Fiji continues to suffer: Hidden in the upbeat economic update from the Asian Development Bank this week on the improving outlook for Asia, was the grim news on the region’s basket case, Fiji. While the ADB said Asia’s developing economies this year will grow by 7.5%, with the region on track for a “robust recovery,” Fiji’s economy will contract this year for a third year in a row. It’s the downside of the coup and the dead hand its on the country’s economy, aided by the global recession and credit crunch. While Papua New Guinea is about to boom (which will cause another set of problems) thanks to the surge in oil, copper and gold prices, plus the start of the $US15 billion LNG project of Exxon and Oil Search, Fiji will languish, its economy deprived of capital for revamping the sugar industry and other vital infrastructure. The ADB looks at 44 countries stretching from the former Soviet states of Central Asia to some Pacific islands, but excludes developed countries such as Japan, Australia and New Zealand.  In its review, the ADB said “The pace of economic contraction accelerated last year owing to damage done by floods, the impact of the global recession on tourism and exports, and political uncertainties. Production of sugar, a major export, fell for a third year.” Reforms involve the military trusting the people and other institutions and foreign advice. That is not going to happen. Ordinary Fijians continue to suffer as a result.

Athens in spring time: Guess who’s dropping into Athens next week for a chinwag about debt, loans and interest rates? The IMF and the European Commission. Greece has blinked (“capitulated” said the Financial Times) to the reality that it can’t go it alone any more. The market thinks, knows it’s a basket case and will continually drive up the cost of its debt, forcing it to pay more until it breaks and defaults or does something drastic. So now it is going to start talking to the EC and the IMF about accessing the €30 billion of standby facilities said to be lurking around Brussels and Washington. Greece says it hasn’t decided, but that stance, like all of Greece’s positions this year, will be overtaken by reality. What seems to have brought Greece to the talks was a surge in the cost of its 10-year bonds to more than 7% again in the markets Thursday, which pushed the premium over German government debt past 4.5%. It will be the first IMF bailout of a eurozone economy when it happens. Will it be the last?

What are friends for? Noble Group of Hong Kong started the noisy takeover battle for Macarthur Coal, which has evolved into at least five possible deals, with bids in the billions being offered. There’s been a flurry of statements, odd-ball comments from one of the parties, with the rumoured presence of “Swiss giant” Xstrata in the wings (even BHP Billiton’s name was trailed through one report last weekend). But what fascinates some in the markets is the presence of high-profile local PR advisers to one of the minor parties, Gloucester Coal. Sydney-based Sue Cato and her firm Cato Counsel have spuiked for Telstra, Pacific Brands and a host of other companies. So why does a company 87% owned by one shareholder (Noble), see the need for such a high-powered spinner when there’s going to an uncontested, high-priced takeout of its minorities if the Macarthur Coal deal doesn’t happen? Gloucester is nearly Noble, given the near absolute control the Hong Kong company has. By the way, Macarthur has been handling all its communications internally, and doing it well, advising the sharemarket and shareholders promptly in announcements for everyone to read, and without spin.

Noble Group: The Hong Kong-based trading group started the bidding in December with an asset-for-shares swap involving Gloucester being bought by Macarthur, in exchange for a 24.6% stake for Noble, plus some other asset deals. Noble seems to be content to handle its side of the spinning out of Hong Kong via its website. Peabody, the US coal giant, which last night lobbed in its third offer, of $16 a share for Macarthur, has been content to use its website for announcements as well. All fairly simple. But Gloucester Coal, a sideshow, sees the need for a high-powered flack like Cato? Look for the answer in a network. The chairman of Gloucester is James Mackenzie, who is also chairman of Pacific Brands. Cato was employed by Pacific Brands during last year’s move offshore controversy. MacKenzie is also chairman of Mirvac, but so far no sign of  Cato there. Noble controls Donaldson Coal, which was also going to be sold into Macarthur, along with Gloucester. But that got knocked on the head earlier this year, it was one deal too much for Macarthur. Mackenzie was also a director of Donaldson Coal and at one stage was chairman, but with his other chairmanships seem to have got in the way.

Cement: In fact Mackenzie is a very busy director, with some serious boards, but the possible takeover of Gloucester might make him available for another slot. So is that why his name was mentioned as a possible director of Adelaide and Brighton Cement in a small contretemps between that company and its biggest shareholder Barro Group of Melbourne (which owns 23%)? Mackenzie was named as a possible second director to represent Barro in a March ASX filing that would have seen a special meeting of Adelaide and Brighton called to appoint him to the board. A notice to the ASX last week revealed this stand-off had ended with Adelaide and Brighton appointing search consultants to find two new directors. Mackenzie is also on the board of Melco, the Macau casino group that James Packer’s Crown has a stake in, and has been rumoured to be a possible seller.

Peabody: So with the takeover battle for Macarthur Coal still running (and with next Monday’s shareholder meeting in doubt after Peabody’s $16 a share offer), the US company’s first quarter profit announcement and briefing will draw a lot of attention in Australia next week. Peabody releases its first quarter profit on April 22 and hold a briefing by teleconference that night at midnight, Australian time. That will mean a long night or early morning for a host of people if Peabody is still in the battle for Macarthur. The Macarthur meeting has been postponed until next Monday, April 19, which is when shareholders in Noble Group are due to meet in Hong Kong to ratify their part of the first deal, which kicked off the whole deal. This thing could change again later today. Oh the fees!

Elmo walks the plank: Sigma Pharmaceutical’s managing director and chief executive Elmo De Alwis is leaving the company, falling into the black hole of Sigma’s balance sheet after the $389 million loss for 2009-10 (and $424 million of write-downs). Next the chairman Dr John Stocker? And what about audit committee head Linda Nicholls, one of the new directors on Fairfax Media. Surely the head of the audit committee needs to share in any blame being handed out (as does the chairman and the chief financial officer as well)?

China steel: Another solid month in March. With iron ore exports of more than 59 million tonnes, crude steel production rose 23% on year to 54.9 tonnes. The National Bureau of Statistics said that was 9.2% higher than February, when 50.36 million tonnes were produced. For the first quarter, China produced 158.01 million tonnes of steel, up 24% on the depressed first quarter of 2009. In March, the country produced 79.7 million tonnes of iron ore, up 28% from a year earlier. During the January-March period, output totalled 204.13 million tonnes, up 22% on the first quarter of last year. Imports were around 157 million tonnes in the first quarter of 2010.

India is hot: The Reserve Bank of India meets next Tuesday after after an unwelcome rise in inflation and is now expected top push up interest rates for a second time in just over a month. Wholesale price inflation is now at 9.90%, a 17-month high, according to figures out yesterday. It was only a small rise from the 9.89% in February and easing food costs, (especially sugar prices) helped dampen the rise. The RBI has target range of 5% for inflation. Indian industrial output jumped 15% in February. Compared with China, India is an economy overheating.

Inflation: So what was the fuss about China’s inflation rate? It eased to an annual 2.4% in March, from 2.7% in February. The American CPI was up 2.3% in the 12 months to March. The core rate is up 1.1% over the same interval, the smallest rise early 2004. The last time the year-over-year core increase was smaller was in January 1966. China’s inflation reflects its stronger economy and a huge drought in the country’s south-west, America’s inflation rate reflects the sluggish nature of the economy and the current recovery and the “moderate” recovery. I know which country would love to have China’s inflation “problem”.

Spud rustling: Finally London’s Telegraph has broken what just might be the scoop of the year. Someone is pinching the great spuds of Britain. “The Jersey Royal Company, which supplies all the leading supermarkets including Tesco, Asda and Waitrose with potatoes, has been forced to hire security guards to stop criminals digging up the tubers in the middle of the night,” the paper reported. “The crop they are targeting is the Jersey Royal Pearl, a smaller potato than the standard Jersey Royal, which has a nuttier taste. They are grown on just 40 of the farm’s 4500 acres and are destined for Tesco, which sells them for £6 a kilo, three times the price of a standard Jersey Royal potato. Tesco potato buyer Paul Thomas: “Jersey Royals are already known as among the finest produce grown in the British Isles and the Pearls, which have been developed over the last 18 months, are the absolute crème de la crème of the potato world.” What will these barbarians do next, rustle a Russet, bag a Sebago, pinch a Pontiac?