Story Selection

Phil Smith CV addendum – Story selection
Multi-skilling is a Reuters journalist’s stock in trade. During the Mumbai Hotel
attacks in November 2008 I captured this image from a nearby rooftop as
commandos were dropped onto the roof of Nariman House one of the three
locations attacked.
------------------------------
There follows a tiny selection of my work as a journalist for Reuters over the past
ten years from many of the different datelines from which I have worked during
that time. I have a longer history of stories available dating back to my days in Fleet
Street.

Inside U.S.-declared no-go zone, Japan quake evacuees await aid
By Phil Smith
700 words
27 March 2011 16:52
Reuters News English
(c) 2011 Reuters Limited
OTSU, Japan (Reuters) - - Ninety-three-year-old Kou Murata sat cross-legged on the floor of an elementary school classroom, her
home for the past fortnight since the massive 9.0-magnitude earthquake struck Japan's east coast.
Surrounded by piles of quilts and blankets, she fretted over what was to become of her in the twilight of her life.
"I am afraid because people are leaving, and we are alone," she said, looking small and frail in a jacket decorated with snowmen.
Otsu is well south of the widespread damage from the earthquake, and the towns that were wiped off the map by the monster tsunami
that reached higher than 10 meters (33 feet) and swallowed boats, homes, businesses and, rescuers believe, some 20,000 people. In all,
more than 27,000 people are dead or missing.
But Otsu is only 70 kilometers (42 miles) south of the crippled Fukushima Daiichi Nuclear Power Station, whose reactors have been
leaking radiation since March 11, adding a nuclear crisis that has drawn alarm from around the world.
The U.S. government has advised its citizens to stay at least 80 kilometers away from the plant, whose radiation has seeped into local
milk and vegetables and, briefly, into Tokyo's water supply.
The Japanese government has evacuated people within 20 kilometers of the plant, and told people who live with 30 kilometers of the
reactors to stay indoors as much as possible. A Geiger counter reading in Otsu Sunday showed 0.9 microsieverts per hour. That was
more than five times the level of 0.16 microsieverts per hour in downtown Tokyo Sunday, although below levels that would cause
concern.
A dose of 50 microsieverts is equivalent to receiving one chest X-ray, according to Japan's Nuclear and Industrial Safety Agency.
TEMPORARY HOUSING
Murata's daughter Hisae complained that the government has not reached out to help them.
"I want to go back home, but the situation is impossible," she said. "I applied to the government to get a temporary house, but we need
a certificate to say the house was destroyed. Now all the temporary houses have been taken. We thought the government would come
to us, but we need to go to them."
Otsu Machi, as it is formally known, is a town of 5,200 that is part of the city of Kitaibaraki at the northern end of Ibaraki prefecture
(state), on the border with Fukushima prefecture. While away from the regions hardest hit by the disaster, Otsu nonetheless suffered
considerable damage from the quake and tsunami.
Some older houses collapsed, and broken furniture littered some streets. Sunday, people were out repairing damaged roofs and there
were lines of up to a kilometer for gasoline. Some petrol stations had put out signs saying "Sold Out."
A local McDonalds restaurant was closed at lunchtime. The port was in ruins. Dozens of fishing boats had been tossed onshore and lay
on their sides. Rows of wrecked cars stood where they had been crushed into each other. Bent and buckled bicycles lay scattered about.
Shops along the harborfront had shattered windows.
A Japanese coast guard ship was offshore. Divers in scuba gear dropped into the water from small dinghies.
More than 243,000 people have been living in evacuation since the quake and tsunami catastrophe more than two weeks ago, mostly
in school gymnasiums that have been turned into dormitories. Government officials estimate it could be months before they can be
moved to temporary housing.
At the school-turned-evacuation center in Otsu, the Muratas and other evacuees watched a large flatscreen television that had been
donated. Details of a temporary bus service were scratched onto a classroom blackboard.
The center had housed up to 400 refugees immediately after the quake, but the number has since dwindled to 43 as people found
shelter elsewhere. Most of those left are elderly, relying on oil heaters for warmth at night and left to wonder, like Kou Murata, where
their home will be.
JAPAN-QUAKE/EVACUEES (PHOTO)

EXCLUSIVE - Acer to protect margins, sees sales jump
By Phil Smith
960 words
22 October 2009 06:26
TAIPEI, Oct 22 (Reuters) - Acer , the world's No. 2 PC maker, aims to boost revenue by more than 70 percent over the next three
years, while maintaining margins to avoid repeating a similar meteoric rise and fall less than a decade ago.
Much of the growth is set to come from low-cost netbook PCs, which Taiwan's Acer expects to jump over 50 percent in 2010,
Chairman J.T. Wang said, citing an improving global economy and a shift to selling smaller, more mobile PCs for the explosive
growth.
Acer was the fastest-growing PC brand in the third quarter, shipping over 25 percent more units than it did a year ago and
outperforming Lenovo and, according to industry tracker IDC.
"The idea is to reach $30 billion as soon as possible," Wang told Reuters in his first public comments since Acer beat Dell to become
the No. 2 PC maker in the third quarter.
"When we look at the overall market, if the PC market starts to grow from next year and handhelds have the potential to become a
$200 billion market, $30 billion is a humble target," Wang, who's been with the company for 28 years, said in an interview.
Wang joined Acer's predecessor Multitech as a sales engineer in 1981, and took over as chairman in 2005 after the company's founder
Stan Shih retired.
"Acer's seeing very strong growth, and is likely to outperform the market in the long run," said Michael On, managing director of
Beyond Asset Management with some $60 million under management but does not own Acer shares in its portfolio.
"But $30 billion sounds like a very ambitious target, and it's probably a best-case scenario they're predicting."
Acer's revenue is expected to increase to T$573 billion ($18 billion) this year, rising to T$821 billion ($25 billion) in 2012, according
to 22 analysts polled by Thomson Reuters I/B/E/S.
Acer, Taiwan's best known brand, has transformed itself from being a contract manufacturer of laptop PCs for global brands.
The company commanded about 14 percent of the global PC market in the third quarter, coming second only to HP's over 20 percent
share, according to IDC.
Acer expects to ship about 12 million low-cost netbook PCs this year, and is currently the biggest player in the field pioneered by
crosstown rival Asustek in 2007. About 26 million netbook PCs are expected to be sold this year, IDC said in June.
Acer shares have jumped about 94 percent so far this year, outperforming HP and Dell, which rose 32 and 48 percent, respectively.
HOLDING ONTO MARGINS
Wang said Acer would be able to maintain its gross profit margin of about 10 percent even as prices of components such as LCD
panels DRAM memory chips climb as demand for technology products increases.
Such attention to margins would be important to avoid a scenario like Acer's rapid rise in the 1990s, when the company gobbled up
market share at any cost and then fell into several quarters of operating losses.
"If you look at the past, even when component prices were up or down, we were able to maintain our gross margins at about 10
percent," Wang said. "I expect this to continue."
Spot prices of both LCD panels and DRAM memory chips that are used in every PC have climbed in recent quarters on growing
demand for flat-screen TVs and as chipmakers cut production to arrest rapidly falling prices.
"What's different this time around is that they're growing sales without compromising on margins, which is key," said analyst Edward
Yen. "If margins were thinning, then that'd be a big problem, but they look comfortable now."
Acer's operating profit margin in July-Sept stood at about 2.8 percent, lower than peers such as Dell, which had a 5 percent operating
margin in its fiscal second quarter.

In its pursuit for a larger market share in what Acer calls a multi-brand strategy, the firm has acquired brands such as Gateway and
Packard Bell to raise its profile in markets such as the United States where it has a lower profile.
Wang said Microsoft's launch of its Windows 7 operating system on Thursday is expected to help sales, as consumers look to upgrade
computers running on Vista or the eight-year-old XP system.
"It's positive," Wang said. "Looking at the past 10 years, they've made the operating system more complicated all the way. This time,
they've made it simpler. It's a totally opposite direction of their design philosophy."
Wang said was working on a new operating system targeted at corporate customers, but he declined to give details.
"The tides are turning and it's time for most customers to consider switching to the new system (Windows 7)," Wang said."I don't
know when the new corporate-focused system will be launched, but they're looking at designing one now."
ACER/ (UPDATE 2, EXCLUSIVE, PIX, TV)
EXCLUSIVE - Taiwan's Ma urges China to scrap missiles
By Phil Smith
741 words
19 October 2009 07:20
TAIPEI, Oct 19 (Reuters) - Taiwan President Ma Ying-jeou urged China on Monday to scrap the growing number of missiles aimed
at the self-ruled island that Beijing claims as its own, a potential stumbling block to trade ties worth $130 billion.
Taiwan planned to buy more weapons from the United States to protect itself, although it did not want an arms race with China, Ma
said, as the military balance tips in the mainland's favour.
"(There are) more than 1,000 (missiles) and they haven't changed that. The number continues to go up. That is certainly a great
concern for the people here," Ma told Reuters in an interview at the presidential office.
"If we are to negotiate a peace agreement with the mainland, certainly we expect them to do something about those missiles, either to
remove them or dismantle them," said Ma, who has eased tensions with China since taking office in May 2008.
Even as China's military clout grows, Taiwan will still want to hold its own fort by ensuring it has adequate arms and hopes to buy
more fighter jets, attack helicopters and submarines from the United States, U.S. and Taiwan officials said.
Ma, 59, who became chairman of the ruling Nationalist Party or Kuomintang (KMT) at the weekend, said he would not rule out
meeting Chinese leaders such as his counterpart Hu Jintao.
"I won't exclude that possibility, but there's no timetable for that yet," Ma said, when asked if he would meet Hu. "At the moment, we
have our hands full with economic issues."
MEETING CHINESE LEADERS
Analysts said the most appropriate time could be in 2012 or 2013, if Ma gets re-elected to a second four-year term and Hu is expected
to step down.
"There is a lot of uncertainty as to when leaders on both sides can meet. I would say the best time is in 2012 if Ma gets re-elected,"
said Lin Cheng-yi, research fellow at the Academia Sinica's Institute of European and American Studies.
"It looks like cross-strait relations are the most important among all of Ma policies. The policy that affects Taiwan most is ties with
China, and not domestic politics nor international diplomacy," Lin said.
Communist China has claimed Taiwan since the end of the Chinese civil war in 1949 and has vowed to bring the island under
mainland rule, by force if necessary.
Despite political differences, commercial ties have flourished. China is Taiwan's largest trading partner with two-way trade worth
more than $130 billion, while Taiwanese businesses have poured over $100 billion into the mainland.
Taiwan's economy, which was in recession earlier this year, has begun depending so much on China that some Taiwanese politicians
and analysts worry the mainland could take over the island by economic means.
Ma said the island needed to diversify its exports to stay competitive and forecast 4 percent economic growth next year. He also said
the island expected to sign a deal similar to a free trade agreement with China next year that would cut tariffs.

The president hopes more of the exports that go to China will be sold to the Chinese domestic market, instead of being re-exported to
advanced economies such as the United States and Europe that have been harder hit by the steep global downturn.
"It's not possible for us to change the economy based on exports, but we could diversify the export market, not focusing entirely on the
United States or Europe," Ma said.
"Actually the largest export destination is mainland China, but many of the goods with mainland China are reprocessed to be re-
exported to the U.S. and Europe, so we will modify that policy so that mainland China is no longer treated only as a factory, but rather,
as a market."
TAIWAN-PRESIDENT/ (EXCLUSIVE, UPDATE 2, PIX, TV)
Grief, anger as India reckons with its own "9/11"
By Phil Smith
523 words
29 November 2008 13:14
MUMBAI, Nov 29 (Reuters) - Shock gave way to grief and anger on Saturday as India grappled with what newpapers called its own
"9/11" and protesters accused neighbouring Pakistan of being behind attacks that killed 195 people.
Commandos and rescue personnel were cleaning up the wreckage of a three-day rampage when about 50 protesters gathered near the
smouldering Taj Mahal Palace Hotel.
"Our soldiers came and Pakistan ran away," they shouted, pumping their fists skyward.
India has blamed the strikes on "elements" from nuclear rival Pakistan and evidence is mounting that the Islamist gunmen may have
hatched their plan there.
For relatives of the victims, the reality of the attacks was laid bare at a morgue at the JJ Hospital in Mumbai.
"For three days, we kept hearing different reports about my sister. Finally, today when I saw her, her face was blown off," said a
relative of journalist Sabina Saikia, who was killed inside the Taj Mahal hotel.
A text message circulated throughout Mumbai urging people to wear black on Sunday. Many lit candles in cities across the country on
Saturday as a mark of condolence.
Elsewhere across India, thousands mourned 20 policemen and soldiers killed fighting the heavily armed militants who turned India's
commercial and entertainment capital into a war zone with coordinated assaults on city landmarks.
"This is a day of mourning for all the men who laid down their lives," Maharashtra state police Chief A.N. Roy told reporters.
The last rites were conducted with full state honours.
TV footage showed the flag-draped and garlanded coffins of the dead men -- widely described as martyrs -- being carried in brightly
coloured processions. Military bands in red and black uniforms played and honour guards fired 21-gun salutes.
Newspapers called the Mumbai attacks India's own "9/11", referring to the Sept. 11, 2001, hijacked airliner attacks on the United
States which killed about 3,000 2,973 people.
The Hindustan Times wrote: "India is under attack. The very idea of India is under attack...Playing the headless chicken is no longer
an option".
Politics did not take a break, with local polls taking place in New Delhi on Saturday.
The Hindu nationalist Bharatiya Janata Party (BJP), India's main opposition, took out front-page advertisements accusing the ruling
Congress party coalition of failing to defend the nation.
"Brutal terror strikes at will. Weak government. Unwilling and incapable. Fight terror - Vote BJP," said one ad, showing a blood-red
stain on a black background.
Congress, criticised by the BJP about national security for the past few weeks, shot back: "20 days of false campaigning cannot
replace 10 years of development. Your decision".
INDIA-MUMBAI/ANGER (UPDATE 1) (PIX, TV)

WITNESS-Black Cats prowl as gunfight ends Mumbai siege
By Phil Smith
780 words
29 November 2008 08:29
MUMBAI, Nov 29 (Reuters) - The gunbattle at Mumbai's famous Taj Mahal Palace Hotel was finally over after three bloody days,
but the dull thud of explosions still vibrated up through the shoes of those standing nearby.
India's crack NSG "Black Cat" commandos went from room to room to secure the battle-scarred old building, mopping up after brazen,
coordinated attacks that killed at least 155 people at three sites in the heart of India's financial hub.
The bodycount rose as one last gunfight in the Taj marked the end of the drama, during which scores of foreigners hid terrified in their
rooms and many more were taken hostage.
Live television images were jolted by explosions, either from stun grenades or controlled detonations used to destroy ordnance found
by the Black Cats as they prowled through the hotel.
The gunbattle ended just after dawn on Saturday.
In the early hours I made my way around to the back of the Taj, where a crack Sikh regiment was stationed.
Stray bullets fizzed as they passed overhead in light rain.
By that stage the story had become a little surreal as tiredness and fear set in, like watching a televised news report with me in it
unfold before my own eyes.
After 30 years in journalism I knew it was my job to be there but it was still hard to put aside fears for my own safety.
I couldn't help but be struck by the futility of ducking each time I heard a bullet pass overhead, knowing full well that the bullet was
long gone by the time I heard it.
BULLETS, GRENADES AND RATS
It was very quiet and very dark at the back of the Taj. Rats scurried around our ankles as we chatted to the soldiers, who were
stretching tired, cramped legs and easing stiff backs.
The language barrier meant it was hard to communicate but it was clear the Sikhs had been on duty for many hours. Unlike them, at
least I had been able to enjoy some nap breaks since the drama began to unfold late on Wednesday.
Through the quiet at the back of the building I could hear a lot of gunfire from the front. It seemed to range widely along the length of
the corridors at the front rather than from the area around the pool at the back of the complex.
The Taj is U-shaped, with the pool spanning the open end. I could see clearly palm trees in the gardens surrounding the cool waters I
had swum in occasionally when visiting friends had found enough money to stay at the swanky hotel.
At the front of the Taj, bleary-eyed journalists who had earlier mobbed National Security Guards chief J.K. Dutt when he announced
the end of the siege were pushed back roughly behind a rope that had marked an unofficial boundary for them.
But that was still only 100 metres from the lobby and the smashed and blackened windows of the hotel.
Hundreds of media workers dived for cover as stray bullets whistled above them during the final stages of a firefight.
Live pieces-to-camera, or PTCs as they are know in the trade, were delivered by local journalists lying prone, adding to the drama of
of the scene.
On Friday at least two journalists were wounded by grenade debris which hit the 100-metre long phalanx of cameras and journalists
working behind their rope border.
It was hard not to think that prying reporters and cameras would have been kept back much further from the action if a hotel siege
such as this had happened somewhere like Britain, rather than this teeming, chaotic, unforgettable city.
A few reporters, including me, wore flak jackets. They were often derided amid an air of bravado, until bullets and debris began flying
and blood-stained journalists were carted off to hospital.

Even wearing the jacket I still felt genuine fear as bullets whizzed overhead, knowing it was useless if I was hit in the head.
"When I was doing my stand-upper (piece to camera) I felt like a bullet might hit the back of my neck at any moment," one Western
reporter told me.
"I stopped then, it just wasn't worth it."
INDIA-MUMBAI/ (WITNESS)
WITNESS-Walking the streets on Mumbai's night of fear
By Phil Smith
509 words
28 November 2008 21:42
MUMBAI, Nov 27 (Reuters Life!) - As the first explosion rattled the seafront homes of south Mumbai's Colaba district at about 10
p.m., my first thought was it must be a firecracker left over from last month's raucous Diwali festival.
It was soon clear it was much, much more than that.
Not far away, what appeared to be a small bomb had exploded leaving the mangled remains of a scooter strewn across the street.
Windows of nearby buildings had been blown out.
Police were erecting road blocks using their own vehicles and the barrows of street vendors who ply the area.
Emotions were running high, resilient Mumbaikars hardened by bombings over the years clearly angry that once again their city was
under attack.
The gunmen who spread fear throughout the city over the next few hours had picked their target carefully: the heart of the city's tourist
area, packed with shops and many of the luxury hotels favoured by international businessmen and visitors.
Among the early targets was the Cafe Leopold, perhaps the most famous hangout for food or a late night drink, an eatery featured in
the bestselling novel Shantaram.
On a normal evening, the Colaba causeway near the cafe is packed with stalls selling tourist souvenirs ranging from pashmina shawls
to reproduction antique clocks.
Most nights, tourists haggle and move on, heading either for a seafront stroll near the Gateway of India, erected for the visit of
Britain's King George V early last century, or their rooms at the nearby 105-year-old Taj Mahal hotel.
I reached the imposing hotel at about midnight, but it was a very different scene.
Gunmen armed with automatic weapons and grenades had moved from the Leopold and stormed into the hotel, beginning a long and
bloody siege as fire trucks and police cars parked outside.
A series of explosions set fire to the upper floors of the six-storey heritage wing of the hotel and grenades were lobbed from second-
or third-floor windows into the street.
Police officers were pulling back and moving forward as they came under attack as were scores of reporters at the scene. As the fires
took hold, high-pressure hoses were used to try and dampen the blaze.
In the following few hours, gunfire could be heard within the Taj as firemen with ladders and hydraulic lifts began rescuing people
through smashed lower windows.
Women in colourful saris and men in suits who a few hours earlier had been dining in the hotel's restaurants or their rooms nervously
edged down the ladders.
As they moved away from the hotel, they recounted harrowing tales of how the siege had begun, how they were forced to dive under
tables and lock bedroom doors.
As dawn broke, flames could be seen jumping from the domed roof of the hotel and sporadic gunfire sent bystanders running.
INDIA-MUMBAI|LANGEN|RLF

Multiple attacks in Mumbai, 80 dead, hostages taken
By Phil Smith
908 words
26 November 2008 17:38
MUMBAI, Nov 26 (Reuters) - At least 80 people were killed in attacks apparently aimed at tourists in India's financial capital
Mumbai on Wednesday night, and television channels said Westerners were being held hostage at two five-star hotels.
At least 250 people were wounded in the series of attacks, police said. Local television channels said the army had begun moving into
one of the hotels, the Oberoi, containing hostages.
Apart from the hotels, attackers also targeted the Cafe Leopold, perhaps the most famous restaurant and hang-out for tourists in the
city, as well as hospitals and railway stations.
"I guess they were after foreigners, because they were asking for British or American passports," said Rakesh Patel, a British witness
who lives in Hong Kong and was staying at the Taj Mahal hotel on business. "They had bombs."
"They came from the restaurant and took us up the stairs," he told the NDTV news channel, smoke stains all over his face. "Young
boys, maybe 20 years old, 25 years old. They had two guns."
India has suffered a wave of bomb attacks in recent years. Most have been blamed on Islamist militants, although police have also
arrested suspected Hindu extremists thought to be behind some of the attacks.
No one has claimed responsibility for the latest Mumbai attacks.
Police said targets included the luxury Taj Mahal and Oberoi hotels, with television stations showing the lobby of both hotels on fire
and people being evacuated from the Oberoi with their hands on their heads.
Hemant Karkare, the chief of the police anti-terrorist squad in Mumbai, was killed during the attacks, police said.
In Washington, the White House condemned the attacks. France, current president of the European Union, also condemned the attacks
and hostage-takings.
A European official was among the wounded.
"My hotel is surrounded by police and there are gunmen inside," European lawmaker Ignasi Guardans told Spanish radio from the Taj.
"We are in contact with some deputies inside the hotel, with one in a room and another hidden in the kitchen. There's another official
hurt and in hospital."
Fresh explosions were heard in the early hours of Thursday.
"An encounter is going on at the two hotels, the situation is grave," Vilasrao Deshmukh, the chief minister told CNN-IBN TV. "Our
men are on the job."
Indian Home Minister Shivraj Patil said there were around four or five attackers in each of the two hotels.
"They have attacked hotels, they have attacked the hospitals, they have attacked the railway station," he said, adding that two attackers
had been killed and two arrested.
KOREANS AND EUROPEANS CAUGHT UP IN ATTACKS
A driver told Reuters at least 50 Koreans were stuck inside the Taj with their drivers waiting outside.
"We were just getting ready to pick them up, when we heard the first blast, police did not let us get past and they (the Koreans) are not
answering the phones," Deepak Aswar, the driver said. Europeans were also caught up in the attacks.
"I was in the restaurant inside Oberoi and I saw this series of gunshots and death which I don't want to see again," a Spaniard who
declined to give his name told Reuters.
"I crawled out into the kitchen and waited there, until I sensed it was all quiet and seemed over."
Maharashtra state police chief A.N. Roy said attackers had fired automatic weapons indiscriminately, and used grenades, adding that
they were still holed up in some buildings.

"These are terrorist strikes in at least seven places," he told the NDTV news channel.
"Unknown terrorists have gone with automatic weapons and opened fire indiscriminately. At a few places they even used grenades."
Some of the injured were evacuated from the Taj on the hotel's golden luggage carts, while waiters in black and white formal wear and
chefs were seen leaving the Oberoi.
"The lobby of the Taj hotel is on fire," a police spokesman said. "We are trying to find out how many people are inside the hotel."
Sourav Mishra, a Reuters reporter, was with friends at the Cafe Leopold when gunmen opened fire around 9:30 p.m. He has received
injuries and is in St. George's Hospital.
"I heard some gunshots around 9:30. I was with my friends. Something hit me. I ran away and fell on the road. Then somebody picked
me up. I have injuries below my shoulder," Mishra said from a hospital bed he was sharing with three other people.
The wreckage of a red scooter, the remains of shop awnings and broken glass were strewn across the street.
Armed police, rifles cocked at the hip, set up barricades. Local people were seen yelling at each other, angry that another terror attack
had hit the city.
Another Reuters reporter saw a hospital ward full of injured people with bullet and shrapnel wounds. Many people were crying as the
injured were brought in on trolleys.
INDIA-MUMBAI/SHOOTINGS (UPDATE 6, PIX, TV)
INTERVIEW-Security clouds Afghanistan's economic recovery
By Phil Smith
750 words
1 April 2006 11:28
KABUL, April 1 (Reuters) - Natural resources, agri-business and power generation are the bricks with which to rebuild
Afghanistan's broken economy but security risks in the country are a major obstacle to investment outside of aid plans, Central Bank
Governor Noorullah Delawari said on Saturday.
Speaking in his Kabul office, the urbane ex-California commercial banker outlined his vision for a self-sufficient Afghanistan where
bureaucracy did not stand in the way of building production capacity and import-substitution became the norm.
"My problem is with lack of capacity ... President Karzai is struggling with government agencies, some of the ministries are not doing
the kind of work, the practical things, to remove obstacles and provide opportunities," he said.
Delawari returned to Afghanistan in 2002 after 35 years abroad which included over 25 years experience in commercial banking with
16 at Lloyds Bank California.
He has seen good times for his country, and bad, when the world was not interested, but says he is determined to use the aid now
coming in to good effect.
"Take advantage of the good times while you are in the spotlight," he said.
"I believe we can do it. We could take advantage of this window of opportunity in the next three to five years. "We have the resources
to become at least 75-80 percent self-supporting, self-reliant."
WAR, POVERTY
After 25 years of war, poverty is still a major problem in the Afghanistan with only 13 percent of the population having access to safe
water and 12 percent to adequate sanitation, according to the World Bank.
Foreign aid has amounted to $11.9 billion since 2002 and the government has drawn up a five-year-plan targeting annual growth of 10
percent.
"The fact is we are a recipient of a very large amount of foreign aid, it brings a lot of foreign exchange, that's our current account,
that's our revenue," Delawari said noting that Afghanistan's exports stand at about $500 million while imports are officially close to $3
billion. He thinks the figure probably exceeds $4 billion.

"In the short-term we need to improve our exports ... agri-business and hand-made products will create a lot of jobs and fairly good
income for the country," he said.
"Second, I believe Afghanistan could be a major player in exploring and exploiting our natural resources."
"We have potential to develop 25,000 MW of electricity ... We may use 10,000 MW, the rest could be exported to energy-hungry
countries like Pakistan and India."
SELF-SUSTAINED ECONOMY
While Afghanistan's infrastructure needs significant attention, Delawari does not see it as a mission in itself.
"Infrastructure is a subjective matter. Building roads, bridges and telecommunications and so on, those are fine ... but I want to spend
more serious time on practical aspects of our growth, to remove obstacles, improve efficiency, to produce, to create jobs, move
towards a more self-sustained economy."
"You have to create production opportunities. That's equally important to building roads and bridges."
Gross domestic product (GDP) in Afghanistan has averaged 17 percent over the past four years, Delawari said. The IMF is forecasting
11.7 percent growth this year.
"I'm convinced we could be a big player in the region. We have quite a bit of natural gas ... We have iron ore and copper," he said,
adding that transport links were being developed from ports in Iran and Pakistan to Central Asia.
But the impact of the Taliban insurgency in the south and east was having a severe economic impact, he said.
"If we didn't have this security concern I could see really good investment opportunities, and investment coming."
He is also fighting with the Afghanistan's administrative ghosts as the government lays to rest old bureaucracies.
"We have had layers of very diverse types of government ... each one of these governments have left their residue in the system. To
deal with it, to remove it, takes a little time."
"This is an opportunity to me that I couldn't buy with any amount in America," he said of his job. "To do what you really want to do ...
you're helping humanity, helping a country which was so beaten down."
ECONOMY-AFGHAN-CENBANK (INTERVIEW)
Chinese dissident author seeks asylum in Australia
By Phil Smith
447 words
6 August 2004 08:50
Reuters News
SYDNEY, Aug 6 (Reuters) - A Chinese dissident author, whose request for political asylum in Australia risks straining ties with
Beijing, said on Friday he wanted to publish books that he had no hope of getting into print in China.
"Once I am out of there I want to publish the books and tell the world what China has done to the Chinese people," Yuan Hongbing
told Reuters.
"I know Australia has very close trade relations with China and I heard its foreign minister is going there soon, but I hope they know
this is an issue of freedom and human rights and accept my application," he said.
Hongbing means "Red Soldier" but with a different inflection can also mean "Red Ice", the name under which Yuan writes.
Yuan was tracked to a secret address in Sydney, where he has been living since applying for political asylum after arriving on an
official trip to Australia last month.
Australian authorities refused to comment directly. China has taken a hard line on Yuan's attempted defection.
"According to reports, on July 24 Mr Yuan left his tour group and applied with the Australian government as a 'political refugee'," the
Foreign Ministry said in a statement.
"In doing so, Yuan violated China's regulations on leaving the country for tourism," it said.

It dismissed reports Yuan had been persecuted and said it expected Australia to handle the case appropriately.
"China and Australia have had good cooperation in fighting illegal immigration. We hope Australia will handle this appropriately."
SMUGGLED
A law professor at Guizhou Normal University, Yuan transferred four books onto tiny electronic memory chips and smuggled them to
Australia. The Mongolian-born 52-year-old was jailed in 1994 and the manuscript of his novel Freedom in Sunset destroyed.
On leaving jail he rewrote the book, which alleges persecution of Mongolians during the 1966-76 Cultural Revolution.
Between 1994 and 2002, Yuan finished four books that he said detailed the ill-treatment of Tibetans under communist rule, China's
persecution of Mongolians, democratic movements in China and the degeneration of intellectuals under Communist party rule.
Yuan said he wants all four books published in Chinese, English and French and has already been talking to publishers.
The Australian authorities refused to comment directly on Yuan's request for asylum.
"We can't comment on the matter due to privacy considerations," said an Immigration Department spokesman.
Australian Foreign Minister Alexander Downer will travel to Beijing on August 15-16 for talks with officials from China, South
Korea, Japan and Russia before travelling to North Korea to urge Pyongyang to dismantle its nuclear programmes.
Reuters Ltd
INTERVIEW-UPDATE 1-Australian PM Howard says economy well poised.
By Phil Smith
509 words
1 June 2004 08:16
CANBERRA, June 1 (Reuters) - The Australian economy is well poised and growth prospects remain very good but a prolonged
period of high oil prices would have a negative impact, Australian Prime Minister John Howard said on Tuesday.
"Overall I think the Australian economy is very well poised, the drought is still around, it still lingers in many parts of the country but
growth prospects remain very good," Howard told Reuters during an interview in his parliamentary office.
He said a prolonged period of high oil prices would fuel inflation, but he was optimistic that prices would not stay high for too long
after hitting a 21-year high of $41.85 a barrel last month.
Howard said high oil prices were a risk to the global economy but noted that the real price of oil is nowhere near as high as during the
oil price shock of the early 1970s.
Australia's economy has been growing strongly for over a decade, despite the Asian economic crisis and slowdown in the global
economy, fuelled in recent years by a sturdy housing market sparked by low interest rates.
This has offset the negative impact on Australia's large rural sector of the country's worst drought in a century.
But with investors hungry to take advantage of surging house prices that have doubled in five years, the independent central bank, the
Reserve Bank of Australia (RBA), stepped in late last year to put the brakes on fast-growing household borrowing.
INTEREST RATES
The bank raised the official cash rate twice, by a total of half a percentage point, to 5.25 percent - the second highest rate among
industrialised nations - and the property market has cooled, raising doubts over whether further hikes are needed.
The RBA held its regular monthly monetary policy meeting on Tuesday and the result of the meeting will be made public at 9.30 a.m.
on Wednesday (2330 GMT on Tuesday).
"I can't speculate about what the Bank may do overnight. It seems to me that what they are saying about monetary policy makes a lot
of sense," Howard said.

In early May, the RBA said economic risks from escalating household debt and house prices had diminished in recent months. It said
inflation was contained and likely to ease through 2004.
Gross domestic product (GDP) numbers are due on Wednesday with a Reuters poll forecasting growth slowing to 0.5 percent in the
first quarter from 1.4 percent in the fourth.
Foreshadowing a soft GDP number, retail sales figures published on Tuesday were unexpectedly flat in April, adding to signs of a
cooling economy.
Separate data on Tuesday showed net exports, the gap between seasonally and price-adjusted imports and exports, subtracted a larger-
than-expected 1.3 percentage points from growth in the first quarter. A surge in the Australian dollar to its highest level in seven years
damaged Australia's trade position during the quarter. (US$1=A$1.39).
ANALYSIS-Few risks seen as Australia begins to tighten policy
By Phil Smith
697 words
6 November 2003 06:35
SYDNEY, Nov 6 (Reuters) - Australia's central bank began taking its foot off the monetary accelerator this week with its first rate
rise in 17 months, shifting back towards a more neutral stance as the global recovery gets under way.
The fact that borrowing for housing is rising over 20 percent a year lent weight to the Reserve Bank's move on Wednesday but it was
not targeting only the red-hot housing market. "It's not about explicitly targeting house prices, it's about restoring monetary policy to a
condition that is consistent with the outlook for the economy now the external and drought threats have gone," said Saul Eslake, chief
economist at ANZ.
No doubt the Bank did have the Australian housing boom in mind when it raised rates to five percent but history shows the dynamics
of the market are different to, say, Britain where bursting housing bubbles has caused a lot of economic pain.
Unlike Britain, it has not been an Australian practice to lend at 100 percent of house valuations, so even though interest rates rose
higher than they did in Britain during the early 1990s, home owners did not find themselves in negative equity where homes were
worth less than their outstanding loans.
In the aftermath of the last house price spike British values dropped around 12 percent over a five-year period while in Australia
property prices barely fell at all.
However, the one possible wildcard is the much higher level of investors in the Australian housing market, who may respond to lower
expectations of future price increases or higher vacancy rates by selling, while an owner-occupier is far less likely to do anything that
drastic.
DEBT LEVELS
With personal debt, not including home loans, at a record level of A$94 billion ($67 billion) economists said only a small further rise
in rates, perhaps two more quarter-point hikes to 5.5 percent, would be necessary to neutralise policy.
"We're expecting them to raise in December before another move in the first half of next year. We have a strong domestic economy
and housing construction, pretty well all sectors of the economy are going well now," said Geoff Kendrick, economist at Westpac.
Meanwhile, companies are much less highly geared than a decade ago so they will feel less pain and there is less likelihood of a
knock-on impact on the jobs market or production.
"Businesses are much better placed to handle higher interest rates and the consequences for employment and business in general of
higher interest rates are much less than they were a decade ago," ANZ's Eslake said.
However, Australia's exporters are feeling the effects of a soaring local dollar which now has a huge 400 basis point premium over the
U.S. and is sitting at a six-year high over 71 US cents.

"I understand the dilemma that the Reserve Bank is in with the housing bubble. But we have to be careful as a nation not to make our
exchange rate uncompetitive, because it has been one of the great strengths of the Australian economy," said Malcolm Broomhead,
chief executive of Orica Ltd, Australia's largest chemicals company.
POLITICAL IRE
Companies may grumble at higher rates but to politicians higher interest rates are always anathema.
The Reserve Bank is fiercely independent and free from political interference but Prime Minister John Howard has made it clear he is
uncomfortable with the development.
"We have a budget surplus, we have a very low level of government debt and because of that, monetary policy - that means high
interest rates - doesn't have to carry such a heavy load," Howard told Sky Television.
"The case to clobber the economy with high interest rates certainly doesn't exist."
It is likely the central bank is moving early on rates to give themselves more elbow-room ahead of an election expected around
November 2004.
While totally independent, economists said the Reserve Bank would not want to be raising rates in any kind of political context closer
to an election. ($1=A$1.41).
Reuters Ltd.
INTERVIEW-Too early to open the champagne over Iraq – Downer
By Phil Smith
592 words
10 April 2003 07:51
CANBERRA, April 10 (Reuters) - Australian Foreign Minister Alexander Downer said on Thursday it was impossible to judge how
much longer Iraqi resistance would last but it was clear Saddam Hussein's regime was over.
"There is still some work to be done, let's not open the champagne yet and say the war is over," Downer told Reuters in a interview in
his parliamentary office on Thursday.
"But there has of course been enormous progress made and it's clear the Republican Guard and regular army are really not putting up
any resistance of any significance."
Downer was speaking after Saddam's harsh 24-year reign collapsed amid scenes of jubilation by local people who defaced pictures of
their former leader and toppled a 20-ft (6-metre) statue of him, dragging its decapitated head through the streets.
"There is no command and control from the regime to the Iraqi defence force, the regime has no capacity any longer to exercise any
power over the country, so we are getting fairly close to the end now," Downer said.
INTERIM ADMINISTRATION
Downer said an interim administration to govern Iraq would be established as soon as possible with a main aim to get as many Iraqis
involved as possible.
Prime Minister John Howard decided on Thursday that Australia would join the United States and Britain in the interim body.
"The more the Iraqis can take control over their own destiny and the faster that can be done the better, without doing it at such haste
that it creates chaos," Downer said.
"But we would obviously want that process to proceed as quickly as possible and I think the Iraqi people would want that. They are
obviously pleased to be free of Saddam Hussein but they don't want to be colonised either."
He was convinced weapons of mass destruction would be found in Iraq even though evidence had been thin so far.
"We have no doubt that a lot will be found...there is no doubt that over the past few months the Iraqis have been doing everything they
can to hide their chemical and biological weapon capabilities from the United Nations," he said.

Australia is planning to spend around A$80 million dollars ($49 million) in post-war aid for Iraq but Downer said there was no plan to
commit large numbers of Australian peacekeepers.
"It's possible we could send some niche capabilities which offer some particular value adding but we are certainly not planning to send
battalions of infantry to play a policing role."
MIDDLE EAST STABILITY
Downer said the overall stability of the Middle East had been improved by the action in Iraq and, in the longer term, it would aid the
Middle East peace process.
"It will definitely improve the overall situation in the Middle East," he said.
"Remember that Saddam Hussein has been...one of the principal sponsors of terrorism in the Middle East and, in particular, terrorism
against the Israelis," he said.
A more balanced, reasonable and moderate regime in Iraq, no threat of weapons of mass destruction and a more prosperous country
with sanctions lifted will make for a better environment for the region as a whole, Downer said.
"It's true that a lot of Arabs have been very opposed to the war but on the other hand they can see now the sense of elation and
liberation on the faces of so many Iraqis," he said. (US$1=A$1.64).
Reuters Ltd.
Winds fan Australia bushfires, fireworks still on
By Phil Smith
712 words
31 December 2001 08:17
SYDNEY, Dec 31 (Reuters) - Hot, blustery winds fanned bushfires around Sydney on Monday, forcing evacuations, but Australia's
biggest city will go ahead with New Year's Eve fireworks over its scenic harbour.
Hundreds of people were evacuated from the Hill Top suburb southwest of Sydney as light rain failed to dampen the fires creeping
closer to city suburbs.
The Sydney weather bureau issued a severe thunderstorm warning on Monday evening, with predicted winds of up to 100 kmh (62
kmh), but fire officials warned the storm could make conditions worse for firefighters battling more than 100 blazes.
"The strong winds will wreck havoc for firefighters on the ground. Fires will move extremely quickly under those horrendous
conditions," New South Wales (NSW) Rural Fire Service spokesman John Winter told Australian television.
"What we need is for the rain to be sufficient to assist in extinguishment," Winter said.
Despite the seven-day fire crisis, smoke-shrouded Sydney will celebrate New Year's Eve with a huge fireworks display over Sydney
Harbour.
A total fire ban has been in place in New South Wales since the fires took hold on Christmas day, but fire officials have made an
exception for the Harbour fireworks display.
"As in New York, a city which has had a major terrorist incident that has produced a mass grave, there is a New Year's Eve
celebration. There should be a New Year's Eve celebration here," said NSW state premier Bob Carr.
But firefighters are concerned about backyard fireworks.
"When sparks from flares or fireworks land in the bush they have the potential to start a major blaze," warned NSW Fire Brigades
Commissioner Ian MacDougall.
ARSONISTS HUNTED
The "Black Christmas" fires, the majority lit by arsonists, have destroyed 150 homes, devastated about 250,000 hectares (625,000
acres) of bush, and killed thousands of sheep.

There have been no serious injuries, but dozens of firefighters have been treated for smoke inhalation.
A special police and fire brigade taskforce is hunting arsonists who continue to light fires.
Eight people, including three 15-year-old boys, have been arrested in connection with lighting fires with Deputy Police Commissioner
Ken Moroney describing acts of arson as "bastardry".
Carr said he would explore the maximum punishment for arsonists in light of the current crisis. "When this is over, I'll look at the
question of whether the 14 years maximum is long enough," he told Australian television.
BIRDS FALL FROM SKY
As a heavy blanket of smoke creates record pollution in Sydney, birds in one of the worst fire areas in the western Blue Mountains are
falling out of the sky due to smoke inhalation, the Wildlife Information and Rescue Service (WIRES) said on Monday.
A number of Australian native plants need fire to regenerate, but tens of thousands of native animals are feared to have perished in
Sydney's bushfires.
The blazes ringing Sydney are the most intense the city has experienced since 1994 when fires entered the city's exclusive bush
suburbs. Four people died in the 1994 fires.
Australia's most deadly bushfires occured on "Ash Wednesday" February 16, 1983. A total of 76 people died in fires sweeping across
almost all of the southern state of Victoria and parts of neighbouring South Australia state.
Australian insurers said the cost of the bushfires remains at about A$50 million ($25.52 million), but further claims are expected. This
compares with A$56 million ($28.59 million) from 3,500 claims in 1994.
But while thousands of firefighters fight the Sydney fires, an outback family has for the past 13 days battled a blaze twice as big as all
the fires in NSW state.
The Mengersens, mainly father John and 21-year-old son Peter, have fought a blaze that has burnt one million acres (404,700 hectares)
of their Argadargada Station, a 5,051 square kilometre (1,950 square miles) cattle property in the Northern Territory.
"Us girls give a hand when we can, but its mainly just the two of them," John's wife Jill Mengersen said on Monday.
(A$1 = US$0.51)
FEATURE - Humour helping people cope after September 11
By Phil Smith
1252 words
11 November 2001 01:44
SYDNEY/SINGAPORE, Nov 11 (Reuters) - If truth is the first victim of war, humour is among its firstborn.
Within minutes of a disastrous, traumatic or epoch making event, someone, somewhere will make a joke about it ... it is part of human
nature which finds no bounds in taste or subtlety.
But as with the death of Princess Diana in 1997, things were a little different after the September 11 attack on the World Trade Center,
which was stunning enough to force a delay of a couple of weeks before people made light of the situation.
Even hard-bitten New Yorkers who often rely on gallows humour to get through the trials and travails of city living respectfully
paused.
Also, the financial markets, the fount of much of the black humour that makes its way into the public consciousness, were silent for a
while probably because the attack on the twin towers was so clearly directed at capitalism.
But soon, and a little sheepishly, the wits made their presence felt.
"Afghan weather forecast: 3000 degrees, very windy" - was among the first to emerge when President George W. Bush was
wallowing in expansive rhetoric linking Osama bin Laden and Afghanistan to the attacks, sparking thoughts of a nuclear strike by the
United States.

Which fits nicely with Q: What's the five-day forecast for Afghanistan? A: Two days.
The trickle soon turned into a flood with e-mail and the Internet providing an easy watercourse.
Heartless and crass? Not according to psychologists who reckon that far from trivialising, humour can heal not only individuals, but
communities and even nations.
"By finding something to laugh at, we reconnect to our life-affirming potentials, and that's what's happening in America after the
sledge-hammer blow we suffered on September 11," said Henry Mindess, Professor Emeritus at Anitoch University in California.
"Our ability to laugh at ourselves and our leaders is a sign of our resilience and insight, an indication that we as a nation can bounce
back from injury and threat to proclaim our determination to live our lives as we see fit and not bow down to any tyrant or madman,
no matter how many terrorists he may send our way."
STATE-SIDE HUMOUR
In America, the jokes have been primarily targeted at the Taliban and the shadowy leader of al Qaeda, Osama bin Laden and are racist
in nature and attack their strict Muslim way of life.
Among the first honed in on the ruling sect's attitude towards women with one cartoon showing two worried-looking Afghan men
holding a note that says, "Give us Osama, or we'll send your women to college."
Another suggested the best revenge for September 11 was to kidnap bin Laden, perform a sex change operation, and then drop him (or
her) back into Afghanistan without a cent in his (or her) pocket.
In a widely circulated e-mail, a mock TV guide in Afghanistan features Xena, not as the warrior princess, but as a "modestly dressed
housewife" who "stays at home and does some cooking". And the featured film of the day is "Shariah's Angels: The three burkha-clad
sleuths go undercover to expose an evil scheme to educate women."
JOKES IN MIDDLE EAST, PAKISTAN
Humour has also been deployed as a way to cope with stress and to comment on the political situation close to where the action is -
Pakistan and the Middle East.
Of course, the targets of the jokes and political cartoons are a bit different, but the humour has been no less cockeyed.
In Pakistan, doctored photographs have bin Laden and Bush taking the stage at the "Musharraf Memorial Concert", darkly referring to
the political risk Pakistan's President Pervez Musharraf has undertaken by siding with the United States.
Pro-government and opposition newspapers in Egypt have been running political cartoons that have been poking fun of the U.S. food
drops in Afghanistan along with bombs.
One cartoon in the semi-official al-Akhbar, entitled, "American planes drop ready-meals on Afghanistan", showed a rough and
bedraggled-looking Afghan holding a burger in one hand and shaking his fist with the other, saying, "Where's the ketchup, you sons of
infidels?"
The paper repeated the cartoon a few times because it was so popular, and it also became an Internet favourite.
Another from the opposition al-Wafd showed U.S. planes dropping bombs and fat chickens. One chicken has a signpost rammed into
it saying, "Killed according to Islamic law," and alongside it is a turbaned and bearded Afghan, who is impaled on another signpost
that says, "Killed according to American law".
Al-Akhbar also ran a cartoon aimed at U.S. paranoia over those of Arab descent that depicted a New York street scene with a bin
Laden as a mother, bin Laden as her baby in a pram and more bin Ladens passing by.
And humour hasn't been limited on land. On board the U.S. aircraft carrier Carl Vinson, in waters near Afghanistan, the strike
operations officer puts a cartoon on the back of the flight schedule he draws up everyday for bombing missions.
One showed two police officers interviewing a dolphin housewife about her missing husband - a reference to a fighter pilot who was
forced to unload a missile in the sea the previous night to balance his aircraft before landing.
ONION TONES DOWN, FOR NOW
Even the satirical, and usually irreverent American newspaper, The Onion, found itself treading very carefully in the immediate
aftermath of September 11.

Senior editor Carol Kolb described the cautious approach that the paper's editorial staff adopted in its first issue after the attacks on
New York and Washington.
"We were very, very careful about what we were going to put in the issue. We all bring to the meetings big lists of possible headlines
for the paper, and many of the headlines were rejected because we felt, even if it were a funny joke, it was a little offensive," she told
Reuters.
Surprisingly, despite the heightened sensitivity after September 11, The Onion attracted a wider audience with that issue. Kolb
estimated that the paper's online edition recorded two million hits during the week immediately following the attacks, compared with
their usual one million hits per week.
Even more surprising was the number of positive e-mails and phone calls it received from readers. Kolb said the ratio between
positive comments and complaints was actually better than usual. "It was maybe 25 to 1. Usually it's 10 to 1," she said.
"I think in a stressful situation, people need some sort of release. They need some sort of new way to look at it. Also, I think humour is
a way to comment on things but in a light and entertaining way." IN DAILY LIFE
It's not just contrived humour that has come to the fore, natural humour has its place too.
Earlier this month Italian police held a truck driver for more than 10 hours after finding the suspicious word "Laden" in his otherwise
perfectly in order papers.
While the trucker was questioned, police called in explosives experts from a nearby airport, a team of sniffer dogs and specialist anti-
mafia and terrorism police who surrounded and sealed off the suspect truck.
Unable to speak Italian, the driver was unable to explain that "Laden" is German for "load".
ANALYSIS-Merger medicine soothes Asia's sick banking sector
By Phil Smith
930 words
6 April 2000 04:25
SINGAPORE, April 6 (Reuters) - The economically debilitating sickness of Asia's banking sector drags on, with the still high level
of non-performing loans and debt write-offs leaving many potential lenders close to the edge.
Economists have long said a priority for governments must be to get their banking sectors in order or see their economic recoveries
flounder on the rocks of capital starvation.
But the banking sector malaise is more of a risk to the longer-term investor. Short-term players are on safer ground.
"I think it is important to have solvent banking systems going forward but can these economies continue to operate for three to five
years with insolvent banking systems?" said Steve Frost, regional banking analyst at HSBC Securities in Singapore.
"I think that's quite possible...Long term they need to sort out these problems, short term I don't really see them impeding economic
growth which is mainly being driven by export growth."
BUT ARE MERGERS A GOOD IDEA?
Merging sick banks with healthy ones seems a good solution but combining a fit bank with a sick bank will not necessarily lead to a fit
bank, but more likely a slightly off-colour bank.
Global ratings agency Standard & Poor's argues the consolidation of Asia's banks could actually slow restructuring.
S&P's Asian financial institutions ratings head Ernest Napier said in Australia recently that bigger did not necessarily mean stronger
when it came to banks, and mergers did not address the problem of impaired assets.
"By consolidating weak banks into stronger banks, you could be increasing systemic risk for the banking sector as a whole."
MERGERS COMING IN SOUTH KOREA

Analysts say many South Korean banks must join forces or face collapse, with heavy loan loss provisions and limited means of raising
capital putting on the pressure for consolidation.
"Mergers are inevitable for weak, nationalised banks such as Chohung, Hanvit and Seoulbank, said Samsung Securities bank analyst
Lee Hyung-jin. "Otherwise, the government must keep pumping in more public funds."
Such banks find it almost impossible to raise cash via share issues given the collapse in their share values.
Since the start of the Asia crisis Chohung has lost 90 percent to 2,130 won ($1.92) as of its close on Tuesday and Hanvit 80 percent to
1,825 won. Seoulbank shares were suspended in September last year after the bank was deemed 'non-viable.'
TAIWAN EAGER
In Taiwan state banking reforms are going slowly, although both the government and private sector say they are eager to consolidate
the banking sector.
Analysts say the fact Taiwan escaped the worst of the crisis means institutions lack a sense of urgency although to prepare for
accession to the World Trade Organisation they must think hard about consolidation.
"To be honest, if there was no WTO, there would be no sense of urgency," said Eliot Tsung, banking analyst at Fubon Securities.
"Banks all belong to conglomerates, and they can use other resources from the parent to fill in banks' losses."
"Actually, banks stopped making money a long time ago, but (conglomerates) can't let (them) go bankrupt, because that would be a
big loss of face."
THAI BANKS
Thai banks will have a tough time for a few years yet but are probably strong enough to survive alone and resist being taken over by
foreigners, analysts said.
"In the short term of, say, three years, their mergers are virtually impossible given the Thai business culture. These original family
banks still hold on to their pride," said Paiboon Nalinthrangkurn, head of research at TISCO Securities.
There was good news for the Thai banking sector this week after rating agency Moody's put Thai banks and financial institutions on
review for possible upgrade of their short and long term debt and deposit ratings.
MALAYSIA GETS GOING
Malaysia is kicking off the biggest shake up of the financial sector in decades with the focus in the next few years on how to
consolidate 54 financial institutions into just 10 banks.
Malaysian bank shares have also outperformed their Hong Kong and Singapore peers, which have seen their finance sector indices
drop so far this year.
The Kuala Lumpur Financial Index has risen by 25 percent this year, outperforming the benchmark Composite Index which has risen
17 percent, and some see further upside.
"Bank stand-alone valuations remain cheap compared to the market and this is a good buying opportunity given that this is the start of
the economic cycle," brokers G.K. Goh said.
INDONESIA BANKS STILL STRUGGLING
Recapitalisation should improve Indonesia's beleaguered banks but loan restructuring is at a snail's pace and expensive valuations
mean there is no rush for investors to buy shares.
"Banks' fundamentals have improved after recapitalisation, their equities are no longer negative and some can even be expected to
book profits and start lending this year," bank analyst Mirza Adityaswara of Indosuez W.I Carr told Reuters.
"But in terms of valuations, they are not cheap, especially considering the systemic risks that surround the sector."
Aditya Wardana from Trimegah Securities in Jakarta, an advocate of bank mergers, summed up the situation facing most countries.
"Mergers are good between good banks, to create a synergy, but the problem now is there are too many bad banks and too few good
banks," he said. ($1=1,112 won)
(C) Reuters Limited 2000.

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