Business

NEW YORK — Oil closed up for a second straight week on Friday after another drop in the US rig count, and Brent crude hit a 2015 high above $60 a barrel, but market skeptics cautioned the rally could fade because supplies keep coming.

Many traders and analysts believe there is a global oversupply of nearly two million barrels per day (bpd) of crude oil. They say little has changed fundamentally to explain the price rebound of the past two weeks.

The number of oil drilling rigs in the United States fell last week to its lowest since August 2011, data showed on Friday. But the market's reaction was relatively tepid compared with the past two weeks when prices spiked on declining rig counts.

"I think people are starting to understand to a certain point that, even if rig counts go down, it's not going to affect production in the short term. It's going to take a few months for that to happen," said Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York.

US crude inventories have swelled to record highs of nearly 418 million barrels, government data showed earlier this month.

Brent settled the session up $2.24, or nearly 4 per cent, at $61.52 a barrel. It rose a 6 per cent on the week and 15 per cent month-to-date. Brent's gains increased last week after its front-month contract switched on Thursday at a premium.

Oil prices more than halved between June and January as a global glut pushed Brent from a summer peak above $115 to a near six-year low under $46.

"Naturally, when prices fall that much within that short a time, you're likely to have a severe rebound as well, though speculators are possibly adding more fuel on the way up now," said Phil Flynn, an analyst at the Price Futures Group in Chicago.

Some traders attributed Friday's strength to an unexpected acceleration in eurozone economic growth in the final quarter of 2014. The bloc's largest member, Germany, grew at more than twice the expected rate.

Market bulls were also betting that cuts in exploration budgets will help mop up some of the excess supply.

Separately, the world's three big energy agencies are forecasting higher demand for the Organisation of Petroleum Exporting Countries (OPEC) crude oil this year, a sign the producing nations' strategy to let prices fall is starting to win them back market share from rivals who are cutting output.

After an oversupply of world oil sent prices tumbling in 2014, top OPEC exporter Saudi Arabia urged fellow members not to prop up the market and to try to knock out competing sources like US shale, which, because it has higher production costs, had to cut output when prices fell.

In reports last week, the International Energy Agency (IEA) and OPEC have raised by at least 200,000 bpd their estimates of demand for OPEC crude in 2015, while the US government's Energy Information Administration (EIA) (EIA) forecasts OPEC will pump 140,000 bpd more.

At the same time, data suggesting a forthcoming economic recovery has raised hopes for improving oil demand: Eurozone economic growth accelerated unexpectedly in the final quarter of 2014 as the bloc's largest member, Germany, expanded at more than twice the expected rate.

"The main three monthly oil market reports...sent encouraging signals," said Daniela Corsini, analyst at Intesa Sanpaolo. "On average, their estimates of the call on OPEC crude have been increased significantly."

Those estimates also indicate that lower oil prices, which have prompted shale oil and other oil producers to cut spending, are also forcing them to cut supplies. 

OPEC officials have expressed cautious optimism about the price recovery and noted signs of higher demand.

Saudi Arabia's Oil Minister Ali Al Naimi discussed a "relative improvement in the market in terms of an increase in demand and the stability of prices in the current period" last week with Algeria's justice minister, the official Saudi news agency SPA reported.

OPEC pumps about 30 million bpd of crude, roughly a third of the world's daily requirement. Rising demand for OPEC oil is generally taken as a bullish sign in the oil market.

Still cautious

On Monday, OPEC forecast demand for its oil this year would average 29.21 million bpd, up 430,000 bpd from its previous prediction.

The IEA, which advises the United States and other industrialised countries, moved its forecast in the same direction on Tuesday, albeit by a more modest upward revision of 200,000 bpd to 29.4 million bpd.

Also on Tuesday, the EIA in its report forecast OPEC will produce 30.05 million bpd in 2015, up from its previous projection of 29.91 million bpd.

"I do believe demand is in a much better shape than we feared before and already expected right now," said Eugen Weinberg, oil analyst at Commerzbank.

"All kinds of signs of demand being above expectation are already in place. Especially in the US, where we had a real boom in registrations of pickups and SUVs and everything else," he added.

Still, this has yet to translate into more bullish global oil demand estimates from the three forecasters. Instead they raised their these forecasts only slightly or kept them unchanged.

David Fyfe, a former IEA official and now head of research at trading house Gunvor, also noted the common thread of the monthly supply and demand balances but was cautious on whether the oil rout was over.

"Certainly the balances have all moved in the same direction, acknowledging that several months of $50 oil is going to cause a supply side reaction and I wouldn't disagree with that," he said.

"But it is still a little too early be calling a floor for prices having been reached. I think we're going to have a pretty choppy, pretty volatile first half," Fyfe added.

SHANGHAI — As China pulls out the stops to get more lending into its economy to bolster flagging growth, farming, a sector that employs almost a third of its 1.4 billion people, remains in desperate need of funding.

Policy makers have cut interest rates, increased lending targets and freed up banks' reserves to lend more, helping to sustain a rally in Chinese shares and a property bubble, but it is not getting through to agriculture, which produces around 9 per cent of the China's gross domestic product (GDP), though with pitiful productivity.

World Bank data showed the value added per farmworker in China was $750 in 2012, compared with around $63,000 in the United States.

Inefficient and obsolete farming techniques have also been blamed for causing major soil and water pollution and food scandals, but it needs investment to turn the sector around.

Jin Yong, a lifelong farmer in Anhui, one of China's poorest provinces, formed a corporate entity with other individual investors in an effort to improve his access to funding.

The plan is to sell organic vegetables, but the company has yet to turn a profit, and credit is part of the problem.

"We don't have rights to the land. We have things in the ground, but banks don't care. They just want evidence of ownership for collateral," he indicated.

Beijing is aware of the problem; its recently published "number one" planning document listed modernising farms as a key priority for 2015, including plans to encourage private investment and cheaper financing.

But lenders are steering clear.

The share of loans going to agriculture has declined every year since 2010, official data show. In 2014, banks lent 306.5 billion yuan ($49.1 billion) to agriculture, compared with approximately 1 trillion yuan for margin finance for use in stock speculation, and 2.8 trillion yuan for real estate.

Reform dilemma

Chinese bankers who spoke to Reuters said official calls to lend to farmers were effectively countermanded by official orders to reduce the bad debt on their books.

"When banks lend, they're not going to think, 'I wonder what direction the country is expanding in?'" said a senior loan officer at one of the big five state-owned banks. "A bank's priority is still going to be a firm's liquidity; is it good? Cash flow, is it good? Do they have the ability to repay?"

Foreign bankers told Reuters they have been approached by regulators asking them to increase lending to the sector, but they, too, are reluctant.

There is also a failure by banks to adapt to changing needs, said Cheng Enjiang, senior research fellow at Victoria University in Australia specialising in rural finance and microfinance in China.

"There has been an increase in demand for agricultural loans to larger-scale farms, but rural credit cooperatives and agricultural banks don't have feasible products tested for that," he added.

There are also political dimensions to the problem.

Agricultural analysts say self-sufficiency goals intended to minimise China's dependence on food imports have resulted in mandated production of staple grains and starches that earn far lower profit margins for farmers than fruits and meats.

Some officials also fear that increasing efficiency and profits through mechanisation would ring Chinese cities with slums full of unemployed farmers.

But policies designed to keep farmers on small, low yielding plots impedes the consolidation that could create economies of scale.

The right to buy and sell rural land is retained entirely by the local government, so not only is a farmer unable to use his land as collateral, he can't buy other people's land.

Thus Jin Yong, the aspiring organic vegetable magnate, can only rent land, and rental contracts are no use in securing bank loans.

Without major policy reforms, farming will remain a bad bet both for the farmers and the bankers.

"We don't lend to certain sectors just because the government tells us to," said a fund manager at a listed Chinese commercial bank. "We'll only lend to a company in any sector if it means we'll come out profitable." 

Separately, China's top anti-corruption watchdog has targeted 26 of the biggest state-owned firms, including telecoms, energy, and manufacturing conglomerates, for inaugural inspections this year.

The visits will kick off immediately this week after lunar new year holidays, the Central Commission for Discipline Inspection (CCDI) said in a notice.

Designated conglomerates include China Telecom Group Co., China National Petroleum Corp., or PetroChina, China National Offshore Oil Corp., and China National Nuclear Corp.

"We need to sharpen the 'Sword of Damocles' hanging above those in power and use inspections to keep them in awe," the statement quoted watchdog head Wang Qishan as saying.

Other firms to be visited by antigraft investigation teams are Sinochem Group, China Ocean Shipping (Group) Co., or Cosco, China Mobile Communications Corp and Baoshan Iron & Steel Group Co.

As part of President Xi Jinping's vigorous crackdown on corruption, the anti graft body will inspect "all important backbone state-owned firms and financial institutions" this year, it said on its website.

The watchdog has brought down more than 70 senior officials at state firms in 2014, the official Xinhua News Agency pointed out on Thursday.

Last week, it accused officials at top coal producer China Shenhua Group of taking bribes and manipulating coal prices for personal benefit, according to its website.

The anti-graft watchdog also found serious violations by executives of power group China Huadian Corporation during takeovers of coal mines and in official appointments, activities that led to large losses.

Lu Haijun, a director of Bank of Beijing Co., has also been put under investigation this year as the commission widens inquiries in the finance sector.

The commission's anti-graft efforts at state firms coincide with the imminent roll-out of ambitious new guidelines to overhaul China's inefficient state sector.

One key measure, expected within weeks, will focus on controlling company insiders and avoiding losses during reforms.

Other firms targeted in the first round of inspections are China Power Investment Corp., State Nuclear Power Technology Corp., China Huaneng Group, State Grid Corp. of China, China Southern Power Grid Co.

Also named are China Nuclear Engineering Group Co., State Development & Investment Corp., Dongfang Electric Corp., China Electronics Technology Group Corp., China Electronics Corp., and China Minmetals Corp.

China State Construction Engineering Corp., China Shipbuilding Industry Corp., China National Machinery Industry Corp., China General Technology (Group) Holding Ltd., China Datang Corp., China Guodian Corp., and Wuhan Iron and Steel (Group) Co. are among the others identified.

According to state media, China's ruling Communist Party will launch a year-long probe into the incomes of military staff, following revelations of widespread graft in its armed forces.

Party leaders have described corruption as a key threat to China's military modernisation campaign, which has seen double digit increases in the army budget for more than a decade.

China's Central Military Commission, headed by President Xi Jinping, will conduct an "investigation of all military personnel", the state-run Global Times said.

The audit will be overseen by the head of the army's general logistics department Zhao Keshi, and will look into "all cash flows, receipts and expenses" to find evidence of embezzlement, said official army media according to the report.

The investigation will be "will be far reaching and may involve conflicts of interest", it cited Zhao as saying.

Xi heads the military and the Communist Party and has vowed a crackdown against endemic corruption, an issue that has long drawn widespread public anger in China.

China's People's Liberation Army (PLA) said last month it launched investigations into 16 senior officers at corps level and above in 2014.

Top Chinese military officer Gu Junshan was formally charged with corruption last year after he was exposed as owning dozens of homes, state media reported.

Officials seized "a gold boat, a gold wash basin and a gold statue of Mao Zedong" along with "crates of expensive liquor" from one of Gu's residences, reports said at the time.

Xi's campaign also led last year to the ousting of Xu Caihou, a former vice-chairman of the Central Military Commission.

But the Communist Party has not introduced reforms such as official asset declaration or independent courts and media, and critics have said that the anti-graft drive is politically motivated.

TUNIS — Just two days after confidently promising economic reforms to match Tunisia's transition to democracy, new Prime Minister Habib Essid was forced to say he would roll back a new tax after police shot dead a man protesting it.

Tunisia has been praised as an example of compromise politics and democratic transition since overthrowing its autocrat Zine El Abidine Ben Ali in a 2011 uprising, holding free elections and drafting a new constitution.

But the latest protests have made clear Essid's economic task list that includes reforms, development and boosting jobs will not be easy in a country reliant on tourism, with few natural resources, high unemployment and heavy state subsidies even with the goodwill of the coalition government.

"What do they mean by reforms, obeying the international Monetray Fund. That just means more misery for us, more sacrifices on our part," said Sami Majdoub, 30, an unemployed graduate. "Their priority should be creating jobs, not increasing prices."

Since its revolution, lenders such as the International Monetary Fund (IMF) have tied credits for Tunisia to efforts to curb heavy public spending and cut a budget deficit by reforming subsidies ranging from basic food goods to fuel.

Authorities tried to raise money by imposing a tax of $20 on foreign travellers, but this angered residents of Dhiba and Ben Guerdan, two remote towns on the Libyan border. They asked for it to be frozen because it hurt daily trade with Libya, which responded by imposing a tax on Tunisian travellers.

Tunisian traders protested, and youths demanding jobs joined them, torching a local police station. Police opened fire with bullets and tear gas, killing one man, witnesses say.

"We will not be silent, we will rebel if any one touches our interests and our work, whatever the political colour of the rulers, whether Islamist or secular, old system or a new system," said Mohammed Amari, a trader in Dhiba.

Protests over economic opportunities are still sensitive in Tunisia, where a street vendor set himself on fire in 2011 in protest over poverty and local official abuses, and helped trigger the "Arab Spring" revolts across the region.

Last week was not the first Tunisian backtrack. A year ago, the government was forced to reverse a vehicle tax and energy price hikes after a string of protests.

Creating jobs is also urgent with unemployment creeping to 15.2 per cent in 2014 from 12 per cent a year after the uprising that promised more freedoms and economic opportunities. A third of those jobless are young graduates.

Tackling youth exclusion is especially sensitive as Tunisia fights a campaign against Islamist militants who emerged after the revolution. Around 3,000 young Tunisians have already left to fight with extremist groups in Syria and Iraq. 

Majority in congress

Tunisia has managed to avoid the upheaval afflicting other Arab Spring nations like Yemen and Libya, both caught up in internecine conflicts driven by unresolved political divisions after their uprisings.

Last week, Tunisia's parliament approved Essid's new government, including secular Nidaa Tounes Party and Islamist rivals Ennahda. Secular and Islamist leaders often reached compromise deals in Tunisia to keep the country on track.

That makeup at least offers Essid the backing needed in parliament to push politically sensitive decisions on reforms.

"Essid's new national unity government will enjoy a comfortable parliamentary majority that will enable it to implement the economic reform agenda with ease," said Riccardo Fabiani, a senior analyst at Eurasia Group.

The IMF agreed in 2012 to support Tunisia with a two-year credit programme worth $1.74 billion, in exchange for keeping its deficit under control and making the foreign exchange market more flexible.

The budget deficit reached 5.8 per cent in 2014 and is expected to narrow to 5 per cent this year. But Tunisia will still need multilateral lenders to make up external financing.

Incremental reforms, such as the temporary taxes and gasoline price rise that were imposed last year are expected to continue.

But while the government tries to cut spending, of which wages total about a third, Tunisia's powerful UGTT labour union demands the government negotiate to increase in 800,000 public sector salaries. UGTT has already threatened a general strike.

Last year, the government tried to raise the retirement age but this was scuttled by the UGTT.

A proposal to review the tax system and increase taxes paid by professionals, such as doctors and lawyers, could also lead to strikes and protests.

"The revolutionary atmosphere makes reforms an impossible dream," Zied Krichen, a Tunisian journalist wrote in a recent newspaper editorial.

But there are favourable indicators. A drop in global oil prices may make trimming energy subsidies easier.

Tunisia also wants to take advantage of its newfound political stability to attract investment and create new businesses and jobs to ease tensions over tougher reforms.

"The reforms are going to be painful, but we don't have a choice," said Moez Joudi, an economics professor at Tunis University. 

"We have to take advantage of the fall in oil prices, the new political stability and also the growth in Europe to push reforms and a clear economic plan right now," he added.

BAGHDAD — Iraq's prime minister called on Thursday for "patience" while the government implements economic reforms that include restructuring of many state-owned companies, saying the plan would deliver growth and development.

Haider Al Abadi, who took office in September after Islamic State (IS) militants seized control of large parts of north and west Iraq, is under pressure to improve economic and security conditions while navigating a polarised political landscape.

Iraq is struggling to attract foreign investment and diversify its revenue sources away from oil, the price of which plunged in the second half of last year.

"We call on citizens to be patient. Success and development are coming," Abadi told an investment conference in Baghdad. "If we stick to the reform plan, soon there will be economic breakthrough."

Abadi said the government aimed to restructure some state-owned companies although he did not say which, when changes would happen, or whether it would entail privatisation.

"We want these companies to be more efficient and contributive to the Iraqi economy," he added. "The government has no intention to get rid of the workers in these companies."

Many state firms have barely functioned since the US-led invasion to topple Saddam Hussein in 2003 and many related to the military have been shut down.

Iraq's economy, which gets about 90 per cent of its revenues from oil, was battered last year by plummeting global oil prices and the land grab by IS which prompted big spending on the military and displaced populations.

Defence alone is expected to take up 20 per cent of 2015 spending in a budget passed by parliament last month which includes a deficit of 25 trillion dinars ($22 billion) to be financed through borrowing.

The government also has to ensure more than 5 million state employees are paid.

Finance Minister Hoshiyar Zebari has said Iraq plans to use its Special Drawing Rights to raise financing from the International Monetary Fund (IMF).

A senior IMF official told Reuters the financial institution was open to providing additional funding to the war-torn nation.

"They certainly could [ask for more money]. So far they haven't... We had a programme before with Iraq. It's their call," the official said.

When extending emergency loan programmes to countries, the IMF has often pressed them to introduce economic reforms such as restructuring state finances.

AMMAN — Jordan's inflation edged down by 0.4 per cent at the end of January this year, according to the Department of Statistics  (DoS) report.

The slight decrease was attributed to the decline in prices of transportation, fuel, electricity tariffs, vegetables, beans and beverages, the DoS report, sent to The Jordan Times, said.

Prices of rentals, cigarettes, fruits, poultry and meat rose during Januray, the report added. As of Januray 2015, the department recalculated the inflation rate based on 2010 prices as the reference year and not 2006, in line with the international indicators. 

TRIPOLI — Libya's electricity grid is struggling to keep going as a shortage of power and gas for generation and its break up under two governments hit supply.

Residents in the two main cities Tripoli and Benghazi say they have been coping for days with outages lasting 10 hours or longer. Mobile phone coverage in parts eastern Libya broke down this week due to a lack of electricity.

"The network has been broken up in separate regions which has a negative impact, is leading to instability and cases of total blackouts," Libya's state electricity firm said on its website.

It gave no details but officials have complained that power plants have been hit or become inaccessible due to nearby clashes.

Some plants such the one in Hun in central Libya have stopped working due to insecurity, the firm added.

Libya had tried overhauling the grid but a departure of foreign partners for security reasons made the completion of projects impossible, the company continued, without giving details.

Oil production has fallen to around 350,000 barrels a day, a  fifth of levels seen in 2013 as major export ports stopped working in the past few months due to nearby fighting.

Gas output has also fallen sharply since the Es Sider port, Libya's biggest, and its connected fields shut down in December when a force allied to the Tripoli government tried to seize the terminal.

Foreign firms have become reluctant to deal with Libya. Last week, gunmen stormed the Al Mabrouk oil field, kidnapping three Filipinos and killing around 10 people, officials have said.

Separately, a top official said Libya will exhaust its wheat reserves in two or three months unless a state fund tasked with ensuring supplies receives money held up as a result of the political turmoil gripping the country and a slump in oil revenues.

Neither side, the recognised government holed up in the east since losing the capital in summer or a rival outfit now running Tripoli, has prepared a budget for this year. Both are busy fighting for territory, oil facilities, and control of the central bank and the country's vital oil revenues.

Wheat imports have been disrupted by fighting between the rival factions. Air strikes on the western port of Misrata have made shippers reluctant to deal with Libya, while local banks suffer from a dollar shortage due to a slump in oil revenues.

As a result, Libya has been forced to halve flour supplies to bakeries to 65,000 tonnes a month. Despite this, the country's wheat reserves will run out within a maximum of three months without fresh supplies.

Jamal Al Shibani, head of the state Price Stabilisation Fund (PSF), which provides finance for mills importing wheat, played down talk of a crisis, but told Reuters there was a shortage of flour. 

"We have flour security for one month and we have wheat reserves which I expect to last until the start of April," he indicated.

In an indication of the difficulties of bringing in imports, a state agency has been trying for three weeks to buy 50,000 tonnes of milling wheat and 25,000 tonnes of rice but payment issues have prevented a deal, European traders have said.

A budget crisis has undermined the funding of imports. The  power struggle has knocked out almost all oil fields. Oil exports, Libya's lifeline, have fallen to around 200,000 barrels a day — a fifth of the levels seen in 2013.

Obligations 

Shibani said the central bank, which is limiting spending as oil receipts decline, had stopped transfers to his fund, leaving it with obligations of more than 3 billion dinars ($2.2 billion) owed to millers or wheat importers.

For three months the PSF had been waiting for the release of 200 million dinars as a short-term financing facility.

"If our financial obligations are not met, [wheat] reserves will run out in two or three months," he added. "We know that Libya, the state, cannot pay everything [but] there are bank obligations. The obligations need to be paid in tranches."

State-owned Matahan, a Tripoli-based mill which buys wheat abroad, said it had received a shipment of 25,000 tonnes of wheat from Hungary this week, with another cargo expected later this month.

But Chairman Mustafa Abdul Majid Idris said the state had failed to guarantee 32 million dinars it had opened as a letter of credit. Its bank was now threatening to charge interest should it fail to come up with the funds. 

The mill has debts of 173 million dinars due to unpaid state bills.

With no fresh money arriving, Shibani has become a crisis manager on all fronts. He spent hours on Monday meeting African storage workers, who are on strike because they have not been paid since October.

"Our accounts have been completely frozen but I managed to persuade them to return to work," he said. But a Reuters reporter visiting a flour storage facility on Tuesday saw the workers still refusing to unload almost 20 trucks. "We'll work when we get paid," one worker told a manager pleading with them to resume work.

Shibani said there was no bread crisis. Loaves are  available, although some bakeries in Tripoli and Benghazi have closed while those still working produce less bread.

The biggest headache for authorities is that Libya has probably the world's highest bread consumption. A loaf is sold for 2 cents, a legacy from the time of Qadhafi, who wanted to buy loyalty by subsidising basic food items.

Each Libyan consumes 15 kilogramme of flour a month. "The closest runners-up are countries with a consumption of five or six kilogrammes," Shibani indicated.

Libyans are used to buying plastic bags full of bread, much ends up in garbage bins or is used as animal feed. Even worse, bread subsidies are a major source of corruption.

Traders smuggle trucks full of flour to southern neighbours Niger and Chad. "They do not need to import any wheat," said Idris.

Libyan officials have been saying for years that the subsidy system is too expensive, but with armed groups effectively running the country nobody dares to touch it.

Shibani also said imports of sugar, macaroni and other subsidied products had stopped, although stocks were available.

DUBAI — Standard and Poor's (S&P) has lowered the outlook for the world's top oil exporter Saudi Arabia to negative and downgraded its Gulf partners Oman and Bahrain on sliding oil prices.

But despite the large budget deficit planned by Riyadh for this year, the agency maintained its sovereign credit ratings for the kingdom, as well as neighbouring Abu Dhabi and Qatar, citing their "very strong fiscal positions”.

"Given its high dependence on oil, Saudi Arabia's currently very strong fiscal position could weaken owing to the oil price decline," S&P said in a statement on Monday.

"The negative outlook reflects our view that Saudi Arabia's general government fiscal position is weakening," it added.

S&P lowered its outlook for Saudi Arabia from positive to stable in December citing similar reasons.

The agency has since further lowered its projections for world oil prices.

In December 2014, S&P expected benchmark Brent North Sea crude prices to average $80 per barrel in 2015 and $85 a barrel in 2015-2018.

"We now assume an average Brent oil price of $55 a barrel in 2015 and $70 a barrel in 2015-2018," it indicated.

Unlike Saudi Arabia, the neighbouring United Arab Emirates (UAE) expects to balance its budget this year, and S&P maintained its "AA/A-1+" ratings and stable outlook for Abu Dhabi.

It said it expected the emirate, which accounts for 90 per cent of UAE crude output, to remain prudent and flexible in its fiscal policy.

"But we also anticipate structural and institutional weaknesses to remain," it added.

Gas-rich Qatar has yet to unveil its budget for this year but S&P maintained its "AA/A-1+" sovereign credit ratings and stable outlook for the emirate.

The smallest Gulf producers, non-OPEC Bahrain and Oman, which lack the fiscal reserves of their wealthier Gulf partners, both saw their ratings downgraded one notch.

Bahrain's sovereign credit ratings were cut to "BBB-/A-3" from "BBB/A-2" and Oman's to "A-/A-2" from "A/A-1”.

World oil prices plunged more than 50 per cent last year and have since rebounded only feebly, amid forecasts of weak growth in key consumer countries and a continuing, if reduced, boost to supply from North American shale producers.

The International Monetary Fund estimated last month that the six Gulf Arab states — which also include Kuwait — would suffer $300 billion in lost revenues this year because of the price slump.

AMMAN  — Czech President Milos Zeman on Tuesday proposed helping the Kingdom in defence, energy and renewable energy projects as well as tourism. 

Addressing the closing session of the Jordanian-Czech Business Forum, Zeman said such cooperation can be achieved through Czech companies specialised in these fields. 

He also referred to the possibility of cooperation with Jordan in establishing the nuclear reactor, expanding the health sector, and launching direct flights between Amman and Prague. 

Energy Minister Mohammad Hamed welcomed Zeman’s visit, voicing hope that it would pave the way for developing economic relations between the two countries.

Hamed said Jordan’s heavy reliance on oil and gas imports inhibits economic and social development, noting that the government is striving to diversify resources through using shale oil and renewable energy.

The minister added that the 2007-2020 energy strategy is in line with ambitions and goals  that aim at enhancing the contribution of local resources to the overall energy mix.

The Renewable Energy Law is the first of its kind in the region, Hamed continued, noting that it allows investors to develop electricity power production and enable them to sell the  power surplus to the national power grid. 

He also mentioned that the government’s policies in facilitating investments in renewable energy projects have resulted in signing several memoranda of understanding such as the 117-megawatt wind energy project in Tafileh, and other 200-megawatt projects, most of which in Maan.

Regarding oil shale, Hamed said the Kingdom has signed many agreements for generating electricity, one of which with an Estonian company to generate 470 megawatts of electricity, a project expected to conclude in 2018.

There is another agreement with the Saudi Arab Company to utilise oil shale, Hamed noted. 

Czech Vice Minister of Industry Vladimir Bartl, stressed his country’s keenness to enhance economic and commercial cooperation with Jordan and to search for new economic opportunities that would expand commercial exchange and lead to establishing joint investment projects. 

First Deputy President of the Jordan Chamber of Commerce Ghassan Khirfan said the Kingdom’s imports from the Czech Republic in 2013 reached JD25 million, while Jordan’s exports to Czech in 2013 reached only JD67,000, mainly phosphate, fertilisers, potash and medicines. 

On the sidelines of the forum, a  memorandum of understanding was signed between Ministry of  Energy and Mineral Resources, and the Czech ministry of industry and trade to increase bilateral cooperation in the fields of electricity, renewable energy, power rationalisation, nuclear energy and natural gas.

The Jordan Atomic Energy Commission and the Czech Nuclear Research Centre also signed a cooperation agreement in the fields of research and nuclear safety.

The Jordan Chamber of Commerce and the Czech Industrial Union signed a memorandum of understanding to increase bilateral cooperation. 

NEW DELHI — For Indian business, the government and the central bank, data revisions that have transformed the country's $2.1 trillion economy into one of the world's fastest growing are too good to be true.

Now, the search is on for reliable indicators of underlying activity, vital for Finance Minister Arun Jaitley as he draws up his annual budget and for Reserve Bank of India (RBI) Governor Raghuram Rajan as he weighs whether to cut interest rates again.

"Let's not get carried away — the ground reality is very different," one senior finance ministry official told Reuters after figures on Monday showed that India's economy outgrew China's in the three months to December.

Based on a new calculation method, the statistics department said the Indian economy grew 7.5 per cent year on year in the last quarter and is on track to expand 7.4 per cent in the year through March 31.

It was quite a turnaround for Asia's third-largest economy, which based on the old calculations was struggling to recover from the longest spell of sub-par growth in a generation.

Yet far from vindicating Prime Minister Narendra Modi's stewardship of the economy, the revised growth numbers are at odds with evidence on the ground.

Stalled projects and stretched capacity in the power, infrastructure and housing sectors are having knock-on effects down the supply chain to small- and medium-sized enterprises (SMEs), indicated Anil Bhardwaj, secretary general of the Federation of Indian Micro and Small & Medium Enterprises.

"This is a bit perplexing. The feedback we are getting on the ground is not as positive. SMEs are not getting the orders," Bhardwaj told Reuters. "There is an improvement in business sentiment, in the environment, but unfortunately there is no movement on the ground."

Larsen & Toubro, an industrial group regarded as a bellwether for the wider economy, lowered its order book estimates on Monday and said a recovery in its domestic business was at least a year away.

"India Inc., while it continues to be aspiring, is still on the wait and watch mode," Chief Financial Officer R. Shankar Raman told reporters.

Weak revenues, weak demand

The 2015/16 budget that Jaitley will unveil on February 28 will be based on an expectation that the economy would grow at the roaring pace of 8 per cent or more, one source familiar with the matter told Reuters. Yet revenues will lag.

"Everyone is happy that India's gross domestic product growth has picked up, but we are worried over slower growth in tax collections," the source said.

Indirect tax receipts, which include customs and factory gate duties as well as levies on services, have risen by just 6.7 per cent so far in this fiscal year against a budget estimate of 26 per cent for the full year.

A weak tax take also points to fragile consumer demand. Although a plunge in global oil prices has cooled inflation, that has yet to encourage Indian consumers to buy TVs, cars or appliances.

Households are still not confident of any quick turnaround in their fortunes, according to a monthly survey by ZyFin Research. Weak demand has hobbled New Delhi's efforts to revive sluggish auto sales with tax breaks, leading car makers to scale back sales forecasts.

Govind Shrikhande, managing director at Indian retailer Shoppers Stop, is puzzled by the latest gross domestic product (GDP) estimates.

"Is it a trick or a treat?" he asked. "I haven't understood how they are calculating it, but we are not seeing it reflected in business as yet."

Falling merchandise exports and sluggish non-oil, non-gold imports suggest demand remains weak in domestic and overseas markets. Exports fell 2.3 per cent month-on-month in December, while imports of goods other than oil and gold fell 7.1 per cent.

Statisticians defend the jump in their growth estimates, attributing it to better measurements of improved business efficiency that has boosted profits even as sales stagnate.

The statistical fog, meanwhile, makes it unclear how much room Rajan will have to stimulate investment and consumer demand without fuelling inflation after cutting interest rates last month.

Financial markets expect Rajan to make three more quarter-point cuts by December in the RBI's main policy rate, now at 7.75 per cent.

"The faster pace of growth puts Mr Rajan in an awkward position," UBS economists Edward Teather and Alice Fulwood said in a note, adding that even if the RBI revises up its own GDP estimates there is still room for policy rates to fall.

GENEVA — Secret documents published online alleging banking giant HSBC helped wealthy customers dodge millions of dollars in taxes caused global shockwaves Monday and spotlighted the financial dealings of the world's ultra-rich.

The cache of files made public in the so-called SwissLeaks case included the names of celebrities, alleged arms dealers and politicians, though inclusion on the list does not necessarily imply wrongdoing.

The documents published at the weekend claim the London-based bank's Swiss division helped clients in more than 200 countries evade taxes on accounts containing $119 billion (104 billion euros).

The huge cache of files from Europe's biggest bank was stolen by an IT worker in 2007 and passed to French authorities, but had not been previously made public.

The International Consortium of Investigative Journalists (ICIJ) obtained the files via French newspaper Le Monde and shared them with more than 45 other media organisations worldwide.

The documents showed that HSBC opened Swiss accounts for international criminals, businessmen, politicians and celebrities, according to the ICIJ.

The revelations renewed calls for a crackdown on sophisticated tax avoidance by the wealthy and multinational companies. Tax avoidance is legal, but tax evasion is not.

"HSBC profited from doing business with arms dealers who channelled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws," ICIJ reported.

Famous names 

A range of current and former politicians from Russia, India and various African and Middle Eastern countries, and the late Australian press magnate Kerry Packer were named in the files.

According to the ICIJ, the list included football and tennis professionals, rock stars and Hollywood actors.

Reuters could not independently verify any of the names listed by the ICIJ. Having a Swiss bank account is not illegal and many are held for legitimate purposes.

The client list included royalty such as Morocco's King Mohammed, politicians, corporate executives including former Santander chairman Emilio Botin, who died last year, and wealthy families, the ICIJ said. A spokesman for the Moroccan royal palace declined to comment.

It also listed arms dealers, people linked to former dictators and traffickers in blood diamonds, and several individuals on the current US sanctions list.

Following the bombshell disclosure, there were calls for a Swiss probe against the bank, which is already facing prosecution in France and Belgium.

"I am angry," former Swiss foreign minister Micheline Calmy-Rey told public broadcaster RTS.

Global fallout on Monday included a Belgian judge said to be considering international arrest warrants for directors of HSBC's Swiss division, while in Britain a political row was triggered, with the main parties blaming each other for not taking action.

Shares in HSBC, whose reputation has been tarnished in recent years by a string of high-profile controversies, were down 1.64 per cent to 610.60 pence at the close of trading in London.

So far, Switzerland has only launched an investigation against HSBC employee-turned-whistle-blower Herve Falciani, who stole the files at the heart of the scandal.

The files were used by the French government to track down tax evaders and shared with other states in 2010, leading to a series of prosecutions.

British tax authorities said Monday they had brought in more than £135 million (181 million euros, $206 million) on the basis of the files.

The Guardian asserted that the files showed HSBC's Swiss bank routinely allowed clients to withdraw "bricks" of cash, often in foreign currencies which were of little use in Switzerland.

HSBC also marketed schemes which were likely to enable wealthy clients to avoid European taxes and colluded with some to conceal undeclared accounts from domestic tax authorities, The Guardian said.

The reports triggered political debate in Britain ahead of a parliamentary election in May. Margaret Hodge, a senior opposition Labour Party lawmaker, said UK tax authorities had done too little.

"All the other countries have collected much more," she told BBC Radio on Monday. "We are never assertive enough, aggressive enough to protect the taxpayer."

David Gauke, a Conservative lawmaker and a junior minister in the finance ministry, criticised HSBC and said the case lifted the lid on poor banking behaviour at the time.

"Clearly HSBC have got questions to answer. Clearly the behaviour that is set out in these disclosures reveal behaviour in 2005 to 2007 that is not what we would expect from a major bank," he said, calling tax evasion "completely unacceptable”.

John Mann, a Labour politician, said HSBC and UK revenue office bosses should be called before lawmakers.

"We acknowledge and are accountable for past compliance and control failures," HSBC said late on Sunday after news outlets published the allegations about its Swiss private bank.

HSBC said that its Swiss arm had not been fully integrated into HSBC after its purchase in 1999, allowing "significantly lower" standards of compliance and due diligence to persist.

HSBC's Swiss banking arm insisted it has since undergone a "radical transformation".

"HSBC's Swiss Private Bank began a radical transformation in 2008 to prevent its services from being used to evade taxes or launder money," Franco Morra, the head of HSBC's Swiss unit, told AFP in an email.

He said the bank had closed the accounts of clients "who did not meet our high standards" and had "strong compliance controls in place", adding that the disclosures were "a reminder that the old business model of Swiss private banking is no longer acceptable".

The Swiss Banking Association said the country's banks had worked hard in recent years to clean up shop and ensure conformity with tax laws.

French Finance Minister Michel Sapin demanded Monday that no mercy be shown to the bank or its tax-cheating clients.

Hidden money? 

Notes in the leaked files indicate HSBC workers were aware of clients' intentions to keep money hidden from national authorities.

Of one Danish account holder collecting cash bundles of kroner, an employee wrote: "All contacts through one of her 3 daughters living in London. Account holder living in Denmark, ie critical as it is a criminal act having an account abroad non declared." 

The files provide details on over 100,000 HSBC clients, including people targeted by US sanctions, such as Turkish businessman Selim Alguadis and Gennady Timchenko, an associate of Russian President Vladimir Putin. 

Alguadis told the ICIJ it was prudent to keep savings offshore, while a spokesman for Timchenko said he was fully compliant with tax matters.

Other individuals named on the list include Rami Makhlouf, cousin of Syrian President Bashar Al Assad, designer Diane von Furstenberg, who told the ICIJ the accounts were inherited from her parents, and model Elle Macpherson, whose lawyers told the ICIJ she was fully in compliance with UK tax law.

Motorcycle racer Valentino Rossi, listed as having $23.9 million in two accounts, said he had regularised his tax situation with Italian authorities.

Switzerland has charged Falciani with industrial espionage and breaching the country's secrecy laws. Falciani could not be reached for comment on Monday but has previously told Reuters he is a whistleblower trying to help governments track down citizens who used Swiss accounts to evade tax.

HSBC said the Swiss private banking industry, long known for its secrecy, operated differently in the past and this may have resulted in HSBC having had "a number of clients that may not have been fully compliant with their applicable tax obligations".

HSBC's Swiss private bank was largely acquired as part of its purchase of Republic National Bank of New York and Safra Republic Holdings, a US private bank.

The ICIJ said details of more than 100,000 clients had been obtained from more than 200 countries. It said 11,235 were based in Switzerland, 9,187 were in France, 8,844 were in Britain, 8,667 were in Brazil and 7,499 were from Italy.

The clients' accounts held more than $100 billion, including $31.2 billion from clients based in Switzerland, $21.7 billion from Britain, $14.8 billion from Venezuela and $13.4 billion from US clients, the ICIJ said. 

HSBC said the number of accounts in its Swiss private bank was much lower, however. It could not explain the difference. HSBC said its Swiss private bank had 30,412 accounts in 2007, which had fallen to 10,343 at the end of last year.

HSBC said it was cooperating with authorities investigating tax matters. Authorities in France, Belgium and Argentina have said they are investigating.