Global Scene

Don’t shun Mumbai, plead tourism bosses, hotels

Mumbai’s hotel managers and tourism chiefs have called for foreigners not to give up on the city after the coordinated strikes that left at least 172 people dead and close to 300 wounded.

With many holiday and business bookings being scrapped, officials urged tourists to support Mumbai in its hour of need.

“If they are thinking of cancelling their stay, we are requesting that they only postpone,” Kiran Kurundkar, the state director of tourism, told AFP.

“If they cancel, everything comes to a halt and the extremists have achieved their aim.

“It’s quite normal for people to feel unsure but life must go on. So, tourism must also move on.” As India’s most cosmopolitan city, with good domestic and international air links plus a vibrant nightlife, Mumbai - dubbed the “Maximum City” - is a magnet for foreign as well as domestic visitors.

Last year nearly two million international tourists made trips to Maharashtra state, of which Mumbai is the capital, according to India’s tourism ministry. “We were totally sold out before the blast,” said Ashwini Joge, manager of the Gordon House Hotel close to the luxury Taj Mahal hotel, which was seized by militants in the attacks that began late Wednesday.

“There was a group that was supposed to come and stay with us but the attacks happened and they cancelled. We only have four guests staying in 28 rooms. All the others have left early,” she told AFP.

“People are cancelling the bookings. They just don’t want to come.” It was a similar story at the Intercontinental hotel on the seafront, up from the Oberoi/Trident hotel that armed extremists also attacked. “There has been a lot of cancellations in the last four days. We are assuming that most are due to what’s happened,” said duty manager Roy Fernandes by telephone. “About 10 percent have postponed.”

The three restaurants and rooftop cocktail bar at the 58-room boutique hotel are normally packed every evening and weekend but they remain closed.

“We have got the entire hotel barricaded and only cars that we know are allowed to stop. No one can just walk in off the streets,” said Fernandes.

A number of countries arranged for chartered planes to take their nationals home from Mumbai following the attacks. One sent by France arrived in Paris Saturday with 77 people on board.

A spokeswoman for the British Deputy High Commission in Mumbai told AFP they had provided emergency passports for Britons who escaped the carnage without any of their possessions.

India’s tourism ministry sought to reassure foreign visitors, saying in a statement at the weekend: “All regions in India are safe and normal.” Despite it being peak tourist season due to the cooler weather, both the Gordon House and the Intercontinental said cuts in room rates were likely to try to entice visitors back.

Mumbai, AFP
 

China not facing major crisis, slowdown moderate: expert

China can weather the financial storm because the economy has no major bubbles while a year of policy adjustments have tamed the property market, a top central bank adviser said in comments published Monday.

The economic slowdown is a “benign correction”, the official Shanghai Securities News quoted central bank adviser Fan Gang as saying.

“Slowdown in the economy is inevitable at this stage, but China remains one of the fastest growing economies in the world,” Fan said .

Fiscal tightening policies aimed at preventing the economy from overheating have squeezed out bubbles in the real estate sector over the past year, he said.

“There are no big bubbles in China’s economy at present. With no big bubbles, there will not be big crisis in future,” Fan was quoted as telling a forum hosted over the weekend.

Fan said China had resources to navigate through the financial turmoil such as abundant foreign exchange reserves and tax revenues.

China’s foreign exchange reserves, already the world’s largest, rose to 1.9056 trillion dollars by the end of September.

China’s property market has boomed for the past few years, prompting a series of government curbs to deter speculators. But recent data show property prices grew in October at the slowest pace in more than three years.

Beijing has announced a range of measures to prop up the slowing sector, including lifting stamp tax on purchases and cutting interest rates on mortgages for first-time home buyers.

It has also removed a value-added tax on land in property sales.

Further efforts to encourage purchases will be introduced in near term such as making it less expensive for families to buy second homes, China Business News reported Monday, citing government officials.

Shanghai, AFP
 

Britain plans raising top rate of income tax

British finance minister Alistair Darling will announce an increase in the top rate of income tax on Monday when he unveils his economic stimulus plan to combat looming recession, media reports said.

Prime Minister Gordon Brown’s government is planning to raise the tax on incomes over 150,000 pounds (220,000 dollars, 180,000 euros) a year from 40 pence to 45 pence in the pound, the BBC and the Sun newspaper reported.

The rise would not be introduced until 2011, after the next general election, allowing the ruling Labour party to avoid breaking its 2005 election manifesto not to raise the top or bottom rate of income tax.

Darling is expected to slash taxes and boost spending in his pre-budget report — an outline of his plans ahead of the full 2009/2010 annual budget due early next year — presented to parliament Monday.

Reports suggest the income tax change is aimed at offsetting the new spending that Brown believes necessary to boost the economy, in an attempt to get Britain’s finances back on course in the long-term.

It is also expected that Darling will announce a cut in value added tax from 17.5 percent to 15 percent.

Michael Fallon, a lawmaker with the main opposition Conservatives, condemned the suggested income tax change, saying it would drive away businesses.

“We want Britain to be an attractive country for people to come and do business in and for the last 15, 20 years there’s been a consensus that you shouldn’t increase the top rate too much,” he told BBC radio.

“Now that’s all been broken tonight.” The Taxpayers’ Alliance lobby group also criticised the move as “totally backwards”, saying raising the top tax rate “punishes success”.

Chief executive Matthew Elliott said: “The government’s strategy risks hobbling the economy even further and scaring off potential investors.” Left-wing Labour lawmaker John McDonnell welcomed the move but said it should be introduced immediately.

“The introduction of a higher rate of tax for high earners is long overdue but the government’s proposals are hardly radical and delaying them until after the next election is pointless,” he said.

London, AFP
 

Massive $300-billion rescue for Citigroup

The US government vowed Monday to safeguard the ailing economy, after stepping in to guarantee over 300 billion dollars in potential losses at Citigroup and pump 20 billion more into the financial giant.

The Citigroup rescue came shortly before midnight Sunday in a deal struck between federal officials and the financial giant ravaged by slumping stock prices.

“This is a tough situation for America. We’ll recover from it. The first step to recovery is to safeguard our financial system,” US President George W. Bush told reporters Monday.

He pledged his administration would take any future measures needed to shore up the struggling economy, after discussing the Citigroup rescue with Treasury Secretary Henry Paulson.

“If need be, we’re going to make these kind of decisions to safeguard our financial system in the future,” he said.

The news of the Citigroup bailout boosted European stock markets Monday, which posted gains of 10 percent and more, with Citigroup shares putting on nearly 60 percent in a spectacular reversal of fortunes.

The Dow Jones also soared, gaining some 4.70 percent to close at 8,424.75. “The failure of Citi, with its two trillion dollar balance sheet, would have been absolutely catastrophic to the global banking system,” said Fred Dickson at DA Davidson & Co.

Citi operates in more than 100 countries and, with more than two trillion dollars in assets, is widely viewed as too big to be allowed to fail.

In a bid to ensure that Citigroup does not become the latest institution to fold, the Treasury Department will invest 20 billion dollars in the group, giving US taxpayers an eight percent stake in the company.

That cash injection will come from the Troubled Asset Relief Program, a 700-billion-dollar package approved by Congress earlier this year to thaw frozen credit markets and keep the US financial system working.

Washington, AFP
 

Japan to fight credit crunch

Japan’s central bank is preparing new measures to tackle a worsening credit crunch in Asia’s biggest economy, which could slip back into deflation next year, its governor Masaaki Shirakawa said Monday.

“Financial conditions in Japan seem to have become less accommodative at an accelerating pace, particularly in terms of availability of funds, reflecting the turmoil in global financial markets,” he warned. The Bank of Japan (BoJ) was drawing up steps to help firms gain access to credit in the run-up to the end of the fiscal year to March, Shirakawa said in a speech to business leaders in the southwestern city of Fukuoka.

The BoJ announced similar measures to help companies in November 1998 after a number of banks collapsed under mountains of bad debts.

Tokyo, Monday AFP
 

Malaysian firm starts building Vietnam’s biggest steel plant

Malaysia’s Lion Industries and Vietnamese shipbuilder Vinashin have started building the country’s biggest steel plant, set to cost 9.8 billion dollars, state-run Vinashin said Monday.

The complex will be located on 1,650 hectares (4,000 acres) in central Ninh Thuan province, about 300 kilometres (180 miles) northeast of the business capital Ho Chi Minh City, Vinashin said in a statement.

Once operational in 2011, the complex is set to produce 4.5 million tons of steel a year. At full capacity from 2025, it is scheduled to produce 14.4 million tons, the statement said.

Lion Industries owns a 74 percent stake in the project while Vinashin holds the remainder, Vinashin said in the statement.

This month Prime Minister Nguyen Tan Dung rejected a proposal by South Korea’s Posco Group to build a 5.4-billion-dollar steel mill near resort areas in south-central Nha Trang province, citing environmental concerns.

Hanoi, AFP