Black money abroad less than $213 bn; Swiss a/cs fall 60 pc - Black money abroad less than $213 bn; Swiss a/cs fall 60 pc -

Monday, May 21, 2012

Black money abroad less than $213 bn; Swiss a/cs fall 60 pc -

Black money abroad less than $213 bn; Swiss a/cs fall 60 pc -

As promised, the finance minister’s White Paper on Black Money is out. But don’t hold your breath. There are no disclosures here to make you spill that cup of coffee you may be holding in your hands. Or rush out of the bath shouting Eureka!

What the White Paper does is give you a backgrounder on the various dimensions of black money – both the stuff generated here and the moolah stashed abroad – and why it is difficult to come up with a precise estimate of how much of it have evaded the taxman.

The most interesting figure it gives us is the officially disclosed figure of Indian accounts held with Swiss banks. It is down 60 percent between 2006 and 2010.  Conclusion: black money is being moved around; it is one step ahead of the taxman.

In fact, net of illegal inflows back into India, the black money held abroad may be less than $213 billion, the White Paper seems to suggest in a roundabout way.

White Paper is a damp squib. It has told us nothing we didn’t already know. PTI

The closest it comes to giving us a figure on the illegal wealth abroad is when it discusses the estimates made by the International Monetary Fund (IMF) and Global Financial Integrity (GFI), a non-government organisation that campaigns against illicit global financial flows.

While the IMF study estimated the flight of capital from India during 1971-97 at $ 88 billion, GFI, in its 2010 report, put the total illicit outflows from India at $213.2 billion. This sum, after adjustment for the possible returns earned on these funds (the money is not kept under a mattress), would amount to $462 billion.

The finance ministry’s White Paper pooh-poohs the GFI claim by saying that the estimates are probably too high since they do not take into account “illicit inflows” – the black money that comes back in to earn returns.

Says the paper: “By not considering illicit inflows, even if the reasons given are valid, it is apparent that the estimate given in GFI’s November 2010 report of a total of US$213.2 billion being shifted out of India from 1948 to 2008 appears to be on the higher side.”

On the other hand, the paper makes the suggestion that some of the black money may be coming back to earn higher returns in India. It says: “It needs to be ascertained whether such an amount is stashed abroad in offshore bank accounts or whether this money has at least partly already returned to India.”

Firstpost has, in the past, made the conjecture that a lot of the sudden surge in exports during 2010-11 and FII investments maybe illicit money returning to India (Read here). The White paper leads us in the same direction.

The paper points to the huge volumes of investments being routed through Mauritius and Singapore, which accounted for $54 billion (42 percent of total) and $12 billion (9.17 percent) of cumulative inflows between 2000-01 and 2010-11. “Mauritius and Singapore, with their small economies, cannot be the sources of such huge investments and it is apparent that the investments are routed through these jurisdictions for avoidance of taxes and/or for concealing the identities from the revenue authorities of the ultimate investors, many of whom could actually be Indian residents, who have invested in their own companies, though a process known as round tripping.”

There’s more debunking of the idea that there are oodles of illegal cash health abroad.

In the public imagination, black money equals Swiss Bank accounts. But the White Paper makes a pointed reference to the fact that estimates of Indian holdings in Swiss accounts may be grossly exaggerated. It makes a pointed reference to a Swiss National Bank statement at end-2010 that the total liabilities of Swiss banks to Indians was just $1.945 billion – less than Rs 10,000 crore.

Says the White Paper: “The Swiss ministry of external affairs confirmed these figures when a reference was made by the Indian ministry of external affairs to them.” According to the paper’s figures, which were taken from the website of the Swiss National Bank, the “bank deposits of Indians in Swiss banks have decreased from Rs 23,373 crore in the year 2006 to Rs 9,295 crore in the year 2010.”

Clearly, this proves at least one thing. All the ruckus about black money in India has alerted Swiss account holders that it may be unsafe to stay on. They would have moved their assets to other tax havens. The 60 percent drop in Swiss bank accounts between 2006 and 2010 is one indicator.

Even in the case of the overall estimates of black money generated in the economy, the White Paper uses a World Bank report of 2007 to show that the problem may be less serious in India. The World Bank report said that the weighted average size of the “shadow economy” as a percentage of the official GDP in 162 countries was 31 percent, while for India the figure was 20.7 percent, from from 23.2 percent in 1999. This, notes the paper, compares “favourably with the world average.”

So what does one gain from the White Paper? A better knowledge of all known methods of generating black money and what is being proposed to close the loopholes. Here are the highlights:

• There are nothing less than two dozen methods of making black money, ranging from maintaining parallel books of accounts to manipulation of sales and expenses, doing cash transactions in real estate and bullion, underinvoicing and overinvoicing external trade and through transfer pricing arrangements, among other things.

• The White Paper lists GAAR (the General Anti Avoidance Rules, that have caused such heartburn for the markets), various Double Tax Avoidance Treaties, the Lokpal Bill, the Judicial Standards and Accountability Bill, the Whistleblowers Bill and the Public Procurement Bill, among several others, as crucial pieces of legislation that will deter the creation of black money.

• In the area of prevention and deterrence of tax evasion and black money generation, the White Paper mentions the need for reasonable tax rates, economic reforms, reforms in high black money sectors like gold and real estate, and improving tax administration to tackle the menace.

One cannot escape the feeling that the White Paper seeks to undercut the hysteria that has greeted the issue of black money and illegal wealth stored abroad.

Net-net: the White Paper is a damp squib. It has told us nothing we didn’t already know, beyond discussing the validity, or otherwise, of the estimates of black wealth stashed abroad.

It is not going to serve the government’s political purpose of showing a resolve to tackle black money and corruption. It has been an academic exercise.

(Read the full report below)
Whitepaper Back Money 2012

Facebook's future has more than just money riding on it - The Guardian

It may have taken Nasdaq (possibly borrowing the London mayoral computer systems) a couple of hours to work out how much Facebook shares cost. But it took the market less than 60 minutes to test the will of Facebook's underwriters, pulling the shares down to the opening $38 to see if there was somebody prepared to save Mark Zuckerberg's face. There was, of course – how else does one earn one's 7% fee? – and the stock ticked back up, because, make no mistake, a Facebook first-morning discount would be little short of a calamity. A point not lost on shareholders of the Facebook games company Zynga, whose shares tumbled 13% on Facebook's so-so debut.

There is no shortage of debate on whether Facebook can justify its inflated $106bn valuation (at the time of writing). It has been well noted that its revenues fell in the first quarter of 2012 to $1.06bn, compared with the $1.131bn achieved in the fourth quarter last year. In the United States, where Facebook is clearly more mature, the company's ad revenue an hour is in line with the take for the proven and mature market of television, according to Enders Research. People in the US already spend 14% of their online time on Facebook (can there really be more growth in that?), which may explain why Facebook wins an estimated 14% of US online display spend. Perhaps in the world's largest economy Facebook is already mature.

Hold tight, though: there are plenty of arguments to keep the bulls happy too. Facebook's real prospects are to spread globally in the way that a single commercial broadcaster would never be allowed to do, not least in China, and to see if the company can develop a new line of business, hence all the speculation about getting into phones. Even on today's numbers, Facebook's revenues imply that each monthly active user generated just $4.11 last year; each daily active user $7.68. Compare that to ITV, to which about two-thirds of British people tune in every week; they are worth £43 a year to advertisers.

So given the difficulty of making predictions, it is possible to take whatever numbers you need to justify your position. What's interesting, though, is that most people argue that Facebook looks overvalued, yet we would not know what to do if that prediction came true. We have more invested in Facebook succeeding – because it is a more worrying question if it doesn't. The essential narrative of our times rests on the notion that technology is a constant motor of change, which brings with it great wealth.

Facebook, in this sense, is the heir to Amazon, Apple, Microsoft and above all Google, an extraordinary pipeline of companies. But it is also our lodestar for the next direction in media: if Facebook does not succeed, then perhaps all this talk of navigating the web through the medium of our friends was overrated; referrals to news websites, after all, still primarily come from Google.

Yet while Google's remarkable commercial success helps sustain the notion that there is a viable digital future out there for the rest of us, the failure of Netscape or the dotcom crash ought to lead us to consider that not every good idea becomes a global hit. And if Facebook falters on the stock market, there is no fresh company to take its place. MySpace et al have gone, and Twitter is a long way from generating the kind of cash that would allow it to excite.

Arguably, it would be more frustrating still if Facebook did quite well – growing by 50% a year rather than doubling, or whatever is required by the elevated valuation set by Wall Street. The credibility of social media would be dented, with a vocal group of frustrated investors – while those who pushed the valuation up to this level, and particularly those who sold out today, will have generated quite a return.

Making Money from Gold as a Personal Dealer with the “Gold Profit Formula” - YAHOO!

Novices are making money from gold with Absolute Wealth's new gold dealing training course.

Austin, TX (PRWEB) May 21, 2012

Making money from gold doesn’t have to involve a brick and mortar business, or a pawn shop mentality of cheating the customer. Any one, no matter how much or how little experience they have, can become a successful gold dealer and earn more money than they could have imagined, according to a recent article. Thanks to outrageously high gold prices, the business is booming and people are jumping at the chance to dump their unwanted precious metals, the article said.

Sellers are earning good money, and buyers are turning their items in to refiners for even better money, said the article. Absolute Wealth has recognized the growing interest in gold dealing, and has accessed one of the most experienced and knowledgeable minds the jewelry and precious metal business has ever seen.

That expert shares his story and his advice in the “Gold Profit Formula,” the new training course that molds people into legitimate gold dealers. It teaches about the types of gold, silver, and other pieces of jewelry that get good money and shouldn’t be treated as scrap. It also teaches how scrap (whether it’s old, broken, or just not high-quality) can be turned into major profits through the refining process. It’s basically an easy gold guide that’s jammed with valuable information, the online article said.

It’s all about learning the value of precious metals and offering accordingly. The tools used to determine weight, size, and financial worth are explained using video trainings and a full-scale manual. “Gold Profit Formula” also guides people in the process of confidently connecting and communicating with potential customers to make them comfortable enough to conduct business. Sometimes the sleaziness of a “Cash for Gold” company creeps people out, said the article. If dealers act in a professional and fair way, they’ll see business pick up fast and have more customers than they could have ever expected.

Absolute Wealth is an expert team of real investors and advisors devoted to identifying winning strategies for exceptional returns. Members subscribe to the Independent Wealth Alliance for professional investment analysis and recommendations on the latest trends and progressions. For more information and subscription instructions, visit

Folks are eager to access the value of their gold, giving dealers the opportunity for real income generation. This is a chance to gain a significant amount of extra cash with the “Gold Profit Formula.” The article said it’s the most complete source of information on making money from gold, and it’s available now from Absolute Wealth.

Paul Norwine
AW Research Publishing, LLC
Email Information

Emerging Stocks in Longest Losing Streak Since '94 - Moneynews (blog)

Emerging-market stocks last week fell for a ninth week, the longest string of weekly declines since 1994, as Citigroup Inc. cut its estimate for the gauge and oil dropped to a six-month low.

The MSCI Emerging Markets Index sank 1.5 percent to 906.61 by 4:32 p.m. Friday in New York, increasing its loss on the week to 6.6 percent, the most in eight months. The gauge erased its annual gain as Europe’s debt crisis worsened. The MSCI Bric Index fell for a ninth week as Russia’s Micex retreated to a seven-month low and the ruble weakened 0.7 percent, dropping 11 days in the longest run of losses since January 2009. Brazil’s Bovespa snapped an eight-day decline on LLX Logistica SA’s 4.4 percent jump.

Citigroup reduced its year-end estimate for the MSCI gauge of 21 developing nations to 1,100 from 1,225, citing concern Greece will exit the euro and China’s economy will slow further, Geoffrey Dennis, the brokerage’s global emerging-market strategist in New York, wrote in a report. Crude oil fell 1.2 percent to $91.48 a barrel on the New York Mercantile Exchange, the lowest settlement since Oct. 26.

“Oil is clearly the challenge right now,” Simon Quijano-Evans, chief emerging-market economist at ING Groep NV, said by phone from London. “The global situation is driving oil prices down and that has really bad implications for importers and producers in the emerging markets.”

‘Summer Doldrums’

The MSCI BRIC Index dropped 0.7 percent, extending its loss for a ninth week, the longest string of declines since Sept. 21, 2001. An MSCI gauge tracking technology companies sank 3.7 percent, the most among the developing-nation index’s 10 industries.

The MSCI Emerging Markets gauge’s 14-day relative strength index, which tracks momentum by comparing closing prices with daily trading ranges, fell to 13.9 Friday. A reading of 30 or below is a signal some investors use to indicate prices may be about to rise.

The IShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF tracking developing-nation shares, fell 1 percent to $37.29. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, rose 3.5 percent to 37.42.

“We do not expect significant outperformance by emerging market equities in the near term,” Citigroup’s Dennis said in the report. “Prolonged summer doldrums, even further near-term weakness, seem likely before a rally later in the year.”

Moody’s Investors Service lowered debt ratings at 16 Spanish banks Thursday, citing the recession and mounting loan losses, and Greece’s credit rating was reduced one level by Fitch Ratings on concern the country may not be able to sustain membership in the euro area.

Russia Falls on Oil

The benchmark gauge in Russia slid 1.3 percent, increasing its weekly retreat to 8.7 percent, the most since Sept. 25. Mosenergo OAO fell 6.7 percent to lead declines on the gauge.

Brazil’s Bovespa added 0.8 percent, after an eight-day strong of declines. LLX Logistica surged after the company said it’s in “preliminary negotiations” for new letting contracts in the Superporto do Acu.

Turkey’s ISE National 100 Index dropped 0.7 percent. Anadolu Cam Sanayii AS, a Turkish glassmaker, slumped 3.1 percent to a four-month low after first-quarter profit missed analysts’ estimates. Hungary’s BUX jumped 1.2 percent.

In South Africa, the FTSE/JSE Africa All Share Index slid 1.2 percent, the lowest in four months. Palabora Mining Co., a copper miner, fell 5.2 percent to the lowest price this year.

Property Prices

Chinese home prices fell in 46 of 70 cities in April, a record high, the National Bureau of Statistics reported Friday.

The Shanghai Composite Index slipped 1.4 percent while the Hang Seng China Enterprise Index fell 1.3 percent to the lowest level since November.

Guangzhou R&F Properties Co. led a decline by Chinese developers, sliding 5.9 percent. Samsung Electronics Co., which gets 40 percent of sales from Europe and America, slid 4.7 percent on concern overseas demand will slow.

Anta Sports Products Ltd., a Chinese sportswear maker, tumbled 9.2 percent in Hong Kong to the lowest close in more than three years after saying that intensifying competition has been affecting the company’s profitability over the past several quarters.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose two basis points, or 0.02 percentage point, to 406, according to JPMorgan Chase & Co.’s EMBI Global Index.

© Copyright 2012 Bloomberg News. All rights reserved.

Black money: White Paper for setting of Lokpal -

ParliamentThe government on Monday tabled the much-awaited White Paper on black money in Parliament which did not disclose any name but made a strong case for setting up Lokpal and Lokayuktas to deal with the menace.

The White Paper, which was tabled by Finance Minister Pranab Mukherjee [ Images ] in the Lok Sabha, also did not provide government's estimate of black money, within and outside the country, though it quoted various estimates of other agencies on the issue.

The 97-page document, however, pitched for fast-track courts to expeditiously deal with financial offences and deterrent punishment for offenders.

It has also suggested tax incentives for encouraging use of debit and credit cards as these leave audit trails.

On the possibility of any tax immunity scheme, especially gold deposit scheme, to deal with black money, it said, "The issue of complete tax immunity needs to be examined in the light of other policy objectives."

The document seeks to dispel the impression that government was not doing enough to deal with black money and talks about various policy options and strategies it has been pursuing to address the issue of corruption in public life.

Referring to the issue of institutions like Lokpal and Lokayuktas, the Paper said, "(they) need to be put in place at the earliest, in the Centre and the states respectively, to expedite investigations into cases of corruption and bring the guilty to justice."

The government has not been able to push through the Lokpal Bill in Rajya Sabha, despite pressure from the civil society.

The Bill was approved by the Lok Sabha.

SE Asia Stocks-Most higher; Thailand falls on energy selling - Reuters UK

Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.

NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Disabled vet Sherman Barton battles for military contracts for business - Philadelphia Daily News

They were 12 hairy years in Sherman Barton’s life. The Burlington County resident worked in military intelligence for the U.S. Army in Germany and Italy from 1972 to 1984, getting shot three separate times while hunting terrorists, he said.

The personal toll was vast, including the loss of two ribs, a portion of his lower intestines and some hearing, along with three broken neck vertebrae, ankle stiffness and instability, muscle weakness and depression.

Those injuries earned Barton an honorable discharge and classification by the Department of Veterans Affairs as having “a 100 percent permanent and total service-connected disability.”

It was a tough-to-take classification for the Edgewater Park resident whose military career was distinguished by his ability to hold up against many physical challenges.

Twenty-six years later — and after an 18-year second career as a disabled veterans counselor and special projects coordinator at the Department of Veterans Affairs in Philadelphia — Barton would see a silver lining in his disability designation: a leg up in competing for federal government contracts as a small-business owner. Or so he thought.

Even with laws and a presidential executive order in place to help steer government work to Service-Disabled Veteran-Owned Small Businesses, or SDVOSBs, Barton said he has found the opportunities maddeningly few and the process for securing such work too slow and unreliable on which to build a business.

He’s on a mission to change that. His primary target is one of the largest Department of Defense purchasing centers in the United States — Defense Logistics Agency Troop Support in Northeast Philadelphia. The center provides more than $14.5 billion annually in food, clothing, textiles, medicines, medical supplies, construction equipment and industrial hardware to troops around the world and others in need.

After two years of e-mails, calls and near-monthly visits to DLA Troop Support — including an unauthorized failed attempt in October to see the commander — Barton’s supply company, VE Source L.L.C. in Shrewsbury, Monmouth County, which currently is solely focused on getting government work, has secured just one SDVOSB contract. Awarded in March, it is worth $111,420 for 250 portable tents.

“How can you call this trying?” Barton said he has asked officials at DLA more than once.

According to the agency, DLA had 1,045 SDVOSB contracts totaling $62 million in 2010, and 3,780 valued at $48 million last year.

In all, DLA’s small business contracts totaled $2.4 billion in 2011, or 30.7 percent of the contract dollars eligible for small business. The remaining $5.4 billion in work eligible for small business awards went, instead, to larger domestic companies. DLA officials said they feel a responsibility to support bigger firms to ensure they will be around at times of heavy need, such as troop deployment.

Barton said he has been assured by DLA officials that more opportunities are coming for small businesses owned by disabled veterans. Those assurances have been accompanied by reminders that the agency must also answer to other mandates, including that it provide work when possible to programs that employ federal prison inmates, and the blind or severely disabled. DLA Troop Support’s contracts to two such primary programs, Federal Prison Industries and AbilityOne, totaled $422 million last year, said spokeswoman Stacey Hajdak. By law, those programs are given priority over service-disabled veterans and other small business subsets, such as women-owned and minority-owned firms.

“That’s kind of a delicate balancing act we have to go through,” Michael McCall, director of small business at DLA in Philadelphia, said in an interview earlier this month. “As the [federal] budget shrinks, that balancing act gets more and more difficult because everybody is trying to get their share of the pie.”

Barton, 59, VE Source’s president and majority owner, said he doesn’t begrudge set-asides for other groups. He just wants more action for himself and other disabled veterans trying to forge new careers. Those opportunities are imperative as troops return home from Iraq and Afghanistan to a stingy job market, said Barton, who plans to hire disabled veterans as soon as his company lands some substantial deals.

“With the downsizing of the military, there are going to be more and more veterans like myself trying to start companies because there is no employment for them in the civilian sector,” Barton said last week.

He formed VE Source with two partners in 2010 to take advantage of an executive order issued by President Bush in October 2004 to strengthen opportunities for SDVOSBs. That directive called on the heads of federal agencies to “more effectively implement” previously adopted SDVOSB initiatives.

They included the Veterans Entrepreneurship and Small Business Development Act of 1999, which established an annual governmentwide goal of awarding not less than 3 percent in total value of all prime contracts and subcontracts to SDVOSBs.

In December 2003, the Veterans Benefits Act was passed by Congress to build upon the 1999 measure. For instance, it allowed — but did not require — federal contracting officers to restrict competition to SDVOSBs and award a sole-source or set-aside contract under certain conditions, such as if it could be done at a fair market price.

In May 2004, the Small Business Administration (SBA) established a Service-Disabled Veteran-Owned Small Business Concern Program to implement the Veterans Benefits Act, establishing criteria and guidelines.

From Barton’s perspective, it was an encouraging string of initiatives — until he retired from his Veterans Administration job in December 2009 and ventured into the trying world of entrepreneurship and DLA Troop Support.

The military supply agency would represent little more than tantalizing but unrealized opportunities, Barton said. Take for example a $28 million contract for cold-weather jackets for which VE Source submitted a bid to provide in July 2010. Seventeen extensions later, the contract still has not been awarded, Barton said.

“It’s just bad bureaucracy,” he said, adding that few small businesses have the financial wherewithal to endure such a waiting game.

At a closed hearing in December held at Burlington County College in Mount Laurel, one of Barton’s partners, Christopher Neary, told the House Armed Services Committee’s Defense Business Panel that the DLA “is not doing right by the policy of the executive order for the SDVO small business program or the veterans themselves,” according to a copy of his remarks.

Long before that hearing, deficiencies with the SDVOSB procurement program had apparently registered at DLA headquarters in Fort Belvoir, Va., according to a July 2010 internal memo obtained by The Inquirer. In it, Nancy Heimbaugh, acquisition management director, and Peg Meehan, then-director of the office of small business programs, urged recipients to “reinvigorate your efforts to increase business opportunities for SDVOSB concerns.”

The memo concluded: “Our wounded warrior entrepreneurs deserve nothing less.”

Raise money and let the people decide how to spend it’ -

COUNCILS should be responsible for raising all the money they spend and have the power to introduce taxes, a think-tank will propose tomorrow.

Right-of-centre Reform Scotland said under its plan, local authorities, responding to local needs, could decide to adopt a property tax – such as council tax – a land value tax, an income tax, a consumption tax, or a basket containing a number of taxes.

The think-tank argues local accountability would be boosted, democracy would flourish and local elections would matter.

Reform Scotland chairman Ben Thomson said: “No-one likes paying taxes, however, what people really dislike more is seeing their money spent inefficiently and with little accountability.

“If more taxes were the responsibility of local councils then they would become more accountable to the communities they serve and create a real change of culture leading towards more effective government.

“Therefore, if a council felt their residents’ preferences and the local economic circumstances dictated that council tax should be abolished and replaced with an income tax, sales tax or something else entirely, they should be allowed to do just that.

“Councils would bear the risk, but also reap the reward of the decisions they make. Local people would be much closer to the decision-making process.”

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Foreign business groups support two-tiered wage system - Sun Star

Monday, May 21, 2012

MANILA -- Foreign business groups expressed support on Monday for the implementation of the two-tiered wage system, which includes additional compensation based on productivity, while opposing any legislated wage increase.

In a position paper on the minimum wage increase, the Joint Foreign Chambers (JFC) of the Philippines urged the other Regional Tripartite Wage and Productivity Boards (RTWPB) to follow the two-tiered wage system, which is now being implemented in Region IV-A (Calabarzon).

"(W)e support a new wage policy in the Philippines, the two-tiered wage system, which is being introduced as part of labor sector reform by the Philippine government, with the support of the International Labor Organization," JFC said.

Under the two-tiered wage system, the minimum wage is set close to the wage needed for an employee to receive compensation somewhat above the regional poverty threshold, while the second tier is additional compensation linked to productivity.

"Regional Tripartite Wage and Productivity Boards should begin to transition to the two-tiered wage system as soon as possible," JFC said.

"Setting wages through legislation is unnecessary and should be avoided," the group said.

Some militant groups have been pushing for legislated P125 across-the-board daily wage increase.

JFC also noted that the relentless upward adjustment in the minimum wages in the Philippines has made it as one among the countries in the region with highest minimum wage and could cause great harm in the domestic and export manufacturing sectors.

"Foreign direct investments (FDIs) seek investment-friendly destinations. Too often, FDI is going away from the Philippines, where minimum wages are high," JFC said, citing that FDIs in the country from 1970 to 2010 only reached to about $34 billion, averaging under $1 billion a year.

During the past four decades, JFC, quoting the United Nations Conference on Trade and Development (UNCTAD), said the other neighboring countries, received higher FDIs. Malaysia had a total of $112 billion; Thailand with $109 billion; Vietnam, $57 billion; and Indonesia, 49 billion.

"This low level of investment in the Philippines has resulted in significantly lower level of employment among Filipinos. Of course, there have been other reasons for low FDI, including corruption, inefficient infrastructure, high power costs, past political instability, red tape, and other high-cost production factors, all of which must be improved to make the Philippine economy more attractive to investors," the group explained.

JFC warned that with any further upward adjustment on the workers' wages, the Philippines could lose in the investors search for investor-friendly locations and therefore will be unable to create more new jobs.

"Manufacturers are increasingly relocating within Asia, especially from Japan, China, and Thailand for various reasons...this presents the Philippines with a huge opportunity to attract many of these companies and the hundreds of thousands, and even millions of jobs that go with such investments," it said.

"Let's take full advantage of this to help the Philippine economy grow twice as fast," it added.

JFC is composed of the American Chamber of Commerce, Australia-New Zealand, Canadian, European, Japanese, Korean, and the Philippine Association of Multinational Companies Regional Headquarters Inc. (SDR/Sunnex)

Business News: Pailton Engineering's going places - Coventry

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