RTC Director

Cuban president says economic changes will help sustain socialism

Cuban President Raul Castro told legislators Saturday that the country's economy would undergo significant change in the coming year, but added that the measures aimed to bolster socialism -- not make Cuba a capitalist nation.

Castro has begun a radical shakeup of the Soviet-style economic model, previously announcing the elimination of one million state jobs and the expansion of private businesses. Cuba's National Assembly tapped him as the Caribbean nation's president in 2008, ending nearly five decades of rule by his older brother Fidel Castro.

As part of the plan, Cubans are being allowed and even encouraged to go into business for themselves, working as barbers, plumbers and even birthday clowns as the government tries to boost productivity.

"The measures we are applying, and all of the changes that are necessary for the modernization of the economic model, are aimed at preserving socialism, strengthening it and making it truly irreversible," said Castro, according to a copy of his speech published by the state-run website Cubadebate.

Castro has called for debates across the country before April, when the Communist Party holds its first congress in almost 14 years at which they could approve his plan.

In the speech, he insisted there should no longer be a stigma attached to working in the private sector.

"Many Cubans confuse socialism with handouts and subsidies, equality with egalitarianism," said the president, who spoke at the close of the country's National Assembly in Havana, according to Cubadebate.

The government expects the Cuban economy to grow 3.1 percent next year, up from a projected 2.1 percent growth in 2010.

"We can assure you that, this time, there will be no going back." said Castro.

by RTC Director

US tax cuts: Obama signs compromise deal into law

US President Barack Obama has signed into law a compromise tax bill agreed with the Republicans, averting income tax rises for millions of Americans.

Mr Obama said the $858bn (651bn euros; £542bn) package was "real money that's going to make a real difference".

The deal also extends benefit payments for some of the longer-term unemployed for 13 months.

The bill passed over objections from House Democrats about tax breaks for wealthy Americans.

Mr Obama said compromise was needed to win Republican support. The $858bn package was passed by 277 votes to 148 in the House of Representatives.

"There probably is nobody on this floor who likes this bill," House Majority Leader Steny Hoyer, a Maryland Democrat, said.

"The judgment is, is it better than doing nothing? Some of the business groups believe it will help. I hope they're right."

Under a proposal the White House crafted with Republicans and announced last week, tax cuts enacted by President George W Bush in 2001 and 2003 and set to expire this year would be extended at all levels - including for the highest-earning Americans.

In addition, inheritance taxes affecting only the wealthiest Americans would be lowered and payroll taxes would be cut for a year in a bid to spur consumer spending.

Mr Obama and his Democratic allies had vigorously opposed allowing low tax rates for wealthy Americans to continue at a time of massive budget deficits, but Senate Republicans rejected Mr Obama's preferred approach and the president said he saw no option other than compromise.

When Mr Obama announced the deal last week he said it was the only way to avoid the damage to American families and the economy that would ensue if taxes were allowed to rise and long-term unemployment benefits were not extended.

Congressman Anthony Weiner, a liberal New York Democrat, said on Friday that Republicans had out-negotiated Mr Obama, describing them as "better poker players".

As liberals in Washington have railed against the deal, some conservatives also took up opposition.

They noted the bill adds to the US budget deficit, while also objecting that the low tax rates - which have the biggest impact on the deficit - are only temporary.

by RTC Director

Bangladesh investors riot over stock market fall

Hundreds of angry investors have staged protests in the Bangladeshi capital, Dhaka, after the stock exchange saw its steepest ever fall in a day.

Reports said they threw bricks at police, marched in the streets shouting slogans, and staged a sit-down protest.

Shares in the stock exchange suffered large falls within hours of opening on Sunday as panicked investors went on a selling spree.

The index ended the day down by 552 points or 6.72%.

It has been on a rollercoaster ride in recent weeks, hitting a record high on 5 December, having climbed 80% since the start of the year.

But on 8 December it nosedived, prompting protests in Dhaka and towns elsewhere.

Slogans

On Sunday, at least 500 investors hurled bricks at law enforcement officers near the Dhaka Stock Exchange and the Securities and Exchange Commission (SEC) offices, said local police chief Tofazzal Hossain according to AFP news agency.

"They chanted slogans against the government and the regulators, and marched through the busy roads in the Motijheel Commercial area, halting traffic. They also staged a sit-in at the SEC building," he said.

Analysts say Sunday's index fall was triggered by a central bank interest-rate hike.

The regulators have also taken measures in recent weeks to restrict money supply into the share market after concerns that stocks were overvalued.

The move forced big institutional investors to withdraw from the market, triggering panic among individual investors.

The rising value of the stocks in recent years has attracted hundreds of thousands of small-scale or retail investors in Bangladesh, says the BBC's Anbarasan Ethirajan in Dhaka.

It became a popular investment for ordinary people, often providing higher returns than bank deposits and savings.

Regulators have now agreed to relax some of the conditions, hoping that will increase the money supply and stabilise the market, he says.

by RTC Director