ILO suspects unemployment in Asia to surge by 23 million

The number of people out of work in Asia could surge by 23.3 million in 2009 as the global financial crisis continues to batter the region's economies, says an ILO study.

The crisis could also force rural-to-urban migration to slow down, with many facing the prospect of returning to low paying agricultural sector as factories and firms slash jobs, the International Labour Organization (ILO) report said.

"A dramatic increase in working poverty of more than 140 million people by 2009 is projected under this scenario, representing regression of the Asia and Pacific region to a working poverty rate of 2004," the study said.

"These projections are not just numbers, they carry with them a real risk that children may be forced to withdraw from school in order to work and support their families," it said.

It said the region's robust growth in the past was not matched by "broad-based gains in real wages," leading to sharp inequalities in many countries.

"The substantial growth slowdown taking place is likely to lead to stagnant or falling real wages, with the potential for increased incidences of wage related disputes," the study said.

As Asia moves to spend about 3.9 percent of its gross domestic product (GDP) on stimulus packages, there is also a need to protect employment and support household purchasing power, it said.

Obama signs USD 787 billion stimulus package

US President Barack Obama has signed into law the USD 787 billion economic stimulus package, which according to him would rejuvenate the American economy and create as many as three to four million jobs in the next two years.

Minutes before he put his signature on the 1,534-page American Recovery and Reinvestment Act in Denver, Colorado, Obama said: "We have begun the essential work of keeping the American dream alive."



The stimulus bill was passed last week by the US Congress House of Representative and Senate - without much support from the opposition Republicans. While no Republican voted in its favour, only three Senators supported the bill in the Senate.



Obama cautioned Americans not to immediately expect miracles with the passage of the bill, as the US has a long way to go in reviving its economy.



"Today does not mark the end of our economic troubles. Nor does it constitute all of what we must do to turn our economy around," he said.



"But it does mark the beginning of the end the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs; to provide relief for families worried they won't be able to pay next month's bills; and to set our economy on a firmer foundation, paving the way to long-term growth and prosperity," Obama said.



Terming it as the sweeping economic recovery package in the US history, Obama said: "What makes this recovery plan so important is not just that it will create or save three and a half million jobs over the next two years.



It's that we are putting Americans to work doing the work that America needs done in critical areas that have been neglected for too long work that will bring real and lasting change for generations to come."



The money would be used to not only save and create three to four million jobs, but also would result in mega

investment into modern infrastructure projects, funding projects which would help the US become energy independent, education and push more funding into scientific research.



"It will make the most significant investment in America's roads, bridges, mass transit, and other infrastructure since the construction of the interstate highway system. It will make investments to foster reform in education, double renewable energy while fostering efficiency in the use of our energy, and improve quality while bringing down costs in healthcare," Obama said.



Middle-class families will get tax cuts and the most vulnerable will get the largest increase in assistance, in decades, he said. "With this Act we begin the process of restoring the economy and making America a stronger and more prosperous Nation," he added.

US tycoon charged over $8bn fraud

Texan billionaire and cricket promoter Sir Allen Stanford has been charged over a $8bn (£5.6bn) investment fraud, US financial regulators say.

The Securities and Exchange Commission said the financier had orchestrated "a fraudulent, multi-billion dollar investment scheme".

The SEC said the fraud was "based on false promises and fabricated historical return data".

English cricket bosses have pulled out of sponsorship talks with Sir Allen.

The charges against Sir Allen, three of his companies and two executives of those companies followed a raid by US marshals on the Houston, Texas, offices of Stanford Financial Group.

A US judge has frozen the assets of Sir Allen and the other defendants as well as those of the Stanford Group, its Antigua-based subsidiary Stanford International Bank (SIB) and another subsidiary, investment advisor Stanford Capital Management.

A receiver has been appointed to "preserve assets for investors", the SEC said.

'Close circle'

Sir Allen last year promoted the Stanford cricket series which saw a West Indian all-star team - the Stanford Superstars - beat an England team for a $20m prize.

The England and Wales Cricket Board (ECB) suspended sponsorship negotiations with him following the fraud charges.

The ECB has a five-year deal to play games against the Stanford Superstars.

The SEC said that the Stanford International Bank - the largest in the Caribbean - sold approximately $8bn worth of certificates of deposit to investors, promising "improbable and unsubstantiated high interest rates".

The bank was "operated by a close circle of Stanford's family and friends", the SEC said in a statement.

"We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world," said Rose Romero of the SEC.

The SEC began investigating Stanford Group last year and intensified their probe following the arrest of US financier Bernard Madoff in December over an alleged $50bn (£35bn) investment fraud.

In the wake of that scandal, SIB falsely told its investors it had no exposure to the funds involved in the alleged Madoff fraud.

The Stanford Group lists its worth as more than $40bn. Antigua and Barbuda granted Sir Allen citizenship about 10 years ago and knighted him in 2006.

Forbes magazine lists him as the world's 605th richest man, with assets of $2.2bn.

Japan finance minister steps down

Japan's Finance Minister Shoichi Nakagawa has resigned, amid claims that he was drunk at a recent G7 meeting.

Mr Nakagawa said earlier that he would wait until parliament had approved a supplementary budget to step down.

But he brought forward his departure after calls for his immediate exit escalated.

Prime Minister Taro Aso said he respected Mr Nakagawa's decision and named Economics Minister Kaoru Yosano to take over the finance portfolio.

At a news conference just hours after his appointment, Mr Yosano said the country's economy had deteriorated "beyond expectation".

Mr Yosano said his priority was to "smooth" the financial system as well as stimulating demand.

He said he would decide whether to take additional steps after consulting not only the government but business leaders, academics and the media.

'Embarrassing'

Mr Nakagawa's departure is seen as a major blow to Mr Aso's government in an election year.

The prime minister was already facing plummeting support; a poll by broadcaster NTV on Sunday put backing for his cabinet at 9.7%.


Voters are worried both about the economy and Mr Aso's leadership credentials in the wake of a series of gaffes, analysts say.

Mr Nakagawa apologised for "causing such a big fuss" and told journalists: "I decided that it would be better for the country if I quit."

He has already apologised for his behaviour at last weekend's news conference in Rome but blamed cold remedies for a slurred performance there.

He said he had not drunk more than a sip of alcohol before facing the media.

The news conference in Rome followed a meeting of finance ministers focussing on the current world economic crisis.

Footage showed Mr Nakagawa slurring his speech and closing his eyes repeatedly as if he was dozing off.

At one point, he mistook a question aimed at the governor of the Bank of Japan as one intended for him.

"It's embarrassing," said Democratic Party Secretary General Yukio Hatoyama. "This has sent a message to the whole world. He's damaged the national interest."

He explained that he had sipped wine at a luncheon toast on the day of the news conference, but had not consumed an entire glass.

He said he had taken too much medicine, including cold remedy, and that had made him drowsy.

Mr Nakagawa has denied reports - including the view of a former prime minister - that he is a regular drinker.

US car giants seek $21bn funding

Troubled US carmakers GM and Chrysler have asked the US government for another $21.6bn (£15.2bn) in support, on top of the $17.4bn already received.

The auto giants also plan to axe 47,000 and 3,000 jobs respectively, as well as shedding a number of car models.

The moves form part of their drastic restructuring plans submitted to the US Treasury Department on Tuesday night.

It came as the United Auto Workers (UAW) union reached agreement with GM, Chrysler and Ford on contract changes.

Plant closures

The UAW is one of a number of stakeholders whose agreement is needed before the proposed plans can be pushed through.

General Motors said it would try to borrow up to $16.6bn more from the government, on top of the $13.4bn it has already received.

Its plan includes cutting 47,000 jobs and closing five more US factories.

GM says that it could be in profit within two years and fully repay its loans by 2017.

'Lot of work'

In December GM had said it would cut the number of plants from 47 in 2008 to 38 by 2012, but has now added another five factories facing the axe, which would leave it with 33 facilities.

The carmaker's brands would also be reduced from eight to four - Chevrolet, Buick, Cadillac and GMC.

GM chief executive Rick Wagoner said the company's plan was "comprehensive, responsive, achievable and flexible".

"We have a lot of work in front of us, but I am confident it will result in a profitable General Motors," he added.

Models cut

The plan came after Chrysler, which was given a $4bn loan by the US government at the end of 2008, revealed its own survival plan.

Chrysler has asked for another $5bn funding, and plans to cut 3,000 posts.

The firm will also cut three car models in 2009 - the Chrysler Aspen and PT Cruiser, and the Dodge Durango.

Unveiling its proposals, Chrysler said it now expects the current downturn in the US car market to last another three years.

'Said right things'

The US's third biggest carmaker said its radical surgery had the support of the United Auto Workers (UAW) union, dealers, and suppliers.

The UAW says it has also reached tentative agreement with Ford and General Motors to help cut those firms' labour costs.

Meanwhile, Chrysler also said it planned to cut outstanding debt by $5bn and reduce fixed costs by $700m in 2009.

Analyst Lincoln Merrihew, of TNS Automotive Consulting, said: "I'm curious to see how the government responds to this plan, but Chrysler has said all the right things."