LONDON, Dec. 30--The rising cost of oil has wiped out the benefits many African countries were expecting from western aid and debt relief over the past three years, new research from the International Energy Agency has shown.
The situation is raising fears that, in spite of the strong growth many African countries have seen in recent years, there could be a repeat of the 1980s’ debt crisis in the developing world that was caused in part by the oil shocks of the 1970s.
Africa enjoyed a surge in western engagement during the UK’s presidency of the Group of Eight leading industrialized countries, culminating in a commitment by world leaders to a broad package of debt relief and increased aid at the 2005 Gleneagles summit in Scotland. But since then oil prices have steadily risen towards $100 a barrel.
Surveying 13 non-oil-producing African countries, including South Africa, Ghana, Tanzania, Ethiopia and Senegal, the IEA found that the increase in the cost of oil bought by the countries since 2004 was equivalent to 3 percent of combined GDP. This was more than the sum of debt relief and aid received over the past three years by the countries, which have a combined population of 270 million, of whom 104 million live on less than $1 a day.
The IEA’s warning comes as Senegal’s President Abdoulaye Wade said “crippling“ oil prices threatened to provoke “unrest and violence“ in Africa. Wade, who has been among the most active African leaders on the issue, told the FT he was encouraging 15 non-oil-producing African countries to form a multinational energy corporation of their own to compete for oil concessions on the continent in order to hedge against further price spikes.
“There is a growing understanding that the most urgent need in Africa today is the challenge of providing affordable energy,“ he said.
Africa’s economic growth has remained strong this year, but increased fuel costs have put upward pressure on inflation and slowed growth in some countries. They have also contributed to social problems including rising food prices, power cuts due to the use of diesel-powered generation in many areas--and an increasing burden of fuel subsidies.

The yuan rose 0.9 percent during the week ending Dec. 28 to 7.3041 to the dollar.

BEIJING, Dec. 30--China’s yuan rose sharply against the US dollar adding weight to rumors China would bow to international pressure and allow the currency to appreciate.
The yuan rose 0.9 percent during the week ending Dec. 28 to 7.3041 to the dollar, which is more than any one-week increase since China stopped pegging its currency to the dollar July 21, 2005, UPI wrote.
China’s chief economist with the National Bureau of Statistics, Yao Jingyuan, told the New York Times officials were debating their next move.
“It is certain that the yuan will appreciate--the time frame and magnitude of the adjustment is difficult to confirm at the current time. We are busy studying this issue right now,“ he said.
Other economic officials said the Chinese government saw rising domestic inflation as a positive climate for a stronger yuan.
However, opposing voices in the labor market said they feared faster appreciation would hurt employment and diminish exports as a stronger currency effects profit margins.
The worries were offset as Chinese exports rose 22.8 percent last month compared with 2006 levels.

A worker turns a valve in the Rosneft oil refinery in Tuapse at the Russian Black Sea coast in this file photo.

MOSCOW, Dec. 30--Russia’s state-owned Rosneft announced that it would raise oil and gas condensate output by 10.9 percent next year to 111.9 million tons, AFP reported.
The increased production will be made possible by new wells and technical improvements, the group, which is Russia’s largest oil producer, said in a statement on Friday.
In addition, a major oil field at Vankor in northeast Siberia is expected to come on stream late 2008, Rosneft said.
This year, Rosneft produced about 100.9 million tons of hydrocarbons, almost 25 percent up on 2006. The increase was in large part due to the purchase of shares formerly belonging to Yukos, the oil company dismantled after the controversial jailing of its founder Mikhail Khodorkovsky.
In related news, oil production in Sakhalin reached 14 million tons in 2007. It is a record-high result over the entire history of exploitation of oil fields on the island and on its shelf, governor of the Sakhalin region Alexander Khoroshavin was quoted by Itar-Tass as saying on Saturday.
Oil production on the island reached some six million tons in 2006. The drastic increase in the hydrocarbons recovery is caused by attaining full capacity by the oil and natural gas project
Sakhalin-1.
Its operator, American company of Exxon Neftegaz Limited, was monthly recovering using its offshore platform Orlan and Yastreb onshore unit one million tons of oil during the year. Through De-Kastri port of the Khabarovsk territory the oil produced within the framework of the Sakhalin-1 project was supplied to Japan, India and South Korea.
Khoroshavin also pointed out that a record high volume of natural gas--six billion cubic meters--was recovered on Sakhalin in 2007. In monetary terms the production volume on the Sakhalin and Kurile Islands accounted for 300 billion roubles. The average monthly wage of the Sakhalin residents grew to 24,000 roubles.
The Sakhalin-2 offshore project will begin the year-round recovery of oil and gas. Its operator--the international consortium Sakhalin Energy--has installed three platforms on the shelf of the Sea of Okhotsk.
Together with platforms of Exxon Neftegaz Limited they will be able to bring the oil production volume up to 25 million tons. They will produce 9.6 million tons of liquefied natural gas a year. Sakhalin will become one of the major suppliers of energy resources to countries of the Asia-Pacific region.

ISLAMABAD, Pakistan, Dec. 30--China will increase its investment in Pakistan from $1 billion to $15 billion by 2012, when trade volume between the two countries will also triple from the current $5.2 billion to $15 billion, said Chinese Ambassador Luo Zhao Hui.
Speaking at a function on Pakistan-China trade in Lahore, he stressed the need for balancing the bilateral trade which was highly tilted in favor of China, APP reported on Saturday.
He said that Pakistan’s exports to China stood at $1.4 billion against Chinese exports of $3.8 billion to Pakistan.
The ambassador predicted that the benefits of Free Trade Agreement between the two countries would be visible in the next five years. However, he advised Pakistani entrepreneurs to explore the Chinese market actively in a bid to bring a balance in trade between the two sides.
The Pak-China Investment Company established with an initial capital of Rs12 billion was different from other similar companies as the emphasis of the company would be laid on engaging the private sector in joint ventures between the two countries.
Speaking at the same gathering, Pakistan Finance Minister Salman Shah said that the Chinese Development Bank had a larger investment portfolio than the World Bank.
He stated that Pakistan should focus on obtaining assistance from that bank to accelerate its growth.
China could benefit from the low labor cost and young age of Pakistani workers, he said, adding with Chinese assistance economic growth of the country could be further accelerated.
Pakistan President Pervez Musharraf has presided over important economic reforms and impressive economic growth: an average of 6.5 percent per year since 2003, nationalpost.com wrote. The World Bank reports that under Musharraf, poverty in Pakistan has declined significantly.

July
-Boeing launches the new Boeing 787.
-China executes the former head of its food and drug agency for approving untested medicine in exchange for cash.

August
-A UK-wide ban on movement of all livestock is in place after foot and mouth disease is found on the Surrey farm.
-Mattel recalls 9 million Chinese-made toys because of lead paint or tiny magnets that could be swallowed.
-Global markets have been shaken up by fears of a credit crunch. Billions of dollars have been wiped off share prices, while the credit markets have been going through a period of repricing that prompted fears of a meltdown.

September
-Oil prices reach $80 a barrel.
-The US dollar reaches parity with the Canadian dollar and falls to record lows against the euro.
-US budget deficit falls to $162.8 billion, the lowest shortfall in five years.

October
-The first Airbus A380 passenger flight, operating for Singapore Airlines, with flight number SQ380, flew scheduled service between Singapore and Sydney, Australia.
-France suffered travel chaos after transport and energy workers started a strike in protest against President Nicolas Sarkozy’s pension reform.

November
-Former French Finance Minister Dominique Strauss-Kahn was selected on September 28 as the new Managing Director of the IMF. Strauss-Kahn, 58, succeeded Rodrigo de Rato for a five-year term beginning November 1.
-Citigroup Inc. CEO Charles Prince resigns as company loses billions in debt crisis.
-Oil reserves found in Brazil. Petrobras, Brazil’s national oil company, says it believes the offshore Tupi field has between five billion and eight billion barrels of recoverable light oil.
-Ecuador joins OPEC. Ecuadorian President Rafael Correa attends the opening session of the third Organization of the Petroleum Exporting Countries summit Nov. 17 in Riyadh, Saudi Arabia.
-Crude Oil prices rose to a new record above $99 a barrel, lifted by worries about inadequate supplies as the Northern Hemisphere enters winter and on news of refinery problems.

December
-Japanese car giant Toyota Motor Corp. plans to raise its global output to near 10 million units next year, out-distancing its rival General Motors Corp. of the United States.
-The UN climate change summit, was held at Nusa Dua in Bali, Indonesia, during Dec. 3-14. The conference aimed to launch negotiations on a climate change deal for the post-2012 period, set the agenda for these negotiations and reach agreement on when these negotiations will have to be concluded.
-The Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia join the Schengen border-free zone.

RIYADH, Saudi Arabia, Dec. 30--Saudi Commerce and Industry Minister Hashim Yamani approved the establishment of a number of new joint stock companies including the Riyadh-based Merrill Lynch Saudi Arabia.
According to an official statement carried by the Saudi Press Agency, Merrill Lynch Saudi Arabia, with a capital of SR50 million, will provide stock management and financial consultancy services.
Merrill Lynch, which is licensed for 99 years, will have a four-member board of directors appointed by the general assembly for three years. “As an exemption to the law, the founders have appointed its first board of directors for five years,“ it said.
The minister also approved the establishment of Al Oula Geojit Brokerage Company, a joint venture of Al Johar Group and Geojit Financial Services Limited, with a capital of SR400 million.
The founders have subscribed to all shares of the company’s capital and paid SR100 million.
Other companies approved by the minister were Financial Brokerage Company with a capital of SR250 million, International Investment House with a capital of SR50 million and Assel Arab Company with SR5 million.
He also licensed the transfer of Mohammed Abdul Aziz Al Rajhi & Sons for Industry, Trade & Agriculture and Al Oyuni Trade & Contracting Company into closed joint stock companies.

SINGAPORE, Dec. 30--From banks to telephones, airlines to shopping malls, and semiconductors to airports, the reach of two state-linked investment firms from the city-state of Singapore extends around the world.
The normally secretive Temasek Holdings and the Government of Singapore Investment Corporation (GIC) were thrust into the spotlight in December with multi-billion-dollar investments in troubled global financial institutions, investment bank UBS and investment and brokerage firm Merrill Lynch, AFP wrote.
In only a generation, the two companies’ assets have ballooned. Temasek says its net portfolio worth is now more than $100 billion. GIC says it manages “well above“ $100 billion, but analysts say it could be as much as $300 billion or more.
Those figures place Temasek and GIC among the largest sovereign wealth funds in the world, according to an October report by Citigroup Global Markets Inc.
Temasek, the elder of the two firms, was founded in 1974 to hold stakes in key companies formerly held by the young nation’s Ministry of Finance.
Its history “is entwined with that of independent Singapore and its economic development and growth,“ Singapore President S.R. Nathan has said.
Once a post-colonial backwater, with no natural resources, the island republic surged ahead of its larger neighbors to become a thriving, developed nation.
Song Seng Wun, regional economist with CIMB-GK Research, said the key to the success of Temasek and GIC was the Singapore economy’s continued generation of revenue surpluses that allowed the firms to grow. They have followed a conservative investment strategy, with sometimes relatively low returns, but that approach has led to solid longer-term gains, he said.
David Cohen, director of Asian forecasting with global research house Action Economics, said Singapore was forced to turn abroad for growth. “It’s a relatively tiny economy domestically. Analogous to Abu Dhabi, they look internationally for their investments,“ Cohen said.

TOKYO, Dec. 30--Rising energy costs triggered the biggest jump in Japanese consumer prices in almost a decade while industrial production slumped, the government said Friday, clouding the outlook for the world’s No. 2 economy, AP reported.
The nation’s jobless rate unexpectedly fell to 3.8 percent in November, but overall the mixed data cements expectations that the Bank of Japan will keep interest rates unchanged for some time, even as energy-fueled inflation accelerates.
The nationwide core consumer price index, which excludes volatile fresh food prices, jumped 0.4 percent in November compared to the same month a year ago, the Ministry of Internal Affairs and Communications said.
The reading was above analysts’ expectations and marked the fastest rise since a 1.8 percent increase in March 1998. It was also the index’s second straight month of gains following a 0.1 percent rise in October.
The core CPI was lifted by a 5.4 percent jump in energy prices. Gasoline prices surged 10.8 percent on year.
“The rise in prices involves higher oil prices, and so it’s not a favorable increase,“ Economy Minister Hiroko Ota told reporters.
The Bank of Japan has looked for a rise in consumer prices as a sign the country has fully emerged from years of deflation, a continuous spiraling down of prices that deadens economic activity and brings down wages.