1 of 4. Men chat as they drink beer at a sheeben (bar) in Soweto, southwest of Johannesburg August 8, 2012.

WORCESTER, South Africa | Wed Aug 8, 2012 10:08am EDT

WORCESTER, South Africa (Reuters) - On a bitterly cold Saturday afternoon in Worcester, a forlorn rural community near South Africa's southern tip, the queue at the liquor store is the longest in town.

It's a scene constantly repeated across South Africa and a number of other nations on the continent: the prelude to a weekend of binge drinking.

After years of turning a blind eye to alcohol abuse, politicians from South Africa to Kenya and Zambia are under pressure to tackle a problem that is adding to Africa's burden of HIV, birth defects, road accidents and violent crime.

Africa has the world's highest proportion of binge drinkers, even though its large populations of Muslims and evangelical Christians generally abstain from alcohol. As incomes rise, it has become a boom market for international brewers and distillers whose sales are often flagging in the wealthy world.

"It's true that most people in Africa don't drink for cultural, religious and economic reasons but those who drink, drink a lot," said Dr Vladimir Poznyak of the World Health Organisation (WHO) in Geneva.

If governments finally crack down effectively, companies such as SABMiller, Diageo Plc and Heineken NV may find Africa no longer allows the spectacular sales growth they have achieved there in recent years.

The drinks firms say Africans are better off consuming their products than popular but sometimes lethal home concoctions.

However, the effects in Worcester of drinkers rapidly consuming dangerous - sometimes even fatal - quantities of alcohol are obvious. The liquor store queue snakes past a drunken man crumpled on the ground in a pool of vomit and in the evening drinkers cram into Worcester's numerous run-down bars.

"They drink and drink and drink. They don't stop when it is necessary to stop drinking liquor," said Berita Jones, a police captain in the town of about 130,000.

"Worcester's crime is almost entirely alcohol-related," said Jones, whose time is spent checking that its 166 licensed bars outlets comply with the law, and making regular raids of its more than 300 shebeens, or informal taverns.

UNQUENCHABLE THIRST

Home to some of the world's fastest growing economies, Africa's thirst for beer and spirits is almost unquenchable: analysts estimate beer volumes rose around 7 percent last year. Excluding the mature South African market, growth reached more than 10 percent.

Drinks companies want to keep up the momentum. SABMiller is investing up to $2.5 billion over the next five years to build and renovate breweries on the continent. Rival Diageo's African sales have risen by an average 15 percent in each of the last five years, and now account for 14 percent of the group's total.

But some public health officials say regulation of alcohol consumption and education about its abuse have failed to keep pace. "In parallel to this increase in commercial alcohol availability, the infrastructure and regulation for effective alcohol control have no strong tradition in many African countries," said Poznyak.

NEW LAWS

On average an African drinks about 6.15 liters of pure alcohol each year, about half of what a European consumes. However, more than 25 percent of Africans are binge drinkers, the highest proportion in the world, according to a WHO report.

Most African countries already have laws that prohibit underage drinking and drink driving, but critics say these are poorly enforced and often completely ignored.

South Africa is crafting a new law to restrict alcohol advertising, raise the minimum drinking age to 21 from 18 and get tougher on drink driving, Minister of Social Development Bathabile Dlamini has said.

The bill would also propose warning labels on alcohol containers, raising taxes and stricter licensing laws for alcohol outlets, said a government official who declined to be identified because the bill has not yet been made public.

The bill will be discussed in South Africa's cabinet in the next few weeks before its release for public comment, the official said.

In Kenya authorities are also looking to raise the legal drinking age to 21 from 18, following on from a 2010 law that banned alcohol sales in grocery stores and in bars before 5 p.m.

The Mututho law, named after the legislator who crafted it, John Mututho, is credited for a 90 percent drop in alcohol-related deaths in Kenya.

"Even when we say we have succeeded up to that level, we are also saying we have failed 10 percent, so the age of drinking will be 21. We are amending the law," Mututho said.

Earlier this year, Zambia banned the manufacture and sale of spirits in relatively cheap small plastic sachets, which it blamed for increasing alcohol abuse by young people. Zambia's health department secretary told Reuters that alcohol-related road accidents and health problems are increasingly a concern.

In Nigeria, Africa's most populous nation and a huge beer market, alcohol regulation does exist but critics say it is loosely enforced.

Adeline Osakwe, deputy director at the Nigeria Food and Drug Administration, said the country ensures consumers are aware of alcohol content through product labeling. It also regulates alcohol advertising.

"For TV commercials, as long as it will not lead people to abuse alcohol, we give approvals," Osakwe said.

HOME-BREW TO HEINEKEN

For years poor Africans were limited to home-brew sorghum or maize beer, sometimes made with dangerous ingredients such as battery acid to increase the potency.

Commercial alcohol is now widely available in most African states and premium brands such as Johnny Walker whisky or Heineken beer are increasingly in reach of the average drinker.

Rising incomes have also encouraged conspicuous consumption of premium brands. Even in Worcester's gritty nightclubs, some tables are weighed down by bottles of pricey spirits such Scotch whiskies Chivas Regal and Glenfiddich.

Drinks companies say commercially produced alcohol is safer than home-brews. "The alternative is that lower income people who wish to consume liquor will buy illicit and potentially dangerous alcohol," said Vincent Maphai, executive director of Corporate Affairs at SABMiller's South African unit.

SABMiller is already offering lower priced beer in order to win over drinkers from the home-brew market, which it says is about four times the $11 billion commercial market.

Higher alcohol taxes, which the South African bill is likely to impose, risk of pushing the poor back to potentially lethal home-brews. Nevertheless, public health officials say governments need to do more to warn about the dangers of alcohol abuse.

BIRTH DEFECTS

Even several months into pregnancy, Johannesburg resident Martha regularly drank until she passed out. She never worried about the effect until her son was born with a hole in his heart. "I would have stopped if I knew that it would harm my baby like this," said Martha, who declined to give her family name.

Her son, now 12 years old, was diagnosed with fetal alcohol syndrome, an incurable birth defect that has left him with the brain and body of a four-year old.

South Africa has the highest reported number of children with such birth defects: about 122 out of every 1,000 are born with the syndrome, compared with about 8 per 1,000 in the United States, according to South Africa's Foundation for Alcohol Related Research.

But experts say many Africans, like Martha, don't get proper education about the dangers of alcohol, especially in rural areas where access to hospitals and clinics is limited.

Alcohol also heightens the danger on a continent where driving is already perilous. Kenya's Kenyatta National Hospital treats up to 40 victims of road accidents, mostly caused by drunk drivers and pedestrians, on some Saturday nights.

But with little to do beyond drinking for entertainment in many parts of rural Africa, health officials face a tough battle.

"In spite of all economic benefits that increased investments in alcohol production and sales can bring, the health of the population should be properly protected and this should be a priority," the WHO's Poznyak said. "Health is the best investment, also from an economic point of view, in any society." ($1 = 0.6401 British pounds)

(Additional reporting by Duncan Miriri in Nairobi, Chris Mfula in Lusaka, Chijioke Ohuocha in Lagos; editing by David Dolan and David Stamp)

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House Budget Chairman Paul Ryan (L) (R-WI) introduces Republican presidential candidate Mitt Romney (R) as he addresses supporters at Lawrence University during a campaign stop in Appleton, Wisconsin, March 30, 2012.

NEW YORK | Thu Aug 9, 2012 8:57pm EDT

NEW YORK (Reuters) - With Republican Mitt Romney on the verge of choosing a vice presidential running mate, conservatives have mounted a concerted campaign to boost the chances of Representative Paul Ryan, the architect of his party's controversial budget-cutting plan.

Often likening Ryan to Ronald Reagan, conservatives say the Wisconsin lawmaker's supposed drawbacks as a candidate - mostly stemming from the steep cuts in social safety net programs he has proposed - are actually strengths that could bring heft, content and perhaps a spark to Romney's campaign.

Romney, in an interview Thursday with NBC News, gave no indication who he might pick, but outlined what he was looking for in a running mate.

"I certainly expect to have a person that has a strength of character, a vision for the country that adds something to the political discourse about the direction of the country," he said.

Despite the nation's economic problems, Romney trails President Barack Obama in most polls three months from the November 6 election, and may even be losing momentum. A Reuters/Ipsos poll this week gave Obama a 7-point lead (49 to Romney's 42 percent), up slightly from a month ago.

Particularly enthusiastic backers of Ryan are opinion writers for the East Coast's leading conservative publications - like the Wall Street Journal, the National Review and the Weekly Standard. As if on cue, many of them weighed in this week in support of Ryan, almost daring Romney to pick him instead of more conventional short-listers, such as former Minnesota Governor Tim Pawlenty or Senator Rob Portman of Ohio.

The case against Ryan, 42, is that he is a lightning rod for criticism of the unpopular cuts in government health programs for the elderly and poor he proposed as chairman of the powerful House of Representatives Budget Committee

That is not a weakness, the conservatives argued, but a strength. They want Ryan's budget to be the issue and they want Ryan there to defend it.

Such a debate, they believe, could elevate the campaign beyond questions that are consuming it now, about Romney's unwillingness to disclose more than two years of tax returns for example, or his leadership of the investment firm, Bain Capital.

"Mr. Obama and the Democrats want to make this a small election over small things - Mitt's taxes, his wealth, Bain Capital," the Wall Street Journal editorialized Thursday as it pushed a Ryan choice.

"To win, Mr. Romney and the Republicans have to rise above those smaller issues and cast the choice as one about the overall direction and future of the country."

"Ryan is an ideologue in the best sense of the term," the National Review's Rich Lowry wrote in Politico. "He is motivated by ideas and knows what he believes and why. But he's not blinkered. He is an explainer and a persuader."

Romney has a choice to make - go with the tried and true, Portman or Pawlenty, or take a bit of a risk with Ryan, or look elsewhere. Many expect him to announce his choice soon, possibly as early as next week when he winds up a campaign trip in Portman's Ohio.

DEMOCRATS WELCOME RYAN

The risk of Ryan becomes apparent from talking with Democrats on Capitol Hill. While lawmakers and congressional aides from both parties use words like "smart," "telegenic," "young" and "exciting" to describe Ryan, Democrats seem him as a dream choice for different reasons.

"I would love for Romney to pick him," said one Democratic leadership aide. "It would crystallize everything for us. Just to have him on the ticket would even further elevate the Ryan budget."

That budget, which has been embraced by Romney, would reform the Medicare healthcare program for the elderly and disabled in a way that Democrats say would shift significant costs to those recipients. It also would cut deeply into other popular domestic programs, including education and the joint federal-state Medicaid healthcare program for the poor.

Another Democratic aide in Congress said if Ryan was the pick, "We could really with no effort wrap the Ryan budget around Romney." The aide added, "If he's not on the ticket we have to spend energy reminding folks" that Romney said he was in favor of Ryan's controversial budget.

Some Capitol Hill Republicans who support Ryan's proposals worry that the Democrats may be right about Ryan's impact.

"There is the practical political question as to whether or not we can truly win by being so blunt about the kind of changes most Republicans think have to be made to programs like Medicare," said a Republican aide who asked not to be named.

"It turns the election into an all-in bet," the aide said, adding, "The concern is that when you go all in, you can lose and be out of the game."

There's another concern as well: Ryan is the ultimate Washington insider in an anti-Washington era. He began his career in Congress as a congressional aide and has been in and around the Capitol most of the time since.

This week's editorials seemed in part designed to give Romney the courage to defy the conventional assessment of Ryan.

"That the hyper-cautious Romney is seriously considering him counts as one of the biggest surprises of a campaign almost entirely lacking in them. Picking Ryan would represent a Romney revolt against conventional wisdom. And appropriately so - since the conventional wisdom is wrong," National Review's Lowry wrote.

In the Weekly Standard, Bill Kristol and Stephen Hayes argued that the party "will be running on the Romney-Ryan plan no matter what. Having Paul Ryan on the ticket may well make it easier to defend the plan convincingly."

CLOSE TIES TO PAWLENTY

Will the pressure on Romney over his vice presidential choice matter in the end? Probably not, said former White House press secretary Ari Fleischer, a Republican political analyst.

"None of it matters - the only criteria should be whether the pick can become president and whether the relationship between Romney and his selection is strong."

If Romney were to pick the one person from among his short list with whom he has the closest ties, it would be Pawlenty, who quickly endorsed Romney after dropping out of his own race for the Republican presidential nomination last year.

Pawlenty, well-liked within the Romney campaign, has been an active campaign stand-in for Romney and was stumping for him in Michigan on Thursday.

Pawlenty is popular among evangelical conservatives whose active support Romney will need. Yet many analysts cite the fact that he failed to generate much excitement for his own candidacy as a strike against naming him as the No. 2. In 2008, he was passed over by then-nominee John McCain for the vice presidency.

"We'll know soon enough," Pawlenty told a crowd in Jackson, Michigan, on Wednesday, according to ABC News. Romney, he said, has a rich pool of conservative talent from which to choose and as a result he "can't make a bad pick."

If there is a tortoise in the race, it could be Portman, a brainy former White House budget director and former U.S. trade representative.

Many in Washington think he is the odds-on favorite despite misgivings about his ties to the George W. Bush White House. Picking him could help turn the tide for Romney in Ohio, a state he desperately needs to win and where he now trails Obama.

There is a long list of candidates beside Ryan, Pawlenty and Portman for his vice presidential running mate, whose most critical task will be to go head-to-head in a debate against sitting Vice President Joe Biden in October.

Among them are Louisiana Governor Bobby Jindal, Florida Senator Marco Rubio, New Hampshire Senator Kelly Ayotte and Virginia Governor Bob McDonnnell.

The campaign has made it clear that an announcement could come soon, but has been coy on exactly when, a strategy that keeps interest in the decision high. Many believe Romney will announce the pick next week when the Olympics are over and after a four-state bus tour that starts in Virginia on Saturday and ends Tuesday in Ohio.

(Editing by Fred Barbash and Jackie Frank)

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* Shareholder equity ratio at 2.2 pct in June vs 4.6 pct in March

* Keeps full-year operating profit outlook at 50 bln yen

* Shares drop 2.2 pct ahead of results

TOKYO, Aug 9 (Reuters) - Japan's Olympus Corp suffered a further deterioration in its ability to meet financial obligations as quarterly earnings slumped, adding pressure on the scandal-hit company to enter into a capital deal.

Shareholders' equity fell to 2.2 percent of total assets in June from 4.6 percent in March, the company said on Thursday. That takes Olympus further away from the 20 percent level widely regarded by analysts as indicative of financial stability.

Olympus needs a capital injection before its business year ends in March 2013, Senior Executive Managing Officer Yasuo Takeuchi told reporters at a briefing.

The 93-year-old manufacturer of cameras and medical equipment has held talks with several Japanese companies including FujiFilm Holdings and Sony Corp on a capital tie-up as it tries to mend its severely depleted balance sheet hit by a massive accounting scandal last year.

Olympus booked a 60 percent slump in operating profit to 2.12 billion yen ($27.05 million) for April-to-June as an operating loss at its camera division and a stronger yen offset a profit gain at its medical equipment division.

The company kept its full-year operating profit forecast at 50 billion yen.

Olympus posted a net loss of 49 billion yen in the year ended March 31, after admitting in November to a decade-long scheme of falsifying financial statements and hiding investment losses.

The company has promised investors it will boost its shareholders' equity ratio to 30 percent in five years. To raise it to 10 percent, Olympus said it needs to find some 50 billion yen in fresh capital.

Sources familiar with the matter have said Olympus is in final talks with Sony to accept a cash injection in return for a stake, while medical device maker Terumo Corp said last month it is seeking to form a joint holding company with Olympus as part of a 50 billion-yen capital infusion plan.

Olympus maintained on Thursday that it is in talks with several companies on financial support.

In an unusual turn of events, Terumo slapped its potential partner with a lawsuit last week for failing to disclose its accounting fraud before signing a business and capital tie-up with the medical equipment maker seven years ago.

In a regulatory filing on Thursday, Olympus said it expects creditors to continue providing loans despite the fact that misreported financial statements in the past meant it had violated covenants on some loans.

Shares in Olympus settled 2.2 percent lower before the earnings announcement. Tokyo's benchmark Nikkei average rose 1.1 percent. ($1 = 78.3600 Japanese yen) (Reporting by Mari Saito; Editing by Ryan Woo)

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A woman in a wheelchair passes the shop window of a clothing store in Pontevedra, northern Spain, June 29, 2012.

FRANKFURT/BERLIN | Thu Aug 2, 2012 6:18am EDT

FRANKFURT/BERLIN (Reuters) - The United States raised the pressure on euro zone leaders to take decisive action on solving the region's debt crisis, notably by lowering troubled members' borrowing costs, on the eve of a crucial European Central Bank meeting.

President Barack Obama said he welcomed recent declarations by European leaders and the ECB on the need to do whatever is necessary to preserve the euro.

U.S. Treasury Secretary Timothy Geithner had a blunter message for the euro zone, saying it must take steps including "bringing down interest rates in the countries that are reforming and making sure those banking systems can provide the credit those economies need".

Obama, in a telephone call with French President Francois Hollande on Wednesday, "encouraged their efforts to take decisive action", the White House said.

Hollande reassured Obama that European Union member states aimed to enact soon the decisions taken at a summit in late June, according to the French leader's office.

Germany, whose voters are deeply hostile to funding bailouts of the euro zone's weakest members, agreed in principle at the summit that the bloc's rescue funds could buy bonds of countries that are struggling to borrow on international markets.

Geither made his more forthright comments in an interview with Bloomberg Television recorded on Tuesday, a day after he flew to Germany to meet Finance Minister Wolfgang Schaeuble and ECB President Mario Draghi.

Italy and Spain, the euro zone's third and fourth largest economies, are struggling to fund their budget deficits and debt obligations at affordable levels as bond market investors take fright.

Draghi's promise last week to do whatever it takes to preserve the euro, within the ECB's mandate, stirred speculation that its Governing Council might take more radical steps at a monthly policy meeting on Thursday.

"BOLD AND APPROPRIATE"

Italian Prime Minister Mario Monti said Draghi's promise was "bold and appropriate", and said European leaders were weighing joint intervention by the ECB and the euro zone's rescue funds.

He predicted that the future permanent rescue fund, the European Stability Mechanism (ESM), would "in due course" be granted a banking licence so it could tap ECB funds to buy almost unlimited amounts of bonds despite German opposition.

Market expectations of a major ECB move this week have faded somewhat. Those traders and investors who expect action on Thursday would sell the euro and European shares, and drive up Spanish and Italian bond yields if the ECB sits on its hands.

Geithner said Schaeuble and Draghi had told him of plans they were making on tackling the crisis, but he cautioned against expecting immediate action.

Past crises showed that the longer it took to address the issues, the more they cost. "I believe they understand that. That's why they've signalled they are prepared to move further. Now again, this is going to take time," Geithner added.

German Vice-Chancellor Philipp Roesler rejected pressure for the ECB to step in and cap the borrowing costs of countries in trouble, saying the central bank should stick to fighting inflation and not ease market incentives for reform.

"If you take away the interest rate pressure on individual states, you also take away the pressure on them to reform," Roesler, economy minister and leader of the Free Democrats, junior partners in Chancellor Angela Merkel's centre-right coalition, told reporters in Berlin.

He also reasserted Germany's firm opposition to letting the ESM borrow from the central bank, calling this "the road to an inflation union".

Nick Parsons, head of markets strategy at nabCapital in London, said the euro could fall a couple of U.S. cents from current levels, while bond market analysts expect Spanish yields to reach new euro-era highs if the ECB does not act.

At the heart of the crisis, Greek political leaders said on Wednesday they had reached agreement on 11.5 billion euros of austerity cuts demanded by the country's lenders. Failure to agree the cuts threatened a sequence of events that could have led to Greece's exit from the single currency.

The head of one of its lenders, Christine Lagarde at the International Monetary Fund, promised to stand by the country and "never leave the negotiating table", while calling on its leaders to do more with structural reforms and by improving tax collection.

She also warned that uncertainty over the future of the euro zone was clouding the horizon for the Spanish economy.

MONTI ON TOUR

Monti, who is touring Europe to press for action to bring down Rome's borrowing costs, made his pitch to euro zone hardliner Finland on Wednesday, saying Italy did not need an assistance programme but might in future need "a breathing break" from high interest rates.

"We have in mind a possible intervention through EFSF, ESM and the ECB," Monti was quoted as saying by Finnish daily Helsingin Sanomat before he met Prime Minister Jyrki Katainen.

Central bank sources have told Reuters that intervention could be at least five weeks away because Draghi's comments had not been agreed in advance with the Governing Council, and other elements must first fall into place.

The sources said the ECB could revive its mothballed programme of buying the bonds of troubled governments along with the rescue funds, but Spain would first have to request assistance, which it has resisted so far.

Credit ratings agency Standard & Poor's affirmed Spain's sovereign BBB+/A-2 rating on Wednesday, citing its commitment to economic and fiscal adjustments, but warned it risks losing investment grade if euro zone support fails to boost confidence.

Euro zone leaders would have to agree to the rescue funds buying up government bonds, and the German Constitutional Court would have to uphold the legality of the bloc's permanent rescue fund in a ruling due on September 12.

The leaders have spent the past week issuing statements promising to take whatever steps are necessary to rescue the currency, but none has raised expectations as high as Draghi, who heads the only federal European institution able to act swiftly and decisively.

However, the ECB is divided, with Germany's Bundesbank opposed to reviving government bonds or giving the euro zone rescue fund a banking licence.

Draghi met Bundesbank chief Jens Weidmann privately earlier on Monday to try to reconcile differences on what action the bank might take. Neither bank would comment on the meeting.

The Bundesbank released on Wednesday a June 29 interview for an in-house publication in which Weidmann said governments expected too much from the central bank, and what they wanted did not always make economic sense.

"Politicians overestimate the central bank's capacity and place too many demands of it," he said. "Whether it's about interest rates or any sort of special measures, in the end it always comes down to the same thing: trying to rope the central bank into meeting fiscal policy objectives.

Weidmann said the Bundesbank would continue to defend its positions firmly "so that the (European) monetary union remains a stability union".

With the economy slowing and inflation under control, other options on the ECB's radar screen include a possible further cut in interest rates and a further loosening of rules on the collateral it will accept to lend funds to banks.

(Additional reporting by Terhi Kinnunen in Helsinki, Swaha Pattanaik and Richard Hubbard in London, Eva Kuehnen in Frankfurt and Margaret Chadbourn in Washington; Writing by Paul Taylor; editing by Will Waterman and David Stamp)

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