BloombergUTV
Published on 26th February, 2010 23:17:00
Union Budget has given lukewarm response for the recommendations of Textile Industry. Although some perks have benefited the garment industry by the government, the all round budget impact was not up to the mark. Some of the provisions in the budget that could have a direct and indirect bearing on the textile and clothing industry are as follows-
Budget Provisions
The Government has decreased the Technology Up gradation Funds for the textile industry by 22% to Rs 2267.50 crore for 2010/11 as against Rs 2890 crore in the corresponding previous year.
The fund allocation for Cotton Technology Mission has been substantially increased by 182% to Rs 141 crore in 2010/11.
The Government has allocated Rs 350 crore, an increase of 32%, for the schemes for integrated textile parks for 2010/11 as against Rs 265 crore in the revised budget 2009/10.
As the domestic cotton prices were hovering in line with the international prices, the Government has reduced the non plan expenditure for CCI sharply by 62% to Rs 244 crore in 2010/11 as against Rs 635 crore in revised budget of 2009/10.
Extension of interest subvention of 2% for one more year i.e, until March 31, 2011, for exports covering handicrafts, carpets, handlooms.
So as to sustain knitwear industry, the government has also proposed one-time grant of Rs 200 crore to the Government of Tamil Nadu towards the cost of installation of a zero liquid discharge system at Tirupur.
The textile Industry was also granted to launch an extensive skill development programme by leveraging the strength of existing institutions and instruments of the Textile Ministry to train 30 lakh persons over 5 years.
Outright exemption from special additional duty was provided on imported ready-made garments, even when they are not imported in pre-packaged form.
So as to boost the research and development (R&D) activity, weighted deduction on expenditure incurred on in-house R&D has been enhanced from 150% to 200%.
The government has increased Minimum Alternate Tax (MAT) from the current rate of 15% to 18% of book profits.
The Current surcharge of 10% on domestic companies has been reduced to 7.5%.
The Government has proposed to introduce GST and DTC w.e.f 1 April 2011.
Budget Impact
The decline in the TUFS assistance is a major negative for the textile sector. At a time when arrears of TUFS benefits were high, and as the industry was expecting hike in TUFS allocation, there has been a decline, affecting the industry significantly.
The demand on extension of 2% interest subvention on exports till March 2011 was partially met as the Government has given it only to handlooms, carpets and handicrafts. On the flip side, the industry demand of abolishing excise duty on man made fibers, filaments and their raw materials, has not been met; which will curtail competitiveness of the man made fibers. Further, increase in the MAT to 18% will have a negative impact on textile firms, as very few companies enjoy profit making, given the tough scenario.
Stock to watch
Raymond, Alok Industries, K P R Mill, Koutons Retail etc
Outlook
The Budget has left an impression that the textile industry has successfully recovered from the impact of global economic melt down and thus has also decreased the TUFS assistance for the industry when compared to the corresponding previous year. While garment industry has some cheers as some of its recommendations in their wish list were granted, the man made fiber industry has no thumps up. Overall the entire outlook is neutral with a negative bias.
27 February, 2010
Thaksin Shinawatra: from phone billionaire to fugitive ex-prime minister
Leader accused by military of corruption but popular with rural poor
Ben Doherty
The Guardian, Friday 26 February 2010
Article history
Born to a silk-trading family in Chiang Mai, Thaksin Shinawatra began his working life as a policeman. After several failed business ventures, in 1989 he established Shinawatra Datacom, a mobile phone network business that was to become the biggest phone operator in Thailand, and make him a multibillionaire.
He entered politics in 1994, becoming foreign minister that same year. He was elected prime minister in the general election of 2001, and became hugely popular, particularly in the north and north-east of the country, enfranchising the rural poor, and offering them healthcare for 30 baht (60p) and low-cost loans. He won a second election in 2005 but was swept from power in a bloodless coup in 2006 by a military leadership that argued he was corrupt, but was increasingly fearful of his growing popularity and power.
In 2008 he was convicted of a conflict of interest over a land deal involving his wife. He was sentenced to two years' jail, but had fled the country before the verdict was delivered. A fugitive, he now lives in Dubai and serves, to the fury of the Thai government, as an economic adviser to neighbouring Cambodia.
He is best-known in Britain for his short-lived ownership of Manchester City football club.
Ben Doherty
The Guardian, Friday 26 February 2010
Article history
Born to a silk-trading family in Chiang Mai, Thaksin Shinawatra began his working life as a policeman. After several failed business ventures, in 1989 he established Shinawatra Datacom, a mobile phone network business that was to become the biggest phone operator in Thailand, and make him a multibillionaire.
He entered politics in 1994, becoming foreign minister that same year. He was elected prime minister in the general election of 2001, and became hugely popular, particularly in the north and north-east of the country, enfranchising the rural poor, and offering them healthcare for 30 baht (60p) and low-cost loans. He won a second election in 2005 but was swept from power in a bloodless coup in 2006 by a military leadership that argued he was corrupt, but was increasingly fearful of his growing popularity and power.
In 2008 he was convicted of a conflict of interest over a land deal involving his wife. He was sentenced to two years' jail, but had fled the country before the verdict was delivered. A fugitive, he now lives in Dubai and serves, to the fury of the Thai government, as an economic adviser to neighbouring Cambodia.
He is best-known in Britain for his short-lived ownership of Manchester City football club.
Key dates in saga of Thaksin
Bangkok Post
Published: 27/02/2010 at 12:07 AM
Online news: Breakingnews
Writer: AFP News agency
Position: Agence France-Presse
The Supreme Court of Thailand Friday stripped more than half of the 2.3-billion-dollar fortune from ousted former prime minister Thaksin Shinawatra, finding he earned the wealth by abusing his power. Here is a timeline of events since Thaksin's first election victory in 2001:
_ 2001 _
January: Thaksin's Thai Rak Thai (Thais Love Thais) party, formed three years earlier, wins most seats in a general election. The party's platform includes a focus on healthcare and debt relief for the rural poor.
_ 2003 _
January: Thaksin launches controversial ``war on drugs,'' which rights groups say leads to more than 2,200 extrajudicial killings.
_ 2004 _
January: Start of insurgency in Thailand's restive Muslim-majority south, on which Thaksin takes a tough line.
_ 2005 _
Feb 6: Thaksin is re-elected, becoming the first prime minister to complete a full term in office.
_ 2006 _
Jan 23: Thaksin's family announces the tax-free sale of their 49 percent stake in telecoms giant Shin Corp to Singapore's state-owned investment unit Temasek for more than 73 billion baht. The move sparks months of protests by the royalist People's Alliance for Democracy (PAD), known as the Yellow Shirts.
Sept 19: The army seizes power in a bloodless coup as Thaksin attends a session of the UN General Assembly in New York. More than a year of military rule follows and Thaksin remains in exile.
_ 2007 _
June: Anti-graft panel freezes Thaksin's assets.
December: The People Power Party, comprising Thaksin's allies, wins elections and forms a coalition government in February 2008.
_ 2008 _
May: The PAD relaunches street protests.
August: Thaksin and his wife, Pojaman _ who had returned to Thailand in February _ flee again, saying they will not get a fair trial on corruption charges.
October: Clashes between police and demonstrators kill two people and wound nearly 500. A court sentences Thaksin in absentia to two years in jail for conflict of interest.
November-December: Thousands of PAD supporters blockade Bangkok's Suvarnabhumi and Don Mueang airports.
December: The Constitutional Court dissolves the People Power Party, forcing out Thaksin's brother-in-law Somchai Wongsawat as Prime Minister. British-born Abhisit Vejjajiva of the rival Democrat Party becomes premier.
_ 2009 _
January-March: ``Red Shirts'' loyal to Thaksin hold protests against Abhisit's government.
April: Red Shirts storm the venue of an Asian summit in the beach resort of Pattaya. Riots and a state of emergency in Bangkok ensue, leaving two people dead.
November: Cambodia appoints Thaksin as a government economic adviser, angering Thailand. Thaksin visits Phnom Penh and Cambodian leader Hun Sen refuses to extradite him.
_ 2010 _
February 26: Thailand's Supreme Court rules that 1.4-billion-dollars of Thaksin's wealth, more than half his frozen fortune, to be seized by the state.
Nine judges ruled he could hold on to the remainder of the money they say he earned before becoming prime minister
Published: 27/02/2010 at 12:07 AM
Online news: Breakingnews
Writer: AFP News agency
Position: Agence France-Presse
The Supreme Court of Thailand Friday stripped more than half of the 2.3-billion-dollar fortune from ousted former prime minister Thaksin Shinawatra, finding he earned the wealth by abusing his power. Here is a timeline of events since Thaksin's first election victory in 2001:
_ 2001 _
January: Thaksin's Thai Rak Thai (Thais Love Thais) party, formed three years earlier, wins most seats in a general election. The party's platform includes a focus on healthcare and debt relief for the rural poor.
_ 2003 _
January: Thaksin launches controversial ``war on drugs,'' which rights groups say leads to more than 2,200 extrajudicial killings.
_ 2004 _
January: Start of insurgency in Thailand's restive Muslim-majority south, on which Thaksin takes a tough line.
_ 2005 _
Feb 6: Thaksin is re-elected, becoming the first prime minister to complete a full term in office.
_ 2006 _
Jan 23: Thaksin's family announces the tax-free sale of their 49 percent stake in telecoms giant Shin Corp to Singapore's state-owned investment unit Temasek for more than 73 billion baht. The move sparks months of protests by the royalist People's Alliance for Democracy (PAD), known as the Yellow Shirts.
Sept 19: The army seizes power in a bloodless coup as Thaksin attends a session of the UN General Assembly in New York. More than a year of military rule follows and Thaksin remains in exile.
_ 2007 _
June: Anti-graft panel freezes Thaksin's assets.
December: The People Power Party, comprising Thaksin's allies, wins elections and forms a coalition government in February 2008.
_ 2008 _
May: The PAD relaunches street protests.
August: Thaksin and his wife, Pojaman _ who had returned to Thailand in February _ flee again, saying they will not get a fair trial on corruption charges.
October: Clashes between police and demonstrators kill two people and wound nearly 500. A court sentences Thaksin in absentia to two years in jail for conflict of interest.
November-December: Thousands of PAD supporters blockade Bangkok's Suvarnabhumi and Don Mueang airports.
December: The Constitutional Court dissolves the People Power Party, forcing out Thaksin's brother-in-law Somchai Wongsawat as Prime Minister. British-born Abhisit Vejjajiva of the rival Democrat Party becomes premier.
_ 2009 _
January-March: ``Red Shirts'' loyal to Thaksin hold protests against Abhisit's government.
April: Red Shirts storm the venue of an Asian summit in the beach resort of Pattaya. Riots and a state of emergency in Bangkok ensue, leaving two people dead.
November: Cambodia appoints Thaksin as a government economic adviser, angering Thailand. Thaksin visits Phnom Penh and Cambodian leader Hun Sen refuses to extradite him.
_ 2010 _
February 26: Thailand's Supreme Court rules that 1.4-billion-dollars of Thaksin's wealth, more than half his frozen fortune, to be seized by the state.
Nine judges ruled he could hold on to the remainder of the money they say he earned before becoming prime minister
17 February, 2010
Cambodian garment trade struggles to get over slump
By Prak Chan Thul
PHNOM PENH, Feb 17 (Reuters) - Cambodia's garment industry, its third-biggest currency earner, shed almost 30,000 jobs in 2009 after a drop in sales to the United States and Europe and could struggle this year, a senior official said on Wednesday.
Oum Mean, secretary of state at the Labor Ministry, said 106 factories had closed in 2009, putting 45,500 people out of work.
On top of that, 66 factories suspended operations, leaving another 38,000 on half pay, after a slump in export orders as shoppers in the United States, Europe and elsewhere cut back on clothing purchases due to the global financial crisis.
However, 48 factories had opened during the year, employing 16,900 people, Oun Mean said. These firms had received permits before the downturn and had taken the risk of continuing with their ventures, banking on an improvement in the world economy.
"In 2010, we suspect garment and shoe production will still be affected," Oum Mean said, adding the industry had 468 factories by the end of last year, employing 330,000 people.
"We just feel happy after hearing information that there's been some recovery in those big countries," he said.
According to data from the Garment Manufacturers Association of Cambodia, the country exported garments, textiles and shoes to the value of $2.3 billion last year, down from $2.9 billion in 2008. More than half of its exports go to the United States.
In recent years the sector has been the third-biggest foreign exchange earner after agriculture and tourism in a country ravaged by civil war in the 1970s but which has achieved some stability over the past two decades.
It accounts for about 16 percent of gross domestic product, so the factory closures will hurt, with a ripple effect in the countryside as the money sent home by garment workers dries up.
The International Monetary Fund forecast in December that the economy would shrink 2.7 percent in 2009 before growing 4.3 percent this year.
The government has offered vocational training to the unemployed, but Oum Mean said some female workers had also turned to the "entertainment industry" -- a euphemism for prostitution. "Some think that these jobs are not good for society," he said.
Chea Mony, president of the Free Trade Union, said some workers had sought jobs in neighbouring Thailand, Malaysia and South Korea.
"Some of the women went to work in night clubs and beer gardens," he said. "Unemployment is a heavy burden for Cambodian women."
(Editing by Alan Raybould)
PHNOM PENH, Feb 17 (Reuters) - Cambodia's garment industry, its third-biggest currency earner, shed almost 30,000 jobs in 2009 after a drop in sales to the United States and Europe and could struggle this year, a senior official said on Wednesday.
Oum Mean, secretary of state at the Labor Ministry, said 106 factories had closed in 2009, putting 45,500 people out of work.
On top of that, 66 factories suspended operations, leaving another 38,000 on half pay, after a slump in export orders as shoppers in the United States, Europe and elsewhere cut back on clothing purchases due to the global financial crisis.
However, 48 factories had opened during the year, employing 16,900 people, Oun Mean said. These firms had received permits before the downturn and had taken the risk of continuing with their ventures, banking on an improvement in the world economy.
"In 2010, we suspect garment and shoe production will still be affected," Oum Mean said, adding the industry had 468 factories by the end of last year, employing 330,000 people.
"We just feel happy after hearing information that there's been some recovery in those big countries," he said.
According to data from the Garment Manufacturers Association of Cambodia, the country exported garments, textiles and shoes to the value of $2.3 billion last year, down from $2.9 billion in 2008. More than half of its exports go to the United States.
In recent years the sector has been the third-biggest foreign exchange earner after agriculture and tourism in a country ravaged by civil war in the 1970s but which has achieved some stability over the past two decades.
It accounts for about 16 percent of gross domestic product, so the factory closures will hurt, with a ripple effect in the countryside as the money sent home by garment workers dries up.
The International Monetary Fund forecast in December that the economy would shrink 2.7 percent in 2009 before growing 4.3 percent this year.
The government has offered vocational training to the unemployed, but Oum Mean said some female workers had also turned to the "entertainment industry" -- a euphemism for prostitution. "Some think that these jobs are not good for society," he said.
Chea Mony, president of the Free Trade Union, said some workers had sought jobs in neighbouring Thailand, Malaysia and South Korea.
"Some of the women went to work in night clubs and beer gardens," he said. "Unemployment is a heavy burden for Cambodian women."
(Editing by Alan Raybould)
How Asean can fully benefit from trade pact with China
THE China-Asean Free Trade Area (Cafta) is one of the world’s largest FTAs, with a combined gross domestic product of US$6.6 trillion (S$9.3 trillion), 1.9 billion people and a total trade of US$4.3 trillion.
Its Framework Agreement was signed in November 2002. The Trade in Goods Agreement was concluded in November 2004 and entered into force in July 2005. And the Trade in Services Agreement was signed in January 2007 and entered into force in July 2007. This year, the full implementation of zero tariffs for most goods in the FTA is expected for China and the Asean 6 - Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Cambodia, Laos, Myanmar and Vietnam will do the same in 2015.
Cafta’s key benefit for Asean is the access it provides to China’s market. In 2008, China accounted for nearly 12 per cent of Asean’s total exports and 10 per cent of its total imports. Some see Cafta as a potential platform for the creation of a larger free trade area, consisting of Asean+3 (China, Japan and South Korea) or Asean+6 (China, India, Japan, South Korea, Australia and New Zealand).
However, the potential benefits of Cafta for Asean are still not very clear. The Chinese economy is a low-cost production base, endowed with a large pool of unskilled workers. It has also recently emerged as an important source of foreign direct investments overseas.
There could be short-term displacements in labour-intensive industries such as textile, garment, footwear and toy manufacturing in Asean, as well as in large capital-intensive industries such as steel and machinery serving domestic markets in Asean. The short-term impact might be more significant for small and medium-sized enterprises (SMEs) in the region. In particular, the competitive impact of Chinese exports of machinery and equipment is expected to affect SMEs in more advanced Asean countries, such as Singapore, Malaysia and Thailand. Overall, the impact of Chinese exports will probably be more significant in Cambodia, Laos, Myanmar and Vietnam, as well as in emerging countries like Indonesia and the Philippines, which are still dominated by labour-intensive industries.
Furthermore, Cafta could diminish the importance of the Asean Free Trade Area and perhaps delay the formation of the Asean Economic Community (AEC). The dominance of the Chinese market might shift the focus away from Asean, even within the region. But despite the short- term adjustment costs of Cafta, the potential gains for Asean and China in the medium and long term are significant. To fully benefit from Cafta, however, Asean needs to address several key issues.
First, Asean needs to maintain the momentum for the formation of the AEC. The integration of Asean into an economic community consisting of a ‘single market and production base’ will be crucial if Cafta is to evolve into a larger free trade grouping encompassing more countries.
Second, there are large disparities among Asean countries and greater focus should be directed towards reducing income disparities within the region. In particular, Asean could focus on capacity building in Cambodia, Laos, Myanmar and Vietnam, and develop stronger infrastructure to facilitate trade.
11 February, 2010
Bilateral approach may not work for border dispute: PM
Photo by: Heng Chivoan
A soldier guards the area near Preah Vihear temple Saturday morning. As he concluded his visit to the border, Prime Minister Hun Sen questioned whether issues with Thailand could be resolved bilaterally.CAMBODIA may be forced to take its ongoing border dispute with Thailand to an international forum if a solution is not brokered soon, Prime Minister Hun Sen said Tuesday, calling Thailand’s occupation of territory adjacent to Preah Vihear temple unacceptable.
“If it is necessary, Cambodia will raise these issues to the UN security council and at the International Court of Justice,” Hun Sen said.
The countries have been addressing the issue bilaterally under the auspices of the Joint Border Commission (JBC), though Ministry of Foreign Affairs spokesman Koy Kuong said Wednesday that this mechanism may prove inadequate to solve the problems near Preah Vihear and elsewhere.
“Yesterday, Samdech Hun Sen showed clearly that Cambodia can choose a third-party approach,” Koy Kuong said. “The bilateral approach we still apply, but if it doesn’t work, we can choose another approach.”
Thai Ministry of Foreign Affairs deputy spokesman Thani Thongphakdi said Thailand believes that disputes over the countries’ shared border are “a bilateral issue that should be solved bilaterally”.
“If the Cambodian government wishes to bring this issue to the world court or the United Nations security council, we’ll have to look at the details of what that may be,” he said.
Koy Kuong noted with frustration that the bilateral JBC negotiations have been stalled for months because the Thai parliament has yet to approve the latest round of negotiations, and he said that Bangkok has “no real willingness to solve the problem”.
“We can wait, but our patience is limited,” he said.
On Wednesday, Hun Sen ended his five-day border trip by inaugurating a new building of the Cambodian Red Cross in Preah Vihear province before returning to Phnom Penh.
Abhisit wants to take the land under your house
Dear Editor,
Photo by: Bloomberg
Prime Minister Abhisit Vejjajiva speaks during a panel discussion at the 2010 World Economic Forum in Davos, Switzerland, in January.It has been more than one year since Pheah Vihear temple was registered by UNESCO as a World Heritage site in Cambodia on July 7, 2008.
Since then, I have been reading different online news in order to learn more about the situation along the Cambodian and Thai border.
While I am struggling to make sense out of the Thai media, the Abhisit government has been using the Bangkok Post to manipulate and confuse the local and international communities in relation to its neighbouring country, Cambodia. In an article titled “Abhisit counters Hun Sen’s claim” on
www.bangkokpost. com, “the Thai government will use Prime Minister Hun Sen’s comment to explain to the World Heritage Committee that the area around Preah Vihear temple clearly belongs to Thailand”, Abhisit was quoted as saying. Such a statement has confused some people who do not know the history of Preah Vihear, especially the verdict by the World Court in 1962 in which Preah Vihear temple was determined to belong to Cambodia.
To make it easy to understand, I am going to translate Abhisit’s statement, and here is what he is trying to explain: The land underneath your house belongs to your neighbour.
Although there are people struggling to make sense out of Abhisit’s statement, I admit that my translation also does not make sense – that is
because what he said was nonsense.
Therefore, in order to clarify the confusion, I am willing to have a direct debate with Abhisit. But first please ask yourself a question: Does the land underneath your house belong to your neighbour? If your answer is a “yes”, let’s open a debate.
Sam Sok
Florida
10 February, 2010
Hun Sen rebuked for criticism of Abhisit
During his high-profile trip to the Thai-Cambodian border this past weekend, Hun Sen repeatedly accused Thailand of invading Cambodian territory, saying Abhisit had “no family honour”.
Chawanon Intharakomansut, secretary to the Thai foreign minister, said this language “should not have come from a prime minister of any country”, Thailand’s Bangkok Post wrote Monday.
“I have to apologise to the Cambodian people that up until today, all Thai people and the government have wanted to resume relationships with Cambodia in all fields,” Chawanon said.“But criticising the Thai premier so badly damages Thailand’s dignity, and that will make it even more difficult to normalise ties.”
Speaking at Royal Cambodian Armed Forces Base 42 in Oddar Meanchey province’s Banteay Ampil district on Monday, Hun Sen focused vitriol on Thailand’s occupation of the Wat Keo Sekha Kirisvarak pagoda, in territory adjacent to Preah Vihear temple that is claimed by both sides.
In Oddar Meanchey’s Trapaing Prasat district on Tuesday, the prime minister said Cambodia may resort to evicting the Thai troops from the pagoda by force.
“It is not clear whether these Thai soldiers will withdraw through negotiation or by being pushed back by the armed forces,” Hun Sen said. “[Thailand] has weapons. I have weapons, too.”
Unions push again for higher factory wages
Owners of small factories say they aren’t included in discussions
Photo by: TRACEY SHELTON
Workers make clothes last year at a Phnom Penh garment factory. Unions are seeking higher wages, but factories say the industry remains subdued.I think that [garment factories] may consider an increase in wages of $5 to $6 instead."
The CUF wants factory owners to raise minimum salaries from US$50 a month to $93 in order to provide workers with a better standard of living, according to President Chuon Mum Thol. The issue will be discussed at a labour consultation meeting next week.
Chuon Mum Thol explained: “According to our research, $93 per month is enough to provide good living conditions and pay for food, house for rent, electricity and water.”
But other union officials questioned whether such a large wage increase is achievable when the sector has been hit hard by the economic crisis.
Chea Mony, president of Free Trade Union, who will not attend the meeting, said: “I do not think they [the garment factory representatives] will agree to increase salaries from US$50 to $93 because their business is still being affected by the economic situation.
“I think that they may consider an increase in wages of $5 to $6 instead,” he added.
The worldwide slump in demand has had a direct affect on Cambodia’s garment sector. The Kingdom’s revenues from garment exports dropped to $716.2 million last year, a 23.8 percent slide compared to 2008.
Production centres throughout Cambodia have closed, putting tens of thousands out of work. Last year, according to the Ministry of Labour and Vocational Training, 93 garment factories closed, causing 38,190 workers to lose their jobs. Another 60 factories suspended production, leaving 30,000 people without work.
In December, Cambodia was estimated to have 516 garment and footwear factories, which employed about 358,660 workers. The Post called 10 major garment factories on Monday, but no one was available for comment at any of them.
Van Sou Ieng, president of the Garment Manufacturers Association of Cambodia (GMAC), said Monday that he was in a meeting.
Representatives from smaller garment factories told the Post they have not been invited to the meeting. A spokeswoman for Fortune Garment and Woolen Knitting said she had not heard about the session.
Sat Navy, director of Navy Garment, said: “The government hasn’t called us about the meeting, but I don’t think it is possible to [raise pay] at a small garment factory like this.”
Meanwhile Oum Mean, secretary of state at the Ministry of Labour and Vocational Training, said that even if owners refuse to raise the minimum wage, meetings to discuss the issue will be held “again and again” in the future.
Subscribe to:
Posts (Atom)