The plunge in stock indexes came amid warnings that Japan had already entered a recession or would do so in the first half of this year.

DAVOS, Switzerland,
Jan. 28--World Bank President Robert Zoellick said the financial crisis that has cost the banking sector billions of dollars in writedowns was not over yet and more losses were to come.
Zoellick, speaking on the sidelines of the World Economic Forum annual meeting in the ski resort of Davos, said uncertainty still pervaded the financial markets and that the impact on the global economy remained unclear.
“Some firms are going to have some big losses (and) I don’t think this has fully run its course,“ Zoellick was quoted by Reuters as saying.
“There’s anxiousness,“ he said. “There’s great uncertainty in the financial markets.“
“It’s unclear, the effects on the global economy, because it’s unclear the effects on the developing economies.“
Meanwhile, growing fears of a global recession sent stock markets in Europe and Asia tumbling again this morning, with poor results from Japanese companies adding to the mounting concerns.
Japan’s Nikkei stock index lost almost 4 percent Monday, dropping 541.2 points to close at 13,087, ending the modest recovery that followed dramatic losses on the world’s major stock markets at the beginning of last week.
In London, the FTSE fell by 1.5 percent when it opened, dropping 88.4 points to 5,780.6.
Tokyo had momentarily been buoyed by last week’s cut in interest rates by the US Federal Reserve, but a drop on Wall Street on Friday reawakened caution among Japanese investors. Today’s losses all but cancelled out the 4.1 percent gain made in Tokyo on Friday.
The plunge came amid warnings that Japan had already entered a recession or would do so in the first half of this year.
Tetsufumi Yamakawa, chief economist at Goldman Sachs Japan, said five of 11 main business performance indicators had deteriorated. If the number of failing components reaches six, it indicates a recession.
“A recession, which was nothing more than a risk scenario six months ago, is now turning into our main scenario,“ due to a slowdown in exports to and stagnation in the domestic housing market, Yamakawa said.

DUBAI, UAE, Jan. 28--Plans for nuclear power stations in the Persian Gulf face a lack of infrastructure which will take time for the region’s cash-rich states to overcome, an expert at the United Nations’ nuclear watchdog said on Sunday.
“These countries are among the richest.,“ Hans-Holger Rogner, head of planning and economic studies at the International Atomic Energy Agency, told Reuters.
“You can buy some expertise. But you can’t buy everything and you have to take responsibility for your safety--that you can’t outsource. You need a safety culture, you need an independent regulator, you need the basic engineering skills. They are starting from scratch.“
Persian Gulf Arab states--among the world’s largest oil and gas producers--are considering nuclear power as they look to meet escalating domestic electricity demand.
Rogner said he doubted a nuclear power plant would be up and running in the Persian Gulf before 2020.
Sellers of nuclear technology might be eager for the business, but they would also be reluctant to see their product used without a fully developed industry framework in place, Rogner said.
“Vendors would also be concerned,“ said Rogner. “They don’t want their technology to be associated with any of the risks. (Persian Gulf countries) will have to regulate and oversee a plant even if it is operated by an international operator.“
For that reason you need nuclear engineers. But there are currently no universities in the region that teach nuclear engineering, Rogner said.
The IAEA is working with the Persian Gulf Cooperation Council (PGCC) on the basic requirements for nuclear power, Rogner said. It is also working with the individual countries of the PGCC.
PGCC countries have proposed uranium enrichment be undertaken in a neutral country, limiting some of the potential crossover with a nuclear arms development program.
For the IAEA, the best way forward for the nuclear industry in the region is with a PGCC-wide agreement, rather than for individual countries to go their own way, Rogner said. If the countries go ahead on their own, the UAE probably has the edge over the rest of the Persian Gulf Arab states after signing a nuclear cooperation deal with the French government earlier this month, Rogner said.
French companies Total, Suez and Areva said earlier this month they would join forces to develop plans for two nuclear reactors in the UAE, with a possible start-up date of 2016.

SHANGHAI, China, Jan. 28--China’s largest steel maker and its top aluminum producer plan to obtain stakes in a new venture that wants to make large jets to rival Airbus and Boeing, AFP wrote.
Baosteel Group and Aluminum Corp of China (Chinalco) join a series of other companies and government departments that have expressed an interest in participating, the Shanghai Securities News said on Monday, citing a source.
The new company, which is tasked with developing and making passenger jets with more than 150 seats, is expected to be officially launched before the annual gathering of the national legislature in March, the report said.
Analysts have said the large jet venture, approved by a cabinet meeting in February last year, could grow into a potential rival of global aviation giants US-based Boeing and Airbus of Europe.
The central government, which will inject cash into the venture through the State-owned Assets Supervision and Administration Commission, will become the largest shareholder, according to the paper.
China Aviation Industry Corp I (AVIC I) and AVIC II--the country’s two major aircraft makers--will jointly be the second largest shareholder, with local governments taking smaller shares, it said.
China unveiled its first home-made regional passenger airliner--mid-ranged ARJ-21 with a capacity of 70 to 90 seats in December and the plane is expected to make its first test flight in March.

Asian workers are seen working at a construction site in Dubai, UAE, in this file photo.

MANAMA, Bahrain, Jan. 28--A Bahraini minister has warned of an “Asian tsunami“ because of the reliance of “lazy“ Persian Gulf Arabs on foreign labor to carry out even the simplest tasks, AFP reported.
Labour Minister Majid Al-Alawi told Asharq Al-Awsat on Sunday that the presence of almost 17 million foreign workers in the Persian Gulf, mostly from the Asian sub-continent, represented “a danger worse than the atomic bomb or an Israeli attack“.
“I am not exaggerating that the number will reach almost 30 million in ten years from now,“ he told the pan-Arab daily.
Alawi has called for the residency of foreign workers in the oil-rich Persian Gulf states to be limited to six years but the leadership of the six-nation Persian Gulf Cooperation Council has not followed up on the proposal.
“The commercial lobby in the Persian Gulf thwarted the project which was in the final phases before being implemented,“ he said.
Alawi said that Persian Gulf nationals were “lazy“ and “spoilt“, relying on imported labor for the simplest of tasks.
“A lord with billions in Great Britain cleans his own car on a Sunday morning, whereas people of the Persian Gulf Arab region look for someone to hand them a glass of water from just a couple of meters away,“ he said.
“If the Persian Gulf governments do not watch out for this tsunami of foreign laborers, the fate of this region is very worrying,“ he said.
In October, Alawi called for the Persian Gulf’s “sponsorship“ system to be abandoned, saying it left foreign workers at the mercy of the individuals or institutions which employ them.
He called for government to oversee visas and work permits to protect the rights of foreign workers, in a region which human rights organizations have often accused of abusing employees in slave-like conditions.

PARIS, Jan. 28--France’s finance minister said Monday that Jerome Kerviel, the Societe Generale trader at the center of a five billion euro financial scandal, acted alone when he bet 50 billion euros on stock market movements.
Christine Lagarde’s statement supports information released by Societe Generale which said that it believed that Kerviel was not complicit with any other individuals at the bank when he made the unauthorized trades, BBC reported.
At the weekend, Jean-Pierre Mustier, the head of Societe Generale’s finance and investment division said: “I cannot give you 100 percent assurances that there were no accomplices, but at this stage, there is nothing pointing to the fact that he had accomplices, either internal or external.“
The bank is also claiming that Kerviel had been gambling with 50 billion euro of Societe Generale’s money--more than its 35.4 billion euro market capitalization--after evading risk controls put in place by the group.
In a formal statement last night, the trader’s lawyers, Elisabeth Meyer and Christian Charriere-Bournazel, said their client had “committed no dishonest act, did not siphon off a single cent, and did not profit in any way“.
Kerviel’s legal team said the bank was trying to “create a smokescreen which would divert public attention from losses that were significantly more substantial than those it accumulated in recent months“.
The 31-year-old trader, who was Sunday held by police for a further 24 hours, was likely to face preliminary charges later Monday Charriere-Bournazel told the AP news agency. Police must this afternoon either release Kerviel or place him under formal investigation.
Jean-Michel Aldebert, the chief financial prosecutor, said: “Things are going well. The inquiry is proving extremely fruitful.“
However, the “five-billion euro man“, as France has dubbed its new celebrity, appeared to be having trouble grasping the scale of the damage. He was said to be convinced that he discovered a wheeze that was clever until it was rumbled on January 18, when he put 50 billion euro of the bank’s money on the line.

LONDON, Jan. 28--The health of the British economy is threatened by the risk of recession in the United States and interest rate cuts are required, a member of the Bank of England’s rate-setting committee said Monday.
Speaking to The Guardian daily, David Blanchflower said that interest rates in Britain were “restrictive“ and added that those who were worried about inflation at this time were “fiddling while Rome burns“, AFP wrote.
“Interest rates are restrictive at their current levels and that is why I have been voting for cuts,“ Blanchflower, who was the lone policymaker calling for a rate cut at the last MPC meeting earlier this month, told the newspaper.
“Recession in the US will impact the UK negatively in terms of output and jobs. ... Britain is more dependent on the financial sector than is the case in the US.
“Also, the housing bubble is greater in the UK based on house price to earnings ratios.“
Britain’s economy experienced a slowdown in the fourth quarter of 2007 when it expanded by the weakest quarterly rate for more than a year, official data showed last week.
While Blanchflower has argued, and voted for, rate cuts, the majority of MPC members wanted to wait until February when the central bank publishes its latest quarterly economic projections, minutes of this month’s meeting showed.
However, they conceded that “there remained a significant downside risk to UK activity ... from deteriorating credit conditions here and abroad.“

SEOUL, South Korea, Jan. 28--South Korea may cut taxes to strengthen its economy amid worries about the impact of the US subprime mortgage crisis, Yonhap news agency said Sunday.
Yonhap quoted officials as saying the government could cut taxes, front-load fiscal spending and remove corporate regulations.
“The downside risk of the global economy is greater than expected and has come earlier, so the government is considering a range of countermeasures, including a tax cut,“ a finance ministry official was quoted as saying.
Experts warned last week that growing overseas financial turmoil and inflationary pressures were threatening to slow the South Korean economy despite resilient exports and a recovery in consumption.
Annual inflation jumped 3.6 percent last month, breaching the Bank of Korea’s target range of 2.5-3.5 percent.
South Korea’s economy posted 4.9 percent growth last year.
The central Bank of Korea expects the economy to expand by 4.7 percent this year. Moody’s Economy.com was more downbeat, forecasting around 4.5 percent--or less if the global business slowdown is sharper than expected.

TOKYO, Jan. 28--Toyota may have fallen short of General Motors in global vehicle sales last year, but it’s beaten its US rival in another measure--global vehicle production.
In the latest neck-and-neck numbers race between the world’s top two automakers, Toyota Motor Corp. said Monday it had made a record 9,497,754 vehicles worldwide in 2007, up 5.3 percent from the previous year, AP wrote.
That’s about 213,000 more automobiles than the 9.284 million that GM made last year.
Honda and other major Japanese automakers also reported strong annual output gains. Only Mazda said its production dropped.
Toyota’s earlier, less precise production estimate for 2007 was 9.51 million. Toyota spokesman Paul Nolasco in Tokyo said there was no special reason for the change from the estimate.
By sales, however, General Motors Corp. just barely retained its crown over Toyota, selling 9,369,524 vehicles around the world, up 3 percent from the previous year, and about 3,000 vehicles more than Toyota.
Toyota on Friday updated its sales tally for last year with additional three digits at 9,366,418. In number released last week, Toyota said it sold 9.366 million vehicles last year globally, up 6 percent from 2006--allowing GM to keep its title of world’s No. 1 automaker for the 77th year.