Immigrants improved UK’s public finances, study

According to a new study, immigrants to the UK have contributed to the improvement of the UK’s public finances as they have given more to the state than they have received.

The international study showed that the net fiscal impact of immigrants was at the level of 0.46 per cent of GDP on an average from 2007-09. Paris-based think tank the Organisation of Economic Co-operation and Development or OECD conducted the study to form an opinion on immigration in various countries in the western world.

“According to recent opinion polls, about 50 per cent of citizens in European countries and in Canada believe that immigrants contribute less in taxes than they receive. are a big burden on the public purse,” the study said.

The study pointed out that immigrants were the like the rest of the population in the country and were neither draining the public finances nor representing a significant gain. In the UK, the households with immigrants made higher contribution than others to the public finances.

Data has shown that UK has received the highest number of people fleeing countries most affected by the economic slodown as their numbers rose 45 per cent between 2009 and 2011.

Clinton offers aid, seeks stronger Pakistan ties

ISLAMABAD, July 19 (Reuters) – U.S. Secretary of State Hillary Clinton announced more than $500 million in new aid projects for Pakistan on Monday, which Washington hopes will help win over a sceptical public in an ally vital to winning the war in neighbouring Afghanistan.

Clinton was in Islamabad for two days as part of the U.S.-Pakistan strategic dialogue, a series of talks aimed at strengthening the relationship between the wary allies in the struggle against al Qaeda and the Taliban.

“The United States does not only want a dialogue between governments, we also want a dialogue between peoples,” she said ahead of the second “strategic dialogue” meeting between the countries in Islamabad on Tuesday.

Clinton will later fly on to Kabul for an international conference as the U.S.-led war in Afghanistan runs into mounting doubt in the U.S. Congress. [ID:nKABCON]

She announced a string of new projects — including dams, power generation, agricultural development and hospital construction — funded under U.S. legislation passed last year that tripled civilian aid to Pakistan to $7.5 billion over the next five years.

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Pakistan blog: blogs.reuters.com/Pakistan/

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The projects, the first to be launched under a new aid plan, are seen as crucial to shoring up support for the U.S.-led struggle against militant extremists in a country where opinion polls show under one in five view the United States favourably.

“These aren’t one-time expenditures; they are long-term investments in Pakistan’s future,” she said.

Pakistan Foreign Minister Shah Mehmood Qureshi echoed Clinton’s optimism.

“This is a transformational phase in our bilateral relations,” he said.

Pakistan also wants enhanced market access, strengthening of its resources to take up the anti-terror fight and “non-discriminatory access” to energy and other technology.

The latter two requests are long-standing Pakistani desires for more military equipment and a civilian nuclear deal such as the one between India and the United States.

Clinton’s two-day visit includes talks with top military and civilian leaders.

The Pakistan and Afghan commerce ministers signed a trade deal during her visit that the United States also hopes will help boost cooperation between the countries. [ID:nN18171993]

HISTORY OF MISTRUST

The Obama administration sees nuclear-armed Pakistan as a pivotal player in the struggle against militant Islamist groups in both countries. But the two sides are divided by a history of mistrust and sometimes diverging goals over a war that is increasingly unpopular.

Opinion polls have shown many Pakistanis doubtful about long-term U.S. intentions, citing examples of abandonment, particularly after the Soviets withdrew from Afghanistan.

U.S. officials, meanwhile, are wary of the role Pakistan is playing in Afghanistan and believe it needs to do more to fight its own homegrown Taliban militants, which Washington blames for the attempted bombing in New York’s Times Square on May 1.

Richard Holbrooke, the Obama administration’s special representative for Afghanistan and Pakistan, said there was a “dramatic acceleration” in cooperation between Washington and Islamabad, but conceded Pakistani public opinion was lagging. (Editing by Chris Allbritton)

Factbox: Key facts in U.S.-Pakistan relations

(Reuters) – Secretary of State Hillary Clinton arrived in Islamabad on Sunday, hoping to bolster shaky U.S. relations with a close ally in the struggle against militant insurgents in both Pakistan and neighboring Afghanistan.

Here are some facts about the importance and problem areas of the relationship, what aid has been given, what Pakistan wants and what is to come:

STRATEGIC IMPORTANCE

Pakistan is of huge strategic importance and a main ally for the United States as it seeks to defeat al Qaeda and cripple the Taliban in neighboring Afghanistan. Osama bin Laden, the mastermind of the September 2001 attacks on the United States, is believed to be hiding somewhere along the lawless border with Afghanistan. The leaders of the Taliban insurgency in Afghanistan are also believed to be hiding in Pakistan.

Washington is also pressing for Pakistan to step up the fight against its own homegrown Taliban militants, which U.S. officials believe were behind the attempted bombing in New York’s Times Square on May 1.

Washington needs Pakistan as it seeks to stabilize Afghanistan as U.S. President Barack Obama sends in an extra 30,000 troops in the coming months.

SECURITY COOPERATION

Much of Clinton’s meetings will focus on how to improve security cooperation, from intelligence-sharing to more equipment from the United States for its ally.

The two sides held an earlier round of talks in March and agreed to fast-track pending Pakistani requests for military equipment including helicopters, fighter jets and pilotless drones.

Washington has also pledged to deliver 1,000 laser-guided bomb kits to Pakistan and is considering more weapons sales to help Pakistan with insurgents in the Afghanistan border region.

KEY IRRITANTS

There is mistrust on a range of issues, from security cooperation to how aid is delivered. Most opinion polls show a majority of Pakistanis hold an unfavorable view of the U.S. government and are suspicious of its intentions. Pakistan’s government bristles when Washington complains it has not done enough to tackle militants in a war that has killed more than 2,000 soldiers and weighed on the economy.

Civilian deaths from drone strikes are also unpopular in Pakistan, although the civilian government is believed to privately support them.

A recent source of U.S. irritation has been delays in granting visas for U.S. officials wanting to audit how aid is spent while Pakistan complains about increased security checks for its citizens visiting the United States.

Clinton, in a visit to Pakistan in October, publicly expressed puzzlement that its government had been unable to find scores of al Qaeda leaders including Osama bin Laden who are believed to be hiding in rugged border territory that divides Pakistan and Afghanistan.

AID PROGRAMME

The United States is Pakistan’s biggest aid donor and has given about $15 billion in direct aid and military reimbursements since 2002, about two-thirds of it security related.

While Pakistan is being propped up by an $11.3 billion International Monetary Fund loan, a new U.S. aid package triples non-military assistance to Pakistan to $1.5 billion a year over the next five years.

The flow of money is being held up, however, as the Obama administration changes how it distributes that aid. Instead of largely using U.S. contractors and non-governmental organizations, it wants to funnel much of the aid via the Pakistani government and domestic NGOs in the hope this will bolster local capacity.

NUCLEAR COOPERATION

Pakistan would like a civilian nuclear cooperation deal with the United States, similar to the one Washington has with India, but there were scant signs of progress on this front during the March meetings.

The United States is leery of such a deal out of concern for how it might affect ties with New Delhi.

Pakistan President Asif Ali Zardari recently visited China amid signs that Chinese companies were ready to move ahead with plans to build two nuclear reactors for Pakistan, which could raise concerns in both Washington and New Delhi about nuclear proliferation.

(Editing by John O’Callaghan and Chris Allbritton)

UPDATE 1-Australia govt holds poll lead as campaign gears up

SYDNEY, July 18 (Reuters) – Australian Prime Minister Julia Gillard is on course for a narrow win in an Aug. 21 election, an opinion poll showed on Sunday, as the economy, border protection and population swiftly emerged as key campaign issues.

Support for the ruling Labor party has rebounded since Gillard, Australia’s first female prime minister, was appointed three weeks ago. Seeking to take advantage of her lead and a robust economy creating jobs, she called an election on Saturday.

But the poll is set to be tight with conservative opposition leader Tony Abbott only needing nine more seats to form a government with four independents, or 13 to take office outright.

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“I genuinely believe this election is on a knife-edge,” Gillard told reporters in Brisbane, adding jobs, the economy and a return to budget surplus could be deciding factors.

A new opinion poll released on Sunday showed the Labor government maintaining a slim lead over the opposition. The Galaxy poll put Labor on 52 percent compared to 48 percent for the conservative opposition.

But the survey showed that the government will have to rely on support from Greens’ voters to ensure victory.

The opinion poll gave Gillard a strong 55 percent to 32 percent lead over Abbott as preferred prime minister.

Financial markets are not expected to react much to the election given there is little to choose on core economic policy.

Despite Labor steering the economy through the global financial crisis and avoiding recession last year, opinion polls show voters view the opposition as better economic managers.

Abbott pledged that interest rates, which have risen six times to 4.5 percent, would be lower if he came to power after accusing the government of boosting debt and living costs.

ASYLUM SEEKERS, MINING TAX

He also accused the government of wasteful spending and pledged to stop the flow of boatpeople heading to Australian waters, a sensitive issue particularly in crowded city areas.

“I think people are right to be concerned about those who arrive unsafely, without papers,” Abbott said on local TV, claiming Australia had become “a soft touch” over boatpeople.

Gillard has proposed a possible East Timor regional asylum processing centre to stop boatpeople arriving in Australia, although Dili has given the plan a cool response. Abbott plans to reopen Pacific island detention camps.

Last month, the asylum seeker issue saw the ruling Labor party lose a key state by-election in western Sydney.

Gillard said the numbers arriving by boat were not large, but “we shouldn’t label people as racist or intolerant or red neck or some other word because they are concerned about boats”.

In her first major campaign speech, Gillard rejected former Prime Minister Kevin Rudd’s “big Australia” idea that could have seen the nation’s population doubling from 22 million now.

“I don’t think we want to hurtle down the track to a population of 36 million or 40 million,” said Gillard, who replaced Rudd in a Labor party coup last month.

Abbott also sought to rekindle a debate over the government’s watered down new mining tax, which he said would give Australia’s mining sector the highest tax rate in the world.

“You do not speed up the slow lane by slowing down the fast lane,” he said, referring to talk of a two-speed Australia with the resource-rich states of Western Australia and Queensland benefiting more than others from high mineral prices.

Abbott has vowed to dump the tax, which the government has said will raise A$10.5 billion ($9.12 billion) from 2012.

(Additional reporting by Michael Perry; Editing by Jeremy Laurence)

Australia govt holds poll lead as campaign gears up

SYDNEY, July 18 (Reuters) – Australian Prime Minister Julia Gillard is on course for a narrow win in an Aug. 21 election, an opinion poll showed on Sunday, although issues such as border protection and population will be key in the campaign.

Support for the ruling Labor party has rebounded since Gillard, Australia’s first female prime minister, was appointed three weeks ago. Seeking to take advantage of her lead and a robust economy creating jobs, she called an election on Saturday.

But the poll is set to be tight with conservative opposition leader Tony Abbott only needing nine more seats to form a government with four independents, or 13 to take office outright.

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A new opinion poll released on Sunday showed the Labor government maintaining a slim lead over the opposition. The Galaxy poll put Labor on 52 percent compared to 48 percent for the conservative opposition.

But the survey showed that the government will have to rely on support from Greens’ voters to ensure victory.

The opinion poll gave Gillard a strong 55 percent to 32 percent lead over Abbott as preferred prime minister.

Financial markets are not expected to react much to the election given there is little to choose on core economic policy.

Despite Labor steering the economy through the global financial crisis and avoiding recession last year, opinion polls show voters view the opposition as better economic managers.

Abbott accused the government of wasteful spending and pledged to stop the flow of boatpeople heading to Australian waters, a sensitive issue particularly in crowded city areas.

“I think people are right to be concerned about those who arrive unsafely, without papers,” Abbott said on local TV, claiming Australia had become “a soft touch” over boatpeople.

Gillard has proposed a possible East Timor regional asylum processing centre to stop boatpeople arriving in Australia, although Dili has given the plan a cool response. Abbott plans to reopen Pacific island detention camps.

Abbott also sought to rekindle a debate over the government’s watered down new mining tax, which he said would give Australia’s mining sector the highest tax rate in the world.

“You do not speed up the slow lane by slowing down the fast lane,” he said, referring to talk of a two-speed Australia with the resource-rich states of Western Australia and Queensland benefiting more than others from high mineral prices.

Abbott has vowed to dump the tax, which the government has said will raise A$10.5 billion ($9.12 billion) from 2012.

Political commentators say that the conservative voter base had strengthened under Abbott but highlight a significant number of swing voters.

“Tony Abbott has many pluses as a leader but he frightens some people. His views turn off some voters and he has always had trouble with women voters,” said John Warhurst, professor of political science at the Australian National University.

Abbott is a socially conservative Catholic, and is opposed to same sex marriages and abortions.

In contrast, Gillard does not believe in God, is unmarried but has a long-time partner, and is childless.

(Additional reporting by Michael Perry; Editing by Jeremy Laurence)

Australia PM puts economy at heart of re-election

July 15 (Reuters) – Australian Prime Minister Julia Gillard sought to sell her Labor government’s economic credentials on Thursday, warning that the conservative opposition’s policies could risk a robust economy.

In her first major economic speech since becoming prime minister on June 24, Gillard set out her platform for re-election at polls expected within months, centering on job creation.

“I believe a strong economy is the foundation of everything else that as prime minister I want for this great country of ours,” Gillard told the National Press Club in Canberra.

“As prime minister I will make my economic judgments based on what gives Australians the best opportunity for access to work.”

The government, on course for a narrow election victory according to opinion polls, tweaked its economic forecasts on Wednesday, predicting robust commodity prices due to Chinese demand will ensure the budget returns to surplus in 2012/13, far ahead of most other rich nations.

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It also forecast unemployment would fall to 5 percent in 2010-11 and 4.75 pct in 2011-12.

Gillard said the economy had emerged from the global financial crisis stronger than many other developed nations due in part due to the government’s A$52 billion ($46 billion) stimulus package in 2009.

“I say to the Australian people, now is not the time to take risks with the Australian economy,” said Gillard, Australia’s first female prime minister who appears far more at ease dealing with the media than her predecessor Kevin Rudd.

“It is a time for prudent and careful economic management, not a time to take risks with a Liberal Party that got it wrong on the global financial crisis, that opposed (stimulus) action to support Australian jobs and that would have allowed hundreds of thousands of jobs to be destroyed.”

Gillard said a new mining tax, which is forecast to raise A$10.5 billion in revenue from 2012, would fund a cut in corporate tax and a rise in pensions but would be dumped by conservative leader Tony Abbott if he was elected.

“Remarkably, my opponent would deny Australians these benefits because he is refusing to accept the tax that our biggest mining companies have agreed to pay,” she said.

PM SELLS ECONOMIC CONSERVATISM

Economic management is traditionally a major issue in Australian elections. And while Australia’s healthy economy, in its 17th year of growth, should be a winning ticket for the government, voters still believe the opposition has the edge in economic management, according to opinion polls this week.

The opposition, which ruled for 12 years before Labor was elected in 2007, is also committed to achieving a budget surplus, and has said it would put downward pressure on interest rates, cut debt and cap spending.

But it differs from the government over its opposition to a new mining tax and a planned carbon price to fight climate change.

Despite her left-wing background, Gillard has sold herself as an economic conservative, dismissing concerns her government would be an old-style, big-spending Labor administration.

Gillard said growth in spending would be capped at 2 percent a year once the economy was growing above trend.

She also said Australia could not rely solely on its resource sector for future economic prosperity, warning doing so could create a two-speed economy of haves and have nots.

“Australia today is a great beneficiary of the economic growth in China and the demand for our mineral resources in our region. But if anyone thinks that gives us a free ticket to easy prosperity, they are mistaken,” she said.

She said a re-elected Labor government would push for micro-economic reforms to ensure Australia remained a competitive and modern economy, but also provided social dividends.

“The microeconomic challenges of the future are not a simplistic choice between the market and the state,” said Gillard.

“Simply applying the extreme free-market medicine of liberalisation and privatisation without thought or care is not a solution. Maintaining an instinctive hostility towards the public sector and all it provides is equally wrong.” ($1 = 1.131 Australian Dollar) (Editing by Ed Davies and Sugita Katyal)

Australian PM may call election within days-media

SYDNEY, July 12 (Reuters) – Australia’s ruling Labor party is set for a narrow victory in upcoming elections, two new opinion polls showed on Monday, as speculation grew that Prime Minister Julia Gillard could call an election as soon as this week.

While the robust economy, in its 17th year of growth, should be a winning ticket for Gillard, voters believe the opposition is the better economic manager, according to the polls.

Gillard has also been seeking to reframe government policy in key areas such as climate and asylum seekers.

Opinion polls published in Fairfax and News Ltd newspapers put Labor ahead of the conservative opposition at 52 percent versus 48 percent. For Reuters Poll Trend [ID:nSYU010167]

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TAKE-A-LOOK-Australia’s Greens to sway policy [ID:nSGE667085]

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Gillard, 48, is Australia’s first woman prime minister. She replaced Kevin Rudd on June 24, in a move that has resurrected Labor’s electoral standing and reshaped Australian politics.

Speculation Gillard may be set to call an election grew after Governor-General Quentin Bryce delayed leaving for a trip to Europe by a day until Saturday, sparking talk that Gillard could ask the representative of Australia’s head of state, Queen Elizabeth, to dissolve parliament as early as this week.

Gillard declined to comment on the timing when questioned by reporters on a trip to Adelaide, but said in a speech “in the days to come I will be putting forward more detailed arguments about some of the biggest challenges facing our nation.

“I will be explaining the steps I think we need to take and asking for people’s consideration of those steps. I will ask for the Australian people’s trust to move Australia forward,” she said.

Political commentators said Gillard’s words meant she may seek to call an election on Thursday or Friday this week.

But commentators warned that Labor still risked losing an election expected in late August. [ID:nSGE6600MU]

“The coming of Julia Gillard to the Labor Party leadership appears to have stopped the decay in her party’s fortunes,” said The Age newspaper’s national editor Tony Wright.

“She has stopped the Rudd rot, though she hasn’t been able to make any serious inroads into Labor’s loss of the disaffected to the Greens.”

Labor took power in 2007 promising to tackle climate change, but under Rudd failed to implement a carbon trading scheme, a disappointment that saw Green voters desert Rudd.

Labor needs to woo them back to ensure victory over the Liberal-National opposition.

Gillard has acted quickly on key policies, ending a three-month row with mining companies over a new tax that was hurting the government in the polls, and proposing a regional asylum processing centre, possibly in East Timor, to curb boatpeople arrivals. [ID:nAUTAX]

The tax deal has been generally accepted by voters, but her asylum policy has received criticism for being in its infancy.

The cabinet will meet on Tuesday and was expected to discuss a new climate policy, but it is not clear whether Gillard will go as far as announcing a carbon tax as an interim measure before a full blown carbon trading scheme can be created.

She has said a carbon price is inevitable, probably via a market-based scheme, but that any decision on such a scheme would not be until 2012 and not without community consensus.

But voters want quick action on climate change, according to opinion polls and public comments in local media.

Until now the political risk of announcing a carbon price ahead of an election has been the threat of rising power bills. But two new surveys suggest power bills will rise and energy investment will fall because of a lack of a carbon price.

The lack of an emissions trading scheme and price on carbon would cost the Australian economy and consumers an extra A$2 billion by 2020 due to investment in less energy efficient coal-fired power plants, The Climate Institute estimates. (Additional reporting by Ed Davies; Editing by Alex Richardson)

Quebec premier to stay on, won’t make federal run

July 10 (Reuters) – The premier of Quebec said he planned to stay in office and battle separatists who want independence for the French-speaking Canadian province, adding that he would not try to become prime minister of Canada.

Premier Jean Charest, a Liberal struggling to fend off allegations of scandal, only has a slim majority in the provincial legislature and his party trails far behind the separatist Parti Quebecois in opinion polls. The Quebec Liberals are not aligned with the federal Liberals, the main opposition party in Ottawa.

Charest complained in April about how difficult it was to be a politician, raising speculation he might quit early. But he told Canadian Broadcasting Corp. radio that he had fought four Quebec elections and wanted to take part in a fifth.

“It’s been four consecutive elections. I think five is a good number,” he said in an interview broadcast on Saturday. Charest retained power in a December 2008 vote and in theory could remain premier for five years before the next ballot.

PQ governments have twice held referendums on breaking away from Canada, in 1980 and 1995. Both failed.

Although PQ leader Pauline Marois has so far declined to outline her plans if she were to take power, party members would expect another referendum in her first term. Any serious hint that Canada might break up would likely hit both investor sentiment and the Canadian dollar.

Charest, 52, was once a star in the federal Progressive Conservatives, one of two movements that merged in 2003 to create the Conservatives, the party that currently governs in Ottawa through a minority government. He is sometimes mentioned as a candidate to eventually replace Prime Minister Stephen Harper, who took power in early 2006.

When asked whether he planned to run for prime minister, Charest replied: “No. I’ve been at this for 25 years and I’m very happy where I am. I have a great job that I enjoy.”

Whether he can stay in his post depends in part on a probe into allegations by a former Liberal justice minister who said some donors had influenced the naming of Quebec judges.

Charest set up the inquiry in April but dismissed demands by Marois for a separate probe into possible corruption in the powerful construction industry, which is a big contributor to Liberal coffers.

Charest told the CBC that Marois was “applying a scorched earth policy” in a bid to hurt the Liberals. (Reporting by David Ljunggren; Editing by Frank McGurty)

Greek pension reform to be fair, viable – PM

June 25 (Reuters) – Greece’s pension reform will be fair and is needed to make the system viable, Prime Minister George Papandreou told parliament ahead of a cabinet meeting meant to agree a pension reform plan.

Bonds | Global Markets

“Today we want to succeed on two fronts, to have a pension system that is viable … and fair,” the Prime Minister said on Friday.

Opinion polls show a very large majority of Greeks oppose the pension reform and unions will stage a general 24-hour strike on June 29.

The cabinet meeting is meant to agree on a major overhaul of the debt-choked country’s ailing pension system and to ease labour rules to make it easier to fire staff, key requirements of a 110-billion euro EU/IMF bailout programme. (Reporting by Tatiana Fragou and Ingrid Melander)

Major Australia investors urge quick action on climate

(Reuters) – A group of major investors on Friday urged Australia’s new Prime Minister Julia Gillard to take swift action to fight climate change and cut carbon emissions blamed for heating up the planet.

Green Business | COP15

Gillard should outline her road map on climate change as soon as possible and set priorities for consensus building over the issue, said the Investor Group on Climate Change (IGCC) that represents institutional investors with more than $500 billion under management.

“We consider that climate change presents real risks to the Australian economy, which must be addressed,” the group said in a statement.

Gillard moved to revive a stalled carbon trading scheme on Thursday, within hours of becoming prime minister after incumbent Kevin Rudd stepped down. Opinion polls had shown a slump in support for Rudd and he was also unpopular within his own party.

Gillard pledged more consultation with industry and voters to win support for a price on carbon pollution, an issue that has split the nation.

Rudd had championed the carbon trading scheme but it was rejected by a hostile Senate for a third time in March.

His decision in April to shelve the scheme till 2013 angered voters who wanted action on climate change and was a major reason for the plunge in his popularity in opinion polls.

IGCC said its members would continue to support strong climate change policy action but neither the government or the main opposition party had an adequate policy to address risks to the Australian economy from global climate change.

Australia is the world’s top coal exporter and among the highest per-capita emitters of planet-warming carbon dioxide, with coal used to generate about 80 percent of electricity.

While the government has embraced renewable energy and energy efficiency, analysts say putting a price on carbon emissions is the most effective way for Australia to cut greenhouse gas pollution.

“We see indications of significant policy progress in China, Europe and in many U.S. states and do not accept that stalled international progress is sufficient reason for further policy delay in Australia,” said IGCC chief executive Nathan Fabian in the statement.

U.N. climate talks on a successor to the Kyoto Protocol, whose first phase ends in 2012, have bogged down and agreement on a broader pact covering all of the world’s major greenhouse gas emitters is now thought to be more likely by the end of 2011.

(Reporting by Bruce Hextall; Editing by David Fogarty)

Q+A: PM Gillard changes Australian govt election hopes

(Reuters) – Australia’s ruling Labor party elected Julia Gillard as the nation’s first woman prime minister on Thursday after former prime minister Kevin Rudd quit on losing the support of his lawmakers.

World

Gillard, 48, has promised a more consensus-driven government to help her party reconnect with disgruntled voters after months of poor opinion polls and with an election expected around October.

Here are some questions and answers on how Gillard’s appointment changes the political outlook in Australia. IS

LABOR MORE LIKELY TO WIN THE NEXT ELECTION?

Gillard’s election should help Labor re-build voter support ahead of the election, and should give the party a stronger chance of victory. Opinion polls regularly find Gillard to be more popular than Rudd, and betting agencies have already reported Labor is now the firm favorite to win the election.

Gillard has long been one of the government’s best performers in parliament with her ability to sell policies and deflect political attacks. Her promise of a consensus style of government is also in stark contrast to Rudd’s sometimes autocratic style.

Gillard also has wide voter appeal to both men and women, compared to conservative opposition leader Tony Abbott, a former Catholic seminarian who regularly polls poorly with women voters.

She is also likely to now enjoy a political honeymoon period, and every action of the first woman to lead the country is likely to be closely reported by media early in her time in charge.

DOES THIS CHANGE THE ELECTION TIMING?

Gillard’s appointment is unlikely to change the timing of the next election, which is due by the end of the year. She is likely to spend the coming months traveling the country, and making sure Australian voters know who she is and where she comes from.

She has also called a truce in the government’s damaging fight with miners over a proposed 40 percent profits tax. She is likely to need time to broker a deal ahead of the election.

An early poll in August would be risky for a new leader, still getting used to the wider responsibilities of the job. Gillard’s home state of Victoria also has elections set for late November. Both point to an election in early to mid October.

WHAT POLICIES MAY CHANGE?

Gillard has already signaled a more consultative approach on the mining tax and has indicated a stronger focus on the postponed emissions trading scheme if she wins the next election

But Gillard could also make changes to controversial asylum seeker policies. More boatpeople arrivals in recent years has been a simmering issue on talkback radio, and Labor has been vulnerable to opposition attacks blaming Rudd’s policies for the arrivals. At her first media conference, Gillard signaled a firmer stance after stressing she understood why Australians were disturbed about refugee boats arriving in Australian waters.

HOW WILL THE ELECTION BATTLE SHAPE UP?

Gillard’s elevation changes the political battle with opposition leader Tony Abbott.

Abbott is a blunt speaking conservative who grabs headlines with his combative style. Gillard can be a sharp-witted debater, but also retains a calm and composed demeanor when under attack.

Abbott may need to take care in his attacks on Gillard, to ensure the election does not become about personalities, particularly as Gillard’s election adds a gender issue to the political debate.

Gillard, in her first news conference as prime minister, has already made it clear she will focus her political attacks on Abbott’s views on workplace laws, and on health and education. Abbott has stressed that while Gillard is a new face for Labor, she supports the same policies as Rudd.

(Editing by Ed Davies and Miral Fahmy)

Colombia says soldiers kill six rebels in clashes

BOGOTA, June 20 (Reuters) – Colombian troops killed six Marxist guerrillas on Sunday in the center of the Andean nation while millions of voters went to the polls to elect President Alvaro Uribe’s successor, the army said.

Violence has declined since Uribe launched a U.S.-backed military offensive against leftist rebels in 2002, but fighting and bombings remain common in Latin America’s No. 4 oil producer, which is struggling to shake off a four-decade rebellion.

An army spokesman said soldiers clashed with the Revolutionary Armed Forces of Colombia (FARC) in Meta province, east of the capital Bogota, killing six rebels.

Uribe steps down in August after two terms marked by a hard-line stance against guerrillas, drug barons and paramilitaries. Improved security has drawn increasing foreign investment in the country’s oil and mining sectors.

Former defense minister Juan Manuel Santos and independent Antanas Mockus faced off on Sunday to take over from the popular incumbent in an election run-off with Santos holding a commanding lead in opinion polls. [ID:nN20126923] (Reporting by Monica Garcia and Luis Jaime Acosta; Writing by Jack Kimball, Editing by Sandra Maler)

Australian PM demands unity amid leadership cloud

June 15 (Reuters) – Australian Prime Minister Kevin Rudd called on Tuesday for government unity as rumours swirled he could be dumped only months from elections due to his falling popularity and a controversial mining tax.

But Rudd is unlikely to be toppled — at least not yet — one senior figure from the ruling Labor Party said, and could expect a boost come election time from Australia’s robust economy even despite his woes over the planned mining tax.

Australia is in its 16th year of uninterrupted growth, avoided recession during the global crisis and its unemployment rate is half that of the Europe and the United States, all significant factors with many mortgage-conscious voters. [ID:nSGE6580KR]

Rudd stood his ground over the mining tax despite speculation his popular deputy Julia Gillard was set to replace him, even as opinion polls warned his government could become the first since 1932 to lose after just a single term in power.

“Reform is a hard business, it is a controversial business. The key thing in the the reform process is for governments to maintain their nerve,” Rudd told journalists as parliament resumed for possibly the final time ahead of a national vote.

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Labor Party stalwart Peter Beattie said the party would stick with Rudd regardless of the opinion polls. “The Labor Party is loyal to its leaders who have won an election,” Beattie wrote in The Australian newspaper on Monday.

Other commentators, however, warned Rudd’s “high-handed instransigence” would cost him his prime ministership. The Sydney Morning Herald said Rudd rivalled Pim Verbeek — coach of the national soccer team thrashed by Germany at the World Cup — as the most unpopular man in Australia.

Gillard has laughed off suggestions she should replace Rudd or could challenge, with the economy and employment still strong.

But with a likely October election looming, some Labor politicians believe she would offer a more conciliatory face and lure back jaded voters as conservative rivals and the minority party Greens close in, threatening a hung parliament or worse.

COMMUNITY, BUSINESS ANTAGONISM

Whatever happens in the elections, Rudd’s leadership could now be terminal. Gillard seems poised to replace him if Labor loses unexpectedly, or early in a new term if Rudd wins with a reduced majority in the parliament.

“There is the momentum of Rudd’s remarkable ability to mobilise community and business antagonism towards his own prime ministership, a momentum that shows no sign of abating,” senior political commentator Jennifer Hewett wrote in The Australian.

A Newspoll last week showed the opposition conservatives with an election-winning 53 percent to 47 percent lead over the government, although Rudd is still well ahead of opposition leader Tony Abbott as preferred prime minister.

Labor backbench members, in power since 2007, are pressuring Rudd to end a damaging row with miners over the planned 40 percent tax on profits, dividing voters in politically vital resource states.

The tax, and a decision to shelve carbon trading until the end of 2012, has hurt Rudd. Opinion polls show roughly half of voters oppose it because of concerns it would jeopardise jobs and investment.

More than $20 billion of new resource investment in Australia has already been shelved by global miners due to the tax, legislation for which won’t be drawn up until after the election and which won’t come into effect until 2012.

The government is preparing a compromise on the tax, being fought by miners in a multi-million-dollar advertising campaign, but Rudd has warned he won’t be rushed on a deal for “generous” transition arrangements.

Finance Minister Lindsay Tanner was among a host of ministers who sought on Tuesday to play down leadership speculation, which began after a former Labor luminary, who now works for a mining firm, called for his dumping.

“One thing I can tell you is we’re not going to be spooked by idle gossip,” Tanner said.

Gary Gray, Labor’s parliamentary secretary for resource-rich western and northern Australia, said the mining tax issue had to be resolved by August to end uncertainty and bring political debate back to Labor’s strengths in health and education.

Tanner said the government was doing all it could in consultations with the mining industry but it was impossible to set a specific deadline. (Editing by Michael Perry and Paul Tait)

FACTBOX-Key political risks to watch in Australia

June 15 (Reuters) – Australian Prime Minister Kevin Rudd is struggling to regain voter support ahead of elections expected in October, with polls showing he may be ousted after only one term, due to a series of policy backflips and a controversial mining tax.[nSGE65E006]

Following is a summary of key Australian risks to watch:

* RUDD’S LEADERSHIP

Despite speculation of a leadership challenge due to his falling popularity and a planned mining “super profits” tax, Rudd is unlikely to be toppled before the election.

His popular deputy Julia Gillard, whom some Labor politicians believe would offer a more conciliatory face and lure back jaded voters, has shrugged off suggestions she will mount a leadership challenge.

Rudd can expect a boost come the poll, due to a robust economy, with unemployment half that of Europe and the United States.

Rudd’s popularity has plummeted in recent months after he shelved a series of policies, including a landmark carbon trade plan. Opposition policies are similar in most aspects, although the opposition will abandon the mining super profits tax.

A further dive in Rudd’s re-election prospects, or a leadership change, is unlikely to have a major impact on markets. For a factbox on key policy differences, click on [ID:nSGE64R07F]

But over the longer-term, Rudd’s leadership may be drawing to a close, with Gillard possibly poised to replace him if Labor loses the election, or early in a new term if Rudd wins with a reduced majority in parliament.

What to watch:

– Opinion polls. The Reuters Poll Trend shows Rudd could lose, or face a hung parliament, although he is still favoured to win the coming election. The government held a narrow 0.4 point lead, down from 10.4 points a month earlier. [ID:nSYU010055]

* ECONOMIC AND TAX POLICY

Economic management is always a key election battleground. Traditionally, conservative parties have claimed this mantle, but the ability of Rudd’s centre-left government to steer the country through the global crisis and avoid recession has given it economic kudos among many voters.

Homeowners, particularly in crucial marginal mortgage belt electorates around Sydney, Melbourne and Brisbane, are concerned about rising interest rates. The central bank has lifted its key cash rate by 150 basis points since October to 4.50 percent, with mortgage rates now around 7 percent. [ID:nSYC002333]

The booming resources sector is also angry at plans for a 40 percent tax on mining profits, to start in mid 2012, which underpins Rudd’s plan to restore the budget to surplus in 2012-13.

What to watch:

– Mining tax: The government is locked in negotiations with more than 80 mining companies on details of the new super profits tax. The 40 percent headline rate appears set in stone, but the government appears more flexible on the definition of a super profit, and may compromise by increasing the threshold for the new tax rate, currently set at around 6 percent. For full coverage of the mining tax, click on [ID:nAUTAX]

– Mining firms say the move puts new investment at risk, and expansion plans have been put on hold. Mining shares have tumbled and the government faces heavy opposition from the resource sector, which has financed an advertising campaign against the changes. The conservative opposition has also promised to abandon the tax if it wins power, putting the issue at the centre of the coming election campaign. The government has countered with its own taxpayer-funded advertising campaign.

– The government could reach a deal with miners, but the fate of any compromise will hang on changes in the composition of the upper house. The post-election Senate is expected to have fewer conservatives but more crossbench Greens. Rudd also faces an outside chance of needing key independents to hold a majority in the lower house. [ID:nSGE64T02H]

– Monetary policy. The Reserve Bank of Australia (RBA) left interest rates unchanged at its policy meeting on June 1, with expectations rates will remain on hold in the near term. [ID:nnSYC002333]

* POLICY SWITCHES

Ahead of the election, Rudd is postponing policies that risk being vote-losers, delaying them to next year and a future parliament in which he hopes to have a stronger hand. The government withdrew its twice-defeated carbon emissions trading scheme from parliament, where it faced a third defeat in the obstructive Senate where it is seven votes short of majority. The government also postponed its planned mandatory Internet filter, which had angered the U.S. government and web heavyweight Google (GOOG.O). Rudd also dumped a troubled scheme to give free home insulation to all houses after the programme was blamed for house fires and linked to four deaths.

What to watch:

– Broadband. The government is bogged down in talks with the country’s biggest phone company, Telstra (TLS.AX), and other telcos on a A$43 billion super-fast broadband spanning the country. Communications Minister Stephen Conroy says difficult negotiations on folding Telstra’s telecoms infrastructure into the network are reaching a conclusion, with parties either reaching a deal soon or breaking off negotiations. The government also has laws before the Senate designed to force Telstra to join the broadband plan by forcing the company to split its retail arm from its wholesale business. The laws face an uncertain future, and the row has weighed on Telstra’s share price.

– Health. Rudd has struck a deal with all states except conservative-ruled Western Australia to take control of health and hospital funding, using consumption tax revenues reserved for states. The deal, popular with voters, could still unravel if Rudd is unable to reach agreement with Western Australia to include it in the scheme. If he fails, it will be a major blow to his authority and could fuel criticism he has not delivered most of his big reform visions. [ID:nSGE63I051]

– Climate policy. Plans for a sweeping carbon trade plan have been put on the backburner until 2012 at the earliest. Rudd has said he will wait until the Senate is more receptive and the direction of world climate talks is more certain. Once the likely outline of long-term climate change policy becomes clearer, the expected impact on corporate profits will be reflected in Australian stocks .AXJO.

(Editing by Sanjeev Miglani)

Japan ruling Democrats keep lead before July poll

(Reuters) – Japan’s ruling Democratic Party kept its lead in voter support ahead of an election expected on July 11, opinion polls showed on Monday, after new premier Naoto Kan took the helm last week and vowed to tackle fiscal woes.

World | Japan

The Democrats have a big majority in the lower house but need to win a majority in an upper house poll to avoid policy paralysis as Japan struggles to keep a fragile economic recovery on track and rein in its bulging public debt.

An Asahi newspaper poll showed that 43 percent of voters plan to cast ballots for the Democratic Party, up 4 points from a survey last week. That compared with 14 percent for the main opposition Liberal Democratic Party (LDP), up 1 point.

A Yomiuri newspaper survey showed that 31 percent of respondents plan to vote for the Democrats, down 5 points from a survey last week, while 16 percent said they will vote for the LDP, up 3 points.

“The people understand well enough the historical meaning of last year’s change of government,” Chief Cabinet Secretary Yoshito Sengoku told a news conference.

“They expect the Democratic government to produce something that is different from the LDP government.”

Kan, who took over as prime minister after his unpopular predecessor quit abruptly this month, has made tackling a public debt that is already twice the size of Japan’s economy a top priority amid market concerns about sovereign debt risk.

Kan, the country’s fifth premier in three years, has called for nonpartisan debate on raising Japan’s 5 percent sales tax, and the media surveys showed more voters were open to an increase in the tax.

In the Yomiuri poll, 66 percent said a sales tax hike is necessary against 29 percent who said it was not. In the Asahi survey, 49 percent said they support raising the sales tax, against 44 percent who said they were opposed.

The Democrats have pledged not to raise the sales tax before the next general election for the lower house, which must be held by late 2013. But some party reformers want the campaign platform for the upper house election to include a reference to increasing the tax after the next general election.

The government will unveil a strategy to fix its tattered finances by June 22 in an effort to reassure investors that it will cut back the country’s huge debts.

Ratings agencies have warned they could cut Japan’s sovereign debt rating unless Tokyo crafts a credible plan to rein in debt.

(Reporting by Yoko Kubota; Editing by Chris Gallagher and Joseph Radford)

Brazil’s Rousseff pledges continuity and female touch

(Reuters) – Presidential candidate Dilma Rousseff pledged on Sunday to continue the policies of President Luiz Inacio Lula da Silva but to govern Brazil with the “soul and heart of a woman” if she wins October’s election.

World | Brazil

Rousseff, a 62-year-old former leftist militant, was speaking in the capital Brasilia after she was formally selected as presidential candidate at a convention of Lula’s ruling Workers’ Party.

“It’s not coincidence that after this great man, our Brazil could be governed by a woman — a woman who will continue the Brazil of Lula but with the soul and heart of a woman,” she said in a speech.

While Rousseff has been gaining on her main opponent Jose Serra in recent opinion polls, surveys show she trails the former Sao Paulo state governor among women voters.

Rousseff can count on Lula’s huge popularity and a rebounding economy to give her a boost as she attempts to become the South American country’s first female leader.

Her running mate is Michel Temer, a veteran federal deputy, who was confirmed as vice presidential candidate on Saturday by the Workers’ Party coalition partner, the centrist PMDB party.

Rousseff also pledged to secure economic stability and continue with key reforms, such as to the tax system, which business leaders complain is overly bureaucratic and costly.

“Our tax system is chaotic,” she said. “If we don’t have the courage to recognize this, we will never implement such urgent and necessary reforms.”

She said Brazil could still do better, despite the advances under Lula, and promised her government would eradicate “absolute misery” in the country, where millions still live in poverty.

SERRA GOES ON ATTACK

Serra, who was confirmed as candidate for the opposition PSDB party on Saturday, is favored by some investors for his perceived fiscal discipline and reputation as a competent administrator [ID:nN09243047] [ID:nN09253247]

But neither he nor Rousseff is seen as straying much from Lula’s largely market-friendly economic policies that have nurtured years of strong economic growth and growing global clout.

Serra launched his strongest attack yet on Lula’s record on Saturday, criticizing the president for downplaying human rights abuses abroad and for not stamping out corruption in the ruling coalition. He also hinted that Lula had become too powerful, apparently comparing him to France’s 17th century “Sun King,” Louis the 14th.

“Louis 14th believed the state was him. In democracies and in Brazil, there is no place for this,” said Serra, who lost to Lula in the 2002 presidential race.

Lula also hit the continuity theme in his speech to the Workers’ Party convention on Sunday, saying that a vote for Rousseff would be the same as voting for him. Lula is barred by the constitution from running for a third straight term.

“There will be a gap on that ballot. To make sure it is filled, I changed my name and will put Dilma’s there,” he said.

Many people expect Lula to continue to have a strong influence on a Rousseff government, even without having a formal position.

“Lula will help her to govern. He won’t leave her alone,” said Cristina Rocha, a Workers’ Party member from northeastern Piaui state who was attending the convention.

(Additional reporting by Fernando Exman; Writing by Stuart Grudgings; Editing by Cynthia Osterman)

Brazil’s Rousseff pledges continuity, female touch

BRASILIA, June 13 (Reuters) – Presidential candidate Dilma Rousseff pledged on Sunday to continue the policies of President Luiz Inacio Lula da Silva but to govern Brazil with the “soul and heart of a woman” if she wins October’s election.

Rousseff, a 62-year-old former leftist militant, was speaking in the capital Brasilia after she was formally selected as presidential candidate at a convention of Lula’s ruling Workers’ Party.

“It’s not coincidence that after this great man, our Brazil could be governed by a woman — a woman who will continue the Brazil of Lula but with the soul and heart of a woman,” she said in a speech.

While Rousseff has been gaining on her main opponent Jose Serra in recent opinion polls, surveys show she trails the former Sao Paulo state governor among women voters.

Rousseff can count on Lula’s huge popularity and a rebounding economy to give her a boost as she attempts to become the South American country’s first female leader. [ID:nN12175920] [ID:nN12110350].

Her running mate is Michel Temer, a veteran federal deputy, who was confirmed as vice presidential candidate on Saturday by the Workers’ Party coalition partner, the centrist PMDB party.

Rousseff also pledged to secure economic stability and continue with key reforms, such as to the tax system, which business leaders complain is overly bureaucratic and costly.

“Our tax system is chaotic,” she said. “If we don’t have the courage to recognize this, we will never implement such urgent and necessary reforms.”

She said Brazil could still do better, despite the advances under Lula, and promised her government would eradicate “absolute misery” in the country, where millions still live in poverty.

SERRA GOES ON ATTACK

Serra, who was confirmed as candidate for the opposition PSDB party on Saturday, is favored by some investors for his perceived fiscal discipline and reputation as a competent administrator [ID:nN09243047] [ID:nN09253247]

But neither he nor Rousseff is seen as straying much from Lula’s largely market-friendly economic policies that have nurtured years of strong economic growth and growing global clout. [ID:nRISKBR]

Serra launched his strongest attack yet on Lula’s record on Saturday, criticizing the president for downplaying human rights abuses abroad and for not stamping out corruption in the ruling coalition. He also hinted that Lula had become too powerful, apparently comparing him to France’s 17th century “Sun King,” Louis the 14th.

“Louis 14th believed the state was him. In democracies and in Brazil, there is no place for this,” said Serra, who lost to Lula in the 2002 presidential race.

Lula also hit the continuity theme in his speech to the Workers’ Party convention on Sunday, saying that a vote for Rousseff would be the same as voting for him. Lula is barred by the constitution from running for a third straight term.

“There will be a gap on that ballot. To make sure it is filled, I changed my name and will put Dilma’s there,” he said.

Many people expect Lula to continue to have a strong influence on a Rousseff government, even without having a formal position.

“Lula will help her to govern. He won’t leave her alone,” said Cristina Rocha, a Workers’ Party member from northeastern Piaui state who was attending the convention.

(Additional reporting by Fernando Exman; Writing by Stuart Grudgings; Editing by Cynthia Osterman)

South Korea opposition puts up fight in polls

SEOUL, June 2 (Reuters) – South Korea’s opposition Democratic Party put on an unexpectedly strong showing in local elections on Wednesday but the close fight is unlikely to put the brakes on President Lee Myung-bak’s drive to adopt pro-business reforms.

The ruling Grand National Party (GNP) expressed surprise at how close some of the key races were being fought, but Lee averted a landslide defeat in mid-term elections in which previous incumbent parties have struggled to pick up seats.

Lee’s uncompromising stand against North Korea after blaming it for sinking one of its navy ships has seen him and the GNP bounce back in opinion polls from a voter backlash after a decision to scrap a plan to shift a large part of the government from Seoul and rows over U.S. beef imports and a river project.

“It appears a big block of hidden votes representing concerns about the tensions with the North and doubts about the way the government handled the ship sinking turned up at the polling stations,” said political commentator Yu Chang-seon.

GNP candidates were leading in five of 16 races for large city mayorships and provincial governors. The opposition Democrats were ahead in five, with six races too close to call, exit polls conducted by three major television networks showed.

Voting for nearly 4,000 mayors, governors and local government representatives has been overshadowed by the March sinking of the South Korean naval corvette Cheonan, which Seoul has blamed on reclusive North Korea, fuelling shrill rhetoric on both sides, including threats of war.

“This will unlikely result in a landslide win for the GNP,” said Choi Han-soo, a professor of Konkuk University in Seoul.

“The Cheonan ship incident could have given Lee a sweeping win, but sentiment to check the current government will deliver him a win by a narrow margin.”

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For a Take-a-Look on North Korea, click on [nNORKOR]

For a factbox on political risk, click [ID:nRISKKR]

For a factbox on reforms, click [ID:nTOE65007Y]

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Lee told Chinese and Japanese leaders at the weekend Seoul was not afraid of war, but did not want it, projecting the image of a government confident of its power and mindful of how mounting tension could unnerve international investors.

Foreign Minister Yu Myung-hwan said controlling cash flows into the North was the most effective “non-military measure” to ensure it is held accountable for the sinking of the Cheonan, which killed 46 sailors.

Pyongyang has accused Lee of fabricating the sinking for political gain ahead of the elections and threatened war if further sanctions are imposed.

“SLEDGEHAMMER BLOWS”

North Korea’s National Reconciliation Council appealed to voters in the South to “deal sledgehammer blows at the Lee Myung-bak pro-U.S. conservative group”.

“The ‘elections’ are an intermediary judgment to be meted out to the group,” North Korea’s KCNA news agency quoted the council as saying. “The past two years and several months of the Lee group’s office were days of disgrace, tribulation, pain and catastrophe.”

Last week, the North accused the South of driving a decade of developing ties into the ground and said it would scrap all pacts between the two sides, including military agreements guaranteeing safety of commercial exchange.

The liberal opposition in Seoul has blamed Lee for provoking tension after a decade of warming ties, with slogans harking back to the Sunshine Policy of the two previous liberal leaders who gave massive aid to the destitute northern neighbour.

Lee has established job creation as a top priority for the year and a smooth exit from massive fiscal spending that has pushed Asia’s fourth-largest economy out of the global downturn ahead of peers at a faster pace than expected.

Lee has seen his pro-business agenda held up in parliament since he came to office in early 2008 for a single five-year term after a summer of protests that year over his decision to allow a resumption of U.S. beef imports.

A proposal to move parts of the country’s central government to a newly constructed city about one hour south of Seoul angered the opposition and created deep rifts inside his own party. But Lee’s decision to scrap the plan also lost him voter support in the swing states in the central region.

Snap Analysis: Colombia’s Santos seen strong in runoff election

(Reuters) – Former Colombian Defense Minister Juan Manuel Santos will enter a presidential runoff in a strong position after voters gave him a comfortable lead in the first-round vote on Sunday.

World

With no candidate securing more than 50 percent of the votes needed to avoid the June runoff, Santos, an ally of outgoing President Alvaro Uribe, will face off with former Bogota Mayor Antanas Mockus on June 20. He led Mockus by 47 percent to 22 percent with most polling stations counted.

Whoever takes the helm of the Andean nation will inherit a waning, cocaine-fueled insurgency, a boom in the expansion of the commodities’ sectors and increased appetite for Colombian assets.

* Santos’ commanding lead against his main rival, Mockus, defied the trend of recent opinion polls, which showed the two deadlocked in the first round and likely headed for a tie in the runoff. Santos won every state, except for one province, according to electoral results. He will also enter second-round campaigning bolstered by his U Party’s dominant role in Congress.

* Mockus, who surged in opinion polls before the vote due to his push for clean government and more jobs, will have to take a tough look at his campaign in the next round after getting only about a fifth of the national vote. His party has only a few seats in Congress and lacks the political machinery of the U Party. That may make beating Santos insurmountable in the runoff.

* Alliances in the second round will be key to winning the presidency. Santos will seek support from the Conservative and Cambio Radical parties, while Mockus will try to claim the moderate, middle ground. The leftist Democratic Pole Party will also play a role in any grouping to oppose a pro-Uribe candidate.

* Colombia’s peso currency and local TES bonds are not expected to react on Monday due to a holiday in the United States and since the June runoff was widely expected. The two candidates are seen continuing Uribe’s pro-investment policies. Market players generally see Santos as more favorable due to the expected continuity of Uribe’s policies and strong presence of his party in Congress. Mockus — whose party is weak in Congress — would have a tougher time pushing through legislation.

* Santos’ strong showing in the first round may irk neighbors Ecuador and Venezuela. They have had strained ties with Colombia, the main U.S. ally in the region, since an attack against Colombia’s FARC guerrillas on Ecuadorean soil — an operation that occurred while Santos was defense minister. Late last week, Venezuelan President Hugo Chavez said he hoped Colombia’s next leader would want dialogue.

(Editing by Peter Cooney)

Philippine lawmakers ready to approve national vote

Philippine lawmakers expect their official tallying of votes for president and vice president in the May 10 elections to be reasonably quick, but some allegations of poll fraud could possibly delay the proclamation of winners.

A joint sitting of Congress to officially name the national leaders was brought forward by a week to May 24 after a new automated voting system produced results far quicker than the manual counting of previous elections.

Senator Benigno Aquino has a massive lead in the unofficial presidential vote count, consistent with opinion polls, and the House of Representatives probe into allegations of fraud and problems with voting machines is not expected to change that.

“We expect it to be faster than previous tallies,” Arthur Defensor, a three-term congressman who was elected governor of the central province of Iloilo, said in a television interview.

In 2004, Gloria Macapagal Arroyo’s victory was confirmed on June 23, just a week before her inauguration as president and the start of new terms of all elected national and local officials.

Nine senators and nine congressmen have been selected to conduct the official tally of votes from 274 provinces, cities and embassies and consulates across the world next week.

“We are looking at three weeks,” Senator Miguel Zubiri, an ally of the outgoing Arroyo, told reporters, saying he would ask the election agency to explain claims of irregularities about the vote count and transmission.

“We have to look at the authenticity of the flash cards, the authenticity of the certificates of canvass. We can’t easily take as gospel truth whatever we’ll see in those documents.”

KOALA BOY

At Friday’s hearing, the chairman of the committee on suffrage and electoral reforms, Teodoro Locsin, a member of Aquino’s Liberal Party, said he believed the Arroyo government was behind the initial allegations that prompted the probe.

A government spokesman said Locsin’s remarks were unsubstantiated and illogical.

Earlier this week, a video was released of an unidentified masked man claiming to work for the elections commission and saying votes been sold and voting machines pre-programmed.

“We already know who is behind ‘koala boy’,” election agency spokesman James Jimenez said, using the nickname given to the masked man, but did not identify him. “He is a losing candidate.”

The election commission had earlier said it has discovered discrepancies involving about 150,000 votes, not enough to have an impact on the presidential race.

A messy transition or drawn-out investigation could erode the positive sentiment generated by what was seen as a relatively smooth election process and the clear victory of Aquino, who has vowed to fight corruption.

Juan Ponce Enrile, current President of the 24-member Senate, who was re-elected for a six-year term, said lawmakers would not entertain protests during the official tallying of votes except when discrepancies were found.

“The fraud can be handled by the election tribunal,” Enrile said, adding lawmakers would tally votes and declare the winners.

On Friday, the third day of the House hearings, more allegations of poll fraud and failures of the automated machines were made by lawmakers who lost their re-election bids.

(Editing by John Mair and Jerry Norton)