Asian countries are beginning to build extensive social-welfare programs like those that long have existed in the West, a move they hope will encourage their people to save less, spend more and help put the region -- and the world -- on a stronger economic footing in the years ahead, The Wall Street Journal reported. Analysts have long worried that Asians lack sufficient health, unemployment and other benefits to tide them over when downturns or emergencies occur, or to prepare for old age. Only about 30% of Asia's elderly receive a pension, according to the United Nations. Just 20% of its unemployed have access to unemployment benefits or other work-related social programs. Partly as a result, Asians tend to save more and spend less of their income than their counterparts in the West. Social-welfare programs are one way of addressing those imbalances. The expansion of Asia's safety net "is happening, and it will help" wean Asia from an over-reliance on exports, says Robert Subbaraman, chief Asia economist at Nomura International in Hong Kong. Read more. (Subscription required.)
Daily Insolvency News Headlines
Mon., July 27, 2009
Mon., July 27, 2009
Russia plans to overhaul its bankruptcy laws to help crisis-hit companies survive financial restructuring without being broken up, the Financial Times quoted an adviser to President Dmitry Medvedev as saying. Economic adviser Arkady Dvorkovich said less than 10 of 100 Russian companies that had gone through bankruptcy procedures had survived as going concerns. He told the newspaper the government would present new bankruptcy legislation to the Duma to be passed into law by the end of the year. "In future, the focus will be on creating efficient financial rehabilitation procedures, which are almost not used right now," the paper quoted Dvorkovich on Monday as saying. It said the government was responding to fears for Russia's legions of debt-laden companies which face repayments of about $130 billion over the next year to domestic and foreign banks. Read more.
Mon., July 27, 2009
When top US and Chinese officials meet on Monday for the first high-level talks of the Obama administration, the American complaints about China’s currency that long bedevilled relations will barely be on the table, the Financial Times reported. For years, Washington alleged that Beijing unfairly manipulated its currency, the renminbi, to support exports, and demanded that China allow it to appreciate to force structural changes in its economy. Humbled by the financial crisis and heavily reliant on Beijing to climb out of it, Washington has shifted gear, relegating the currency to a subset of its push for broader economic reforms in China. The global crisis does not appear to have lifted the confidence of Beijing in its own currency. Instead, Chinese leaders have repegged the renminbi to the US dollar in the past 12 months in the search for a stable environment to ride out the turmoil. In the foreseeable future, the central bank has little choice but to invest its foreign currency holdings in US dollars, because there is no other asset class that can handle such large sums of money. Read more. (Subscription required.)
Mon., July 27, 2009
Nortel Networks, the bankrupt Canadian maker of telecommunications equipment, said over the weekend that Ericsson of Sweden had won an auction of its wireless technologies unit with an offer of $1.13 billion, thwarting a bid by a rival, Nokia Siemens Networks, The New York Times reported. Last month, Nortel signed a deal to sell the division, which is profitable, to Nokia Siemens for $650 million. A bank owned by the Canadian government also agreed to provide $300 million in financing for the deal. But other companies were invited to submit bids to a court overseeing Nortel’s restructuring in bankruptcy. The final days of the auction had produced considerable controversy in Canada, where the sale was front-page news. The maker of the BlackBerry, Research In Motion, which replaced Nortel as the leading Canadian technology company, said last week that it had been unfairly shut out of the bidding. R.I.M. said it had been prepared to offer about $1.1 billion. It was not clear whether enough of the wireless unit’s assets remained in Canada to prompt a mandatory review of the sale under Canada’s foreign investment laws. Ericsson will rename the Nortel operation Ericsson CDMA. It said it would offer jobs to at least 2,500 of its workers, about a third of whom are based in Canada. Read more.
Fri., July 24, 2009
Fri., July 24, 2009
As it prepares to rule on a series of big banking bailouts, the European competition authority warned Thursday that it was ready to force failed government-backed banks to sell off assets or even to close, The New York Times reported. “We would impose a winding down,” said Philip Lowe, director general of the European Commission’s competition department, “if the viability of the bank isn’t assured.” The comments, made after the publication of new European Union guidelines on dealing with bank bailouts, came as the European Commission began reviewing two British banks, Royal Bank of Scotland and Lloyds. The guidelines published Thursday give banks up to five years to implement restructuring plans. Read more.
Fri., July 24, 2009
Canadian officials have begun researching whether and what kind of foreign purchases of Nortel Networks assets might be subject to government restrictions, Industry Minister Tony Clement said on Thursday. He told Reuters he was not allowed to review purchases under the Investment Canada Act before there is an agreement, but he has directed his officials to examine what could be subject to the act. "I can't review anything until there is an agreement of purchase and sale, so that's not germane right now because there's still an auction going on," he said. Canada's opposition New Democratic Party said in a statement Clement was obliged to examine foreign takeovers above a certain size to see if they were of net benefit to Canada. Read more.
