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Ericsson takes over Marconi - end of an era
London: Ending more than six months of uncertainty over the future of one of Britain's historic companies, the Swedish telecom equipment maker Ericsson has agreed to pay £1.2bn for the bulk of its rival Marconi.

The rump of Marconi will remain as a telecoms services business in Britain and Germany employing about 2,000 people. It will be known as Telent and will have Ericsson as a key customer. Telent will also retain the British company's cash of £275mn and responsibility for the British pension fund.

Allaying fears, that a change of ownership could send the scheme's deficit of £141mn soaring, Marconi's chief executive, Mike Parton, said, "This is now the most secure pension fund in the whole of the UK."

Alongside 100 per cent ownership of Telent, investors in Marconi will get £577mn, the equivalent of 275p a share, in line with the price of the stock the day before the company confirmed it was in merger talks.

Marconi never really recovered when the dotcom bubble burst in 2000, and the efforts of the current management to rebuild the business suffered a fatal blow when the group lost out on a key £10bn network contract with BT earlier this year.

The Swedish group will acquire the Marconi trademark alongside other trade names and intellectual property rights.

The deal brings together the names of two of the most famous men in the industry: the radio pioneer Guglielmo Marconi and Lars Magnus Ericsson, who set up an electro-mechanical repair shop in 1876.

The trade union Amicus said it would be seeking talks with Ericsson over jobs and the retention of skills, research and development in the UK. It added that while the deal "marks the end of an era for the Marconi name, we hope it also marks the end of monumental mismanagement, excessive corporate greed and catastrophic job losses. It's the end of an era for a once great company."
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World Bank report: Developing lands hit hardest by 'Brain Drain'
Geneva: A World Bank study released yesterday says that poor countries across Africa, Central America and the Caribbean are losing, quite often, staggering portions of their college-educated workers to wealthy democracies.

The study's findings document a troubling pattern of "brain drain," the flight of skilled middle-class workers who have the potential to lift the countries out of poverty. The findings are based on an extensive survey of census and other data from the 30 countries in the Organization for Economic Cooperation and Development, which includes most of the world's richest nations.

The study found that from a quarter to almost half of the college educated citizens of poor countries like Ghana, Mozambique, Kenya, Uganda and El Salvador lived abroad in an O.E.C.D. country - a fraction that rises to more than 80 percent for Haiti and Jamaica.

In contrast, less than 5 percent of the skilled citizens of the powerhouses of the developing world, like India, China, Indonesia and Brazil, live abroad in an O.E.C.D. country.

These patterns suggest that an extensive flight of educated people is damaging many small to medium-size poor countries, while the largest developing countries are better able to weather relatively smaller losses of talent, and even benefit from them when their skilled workers return or invest in their native lands, according to analysts.

The World Bank study, published yesterday in a book, "International Migration, Remittances and the Brain Drain," also presents an analysis of the effect of the money that migrants from Guatemala, Mexico and the Philippines sent home, typically to their families.

Those payments, known as remittances, helped reduce poverty in those countries and were a major source of foreign exchange, but the broader implications were complex.

Most experts agree that the exodus of skilled workers from poor countries is a symptom of deep economic, social and political problems in their homelands and can prove particularly crippling in much needed professions in health care and education.

Devesh Kapur and John McHale argue in their book, "Give Us Your Best and Brightest," published last week by the Center for Global Development, a research group in Washington, that the loss of institution builders, hospital managers, university department heads and political reformers, among others - can help trap countries in poverty.
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IISS: China's defence spending more than double of that disclosed
London: Chinese military spending is more than double the level the country admits to publicly and is growing rapidly, London-based defence think-tank, the International Institute of Strategic Studies said on Tuesday.

In its yearly assessment of global military power, the IISS estimated that China spent US$62.5bn on defence last year, compared with the government's official figure of US$25bn.

For the current year, the Pentagon estimates that the Chinese defence spend could be as much as US$90bn, three times the official Chinese defence budget of US$30.2bn.

Speaking alongside Donald Rumsfeld, the American defence secretary, at the Chinese defence ministry last week, General Cao Gangchuan, the defence minister, dismissed suggestions that Beijing was ramping up its military defencespending by more than the official figures. He conceded, however, that the budget did not include some expenditures such as the Chinese space programme.

In contrast, the IISS said its own much higher assessment included fundamental parts of defence budgets such as research and development, weapons procurement, military pensions and some nuclear costs. It estimated the Chinese defence budget had grown about 10 per cent in each of the past 10 years.

Separately, the IISS on Tuesday said the US would need to retain a sizeable force in Iraq after George W. Bush, US president, has left office. It said US plans to shift the task of combating Iraq's insurgency to the country's own army had not borne fruit, while rebels were showing resilience.
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