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Foreign cos agree to sign GPS accords with BD

DHAKA: Foreign companies have agreed to sign Gas Purchase and Sales (GPS) agreements, accepting the government term that they would produce gas to meet the country's domestic need, according to official sources.

The decision removed the main impediment to the bidding, he added. The major breakthrough, achieved over the past couple of weeks, would pave the way for signing of final agreements for awarding of gas blocks.

After hard and long negotiations, the foreign bidders finally agreed to the crucial term, Petro-Bangla sources said.

In the first phase of the second round bidding, agreements will be signed for block 5 and 10 with Shell and block 7 with Unocal.

An official of Petrobangla said that the foreign companies were in favour of signing contracts as per pervious terms. But the government was determined not to sign any agreement to purchase as much gas as the companies could produce.ÑAPP

US economy threatened by inflation, rising oil prices

WASHINGTON: The Federal Reserve Chairman Alan Greenspan warned on Thursday that the red-hot US economy could be undermined by a build-up in inflation and soaring oil prices at a time when global petroleum stocks had fallen dramatically.

Greenspan, testifying on the US economic prospects before the House Banking Committee, rattled Wall Street investors by dropping a clear hint that the Fed Ñ the US central bank Ñ was tilting toward interest rate hikes.

The Dow Jones Industrial Average gave up 46.843 points to close at 10,514.57 after Greenspan told lawmakers "the risks still seem to be weighted on the side of building inflation pressures."

He said the Fed's policy making Open Market Committee would therefore be watching "for signs that real interest rates have not yet risen enough to bring the growth of demand into line with that of potential supply".

The committee voted to add a quarter or a point to its benchmark federal funds rate at its last meeting in early February, raising the target figure for banks making overnight loans among themselves to 5.75 percent.

"Greenspan clearly implied that the Fed has more tightening to do," said Merrill Lynch chief economist Bruce Steinberg.

"We expect that the Fed to tighten at the next two (committee) meetings in March and May. But the risk is that the Fed will end up tightening three or four times more this year".

Greenspan told the Congress that there was little evidence that the economy, which grew more than four percent in 1999 and surged forward at an even faster pace in the second half of the year, was slowing in any significant way.ÑAFP

Global trading system

BANGKOK: While a UN trade conference ponders ways to lift the fortunes of poor nations, one of the poorest Ethiopia Ñ offers an economic perspective that focuses more on fickle nature than the red-hot Internet.

E-commerce and dotcom ventures may be churning out 20-something millionaires in the wealthy West, but farmers who are the backbone of Ethiopia's economy still have to hope for rain for a successful crop.

"We still do not have the capacity to develop irrigation," explains Kassahun Ayele, the minister for trade and industry. "We depend on rain for our agriculture".ÑAP