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DIARY - Latin America - to June 4
Reuters: [2008-05-26 13:15:00]
This diary is updated daily. All dates and times are provisional.
The inclusion of diary items does not necessarily mean that Reuters
will file a story based on the event.
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DATE GMT/LOCAL INDICATOR PERIOD F/CAST PREVIOUS
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MAY26 1330/1030 BR current account Apr -$4.4 bln
MAY26 1900/1600 AR trade balance Apr $801 mln
MAY28 1200/0900 BR mid-month inflation May 0.59 pct
MAY28 1330/1030 BR budget surplus (reais) Apr 15.4 bln
MAY29 1100/0800 BR IGP-M inflation May 0.69 pct
MAY29 1300/0900 CL Unemployment Apr 7.6 pct
MAY29 1300/0900 CL Industrial production Apr -1.0 pct
MAY29 1300/0900 CL Copper production Apr -8.4 pct
MAY29 1930/1430 MX economic activ (IGAE) Mar 3.15 pct 5.8 pct
MAY30 1930/1430 MX fiscal balance (pesos) Apr 50.7 bln
JUN 3 1200/0900 BR industrial output Apr 0.40 pct
JUN 4 1000/0700 BR FIPE inflation index May 0.54 pct
JUN 4 2200/1900 BR Selic interest rate Jun 11.75 pct
JUN 4 1930/1430 MX consumer confidence May 97.8 pct
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EVENTS
TUESDAY, MAY 27
MEXICO CITY - Central bank announces results of weekly T-bill
auction 1130 (1630 GMT)
FRIDAY, MAY 30
MEXICO CITY - Mexico releases March metals production data 1430
(1930 GMT)
TUESDAY, JUNE 3
BRASILIA - The central bank's monetary policy committee, or
Copom, begins two-day meeting on interest rates.
WEDNESDAY, JUNE 4
BRASILIA - The central bank's monetary policy committee, or
Copom, announces decision on interest rates after the market
closes.
((Page editor: Inae Riveras, Sao Paulo newsroom, +55 11
5644-7728))
Singapore, Malaysia grapple with U.N. court decision
Reuters: [2008-05-26 13:07:00]
By Jalil Hamid and Ramthan Hussain
KUALA LUMPUR, May 26 (Reuters) - Malaysia and Singapore face a new bump in their testy bilateral ties unless they swiftly tackle questions from a World Court's decision over disputed rocky outcrops on a strategic shipping lane, analysts said.
The ruling could complicate the 28-year-old row, especially over jurisdiction of waters surrounding the adjacent islets where the Singapore Strait meets the South China Sea, a strategic route that sees 80,000 ships pass each year, they said.
The International Court of Justice (ICJ) ruled on Friday that Singapore owns Pedra Branca islet or Pulau Batu Puteh, the more critical islet where it has an operational lighthouse, while Malaysia was given the smaller Middle Rocks.
It left the two sides to decide on South Ledge, depending on the territorial water it lies in, and both have pledged to form a joint panel to resolve the issues. Malaysia, though, has promptly laid claim on this group of rocks visible only at low tide.
"I believe the court's decision may lead to more overlapping claims because Malaysia was awarded sovereignty over Middle Rocks while Singapore has sovereignty over Pulau Batu Puteh," said Abdul Ghani Othman, Chief Minister of southern Johor state, which will have jurisdiction over Middle Rocks.
"The ICJ decision is rather interesting because both islands are close to each other but are separated by different sovereignties," he told reporters.
OUTSTANDING ISSUES
Malaysia and Singapore have a hefty historical baggage since the island-state split from Malaysia 43 years ago, with both still haggling over issues ranging from water supplies to land reclamation, transport links and use of airspace.
"It is necessary for the Joint Committee to meet expeditiously to establish the protocols for cooperation because of the narrow channel between Pedra Branca and Middle Rocks," said Barry Desker, Dean of the Rajaratnam School of International Studies in Singapore.
"The next step will be to enter into consultation with Malaysia immediately, to work out a timetable and framework for the implementation of the ICJ judgment," he told Reuters.
The islets are separated by 600 metres (2,000 ft) of water.
"As one of the leading ports in the world, safety of navigation in the Straits of Singapore is a critical issue. The immediate focus would be to ensure the continuation of lighthouse operations on Pedra Branca and the security of sea lanes through which more than 80,000 vessels pass annually," Desker added.
One contention is whether or not the two sides would proceed to enlarge their respective outcrops and develop naval outposts.
Malaysia has warned Singapore not to initiate its reclamation plans. In its case at the ICJ, Singapore said Malaysia had not responded to the installation of military communications equipment in 1977 and its reclamation plans on Pedra Branca.
"This is a potential flashpoint," said Abdul Ghafur Hamid, law expert at Malaysia's International Islamic University.
"The crucial thing is the two countries should delimit their territorial waters. Otherwise, there will be so many problems and confusion," he said, adding both nations must set up a protocol on fishing, navigation and naval patrols in the area.
Malaysia's Home Minister Syed Hamid Albar has proposed joint patrols of the area to prevent any trouble. (Editing by Sanjeev Miglani)
((ramthan.hussain@reuterthomson.com; Reuters messaging: ramthan.hussain.reuters.com@reuters.net))
Keywords: MALAYSIA SINGAPORE/DISPUTE
UPDATE 3-Nigeria rebels say attack Shell oil pipeline
Reuters: [2008-05-26 13:05:00]
(Adds comment from military spokesman)
By Nick Tattersall
LAGOS, May 26 (Reuters) - Rebels from Nigeria's oil-producing Niger Delta said they had blown up a Royal Dutch Shell <RDSa.L> pipeline and killed 11 soldiers in a firefight on Monday, but the army denied losing any men.
The rebel Movement for the Emancipation of the Niger Delta (MEND) said in an emailed statement that it had sabotaged the Shell pipeline at Awoba flow station in southern Rivers state in the early hours of Monday morning.
"Today's attack is dedicated to the administration of (President) Umaru Yar'Adua and (Vice President) Goodluck Jonathan who have failed after one year in office to ensure peace, security and reconciliation in the Niger Delta region," the MEND statement said.
Shell in Nigeria said it was investigating and had no immediate comment.
Nigeria's army initially denied there had been an attack but later confirmed there had been a blast early on Monday at a Shell facility close to Awoba which was not guarded by soldiers.
"The cause of the explosion has not yet been determined but it is strongly suspected that explosives might have been used by miscreants," Sagir Musa, military spokesman in Rivers state, told Reuters.
Musa said troops had been sent to the site of the blast but denied that 11 soldiers in a military gunboat had been killed in a shoot-out.
The Niger Delta is home to the world's eighth-biggest oil industry, exporting about 2.1 million barrels per day, but rebels have led a campaign of sabotage since early 2006 to push demands for greater local control over oil revenues.
The unrest has depressed Nigerian output by around a fifth since then, helping to push world oil prices to record highs. Oil rose above $133 a barrel on Monday after striking a record high of $135.09 last week.
A new government in Nigeria led by Yar'Adua and Jonathan, a native of the delta, took office on May 29 last year promising to address the root causes of the violence in the Niger Delta and to negotiate with the militants.
But attacks on oil installations and the kidnapping of oil industry workers have continued in the region, with MEND last week accusing the government of "insincerity" in its handling of the situation.
Shell was forced to shut in about 164,000 barrels per day of Bonny Light crude production -- or about 40 percent of the Anglo-Dutch major's equity oil output in Nigeria -- late last month due to militant attacks in the delta.
The company has been restoring some of the shut-in production but a force majeure remains in place for Bonny Light exports, meaning it cannot guarantee to meet its contract commitments. (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ ) (Additional reporting by Austin Ekeinde in Port Harcourt, Writing by Nick Tattersall; Editing by Matthew Jones) ((Reuters messaging: nicholas.tattersall.reuters.com@reuters.net, Lagos Newsroom +234 1 463 0257))
Keywords: NIGERIA DELTA/ATTACK
ANALYSIS-Asian fuel price rises unlikely to spark unrest
Reuters: [2008-05-26 13:04:00]
(Refiles with additional codes)
By Jason Subler and Ahmad Pathoni
SINGAPORE/JAKARTA, May 26 (Reuters) - Leaders across Asia are starting to give in on the prickly issue of fuel subsidies, hiking prices in the face of $130 a barrel oil, but careful calibration of the steps may allow them to get away with it.
Indonesia jacked up fuel prices by an average of 28.7 percent from Saturday, Sri Lanka followed with its own increase on Sunday and Bangladesh said it planned an increase soon.
India is also considering such a move. The odd man out is China, which has strong finances and has said it does not plan to raise prices soon.
(For a graphic on world petrol prices, see: https://customers.reuters.com/d/graphics/Petrol_prices.gif)
While the increases will be difficult to swallow, especially for governments with approaching elections such as India and Indonesia, social disruptions such as those seen due to food shortages will probably be avoided, analysts said.
For one thing, fuel does not have the same impact with lower-income people as food.
"Food is so immediate and obvious," said Steve Wilford, India country manager for consulting firm Control Risks.
"In countries that have a recent memory of famine ... it's such an emotive subject that governments can't ignore the immediate impact of rapid food price hikes in the same way as they can with fuel price hikes."
In addition, accompanying the hikes with mollifying steps can cushion the blow.
Indonesia has twinned the fuel price hikes with some $1.5 billion in cash handouts for the poor.
India may try to limit increases in prices for fuels used by the poor, such as kerosene, while also not giving too big a hit to middle-class voters through dearer gasoline, said Wilford.
Some policymakers are also aided by an awareness among their populations of the reality of sky-high global prices.
LESSER OF TWO EVILS
That is generally the case in Taiwan, which has said it will end a freeze on prices of fuels and utilities on June 1, said Raymond Wu, managing director of Taipei-based political risk consulting firm e-Telligence.
"These utility price hikes are expected, from cement to food, so people psychologically are expecting an increase," Wu said.
Still, the potential impact on elections will prompt governments such as in India and Indonesia to tread very carefully, weaning their economies off subsidies only bit by bit.
"Once given, these kinds of subsidies are extraordinarily difficult to take away," Wilford said.
The issue of fuel subsidies has proved tricky for the Indonesian government ahead of next year's parliamentary and presidential elections, highlighted by the protests in the run-up to the policy move.
President Susilo Bambang Yudhoyono sought on Monday to ease people's concerns.
"The alternative would be a possible financial and economic crash similar to that of 1997, and the real loser here would be our own people," Yudhoyono told an investment forum.
While a threat by some legislators to impeach Yudhoyono on account of the decision was just "empty talk", it was dividing his ruling coalition, said Arbi Sanit, a political analyst at the University of Indonesia.
"If SBY failed to restore the unity of the coalition, it would jeopardise his chances for re-election," Sanit said.
Still, some analysts said that the fuel price increase was unlikely to trigger social unrest in Indonesia, even though it comes on top of rapid increases in food prices and other goods.
"Even though the people reject the fuel price increase, I don't see signs people want to make things worse," said political analyst Fachry Ali, noting that the latest increase was moderate in comparison to a rise of more than 100 percent in October 2005.
"Nothing happened then, so it will be all right now."
MOUNTING COSTS
To be sure, raising fuel prices will come at a cost.
Though Taiwanese citizens would generally accept the fuel price rises, they would probably put the administration of freshly-inaugurated President Ma Ying-jeou under more pressure to deliver on his election promises of better economic links with China, said Wu.
The pick-up in inflation that results from lowering subsidies will also probably force central banks to increase interest rates, analysts say, just at a time when weakening global demand already threatens to sap growth.
But inaction could have an even greater cost, as it would contribute to the growing current account and fiscal deficits in countries such as India, putting further downward pressure on their currencies.
The cost of sinking so much money into fuel subsidies could drag significantly on countries like India, where significant investments are needed to improve education and infrastructure, said Wilford.
"Those kind of issues are just not getting the money they should be getting, because it's all going to prop up the price of fuel," he said. (Additional reporting by Nidhi Verma in New Delhi, Ralph Jennings in Taipei and Telly Nathalia in Jakarta; Editing by David Fox) ((jason.subler@thomsonreuters.com; +65 6870 3818)) Keywords: ASIA SUBSIDIES/
UPDATE 2-EU backs mandate for talks on new Russia deal
Reuters: [2008-05-26 13:01:00]
(Recasts with quotes, details)
By David Brunnstrom
BRUSSELS, May 26 (Reuters) - The European Union approved a negotiating mandate for a new partnership agreement with Russia on Monday after months of internal wrangling and the EU Presidency hoped a deal could be in place in two years.
Others predicted that the broad deal Brussels wants on political and economic ties, including energy and trade, could take much longer to agree and EU External Relations Commissioner Benita Ferrero-Waldner warned talks would be long and complex.
EU foreign ministers endorsed the mandate after 18 months of objections from the bloc's ex-communist members, most recently by Lithuania which had raised concerns over Russia's role in "frozen conflicts" in some of the ex-Soviet republics.
The EU hopes now to launch talks with Russia on the new partnership at a June 26-27 summit in Siberia.
Slovenian Foreign Minister Dimitrij Rupel, who pushed hard to get an agreement allaying Lithuania's concerns, was optimistic.
"Negotiations will start I hope now in June. How long will they take? I think around a year. How long will it take to ratify? I don't know, I hope another year, or I presume another year," he said.
"We are not in front of some quick fix," he cautioned to reporters, "but indeed the process has started and we should be able within the process of negotiations to clarify all the problems that exist between EU and the Russian Federation."
"It (the future deal) should finally provide some legally binding commitments in all main areas," Ferrero-Waldner told reporters.
She said it should cover the economy, trade, internal and external security issues, research, education and culture and industry deals in areas such as energy, in which Russia is a crucial supplier for many EU states.
"LEVEL PLAYING FIELD"
The European Union sought a "level playing field" on energy in terms of reciprocal market access and would seek a free trade agreement once Moscow joined the World Trade Organisation.
"Negotiations will certainly not be easy; they will be complex negotiations. I don't want to speculate at this moment, but I think they will take quite some time."
The struggle over the mandate highlighted the split between west European capitals that want solid economic ties with Russia and mostly ex-communist eastern states that want the EU to deal more firmly with Moscow.
Analysts say there are differences of approach between Brussels and Moscow on the type of a future agreement.
Brussels seeks an all-encompassing pact, but Moscow prefers a short framework document coupled to detailed sectorial pacts. Moscow is likely to resist EU insistence on including issues such as human rights.
Monday's progress came as Poland and Sweden proposed that the European Union build an Eastern Partnership to groom former former Soviet republics for eventual membership by getting them to cooperate more closely with the bloc and with each other.
Polish Foreign Minister Radoslaw Sikorski, whose country had also raised objections to the Russia mandate, said negotiations would be problematic.
"We think the biggest issue is energy. We have a situation where Russian companies want to participate in our networks but we have a situation where western investors are not always welcome in Russia. We need to even out that situation.
(Additional reporting by Paul Taylor and Mark John; Editing by Mark John and Richard Balmforth) ((david.brunnstrom@reuters.com ; +32 2 287 6839; Reuters Messaging: david.brunnstrom.reuters.com@reuters.net ))
Keywords: EU RUSSIA/
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