 Morning News |
Widespread blackout hits country
(February 25, 2013) Major cities and towns across the country suffered total blackout after Mangla and Tarbela power houses tripped late on Sunday night, Aaj News reported.
Cities affected by the power outages included Karachi, Hyderabad, Nawabshah, Sukkur, Khairpur, Shikarpur, Mirpurkhas, Badin, Kashmore and Panno Aqil in Sindh, Rawalpindi, Islamabad, Faisalabad, Jhelum, Attock, Layyah, Rajanpur and Multan in Punjab, as many as 18 districts in Balochistan, including Quetta, Zhob, Jhal Magsi and Jaffarabad, as well as a large area of Khyber Pakhtunkhwa, including Peshawar.
The channel quoted an official as saying that efforts were being made to rectify the power situation, adding that it might take "four to six hours" to overcome the crisis.
According to a KESC handout, Karachi plunged into total darkness at around 11pm on Sunday night because of the tripping of its Bin Qasim power plant, housing the company's main power units. A KESC spokesperson said that the power supply to the Sindh metropolis was affected by a tripping in the Jamshoro circuit of the National Transmission and Dispatch Company (NTDC) and Wapda systems, adding that the power utility's top management was in contact with NTDC officials for resumption of power supply.
KESC said that its system tripped after a disturbance in the distribution system, caused by a "sudden disconnection of supply from the NTDC line". The KESC spokesperson said that the power company's team was "active to normalise the situation". Hubco power plant tripped because of a technical fault at 11:45pm on Sunday night, Secretary for Water and Power Rai Sikander said addressing an emergency press conference late in the night.
He said that because the entire national grid was interconnected, a cascading effect resulted in countrywide power system failure, including tripping at Mangla and Tarbela power houses.
Sikander said that power supply was restored to an area ranging between Peshawar and Kalashah Kaku near Lahore.
He said that the prime minister and minister for water and power had taken stern notice and ordered an inquiry into the incident. He said that the press conference had been necessitated because of widespread rumours. However, he did not specify.
Excessive government borrowing: massive contraction in private sector credit: SBP
(February 25, 2013) The net government borrowing from domestic sources stood at 92 percent of total credit extension during the last fiscal year, obstructing the implementation on monetary policy. This was pointed out by the SBP during a presentation to the Senate's Standing Committee on Finance.
A copy of the presentation, obtained by Business Recorder, shows a persistent increase in government financing requirements and as a result, the net government borrowing as a percentage of total credit has doubled since 2008. The net government borrowing was 56.9 percent of total credit during 2008 which increased to 75.6 in 2009 and in the subsequent year to 67.3 percent of total credit in fiscal year 2010. The net government borrowing increased to 78.6 percent of total credit in fiscal year 2011 and 92 percent in fiscal year 2012.
As a result of government borrowing, private sector credit as percentage of total credit was squeezed to 17.5 percent in 2012 from 39.8 percent in fiscal year 2008. The government financing requirements has increased to Rs1,237 billion, excluding Rs391 billion for power sector and commodities in the fiscal year 2012, up from Rs584 billion in 2008 and private sector credit squeezed to Rs235 billion in the last fiscal year, down from Rs408 billion in 2008.
The SBP also listed constrained foreign financial inflows, scheduled large debt repayments and rising burden of oil import because of high oil prices as factors for external sector weakness.
Oil imports rose to $11.7 billion per annum during fiscal year 2008-12 from an average $4.9 billion per annum during fiscal year 2003-2007 and oil imports are projected to be around $14.8 billion.
According to SBP, oil price surged from around $41 per barrel in fiscal year 2005 to $112 per barrel in fiscal year 2012 and is expected to remain at around $110 per barrel on an average in fiscal year 2013.
According to the Central Bank, fiscal weakness with an average of about 6 percent fiscal deficit in recent years was largely financed domestically, including borrowing from SBP, which is hampering monetary policy in a major way.
Services sector's trade posts $75 million surplus
(February 25, 2013) Followed by Coalition Support Fund (CSF) payment, the country's services sector trade posted $75 million surplus in the first seven months of current fiscal year 2012-2013 (FY13). The services sector's trade was facing high deficit during the same period of last fiscal year, 2011-2012, owing to sluggish exports' growth and slow foreign inflows particularly CFS, which were withheld by the US after tension with Pakistan.
The US released two tranches of the much-awaited CSF payments, when Pakistan resumed Nato supplies. These inflows have supported the services sector's trade to post a surplus account during current fiscal year.
Since July 2012, the country has received an amount of $1.8 billion on account of CSF from the US. First tranche of $1.118 billion was received in August 2012 and another payment of $688 million in December 2012. Following these payments services' sector trade is presenting an improved picture and its deficit has turned into surplus.
According to the State Bank of Pakistan (SBP) services' sector trade posted a surplus of some $75 million along $4.5 billion exports and $4.4 billion imports during July-January of FY13 as against a deficit of $1.664 billion in corresponding period of last fiscal year, when its exports were $3 billion and imports $4.6 billion.
The detailed analysis revealed that followed by CSF inflows services sector exports are on the rise and with a healthy increase of 50 percent or $1.523 billion, it reached $4.53 billion mark in July-January of FY13 as compared to $3.007 billion in the same period of FY12. Services sector imports have registered a decline of 5 percent during the period under review. Overall services imports decreased to $4.455 billion during first seven months of FY13 against the imports of $4.671 billion in corresponding period of last fiscal year, depicting a decline of $216 million.
"Surplus services trade is a positive indication for external account as the higher current account deficit is already a concern for the policy makers," analysts said. This will help in reducing the balance of payment deficit, besides injecting million of dollars in the depleting foreign exchange reserves.
The country's foreign exchange reserves are already on decline due to debt and current account payments. With a fall of over $2 billion, the country's total liquid foreign reserves have decline to $13.058 billion in the third week of February 2013 from $15.236 billion in June last year.
They said, however, high payments on account transportation, travel, financial services, information technology and government services were still a threat for improved services trade as previously these heads were responsible for a higher services trade deficit. "Although, services trade has performed well in initial months, but it is believed that this trend will not continue in future," they added.
Month on Month basis, the services trade has registered a deficit of $181 million as services exports stood at $365 million against $546 million imports.
PSO's L/C payments: finance ministry to release Rs 15 billion today
(February 25, 2013) The Ministry of Finance is to release Rs15 billion to Pakistan Sate Oil (PSO) on Monday (today) to clear its Letters of Credit (L/Cs) payments to international fuel suppliers.
This is the second release in less than a week to PSO which received Rs10 billion on Wednesday, February 20. Sources said that the new Finance Minister Salim Mandviwalla assured PSO that there would be no delays in the release of funds. Sources said that Salim Mandviwalla has assured PSO management of support on the matter of outstanding payments against power sector and indicated that a long term plan to clear PSO's payments has been finalised.
Several Finance Ministry officials, however, expressed serious concern over the resource drain implicit in such a policy that would fuel the budget deficit to unsustainable levels.
During the current month, PSO has to pay Rs55 billion to Kuwait Petroleum Company (KPC) and other international fuel suppliers; the government has so far has released only Rs28.6 billion. It has to clear L/Cs worth Rs46 billion during next month.
"The Finance Minister has taken the issue with President Asif Ali Zardari and Prime Minister Raja Pervez Ashraf, and both have directed the Finance Ministry to make all possible efforts to resolve PSO's financial crisis. During March, we have to clear Rs46 billion on account of L/C payments and the Finance Ministry has assured us of all out support", the source revealed.
The problem is exacerbated by influential consumers, including most of the public sector entities, which refuse to clear huge backlog of utility bills to power distribution companies. As a result power producing companies like Water and Power Development Authority and others have failed to pay back dues to PSO for the fuel they use compounding the inter-circular debt.
In the last week of January, PSO management requested the federal government for Rs10 billion; on February 1, the government released Rs8 billion and Rs10.5 billion on February 10, the source maintained.
According to official documents, at present, total receivables of PSO from power and other sectors stood at Rs141.56 billion against Rs155 billion on February 8. Wapda has to pay Rs50.8 billion to PSO, Rs55.86 billion to the Hub Power Company (Hubco), Rs10.43 billion to Kot Addu Power Company (Kapco), Rs1.9 billion to Pakistan International Airline (PIA), Rs424 million to Oil and Gas Development Company Limited (OGDCL), Rs9.1 billion to Karachi Electric Supply Company (KESC), Rs476 million to National Logistics Cell (NLC), Rs1.5 billion to Independent Power Plants (IPPs) and Rs 1.2 billion to Pakistan Railways.
The company is to receive Rs1.62 billion on account of audited price differential claim of High Speed Diesel (HSD), Rs 3.4 billion on account of price differential on Low Sulphur Fuel Oil & High Sulphur Fuel Oil (LSFO/HSFO), Rs1.36 billion on account of price differential on imported PMG and Rs3.91 billion price differential under GLMP.
PSO's total payables to local refineries stands at Rs35.2 billion including Rs21.9 billion to Pak-Arab Refinery Limited (Parco), Rs1.22 billion to Pakistan Refinery Limited (PRL), Rs 129 million to National Refinery Limited (NRL), Rs9.64 billion to Attock Oil Refinery Limited (ARL), Rs1.15 billion to Bosicor and Rs1.6 millions to others.
PSO has to pay Rs118.9 billion to KPC and other international fuel suppliers, of which Rs22.6 billion is currently due or overdue. While in the next month, the company has to pay Rs35 billion on account of L/C payments.
Nandipur power project sovereign guarantee: summary not discussed in ECC meeting
(February 25, 2013) The Economic Co-ordination Committee (ECC) of the Cabinet in its meeting on February 22 this year reportedly did not take up a summary on grant of GoP sovereign guarantee of Rs 23.496 billion for the much-delayed 425-megawatt Nandipur Project, officials told Business Recorder on Sunday.
The sources said the Engineering Procurement and Construction (EPC) contractors had already served a contract termination notice to Water and Power Development Authority (Wapda) because of delays in decision-making at the government level. This issue is already in the Supreme Court and a Commission accused former Law Minister Babar Awan of delay in clearing some issues.
According to official documents, additional funding of Rs 23.496 billion is needed to be arranged from a syndicate of local banks for resuming the construction activities and to complete the remaining work of the Combined Cycle Power Plant (CCPP), Nandipur.
Financing facilities from the Export Credit Agency (ECA) could not materialise because of an inordinate delay in the fulfilment of various conditions.
Moreover, a waiver of demurrage and detention charges up to June 30 this year against equipment and material lying at Karachi ports is also required for their release and shifting to site.
As per revised PC-1 (under the approval process), the estimated cost of project is Rs 57.380 billion, out of which Rs14.734 billion has been utilised from Pepco/ NPGCL's own resources. Remaining amount of Rs 42.646 is to be funded through debt of which Rs 19.150 billion has already been committed by local banks' syndicate. Issuance of GoP guarantee against this amount has already been approved by the ECC. Balance debt of Rs 23.496 billion is yet to be arranged either from local or foreign banks.
The sources said against estimated amount of demurrage and detention charges till June 30, 2013, waiver of Rs1.729 billion up to August 31, 2012 has already been accorded by the ECC of the Cabinet. The balance amount of the charges is Rs786 million up to June 30, 2013 which also requires an ECC waiver.
"EPC contractors have served a notice of termination of contract. However, negotiations are underway to remobilize the contractors," the sources said. ECP contractors had served termination notice in August last year. The Ministry of Water and Power has also requested the ECC to grant GoP sovereign guarantee for Rs 23.496 billion in favour of local and/ or foreign banks/ financial institutions against additional financing facility.
The sources said that this issue was expected to be taken up by the ECC in its upcoming meeting to be chaired by the new Finance Minister.
FX & Gold - weekly outlook - February 25-March 1
(February 25, 2013) After an eventful week with Germany earlier responding well to economic measures taken by their economic mangers, it is once again under pressure as German economy was unable to maintain the required growth pace. Other eurozone economies too are struggling to perform, as later the release of economic numbers suggests that a difficult business environment could prolong.
Last week's European GDP data have already shown a substantial decline. High unemployment rate already peaking to 12.2 percent or over 19 million while job prospects get a setback due to demand for severe austerity measures that do not provide growth space and help revenue collection grow.
Europe is once again faced with difficult times, as the life of its window-dressing policies is clearly too short. It has been proved that window dressing is a temporary solution and not a solution to the problem. Some of the region's minor economies may have found breathing space, but the European Commission's growth report has definitely exposed all the recent good talking.
France is clearly off its 3 percent deficit target, spending more and is unable to meet its revenue/savings target. Moreover, Spanish and Italian response could be widely off the target. The EU, which is already aware of slow growth, has no choice and may consider giving an extra time to meet deficit target.
Sensing the economic imbalance all over the region, the European Commission has clearly mentioned in its report that economy will contract. According to it, contraction of 27-nation economy is due to tighter lending conditions.
Surprising, there is no evidence of credit growth despite below one-percent bank rate and over euro one trillion injections in the European banking system, which means money is spent for growth purpose. It is surely because of faulty policies, which are never questioned at an appropriate forum due to whatever reasons.
All above factors in the eurozone region have once again strengthened the prospect of another rate cut in the refinance rate, but it is going to be another futile rate cut exercise unless cheap money reaches genuine businesses or the individuals that can help spur growth in consumer business.
The Fed's monetary policy committee meeting was another big event of the week that may have turned the table, as we can sense a change in Fed members' dovish stance. Quite a few members are sounding uncomfortable with its current ongoing QE policy. Therefore, the discussion on Fed's bond purchase programme will continue in days to come. This could also means that the Fed members that have decided to extend its monthly asset purchase up to USD 85 billion fears about the risk involved, though some of the members were of view that end to Fed's asset purchase too could soon cause damage to the economy.
It all suggests that in future cracks could appear on the subject of continuation of Fed's QE policy and hence, a downward adjustment of Fed's asset purchase amount is surely on the cards. This does not mean that the Fed could be done with their asset purchase programme before they reach the unemployment target of 6.5 percent. But I do see trouble when the Fed decides winding of its asset purchase programme if the inflation pressure continues to grow at a faster pace.
However, this week Fed Chairman Ben Bernanke will be appearing in front of the Senate's Banking Committee and his remarks will be of vital importance, which should help in providing guidance to the market because of the discomfort shown by many of the Fed members on Fed's monthly $85 billion bond purchase programme. In order to arrest volatility, Ben is likely to seek to create a balance through his talk, which may not be easy to defend, as he is good for one vote out of 12.
GOLD $1581.20 = Last week, as per forecast, we saw a perfect fall in the price of gold hitting the lows of $1555 before making a bounce back. This week, we could witness some choppy sessions due to Italian elections and the Fed Chairman's appearance in front of the Senate's Banking Committee. If Silvio Berlusconi is able to set up or support a government there is a possibility of unrest in the region and there could be three beneficiaries: US Dollar, US Treasuries and gold. Similarly, his loss will encourage US Dollar selling USD-based asset.
Based on above estimates for gold, resistance level is $1590-95, which is likely to hold for a drop or else a break would risk for a test of $1620-50 zones. However, I remain bearish for gold; it needs to fall below $1558-62 for a test of $1540-45 zones or probably $1525.
EURO @ 1.3188 = It all points to a weak euro trend unless Berlusconi loses election and European currency is blessed with some good news. Banks in Europe that obtained cheap LTRO funding have already indicated that they will be paying back less money, which is against market expectations. So there is every reason for a weak euro stance. Picking the top to sell the European currency should be preferred strategy.
The levels to watch on the upside is 1.3350. Only break here would encourage for a test of 1.3480. More dips could be a possibility if 1.3010 surrenders. Range for the week: 1.2950-1.3480;
GBP @ 1.5160 = Pound Sterling that did not get time to take a breather was trying to make a modest comeback and while it was inching up, Moody's surprised the market by downgrading the UK from its "AAA" credit ratings to "AA1". Earlier in the week, speculation was that S&P would be the first to act. I think BOE's minutes made it easier for the rating agencies to get their job done.
I am expecting a volatility and a choppy trading session, as market will try to determine the trend. Next support level is at 1.5010-20 and only a break could target 1.4880. However, a move beyond 1.5250 is required for a test of 1.5350-80. Range for the week: 1.4850-1.5350;
JPY @ 93.39 = an announcement of the new BoJ Governor is expected. This appointment is vital due to Japanese government's keenness of getting a dovish BoJ governor nominated so that he can support present government extremely loose monetary policy approach and Prime Minister Abe's visit to the US where apart from Japan-China island conflict, Japan's currency stance of competitive devaluation could be questioned.
As long as 94.80 get protection buying of Japanese currency should provide an opportunity to book profit. Unless 92.10 surrenders occasional bounce back will be seen as sellers of Yen will emerge on dips. However, a push below could generate some more buying of JPY for 90.50. Range for the week 90.50 - 95.80;
AUD @ 1.0317 = There is no change in sight as Aussie will struggle to make a big upward move, as threats of rate cut are looming. Only a break above 1.0380-90 levels will encourage for 1.0450. But a risk of a fall will increase on a break of 1.0220-40 once for a possible test of 1.0170. Range for the week: 1.0170-1.0450.
Italians vote in crucial election for eurozone
(February 25, 2013) Italians voted on Sunday in one of the most closely watched and unpredictable elections in years, with pent-up fury over a discredited elite adding to concern it may not produce a government strong enough to lead Italy out of an economic slump.
The election, which concludes on Monday afternoon, is being followed closely by investors; their memories are still fresh of the potentially catastrophic debt crisis that saw Mario Monti, an economics professor and former bureaucrat, summoned to serve as prime minister in place of Silvio Berlusconi 15 months ago.
A weak Italian government could, many fear, prompt a new dip in confidence in the European Union's single currency.
Opinion polls give the centre-left a narrow lead but the result has been thrown completely open by the prospect of a huge protest vote against the painful austerity measures imposed by Monti's government and deep anger over a never-ending series of corruption scandals. Berlusconi's centre-right has also revived.
"I'm not confident that the government that emerges from the election will be able to solve any of our problems," said Attilio Bianchetti, a 55-year-old builder in Milan, who voted for the anti-establishment 5-Star Movement of comic and blogger Beppe Grillo.
The 64-year-old Grillo, heavily backed by a frustrated generation of young Italians hit by record unemployment, has been one of the biggest features of the last stage of the campaign, packing rallies in town squares up and down Italy.
"He's the only real new element in a political landscape where we've been seeing the same faces for too long," said Vincenzo Cannizzaro, 48, in the Sicialian capital Palermo.
Italians started voting at 8 am (0700 GMT). Polling booths will remain open until 10 pm on Sunday and open again between 7 am and 3 pm on Monday. Exit polls will come out soon after voting ends and official results are expected by early Tuesday.
Snow in northern regions is expected to last into Monday and could discourage some of the 47 million people eligible to vote in Italy to head out to polling stations, though the Interior Ministry has said it is fully prepared for bad weather. Monti and his wife cast their votes at a polling booth in a Milan school on Sunday morning and centre-left leader Pier Luigi Bersani, the leader opinion polls suggest will have to form a new government, voted in his home town of Piacenza.
A small group of women's rights demonstrators greeted former prime minister Berlusconi when he voted in Milan. They bared their breasts in protest at the conservative leader, who is on trial at present for having sex with an underage prostitute.
Whichever government emerges from the election will have to tackle reforms needed to address problems that have given Italy one of the most sluggish economies in the developed world for the past two decades. But the widespread despair over the state of the country, where a series of corruption scandals has highlighted the stark divide between a privileged political elite and millions of ordinary Italians, has left deep scars.
"It's our fault, Italian citizens. It's our closed mentality. We're just not Europeans," said Luciana Li Mandri, a 37-year-old public servant in Palermo.
"We're all about getting favours when we study, getting a protected job when we work. That's the way we are and we can only be represented by people like that as well," she said.
ANP urges army, Taliban to announce ceasefire
(February 25, 2013) The Awami National Party (ANP) senior leader Senator Haji Adeel has said that his party was ready to forgive Taliban, the bloodshed of its martyrs for the sake of peace. Talking to media persons here on Sunday, Haji Adeel urged Taliban and military to announce ceasefire and hold dialogues which seems to be only way to resolve the issue.
He said that Taliban have sought the guarantee of Maulana Fazlur Rehman, Mian Nawaz Sharif and Syed Munawar Hassan for dialogues but the question arises that who will provide their guarantee that they would follow the agreement chalked out after consultation.
To a question regarding formation of new provinces, the ANP leader said that he has objection over paragraph 1 of the bill tabled for constitution of Bahawalpur Southern Punjab province. The paragraph says that area of any province can be increased or decreased in accordance with the need which could lead to new debate and will give rise to provincial hatred, he added.
Haji Adeel said that if the said paragraph was implemented then it was feared that the Muttahida Qaumi Movement (MQM) would seek to separate Karachi and Hyderabad from Sindh province.
US regulators examine if big banks evade payday loan laws: The New York Times
(February 25, 2013) Federal and state regulators are examining whether some of the largest US banks are helping Internet-based lenders evade state laws that cap interest rates on payday loans, The New York Times said on Sunday. Citing several people with direct knowledge of the matter, the newspaper said the FDIC and the Consumer Financial Protection Bureau in Washington, D.C. are examining the role of banks in online payday loans.
It also said Benjamin Lawsky, who heads New York State's Department of Financial Services, is investigating how banks enable online lenders to make high-rate loans to residents of New York, where interest rates are capped at 25 percent.
Payday loans, typically a few hundred dollars in size, enable cash-strapped borrowers to obtain quick funds to tide them over until their next paychecks.
But the loans can carry effective annual interest rates that reach well into three digits. Some consumer advocates consider the loans a means to take advantage of financially desperate Americans, who nonetheless shell out $7.4 billion a year for them according to a February 20 study by the Pew Charitable Trusts.
The newspaper did not identify the banks being examined.
But it said that while large banks such as Bank of America Corp, J. P Morgan Chase & Co and Wells Fargo & Co do not make the actual loans, they do let lenders that do to withdraw payments from customers' accounts, even if customers have already begged them to stop.
According to the newspaper, 15 US states ban payday loans, but lenders are setting up online operations in places such as Belize, Malta and the West Indies to more easily evade the caps.
Representatives of J. P Morgan, Bank of America, Citigroup Inc and Wells Fargo, the four largest US banks, had no immediate comment or did not immediately respond to requests for comment.
The FDIC, the CFPB and Lawsky's office did not immediately respond to requests for comment. The newspaper said a Bank of America spokeswoman said that bank has always honoured requests to stop automatic withdrawals, a J. P Morgan spokeswoman said that bank is working to resolve open cases, and Wells Fargo declined to comment.
"YOU NEVER CATCH UP"
According to the Pew study, Americans on average pay $520 in finance charges for payday loans that average just $375.
Many of these borrowers find the process a never-ending cycle that leaves them in the same financial binds where they started, according to the study.
Fifty-eight percent of borrowers reported persistent problems paying their bills, and 41 percent found they needed help to repay the loans - such as by borrowing from friends or family, selling personal possessions, or taking out other loans. Moreover, 27 percent of payday loan borrowers said the loans caused them to overdraw their checking accounts - enabling banks to charge fees for those overdrafts.
"It seems like you never catch up, and it, it's just check-to-check, and something breaks down, and the house needs work, kids have school, just never catch up," a storefront borrower in Chicago was quoted in the report as saying.
African leaders sign deal to end eastern Congo conflict
(February 25, 2013) African leaders signed a UN-mediated deal on Sunday aimed at ending two decades of conflict in the east of the Democratic Republic of Congo and paving the way for the deployment of a new military brigade to take on rebel groups.
Congo's army is fighting the M23 rebels, who have hived off a fiefdom in North Kivu province in a conflict that has dragged Congo's eastern region back into war and displaced more than half a million people.
UN Secretary-General Ban Ki-moon, who witnessed the signing in the Ethiopian capital Addis Ababa, said he hoped the accord would bring "an era of peace and stability" for Congo and Africa's Great Lakes, and added that he would soon name a special envoy for the region.
The Great Lakes area, where colonial era borders cut at random through ethnic groups has in the last 20 years been a crucible of conflict that has launched multiple uprisings and invasions.
"It is only the beginning of a comprehensive approach that will require sustained engagement," Ban said of the accord, which did not include any representatives of rebel groups.
The agreement was signed by leaders and envoys of 11 African countries, including Rwanda and Uganda, which have been accused by UN experts of stoking the rebellion. They deny the accusation. Speaking after the signing, Ugandan Vice President Edward Ssekandi said the deal could speed up the deployment of a new, UN-flagged intervention force to take on the rebels. "We should be able to fast-track the ongoing consultation so that the force with a robust mandate and capability is put in place," he said.
African leaders failed to sign the deal last month after a disagreement over who would command the force.
A fresh rebellion launched in May 2012 by the M23 group has brought more fighting and displacement to eastern Congo. In November the rebels seized the provincial capital Goma, but left the city to open the way for peace talks, which are being held in neighbouring Uganda.
Those separate talks between Congo's government and the rebels are aimed at reaching an agreement on a range of economic, political and security issues, including amnesty for "war and insurgency acts", the release of political prisoners and reparation of damages due to the war.
But the rebels have broadened their goals to include the removal of Kabila and "liberation" of the entire Congo.
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