Technology can pull US out of crisis, says Bill Gates

Technology can pull the United States out of recession and help the world's ailing financial markets work better, Microsoft Corp
Bill Gates Chairman Bill Gates told a high-level business summit at the company he co-founded.

"The drug companies will get back in high productivity mode. The software, IT revolution -- we're just at the start of that," said Gates at Microsoft's annual CEO Summit at the company's campus near Seattle.

"What we can do for education, communication, and what that looks like for the efficiencies of world markets, we are just at the beginning of that."

Gates, who focuses on health and education issues at his Bill & Melinda Gates Foundation since giving up his day-to-day role at the world's largest software company last year, made the remarks at the private event.

"The opportunities for innovation are stronger today than ever," Gates told the audience, which included billionaire investor Warren Buffett -- the world's second richest man behind Gates himself -- alongside News Corp Chairman Rupert Murdoch and Amazon.com Inc Chief Executive Jeff Bezos.

Despite the fact that Microsoft is laying off 5,000 employees, Chief Executive Steve Ballmer also struck an optimistic note, saying the business world is only "coming into halftime" of the Internet revolution.

He downplayed fears that the recession would choke off investment in technology start-ups from venture capital (VC) firms. "The VCs are pulling back," said Ballmer. "The seventh, eighth, and ninth copy of the idea won't get funded today, but most good propositions are still going to get funded. There's plenty of venture capital out there, relative to ideas."

He said research and development spending was also strong. "I don't know anybody in our industry actually who's cutting their R&D budget," said Ballmer. "I know people who are doing a lot of different things, but most people are not slashing their R&D budget."

Microsoft's research chief Craig Mundie said in February the company was not cutting back on its $9 billion R&D budget this fiscal year.

Agencies

Is HP top PC maker in US?

Global shipments of personal computers fell 7.1 percent in the first three months of the year, but the decline was smaller than expected and research group IDC on Wednesday said the industry could turn around by the end of the year.

A second research group, Gartner Inc, calculated first-quarter PC shipments fell 6.5 percent from the same period in 2008. The two groups use different methods to track PC shipments.

IDC had predicted worldwide shipments would fall 8.2 percent in the quarter. The US market was also much stronger than IDC forecast, with PC shipments falling 3.1 percent from a year ago, compared with an expected 8.9 percent drop. By Gartner's count, US shipments dipped less than one percent.

"Based on the U..being the center of the financial crisis, and looking at trends of last recession, we were concerned that demand and growth would continue to decline," said Loren Loverde, an IDC program director.

Instead, the US PC market, which took a beating in the fourth quarter, benefited from intense price competition among PC makers as well as the growing demand for netbooks, or small, cheap, low-powered laptops.

Both groups reported that Hewlett-Packard Co used the trend to overtake Dell Inc as the top PC maker in the US HP's lower prices and more established brand among shoppers helped push its market share to 27.6 percent. Dell's share fell to 26.3 percent as it struggled to reorganize its consumer business, according to IDC.

Taiwan's Acer Inc, the No 3 PC maker in the US and a force in the netbook market, snagged 10.5 percent of the market. Apple Inc's share edged up to 7.6 percent, and Japan-based Toshiba Corp, the fifth-largest, took 6.6 percent.

Worldwide, HP's market share crept up to 20.5 percent while Dell's slipped a few points to 13.6 percent, IDC reported. HP's shipments rose 2.9 percent as Dell's plunged 16.7 percent.

No 3 Acer captured 11.6 percent of PC shipments worldwide. China's Lenovo Group's share was flat at 7 percent, and Toshiba's share edged up to 5.4 percent.

Chipmaker Intel Corp. on Tuesday said personal computer sales "bottomed out" in the first quarter. Neither IDC nor Gartner wanted to match Intel's bold assessment, but IDC took a more optimistic stance.

"I don't think Intel's comment was meant to say we're going to come roaring back next quarter," Loverde said. "It's likely we won't see growth deteriorate from here."

Before the release of Wednesday's numbers, IDC had forecast an 8.4 percent decline in the second quarter and a 4.5 percent drop in the third before seeing growth in the fourth quarter.

George Shiffler, research director at Gartner, said in a statement that retailers may be restocking inventory, but "this restocking should not be interpreted as a recovery in PC end-user demand. It's still unclear if the global PC market has hit the bottom."

Agencies

Is Indian CEO confidence highest in world?

Indian CEOs expect their businesses to be less affected by the crisis in the international banking system than their global counterparts.

PricewaterhouseCoopers’ 12th Annual Global CEO Survey found only 50% of the respondents in India saying they were likely to be affected by the credit crisis, as compared to 70% globally.

India has recorded the highest CEO confidence levels amongst the emerging economies, with 70% expressing confidence about both short term and long term revenue growth, compared to just 21% and 34% globally. CEOs worldwide were gloomier about longer-term growth, predicting a slow recovery.

“This confidence is extremely significant since it signals the inherent strength of the Indian market, and its continuing potential for growth even in the face of crisis,” said Ramesh Rajan, chairman of PwC, India. Pessimism prevailed across all geographic regions, business sectors and levels of economic development, said the survey. Only 15% of CEOs in North America and 15% in Western Europe expressed confidence about growth prospects for the next 12 months. This compared with 21% in the emerging economies of Central and Eastern Europe, 31% in Asia Pacific, and 21% in Latin America.

The outlook for the next 12 months was optimistic for Indian CEOs as 89% of the respondents expect to make a return on investment in products or services provided, compared to 69% globally. 60% of Indian respondents said that they were likely to grow their businesses by penetrating existing markets better, compared to 37% globally.

Indian CEOs indicated that M&A activities were likely to play a greater role in the growth of their businesses than JVs or strategic alliances, in contrast with the global trend. 97% of Indian CEOs indicated that information about employee views and needs was important in making decisions about the long-term success and durability of their business, compared to 88% globally. The India figure was highest in Asia too.

For the survey, 1,124 interviews with CEOs were conducted in 50 countries during the last quarter of 2008.

Times of India

Has the crisis left Dubai migrant workers out in the cold?

Low-paid Asian workers who toil long days to build the skyscrapers of Dubai have become the latest victims of the global financial crisis as companies run short of business and money.

For many years, the Gulf emirate was a magnet for South Asian workers who fed the booming economy with cheap manpower -- from cleaners and gardeners to skilled and unskilled builders.

A report issued earlier this month showed that 582 billion dollars worth of building projects in the United Arab Emirates, of which Dubai is a part, had been put on hold due to the slowdown. That was 45 percent of the total.

Arnold, a 26-year-old Filipino machine operator, found a job in a small aluminium factory only two months after arriving in Dubai last summer. But in January, he and six others from the 15-strong workforce were laid off.

"I am staying in Dubai trying to find another job," he said, pointing out that his previous employer lost a great deal of business when many construction projects ground to a halt, cutting demand for aluminium products.

Six years of spectacular growth in the UAE construction sector, mainly in Dubai, absorbed hundreds of thousands of workers, mostly from South Asia. That had a knock-on effect, creating further opportunities for migrants.

But the financial crisis, mainly in construction and related industries, is reversing that trend, forcing foreign workers to go home.

"The crisis is worse in the Philippines. We have no future there. We are looking for part-time jobs here, anything," Arnold told AFP as he hung out with two friends who had also lost their jobs.

Christopher, a compatriot, said he has been in Dubai for around nine months working as a welder during the day and a barista in the evening.

He and his wife, who also works in a Dubai coffee shop, used to send 500 dirhams (136 dollars) a month home, where their two kids were left behind.

Migrant workers send billions of dollars home every year. One money transfer firm, UAE Exchange, said its volume last year was 12 billion dollars, most of it to India, Bangladesh and the Philippines.

Like Arnold, Christopher was working illegally in the hope that an employer would get him a work permit. Now he is searching desperately for anything.

But even for labourers who were brought to the UAE on a work visa to satisfy the needs of the once-booming economy, many are receiving the pink slip.

"Some 200 gardeners were sacked recently from our company" out of about 10,000 workers, said an Indian as he planted saplings in the garden of an elegant office building in Dubai.

"They told us the company does not have much work and is short of money," said the man in his mid-40s, refusing to give his name.

Two other colleagues, an Indian and a Bangladeshi, carried on trimming the hedge, appearing hesitant to say anything that might jeopardise their jobs.

"We are expecting to lose our jobs," said the man, who earns a meager 500 dirhams (136 dollars) a month in return for 48 hours a week.

He lamented that two years ago he had to pay what was for him a fortune of around 10,000 dirhams (2,725 dollars) to Indian intermediaries to get a job in Dubai.

Murukesan, an Indian cleaner, said his employer, a large cleaning and maintenance company, last week told workers who had completed at least two years of work to go home on four-month unpaid vacations.

"They said do not come back until we call you," he said with a faint smile, appearing content as he has completed only 18 months of his contract.

"In the past, workers were not taking vacations, even after four years of continuous work," he said, highlighting a huge work load in the immediate past.

It appears some of the unpaid "vacations" are simply a way of getting rid of people without having to pay them off. Under UAE law, workers laid off must be paid 21 days' salary for each of the first five years worked and a month's salary for every year after that.

"They are trying to find excuses to bypass the rules of terminating a contract," said Monir al-Zaman, labour attache at the Bangladeshi embassy.

"Compensation should be paid if workers are being fired," he told the media, adding that companies should resort to cutting overtime work and even reduce salaries before laying off workers.

In December, Khalfan al-Kaabi, a member of the Abu Dhabi Chamber of Commerce board of directors, said up to 45 percent of construction workers could be laid off this year if private sector projects in the UAE were delayed or cancelled.

Zaman said he could not provide a figure on Bangladeshi workers having lost their jobs in the UAE, because the process is not done "formally".

He also pointed out that he noticed, during inspection visits to labour camps, that many workers stayed in the UAE even if they were not being paid, in hope of finding work.

But poor unemployed workers cannot linger for long if jobs remain rare.

"Maybe this month I have to decide to stay or go ... because I don't have any money. Now I'm borrowing from friends," said Arnold.

Agencies

FIEO estimates 10 million layoffs in export units

Ten million people in the export sector will be out of job by March this year, as Indian goods find fewer buyers in the international Coming to terms with layoffs market which is battling the worst crisis since 1929.

"There will be 10 million job losses by March," Federation of Indian Export Organisations (FIEO) President A Sakthivel told reporters here on Tuesday.

Indian exports, which account for just about 20 per cent of the country's Gross Domestic Product, are a highly labour-intensive activity, employing 150 million people.

The country's exports, which posted a robust 30.9 per cent growth rate in the first half of fiscal, contracted by 12.1 per cent in October, for the first time in the last five years. The negative trend continued in November, when exports fell to $11.5 billion from $12.7 billion. The data for December are yet to be released.

"I can safely say that negative growth trends will continue in December and in the next couple of months... I hope we will end the fiscal with exports of about $175-180 billion," Sakthivel said.
FIEO yesterday said there was no "serious consideration" for exporters in the measures announced by the government last week.

The target for the current fiscal is $200 billion while exports totalled about $160 billion in 2007-08.

Europe and North America, which account for 37 per cent of India's merchandise exports, are reeling under recession and slowdown.

The FIEO chief said he did not see positive trends before the fourth quarter of the calendar 2009, "though a complete U-turn may take a little longer", he said.

Agencies

Will HDFC Bank sail through the financial crisis?

HDFC Bank's ability to grow at over 30 per cent annually in the last nine years, along with superior credit risk management practices, which have helped it maintain asset quality, would ensure that it will be among the least affected in a slowdown.

The bank's focus on technology and superior margins with support from low-cost deposits will ensure profitable growth in the future. The merger of retail focused-Centurion Bank of Punjab (CBOP) with HDFC Bank effective May 23, 2008, will shore up revenues in the medium-term.

However, the synergies from the merger with start reflecting over 12-24 months, and boost profitability. Put together, the gains from organic and inorganic initiatives will help the bank sustain growth rates in excess of its historical average of 29-30 per cent, and in a profitable manner.

To read more...click on the link below:
http://www.rediff.com/money/2008/nov/24bcrisis-why-hdfc-bank-will-not-be-hit.htm

Financial crisis hits Russia hard

Russia had convinced itself -- and the outside world -- that its huge oil wealth and vast foreign exchange reserves made it much less vulnerable than others to the global financial crisis.

But after weeks of virtual silence by state media about the effects the crisis has had on Russia, President Dmitry Medvedev has suddenly acknowledged the extent of the damage.

"In all likelihood, the crisis is going to spread. Here we have to face reality," he said.

Top bankers and businessmen say Medvedev's words amounted to an official acknowledgement of what they have sensed in recent weeks -- a sudden, dramatic slowdown of the economy as credit dried up, sales slumped and factories laid off staff.

"We had thought that Russia would be far less badly hurt by the crisis than other major economies," said one leading Russian banker, speaking on condition of anonymity.

"Now it is clear that Russia will be much worse affected by the crisis than other major economies and will be affected for much longer."

The government is still officially predicting growth of 6.7 percent next year but the World Bank this week halved its growth forecast for Russia to 3 percent and many businessmen and bankers say privately growth will be at best zero.

Underlining the fresh sense of urgency felt in the government, Prime Minister Vladimir Putin on Thursday announced a $20-billion package of tax cuts and extra spending to help pensioners, companies and the unemployed. This was on top of $200 billion of financial aid already pledged by the Kremlin.

To read more click on the link below
http://www.reuters.com/article/reutersEdge/idUSTRE4AK4L620081121?pageNumber=2&virtualBrandChannel=0