theSun | FRIDAY JANUARY 2 2009 17

business

Malaysian timber to gain easy

access to EU market with VPA
KUALA LUMPUR: Malaysian timber and
timber products will gain easy access to the
European Union market with the signing of
a bilateral Voluntary Partnership Agreement
(VPA), Ambassador and head of delegation
of the European Commission (EC) Vincent
Piket said.
“Indeed I hope to reach the agreement
in the first three or four months of 2009,” he
told Bernama.
Piket said the negotiations between
Malaysia and the EU on the timber trade
agreement had seen six rounds of talks.
It is reaching the final phase, he added.
The EU would be introducing next
year a new legislation that would require
importers of timber and timber products to
demonstrate that the wood used is legally
harvested and traded.
“That is the environmental objective we
have and being shared by the Malaysian
government. The agreement that we are
negotiating with Malaysia now is to come
to a recognition by the EU of Malaysia’s
certification system for timber,” he said.
If that goes through, then Malaysian
wood products can enter the EU without any
further certification requirements, he said.
That will be good for Malaysia and it
will give its exporters specific advantage on
the European market for quite some time
to come, as Malaysia is well ahead of any
other Asean country involved in the timber
negotiations with the EU, he added.
As part of the commitment to fight il-
legally-harvested timber, the European
Commission (EC) had taken the initiative
to develop its own Forest Law Enforcement,
Government and Trade (FLEGT) action
plan.
The plan aims to eliminate imports of
illegally-harvested timber and timber prod-
ucts into the EU while supporting progress
towards sustainable forest management.
The EU, a significant consumer of timber
products, shares responsibility with timber-
producing countries in tackling illegal log-
ging and related trade.
The core element in the approach was
the signing of bilateral VPAs between the EU
and major timber-producing countries.
VPAs are based on the establishment of
licensing schemes to ensure that only legal
timber enters the EU. – Bernama

Malaysia able to survive worst of global

economic crisis: Watchdog group
KUALA LUMPUR: Malaysia, supported by
a well-diversified economy and regulatory
framework, will be able to survive the worst
of global economic crisis which is expected
to hit the country next year, according to
the Minority Shareholder Watchdog Group
(MSWG).
“As far as we are concerned, our regula-
tory framework is better than what we had
in 1997 and our economy is more diversi-
fied,” said MSWG chief executive officer
Abdul Wahab Jaafar Sidek.
However, he said the country is still
expected to be affected during the period.
According to Abdul Wahab, Malaysia
will be most affected six months after
conditions in the world’s largest economy,
the United States, are expected to worsen
in June 2009.
“The worst will come six months later
after June and we will recover after that,” he
said at a media briefing on Wednesday.
Abdul Wahab said during the period con-
cerned, about 1,000 public-listed companies
in the country are expected to be affected.
“There will be four categories of com-
panies, with the first category comprising
companies that are still able to increase
profit and the second with companies that
will just break even,” he said.
“Then the third category will be compa-
nies suffering losses but still able to survive
and finally companies that will go bust,” he
added.
Abdul Wahab said during the difficult
times, the RM7 billion stimulus package
announced recently would be better used to
tackle the economic fundamentals.
“It’s better to address the issues on the
ground. Create jobs rather than invest in
so-called undervalued companies. We have
seen that in the last recession when money
was used to bail out certain companies.
We hope this is not repeated,” he added.
– Bernama

briefs
Russia calls for
renewed gas talks
with Ukraine
MOSCOW: Russia’s Gazprom
energy giant yesterday
called for renewed negotia-
tions with Ukraine on their
gas dispute after cutting
supplies to the neighbour-
ing state.
“We call for a con-
tinuation of negotiations,”
Gazprom spokesman Sergei
Kupriyanov told reporters,
noting, however, that the
Ukrainian negotiating team
was no longer at Gazprom
headquarters.
Russia halted supply of
natural gas to Ukraine yester-
day after the two ex-Soviet
neighbours failed to agree
on payment terms, spark-
ing fresh concerns about the
security of energy resources
controlled by Moscow.
State-run gas giant
Gazprom confirmed supply
to Ukraine had been shut
off at 10am as planned
following the expiry at
midnight New Year’s Eve of
the old contract. – AFP
‘Local funds
should diversity
portfolios’
KUALA LUMPUR: Malaysian
institutional funds should take
the opportunity to diversify
their portfolios now as they
are insulated to a certain
extent from events in global
markets, according to global
financial consulting firm
Watson Wyatt.
Its Asean practice leader
for investment consulting,
Puah Ser Sze, said a few things
could happen with local funds
under current extreme global
market conditions, especially
since their investments were
mainly domestic.
“I hope funds will go with
the first route by introducing
diversity into their portfolios.
This is what we have been
encouraging our clients to
do,” she said in a statement
on Wednesday.
Watson Wyatt’s global
practice director for invest-
ment consulting, Carl Hess,
said good investment manag-
ers should already be taking
advantage of undervalued
securities with prices that
have been depressed through
panicked selling. – Bernama
Over 1,600 UK
retailers to go
bust in ‘09: Study
LONDON: The downturn in
consumer spending will
drive over 1,600 British re-
tailers out of business this
year, triggering thousands
of job losses and leaving
more than one in 10 shops
empty, a report said yes-
terday.
Market researchers
Experian said trading con-
ditions for survivors would
be the worst for at least 30
years and there would be
knock-on effects at sup-
pliers, manufacturers and
service providers.
“There is no doubt that
the impact on retail will
resonate through the entire
economy,” said Jonathan
de Mello, director of Retail
Consultancy at Experian.
Britain’s retailers are
slashing prices as indebted
shoppers curb spending
amid rising unemployment,
sliding house prices and
fears of a deep recession.
– Reuters
Singapore’s 2009
economic outlook
highly uncertain
SINGAPORE: Singaporeans
have been urged to be psy-
chologically prepared as the
republic’s economic outlook
next year “is highly uncertain”.
Prime Minister Lee Hsien
Loong said although the
economic growth for the year
was still positive at 1.5%, an
open economy like Singapore
could not avoid being hit by
the global slowdown.
In his New Year message
on Wednesday, Lee said Sin-
gaporeans must be prepared
for a difficult year ahead,
especially the first half of 2009
in which its economy would
probably contract further.
Singapore, which has
already gone into recession,
is experiencing a sharp fall
in world-wide demand for its
exports, tourist arrivals and its
broader economy.
Lee said the world was
entering the most serious
economic crisis in 60 years
as the global financial system
had seized up and “at each
stage of this crisis, events
have turned out worse than
the experts predicted”.
“Compared to the 1997
Asian Financial Crisis, this
crisis is more difficult for us
to overcome because it is
global,” he said. – Bernama MasterCard
holders
Airline yields spend
will come under RM4bil in
pressure: OSK 59 days
KUALA LUMPUR: With over pg 18
400 planes being delivered
in Asia-Pacific last year, air-
line yields will come under
pressure next year, says
OSK Research.
Managing costs well will
be the key to the airlines’
profitability this year, OSK
said in its research note on
Wednesday. It also said the
liberalisation of routes be-
tween Asean capitals and the
drop in demand for long-haul
business travel will put pres-
sure on the full-frill players.
OSK said airport across
the region would be hit as
long-haul demand for both
business as well as leisure
travel shrinks.
“We believe airports that
cater mainly to domestic
and indigenous traffic will
be less impacted than those
serving transit passengers
or inbound tourists as devel-
oped economies will likely
take the first hit,” it said.
– Bernama