BHP remains cautious about global economy

Don Argus, in his last letter to shareholders as BHP Billiton chairperson, said on Thursday that the IMF predicts that between 2007 and 2011 the output from advanced economies will grow by just 1.9% whilst the developing countries will be 22.1%.

"We are very mindful that most countries have difficult decisions to make regarding a wind back of stimulus packages, against the backdrop of financial services sector reform, and how they boost economic growth. Governments play a key role in spurring productivity, encouraging investment and fostering international competitiveness.

"It is imperative that the impact of any policy and tax changes of governments around the world on sectors of economies should be well understood and do not hinder investment and the capacity of economies to grow. Ultimately policies which reduce free cash flow available from profits generated after paying tax could affect a company's capacity to pay future dividends to its shareholders," he wrote.

"These are important considerations as we plan our future but equally important are our succession processes and Board renewal which continue to work well," he said.

Following a successful transition period, which is all but complete, Jac Nasser will become the chairperson of BHP Billiton on March 30.

"There is no doubt in my mind that the new partnership of Jac Nasser and [CEO] Marius Kloppers will deliver the long term value to which shareholders have become accustomed," Argus said.

Argus was a BHP Billiton Board member for 13 years and served 10 years as chairperson.

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