World Briefing

Gaddafi Comes Out of His Shell
Libyan leader Muammar Gaddafi may be secretive, but we know this: he has great timing. Just when OPEC cutbacks and declining reserves are driving up oil prices, Gaddafi's mea culpa on his weapons program and open invitation to foreigners to explore for Libyan energy are gaining Western oil firms' interest. First to benefit: Royal Dutch/Shell, the Anglo-Dutch conglomerate, which last month signed a $200 million deal with Libya's state-owned oil-and-gas company to search for reserves and build a liquefied-natural-gas terminal. Shell could use a new partner: this year it has twice admitted overstating proven reserves. Officials from ConocoPhillips and Marathon have also visited Tripoli. "Libya is a nice market because of the quality of its crude and proximity to Europe," says Jeb Armstrong of Argus Research. But don't confuse this crush with true love. Says Armstrong: "Russia remains the grand prize."

Coke Falls Flat Overseas
You would think a recovering global economy would be good for a company like Coca-Cola. But the Atlanta soft-drink giant has been facing multinational malfunctions. In February, India's Parliament alleged that Coke's soft drinks contain pesticide residue. (India levied similar charges against PepsiCo.) Meanwhile, U.S. investigators are probing whether the company oversold its product in Japan to pad short-term results a practice known as channel stuffing. In Britain, the press has been ridiculing Dasani, Coke's purified-water brand. It turns out Dasani does not flow from mountain springs in Switzerland but from the taps of London. And Coke had to recall Dasani from British shelves after discovering high levels of bromate, a chemical that carries long-term cancer risk. The recall forced Coke to postpone Dasani's launch in France and Germany. For a company that derives two-thirds of its revenues from international sales, the hits do damage: Coke's stock was flat through the first quarter; Pepsi's rose 14%.

The Movie Phones
Cell phones are going straight to video. New models from Nokia, Sanyo and Toshiba enable you to record and send 15-sec. video clips as well as stills. But considering that prices range from $199 for the Nokia 3650 and $350 for the Sanyo VM4500, you might want to wait for the next generation. The mini-movies on these camcorder phones are grainy, and sending clips via e-mail is clumsy because common keyboard symbols, like @ and _, are hard to find on all three phones. The clips are meant to take only a few minutes to transmit, but in our test, we had trouble sending with the Toshiba VM4050 from Sprint ($330), though the sound was superb. You may not see your friend's 1-year-old smiling by his first cake, but you'll hear Happy Birthday loud and clear.

Cheap Air Everywhere
A new flock of discount carriers is taking wing this year, bringing lower prices and tougher competition around the world. Orient Thai Airlines launched low-fare One-Two-Go in December to defend its turf from newcomers like AirAsia. Elsewhere in Asia, elite Singapore Airlines is rolling out the cheap seats on its new discount marquee, Tiger Airways, which launches later this year, partly to fend off upstart ValuAir, which has set a May debut.

In Europe, Air Polonia is flying within Poland and to London's Stansted Airport. To the south, Wizz Air, a Hungarian carrier, starts service in Eastern Europe in May, with an average one-way fare of $60. Even farther south, Qantas, Australia's biggest airline, begins service linking more than a dozen cities on Jetstar, going head to head with Virgin Blue. In the U.S., veteran no-frills flyer Southwest Airlines will take on U.S. Airways in Philadelphia. Southwest will offer $198 round-trip fares to cities like Phoenix, Ariz., and Las Vegas; USAir vows to make it a nasty fight. --By Barbara Kiviat

Chips Are in the Money
If microchips are any indicator, the global economy continues to gain momentum. The Philadelphia Semiconductor Index, which perked up last month after yet another research group forecast a recovery in 2004, is up 70% from a year ago (though still below its 52-week peak in January). On the heels of upward predictions by IDC and IC Insights, Gartner revised its estimates of global chip sales to call for a 23%-to-32% surge this year, but the boom probably won't last long. Gartner's latest report also lowered its 18% growth forecast for 2005 to 13%.

Meanwhile, semiconductors are creating trade friction with China. Last month Japan and the European Union publicly supported a complaint the U.S. filed with the World Trade Organization against Beijing for imposing a 17% tax on imported semiconductors while levying 3% on chips made domestically. The policy has helped attract chipmakers like Taiwan Semiconductor Manufacturing Co. to open plants on the mainland. One U.S. trade group estimates that at least 19 new semiconductor facilities will be built there by 2008. --By Julie Rawe