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Burma upset at loss of grant
India to review freeing of FDI
Jo Johnson, FT Syndication Service
11/21/2005

NEW DELHI: India's Communist-backed government shied away late last week from approving a sweeping liberalisation of foreign direct investment (FDI) rules that would have kickstarted a stalled programme of economic reforms.
The cabinet referred to a group of ministers for further review a commerce ministry proposal to allow 100 per cent FDI in a range of sectors, including airport construction, oil and gas infrastructure and cash-and-carry wholesale trading.
Designed by Kamal Nath, commerce minister, the package also recommended allowing unlimited FDI in the mining of coal, lignite and diamonds, and in the cultivation of important plantation crops such as coffee, tea and rubber.
"It's big news, as this is the first time that such a specific sector review of foreign direct investment has been undertaken," said a senior commerce ministry official, adding that the referral would not "necessarily" mean the package would be delayed.
India attracted $5.5bn (4.7bn, euro3.2bn) in FDI in 2004-05, an increase of 18 per cent, but less than a 10th of the inflows into China.
The government estimates that $150bn needs to be invested in upgrading the country's infrastructure over the next 10 years.
Another FT Syndication Service report by Amy Kazmin from Rangoon adds: Burma's health minister has strongly criticised the Global Fund for HIV/Aids, tuberculosis and malaria for its recent decision to terminate $98m (euro84m, 57m) in health grants for the military-ruled country, calling the move "uncalled for, and unwarranted".
Dr Kyaw Myint, a UK-trained medical doctor, expressed deep disappointment at the way the fund had treated Burma, saying the abrupt pull-out would hit "people on the streets" who face the three killer diseases. "Whoever pulled the trigger for this termination will be held morally responsible for the plight of these people, who are going to suffer for want of money," he told the Financial Times.
The Global Fund stunned Burmese health officials, many European donors and international aid agencies when it declared in August it was terminating its planned $98m, five-year grant for Burma, one of the largest health initiatives ever envisioned for the impoverished country.
In its explanation, the fund -- a Geneva-based public-private partnership that is supposed to dispense health aid regardless of political considerations -- cited new travel restrictions on foreign aid workers that it said would make it impossible adequately to monitor use of the grants.
But Dr Kyaw Myint said the temporary travel restrictions, which he and international aid workers say have been eased, were insufficient reason to cancel a programme with vast implications for many lives.
"They should have consulted us, or at least give us warning signals that we are falling behind, so we can improve it, and try to satisfy their needs. But they didn't do that. They just terminated - just chopped us off."
Many Rangoon-based foreign aid workers believe the Global Fund wanted an excuse to withdraw from Burma after sustained pressure from hardline US congressmen and activists, who opposed the health aid programme on the grounds that it could boost the credibility of the military government. The US is the biggest single donor to the Global Fund.