Japan stops nuclear plant leak; crisis far from over

Japan stopped highly radioactive water leaking into the sea on Wednesday from a crippled nuclear plant and acknowledged it could have given more information to neighboring countries about contamination in the ocean.

Despite the breakthrough in plugging the leak at the Fukushima Daiichi power plant, engineers need to pump 11.5 million liters (11,500 tons) of contaminated water back into the ocean because they have run out of storage space at the facility. The water was used to cool over-heated fuel rods.

Nuclear experts said the damaged reactors were far from being under control almost a month after they were hit by a massive earthquake and tsunami on March 11.

Plant operator Tokyo Electric Power (TEPCO) said it had stemmed the leak using liquid glass at one of the plants six reactors.

"The leaks were slowed yesterday after we injected a mixture of liquid glass and a hardening agent and it has now stopped," a TEPCO spokesman told Reuters.

Engineers had been struggling to stop leaks from reactor No. 2, even using sawdust and newspapers.

Neighbors South Korea and China are getting concerned about the world's worst nuclear disaster since Chernobyl in 1986, and the radioactive water being pumped into the sea, newspapers reported.

"We are instructing the trade and foreign ministries to work better together so that detailed explanations are supplied especially to neighboring countries," Chief Cabinet Secretary Yukio Edano told a news conference.

Experts insisted the low-level radioactive water to be pumped into the ocean posed no health hazard to people.

"The original amount of radioactivity is very low, and when you dilute this with a huge body of water, the final levels will be even lower than legal limits," said Pradip Deb, senior lecturer in Medical Radiations at the School of Medical Sciences, Royal Melbourne Institute of Technology University.

The government is preparing to revise guidelines for legal radiation levels, designed for brief exposure to high levels of radiation in emergencies and not cumulative absorption, for people living near the damaged plant.

Workers are struggling to restart cooling pumps -- which recycle the water -- in four damaged reactors.

Until those are fixed, they must pump in water to prevent overheating and meltdowns, but have run out of storage capacity for the seawater when it becomes contaminated.

Radioactive iodine detected in the sea has been recorded at 4,800 times the legal limit, but has since fallen to about 600 times the limit. The water remaining in the reactors has radiation five million times legal limits.

"What they are going to have to release is likely to be highly radioactive. The situation could politically be very ugly in a week," said Murray Jennex at San Diego State University, who specializes in nuclear containment.

Source: Reuters

India set to harvest record grains, may allow exports

India's record grains output in 2011 may prompt the government to allow wheat exports, Farm Minister Sharad Pawar said on Wednesday, boosting the prospect of overseas sales of the grain from the world's second - biggest producer.

Junior Farm Minister Arun Yadav last month said the country could lift a four-year-old ban on the overseas sale of the grain.

Pawar, a key member of a panel of ministers headed by Finance Minister Pranab Mukherjee on food, has favoured overseas sale of farm products like sugar to keep funds flowing to mills to ensure timely payments to cane growers.

India's wheat harvest is seen at 84.3 million tonnes in 2011, higher than the previous forecast of 81.5 million tonnes and last year's output of 80.8 million tonnes.

"The government has to take a serious thought on storage, allocation to states and exports," Pawar said while releasing the latest food grain forecast for the current crop year to June.

India's food grain output is set to touch an all-time record of 235.88 million tonnes in 2010/11 helped by the highest-ever output of wheat and pulses, he said.

The latest production forecast is 1.6 percent higher than the previous year's 232.07 million tonnes.

India's crop year runs from July to June.

Analysts said the higher grain output forecast would help the government to allow wheat exports at a time when the country's food inflation has eased.

"The record production is expected to expedite overseas sale of wheat," said Veeresh Hiremath, research head of Hyderabad-based Karvy Comtrade, a commodity brokerage.

In 2010/11, India's lentils production is likely to rise 18 percent to 17.3 million tonnes. India is a net importer of lentils and higher production would make the widely consumed nutritional cereals more affordable for the common man.

Last week, a senior government adviser said the prospect of a good winter harvest was expected to cool food prices.

India's food inflation eased to 9.50 percent in the year to March 19, data released last Thursday showed, from 10.05 percent in the preceding week.

Source: Reuters

IMF chief sees limits to free market

AFP, WASHINGTON, April 4: The liberal theories that have guided the global economy for the last 30 years need to be overhauled, according to the head of the IMF—an institution long seen as their chief cheerleader.

The International Monetary Fund's Dominique Strauss-Kahn, in a speech on Monday said the 'Washington Consensus'—a set of liberal theories that stress the efficiency of the free market—were antiquated.

'The Washington consensus is now behind us,' Strauss-Kahn told students in Washington, reflecting on lessons learned from the 2008-2009 financial crisis.

'In designing a new macroeconomic framework for a new world, the pendulum will swing—at least a little—from the market to the state,' he said.

The IMF has long championed free-market policies, calling on member countries to privatize state-run industries and to ease rules for businesses.

'Don't get me wrong—the old pattern of globalization delivered a lot—lifting hundreds of millions out of poverty,' he said.

'But this globalization had a dark side—a large and growing chasm between rich and poor. While trade globalization is associated with lower inequality, financial globalization—the big story of recent years—increased it.'

Strauss-Kahn, who is widely expected to leave his post soon to lead France's Socialist Party in 2012 presidential elections, said more focus on social cohesion as well as tighter rules were needed.

'Over the longer term, sustainable growth is associated with a more equal income distribution,' he said. 'The new global governance must also pay more heed to social cohesion.'

'We need a tax on financial activities to force this sector to bear some of the social costs of its risk-taking behavior.'

Bank of England set to freeze interest rates

AFP, LONDON, April 5: The Bank of England is forecast to maintain its key interest rate at a record-low 0.50 per cent in a vote Thursday, when the ECB is widely expected to announce its first hike in almost two years.

The European Central Bank is expected to announce its first interest rate hike since July 2008 -- from an all-time low of 1.0 per cent—to combat high inflation across the eurozone.

Inflation is even higher in Britain but because its recovery from recession has stalled, the Bank of England (BoE) is expected to wait a while longer before embarking on a policy of rate tightening.

'Investors now have to contemplate the prospect of higher interest rates, at least in Europe over the near term as this week the ECB are expected to hike their base rate from 1.00 per cent to 1.25 per cent,' said Simon Denham, an analyst at trading group Capital Spreads.

'The BoE on the other hand is due hold fire as things in the UK continue to look rather fragile,' he added.

Recent official data showed Britain's economy shrank by 0.5 per cent in the final quarter of 2010, while analysts have said that the government's austerity drive will hinder growth this year.

Britain's Conservative-Liberal Democrat government is slashing state spending in a bid to virtually eliminate a record public deficit it inherited from the previous Labour administration after winning power last year.

Britain also faces further rises to its consumer price inflation, whose annual rate jumped to 4.4 per cent in February, the highest level for more than two years and more than double the Bank of England's official target of 2.0 per cent.

'A further increase in the rate of inflation would clearly make the MPC increasingly nervous as it eyes its credibility as an inflation tackling force,' said Victoria Cadman, an economist at financial group Investec.

In March, the BoE's Monetary Policy Committee (MPC) voted 6-3 to keep rates at 0.50 per cent, with those in favour of a rise pointing to inflationary pressures.

'There is little to suggest that the Monetary Policy Committee has shifted its position at all since its last meeting. A rate rise therefore does not look very likely,' said Vicky Redwood at research group Capital Economics.

The BoE slashed interest rates to 0.50 per cent more than two years ago, in March 2009, when it also launched a radical quantitative easing (QE) programme to help drag Britain out of a deep recession.

Under QE, the bank has created some £200 billion (235 billion euros, $322 billion) of new money by purchasing government bonds and high-quality private sector assets so as to give the economy an added boost.

Britain's recession, sparked by the global financial crisis, ended in the final quarter of 2009.

Merkel stops India-Bundesbank Iran deal

AFP, Berlin, April 5: Chancellor Angela Merkel has put a stop to plans that have irked Washington and Israel for India to channel oil payments to Iran through the German central bank, a press report said Tuesday.

According to the Handelsblatt business daily, India, under US pressure to break direct commercial links with the Islamic republic, intended to place money for its Iranian oil imports in an account with the Bundesbank.

The Bundesbank would then transfer the money—around nine billion euros ($12.8 billion) annually—to the European-Iranian Trade Bank AG (EIH), based in the northern German city of Hamburg, the paper had said.

The German government had said it was powerless to stop the deal because EIH, also known as EIHB, was not subject to sanctions because the bank was not involved in financing Iran's controversial nuclear activities.

The New York Times last week quoted an unnamed US Treasury official as saying the United States was 'concerned' and that Washington wanted 'to work with all our allies to isolate EIH.'

Israel and Jewish groups were also reported to be annoyed.

But now, Berlin has stepped in, the Handelsblatt cited high-ranking German government officials as saying on Tuesday. Payments for oil already delivered can go ahead, but no new transactions will take place, the paper said.

Contacted by AFP, neither the Bundesbank nor the German economy ministry were immediately available for comment.

Germany has long been under fire for its close business ties with Iran, with the country's exports there totalling 3.8 billion euros in 2010, according to official figures.

Sales generated by German industrial giant Siemens in its last business year, which ended September 30, rose more than 20 per cent to 680 million euros, the Wall Street Journal reported Tuesday.

EU launches debate on quotas for women in boardrooms

AFP, Brussels, April 5: The European Commission, seeking more diversity in Europe's boardrooms, launches a debate Tuesday on whether to impose quotas to help more women break the glass ceiling.

The public consultation will collect ideas on how to shake-up boards of directors to bring people of different nationalities and profiles to companies in the 27-nation European Union.

An EU source said the option of imposing quotas to help more women get seats on the board will be part of the consultation.

With an average of just one woman for every 10 board members in Europe, top EU officials have lamented the lacklustre representation of women at the helm of companies.

European Financial Services Commissioner Michel Barnier has called for a 'culture change' in companies.

European Justice Commissioner Viviane Reding and European Parliament President Jerzy Buzek said in March that quotas should be imposed as a last resort if companies fail to reform their boardrooms.

The public consultation will be used to determine if the commission needs to draft EU-wide legislation.

Bankers to succeed officals at Russia company boards

AFP, Moscow, April 5: Russia plans to pick investment bankers and professional directors to replace government officials at state company boards in line with President Dmitry Medvedev's orders, a report said on Tuesday.

Kommersant business daily published a list of candidates who could replace deputy prime ministers and ministers on the boards of the top 19 companies which accounted for 15 per cent of the country's gross domestic product in 2009.

Last week, Medvedev reeled off a list of measures to improve the investment climate that among other things calls for some of Prime Minister Vladimir Putin's most trusted allies to stand down from company boards.

This prompted some observers to speculate that the Kremlin chief is seeking to assert himself ahead of presidential polls next year.

According to Kommersant, Igor Sechin, Putin's influential deputy and energy czar, could be replaced by Rair Simonyan, non-executive chairman at Morgan Stanley Russia, or Vyacheslav Martynov, general director for SAP CIS.

Finance Minister Alexei Kudrin, who has to quit the board of VTB bank, could be replaced by Vladimir Gusakov, vice-president of MICEX exchange, former deputy economics minister Kirill Androsov or Nikolai Pryanishnikov, president of Microsoft Russia, the report said.

On Saturday, the Kremlin published a list of 17 companies whose boards state officials should leave by July 1. The Kremlin added that government officials should quit boards of all state companies by October 1.

Kommersant indicated that even though the lists of successors appeared to have been put together in haste, it must have taken at least several weeks to compile them.

'The presidential initiative was clearly not a completely impromptu move,' it said.

While many economists have said that if implemented, the move would improve corporate governance, others say Medvedev's order is another false dawn in an uphill struggle to dismantle a system of state control over the economy put in place under his predecessor.