In this issue:

Soaring Oil Prices Harm Asian Economies

Oil Cartels Wrack Up Record Profits

UK Profit Decline Threatens Pensions, Jobs, Schools

From Volume 3, Issue Number 45 of EIR Online, Published Nov. 9, 2004

World Economic News

Soaring Oil Prices Harm Asian Economies

The soaring cost of oil, which is still above $50 per barrel, has gouged the national economies and treasuries of several Asian nations, some of which are the least able to afford it. Although an oil producer, Indonesia also provides fuel subsidies to hold down the price of oil to the equivalent of 76 cents (U.S.) to the gallon. Struggling to subsidize its citizens' oil costs, the Indonesian government has quadrupled its allocations for fuel subsidies, to $6.5 billion. Malaysia plans to spend $3.7 billion on such subsidies over the next 12 months, which is substantially more than it normally spends.

In India, which imports three-fourths of the oil it uses, the state-owned oil company estimates it will spend $27 billion for oil imports—up 50% from $18 billion it spent in 2003.

Oil Cartels Wrack Up Record Profits

ExxonMobil announced that for the third quarter of 2004, its profits jumped to $5.68 billion, an increase of 56% from the level of the comparable quarter of 2003. Shell Oil, an Anglo-Dutch asset, reported third-quarter profits reached $4.4 billion, a 70% rise from the comparable quarter of 2003, while British Petroleum unveiled profits of $3.9 billion, an approximate 50% rise from the comparable period of 2003. These three companies are at the top of the House of Windsor-pivoted raw materials empire, which extends through marketing and distribution.

UK Profit Decline Threatens Pensions, Jobs, Schools

A fall in profits for British manufacturers, caused by soaring prices of oil and metals, could hit pensions, jobs, and schools, the Confederation of British Industry (CBI) warned in a report Nov. 1. The amount enterprises make as a share of GDP has shown a "marked and worrying" decline since 1997, the CBI said. CBI director general Digby Jones warned: "We have been through a period of profitless prosperity with firms not making as much money as in previous economic upswings. Ministers and voters alike must realize this is not merely a business issue.

"With a significant proportion of all corporate profits going to pension funds and insurance companies as shareholders, poor profits mean lower pensions, less tax and fewer schools and hospitals."

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