have multiplied.

The investigative committee and the prosecutor general's office vowed to severely punish a debt collector in the Volga city of Ulyanovsk, who in January threw a Molotov cocktail into the house of a man who had taken out a small loan, causing his two-year-old grandson to suffer serious burns.

In mid-February, the speakers of the upper and lower houses of parliament, Sergei Naryshkin and Valentina Matviyenko, submitted a draft law regulating debt collection.

It limits the lawful number of phone calls debt collectors can make and bans them altogether at night, as well as penalising harassment.

But Malinina believes it does not go far enough.

"The constitution already bans entering properties, making threats and resorting to physical violence," she complained.

TIANJIN, China — Europe's largest aircraft manufacturer Airbus started construction Wednesday on a new facility to deliver wide-body planes in China, as it faces off against bitter US rival Boeing for market share in the world's second-largest economy.

At a ceremony in the northern port of Tianjin, Airbus Chief Executive Officer Fabrice Bregier and Chinese officials officially broke ground for the completion and delivery centre that will produce two A330 planes per month.

The centre is an expansion of the firm's existing final assembly plant for A320 single-aisle aircraft in the city.

It comes with China's economic growth at its weakest in a quarter of a century and concerns over its outlook sending shivers through global stock exchanges.

But Bregier said that "this is not true for our market", adding that increased middle-class incomes and easing visa rules were driving a boom in Chinese air travel.

The world's second-largest economy is already Asia's biggest aircraft buyer as a growing middle class takes to the skies in ever-increasing numbers. The country is forecast to have 1.7 billion air passengers by 2034, and is poised in the next two decades to become the largest civil aviation market in the world.

The new $150 million centre is the company's first such facility for wide-body aircraft outside Europe, and "marks a new milestone for Airbus' international footprint", Bregier said. 

It will take flyable unpainted aircraft from their headquarters in Toulouse, France and add cabins, furnishings and paint, before they are delivered to customers.

Boeing also plans to open a completion centre in China, it announced last year. The company sold 300 aircraft worth a record $38 billion during President Xi Jinping's visit to the US in 2015.

The two firms have been in a fierce battle for market share in China, where Airbus says it has gone from 27 per cent in 2004, before it opened the Tianjin final assembly line, to roughly 50 per cent today. 

The country is now Airbus' largest market, accounting for nearly a quarter of the planes it delivered in 2015. Days before the ground-breaking, Air China announced orders for 12 wide-body aircraft for $2.9 billion.

"I understand that our competitor is trying to mimic" the Airbus strategy by opening a facility, Bregier said in Tianjin, but added: "It's not really state-of-the-art."

A Boeing spokesman retorted: "Partnership is defined by more than a few buildings," calling its relationships in the country "second to none" in supporting the development of Chinese aviation.

SINGAPORE — Vacancies at Singapore's gleaming office towers are nearing their highest level in almost a decade, with construction of the city-state's tallest building, GuocoLand Ltd.'s 64-floor block in the financial district, wrapping up just as the economy slows.

Singapore's export-oriented economy has been hit by the slowdown in China and beyond, which has also put pressure on key sectors such as marine oil and gas, commodity trading and banks. Last year, the economy grew at just 2 per cent, its slowest pace since 2009.

A January review by real estate services firm JLL of major foreign international banks in the financial district showed half had either reduced the size of their office space over the past year and a half, or had to contend with extra space.

Analysts predict vacancy rates will continue to rise this year, with JLL estimating prime office rents to fall between 10 per cent and 20 per cent after dropping 15 per cent last year in a city that is ranked the 11th most expensive in the world to rent top quality offices.

Nicholas Mak, executive director at SLP International Property Consultants, said many of the buildings that are now ready for occupancy were planned about five years ago, towards the end of the global financial crisis.

"Many people thought that this is the new boom, let's try to capitalise on it. Nobody expected the party to end by end of 2015," he added, noting that office vacancy rates could hit 13.5 per cent, a level not seen since 2005.

Broader cost-cutting at banks due to the slowdown in the global economy is likely to have an impact on vacancies as financial institutions are key tenants for prime commercial space in Singapore.

Barclays will cut about 1,000 jobs in investment banking worldwide and close its cash equities business in Asia, an internal memo seen by Reuters showed.

Societe Generale gave up two floors in an office tower after selling its private banking activities in Asia to DBS Group Holdings in end-2014. It added three-quarters of a floor to existing space in another building.

Mak said vacancy rates could improve by the end of next year if the economy picks up and as demand catches up with the supply, easing the glut.

In the meantime, office landlord are limiting the number of leases that will expire over the next couple of years as well as diversifying their tenants to cope with the glut.

"This will be a short-term blip," Lynette Leong, chief executive of CapitaLand Commercial Trust, said in January.

Banking, insurance and financial services represented 33 per cent of CapitaLand Commercial Trust's tenant mix at end-2015, compared with 38 per cent five years ago, its results show.

BANGKOK — Governments must provide migrant labourers with the same benefits and social protections they give their own citizens, which will boost their economies and worker productivity, a United Nations official said.

Of the estimated 232 million migrants in the world in 2013, more than 95 million are from the Asia-Pacific region, according to the UN’s Asia-Pacific Migration Report 2015 launched this week in Bangkok.

Migrants contribute significantly to gross domestic product (GDP) growth in host countries, while sending home about $435 billion in remittances to developing countries in 2015, with Asia-Pacific nations receiving the highest amounts, the report indicated citing World Bank estimates.

Yet, many face abuses at every step of the way, from recruitment agencies and job brokers at home to exploitative employers, officials and police abroad.

It is the responsibility of governments in the countries that send and receive migrants to have domestic, regional and inter-country discussions to create the policies and conditions necessary for safe migration, said Hongjoo Hahm, deputy executive secretary of the UN’s regional development arm.

“When the recipient country provides social protection for the migrants — that is, healthcare, unemployment compensations, social safety net, education for their children... productivity of the migrants increases. It clearly has a benefit to the national economy,” he added, at the report’s launch on Monday.

“Treat them with dignity, treat them fairly, and provide the same protections that you provide your citizens, and... you will be rewarded for it,” Hahm continued.

Origin countries, he stressed, must create a system for orderly and structured migration.

“Too often, migrants have to rely on intermediaries that charge them exorbitant fees, and they are forever in debt, paying off their debt,” he elaborated.

“Creating fairness in terms of the employment process, both at the recipient country and at the home country, is really crucial, so that you get rid of the middlemen and you make migration a labour movement policy that we see in other parts of the world,” Hahm emphasised.

The region’s top country of origin for migrants in 2013 was India, with 14 million migrants leaving the country, followed by Russia, China, Bangladesh, Pakistan, the Philippines, Afghanistan, Kazakhstan, Turkey and Indonesia.

The top destination in the region that year was Russia, with 11 million migrant arrivals, followed by Australia, India, Pakistan, Thailand, Kazakhstan, China, Iran, Malaysia and Japan.

Most of the region’s migrants go to nearby or neighbouring countries, with Asia-Pacific hosting about 59 million migrants, while others go further afield to work in places such as the Middle East and North America.

Hahm cited the Philippines, which sends about 2 million citizens abroad each year, as a country that supports migrants as they prepare to go abroad, and also helps them to acclimatise to life back home when they return.

AMMAN — Jordan Chamber of Commerce (JCC) President Nael Kabariti on Tuesday called for opening new channels to develop economic relations between Jordan and Brazil and to encourage the private sector to establish joint investment projects, increasing the volume of bilateral trade.

Meeting with the director of the Arab-Brazilian Chamber of Commerce, Kabariti urged Brazilian businesspeople to benefit from Jordan’s location and stability as a centre of commerce and investment in the Middle East, despite the conditions of the region.

Kabariti voiced the private sector’s willingness to benefit from the big Brazilian markets and its varying products of foodstuffs, car parts and heavy machinery. Jordan’s exports to Brazil amounted to around $7 million in 2014 whereas imports amounted to $268 million, according to the JCC president.

The meeting also covered preparations for a visit of a Jordanian delegation to Brazil, in order to participate in the APAS 2016, the biggest trade show to be held in Latin America next May.

NEW DELHI — India's government pledged billions of dollars to help struggling farmers and boost the rural economy as it unveiled its annual budget on Monday, with an eye on kickstarting growth and boosting its flagging popularity.

India is now the world's fastest-growing major economy, but two years of drought and a failure to create jobs for a burgeoning young population has left millions of rural Indians struggling and led to deadly protests in recent weeks.

The government came to power nearly two years ago promising to transform India's economic fortunes, but has been hampered by the global economic slowdown and a failure to push much-needed reforms through parliament.

Finance Minister Arun Jaitley acknowledged the challenges as he presented the budget in parliament, but said he had a "vision to transform India".

"We have a desire to provide socio-economic security to every Indian, especially the farmers, the poor and the vulnerable," he added. "We have a dream to see a more prosperous India and a vision to transform India."

Jaitley pledged to spend 359 billion rupees ($5.2 billion) on doubling the income of India's estimated 120 million farmers over the next five years through measures including a crop insurance scheme and better access to markets.

India also plans to raise credit available to farmers to 9 trillion rupees for 2016-2017, and has pledged to ensure all the country's villages would have electricity within two years.

It will increase spending on the National Rural Employment Guarantee Scheme, which guarantees 100 days of employment on public works each year for any household that requests it.

Stalled reforms 

Analyst Samir Saran said the ruling Bharathiya Janata Party (BJP) was "responding to the political reality" ahead of crucial state elections this year and next.

"The BJP has to lay greater emphasis on social policy, it has to deliver a more populist budget," added Saran, a senior fellow at the Observer Research Foundation think tank. "The government is also responding to the fact that farmers have suffered two bad monsoons and there is great stress in the rural sector."

The BJP needs to perform well in those elections in order to push stalled economic reforms through the national parliament, where it lacks a majority.

These include Prime Minister Narendra Modi's flagship plan to introduce a national Goods and Services Tax (GST) to replace myriad complex state and national levies seen as deterring much-needed investment.

India is seen as a relative bright spot in the world economy, but feeble global demand has caused its exports to shrink for 14 months in a row and investment remains weak.

On Friday, the government forecast gross domestic product (GDP) would expand between 7 per cent and 7.75 per cent in the next financial year, marking little change from this year's levels.

The main Sensex index on the Bombay Stock Exchange fell 300 points during Jaitley's presentation of the budget, which included a hefty 23 per cent pay rise for millions of civil servants and a pension scheme for retired soldiers.

The two schemes will add billions of dollars to the government's spending bill over the next year, but Jaitley said it would stick to its ambitious target to cut the fiscal deficit to 3.5 per cent of the GDP in 2016-2017.

He also pledged to spend 2.21 trillion rupees on improvements to its creaking roads and other infrastructure seen as key to attracting investment for manufacturing.

The government will also inject 250 billion rupees into India's ailing public sector banks, which are weighed down by bad loans.

Despite a major push to boost manufacturing, farming remains by far the biggest employer in India and the sector is struggling after two years of weak monsoon rains.

This month the Jats, traditionally a farming caste, sparked riots in northern India to press their demands for better access to government jobs and education. They say they are struggling to make a living in farming.

The BJP performed poorly in elections in the impoverished eastern state of Bihar last year and faces polls in other major farming states this year and next.

According to activists, a complete overhaul of credit and subsidies to farmers is needed as government action to increase spending on irrigation and crop insurance is not enough to end a cycle of indebtedness that has led to thousands of farmer suicides.

Drought in many parts of the country has hit rice, cotton and other crops, and lower world commodity prices have added to the farmers' plight.

More than half India's farming households are in debt, owing banks and moneylenders hundreds of millions of rupees, despite numerous loan write-offs by successive governments.

Tens of thousands of farmers across the country have killed themselves over the past decade, several farmers' lobbying groups said.

Farmers' groups have been demanding better monsoon forecasts, bigger fertiliser subsidies and a state-funded insurance scheme for all crops, to help farmers improve yields and help prevent crop failures.

"The need of the hour is a focus on the dying farmer community," said activist Kishor Tiwari, who heads a task force set up to recommend action to tackle farmer suicides in western Maharashtra state, which accounted for more than half of all  suicides among Indian farmers in 2014.

"Debt is a core issue, and it needs a long-term plan to resolve it," he added.

While inter-generational bonded labour in the farming community is no longer as common as before, the number of poor and landless workers who are in debt bondage is rising, particularly in agriculture, brick kilns and stone quarries, activists say.

Indian farmers seldom own the land they cultivate, and often take loans to buy seeds and fertilisers. Only about one-tenth of India's 263 million cultivators take out crop insurance because of the high premiums.

Unpredictable weather and low crop yields have made farming unviable for many. Financial assistance provided by the government usually doesn't cover the losses, and some farmers have migrated to urban areas for low-paid jobs, even selling their blood to make ends meet.

Tiwari, in a plan submitted to the Maharashtra government, has recommended direct cash subsidies for farmers instead of the current indirect agriculture credit.

He also suggested the central and state governments help underwrite full crop insurance cover and promote the adoption of organic farming methods in drought-prone districts, to help restore soil quality and benefit from the higher price of organic produce, even though yields are lower.

A total of 5,650 farmer suicides were recorded in India in 2014, more than half of them in Maharashtra, according to the National Crime Records Bureau. The states of Madhya Pradesh, Telangana, Chattisgarh and Karnataka also had large numbers of farmer suicides.

The Cabinet in January cleared a proposal for the country's first major crop-damage insurance scheme. The government has said it will reduce premiums to be paid by farmers, and ensure faster settlements.

Delays in estimating crop damage and paying claims are a big challenge, said Sunita Narain, director of non-profit Centre for Science and Environment in New Delhi.

The government must encourage the use of new technologies, including remote sensing and mobile-based image capturing systems to improve yield data and claims processing, she added.

"Insurance coverage has to be universal and payouts enough to cover losses," she wrote in a blog.

Farm output contributes about 15 per cent to India's $2 trillion economy, and farmers and rural communities are a large and powerful vote bank.

Politicians have often promised to waive farmers' loan repayments, but have not addressed the underlying reasons for their chronic indebtedness, Tiwari said.

"Loan waivers are not the solution; it is like a simple dressing for a cancer tumour. You need to excise the tumour and address the cause of the disease," he added.

AMMAN — Jordan Chamber of Commerce (JCC) Nael Kabariti on Monday described the Kingdom's participation in the Gulf Food Exhibition in Dubai as successful, and commended the high level of coordination between the commercial and industrial sectors to promote national products. 

He said that more than 40 Jordanian specialised companies participated in the exhibition and that the Jordanian pavilion was visited by large numbers of people who had a first-hand look on the development of the national industry.

Kabariti highlighted the importance of cooperation among different sectors to build a strong economy capable of contributing to the development and taking advantage of the Kingdom's geographical location as  a centre for trade between the East and West.

AMMAN — Jordanian-Palestinian Business Forum Chairman Talal Al Bau on Monday stressed that the forum seeks to promote economic opportunities available in the Kingdom and attract new investments in different sectors.

After his re-election as forum chairman for two years, he said the forum also seeks to enhance cooperation between Jordanian businesspeople and their Palestinian counterparts, in addition to encouraging Arab capitals to invest in Jordan and Palestine to serve the two countries' economies.

The forum was established in 2011 and includes more than 200 members representing different economic sectors. In addition, the forum also contributes to creating new jobs through holding periodic conferences and exhibitions.

AMMAN — The Jordan Securities Commission (JSC) has prepared draft new instructions that allow trading unlisted securities on the Amman Stock Exchange (ASE).

The listing instructions to the stock exchange have been amended in accordance with the new draft, prepared in cooperation with the ASE and the Securities Depository Centre (SDC), and the instructions to issue and register securities have been amended as well.

Under the draft, a special market to trade securities unlisted on the ASE will be established, JSC Chief Commissioner Mohammad Hourani said.

He added that all shares of public shareholding companies registered at the JSC and  SDC and not listed or traded at the ASE can be traded in this market, stressing that the companies will still be committed to disclose financial statements in accordance with the law.

Establishing this market will provide an opportunity for shareholders of companies whose listings were annulled or whose share trading was suspended to sell their shares through brokerages based on market supply and demand.

Also, investors will be able to buy the shares of these companies because, at present, such transactions whether buying or selling are not allowed, Hourani continued, noting that the trading in this market will be separated from that of the ASE-listed securities and will not affect the index calculated by the bourse.

The amendment aims at having the company, officially listed on the stock exchange, to be financially sound with high-level disclosure, in accordance with international practices, which  companies have to achieve in order to have the privileges of being listed in a licensed financial market. 

According the amendment, “the third market will be cancelled after a whole year elapses from the date the new amendments are implemented”, and then the situation of companies listed in the market will be reviewed.

When that happens, companies that will have achieved the conditions of being listed in the ASE will be moved to the second market and the rest will be unlisted and the trading of their stocks will be moved to the newly-established special market.

The draft includes reconsidering the measures taken against companies that do not disclose annual financial statements during the period set according to the law as to suspend their stocks on the same day of the deadline to issue the statements until they issue them, according to Hourani.

The draft will allow listing and trading the stocks of private shareholding companies and corporate bonds issued by them in accordance with the Companies Law, which views stocks and bonds issued by a private shareholding company as securities that a company may want listed and traded in the market, he said.

The amendments can add new securities to the market to increase its liquidity and those investing in it, Hourani added, noting that there are around 1,000 private shareholding companies registered at the Companies Control Department.

Moreover, he said the recommendations were put on the JSC's website and were distributed to all the concerned parties interested in expressing their opinion towards suggested amendments in order to take them into consideration before issuing the final draft of the new instructions.