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The General Assembly voted overwhelmingly Wednesday to replace the UN's discredited human rights body with a new Human Rights Council, ignoring US objections that not enough was done to prevent abusive countries from becoming members, reports The Associated Press.

A year ago, Secretary-General Kofi Annan proposed replacing the widely criticized and highly politicized UN Human Rights Commission, which has allowed some of the worst-offending countries to use their membership to protect one another from condemnation. The Human Rights Council, approved Wednesday, is a watered-down version of Annan's vision. But the secretary-general still called it "historic," and human rights groups welcomed its creation.

Kyodo (Japan) writes that Ambassador John Bolton said after the vote that Washington would cooperate to make the new council as ''strong and effective as it can be,'' despite the fact that ''we did not have sufficient confidence in this text to be able to say that the HRC would be better than its predecessor.''

Canadian daily The Globe and Mail writes that Bolton said his government is concerned that the UN members did not go far enough in ensuring that the council will have credibility. Bolton said the United States wanted council members elected by a two-thirds vote rather than a majority, and wanted a more efficient mechanism for booting violators off the council. Opponents of the resolution in the United States also complained that, under new term limits, the United States would have to vacate its seat three out of every nine years, leaving the world's only superpower vulnerable to political attacks.

Xinhua (China) explains that by the terms of the resolution, the membership in the new council would be based on equitable geographic distribution, and the 47 seats shall be distributed among regional groups with 13 from Africa, 13 from Asia, 6 from Eastern Europe, 8 from Latin America and Caribbean, and 7 from Western Europe and other countries. The members of the council will serve for a period of three years and shall not be eligible for immediate re-election after two consecutive terms. The elections of the first members of the council would take place on May 9, 2006, and that the first meeting of the council shall be convened on June 19.

The New York Times further explains that under terms meant to restrict rights abusers from membership, candidates for the council will be voted on individually rather than as a regional group, their rights records will be subject to mandatory periodic review and countries found guilty of abuses can be suspended. But the final text had a weakened version of the crucial membership restriction in Annan's original plan, which required new members to be elected by two-thirds of those voting. Instead, council members will be elected by an absolute majority of member states, meaning 96 votes.

The Washington Post adds that General Assembly President Jan Eliasson, who led negotiations on the council, said the resolution adopted Wednesday would strengthen the UN capacity to confront rights abusers and make it more difficult for them to join. "The true test of the council's credibility will be the use that member states make of it," Annan said. Human Rights Watch, Amnesty International and other human rights groups praised the General Assembly's decision. But they cautioned that UN members will have to ensure that governments with poor rights records do not win election to the new council.

LONDON – Ethnic and religious fighting, land disputes and communal conflicts have driven more than 3 million Nigerians from their homes since 1999, a report showed in mid-March.
That gives Nigeria the dubious honour of being home to the third-highest number of internally displaced people (IDPs) in the world after Sudan and Colombia.

How do other countries stack up? Here’s a league table of countries with the highest numbers of people internally displaced by violence.

1. Sudan 5.4 million
2. Colombia 1.7 to 3.7 million
3. Nigeria 3 million
4. Uganda 1.7 million
5. Congo 1.7 million
6. Iraq 1.2 million
7. Algeria 1 million
8. Turkey 356,000 to more than 1 million
9. India At least 600,000
10. Indonesia 342,000 to 600,000

Source: Internal Displacement Monitoring Centre except Nigeria’s National Commission for Refugees for Nigeria

MILWAUKEE, WI - The Manpower Employment Outlook Survey released March 14, 2006 revealed that second-quarter hiring is expected to be positive in 23 of 24 countries and territories surveyed, with Japanese and German employers reporting their most optimistic hiring plans since the survey began in these countries in the second quarter of 2003. The strongest second-quarter hiring prospects reported globally were in Japan, India, Taiwan, Peru, New Zealand and Hong Kong, with only Italian employers reporting a negative hiring outlook for the quarter ahead. This quarter also marks the first time the survey has been conducted with employers across Peru. The quarterly report from Manpower Inc. (NYSE:MAN) is the most extensive, forward-looking employment survey in the world, gathering data from more than 47,000 employers across the globe each quarter.

"Despite high fuel prices and other challenges, the global labor market looks set to improve in most of Europe and Asia in the second quarter, with steady hiring set to continue in the Americas," said Jeffrey A. Joerres, Chairman & CEO of Manpower Inc. "German employers are saying they will begin to add employees again, albeit modestly, and hiring activity in Japan should be vigorous, beyond what we normally see in the second quarter - their peak hiring season. Chinese employers say they will reduce their hiring activity compared to last year at this time, while U.S. employers expect to add to their payrolls at a continued steady pace."

Employers in 10 of 12 European countries surveyed are reporting stronger hiring intentions compared to first quarter and nearly two-thirds are reporting improvements from last year at this time. Second-quarter hiring prospects are the strongest in Spain, Norway, Sweden, Ireland and the UK, based on seasonally adjusted data. Notably, the only negative Outlook for Europe was reported in Italy where employers have been pessimistic for three consecutive quarters. German, Spanish, Swiss and Dutch employers are reporting their strongest hiring intentions since the survey began in those countries. "Compared to the first three months of the year, hiring intentions in Europe are decidedly improved, however, Italy continues to lag behind," said Joerres. "Encouragingly, German employment prospects have improved from both the first quarter and a year ago at this time, with the strongest hiring activity anticipated by employers in the Finance/Insurance/Real Estate/Business Services sector."

Of the eight countries and territories included in the survey across Asia Pacific, hiring activity is expected to be strongest in Japan, India and Taiwan, while the weakest hiring in the region is anticipated in Singapore, Australia and China. While hiring is set to improve from first quarter in the majority of countries surveyed in Asia Pacific, employment prospects are weaker than the same quarter of 2005 in Australia, China, New Zealand and Taiwan.

"A large part of the robust hiring expectations in Asia Pacific can be attributed to activity in the Finance/Insurance/Real Estate, Manufacturing, and Services sectors, where improvements from first quarter were reported in these sectors across nearly every country," said Joerres. "Meanwhile, employers in five of six industry sectors we survey in China say they will slow hiring from one year ago, the only exception is the Finance/Insurance/Real Estate sector."

Hiring across the Americas is expected to remain stable from last year at this time. Employers in Peru joined the survey this quarter with particularly optimistic second-quarter hiring plans, the strongest of the four countries surveyed. The Canadian outlook remains identical to one year ago.

"The labor markets in North America have been incredibly stable and, as is so often the case, the Mexican labor market is moving in tandem with its northern neighbor," said Joerres. "There is notable optimism amongst employers in the Construction sector in both the U.S. and Mexico, where job seekers should find favorable conditions."

The next Manpower Employment Outlook Survey will be released on the 13th of June 2006 to report hiring expectations for the third quarter of 2006.

The new head of the World Bank is ruffling feathers, but his intolerance of crooked politicians should be applauded, writes former economics correspondent at the Far Eastern Economic Review, Salil Tripathi, in a commentary published in The Guardian (UK). World Bank President Paul Wolfowitz has suspended loans to powerful countries, strengthened the internal department of institutional integrity, reshuffled officials, and brought in new staff with the aim of making the organization - and its borrowers – accountable (…) Wolfowitz is on the right track on corruption.

For too long, aid money has been squandered by unscrupulous officials and he appears to be keen to turn that around. In recent months, loans to Argentina, Bangladesh, India, Kenya and Uzbekistan have been put on hold. The Bank's disbursements to Chad have been suspended after the African country went back on its commitment to use revenues from a controversial pipeline with Cameroon only for agreed development targets. Individually, Wolfowitz's decisions may seem like unconnected, reflex-action measures. [But] to understand his crusade against corruption, think of his time as the US ambassador to Indonesia in the 1980s. Anyone who spent time in Indonesia during that time would have seen how corruption was undermining Indonesia. The Suharto regime had made the country self-sufficient in food, built infrastructure, and made serious attempts at spreading literacy, but the government was reeking of graft and hobbled by corruption, which raised costs at all levels. But few in the international community complained at that time, because Indonesia was the model pupil of the World Bank [until] change came abruptly, when the rupiah collapsed and debt-laden Indonesian firms went under. The story of many developing countries is similar, if less stark and spectacular, writes Tripathi.

Corruption hurts poor countries at all levels. It raises costs, diverts resources and undermines integrity. It forces people to act dishonestly. Big business passes on such costs by increasing prices, thereby passing the cost to consumers. At the petty level, bureaucrats who exercise discretionary power seek bribes even from the smallest of businesses - rickshaw drivers or shopkeepers. How will Wolfowitz measure, or eliminate, this? Governance indices from the World Bank, particularly from its innovative recent research on business procedures, such as the Doing Business reports, show that countries which have multiple and cumbersome procedures grow more slowly. When juxtaposed with the corruption perception index of Transparency International, the anti-corruption watchdog, there is often close to perfect correlation. Indeed, Wolfowitz's predecessor James Wolfensohn called corruption "cancer" as early as 1996, in a speech still cited widely within the Bank, writes Tripathi.

One way to address corruption is by setting examples and punishing bad behavior. That, Wolfowitz has already demonstrated. The other is to establish clear procedures that everyone can understand. While headline-grabbing suspension of loans, such as in the case of Chad, are useful and may even be necessary, in the longer run Wolfowitz will need a more coherent strategy.

To do this, he should also think beyond natural resources: oil is not the only culprit. The other elephant in the room is infrastructure - there is a reason why public works departments in many countries are known as "plunder without detection." The Bank needs to develop clearer criteria by pulling together the various anti-corruption initiatives in one framework. For every Chad there is a Cameroon, and the World Bank cannot say no to all loans, all the time, the author concludes.

A new United Nations report, "The World’s Women 2005:

Progress in Statistics", published in January 2006, concludes that there has been limited progress in the last thirty years both in the number of countries reporting national statistics as well as in the degree to which national statistics capture gender-related issues. With over forty percent of Africa’s population not covered by census, it is clear that today’s statistical reporting simply excludes many of the world’s poorest people. The report recommends that governments should conduct at least one census every ten years; and that countries establish and sustain civil registration and vital statistics systems, and adopt sustainable integrated national survey programs. “Statistics are essential building blocks for programs to provide health and education services, to fight poverty, AIDS and deliver clean water to communities,” said Shaida Badiee, Director of the World Bank’s Development Data Group, who chaired a recent World Bank panel discussion on the report. “Without reliable statistics, we don’t know the full scope of the problems and cannot adequately measure the results we actually achieve."

Corruption plays a crucial yet nearly invisible role in depriving nearly a fifth of the world's population of access to safe drinking water, a new United Nations report on water and development said on Thursday, reports Reuters.

While supplies of fresh water are adequate for the whole planet, mismanagement in its distribution helps explain why adequate drinking water is beyond the reach of 1.1 billion people, while 2.6 billion people lack access to basic sanitation, said the report prepared by 24 UN agencies. Those affected are among the world's poorest, and according to the report, over half of them live in China or India.

The Press Trust of India Limited adds that at this rate of progress, regions such as Sub-Saharan Africa will not meet the UN Millennium Development Goal of halving, by 2015, the proportion of people without sustainable access to safe drinking water. Such are the findings in the second UN World Water Development Report entitled: "Water: A Shared Responsibility," which was presented at a press conference in Mexico Thursday on the eve of the fourth World Water Forum to be held March 16-22.

The BBC notes that described as the most comprehensive assessment to date of the world's freshwater supplies, the report said that politicians, businesses and aid charities all had a role to play in addressing the problem. Although steady progress had been made in recent years, it said that more still needed to be done. UNESCO, which headed the group of 24 UN agencies that compiled the data, said the report highlighted the need for stronger leadership and coordination.

The Associated Press writes that according to the UN, diarrhea diseases and malaria kill around 3.1 million people globally -- 1.6 million of whom could be saved if provided with safe drinking water, sanitation and hygiene. Poor nations are losing as much as eight percent of their GDP due to environmental degradation. Water pollution in China alone cost the country $1.7 billion in lost industrial income in 1992. In Kenya, improved resilience to droughts and floods by better water management and preparedness could see the country's GDP increase as much as 6 percent, the report states.

The news agency adds that water use has increased six-fold during the last century -- double the rate of population growth. More water is needed for food production, which must grow by 55 percent to meet food needs by 2030. But private investment in water services is declining and financial resources for the water sector are stagnating, the report found. Investment in water also pays massive dividends, the authors argued. It is estimated that 322 million working days a year are lost -- worth $750 million -- because of poor water and sanitation. Meeting global targets to provide clean water and sanitation would yield time and convenience savings of $7 billion and $340 million in health care costs.

The Toronto Star (Canada) further reports that lakes, rivers and groundwater are being polluted and much water is wasted in inefficient industrial and farming practices. In many places, "a colossal 30 to 40 percent or more of water goes unaccounted for, through water leakages in pipes and canals and illegal connections." Wetlands, forests and other areas that naturally cleanse and store water are being destroyed. Mushrooming urban populations are spreading on to swampy or hilly land that's difficult to service. Climate change is worsening things: droughts in Africa and southern Europe are more intense, hurricanes are more violent and precipitation is increasingly unpredictable.

The daily adds that the report offers many solutions. They include pollution cuts, attacks on corruption, more efficient use of water - through measures such as drip irrigation instead of spray - and better urban planning. As well, it says, more dams and other storage measures should be built, particularly in Africa where only seven percent of the potential water control has been harnessed. Price increases would discourage waste, but poor people must be protected, the report states. The major reform, Gordon Young, coordinator of the Paris-based UN World Water Assessment Program says, must be improved communication, policies and planning by governments. Canada, with approximately 20 percent of the earth's fresh water is the envy of much of the world, and Young says, has the capacity and expertise to play a major role.

UN: Women Denied Representation, Making War On Poverty Hard To Win

Millions of women around the world are being denied effective representation because of the low numbers of female politicians, judges and employers, warns the United Nations in a report published to mark International Women's Day, The Independent (UK) reports.

Campaigners say that unless urgent action is taken on the status of women, the Millennium Development Goals on reducing poverty, infant deaths and standards of education will not be met. A woman dies every minute from complications arising from pregnancy and childbirth, and HIV rates are now rising faster among women than men. Charities say that 700 million women are living without adequate food, water, sanitation and education.

The UN report says rates of female participation in governments across the developed and developing world are still appallingly low and that for women to be adequately represented in their countries, at least 30 percent of parliamentary seats should have a female representative. Just 20 nations -- including Rwanda, Mozambique, Guyana and Burundi -- have reached or exceeded the 30 percent mark and only three countries (Chile, Spain and Sweden) have complete gender parity in government.

Reuters notes that even after winning a leadership post, women leaders face harsher judgment than their male counterparts when they make mistakes, simply because they are women, Rachel Mayanja, special UN adviser on the advancement of women told a news conference. According to the report, among the obstacles facing women, are their under representation in such male-dominated fields as the military and foreign affairs and the persistence of stereotypical attitudes and behavior toward women. Even though more women are being elected to parliaments every year, they soon discover "the absence of gender-sensitive enabling environments" in the world's legislatures, it said.

The Jakarta Post (Indonesia) further reports the Indonesian National Commission on Violence Against Women, in conjunction with International Women's Day, released a report Tuesday on violence against women in 2005. Commission chief Kamala Chandrakirana reported a 45 percent increase in reported cases of violence against women, from 14,020 cases in 2004 to 20,391 cases in 2005. Some 82 percent of the cases were domestic abuse. She said the increase showed an iceberg phenomenon. This indicates the number of reported cases in 2005 represents the actual extent of violence against women in Indonesia as Kamala said women had been gaining confidence about reporting the violence they suffered or witnessed since the Domestic Abuse Law came into effect in 2004.

Xinhua (China) meanwhile writes that Chinese legislators are calling for the clampdown on various forms of gender discrimination and maltreatment of women. Mentioning rampant extramarital love affairs, domestic violence, sexual harassment and career gender discrimination, deputies attending the ongoing annual session of the National People's Congress, China's top legislature, said that more efforts should be made to prevent women from unfair treatment.

The Hindu (India) reports that in a message on the eve of International Women's Day, Indian President A.P.J. Abdul Kalam said women had an important role to play in the mission to transform the country into a developed nation by 2020. Kalam noted that women were a source of inspiration for the family, society and ultimately the nation and that when a woman was empowered with value-based education, an empowered society was assured.

The Irish Times writes that in marking the theme of the day -- the celebration of leadership by women throughout the world -- there have been notable examples over the last year in politics and other spheres. Angela Merkel became the first female chancellor in Germany, Ellen Johnson-Sirleaf of Liberia became the first female president in Africa, Michelle Bachelet of Chile, the first in Latin America. The struggle to achieve these goals has inspired successive generations of women since International Women's Day was, in effect, inaugurated in Copenhagen in 1910.

Agence France Presse meanwhile notes that Liberian President Sirleaf, is in France on Wednesday as guest of honor for the country's International Women's Day celebrations. French President Chirac's office said that Chirac is expected to hail Sirleaf's efforts in rebuilding and reinforcing democracy in Liberia. Sirleaf, who became Liberia's leader in January after elections, has one of Africa's toughest jobs before

her: picking up the pieces in her small West African state after 14 years of civil war. Sirleaf's Women's Day events Wednesday include a development conference, UNESCO events and a banquet at France's foreign ministry.

China will channel its surging economic growth to narrow the chasm dividing its rich cities and restive countryside, Premier Wen Jiabao told parliament on Sunday in a speech tempering optimism with stark warnings, reports Reuters (03/04).

In setting out government goals for the coming year, Wen promised "continuity and stability" in general economic policy, including the currency exchange rate and monetary policy. But he said more wealth and investment must go to farmers and other struggling groups to ensure China's stability and growth. Wen warned of dangers and difficult choices ahead. Wen also drew a picture of a rapidly growing economy threatened by excessive investment, production gluts and mismanagement. He said distorted industrial expansion was undercutting China's long-term economic health.

A large section of his report addressed the government's plans to build a "new socialist countryside" for the country's 750 million farmers. Wen said the government plans to spend 339.7 billion yuan ($42.3 billion) this year on upgrading agriculture, and billions more on rural social services. The program was a "major historic task" to divert government investment, education and health care, and bank loans to the countryside, where rising protests against corruption and inequity have alarmed central officials.

Wen said these redistributive policies would bring industry and cities not pain but more growth by stimulating domestic demand. He described the measures as part of the government's "strategy of expanding domestic consumption." Income rises would provide cash for the poor to spend on consumer goods, and improved social security and more affordable hospitals and schools would ease fears about the future, he said.

Agence France Presse (03/05) adds that Wen plans to increase subsidies for farmers, and ensure they get paid enough for their products by maintaining floors on the prices of key grain varieties on the market. In another attempt to remedy this, China will completely rescind an agricultural tax collected from farmers nationwide, according to the Premier. The Premier also briefly suggested more efforts would be undertaken to protect farmers from land seizures, which often leave them with only token compensation.

The Associated Press (03/04) reports that China is confronting a rural health crisis on a monumental scale. Up to 90 percent of the 800 million people in China's countryside lack affordable medical care. Children go unvaccinated. AIDS patients can get free drugs, but can't afford the monitoring and additional medicine they need. China ranked 187th out of 191 countries in a recent World Bank survey of affordable care. Communist leaders are now promising to rebuild a rural health care system that has fallen apart with the decline of farm cooperatives during two decades of economic reform.

The Wall Street Journal (03/06) notes that the commitment to fund additional spending on rural health care and education from central coffers could have far-reaching consequences. Until now, Beijing has increasingly pushed the burden of social welfare onto cash-strapped local governments, which have responded by raising ad hoc fees they charge farmers. Hong Liang, a Hong Kong economist with Goldman Sachs Group Inc., said reducing the spending and revenue-raising powers of local governments would curb abuses of power that fuel rural unrest.

Beijing's focus on rural areas wouldn't necessarily result in a slowdown along the booming coast, she said, as investment there is largely funded by local governments, and central-government infrastructure spending has long been skewed toward the interior. Liang said it was "much more worrisome" that Wen made scant reference to private enterprise in his speech and emphasized government spending and subsidies over market-based solutions to tackle the country's welfare and agricultural problems.

Geneva, Switzerland, 6 March 2006 - The World Economic Forum, the world leader in competitiveness research, will release its annual Global Information Technology Report on Tuesday 28 March at 11.00 CET (10.00 GMT).

The Global Information Technology Report 2005-2006 assesses and ranks the competitiveness of a record 115 economies. The annual study is used widely by governments, academics and business leaders as a valuable tool for shaping economic policy and guiding investment decisions. It is based on the latest national statistics as well as results of the Executive Opinion Survey, which captures the perceptions of over 10,000 top business leaders around the world.

Since it was first launched in 2001, The Global Information Technology Report has become a valuable and unique benchmarking tool to determine national ICT strengths and weaknesses, and to evaluate progress.

The China Development Marketplace, a new initiative of the World Bank to support and strengthen grassroots civil society organizations (CSOs) in China, selected the top projects from 100 finalists. The winners proposed reduction of poverty through a range of different approaches. The winning ideas included supplying environmentally sustainable biological gas to single mothers in Hubei Province; creating support networks for waste collectors in Shenzhen City; teaching poor children believing in Islam in pasturing areas of Xinjiang vocational skills by providing them with micro-credit.

He Shenghua is the winner of a project that will create community service centers to teach deaf youngsters vocational skills in East China's Jiangxi Province. She said teaching sign language enhances communication not only between deaf children and their parents, but also within the wider deaf-mute community throughout China. "Every penny of the grant from China Development Marketplace will be spent on promoting services for deaf people in society."

Entitled "Supporting Innovations for Scaling-Up Services that Reach the Poor," the scheme reflects the World Bank's commitment to promoting the potential of CSOs to improve their communities, the Bank said. World Bank Vice President Frannie Leautier said China has made significant achievements in poverty reduction, but there are still challenges. "It is important and necessary for civil society organizations to play a key role in supplementing the government's efforts in the fight against poverty. "Often focusing on particular districts, and working closely with local governments, CSO interventions involve capacity building, training and service-delivery in micro-credit, agriculture, off-farm employment, education, health, water and sanitation, and other activities," said the vice president.

The news agency notes that almost 1,000 applicants from all over China submitted their ideas on how to best reduce poverty. The 100 finalists with the best ideas were invited to Beijing for the two-day competition to showcase and share their unique ideas. A diverse and eminent jury selected the winners during the event. Many of these judges came from China Development Marketplace partner organizations, including government agencies, academia, non-profit organizations, media, Chinese corporations, multinational corporations and the international donor community.

Each of the winners received up to $30,000 to implement their projects. David Dollar, China Country Director of the World Bank, thanked the finalists for their participation in the competition and for the role they are playing to reduce poverty around the country, saying, "In my mind they are all winners because they are doing important and rewarding work on the ground."

In other developments, Xinhua and Asia Pulse (02/27) note that World Bank President Paul Wolfowitz praises China's poverty reduction efforts in a new publication that details worldwide efforts to reduce the scourge of poverty. Entitled “Reducing Poverty on a Global Scale: Learning and Innovating for Development,” the book identifies the main factors that cause an increase or reduction in poverty and what this means for the World Bank and donor countries.

An entire chapter is devoted to China which has worked closely with the World Bank to pilot innovative poverty reduction efforts in Southwest China, Qinba Mountain Area and northwest China's Gansu Province, and China's Inner Mongolia Autonomous Region. The book outlines how the World Bank-sponsored programs helped raise incomes, improve food security, and expand access to basic services in 61 of China's poorest counties. These projects have played an important role in poverty reduction and rural development, it said.

Meanwhile, Pakistan Press International Information Services (02/24) report the World Bank Thursday announced names of 33 finalists being invited to the first Pakistan Development Marketplace, scheduled for March 15, 2006 in Islamabad.

After Chad, Kenya, and Bangladesh, it is now Congo-Brazzaville’s turn to be scrutinized by the World Bank, writes La Tribune (France). World Bank President Paul Wolfowitz has decided to suspend several loans and block debt forgiveness to the country. Kleptocrats better watch out, the daily warns. Wolfowitz, who became head of the World Bank in June, is in the process of making the fight against corruption one of the priorities of his mandate, as corruption undermines the growth and thwarts the efforts of poverty reduction -- the heart of the World Bank’s mandate. But Congo is not an isolated case. Chad, Kenya, Bangladesh, India and Argentina recently witnessed themselves refused loans due to problems of corruption or the non-observance of commitments they entered into.

Meanwhile, the World Bank President has succeeded in enlarging his new crusade. Last week, during a meeting in Washington, the African, Asian, Inter-American, European development banks, as well as the World Bank, agreed to reinforce their practices in the fight against corruption, notably through the exchange of information.

A Radio France Internationale broadcast further reported that during a meeting of the World Bank’s Board of Directors in Washington last Thursday, Paul Wolfowitz said that Congo’s debt could not be cancelled without major changes by the government in terms of transparency. Wolfowitz said that debt relief for Congo could not be granted on the basis of promises, but on the basis of facts, good governance, and transparency. “I think we are basically on the right figures that have to be reached. There are basically three: the implementation of a new procurement code that promotes transparency and competition; reforms in the national oil company marketing practices that bring them in line with best international practice; and completion and implementation of a national governance and anticorruption plan,” Wolfowitz said.

The head of the global development lender stressed that a central issue was to get “real performance, the kind of performance that makes sure that debt relief goes to benefit the poor people of Congo.” Wolfowitz noted that 70 percent of the country’s population was living on less than a dollar a day, even though the country has more than $2 billion, the oil revenues of the country are more than $2 billion annually.

RFI adds that the decision of the World Bank President fully satisfies NGOs such as Global Witness, which belongs to the Publish What You Pay initiative. Sarah White of Global Witness stated that, “We, as a member of PWYP, are very happy with the decision the World Bank has taken. In the case of Congo, there are clear proofs of bad management of oil revenues and even embezzlement. In these circumstances, we think neither the World Bank nor the IMF should cancel Congo’s debt.”

La Croix (France) meanwhile writes that the government of Congo-Brazzaville “took note” of Wolfowitz’s desire to link debt forgiveness to country performance in the fight against corruption. “This desire is not at all in contradiction with what our country tries to do in the field of transparency and good governance,” stated a spokesperson for the Congolese government.

After more than two years of debate, the IFC's board passed measures changing the way businesses qualify for World Bank funding and injecting more flexibility into rules on consultations with local residents and assessments of the impact on the environment. The lender hailed the new guidelines as increasing the influence of local residents in developing countries over the lifetime of the projects, not just before they start, and said they also promoted sustainable use of natural resources.

The new guidelines cover labor rights, the impact of a project on health and safety of people and tracking greenhouse gas emissions - as well as expanding environmental assessments and social consultations. The IFC said its new standards will likely lead to an update of the so-called Equator Principles that - based on IFC guidelines - are already applied by 40 commercial lenders representing some 80 percent of global project finance.

Triggers for the changes, it said, were that old rules were inadequate for increasingly complex projects and a new IFC business model that believes long-term profitability of these ventures is better secured by the companies running them. But wider unease about standards applied to IFC-funded projects has been rising as some sparked protests by local communities over environmental problems and lack of consultation.

The Financial Times meanwhile reports that the move to tighten standards will have a big impact on the IFC's investment in Asia. Last year, the IFC committed nearly $1.5 billion to projects in south Asia, East Asia and the Pacific, out of a total of $6.5 billion. Under the new rules, projects will have to meet eight performance standards, including rules on pollution, health, biodiversity and working conditions. Companies working on projects with IFC financing will have to disclose much more about their engagement, including the expected risks and impacts. The IFC itself will also undertake to disclose more information than before.

Reuters further writes that concerned NGOs on Tuesday warn loosening the guidelines and moving away from minimum requirements and concrete benchmarks now left the IFC, whose mandate is development, behind many private banks in the benchmark it provides for good practice. Specifically, they said the new standards do not state when consultation with local populations should take place, fail to include the right of indigenous peoples to prior informed consent and rely largely on firms' self-reporting rather than independent assessments of a project's impact.

La Tribune (France) finally writes that certain World Bank officials fear that too strict standards encourage companies to seek other sources of financing among private banks. These fears, La Tribune writes, need to be qualified as 40 private international banks have said that they are ready to adopt the new criteria. Some have been members of the Equator Principles since 1998. The mining sector has stated in the past few days that it was "at ease" with the new criteria which raise the image of the companies. The IFC has already started to put them into practice. In Ghana, it recently granted partial financing to a gold extraction project piloted by Newmont on the condition that the mining giant involves the local communities.

MONTREAL - The kidnappers of American journalist Jill Carroll in Iraq have set Sunday, February 26th as a new deadline for meeting their demands. Reporters Without Borders is launching an international week of mobilisation starting on Tuesday, February 21st for her release. Reporters Without Borders Canada invites Canadian media to express their solidarity with Carroll and the two kidnapped Iraqi journalists also being held in the country. During this week, RWB distributes badges to media workers with the slogan "Free Jill Carroll" written on a white background, white being the colour we have chosen for this campaign. Everyone is encouraged to wear a badge in solidarity with the detained journalists and to publicise their case whenever possible. Reporters Without Borders Canada also has new audio recordings from Jill Carroll's father and twin sister asking for her release. These recordings can be sent to media representatives by email.

With only five days to go before the new ultimatum expires, the efforts of everyone are vital. If we really believe it is essential for journalists to be reporting in Iraq, it is our duty to step up action to save the lives of not only Carroll, but also Iraqi journalists, Ms. Rim Zeid and her colleague Mr. Marwan Khazaal, who are also being held hostage. Carroll, who works for several Jordanian, Italian and US papers, including the Christian Science Monitor, was kidnapped on January 7, 2006 by three armed men in the western Adel neighbourhood of Baghdad as she went to meet a Sunni politician, Adnan al-Dulaimi. The body of her interpreter, Allan Enwiyah, who was shot dead, was found at the scene.

Zeid and Khazaal, who work for the Iraqi TV station Al-Sumariya, were seized by four armed men as they left a press conference on February 1, 2005 at the headquarters of the Iraqi Islamic Party.
37 journalists and media assistants have been kidnapped in Iraq since fighting began there in March, 2003. Eight of them are women.

In a commentary published in The Washington Post (02/20), columnist Sebastian Mallaby writes that nine months into his tenure as President of the World Bank, Paul Wolfowitz has made headlines mainly by provoking a staff backlash. Meanwhile, the staff backlash is obscuring something interesting. In the past few months, there have been hints of fresh thinking on corruption. Now the evidence has reached critical mass: The change appears to be genuine, writes Mallaby.

The Bank has held up $800 million in lending to Indian health projects. Indian politicians were said to have their hands on the health funds, so Wolfowitz blocked the loans. The Bank has frozen lending to Chad, whose government had reneged on a promise to spend its oil revenue on poverty reduction. It took some courage to admit that the curse of oil remained unbroken. The Bank has canceled 14 road contracts in Bangladesh because of corrupt bidding. Two government officials have since been fired, and Wolfowitz plans to ban the private firms involved from future World Bank contracts. The Bank has frozen five loans to Kenya because of corruption, though it did go ahead with a project to improve Kenya's financial management. The Bank has interrupted a project in Argentina that topped up the wages of poor workers.Some of the money seems to have greased the ruling Peronist Party's electoral machine before elections in 2003, and the government has brought charges against one senior official and fired 10 others.

Finally, the Bank has postponed debt relief for Congo. A team from the International Monetary Fund had certified that the country deserved relief, and the Bank was supposed to fall in line last Thursday. But a newspaper report about the Congolese president's extravagant hotel bills was passed around by Wolfowitz's top staff, who noted that KPMG, the firm that audits Congo's state oil company, had refused for three years running to sign off on its financial statements. On Tuesday Wolfowitz called the IMF's boss and asked whether Congo really merited debt relief. On Thursday he refused to go ahead with it.

In sum, Wolfowitz's World Bank presidency, which had seemed to lack an organizing theme, has acquired one. The new boss is going to be tough on corruption, and he's going to push this campaign beyond the confines of the World Bank; on Saturday he persuaded the heads of several regional development Banks to join his anti-corruption effort.

“As each case for intervention arises, Canada must prioritize our choice between intervention and respect for state sovereignty, realistically assess our capabilities, and then clearly identify the states and organizations that will make the best collaborators for Canada,” says Dr. Cooper in the paper. This entails adding the “3Ns”: niches, norms and networks, to the existing “3Ds” of defence, development and diplomacy.

Accompanying the release of this paper, Dr. Cooper will also give a public lecture entitled “Rethinking Canada’s Strategy for Humanitarian Intervention” as part of CIGI’s Food for Thought lecture series on February 17, 12:00pm-1:00pm. CIGI hopes the lecture and release of the Working Paper will generate broader public discussion on Canada’s foreign policy in fragile and weak states.

This Working Paper is the first in an upcoming series of publications on fragile states. The series builds on two international conferences held at CIGI in 2005: ”Canada in Haiti: Considering the 3-D Approach” (November 2005) and “Canada in Afghanistan: Assessing the 3-D Approach” (May 2005). Military, development, and political experts and NGO practitioners took part in those discussions. More information on those conferences may be found at www.cigionline.org

All CIGI Working Papers, encompassing themes such as emerging economies and the re-shaping of diplomacy, are available at http://www.cigionline.ca/publications/working_papers.php.

The World Bank announced this week that Latin America needs to cut poverty to boost growth - a conclusion that may be "descubriendo el agua tibia," or, stating the obvious. But this is a big deal for the international lending institution, writes columnist Marcela Sanchez of The Washington Post.

The authors of the World Bank report, "Poverty Reduction and Growth: Virtuous and Vicious Circle," recognize that a country can't necessarily grow its way out of poverty, and that poverty can be a huge drag on economies and on growth. Poor regions lacking in infrastructure fail to attract investment. Poor families, faced with substandard schools and high costs, are less likely to invest in the education of their children. And, as has been particularly clear in recent years, countries unable to moderate income disparities face social tensions that jeopardize business. As the authors quantify it, when poverty levels increase by 10 percent, growth decreases by 1 percent and investment is reduced by up to 8 percent of a country's GDP.

Two of their main conclusions are a breakthrough for the Bank: that private sector growth is not a panacea for the poor and that inequality must be targeted directly. Sanchez suggests that a third conclusion is almost heretical for the Bank: that the state needs to take on more economic responsibility than less. "Converting the state into an agent that promotes equality of opportunities and practices efficient redistribution is, perhaps, the most critical challenge Latin America faces in implementing better policies that simultaneously stimulate growth and reduce inequality and poverty," the report says.

The authors of the World Bank report point out that there are specific "intervention" programs already in place in Brazil, Colombia and Mexico that manage to be "both pro-poor and pro-growth." These programs provide cash to very poor families under the condition that their children stay in school and that they take steps to improve their health. Rather than creating dependency or increasing birth rates, as some critics feared, the programs have "successfully increased human capital" in high-poverty regions.

Tages Anzeiger (Switzerland) meanwhile reports that according to the World Bank report, one fourth of Latin Americans live on less than three Swiss francs per day. And the gap between rich and poor is getting bigger. Latin American heads of governments can be satisfied with the overall economic growth over the past two years. In 2004, GDP rose on average 5.7 percent, and 4.2 percent last year. The majority of the population did not, however, profit from the newly won dynamics. The new study by the World Bank shows that growth does not automatically remove poverty. Of the 450 million people in Latin America and the Caribbean, 135 million cope with less than 3 francs per day. About 40 million people are extremely poor, they don't even have enough money to buy the most basic food items on a regular basis.

EFE News Service and Cinco Dias (Spain) also report on the World Bank study, "Poverty Reduction and Growth: Virtuous and Vicious Circle."

Boomtown Rats member and Live Aid founder and Bob Geldof has joined forces with Berlin-based global anti-corruption group Transparency International (TI) to better ensure global aid is not lost to corruption, reports The BBC (UK).

They will focus on the $50 billion of additional aid to developing nations pledged last year by the Group of Eight (G8) most industrialized nations. "It will not be possible to beat poverty without fighting corruption," said Geldof. Geldof wants TI founder Peter Eigen to head a group studying aid delivery.

Geldof said he would urge UK Prime Minister Tony Blair to appoint Eigen to lead the independent monitoring committee on aid delivery proposed by Blair's Commission on Africa Report. Geldof, along with fellow anti-poverty campaigner and pop star Bono, wants Eigen to head a committee of six or seven high profile members.

Eigen said Tuesday's coming together of TI and Geldof would have a real impact. "Today we have started a dialogue between a champion of the global fight against poverty and the worldwide organization at the vanguard of the anti-corruption movement," he said. "This cooperation has the potential to save millions of lives and improve the quality of life for millions more."

Geldof said the proposed monitoring committee must "have an understanding of corruption and how it works." He added that structures need to be put in place to ensure that the G8's promised increase in aid got through to those who needed it.

Le Monde (France) meanwhile writes that World Bank President Paul Wolfowitz has made the fight against corruption one of its priorities. The Kenyan government had to realize a few days ago not to take his words lightly. The organization suspended a loan of $250 million while several ministers in the government are facing corruption charges. "The money will only be made available once we are satisfied with the governments' efforts in the fight against corruption," his spokesperson said. For Wolfowitz, the number one priority of the Bank towards its shareholders is to ensure that the $20 billion in loans that are made available each year are neither wasted nor embezzled.

A blueprint for China's future Thursday predicted that the world's most populous country will have eradicated poverty by 2050, reports The Guardian (UK).

The China Modernization Report, drawn up by the country's leading research institute, the Chinese Academy of Sciences, predicted that the more than 80 million Chinese living below the government's poverty line of less than 668 yuan ($81) a year will be lifted out of poverty and that half the projected population of 1.5 billion will own a car and be able to afford overseas travel. If the country can maintain its current nine percent rate of economic growth, it predicts the average income in China will rise to $1,300 a month, about ten times the current level.

Agence France Presse notes that if China were to continue along its current development path, the earth's most populous country would be among the world's top 40 modernized nations by 2050, the academy, overseen by the State Council, China's cabinet, said. "By the end of the 21st century it will be in the top 20." The academy pointed out that in 2001 China lagged 80 years behind the US and Europe in terms of a developmental index that factored in overall productivity, urbanization, average life expectancy and adult literacy. However, to attain such goals China will have to leave behind its agrarian roots and transform itself into a wholly industrialized society and then move towards a knowledge-based society, similar to that of Europe and the US. The academy's report was not resoundingly endorsed, however, with an editorial carried in the English language China Daily on Thursday cautioning it may not be realistic.

The Press Trust of India writes that China has already recorded impressive achievements in reducing poverty. According to Chinese official statistics, the population in abject poverty was reduced from 250 million to 26 million during 1978 and 2004. The ratio of the very poor to the total rural population has been reduced from 30.7 percent to 3.1 percent.

He Chuanqi, head of the research team who compiled the report, said that to attain the goal, China should follow two stages of social transformation. It should first turn into a city-based industrialized society from the present agricultural one, and then step into a knowledge-oriented society with rural and urban areas developing at the same rate.

By 2050, 80 percent of the urbanization work in China will have been completed, Xinhua (China) quoted Chuanqi as saying. He added that the social transformation will also bring great changes to peoples' life-styles, as 80 percent of the population would have access to information industry services, 50 percent could afford foreign travel and 50 percent would own private cars. However, he was keen to point out that the current situation is still not that optimistic. The economic index of China in 2001 equaled that of the US 100 years ago. China is lagging far behind developed countries in terms of urbanization, life-expectancy and adult literacy. He also noted that the social transformation will change peoples' opinions and life-styles, thus evoking controversy and provoking social problems.

But the Bank's quarterly report on the eight ex-communist countries which joined the European Union in 2004 said elections in four central European countries and inflationary pressures in the Baltic states may delay euro adoption beyond current plans. "Growth remains buoyant in the EU-8 despite high oil prices, slow recovery in Western Europe, and domestic political uncertainty related to elections," Thomas Laursen, the World Bank lead economist for the region, said in a statement. "However, slow progress in fiscal consolidation in the Visegrad countries and inflation pressures in the Baltics create uncertainty about euro adoption prospects," he said.

The Bank said it expected no improvement this year in budget positions, needed to fulfil euro entry criteria, among the so-called Visegrad countries of Hungary, the Czech Republic, Slovakia and Poland, with Hungary even risking deterioration. Hungary, the Czech Republic and Slovakia face elections this year and Poland's polls last year produced a minority government.

Laursen said Poland, the biggest of the new EU members, was missing an opportunity for bolder budget reforms, created by a pick-up in economic growth and the fact that its conservative government was still at the beginning of its term. Poland's government last week signed a deal with two smaller parties, raising concerns it may lead to looser budget policy and higher spending. Buoyant growth in the region is helping to reduce high unemployment rates which are easing in tandem with strong output and productivity growth, the Bank said. But sustained growth and more job creation required further reforms.

The Baltic states of Estonia, Latvia and Lithuania eased their fiscal policies in recent months despite continued robust economic expansion, the World Bank said. It warned that this policy shift, coupled with high oil prices, may complicate inflation control. The Bank said Slovakia was set to adopt the single currency in 2009, while Slovenia was on track for euro zone entry in 2007. Estonia, Lithuania and Latvia, which aim to take up the euro either in 2007 or 2008, may miss their targets, because of their problems with controlling inflation, it said. It reiterated that Poland, the Czech Republic and Hungary were all unlikely to join the euro bloc before 2010.

The World Bank boosted its forecast for China's economic growth this year from 8.7 percent to 9.2 percent on Thursday following an economic census that prompted Beijing to sharply increase the official size of its economy, reports The Associated Press.

Agence France Presse writes that the Bank offered a "benign" outlook for the world's fastest growing major economy in its "China Quarterly Update," attributing growth to strong demand for its exports, continuing robust investment and increasing domestic demand. However, consumption is not expected to expand fast enough in 2006 to achieve the government's goal of more balanced growth, largely due to subdued rises in already low rural incomes, the report said. To achieve more balanced growth, the government will need to invest more on social services, such as health care, education and a social safety net to encourage farmers and others to spend more, the bank said.

The organization said the revised figure was due to the government's announcement in December last year that the size of economy had been underestimated by 16.8 percent in 2004 and so was not due to any change in the general economic situation. The world's fastest growing economy grew 9.9 percent in 2005, elevating it to the world's fourth biggest, from seventh place previously, overtaking France and Britain.

Xinhua (China) notes Bert Hofman, the World Bank's chief economist for China, told a briefing in Beijing that China's adoption of a more flexible exchange rate last year should make it easier for its central bank to limit spare credit in the banking system. China scrapped its currency's 11-year-old peg to the dollar in July last year in favor of a link to a trade-weighted basket of currencies, allowing it to appreciate 2.1 percent against the US unit. Hofman noted that the reform had achieved a "fair amount of success" in reducing non-foreign direct investment inflows into the country, especially in the second half of 2005, thereby increasing monetary policy independence. Funds had rushed into the country betting on a large appreciation of the Chinese currency, the yuan, but the limited gains against the dollar achieved since July plus interest rate hikes in the US and elsewhere may have dampened the enthusiasm of speculators.

AFX Asia (Hong Kong) adds that the World Bank forecasts broad M2 money supply growth of 15 percent in 2006 but stops short of any interest rate predictions. It said, however, that a more flexible exchange rate system could eventually allow for rises in the cost of capital, which is currently priced well below international levels and strictly controlled by the People's Bank of China. A market-driven currency policy could also provide China with another means of managing inflation via exchange rate fluctuations that influence the cost of imports and, as a result, domestic prices. At present, however, China's economy is not at major risk of either inflation or deflation, according to World Bank forecasts, which put consumer price index (CPI) growth at 1.8 percent in 2006, the same as last year. Overcapacity, which pushed down prices in China last year, remains restricted to selected sectors and does not yet deserve macroeconomic intervention, the Bank said.

Reuters adds that as significant as the headline forecasts is the Bank's judgment that domestic demand is taking over the baton of growth from exports - a key goal of China's latest five-year plan, which has just commenced. While China's trade surplus tripled to a record $102 billion in 2005, fanning protectionist flames in the US, the World Bank said the contribution of trade to economic growth had already turned negative. Louis Kuijs, the Bank's senior economist for China, said import growth was likely to keep outstripping exports in 2006. "We expect looking forward that there will be a gradual decline in the trade surplus," Kuijs told a news conference. "It will take a while before the surplus has dropped dramatically, but we do see a halt in this trend."

Bringing better balance to the economy will also require tilting domestic demand away from investment towards consumption. Here the Bank was less optimistic of swift progress because of the difficulty of significantly boosting incomes in the countryside, where two out of three Chinese live, without much faster emigration to the cities. Strong fixed-asset investment - growth in the last 3 years has averaged 26.3 percent - has raised fears that gluts will squeeze margins and profits, spawning a new crop of bad loans.

Hofman acknowledged that state-owned companies, flush with cash and with easy access to credit, may not have incentives to rein in investment. But he said there was no convincing evidence of systemic overcapacity or overproduction. The Bank said the challenges facing policy makers had not changed much as a result of China's first comprehensive economic census.

It has been written off as wristband idealism, but last year's "Make Poverty History" campaign mobilized a generation of politically active young people, according to a survey for Oxfam, reports The Guardian (UK).

Eighty-four percent of 16- to 25-year-olds said the campaign and the Live8 concerts had had the biggest impact on them last year, ahead of London's Olympic bid victory and the general election. Two-thirds of respondents said they had worn the white bands last year and a similar percentage intended to support charities this year by signing petitions or joining email campaigns. Nearly half said they would attend rallies or events this year, and 45 percent said they would donate money or goods to charity.

But the survey of 1,400 16- to 25-year-olds for Oxfam's website, Generation Why, also indicated that charities needed to work hard this year to maintain the impetus. More than half (54 percent) of those surveyed said they were uncertain about what should happen next. Young people were not turned off by the celebrity-driven nature of Make Poverty History. More than three-quarters (78 percent) said celebrity endorsements got "the message to people who might not otherwise care", and 63 percent said actors and music stars could raise awareness of important issues. Just 6 percent said the involvement of celebrities trivialized the issues.

The office and World Economic Forum USA Inc. - an independent, non-profit organization with its own board and officers - will be led by the former Chairman and CEO of CNH Global NV, Jean-Pierre Rosso, who will become its Chairman as well as Chairman of the Centre for Global Industries. Mr Rosso previously was Chairman and CEO of Case Corporation (which through its merger with New Holland formed CNH Global NV) and currently serves on the boards of ADC Telecommunications, Inc., Eurazeo, and Medtronic.

"I am excited to join the World Economic Forum team and contribute to its mission to improve the state of the world. The Centre for Global Industries is a major step towards reinforcing the partnership between business and other global stakeholders to address key global issues."

With operations spanning New York and Geneva, the Centre for Global Industries will focus on developing the Industry Partnership programme, which is aimed at engaging global companies in the Forum's activities at the industry level. To date, more than 80 companies have formally joined the programme, including more than 45 from North America.

Commenting on the announcement, Klaus Schwab, Founder and Executive Chairman of the World Economic Forum said: “This step of expanding our presence in the US will help us better serve our core constituency, the business community, many members of which are based in North America or have significant operations there. Along with the recent announcement of an office in Beijing, it helps give the Forum a truly global presence. Jean-Pierre Rosso brings a wealth of experience and intelligence to his new role, and I have complete confidence that we will see the Centre thrive under his leadership. On a personal note we have always had a very special relationship with New York - we even moved our Annual Meeting normally held in Davos to New York to show solidarity with the city in the months after 9/11. In many ways the city is a home from home.”

“The World Economic Forum's decision to locate its North American affiliate here signals its enormous confidence in New York City as one of the world's greatest places to do business," said Mayor Michael R. Bloomberg. "Our unparalleled access to global companies and international markets will allow World Economic Forum USA to advance its mission and achieve great success in its new office."

US operations will be led by Kevin Steinberg, who will become the Chief Operating Officer of the World Economic Forum USA Inc. Mr Steinberg brings 14 years of experience with the World Economic Forum to his new role, having in recent years led its Membership and Partnership department, overseen its Geneva-based industry teams and guided its Institutional Strategy function.

Kevin Steinberg noted: “Complementing our presence in Geneva with dedicated teams in New York will allow us to more effectively and systematically work with our corporate partners - not only those based in the US, but also globally. New York, as a leading centre for global business, is a focal point of expertise and activities for many industries. With the creation of the World Economic Forum USA Inc., we hope to become an integrated part of that hub, offering our members and partners a way to collectively engage on issues that matter to them most."

The Board of the World Economic Forum USA Inc. will initially include Al Berkeley, Chairman and CEO of Pipeline Trading Systems and formerly the President and Vice-Chairman of NASDAQ; Rajat Gupta, Senior Partner, McKinsey & Company and formerly its Managing Director Worldwide; Joe Schoendorf, Partner, Accel Partners; with Jean-Pierre Rosso as its Chairman. Kevin Steinberg will serve as its Secretary.

The World Economic Forum (WEF) wrapped up its annual meeting in the Swiss mountain resort Sunday with the emphasis firmly on business, reports The Associated Press (01/29). Business leaders reviewed the discussions of the week, which covered topics including the potential growth of China and India, Iran's nuclear program, Iraq and Hamas' landslide election victory. Martin Sorrell, group chief executive of the British-based advertising giant WPP, said India had made a strong presentation to leaders during the Forum, while reports on the strength of the Chinese economy, now in third place globally by some measures, had sharpened the discussions. "But it's not just India and China," Sorrel said. "In the context of Asia it's countries such as Pakistan, countries such as Indonesia, Vietnam, Bangladesh in the long term, that will become critically important. Latin America, in contrast, was hardly mentioned in the Forum's discussions, he said.

The Business Standard (India, 01/30) writes that the 36th Annual Meeting of WEF identified several areas of concern during the 240-odd sessions held in the course of the last five days. These included the challenges arising out of the need for encouraging risk-taking, creating a global educational framework, reducing income disparities, meeting skills requirements, tackling the threat of climate change and ensuring sustainable environment through sustainable energy policies, global integration, accountability and responsibility among global leaders. But in the closing session many stressed the need for reducing the imbalances in global growth as the primary area of concern.

The Associated Press (01/28) further notes that the question of what is needed not just to aid Africa but actually solve its seemingly never-ending problems was the theme of a top international panel -- including Britain's finance minister, World Bank President Paul Wolfowitz, rock star-activist Bono and Nigerian President Olusegun Obasanjo -- at the WEF. Obasanjo tried to focus on the positive, but attention soon turned to Africa's endemic miseries of conflict, corruption, and government incompetence. And from the labyrinth of advice, gentle scolding and genuine good will from panel and the audience of several hundred people, consensus seemed to emerge.

In related news, Agence France Presse (01/28) reports that World Trade Organization (WTO) chief Pascal Lamy and ministers from 19 nations agreed on a detailed timeline Saturday to smooth progress over global trade talks, which one participant said was entering its "end game." After the first political gathering since the WTO's full ministerial conference in Hong Kong last month, Lamy said about 40 percent of a landmark deal on breaking down barriers to commerce still needed to be secured by the agreed deadline of the end of the year. Full details were not made available because the rest of the WTO's 149 members still have to examine them.

The International Herald Tribune (01/28) writes that as world trade ministers started a two-day meeting on Friday in an effort to unblock global trade talks, the EU warned that it would lose nothing by walking away from the negotiating table, while the US said there would be little progress unless the EU made a new offer on agriculture. Just over three months before an April 30 deadline for trade leaders to agree to a formula for cutting trade barriers, both sides are intensifying their rhetoric.

Reuters (01/28) notes that the US and South Korea will announce the launch of politically sensitive free trade negotiations next week, a source close to the situation told Reuters on Saturday. "There is going to be a press conference in Washington on Thursday. This is going to be the largest US free trade arrangement since NAFTA," the source told Reuters on the sidelines of the WEF. US Trade Representative Rob Portman said he hoped to announce the launch of free trade talks with South Korea "in the immediate future."

Agence France Presse (01/28) adds that a summit of leaders of key WTO nations should be held around late February or in March to drive forward global trade talks, Brazil's Foreign Minister Celso Amorim said Saturday. Amorim said top-level political input was fast becoming essential to help negotiators overcome conflicting demands in the 149-nation WTO talks, particularly on the controversial issues of cutting agricultural tariffs and subsidies. Amorim said a trade summit would have to be a carefully-timed "one-shot operation" involving key nations.

Reuters (01/28) further notes that Japan will help developing countries sell their products under a "one village, one product" campaign at the country's two international airports, Japan's trade minister said on Saturday. Toshihiro Nikai, minister for trade, economy and industry, said the campaign would help contribute to the WTO’s Doha round of free trade negotiations launched in late 2001.

The BBC (01/28) reports that UK chancellor Gordon Brown has dismissed suggestions that little progress has been made in tackling global poverty since the Gleneagles G8 summit in July. Brown told BBC £170 billion of debt had been written off, aid to Africa had doubled, and health and education programs organized. But Brown, speaking from the WEF in Switzerland, conceded trade negotiations had failed. And he said the Global Plan to Stop Tuberculosis, launched on Friday at the WEF, "wouldn't have happened" without pressure from the Gleneagles summit. He also cited an education plan - which aims to provide by 2015 primary schooling for 110 million children who currently receive no provision - as a further example of progress made on global poverty since Gleneagles.

Agence France Presse (01/28) further writes that as world leaders build a response to the threat of a bird flu pandemic, health experts and officials simulated a worst-case scenario of a deadly outbreak among humans in Europe. The experiment on the margins of the annual WEF was one of a series governments and officials have been carrying out to assess their readiness. It underlined, said David Nabarro, the United Nations' coordinator for bird and human influenza, that much work remains to be done in order to prevent or, if necessary, contain any outbreak.

Davos, Switzerland, 28 January 2006 - Business leaders have called for a greater role in the fight to reduce poverty and speed progress towards the Millennium Development Goals (MDGs). A new report from the World Economic Forum released today calls for business expertise and skills to be more broadly applied in partnerships to tackle world problems.

In meetings here this week, business leaders defined strategies for expanding private-sector partnerships with government, agency and non-profit groups to address health, education and hunger in developing countries.

The Forum released a new report today outlining high-leverage ways in which companies can apply their skills to the problems of hunger, malaria and basic education. The report, "Harnessing Private Sector Capabilities to Meet Public Needs," includes examples of over 40 companies engaged in high-impact work on these three issues.

"Companies have skills and capabilities that can be applied to development," said Richard Samans, Managing Director of the World Economic Forum. "Often these capabilities turn out to be more valuable than simply writing a cheque. This report takes a first step towards mapping out the ways in which core capabilities of specific industries can help meet development needs."

Business and public leaders met Thursday with UN Secretary-General Kofi Annan to discuss private-sector strategies for reducing hunger in Africa. "Business is joining the fight against hunger, through a wider strategic action plan," said Antony Burgmans, Chairman of Unilever, who co-chaired the meeting. Participants discussed applying business skills and innovation to help small-scale farmers grow and sell more food, through supply chain improvements, the training of entrepreneurs and investments in higher education. The Forum report points to promising efforts by agribusinesses to get improved seeds and fertilizer into hungry regions; by food retailers to provide training and guaranteed markets to farmers; and by food manufacturers to fortify staple foods with key micronutrients.

John Chambers, CEO of Cisco Systems, noted that information technology firms have teamed up with governments, school administrators, local and global companies and NGOs to develop new curricula, train teachers and provide IT infrastructure to schools in poor regions. Cisco Systems has helped lead successful efforts by companies and public partners to improve education systems in Jordan, the Palestinian Territories and Rajasthan, India, through the World Economic Forum's Global Education Initiative.

"The Internet and education can provide equal and greater access to opportunities for individuals, communities and nations," Chambers said. "An effective educational system is critical for economic growth and the development of a thriving private sector, and success in improving global education can only be achieved through strong public-private partnerships, the co-application of core competencies and resources, and sustained investment." Chambers and other CEOs are discussing broadening their efforts to other countries in meetings undertaken at the World Economic Forum Annual Meeting in Davos, through the Forum's Global Education Initiative.

At the Forum's Global Health Initiative meeting, over 50 CEOs met to discuss business strategies for addressing malaria and other diseases. These include not only expanding the market reach of anti-malarial drugs, bednets and diagnostic tests by their manufacturers, but also innovative efforts by companies in malaria-endemic areas to reduce the impact of the disease on a community scale. Exxon-Mobil distributes subsidized bednets to pregnant women through its filling stations in Africa, and BHP Billiton works in partnership with the governments of Mozambique, South Africa and Swaziland to reduce the malaria burden around its mining operations in Southern Africa.

According to John Clarkeson, Chairman of the Boston Consulting Group, companies are increasingly perceiving the value of engaging in such efforts. "In the case of malaria, the business case for companies to get involved in malaria prevention, diagnosis and treatment can include business considerations like saving on employee health costs or developing new markets. But it can also include less-tangible factors such as enhancing reputation or strengthening community relations."

Governments and public agencies are increasingly seeking collaboration with companies to help improve and expand development programmes. "The MDGs will not be reached without active private sector engagement," said Kemal Dervis, Administrator of the United Nations Development Programme.

The Global Plan to Stop Tuberculosis (2006-2015) - released today by the Stop Tuberculosis Partnership, a coalition of more than 400 organizations worldwide - calls for global tuberculosis spending to triple over the next decade to increase access to tuberculosis control programmes and accelerate research on new tools to fight the disease.

Chancellor Brown called for the G8 to formally designate tuberculosis a top priority at its next meeting in July, and urged G8 member countries to pledge immediate new funding to implement the Global Plan.

"I welcome the Gates Foundation's announcement today. For far too long, world leaders have ignored the global tuberculosis epidemic, even as it causes millions of needless deaths each year," Chancellor Brown said. "Today's plan demonstrates that the fight against tuberculosis is one we can win. I hope that the G8 will make fighting tuberculosis a top priority."

President Obasanjo said implementing the new tuberculosis plan should be also a major priority for African leaders. Nigeria will be hosting an African Heads of State meeting in May, at which tuberculosis is likely to be addressed.

"The Global Plan is fundamental for Africa, where tuberculosis was declared an emergency by 46 countries in 2005," Obasanjo said. "We hope the African Union will endorse this plan, and call upon African governments to commit their share of the resources needed to implement it."

Fully implementing the Global Plan would cost an estimated $56 billion over the next decade - including $47 billion for tuberculosis control and $9 billion for research and development - an overall increase of $31 billion over currently projected funding. Based on current funding trends, the plan estimates at least 40% of the additional funding needs to come from the G8 and other donor countries, while the remaining 60% should come from the governments of tuberculosis-affected countries.

Gates Foundation Pledges to Triple Tuberculosis Funding

To help achieve the plan's goals, Bill Gates announced that the Gates Foundation will triple its funding for tuberculosis over the next decade, with a focus on supporting research and development. To date, the foundation has committed more than $300 million for tuberculosis. Today's pledge will take this total to more than $900 million by 2015.

"This plan makes a compelling case for greater investment in tuberculosis," said Gates. "We're willing to triple our funding for tuberculosis, and we urge others to do the same. If we have the chance to save 14 million lives, and a clear plan to make it happen, we have an obligation to act."

Gates emphasized that new tools are urgently needed to fight tuberculosis - the current treatment regimen for tuberculosis takes at least six months to complete, and approximately 300,000 cases of tuberculosis every year are resistant to multiple tuberculosis drugs.

New Plan to Provide Tuberculosis Treatment to 50 Million People in 10 Years, Help Achieve MDGs

Full funding of the new Global Plan announced today will help achieve the Millennium Development Goal to have "halted by 2015 and begun to reverse the incidence of tuberculosis". Key objectives of the plan include the following:

Improve treatment access - prevent 14 million tuberculosis deaths and provide treatment to 50 million people.

New drugs - develop and distribute the first new tuberculosis treatment regimen in nearly 40 years.

New vaccine - develop a safe and affordable vaccine to improve upon the existing vaccine, which has been in use since the early 1900s.

New diagnostics - develop efficient, effective and affordable diagnostic tests for tuberculosis - the first in more than a century.

"We have a unique historic opportunity to stop tuberculosis, but we must act now," said Dr Marcos Espinal, Executive Secretary of the Stop Tuberculosis Partnership. "The challenge now is for people to work together in putting the plan into action, in order to stop one of the oldest and most lethal diseases known to humanity. This plan tells the world exactly what we need to do in order to defeat this global killer."

Dr Espinal noted that the plan will build upon important progress against tuberculosis over the past several years. Since 2000, estimated spending on tuberculosis control in the 22 hardest-hit countries has increased from US$800 million to US$1.2 billion; as a result, the number of patients receiving tuberculosis treatment in these countries more than doubled.

The Plan will be implemented based on a new Stop Tuberculosis Strategy developed by the World Health Organization (WHO), which houses the Stop Tuberculosis Partnership. The strategy has six key elements: optimizing and sustaining access to the existing tuberculosis treatment and control strategy - known as DOTS; adapting DOTS to respond to challenges such as HIV/AIDS and Multi-Drug Resistant Tuberculosis; strengthening health systems; partnering and engaging with all care providers; empowering patients and communities to fight tuberculosis; and promoting research and development for new drugs, diagnostics and vaccines.

Global risks can no longer be dealt with reactively. In line with "The Creative Imperative" which underscores this year's Annual Meeting, the Global Risk Report 2006 outlines the pillars of a proactive risk mitigation agenda.

Our common vulnerabilities to global risks, from terrorism to natural disasters, were on tragic display in 2005. In an increasingly interconnected world, we have a shared responsibility to collectively address global risks, from those in the public eye at the moment - such as pandemics - to those that are moving fast up the international agenda - such as climate change. The aim of collective risk mitigation is to ensure that today's global risks do not become tomorrow's headlines.

The report draws on the expertise of the Forum's extensive network of academics, business leaders and practitioners to provide insights into the nature of global risks.

In 2005, the network benefited in particular from the partnership of Merrill Lynch, MMC (Marsh & McLennan Companies) and Swiss Re, and the expertise of the Risk Management and Decision Processes Center at the University of Pennsylvania's Wharton School. In the year ahead, the Forum intends to build on the insights of the Global Risk Report 2006 through an enhanced Global Risk Network.

Professor Klaus Schwab, Executive Chairman of the World Economic Forum, explaining the thinking behind the network, said that: "The key to mitigating global risks is understanding their systemic nature and building consensus on how to best deal with them. The Forum, in bringing together business, government and civil society, has a key role to play in this process."

While many Chinese companies are going global by making strategic investments and acquisitions abroad, gaining essential management expertise in the process, they must balance this with an inward-looking approach aimed at increasing business and developing the home market. "This would be a more sustainable model," Roach argued.

The issue of the quality and sustainability of China’s economic growth is a major focus of discussion at the Annual Meeting in Davos. In a special address to participants, Zeng Peiyan, Vice-Premier of the People’s Republic of China, declared that China would stimulate domestic consumption to drive new growth over the next five years. In another session, Cheng Siwei, Vice-Chairman, Standing Committee, National People's Congress, People's Republic of China, said that China aims to bring down the domestic savings rate - currently at over 40% of GDP - by developing more direct investment channels including private equity and venture capital funds, offering more short-term bonds and promoting the concept of credit. At today’s session, Zhou Xiaochuan, Governor of the People's Bank of China, People's Republic of China, acknowledged that it would be difficult to convince Chinese people to spend more.

Chinese companies could match a global strategy with a domestic market focus through the acquisition of brands. Orit Gadiesh, Chairman, Bain & Company, USA; Member of the Foundation Board of the World Economic Forum, noted that Chinese companies have been trying to buy brands. While there are very few Chinese brands known outside of China, the Chinese are highly brand conscious. It would not be long before Chinese interests acquire a major brand that they could then introduce or develop in their home market and overseas. One sector where this could happen, she reckoned: high-tech.

RED presents a new and profitable way of doing business by harnessing the partners’ brand-building expertise while generating a new income stream for the Global Fund. International brands including American Express (founding partner), Gap and Giorgio Armani are the launch partners. They have designed products that will take on the RED mark and will be available from 1 March 2006.

Bobby Shriver, Chief Executive Officer of Product RED, said, “This is a long-term initiative designed for sustainability. RED partners expect that they will broaden their own customer base and increase loyalty in a manner that delivers a sustainable revenue stream to both the company and the Global Fund.”

Shriver continued, “It’s incredible to have the marketing brilliance of these companies behind the AIDS emergency.”

Currently, the private sector contributes less than 1% of the Global Fund’s resource needs. RED believes this initiative will start a new income stream, providing an outlet for those consumers who want to “do their bit” on a daily basis but have not yet found a way to do so.

“People see a world out of whack. They see the greatest health crisis in 600 years and they want to do the right thing, but they’re not sure what that is. RED is about doing what you enjoy and doing good at the same time,” explained Bono.

How Funding Works

All funds generated by sales of RED products will support programmes financed by the Global Fund which positively impact the lives of women and children affected by HIV/AIDS in Africa. These include programmes in countries such as Rwanda, which has a proven track record and ambitious targets. For example, in the past two years, Rwanda has increased the number of people receiving treatments for HIV/AIDS tenfold.

Each programme highlighted by RED will be selected based on the following Global Fund criteria:

Focus:

• The grant’s activities are related to HIV/AIDS treatment, care and prevention, and focus on women and children in Africa.

Performance:

• The programme is performing well as evidenced by progress reports and a mid-programme performance review.

Reporting:

• The programme’s principal recipient is providing progress reports and making disbursement requests to the Global Fund on time.

• The Global Fund Secretariat has been approving disbursement requests, based on Local Fund Agents’ (professional consultants) recommendations to the Secretariat.

Dr Richard Feachem, Executive Director, The Global Fund, said, “Product RED is a breakthrough in corporate and consumer engagement for the greatest global crisis of our time – the HIV/AIDS pandemic. RED can make a substantial contribution to financing the massive scale-up of prevention, testing, treatment and care that is desperately needed in Africa.”

RED Products

American Express has introduced a credit card that offers free annual membership and a minimum of 1% on all eligible spend is paid directly to The Global Fund on the cardmember’s behalf. Spending above £ 5,000 per year will generate an increase of 1.25% on all spending above that amount. An extra 5 pounds will be given to The Global Fund if cardmembers make their first purchase on the card within the first month. There will also be a number of added benefits for (American Express) RED cardmembers including unique ‘experiences’, hand picked discounts and access to entertainment and retail events. The card will be available from March 2006.

Gap is developing a special collection of items to be sold initially in the United Kingdom and US. The first piece of the collection is a t-shirt, the most iconic of Gap’s items. The 100% African-made vintage-style t-shirt will come in red, as well as a range of colours for both men and women, and will be available in United Kingdom stores in spring 2006.

An enhanced collection will be launched in autumn 2006.

Giorgio Armani's first RED product will be a pair of Emporio Armani sunglasses (Style EA 9285/s). The striking metal wrap-around sunglasses are designed with a single lens available in green, rose, blue, smoke grey, grey and brown, all embossed with the EA RED logo. The forked arms, available in shades of ruthenium, gunmetal and light gold, are superimposed on the lens with a futuristic feel. The EA RED sunglasses will be available from April in all Emporio Armani stores and in select specialty eyewear stores and department stores worldwide.

Giorgio Armani will present a complete Emporio Armani RED capsule collection for women and men, including clothing, accessories, fragrances, watches, eyewear and jewellery later in 2006.

Building on the work of the Forum's Centre for Strategic Insight, participants discussed key global challenges and proposed responses tied to the theme of this year's meeting: The Creative Imperative. These were reviewed and analysed at a plenary session entitled "The Big Debate: Setting the Business Agenda", resulting in a set of questions that participants will be asked to address in this year's sessions and workshops.

Participants also reviewed public sentiment about these same critical challenges and responses, as reflected in the Voice of the People survey, which was conducted on the Forum's behalf by Gallup International. The survey polled almost 50,000 people in over 60 countries, and thus represents the views of some 2 billion citizens worldwide.

The Forum's survey, as well as others, highlighted a growing lack of confidence in the ability of national and international institutions to respond to the complex problems of a rapidly changing world, noted Ged Davis, Managing Director of the World Economic Forum. The deterioration of trust in both public and private leadership also emerged as a common theme at workshops and focus groups the Forum has conducted over the past year in various regions of the world.

The five key challenges to be addressed at this year's Meeting:

• The Emergence of China and India

• The Changing Economic Landscape

• New Mindsets and Changing Attitudes

• Creating Future Jobs

• Regional Identities and Struggles

Participants will seek to develop possible responses to these emerging issues under three broad headings:

• Building Trust in Public and Private Institutions

• Effective Leadership in Addressing Global Risks

• Innovation, Creativity and Design Strategy

The key questions raised by the participants in the brainstorming session were:

• What should be done to close income disparities?

• How should educational systems be designed to respond to changing skill requirements?

• How should business react to global imbalances?

• How should China and India maintain sustainable development and preserve the environment?

• How can we create a global educational framework that fosters inclusivity?

A number of participants argued that environmental concerns, such as global climate change, require a level of attention at least as great, if not greater, than purely economic issues such as job creation and wealth generation.

Davos, Switzerland, 25 January 2006 – The 36th World Economic Forum Annual Meeting in Davos has opened with calls for business, political and civil society leaders to harness creativity to provide new answers to the world’s problems.

“The assumptions, tools and frameworks that leaders have used to make decisions over the past decade appear inadequate. It is imperative for leaders of all walks of life to develop new capabilities if they expect to be successful and to maintain relevance,” said Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

“The Creative Imperative is very important because although the outlook for 2006 is generally positive, there are clouds in the blue sky,” said Peter Brabeck-Letmathe, Chairman and Chief Executive Officer, Nestlé, Switzerland; Member of the Foundation Board of the World Economic Forum, and a Co-Chair of the Annual Meeting 2006.

Creativity is needed to find new tools and solutions to tackle dark clouds like global imbalances, according to Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries, India, also a Co-Chair of the Annual Meeting 2006. “The world has a real chance if we form global partnerships to banish poverty and we need creative solutions. What we are going to do at the Annual Meeting is have a dialogue among the different constituents to form a partnership to create a more balanced world,” he said.

“Whether it’s the global environment, nuclear proliferation, global poverty or global governance, the challenge is finding the energy to address tomorrow’s problems today. This is not something that can be done by the public sector alone, or without business, but it should be done collectively. And this is why the Annual Meeting is such a valuable one because we can confront fears, marshal hope and move forward,” said Lawrence H. Summers, President, Harvard University, USA, another Co-Chair of the Annual Meeting 2006.

“The Creative Imperative is about innovation and differentiation and has geographical and functional implications,” said Sir Martin Sorrell, Group Chief Executive, WPP, United Kingdom, a Co-Chair of the Annual Meeting 2006. The four Co-Chairs agreed that technology is a key area where creativity and innovation can be used to deliver solutions.

This year’s Annual Meeting sees the highest level of top business participants – 735 of those participating are at the CEO or chairman level – the highest ever. Around 50% of participants are business leaders drawn principally from the Forum's members – 1,000 of the foremost companies from around the world and across all economic sectors.

“Business is in a unique position to play a leading role in helping to shape the global agenda, and can provide government and civil society with the tools and capabilities to better adapt,” said Jonathan Schmidt, Director, Global Agenda, World Economic Forum. “The Annual Meeting aims to bring this message to participants, in order to stimulate creative capabilities and the courage to embrace change, which is at times disruptive and painful, but can ultimately be uplifting and rewarding,” he said.

The Annual Meeting kicks off with the “Big Debate” – an interactive session during which participants will exchange their views and experiences. The programme will follow five main themes that are high on the global agenda in 2006. These range from “The Emergence of China and India” and “The Changing Economic Landscape” to “New Mindsets and Changing Attitudes”, “Creating Future Jobs” and “Regional Identities and Struggles”. There will be three responses: "Building Trust in Public and Private Institutions", "Effective Leadership in Managing Global Risks" and "Innovation, Creativity and Design Strategy".

A Memorandum of Understanding (MoU) was signed by Mr Zhang Xiaoqing, Vice-Chairman of NDRC and Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. The MoU further strengthens the Forum’s long-standing engagement in China and sets the path to open the Forum’s first office in Asia and launch the Global Industry Summit in China as of 2007.

“The establishment of the Forum’s representative office in China will promote the comprehensive cooperation between China and the Forum,” said Mr Zhang Xiaoqiang, Vice-Chairman of the NDRC. “It will also actively facilitate communication and cooperation between Chinese enterprise and global companies.”

“We have chosen China for our Global Industry Summit because we believe that China is well positioned to serve as a global hub for working with the next generation of corporate champions,” said Klaus Schwab. “The Forum first engaged in China over 26 years ago with our China Business Summit. Opening an office in China underlines our commitment to the country and reinforces our efforts to work with the companies that will shape the 21st century.”

The Global Industry Summit will be the flagship event and primary community-building activity for the Global Growth Companies. The Summit will bring together Global Growth Companies and the World Economic Forum’s top experts and leaders of industry. Industry-specific meetings of global business leaders will emphasize the needs and aspirations of companies that are operating globally, developing recognized global brands and managing extremely rapid expansion

Abbas invited every group—regardless of origin or inclination—to take part in the democratic process. Some diplomats saw in the president a valid intention of establishing a legislative branch that would truly represent Palestinians, while others deemed the gesture as a sign of weakness and a capitulation to the acts of violence that have marked the area for decades.

The most controversial participant in the election is Hamas. The Israeli government holds the group responsible for the death of 377 citizens in a variety of attacks, including dozens of suicide bombings. In fact, Israel briefly hinted at the possibility of cancelling the ballot in East Jerusalem, unless Hamas was barred from actively campaigning.

Hamas’ List of Change and Reform—headed by Ismail Haniyeh—has consistently ranked second in the pre-election surveys. The new regulations mean half of the 132 lawmakers will be chosen through proportional representation, so the presence of Hamas members in the Palestinian Legislative Council is assured. The group presented its platform on Jan. 11, calling for "an end to the occupation by any means" and "the establishment of a state with Jerusalem as its capital."

Hamas opted to leave one of its most controversial statements out of their campaign manifesto. The group was consolidated after calling for the "destruction of Israel."

Hamas has lost several of its most important leaders over the past few years. Founder Sheikh Ahmad Yassin and ideologue Abdel Aziz Rantisi died in 2004, following two missile attacks ordered by the Israeli government. Haniyeh could become the person to guide the militant group down the path of politics, but many Palestinians—and even more Israelis—remain sceptical.

Fatah also went through a brief internal crisis. Last month, a group of reformers threatened to present its own list of candidates, under the name The Future. Following intense negotiations, Abbas managed to register one list, headed by the popular Marwan Barghouti, currently in jail for his alleged involvement in terrorist attacks committed by the Al-Aqsa Martyrs Brigade.

On Jan. 18, Abbas surprised observers when he said he would quit politics if Fatah’s platform—which includes the return of peace talks with Israel—is rejected by the incoming lawmakers. The latest voting intention polls place Fatah ahead with close to 38 per cent of the vote. Hamas, hovering around the 30 per cent mark, seems destined to become the second political force.

Beyond the outcome of the ballot lies the pressing revival of the peace process. A poll by the Palestinian Centre for Public Opinion shows that 79.3 per cent of respondents in the West Bank and Gaza Strip back the Palestinian Authority’s return to the negotiating table. However, the illness of Sharon—who has been temporarily supplanted by Ehud Olmert as acting head of government—and Israel’s legislative ballot in March could change the prospects.

igital 2.0: Powering a Creative Economy with John T. Chambers, William H. Gates, Eric Schmidt, Niklas Zennström

A Trade Compromise, for Now? with Mukesh D. Ambani, Celso Amorim, Joseph Deiss, Pascal Lamy, Peter Mandelson, Kamal Nath, Robert Portman

Special Address by Angela Merkel

A New Mindset for the UN with Ban Ki-Moon, Jayantha Dhanapala, Rajat Gupta, Vaira Vike-Freiberga, Kofi Annan

China Goes Global with Victor L. L. Chu, Orit Gadiesh, Stephen S. Roach, Edward S. Tian

The podcasts will be available for downloading from the following site: www.weforum.org/annualmeeting/podcasts. The World Economic Forum has been webcasting from Davos since 2001. All webcasts can be accessed from: www.weforum.org/annualmeeting/webcasts

“In the interest of transparency, we wish to further the “spirit of Davos” online through webcasts – and this year for the first time, podcasts,” said Mark Adams, Director, Head of Communications.

British finance Minister Gordon Brown admitted Wednesday that Britain's Group of Eight (G8) presidency had failed to meet its global poverty objectives, but vowed to keep up the battle, reports Agence France Presse.

Brown said he would be heading to the G8 leading industrial powers' finance ministers' meeting in Moscow in February armed with a five-point post-British presidency plan to keep poverty on the agenda. The Chancellor of the Exchequer said the logjam in global trade talks was "depressing," but a breakthrough would empower poorer countries to do more for themselves.

The Guardian (UK) writes that Brown's five point plan for "urgent" action in 2006 will include debt relief, trade, the environment, disaster relief and ensuring poor countries meet the United Nations millennium development goals for poverty reduction by 2015. The daily also notes Britain hoped that 2005 would see 38 of the poorest countries given debt relief, aid doubled to $50 billion a year and a comprehensive deal to remove barriers to trade at the meeting of the World Trade Organization in Hong Kong last month. The chancellor says he agrees with debt campaigners that more countries need debt relief and calls for 67 to be made eligible. So far, only 19 of the 38 countries identified as in need of help have been granted clemency.

Further, in the aftermath of the Indian Ocean tsunami and the earthquake in Pakistan, Brown says he will be pressing at next month's meeting of G8 finance ministers in Moscow for a new $4 to 5 billion UN disaster relief and reconstruction fund, in part bankrolled by oil producers that have benefited from rising energy prices.

Writing in a commentary in The Guardian, Brown argues that if Make Poverty History shifted from the old calls for charity to the new demand for justice, 2006 must see campaigners and governments moving the agenda beyond addressing the consequences of poverty to attacking its root causes. The delivery of aid is not the final goal, but just the first stage in the process of empowerment, Brown writes. That is why all developing countries must now produce their own poverty-reduction and development plans - not just for economic empowerment through transparent monetary, fiscal and corporate policies to tackle corruption, but for social empowerment through universal free schooling and healthcare, the Chancellor argues.

Brown also suggests that if past generations said 'If only we had the knowledge, the technology, the medicine and the science to act,' today we have no such excuse. The Minister further notes that in order to coordinate the war on poverty there should be a regular summit of the World Bank, the IMF and all UN agencies. And recognizing that the recent doubling of oil prices has hurt poor countries most, we propose the World Bank considers a new $20 billion loan and grant fund for investment in alternative energy sources and energy efficiency.

China, the greatest economic success story of the 21st century so far, is calling on its growing middle class to share more of its good fortune with the needy. The government has made an appeal for charity amid rising criticism that the spirit of philanthropy is developing a lot less quickly than the urge to accumulate wealth, as the country becomes richer but more divided, reports The Guardian (UK).

Twenty-five years of spectacular economic growth are estimated to have created more than 10,000 people with assets in excess of GBP6 million ($10 million). But while the new rich are spending, investing and gambling more than ever, their willingness to give something back to a society which still contains tens of millions of people living on less than a dollar a day is being called into question.

Last week the Vice-Minister of Civil Affairs, Li Liguo, said the government needed more help from the private sector to deal with natural disasters. The appeal would have been unthinkable a generation ago, when the Communist authorities boasted that they would provide for every social need, and displays of wealth would have been condemned as bourgeois and counter-revolutionary. But the private sector now accounts for more than half of China's economy. Although tax revenues have grown, public spending has not prevented a widening gap between rich and poor, particularly with regard to health and education.

Private charitable organizations, once viewed with suspicion by the authorities, are gaining acceptance, but only 100 national-level groups have been recognized in the past ten years. According to the China Charity Federation, they received approximately GBP350 million last year, accounting for just 0.5 percent of China's GDP. In a report calling for companies to be more generous, the state-controlled China Daily noted that just one percent of the country's ten million companies had made a donation to charity last year.

International funds, once an important source of support for the poor, are drying up. Citing China's economic success, the UN world food program closed its last humanitarian project in the country two years ago. Japan, the biggest provider of aid over the past 30 years, has said it will do the same soon. And the British Department for International Development is among many other big donors now scaling back their activities. To counter these trends, the government has established thousands of charity centers to accept donations of cash and clothing from the public. Last June it introduced the country's first tax relief on donations, though initially only to a small number of foundations. Some private donors do their own good works.

With China developing so quickly, some of the newest millionaires say they have been too busy to consider their charitable responsibilities. Robin Li, the founder of the country's biggest internet search engine, Baidu, has a fortune estimated at GBP350 million, most of it accrued in the past year. He admits his company has not given much back yet, but says this is simply because it has grown so fast.

The same may be true at an international level, where China is in transition from aid recipient to donor. The government just made its first small contribution to the world food program and it has provided support - usually tied to business - to several African and Asian countries. Beijing was also the ninth biggest contributor to the UN budget, paying GBP23 million, a modest figure in terms of its share of the global economy, but more substantial given that the average Chinese income is less than GBP600 a year. The biggest cause of optimism, however, has been the public's response to natural disasters overseas. Last year the Chinese Red Cross received a record GBP30 million for the Boxing Day tsunami, and smaller sums for Hurricane Katrina and the Pakistan earthquake.

The Department of Philosophy at University of Guelph is offering a new course designed to explore the ethical and political nature of disaster response. The tsumani that devastated parts of Southeast Asia just over a year ago and hurricane Katrina are among the disasters to be examined. The course will also look at local “disasters,” including political apathy and biodiversity loss.

Taught by Prof. Karen Houle, the advanced seminar/graduate course is titled “Facing Disasters: Political and Ethical Responses to Natural and Social Disasters.” It aims to engage students in dialogue surrounding what issues gain prominence out of disaster, which disasters get coverage and how they're covered, and conceptual, political and public responses to tragedies, said Houle.

“We know the facts of natural disasters, but we seem to be needing ways to understand what our duties are in the face of them, how to respond to them meaningfully, and how to understand our obligations to prevent or intervene in their coming about,” she said. “The debates raging in environmental, political and social philosophy about the limits of justice and caring for others should be brought to bear on the questions of what we could and should be doing about disasters, however those are identified. I’m very interested in sharing the theoretical perspectives with individuals interested in practical questions and involved with such struggles in their own lives.”

The particular issues that gain prominence during times of crisis will also be investigated. “One of the things we see by paying attention to the coverage of the hurricane Katrina disaster is that there’s always some constituency that can’t be heard or seen under normal circumstances, no matter how hard they try to lobby for change or improvements in their conditions, and those constituents momentarily register on public consciousness in the wake of disasters,” said Houle, noting that Katrina brought to light interconnected issues of poverty, racism and the reliability of American federal relief agencies. “It’s not that these issues didn’t exist before the storm; they just didn’t receive the same level of international exposure and discussion until then.”

By examining disasters from an ethical perspective, students gain a wider understanding of the values that underlie our responses to disasters, responses that are influenced by beliefs and values, said Jacqueline Murray, dean of the College of Arts. “This is an excellent example of how learning can — and indeed must — move out of the classroom and interact with our world and its real problems.”

A highlight of the course, which is geared to students with an interest in social justice and responsibility, is an all-day World Café event March 18. Borrowed from the World Café model, it will engage students and community members in a conversation about the meaning and impacts of various disasters on them, said Houle. “This is an extremely important component of the course because students will be able to listen to people with a broad range of views who will share their personal experiences and what the issue means to them and what being responsible can entail.”

The worst political crackdown in years is shaking investor confidence in impoverished Cambodia, where foreign money largely drives both the government and the economy, the World Bank said Monday, reports Agence France Presse (01/09).

The arrest of human rights leaders and political rivals "will send a worrying message to potential investors and Cambodia's development partners about Cambodia's commitment to openness, transparency and sustainable development," Ian Porter, the World Bank's Director in Cambodia, said. "In a country where corruption is extensive and accountability is weak, greater openness and more vigorous public scrutiny

- not less - are essential ingredients of development policy," he said in a statement.

Cambodia is still heavily dependent on international capital to bolster its fragile economy after decades of civil war that ended only in 1998. While its economy has grown annually at around seven percent for the past few years, tourism and foreign-backed garment factories are the only major sources of income. Observers warn a worsening political situation could see both industries collapse.

The Associated Press and Dow Jones (01/09) write that the Bank on Monday became the latest international institution to deplore a deterioration of civil liberties in the impoverished kingdom following the detention last week of three top activists on defamation charges filed by the government of Prime Minister Hun Sen. The Bank is among the donors that annually give hundreds of millions of dollars in development aid to Cambodia. Donors have roundly slammed the government for failing to curb chronic corruption that many say is hindering the country's efforts to rebuild after decades of conflict.

The arrests followed earlier signs that have chilled the climate for civil liberties in Cambodia and prompted fears that Hun Sen's government, which relies heavily on foreign aid, is sliding toward dictatorship.

In related news, Agence France Presse (01/09) reports that Cambodian Prime Minister Hun Sen is widening a crackdown on critics of his government in a bid to head off a groundswell of opposition before general elections in 2008, observers say. Since October nearly a dozen criminal cases have been brought against a wide array of critics, from rights workers to journalists and union leaders, mostly for defaming the government over its border pact with Vietnam.

As for energy security, the G8 plans to call for the development of nuclear energy and clean energy sources such as solar power and fuel cells in the quest for environmentally and economically sustainable energy, which would also help control climate change. G8 members are also considering drawing up measures to crack down on illegal deforestation, the sources said.

The group is expected to request that consumers redouble their efforts to enhance energy efficiency in a bid to stabilize high oil prices. Although off their 2005 peaks, crude oil prices are projected to remain high this year, due partly to surging demand from emerging economic powerhouses like China and India.

On education, the G8 plans to help Africa and other parts of the developing world improve their education systems with the goal of ensuring quality education for all people, the sources said. Experts say this is vital for eradicating poverty and building the basis for the development of any society, the sources said. Specifically, G8 officials are likely to call for increased vocational training and distance learning with Internet use as a way of promoting education around the world, they said.

The G8 also plans to consider a trade-related development package for poor countries, including technical assistance and financial aid to build harbors, roads and other basic infrastructure. One G8 country is requesting that major emerging economies open their markets to poorer countries, while another urges the developed world to eliminate trade barriers on farm products. These calls are seen key to advancing trade liberalization talks under the World Trade Organization, with the view to successfully concluding the current Doha Round by the end of 2006 as scheduled.

In related news, Reuters writes that British Finance Minister Gordon Brown has urged the world's richest countries to work towards providing free education for all children by 2007. Brown said he would use a meeting of G8 finance ministers in Moscow next month to press his counterparts to help improve health care and education in developing countries. He said G8 nations should resolve to build on their promise at a summit in Scotland last July to more than double aid to Africa.

He said it would cost $10 billion each year to provide primary education to every child in the world, which in turn would reduce poverty, unemployment and illiteracy. Brown said 110 million children worldwide, the vast majority of them girls, currently receive no education. Well over two-thirds of the poorest countries charge some type of fee for primary education, he said, citing World Bank estimates. He said a new international finance facility should be launched to pay for long-term schooling.

President Vladimir Putin's push to revive Russian global clout reached a symbolic milestone Sunday when Moscow assumed the rotating presidency of the Group of Eight (G-8) industrial nations, reports The Associated Press (12/31).

Putin has suggested this summer's G8 summit in his home city of St. Petersburg focus on energy security, reflecting Moscow's aspirations to convert oil wealth into political influence. It hopes projects like a prospective Baltic Sea pipeline to deliver Russian natural gas to Western Europe would bolster its clout and muzzle Western criticism of its democracy record. While the other members of the G8 club -- have voiced concern about Russia's backtracking on democracy under Putin, they will likely avoid strong criticism to help Russia maintain a respectable profile as their chairman.

Agence France Presse (12/30) notes that Putin is determined to make a more solid transition from being the G8's "poor relation" to being treated as a full member of the family. The promotion, analysts say, would involve huge expenditures on global G8 projects in fields like Third World poverty reduction, environmental clean-up and weapons reduction programs -- projects that Moscow is more accustomed to being a beneficiary of rather than a contributor to.

In other developments, Agence France Presse (01/03) writes that Russia moved to restore gas supplies to European nations on Tuesday after key markets felt the squeeze from a price war with Ukraine that has shown no signs of abating. After European importers noted drops in their supplies, Gazprom said it was raising exports by 95 million cubic meters a day to make up the shortfall. Russian media referred to a "gas war", while across Europe analysts pointed to Moscow's potential power to wield it mammoth energy supplies for political purposes. Europe imports a fifth of its natural gas from Russia via Ukraine.

“Davos is a small place, and the Conference Centre is even smaller. By broadcasting, webcasting, podcasting and encouraging blogging by all participants, we hope to share the spirit of Davos with as many people as possible. As every year, every single session will be open to more than 200 journalists from around the world,” said Mark Adams, Director, Head of Communications.

A full list of all the sessions that will be webcast and podcast will be provided in advance of the Meeting on the Forum’s website at: www.weforum.org

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.

Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. (http://www.weforum.org)

UN Secretary-General Kofi Annan urged governments on Tuesday to follow France's lead after its parliament approved a tax on airline tickets to finance development aid for poor countries, reports Reuters.

"The Secretary-General warmly welcomes the adoption by the parliament of France of a levy on airline tickets issued locally that will benefit the health sector of developing countries," UN spokeswoman Marie Okabe said. Parliamentary approval came December 22 on the tax, which will range from EUR1 to EUR40 on flights from France, depending on distance traveled and class of ticket. It takes effect on July 1.

French President Jacques Chirac has campaigned hard for an international tax on airline tickets to help fight global poverty. French Foreign Minister Philippe Douste-Blazy has said more than 66 countries support France's campaign. Chilean President Ricardo Lagos said in September the measure had been approved in his country and would go into effect on January 1, when a $2 charge would be added to tickets on all outgoing flights from Chile. But the plan has encountered resistance in the United States, failed to win widespread backing in Europe and upset airlines, which fear higher fares will drive away passengers.

Agence France Presse adds that the UN spokesman further said in a statement, "This is a significant step, raising additional sources of innovative financing in support of the efforts by developing countries to reach the (UN) Millennium Development Goals." The tax is expected to raise EUR200 million a year for AIDS and other health programs largely directed at African states.

A decision by Brazil and Argentina to repay their loans to the International Monetary Fund (IMF) ahead of schedule raises the question of whether the institution needs a new business model, reports The Financial Times (UK).

The IMF, like any financial institution, lends at a slightly higher interest rate to the one it borrows at, using the proceeds to cover its operating expenses and add to its reserves. Yet for now, at least, its borrowing customers are drying up. New loans in the last financial year, at $2.5 billion, were the lowest since the late 1970s, even before adjusting for inflation. Brazil, Argentina, Turkey, and Indonesia account for over 70 percent of total outstanding loans – which have fallen from $90 billion in April 2004 to about $66 billion at the end of November.

Brazilian and Argentine repayments of about $15.5 billion and $10 billion respectively will wipe out another big chunk. Those repayments mean that Uruguay’s much smaller loan will be the Fund’s largest exposure in Latin America. In Asia, following the financial crises of the late 1990s, governments built up huge financial reserves, in part to ensure that they never again had to go cap in hand to the IMF, which sets tough conditions for loans.

Low demand for IMF credit is mainly the result of emerging market countries’ good economic performance, and very favorable conditions in international financial markets. But lower lending raises the questions of how the Fund is going to pay its annual expenses of close to $1 billion in the most recent financial year. The interest rate it charges to borrowers is based on covering those costs, and a target for reserve accumulation set by the Fund’s board. In the short-term, there is a danger that Brazil and Argentina’s move will force the IMF sharply to increase the interest charged to its other borrowers.

Some quick fixes are possible, writes the financial daily. The board could cut the target for reserve accumulation. It could also reduce the interest rate it pays to member countries on their contributions to the Fund. And the multilateral lender can pay its bills for several years out of its reserves, which stand at $6.8 billion – something it did in the 1950s and the 1970s in periods of low demand for its loans. “The fund has the reserves to pay for its operations for the next several years,” says Kenneth Rogoff, Harvard professor and former IMF chief economist. “It is only if the good times go on for another five to seven years and there are no major financial crises, then it is going to become a significant issue.” With external conditions for emerging market countries so favorable, many observers predict another turn in the cycle, in a few years’ time, when less favorable external conditions lead to a greater demand for IMF assistance, particularly in Latin America.

While the precise timing of the two big early payments was a surprise – particularly in the case of Argentina – prospects of a shrinking loan book are not new. The IMF’s accountants have for some time been working on a plan to cope by boosting its income from other sources – a plan flagged by Rodrigo Rato, the IMF Managing Director, as part of a strategic review.

One possibility is earning a better return on the reserves, by investing a portion in longer-dated government securities, rather than in the shortest-term instruments. There is also the undervalued gold on the Fund’s books – a source of potential income though equally a source of political strife given controversies over potential sales of the gold to fund debt relief for the IMF’s poorest borrowers.

Another option would be to levy charges for some of the other services the Fund provides. These include a broad array of work in fiscal and monetary policy and the financial sector, national statistics and data standards. Any new charges could target the Fund’s richer members: donor countries could be encouraged to pay the bills of poorer members directly or by agreeing to receive lower interest rates on their deposits at the Fund. Some within the IMF see this as an opportunity to explain to the world the work it does, above and beyond crisis-lending to emerging markets.

And at a time when the IMF’s lending is shrinking, many observers see the Fund’s most important challenge to make its voice heard in countries that do not need to borrow from it, most importantly the US, its largest shareholder, and China, the biggest developing country.

The IMF was set up after the second world war to deal with global payments imbalances, and exchange rate misalignments. At the moment, the Fund’s own analysis suggests the biggest problem facing the world is precisely such global imbalances. The IMF’s solution is to call for slower growth in domestic demand in the US to address its huge trade deficit, and for faster domestic-led growth elsewhere to keep the world economy turning.

The Fund’s biggest shareholders – the Group of Seven leading industrialized countries – have embraced this approach on paper but done little in the way of implementation writes the Financial Times. A big challenge lies in persuading Asian governments to play their part in such an adjustment, both in their own economic self-interest and to promote more balanced trade flows. This would involve allowing their currencies to rise against the dollar – rather than building up ever higher foreign exchange reserves to keep exports to the US cheap.

All 49 Sub-Saharan African countries will have phased out leaded fuel from their pumps and refineries by the end of the year, part of a wider aim to improve the continent's health and environment, a UN environment agency said Tuesday, reports Dow Jones.

South Africa will be the last country south of the Sahara desert to switch to unleaded fuel on January 1, a change promised by Sub-Sahara African governments at the UN-sponsored 2002 World Summit on Sustainable Development, The Associated Press reports the UN Environment Program

(UNEP) said. The switchover contributed to severe shortages at gas stations in South Africa and its neighbors as holiday makers took to the road in large numbers earlier this month. Government officials accused gas companies of failing to stockpile for production shutdowns as refineries prepared to make the switch to cleaner fuels.

The BBC writes that Klaus Toepfer, head of the Nairobi-based UNEP, described the continent-wide changeover to unleaded fuel as “a real environmental and health achievement.” He continued to say that he pays “tribute to all those governments, companies and others such as the World Bank who kept this promise.” Lead is associated with a wide range of health problems, including damage to the brains of babies and young children. Leaded fuel has already been phased out in most developed countries, but is still in use in some North African and Asian countries.

Agence France Presse further notes UNEP said it and a public-private partnership would now set their sights on other regions as well as look at reducing other dangerous fuel emissions. More than 30 countries still use leaded gasoline and the aim of the new program, to be launched in early 2006 with an emphasis on the Middle East and Asia, is to switch the entire world to unleaded by 2008. Nations without plans to phase out the use of leaded petrol include: Afghanistan, Algeria, Bhutan, Cambodia, Cuba, Iraq, Laos, Mongolia, Myanmar, North Korea, Tajikistan, Turkmenistan and Uzbekistan, according to UNEP.

In addition, UNEP plans to address sulfur exhaust emissions in Sub-Saharan Africa and in Latin America, where the sulfur content in diesel fuel in many countries is thousands of times higher than it is in Europe. Emissions of sulfur, which occur naturally in petroleum, have been linked to heart trouble in the elderly and vulnerable groups and can damage trees and ecosystems. "It is cause for extreme concern," Toepfer said. So I am delighted that (we are) now looking at this issue too so we can end the bipolar world in which developed countries have cleaner and healthier sulfur levels than developing countries."

Coastal communities across the Indian Ocean yesterday marked the first anniversary of the Boxing Day tsunami that left 230,000 people dead, with ceremonies of tearful remembrance and hopeful thanksgiving, reports The Guardian (12/27). They were joined by thousands of foreigners, many of whom were survivors of the disaster, relatives of those who died and aid workers involved in what has become the world's largest ever recovery and reconstruction operation.

Commemorations began in Indonesia's Aceh province on Sumatra's northern tip. It was the closest place to the epicenter of the 9.2-magnitude quake which triggered the tsunami, the first place to be struck by the deadly waves and the region that suffered the most deaths and damage. More than 132,000 people were killed, 37,000 were reported missing and 600,000 were left homeless along a 500-mile stretch of coast. The UN secretary-general, Kofi Annan, said in a videotaped message that the tsunami "was so brutal, so quick, so extensive that we are still struggling to fully comprehend it". In a response to criticism that the pace of reconstruction in many countries is too slow, Annan said that in the recovery operations "we need to strike a balance between quick results and sustainable development."

The South China Morning Post (12/26) writes that the international response to the disaster was unprecedented, spurred on by the scale of the tragedy, the number of foreigners at tourist resorts caught up in the disaster, the media coverage during a normally quiet news time and the fact that it occurred during the holiday season. So far, at least $13.6 billion has been pledged and three-quarters of that has already made its way to governments, development banks, charities and aid agencies. It was an astounding reaction that has meant organizations and agencies normally scrambling for funds to do their work have, in all but the case of the Maldives, more money than they need. The worst-affected country, Indonesia, has been allocated $1 billion more than was considered necessary.

However, as Agence France Presse (12/24) notes, one year on, the recovery task remains massive. In Aceh, more than 60,000 people still huddle in tents, while hundreds of thousands wait for new homes to be built, as do tens of thousands in Sri Lanka and India. The cost of rebuilding Aceh alone is estimated at $7 billion, with half so far received. Survivors around the region say that the aid effort has been hampered by poor distribution, lack of information, poor management of funds, the slow pace of delivery and outright corruption. And in hard-hit Sri Lanka, a recent report from the country's auditor general Sarath Mayadunne charged that corruption and poor management had doomed the aid effort in the South Asian nation.

BBC News Online (12/27) notes that Indonesia's troubled Aceh province and the nearby island of Nias, the disaster is estimated to have caused $1.2 billion of damage to the local economy. Almost half of the population of Aceh and Nias has been pushed below the poverty line. "The challenges remain huge," says Joel Hellman, the World Bank's deputy country director for Indonesia, who has been overseeing the international lender's operations in Aceh. "A lot of people were thrown out of work as a result of the tsunami. The unemployment rate is substantially higher in Aceh than in the rest of the country," he says.

Dutch daily Trouw (12/24) further reports that Andrew Steer, country director for the World Bank in Indonesia, notes that it is a sign of failure that 60,000 people are still living in tents. At the same time, he states, there is a positive side to this figure as many aid organizations are building permanent houses instead of temporary ones. As the construction of 5,000 houses per month continues, he expects the shelter problem in Aceh to be solved by mid-2007. Steer also thinks that the choices taken in Aceh can provide a new model for development cooperation. The first one was to reject a top-down Jakarta-led reconstruction strategy in favor of one led firmly by the affected communities themselves. In several thousand villages in Aceh and Nias, communities have been helped to map their own land, choose their house designs, and, in many instances, build their own homes.”

Further, Steer notes, establishing a new government agency, the Badan Reconstruksi dan Rehabilitasi (BRR), to coordinate the reconstruction effort, led to a temporary slowdown of activities, though now the benefits of this decision are outweighing the costs. There is coherence and drive to the program that would have been unlikely had existing government departments been left to do the job on their own. It is too early to state whether the Tsunami reconstruction is a success, says Steer. For Aceh only, another two billion to three billion dollars in aid is necessary.

Meanwhile, former US President Bill Clinton meanwhile writes in an opinion piece published in The International Herald Tribune (12/24) that recovery must be guided by a commitment to "build back better": better housing, schools and health care centers, safer communities and stronger economies. Recovery policies, he continues, must incorporate basic principles of good governance, such as consultation with local communities on reconstruction plans and objectives, and transparency and accountability. “In 2006, I will focus on three priorities to make sure that we do build back better, he writes.” First, we need to ensure that this uniquely well-resourced recovery effort keeps faith with the most vulnerable populations: the poorest of the poor, children, women, migrants and ethnic minorities. Second, we need to ensure continued progress on disaster risk reduction in 2006. An Indian Ocean early warning system is a welcome development, but is only part of the answer. Third, we cannot ignore the importance of political reconciliation, peace and good governance to successful recovery.

Xinhua (China, 12/23) also reports that almost one year after the tragic tsunami in the Indian Ocean, the World Meteorological Organization (WMO) said Friday that a telecommunications network to provide a tsunami early warning system is on track to be completed by the middle of 2006. However, Michel Jarraud, Secretary-General of the United Nations agency, added that the completion of the Global Telecommunication System (GTS) would hinge on securing financial commitments of some $1.8 million. The system would be able to provide for an adequate information exchange network between the proposed Regional Tsunami Watch Providers and national tsunami centers in countries hit by last year's tsunami, the agency said in a statement. GTS upgrades will enhance national capacities and allow governments to respond more rapidly and effectively in the event of all natural hazards related to weather, climate and water, not just tsunamis, it added.

The Financial Times (12/27) further reports that governments and charities are facing calls for tougher scrutiny of emergency medical donations after a World Health Organisation-funded study showed that half the drugs supplied to Indonesia following last year's tsunami will have to be destroyed. The International Committee of Pharmaciens sans Frontieres (PSF), a French charity, has found that of more than 4,000 tonnes of drugs donated to Indonesia's Aceh province, 50 per cent had expired, had unreadable labels or were not approved for local use. Destroying the drugs is expected to cost €8 million.

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Malaria: Donors Ready to Subsidize New Drug =====================================================================

International organizations are backing a pioneering subsidy program that could make a new generation of malaria medicines affordable around the world from the start of 2007, reports The Financial Times (12/27).

The World Bank is developing proposals with Roll Back Malaria, a partnership that includes UNICEF, the World Health Organization and western and developing nations, for a mechanism to underwrite widespread use of artemisinin combination therapy (ACT). Through a "high level global subsidy" of at least $100 million a year from aid donors, officials believe they can make significant progress in stimulating competition among producers of ACTs and reduce the price to that of far inferior medicines such as chloroquine, which sells for as little as 10 cents per adult dose. Olusoji Adeyi, who is leading the project for the World Bank, said, "The concept is so clear, the real bottleneck is money."

The move would mark an important boost to flagging efforts to tackle malaria, one of the world's leading killer diseases which claims more than a million lives a year and is on the rise at a time of growing drug resistance. Such combination drugs are seen as less likely to spawn resistance than artemisin on its own.

The World Bank has prepared a proposal seeking $2.5 million over nine months from the Bill & Melinda Gates Foundation to finalize how the subsidy would work. The aim is to work within an existing organization, providing funding to a procurer such as UNICEF, creating a market for drugs companies interested in manufacturing ACTs. The initiative builds on recommendations made in 2004 by the US Institute of Medicine in a group chaired by the Nobel laureate Kenneth Arrow to work alongside existing competitive drug distribution systems to establish a "high level subsidy" as the only way to make ACTs widely affordable, particularly in Africa.

Novartis, the Swiss drug group, has developed the first ACT recommended by the World Health Organization, known as Coartem, and has attempted to offer it at cost to developing nations. Yet at $2.50 per adult treatment, it is still 10-20 times more expensive than other malaria drugs. The company has long complained that orders for Coartem - currently placed country by country - are well below estimates of demand, making it reluctant to invest too much in scaling up production and building new factories.

Sanofi-aventis of France is close to launching a different ACT, but activists have called for far broader competition from generic manufacturers to bring down prices further. Arrow conceded that the challenges of the subsidy mechanism would be to ensure that its benefits were passed on from manufacturers to patients, and the likelihood that it would need to be maintained over many years. "The program will encourage producers but the problem is consumers. Africa's going to have to become a lot richer before the subsidy is no longer required,” he said. A World Bank study last summer estimated that even a relatively small subsidy injected rapidly would save many lives and slow the development of drug-resistant malaria.

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IMF Says Agrees First Ever Iraq Stand-By Loan =====================================================================

The International Monetary Fund (IMF) said on Friday it had completed a $685 million stand-by financing deal with Iraq, clearing the path for a wider debt accord and access to international financial markets, reports Reuters (12/23). The IMF deal, its first ever with Iraq, is critical for the country's ability to borrow money overseas and necessary to trigger a full debt reduction agreement approved by the Paris Club of creditors a year ago.

The Associated Press (12/23) writes that the loan, approved Friday by the lending institution's 24-member executive board, represents the IMF's seal of approval that the Iraq government is taking the proper approach to reviving its war-torn economy. The loan should open the door to more funding from countries that want to participate in Iraq's reconstruction. The loan deal was achieved after months of bargaining between the IMF and the Iraqi government.

The Washington Times (12/24) writes that IMF loans normally are considered a green light for private investors to start doing business with a country. But Iraq continues to have trouble attracting investments from major Western companies, particularly in its critical oil sector. While Iraq has the world's third-largest reserves of oil, without the investment and involvement of major Western oil companies, analysts say Iraq will not be able to rebuild and expand its production of oil.

The Press Trust of India (12/24) notes that the IMF loan over the next 15 months will be used partly to finance plans for an expansion in oil production, but analysts are saying that Iraq would first have to come to terms on who owns the oil fields and an argument has been made that the best way to go forward with this is for Baghdad to establish central control over all of the oil assets and then have a state oil company that can deal with overseas private investors.

In related news, The Financial Times (12/24) writes that Iraq Friday completed an important phase in restructuring the huge debt burden accumulated during the Saddam Hussein era, when commercial creditors - owed about $14 billion - accepted a debt-for-debt exchange offer. The $14 billion accounts for about 60 percent of the known commercial claims against Iraq in a deal which the Iraqi and US governments said should help pave the way towards rejoining the international financial community. The debt swap offer, co-managed by Citigroup and JPMorgan, follows cash buyback deals with some smaller private creditors. It also comes a year after the Paris Club of leading creditor nations agreed to write off 80 percent of about $39 billion Iraq owed to the group in three phases.

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UN Votes For Budget; Averts Financial Crisis =====================================================================

The UN General Assembly late on Friday (12/23) passed a budget with an unprecedented spending cap aimed at pressuring countries into approving management and other reforms within six months, reports Reuters.

Under the deal between wealthy and developing nations, the assembly adopted a resolution for a two-year, $3.8 billion administrative budget, thereby averting a financial crisis. But the resolution capped UN spending at $950 million -- enough only for the first six months of 2006

-- after which Secretary-General Kofi Annan has to ask the assembly for more funds to pay staff.

The news agency notes that several nations, including Egypt, India and Jamaica, refused to link reforms to the budget. But US Ambassador John Bolton said this was implicit since the assembly would have to approve additional funding in six months time. Jamaica's UN Ambassador Stafford Neil, head of the main bloc of developing nations, known as the Group of 77, said he had no choice but to approve the compromise, which he likened to the "Sword of Damocles" or the United Nations would shut down. The rancor was evident in speeches by India, Egypt, Cuba, Venezuela and others. South Africa's ambassador, Dumisani Kumalo, said some nations "resorted to coercive measures" because of their financial clout and that the United Nations was founded for rich and poor countries alike.

The New York Times (12/24) further reports that the budget process was particularly critical because of the emphasis that the large donor nations and the Secretariat put on making management more accountable in the wake of the oil-for-food scandal, which had exposed weaknesses in how the United Nations is run. The poorer nations feared the changes would dilute the authority of the 191-nation General Assembly, where they each have a vote, while strengthening the Secretariat, which they perceive as beholden to the great powers, and the Security Council, whose actions are subject to vetoes from the five permanent members, Britain, China, France, Russia and the United States.

The Irish Examiner (12/24) further explains that reaching agreement on the nuts and bolts of the reform programs and how they will be implemented has so far proved divisive and time consuming. Some UN reforms have however been approved. On Tuesday, a new UN Peacebuilding Commission was established to help countries emerging from conflict manage the difficult transition to stability and development. Annan also signed a directive to protect whistleblowers. But the General Assembly has put off talks on a new Human Rights Council to replace the discredited Human Rights Commission until January 11, and no action is expected until late February on key management reforms. They include reviewing and eliminating old UN programs, initiatives to make managers more accountable, greater flexibility for the secretary-general to run the organization, and a new human resources policy.

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Make Poverty History Campaign Pledges Not Being Delivered =====================================================================

Charities have accused celebrities of "hijacking" the Make Poverty History campaign and said pledges to cut the gap between rich and poor nations has had little impact, reports Agence France Presse (12/26).

The Make Poverty History campaign, a coalition of about 500 charities and social groups, involved more than 200,000 people marching on the Scottish capital Edinburgh to demand the G8 take action on aid, trade and debt relief. Its rock concert spin-off Live8 brought the world's leading musicians together for concerts on the same theme and adverts demanding change for the world's poorest nations.

The Independent (UK, 12/27) writes that events at the G8 summit in Gleneagles in July, attended by the campaigner Bob Geldof, attracted some of the strongest criticism. Aid workers said that pledges announced by UK Prime Minister Tony Blair at the summit were not being carried out and that hardly any had yet to translate into real money. Following the G8 Summit, Geldof praised the Labor Government, giving them “10 out of 10” on debt relief progress and “eight out of 10” on aid issues.

But Aid workers were critical of the way in which Geldof appraised the summit, with many organizations saying that the pledges were too little, too late. More than 15 million people in Britain bought a white wrist band in support of the Make Poverty History Campaign and a clutch of celebrities featured in television adverts for the movement. But many charity workers believed that the campaign became hijacked by the Live8 concert promoted by Geldof and that the message got lost in the hype.

The Independent further writes that at the G8 summit Blair also made much of the pledge that Britain would increase the proportion of GDP in the developing world to 0.7 percent by 2013. But Dave Timms, a spokesman for the World Development Movement, said that some Scandinavian countries had already reached this target and that France was set to achieve it before the UK. He pointed out that raising the proportion to 0.7 percent would only bring Britain up to the level of spending that it was at during the Callaghan era.

Richard Miller, from the ActionAid charity said, “It now transpires that up to 2008 almost all of the aid increase will be Iraqi and Nigerian debt relief, most of which wasn't being serviced. As for what happens between 2008 and 2010, the US is openly doubting the feasibility of its aid commitment while German and Italian finance ministers have said that they do not regard the target [of doubling aid by 2010] as binding.” Campaigners are also concerned that canceling debts will be linked to “free trade” demands that will benefit western countries at the expense of the poorer countries they claim to be helping by scrapping subsidies that poor farmers in the developing world desperately need to survive.

Jeffrey Sachs, director of the Earth Institute at Columbia University in the New York, meanwhile comments in an opinion piece in The Financial Times (12/27) that there was a lot of talk in 2005 about ending extreme poverty. But these words have yet to make a discernible difference for the hungry, destitute and dying, Sachs writes. The key breakthrough in 2005 was the commitment of the European Union donors to achieve the vaunted target of 0.7 percent of gross national product in official development aid by the year 2015. An intermediate benchmark of 0.56 percent of GNP in aid as of 2010 was established. In 2006, Sachs writes, the national development strategies must be based on what is really needed financially to break free of extreme poverty and achieve the MDGs, not on what is currently available. The donors have committed to double Africa’s aid by 2010, but that will never materialize, or will go into the pockets of rich country consultants, unless it is programmed directly into African investments for infrastructure, health, education and the African “green revolution” in agricultural practices, Sachs argues.

In another opinion piece published in The Independent (UK, 12/27), Richard Dowden, director of the Royal African Royal Society notes that Africa did receive a huge present this year. Not from generous rich countries giving it aid but from China's thirst for raw materials. The resulting rise in Africa's commodity prices; for oil, copper, nickel and rarer metals has brought more income to Africa than all the aid and debt combined. If money is the answer then Africa is in a far better position than it has been for years. And the trend looks set to continue. This factor was ignored by the campaigners. Led by Geldof and other celebrities, organized by Make Poverty History and encouraged by the British Government, the campaign concentrated on more aid, less debt and a better trade deal for Africa. Tony Blair pinned his hopes for doing something for Africa on this tripod of external assistance.

In related news, The BBC (12/27) reports that development charity Oxfam is calling for a million people to support a new campaign to fight world poverty. It wants people to either volunteer, donate money or fight for change as part of its "I'm in" campaign. The charity says it wants to build on support for this year's Make Poverty History push and capitalize on people's generosity after the Asian tsunami. Despite deals on debt and aid, Oxfam wants to see more done on fair trade. This, the charity says, will reduce poverty in the longer term. It says the need to allow poorer nations to trade free from the tariffs and trade barriers that prevent their economies growing should not be forgotten in 2006.

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Chad May Alter Its Pledge On Oil Funds: Hard-Line Stance Tests World Bank =====================================================================

Six months after assuming the presidency of the World Bank, Paul D. Wolfowitz is facing his first big test in his new job. An avowed hard-liner on corruption, he must decide whether the Bank should wash its hands of one of its most controversial projects, in a country with a notoriously corrupt regime, reports The Washington Post (12/27).

At issue is a 650-mile pipeline that the World Bank helped finance for Chad to transport oil from the country's interior to a coastal port. Despite objections by critics that oil money in such countries is almost invariably squandered or stolen, the Bank backed the pipeline in the hope of showing that Africa could use its mineral riches to benefit the poor. It secured an agreement with Chadian leaders that most of the government's oil proceeds would go into a closely supervised escrow fund in London, to be disbursed and invested on the nation's behalf in areas such as education, health and rural development. Now that the oil has been flowing for two years, the wisdom of the Bank's gamble is coming under renewed questioning because the government is threatening to unilaterally change the terms of the deal.

Out of cash for its regular budget amid mounting security problems involving army deserters and refugees on the border with Sudan, the government announced in October that it intends to amend the law governing the petrodollars so it can use a larger chunk of the money for any purpose it likes, including its security forces. Under the proposed new law, the government would double, to 30 percent, the amount of oil money that it can spend without oversight. The government would also halt the diversion of 10 percent of the oil money into a "future generations" fund that is to be spent only after Chad's oil wells run dry.

In the past few days, however, the situation has improved slightly as the government postponed parliamentary action on the legal changes and sent a letter dated December 16 asking the Bank to dispatch a high-level mission "as soon as possible" to N'Djamena, the capital -- possibly an olive branch, though Bank officials are not sure.

The Bank has the legal right to take punitive measures in response to any action by the Chadian government to change the agreement, which so far has generated more than $300 million in revenue for public purposes in Chad. The measures could include barring new aid to the country and insisting on immediate repayment of the loans it made for the pipeline.

But the Bank is instinctively loath to cut off financial ties with a country; it argues that the country's poor are likely to suffer most from the withholding of aid -- a painful prospect in Chad, one of the world's most impoverished nations, where 80 percent of the population relies on subsistence farming and livestock raising.

Bank officials say they are willing to sit down with the Chadians and examine the reasons for the government's cash woes and its increased needs. The Bank might accept amendments to the agreement, a staffer said, "but they have to be arrived at logically, in a structured review process, not just coming out of thin air."

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December 27 Briefly Noted =====================================================================

The Jakarta Post (Indonesia, 12/27) writes that the latest update of the World Bank's "Doing Business" study conducted in 155 countries placed Indonesia among the most frustrating places in the world for doing business. Although an improvement from last year's 155 days, setting up a business in Indonesia still takes some 80 days, far above the global average of between 40 days and 50 days, and even farther from the government's own 30-day target. A separate study by Regional Autonomy Watch found 297 of 881 bylaws issued in recent years have impeded trade and discouraged investment, although the government -- invoking last year's amendments of the Law on Decentralization -- has since moved to review and revoke 60 of the bylaws.

The New Straits Times (Malaysia, 12/27) writes that the Malaysian Cabinet has directed the Malaysian Administrative Modernization and Management Planning Unit (Mampu) and the National Economic Action Council (NEAC) to study the World Bank "Doing Business in 2006" report, identify the factors responsible for the country's low scores in certain classifications, and recommend ways to rectify the weaknesses. Malaysia may have been ranked a commendable 21st in the world in terms of ease of doing business, but the World Bank report shows a crying need to streamline the rules in specific areas which currently restrain business operations.

The New York Times (12/25) further writes that according to the new World Bank report, ''Doing Business in 2006,'' it takes 15 bureaucratic steps to start a small business in Bolivia (presumably with corruption all along the way). It takes 187 days to get a commercial license and costs over two and a half times the average Bolivian's annual income. Because of discrimination, over-regulation and corruption, it is hard for people not in the elite to rise and succeed, even if they have the skills.

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Reuters (12/25) reports Nigeria will provide free anti-AIDS drugs to all HIV-infected Nigerians starting next month, officials said Saturday, dropping fees that aid workers say deny poor people access to treatment. Nigeria has 3.5 million people with HIV/AIDS. Only India and South Africa have more. Some 40,000 Nigerians now receive subsidized antiretroviral drugs. Money for the free drugs will come from extra government funds approved by President Olusegun Obasanjo, as well as from major donors, like the World Bank, the United States and the Global Fund to Fight AIDS, Tuberculosis and Malaria.

Agence France Presse notes that Sub-Saharan Africa is set to meet a January 1 deadline to move to unleaded gasoline agreed three years ago by the region's 49 nations in a bid to stem rising pollution and improve health, the United Nations said Tuesday. The UN Environment Program

(UNEP) said the goal would be achieved Sunday when South Africa officially switches from leaded to lead-free petrol in keeping with the pledge made at the 2002 World Summit on Sustainable Development (WSSD) when only one nation in the region, Sudan, was fully unleaded. "This is a real environmental and health achievement and I pay tribute to all those governments, companies and others such as the World Bank who kept this promise," said Klaus Toepfer, the head of the Nairobi-based UNEP.

The Associated Press (12/26) writes that the European Union on Monday earmarked €165 million for 10 crisis centers in Africa, saying droughts, floods and armed conflict ravage the continent like "silent tsunamis." Sudan is the biggest beneficiary and will receive euro48 million while Congo has been allocated euro38 million (US$45 million). Burundi, Chad, Liberia, Tanzania and Uganda will each receive over euro10 million ($12 million) in aid.

Reuters (12/25) that China's parliament has announced plans to abolish the country's long-standing agricultural tax at a time when social unrest and a deepening income divide are raising official fears about stagnant farm incomes. China's economic development has been accompanied by widening income disparities, said Liu Jibin, a member of the National People's Congress, China's legislature.

The Financial Times (12/27) writes that the European Union has given up an attempt to deliver millions of euros in aid to northern Cyprus – a failure that could spell trouble for Turkey’s EU membership bid and means €120 million in funding will be lost for good. The tensions between Ankara and the internationally recognized Greek Cypriot government of the south of the island are one of the biggest stumbling blocks in Turkey’s negotiations with the EU, which Cyprus joined last year. EU governments had vowed in April 2004 to “put an end to the isolation of the Turkish Cypriot community” in north Cyprus and to help its economic development – largely through delivering €259 million in aid. But at a meeting last week, the British presidency of the EU formally gave up the latest attempt to deliver the aid because of continuing resistance by the Cypriot government.

The Associated Press notes that Bolivian President-elect Evo Morales plans to impose a new tax on the wealthy after he takes office in January, part of his program to reform the Andean nation's free market-oriented economy, officials said Saturday. He did not give details of what the changes would be and one of his senior advisers said Saturday that Morales' team was still preparing its economic program. The proposal would differ from the tax hike that sparked protests in 2003 and led to the resignation of President Gonzalo Sanchez de Lozada, Garcia Linera said.

Kyodo News (Japan, 12/24) reports that ministers from about 20 countries and regions are expected to hold an informal meeting Jan. 27-28 in Davos, Switzerland, in a bid to accelerate global trade liberalization talks under the World Trade Organization, trade sources said Friday. Participants in the meeting will include ministers from Brazil, the European Union, India, Japan and the United States, the sources said.

The International Monetary Fund's executive board on Wednesday agreed to write off $3.3 billion owed to it by 19 of the world's poorest countries but delayed forgiving Mauritania's debt, reports Reuters.

An internal IMF staff memo, dated Dec. 8 and obtained by Reuters this week, had recommended the board delay debt relief to six nations -- Ethiopia, Madagascar, Mauritania, Nicaragua, Rwanda and Senegal -- until macroeconomic and government accounting problems were addressed. The IMF's leaked Dec. 8 memo had cited Mauritania for a "substantial deterioration" in budget formulation, execution, reporting and public expenditure tracking. A detailed statement from the board's Wednesday meeting is expected within a week. But a group of Capitol Hill lawmakers wrote to the IMF and US Treasury urging full debt cancellation "without further delays or conditions," and aid activists staged a rally outside the lender of last resort's Washington headquarters this week.

The news agency further notes that those approved for IMF debt relief are Benin, Bolivia, Burkina Faso, Cambodia, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tajikistan, Tanzania, Uganda and Zambia. The one country deemed ineligible for immediate debt forgiveness, Mauritania, should be able to get the write-off in coming months, Dawson told reporters on a conference call. "We are optimistic that once the required policy options are taken, Mauritania will be positioned to receive 100 percent debt relief," he said without specifying the areas of concern.

BBC News adds that the debts owed by the 19 nations will finally be cancelled once the IMF has the approval of all 43 rich countries that have contributed to an anti-poverty trust set up by the Fund. "So far we have 37 consents. We're quite hopeful we'll get remaining the six in the next few weeks," said IMF spokesman Thomas Dawson said. The countries should receive IMF debt relief by early 2006.

The Associated Press reports that Tim Adams, the US Treasury undersecretary for international affairs, told reporters he expects the World Bank and the African Development Bank to follow quickly the IMF action with their own board votes approving forgiveness of the debt owed to their institutions. Neil Watkins, national coordinator for the Jubilee USA Network, a group working for debt relief, said he was relieved that that the executive board had "reversed a terrible proposal" that would have delayed $650 million in debt cancellation for the six countries.

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Tsunami-Hit Aceh On Brink Of Building Boom-UNDP =====================================================================

Tsunami-Hit Aceh On Brink Of Building Boom-UNDP. Indonesia's Aceh, devastated by last year's tsunami, is about to experience a construction boom that will require an additional 200,000 workers in mid-2006, the United Nations Development Programme said on Thursday, reports Reuters News.

Construction spending in Aceh, as well as quake-shattered Nias island, would soon reach $2 billion a year, the UNDP said. "Aceh and Nias are on the brink of a construction boom which is showing a gigantic leap in construction spending," the U.N. programme said in a statement released days before Aceh province marks the first anniversary of the Dec. 26 tsunami disaster. "More than 200,000 additional workers will be needed in Aceh at the peak of reconstruction efforts in mid-2006."

The Financial Times writes, many of the international agencies that set up operations in Sri Lanka after the tsunami last December had a negative impact on relief efforts and the local economy, according to an independent fact-finding mission.

According to the mission, involving German and Sri Lankan development experts, Sri Lankan officials complained that many NGOs refused to take part in meetings with local authorities to co-ordinate relief and reconstruction work, leading to confusion and duplication in efforts to rebuild houses and replace fishing boats, causing a waste of resources. An estimated 300 foreign charities and other NGOs entered the country to help with tsunami relief work, according to the report, and “overwhelmed” local administrations and civil society groups, despite being largely unaware of the “social, economic, cultural and political relations” in the country. NGOs that did join co-ordination meetings often insisted on speaking English without interpreters, a decision that excluded many local officials and relief workers, the report said.

Reinhardt Bolz, a German Sri Lanka expert who took part in the mission criticized World Vision, a US charity, for extravagant expenditure in Sri Lanka, including the funding for large roadside billboards advertising the organization’s work. This sort of “propaganda” was not appropriate, he said. Barbara Unmüssig of the Böll foundation said the report underlined the need for NGOs to become more aware of their impact on political and economic structures.

Agence France Presse further reports that thousands of new boats given to fishing communities to replace those destroyed in last year's tsunami risk bringing "economic misery" by exhausting already depleted fish stocks, according to a new report. The Malaysia-based WorldFish Centre labeled them as "misguided" aid projects that were supplying affected countries with more vessels than they had before the December 26 disaster. The research institute said that in the Indonesian province of Aceh, which was worst-hit by the tsunami, some 8,000 boats were destroyed, but that some 10,800 new vessels had either already been delivered or were about to be. "In many cases we see higher numbers of smaller boats which are used for inshore fishing, and this has potential negative consequences on the stocks which are the small fisherman's catch," said WorldFish expert Madan Dey. "Smaller fishermen cannot go to the deep sea and catch tuna -- they will be relying on the fish in inshore areas and if this ecosystem is destroyed, that will have a big long-term effect," he told AFP.

Reuters writes that while much of the focus in the past year has been on shelter, aid groups have stepped up work-creation schemes or given out small loans so survivors can restart businesses, plant crops or buy outboard motors for fishing boats. "Economies are showing the first clear signs of recovery," a report by charity group Oxfam said this week. It said the fishing industry in Sri Lanka was taking tentative steps toward recovery, with the August catch reaching nearly 70 percent of the previous year's. Crops in Indonesia's Aceh province were now being sown on reclaimed land. However, it could be two to five years before moderately affected land was back to normal, Oxfam added.

Dow Jones adds that Indonesia's tsunami-ravaged Aceh province is on the verge of a building boom that will soon be worth $2 billion a year, the UNDP said Thursday. The surge in spending in Aceh and on neighboring quake-shattered Nias Island will mean some 200,000 new jobs, but training schemes and more local production of construction materials are needed so that the poor can tap into the boom, it said.

The Jakarta Post (Indonesia) further writes that at least 67,500 people are living in tents or barracks a year after the tsunami, while hundreds of thousands of people are dependent on food aid and programs to find them work. Health care is also an issue as eight hospitals and 141 health centers were damaged in the disaster last year. On top of that, people have been struggling with high inflation stemming from the rising price of fuel and the growth of the construction industry in the aftermath of the tsunami. Frustration and anger has been directed at the Aceh Reconstruction and Rehabilitation Body (BRR), which has been overseeing the rebuilding process in the province.

World Bank Country Director for Indonesia, Andrew Steer, is meanwhile quoted in Dutch daily Volkskrant as saying that “reconstruction after disasters is almost always much slower than expectations, mainly because we fail to grasp how difficulties affect the work and multiply. We tend to plan our programs as if land titles, ports, roads and power supply still existed, and as if public officials suddenly learned to cooperate in a manner never seen before…If we apply the lessons of the past year, and redouble our efforts, Aceh’s reconstruction could introduce a new and better way of doing business during recoveries. The second anniversary will be the one that counts".

Agence France Presse further reports that Indonesia's children are recovering slowest among those in countries worst hit by last year's calamitous tsunami, said a survey by the UN's children agency released Thursday. More than 1,600 children from Indonesia, Thailand, Sri Lanka and India, all of whom lost a home or relative in the disaster, were quizzed by UNICEF about their feelings on the catastrophe and their future. One third of children surveyed in Indonesia believed that their lives would not improve, while in the other three countries 80 percent of children were positive about the future.

The Jakarta Post (Indonesia) also notes that it is estimated there are hundreds of thousands of people in Aceh suffering from malaria. Between January and November, there were 26,844 reported cases of suspected malaria in Aceh, with three deaths. Sadly, many of the people who contracted malaria were tsunami survivors. Dengue fever, another disease transmitted by mosquitoes, is another major concern for the people of Aceh. The number of dengue fever cases in the province has been on the rise since the tsunami. There were 290 reported cases of dengue fever last year, with three deaths. But the number of cases jumped to 423 so far this year, with seven fatalities.

The Associated Press finally reports that the UN on Thursday praised the Thai government's response to the tsunami nearly a year ago, but said that land disputes, recovery of poor communities and other long-term problems still must be addressed. It cited a number of challenges to ensure sustainable recovery of affected communities. These include environmental rehabilitation, housing, rights of migrant workers, improved local governance and community-based disaster preparedness. Criticism has been voiced that migrant workers from Myanmar have received relatively little assistance and that developers are using the disaster to take over land on which poor locals had settled before their homes were washed away. The report raised concern that rampant tourism development was again evident despite earlier plans to rebuild destroyed facilities in an eco-friendly way.

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US Senate Votes To End New Byrd Amendment Payouts By Oct 2007 =====================================================================

The US Senate approved legislation Wednesday that would eventually end distribution of government revenues from dumping and anti-subsidy duties to US companies that brought the complaints, reports Dow Jones.

The repeal of the so-called Byrd amendment, part of a $39.7 billion budget bill, would apply to dumping and subsidy cases filed after Oct. 1, 2007, once the legislation becomes law. Disbursements, which have totaled almost $1.3 billion since the law went into effect in 2001, will continue only up to October 1, 2007.

In 2002, the World Trade Organization ruled the Byrd amendment, named for its sponsor Sen. Robert Byrd, violated international trade rules and authorized Canada, the EU, Japan, and Mexico to retaliate with tariffs on US exports of several categories of food products. Before it goes to the White House for the president's signature, the budget bill returns to the House, which must resolve some technical differences between its version and the Senate's version of the bill unrelated to the Byrd amendment.

The Washington Post explains that according to the Byrd amendment, whenever the government finds US companies to be disadvantaged by the dumping of imported goods at unfairly low prices, the duties collected on those goods can go to the companies rather than to the Treasury. The vote yesterday was praised by free-trade advocates and foreign nations, which have viewed the Byrd amendment as a sign of US protectionism and its continued existence as a sign of US contempt for international trade rules.

The Byrd amendment became law in 2000 under pressure from steelmakers and their congressional allies who argued that companies damaged by unfair competition deserved to receive the duties the government collected in anti-dumping cases. US companies have received more than $1.25 billion under the law, with more than one-third of that amount going to the Timken Co., an Ohio bearings maker, and much of the rest going to makers of candles and steel, according to Alexander's group.

In related news, Reuters reports the US Senate on Wednesday voted to terminate the major US cotton export subsidy, honoring a promise made at world trade talks, along with trimming $2.7 billion from agricultural programs. The provisions were wrapped into the bill that cuts government spending by about $39.7 billion. Work on repeal of the so-called cotton Step 2 subsidy began months ago after the World Trade Organization ruled that lavish US subsidies distorted the global cotton market. Negotiators at world trade talks agreed last weekend that countries must end cotton export subsidies in 2006. Under the bill passed by the Senate, the Step 2 program would end on Aug. 1, when the current marketing year ends. Step 2 gives exporters and millers an incentive to purchase higher-priced US cotton.

In a separate piece, Reuters further reports that cotton production in west and central Africa is forecast to drop by 120,000 bales in 2005/06 as farmers started the season by planting fewer acres due to low prices, the US Agriculture Department said on Wednesday. The USDA's Foreign Agricultural Service forecast the cotton harvest in the African Franc Zone at 4.76 million bales, down 2 percent from last year's record harvest of 4.89 million bales. The Franc Zone, which grows the lion's share of Africa's cotton, includes Burkina Faso, Mali, Benin, Cote d'Ivoire, Cameroon, Chad, Togo, Senegal, Central African Republic, and Niger. "Farmers planted less cotton than last year due largely to low world prices, but above average rainfall this year is forecast to boost yields to a record of 425 kilograms of lint per hectare," USDA said. Burkina Faso and Mali, the two largest cotton growers in the Franc Zone, also were the only two countries to exceed last year's production levels. The remaining eight countries saw output down or unchanged from 2004/05.

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WTO Deal Positive For Small Economies: Mauritius =====================================================================

The World Trade Organization deal on global trade last weekend is positive for small, vulnerable economies fighting for specific trade challenges to be recognized, a Mauritius government minister said on Wednesday, reports Reuters.

Since the failure of the WTO meeting in Cancun, Mexico in 2003, negotiations on special provisions for small developing states have been in limbo. But the impasse was broken when ministers from 149 countries reached an agreement in Hong Kong on Sunday which included text urging members to adopt specific measures in favor of small, vulnerable economies. "For Mauritius and other similar states, the outcome of the WTO meeting is positive," Madan Dulloo, Mauritius's Minister for International Trade, told a news conference. "The fact that small vulnerable states have been included in the final ministerial declaration is very important."

The Indian Ocean island is grappling to deal with the loss of key revenues for its sugar and textiles exports as global trade liberalization takes effect. The slashing of European Union sugar subsidies on which Mauritius has depended for decades, alongside the end of WTO textile quotas on China, has subjected it to fierce competition and thousands of job losses. Mauritius's agriculture minister, Arvin Boolell, said the issue of longstanding preferences, preference erosion, treatment of sensitive products and exemption from reduction commitments on domestic subsidies would also be taken on board by WTO members. "It's a small step in the right direction because longstanding preferences and erosion of preferences have appeared in the text which means we are going to limit erosion of preferences for small vulnerable economies," Boolell said.

Mauritius, the world's seventh largest sugar exporter, will face sugar revenues cut by 36 percent over the next four years as a result of a massive overhaul of the EU's sugar regime. The island now wants sugar to be placed on a list of sensitive products to protect its heavily-indebted centuries-old sugar industry as it fights to restructure and modernize to be more competitive in the global market. "You cannot pitch in a ring a bantamweight against a heavyweight - you need to give us time, you need to help us to build up capacities, you need to give us the financial assistance," Boolell said. Mauritius trade officials say the island may also be exempted from making tariff reduction commitments on industrial products and, as a developing country, will be given flexibility in undertaking liberalization of trade in services.

In related news, Dow Jones reports that African, Caribbean and Pacific countries Wednesday blasted the new European Union budget for hurting their sugar industries. In a statement, 18 poor sugar producing countries complained that the EU budget agreed last weekend for 2007-13 gives them only EUR190 million in aid a year - compared with EUR1 billion a year to EU producers. In addition, the planned EU sugar reform will cost them about EUR250 million a year in exports. "The current situation is gravely unjust - it is a complete contradiction of the EU's stated commitment to the developing world," complained Arvin Boolell. "The member states were able to find an extra EUR2 billion at the last minute to placate their own producers, yet the ACP are left with next to nothing."

The European Commission rejected the criticism as "disingenuous." EU spokesman Michael Mann said the money being paid to EU sugar farmers was to "encourage them to stop producing," while the money being paid to poor farmers "was to modernize their sugar industries to make them competitive." He added that Europe still will pay the poor farmers twice the world price for their sugar.

The WTO has given the EU until May 2006 to reform its sugar subsidy programs or potentially face billions of dollars in retaliation from major producers such as Brazil, Australia and Thailand. In response, the EU last month agreed to slash prices by 36 percent as part of a major overhaul of its subsidy program, leading to outrage among trade groups and diplomats from the African, Pacific and Caribbean countries.

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Make Poverty History Campaign Closes Amid Warnings =====================================================================

Make Poverty History, the campaign that galvanized the political agenda in 2005, comes to an end next week hailing its own success, despite warnings that world leaders are backsliding on their pledges, reports Reuters.

When Nelson Mandela challenged the Group of Eight rich nations in London's Trafalgar Square in February to eradicate the "obscene inequality" of global poverty, his call acted as a clarion cry. The campaign's white wristband became a must-have fashion accessory and millions of people took part in marches, vigils and events that reached a climax in Live 8 concerts around the globe on July 2. And politicians took heed.

Britain, at the helm of the G8 this year, brokered a major increase in aid and debt cuts for some of the world's poorest nations as well as winning a pledge to tackle the HIV/AIDS pandemic. "The Make Poverty History coalition came together for a special year of opportunity," campaign chairman Richard Bennett said. "The political decisions made would not have been made without their passionate commitment. If governments follow through on their promises, millions of lives that would have been lost could now be saved."

But ActionAid, one of the 540 organizations that made up Make Poverty History, warned that all was not what it might seem and that world leaders were already distancing themselves from some of their loftier declarations. "It is not enough for politicians to wear white bands," ActionAid director Richard Miller said. "They had the power to turn commitment into reality in 2005 and they failed to rise fully to the challenge. Pledges have been half-hearted, and recent backsliding on aid and debt commitments underscores the need for sustained pressure," he added. "This must come from the public."

While Make Poverty History trumpeted the progress on aid, debt and HIV, it lamented the lack of action on reforming world trade to benefit poorer nations. "The World Trade Organization ministerial meeting in Hong Kong could have been a turning point in making poverty history. But the potential for justice for the world's poorest people was squandered," it said on its Web site. At the WTO meeting this month, ministers from 149 states saved long-running global trade talks from collapse with an interim deal to end farm export subsidies by 2013 but agreed the results were generally disappointing.

Make Poverty History insisted the campaign had energized a new generation who would carry on the fight. "Although this special year is coming to an end, the campaign has inspired a generation who believe that it is possible to make poverty history," Bennett said. "Their leaders have the power and ability to do this and all of those who have campaigned this year, including many thousands who have done so for the first time, will continue to urge them to deliver the changes that will make poverty history."

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Briefly Noted =====================================================================

The Manila Bulletin writes Indonesia aims to restructure portions of around $135 billion in debt owed to foreign and domestic creditors to ease the government’s fiscal burden and boost the economy, a minister said on Wednesday. Planning Minister Paskah Suzetta told Reuters in an interview that Indonesia needs not just debt rescheduling but debt hair cuts, and needs not just rescheduling of some bilateral debt but also of debt owed multilateral agencies like the World Bank.

Dow Jones notes Japan plans to disburse $420 million in loans to Indonesia next year to help boost the country's economic growth, Japanese Ambassador Yutaka Iimura said Thursday. He said the funds are slated to finance 50 infrastructure projects here. Japan is the largest lender in the Consultative Group on Indonesia, a World Bank-led grouping of international donor countries.

Reuters reports China sought to reassure the world on Thursday that its rapid economic growth does not pose a threat just days after announcing its economy is a sixth bigger than previously thought. Its policy paper, "China's Peaceful Development Road", is the latest effort to convince other countries, notably the United States, not to be alarmed by the rapid economic ascent of the world's most populous nation and its growing diplomatic clout. Thursday's policy paper stressed the benefits China's boom could bring to other countries.

The New York Times reports Afghan President Hamid Karzai's chief political rival, Yunus Qanooni, was elected Wednesday as chairman of the lower house of Afghanistan's new Parliament in a close race that split the lower house down the middle and revealed an ethnic divide that might plague future debates. Qanooni, 48, is a Tajik, a member of Afghanistan's second largest ethnic group. He promised to work for national unity and to look to the future to build a "new Afghanistan."

Dow Jones reports resistance to Roche Holding AG's Tamiflu can emerge during the treatment of patients infected with the avian influenza virus H5N1, a report to be published in the New England Medical Journal on Thursday shows. International organizations, including the World Health Organization and the World Bank, last month agreed on strategy to fight a possible outbreak, including a rapid deployment of 3 million Tamiflu doses to the area of the outbreak.

Agência Brasil writes that after visiting a mill that makes sugarcane-based ethanol, the president of the World Bank, Paul Wolfowitz, declared that he would like to see the use of Brazilian ethanol technology in Sub-Saharan Africa where it could contribute to social development. Brazil has used sugarcane to produce a low-polluting ethanol vehicle fuel for over 20 years. "I was pleased to hear various Brazilians say that this technology can be transferred," said Wolfowitz.

Dow Jones reports the Argentine government has made a formal complaint to the Uruguay Foreign Ministry about the planned construction of two pulp mills on the Uruguayan side of their shared border, moving ahead with its efforts to block the controversial projects. Argentine residents and government officials oppose the construction projects because they say the two plants will generate heavy pollution. On Monday, the World Bank's private-sector financing arm, the International Finance Corp., released an environmental impact report that raised few concerns about the plants' effects but said there needed to be more consultation with residents of the affected areas. The IFC did say, however, that traffic would see a significant spike once operations are underway.

Reuters notes Liberian soccer star George Weah is dropping a legal challenge to ex-World Bank economist Ellen Johnson-Sirleaf's victory in last month's presidential vote, the former AC Milan striker said on Wednesday. He stopped short of explicitly recognizing her victory but made clear he and his CDC party were backing away from formally contesting the Nov. 8 election result, which has been endorsed by international observers and foreign governments.

The New York Times notes Russia's lower house of Parliament on Wednesday amended legislation intended to increase the government's control over charities and other private organizations, but left in place core provisions that critics said would open the groups to political pressure or even force them to close.

Agence France Presse reports the French Ministry of Foreign Affairs announced Wednesday that is has decided to double its contribution to World Bank fiduciary funds for Palestinian territories, raising its contributions to EUR5.5 million. During a press conference, Jean-Baptiste Mattéi, spokesperson of the ministry, declared that it is a question of reinforcing France’s support for the Palestinian Authority at a time when it is confronted with major financial difficulties.

The New York Times further reports Israel said Wednesday that if the militant faction Hamas took part in next month's elections for the Palestinian parliament, Palestinians would not be allowed to cast ballots in East Jerusalem. The Palestinian leadership responded by saying that it might postpone the voting, which is scheduled for Jan. 25.

The Associated Press notes that looking ahead to the final year of his second five-year term, Kofi Annan said there were "three priority areas I will focus on next year: the fight against poverty and disease, peace and security, and reform of the United Nations." He said other major issues for the UN would be terrorism and the situation in the Middle East, including Iraq, Lebanese-Syrian relations and the Palestinian-Israeli conflict. "We also should keep a very close eye" on the conflict in Sudan's Darfur region and developments in Congo, he said.

Reuters notes the United Nations shelved efforts to reshape the main UN human rights agency by the end of the year on Wednesday in a fresh sign that UN reforms being pushed by wealthy nations were faltering. Tense talks aimed at ensuring a package of proposed management reforms is reflected in the 2006 UN budget also remained at an impasse just days before a Dec. 31 deadline for the spending plan to be in place, diplomats said.

Poor Farmers Gain In Trade Talks -- Developing Nations Positioned To Benefit But Only Over Time =====================================================================

Farmers in developing countries, especially African cotton growers, were the biggest winners in global trade talks that ended in Hong Kong over the weekend, reports The Wall Street Journal Europe.

Their gains -- still tentative and, at best, to be dragged out over seven years -- would come at the expense of their American and European competitors. For multinational manufacturers and service providers, such as banks and telecommunications firms, the week in Hong Kong was a wash. But they at least ended up with a glimmer of hope that their wish list for knocking down barriers around the world will get some attention early next year. The underlying message of the World Trade Organization talks here was this: The push for greater world-wide liberalization of commerce still has a pulse, though perhaps a faint one. And to keep it going, free-trade advocates will continue to have to show, like never before, concrete gains for lower-income countries.

Reuters meanwhile reports that Africans reacted with dismay on Monday to the WTO compromise deal on global trade, saying the world's poorest continent would pay the price for the intransigence of rich nations. "The developed countries once again failed to extend a hand of solidarity to the poor," South Africa's powerful COSATU labor federation said in a statement, calling Sunday's last-minute WTO agreement in Hong Kong an "abysmal failure." "The situation will remain that it would be better to be a cow in Japan, subsidized for $7 per day, than to be a human being living in Africa."

South Africa's director-general for agriculture Masiphula Mbongwa meanwhile said successes included plans to drop export subsidies for cotton in 2006 and duty-free and quota-free access for imports from the 49 poorest nations of the world. Chileshe Mulenga, the head of the Zambia's Institute for Economic and Social Research, an economic think-tank, said the limited progress seen in Hong Kong paled in the face of Africa's tremendous economic need. "It's very sad for Africa that there is not much progress made," he said. "The status quo remains and it means business as usual which is not helping Africa at all."

The Associated Press meanwhile writes that the EU claimed success Monday in keeping world trade talks on track, despite criticism from European farmers that it had moved on farm subsidies without winning the progress it wanted on services and industrial tariffs. EU Commission President Jose Manuel Barroso said Europe had rescued the talks from collapse by accepting a deal to end all farm export refunds by 2013. European farmers criticized the agreement as "incomplete and one-sided," saying the EU could not move an inch more and needed more guarantees to keep them from going out of business. Barroso urged the EU's trade partners to go further when talks continue next year, saying they had to make "real concessions" to strike a deal the EU could accept.

The Financial Times further notes that the main EU concession on agriculture in Hong Kong was to accept a 2013 deadline for eliminating all farm export subsidies. By then, the EU will have already cut export subsidies to about €1 billion, from €3 billion, so the extra step will be relatively insignificant. In coming months, the only internal EU steps that could help to move Doha forward on agriculture are expected reforms from the EU's trade commissioner Marianne Fischer Boel in sectors such as wine, fruit and vegetables and decisions by EU agriculture ministers on exactly how to spend 2007-2013 funds. The room to maneuver appears small, since the 2003 CAP reform agreed to keep spending at €43 billion a year until 2013.

The West Australian meanwhile writes in an editorial that while some crumbs of optimism may have emerged from the WTO talks, it is impossible to avoid the conclusion that the vested interests of the European Union, and France in particular, again have triumphed over the ideal of global free trade. Again, and quite predictably, it was the power of the EU which principally was to blame for the lack of progress, forcing the extension by three years of the 2010 deadline sought by the developing nations. In effect, this extends the outrageous protectionism afforded to inefficient European farmers and continues the unequal battle being fought by agricultural nations, including Australia, to have their products reach European shop shelves.

Commenting in a second editorial, The Business Standard (India) writes that the world trading regime has had a close shave at Hong Kong. Since an agreement on this was the acid test for whether or not the Doha Round of trade talks had achieved anything, it must be admitted, even by the skeptics, that there has been some progress. By pinning the developed countries down to a specific date for ending farm subsidies, the developing countries have done better than was expected. Trade ministers from the different countries, including India, will claim credit for the outcome because success, never mind that it is partial, has many fathers. India, in particular, can draw comfort from the fact, that unlike in the past when the coalitions it built would fray and then come apart, this time that did not happen. That said, it would be navel-gazing to credit Third World solidarity beyond a modest point. The hard truth is that the outcome of this ministerial had boiled down to just one thing: French willingness to budge on the agricultural subsidies issue. And that was predicated on the just passed EU budget, on which the French had locked horns with the British.

Marian Tupy, assistant director of the project on global economic liberty at the Cato Institute, meanwhile comments in The Financial Times that the steps that are necessary in order for Africa to prosper rest in the hands of African governments. Yet conventional wisdom continues to hold that the continent is destined to remain poor unless the rich countries change their economic policies. African leaders are only too happy to play their part in that charade. Blaming poverty on forces beyond the control of Africa's political elites takes the spotlight away from decades of failed economic policies, wholesale looting of the continent's wealth and loss of countless lives to political repression and ethnic conflicts. If African political elites are serious about improving the lot of the African people, they must first look to their own actions and stop blaming others for the poverty on the continent. The war on African poverty must begin at home.

Julian Morris, executive director of the International Policy Network, writes in an opinion piece in The Wall Street Journal Asia that in the push to get a deal, trade negotiators in Hong Kong accepted the lowest common denominator. Not only will liberalization in all major areas proceed slowly, but the poorer countries are for practical purposes exempted from liberalization in a broad range of goods and services, Morris argues. In other words, the vested interests in those countries will continue to be protected at the expense of entrepreneurs and the poor in general. Moreover, the poorest countries are to be given "aid for trade" -- a euphemism for bribes to be paid by taxpayers in rich countries to the trade ministries in poor countries -- which may well do more harm than good. Even aid given for a specific purpose is "fungible"

-- because it frees up other money to be used for more dubious purposes, suggests Morris.

The Jakarta Post argues that last week's last-gasp deal at the Hong Kong Ministerial Meeting would mean little for Indonesia without strategic domestic policies to increase competitiveness, say observers. In order for Indonesia to benefit from the Hong Kong deal, it has to set out a clear-cut agenda to address the country's structural problems in the agricultural sector. "The deal would not mean anything if we do not raise the productivity and competitiveness of our farm products," economist Bustanul Arifin said on Monday. He added the country's agricultural sector still had to deal with structural problems like low productivity and insufficient resources. "The government needs to prioritize the intensification of the farming sector and increase the quality of agricultural products," he emphasized.

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Conditional Aid Is Effective Against Poverty, According To World Bank =====================================================================

According to the World Bank, conditional aid programs linked to criteria, such as school attendance, are an effective tool against poverty in Latin America and are ready to enter a second phase, reports Agencia EFE.

Brazil was the first country in the region to implement, in 1995, a local initiative that over time has evolved into the current "Bolsa Familia" or "Family Stipend" program. Kathy Lindert, an economist at the World Bank in Brazil, told EFE that the program drew attention of the Mexican government, which copied the idea and implemented it for the first time at the national level in 1998. The current government of Brazil, under President Luis Inácio Lula da Silva, decided to merge all four existing local programs in the country into a single national program.

One of the most innovative aspects of the new Brazilian plan is that the recipients receive a bank card with which they can withdraw money every month. The system, said Lindert, "allows poor people to access banks for the first time in their life." In the last few years these kinds of programs have also been implemented in Nicaragua, Honduras and Chile, among others countries.

The "Bolsa Familia" program, and similar programs in the region, grants a fixed monthly stipend, which, in the case of Brazil, amounts to approximately $40 and applies to more than 8 million families, some 35 million people. Beneficiaries must be committed to the fact that the assistance is tied to children's school attendance (with a minimum of an 85 percent attendance rate) in addition to certain sanitary requirements, such as childhood vaccinations. The "Bolsa Familia" program is financed by the Brazilian government (this year it was assigned $2.5 billion), and is supported by the World Bank with a two-year loan amounting to $572 million.

For Eleith Nogueira and Albertina de Sousa and the 10 percent of the Latin-American population that live on less than $1 per day, or the 25 percent that live on less than $2 per day, the amount is not insignificant. Nogueira and De Sousa are two of the inhabitants of the Varjao "favela" (a very poor neighborhood) that World Bank President Paul Wolfowitz visited Tuesday as part of his six-day tour of Brazil. They explained Tuesday how the monthly assistance helps them feed their family. "The most important thing is that they can eat," one of the inhabitants of Varjao, who was happy to know that when the fruit truck comes by she will have money to buy some fruit, explained to Wolfowitz during his visit to a school in the "favela." And for these mothers, putting something on the table every day is always a challenge.

Recent official figures point that the poverty rate has declined from 14.5 to 12.3 percent between 2004 and 2003, and inequality has also decreased thanks in part to increased education. However, Lindert warns that this program is not a panacea. The World Bank expert believes that the region should support a second phase of the program to focus on the increased quality of basic social services, such as education and health. Lindert considers that in the future, aid should also be linked to other services, such as access to microfinance, or to initiatives against domestic violence, as is the case in Chile.

In other news, Business News Americas reports that the World Bank is considering specifically focusing on the areas of power and infrastructure to reinforce the impact its programs have on the developing world, and a pilot project will be launched in Brazil, newspaper Panamá América reported. The Bank's new focus fits in with the interests of President Luis Inácio Lula da Silva's government, which sees the Bank as a "niche" institution, the paper said. Brazil is looking for financial backing and advising from the World Bank for interregional power programs and development of transport corridors. Improved infrastructure would result in higher growth, said World Bank Brazil director John Briscoe, which would help to reduce poverty in the country.

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Half Of Tsunami Survivors Back At Work, Much More To Be Done: Oxfam =====================================================================

At least half of the tsunami survivors who lost jobs after last year's disaster have returned to work but much more must be done to restore livelihoods, Agence France Presse reports aid group Oxfam said in a report titled "Back to Work" released Tuesday.

According to the Oxfam report, unemployment in Indonesia's worst-hit Aceh province rose from about 6.8 percent to one in three people while in Sri Lanka the rate in affected areas jumped from 9.2 percent to more than 20 percent. Among those worst affected were fishing families, small-scale agriculturalists, laborers, people running small businesses and those working in the tourism sector, it said.

Many survivors were already living in poverty, "and many of the underlying reasons that kept so many in poverty in the first place have still to be addressed," the report warned. In Aceh, nearly three decades of separatist conflict had left a scarred population where the poverty rate had doubled from 14.7 percent in 1999 to 29.8 percent in 2002. In Sri Lanka, about 45 percent of the population were earning less than two dollars a day before the disaster.

Nevertheless, the UN labor agency forecasts that 50 to 60 percent of workers will be able to earn a living again by the end of 2005 and that 85 percent of jobs will have been restored by the end of next year. And economists believe that 70 percent of those dragged into poverty by the tsunami -- 1.4 million people -- will be out of poverty by 2007. "Crops are now being grown on the land that has been reclaimed and will be ready to harvest within the next few months. In Aceh alone, over 5,000 farmers have begun cultivating their fields once again," the report said. Experts say that it will still take two to five years before the productivity of moderately affected land is fully restored to pre-tsunami levels, it added.

The Associated Press adds Oxfam said increasing employment numbers could be partly explained by the "cash for work" programs, where beneficiaries were paid for basic work which varied from clearing rubble to rebuilding houses and burying bodies. This program helped provide the beneficiaries with more choices and control over their options and helped to rapidly stimulate the economy, Oxfam noted.

BBC News Online further notes the aid agency believes that the drive to restore jobs has progressed more than some other areas of the recovery operation, such as shelter. Last week, the charity said about a fifth of those made homeless would be in satisfactory permanent accommodation by the first anniversary of the disaster. Oxfam's report stressed that many underlying causes of poverty still remain, particularly in coastal areas over-reliant on fishing or tourism. In Sri Lanka, where the tsunami slammed into eastern and southern coastlines, up to 65 percent of the fishing fleet was wiped out, Oxfam says. In Aceh, less reliant on tourism but more dependent on fishing, unemployment hit 33 percent after 70 percent of the area's fishing fleet was scuppered. Repairing and replacing boats has provided jobs for many.

The Associated Press adds thousands of hectares of land ruined by saltwater and mud have been desalinated and cleared, and many farmers already have had successful harvests, the report said, citing data from UN agencies and international lending institutions. "There are of course problems that remain and continued support is essential if we are to safeguard the progress made," said Oxfam International's executive director Jeremy Hobbs. The report however also identifies some of the continuing problems: It will take from two to five years for the soil to return to full productivity. In some cases fishing communities are being given new land that is too far away from the sea to sustain their livelihoods.

The Wall Street Journal Asia meanwhile writes that rebuilding after the tsunami is lagging behind in many areas, leaving tens of thousands without homes and billions of dollars in donations unspent. In Indonesia and Sri Lanka fewer than a fifth of the homes that were destroyed have been rebuilt. Most displaced families remain in temporary shelters or with relatives or neighbors. Vital infrastructure, such as roads and ports, has yet to be repaired. Only a small slice of the more than $13 billion pledged by foreign governments, international aid agencies, private donors and others has been spent. "Rebuilding on this scale is a massive exercise that needs to be thought through and planned," said Joel Hellman, recovery coordinator for the World Bank in Aceh, Indonesia. "The time lag is long because of the sheer difficulty of the nature of the task."

The business daily adds that some delays, however, are the result of deliberate choices made by officials and aid workers. In places such as Indonesia's Aceh province and Sri Lanka, rapid rebuilding has been held back by officials hoping the aid windfall can be deployed without graft and used to raise living standards. That approach has been generally applauded by development experts, who say it might help affected areas emerge in better shape than before the tsunami.

Finally, in an Op-Ed for Business Times Singapore, Andrew Steer writes that the scale of the tragedy was unparalleled, of course, even for those of us who had worked in other disaster reconstructions. With 167,000 dead or missing along an 800 kilometre strip of coastline that had been swept clean of buildings and all signs of life, the task of rebuilding seemed, and was, overwhelming.

The response was also unprecedented. Never in history had so many individuals, businesses and countries contributed so much in response to a single event.

It now appears that around US$9 billion in total will be available to rebuild Aceh and Nias, with around one third from Non-Government Organisations (NGOs) and the private sector, one third from international donors, and one third from the government of Indonesia.

Never before have non-government actors played such a central role in long term reconstruction. Twelve months on, there are 124 international NGOs and 430 local NGOs working alongside dozens of donor and UN agencies engaged in the largest building programme in the world.

Former US president Bill Clinton, the UN Special Envoy for the Tsunami, and Paul Wolfowitz, president of the World Bank, have both noted that the scale and spontaneity of the response to the tsunami offers a test for us all. If funds are used efficiently to quickly restore communities and livelihoods, then this type of response could become a model for future disasters. But if reconstruction is seen to be inefficient or delayed by bureaucratic bottlenecks, cynicism will set in and it may be decades before such generosity will be seen again.

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First Afghan Parliament In Decades Sworn In =====================================================================

Former warlords, ex-communists, Taliban defectors and women activists were sworn in on Monday as members of the first Afghan parliament in more than 30 years amid hopes of national reconciliation after decades of bloodshed, reports Reuters.

After swearing in the 351 lower and upper house members, President Hamid Karzai urged national reconciliation after almost three decades of warfare and reiterated a call to the Taliban to abandon their insurgency, which has intensified in the past year despite his efforts to encourage defections.

Parliament has to endorse Karzai's ministers, and government officials said after the inauguration he was considering reshuffling his cabinet and cutting the number of ministries. Analysts say Karzai appears to have enough support in parliament to avoid major problems, but could face difficulties with appointments, given disappointment at his administration's failure to improve people's lives and carry out crucial reforms. The inauguration was the culmination of a UN-backed plan to bring democracy to Afghanistan that was drawn up after US-led forces overthrew the Taliban in 2001.

Dow Jones adds that Afghanistan's parliament struggled with the business of government in its first full session Tuesday, haggling over procedural issues and failing to select leaders. The debate on how to select the bodies' leaders was to continue Wednesday. The body has come under fire for including many regional strongmen, raising concerns over whether it can truly be a positive political force.

The Associated Press notes that Afghans voted for the 249-seat lower house in September, and also elected provincial councils that then chose two-thirds of the 102-seat upper chamber. Karzai appointed the remaining 34. Most of the government's power is still concentrated in the hands of the president, although parliament will be able to pass laws and veto Cabinet selections.

The Washington Post further reports that while the country has generally stayed on track with the creation of political structures, it has had less success in achieving economic and security goals. Despite signs of commercial development such as a new shopping mall and towering office buildings, unemployment remains stubbornly high while prices continue to rise. Further, access to electricity and clean water is limited, and the opium trade has surged. And this fall the country has suffered a spate of suicide bombings, leading to concern among security officials that Taliban rebels and their international supporters are mimicking insurgent tactics in Iraq.

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China Increases Official Size of Economy =====================================================================

China sharply raised the official size of its economy Tuesday after taking into account emerging service industries, saying its output last year was 16.8 percent higher than previously reported, reports The Associated Press.

The new figures mean China's mainland overtook Italy as the world's 6th-largest economy in 2004, behind France and the United Kingdom. China would jump to No. 4, after only the United States, Japan and Germany, if it included Hong Kong, a Chinese territory that reports its economic figures separately. The data could have far-reaching effects on economic and social policymaking as Beijing tries to create new jobs for unemployed workers and plans investments.

The new Chinese output tally of $1.981 trillion (15.987 trillion yuan) followed a survey meant to gather more accurate data on restaurants, retailers and other service businesses, which were underreported previously. Economists have long said China's already stunning official figures showing annual growth above 9 percent in recent years understate the size of its economy due to old-fashioned data that focused on manufacturing and undercounted services.

Reuters writes that the National Bureau of Statistics (NBS) said the revision reflected better information on the services sector and on private firms, unearthed during a year-long survey for which the government mobilized 13 million data-gathers -- one in every 100 Chinese. For investors, the bigger economic pie means some ratios that had looked worryingly high, such as investment or bad loans as a share of GDP, now look more sustainable. Fast-growing service industries such as telecommunications, retailing and real estate accounted for 93 percent of the revision and boosted the service sector's share of economic output in 2004 to 40.7 percent from 31.9 percent. Industry's hitherto outsized share of GDP dropped to 46.2 percent from 52.9 percent, while the share taken by farming and fisheries shrank to 13.1 percent from 15.2 percent.

The news agency adds the changes mean China will need to lean less on ever-faster industrial output, and the ever-rising demand for energy and raw materials it entails, to sustain the 9 percent-plus GDP growth rates of the past three years. Because policy makers now know that growth is less reliant on export-orientated industries, they could be more relaxed about letting the yuan rise, which would favor consumption and services growth, said Frank Gong, chief economist at JPMorgan Chase in Hong Kong.

Xinhua (China) meanwhile reports the World Bank has welcomed China's revision of its 2004 gross domestic product figures, saying the new data will provide better insight into China's economy. In a statement, the Bank said the revised figures will give better information on the state of the Chinese economy as well as structural issues such as sector contributions to the economy. "The new GDP data are a major improvement" over the previous indicators, according to Bert Hofman, chief of the economics unit of the World Bank office in Beijing. Hofman called the new data "very timely as many policy issues that the government wants to tackle in the forthcoming 11th Five Year Plan need reliable data for those issues to be assessed correctly." He noted that some of the ratios that have drawn policymakers' attention, such as the investment to GDP, services to GDP and energy intensity, are likely to change in light of the new GDP numbers.

AFX Asia (Hong Kong) notes that the Bank added in the statement the magnitude of China's revision was by no means an exception, and that revisions tend to be larger for countries that grow faster. "The important thing is that we now have better data to work with," Hofman said. "We are looking forward to a technical briefing by the NBS to understand the detail of the revisions," he added.

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Also Reports =====================================================================

Also Reports... Xinhua (China) reports that the World Bank predicted that economic growth in developing countries will slow to 5.9 percent this year, down from 6.8 percent last year. According to the World Bank's annual "Global Economics Prospect" report for 2006, the slowdown among industrial economies, which began in the second half of 2004, continued this year. "High oil prices were one factor in dampening the global expansion," said Andrew Burns, one of the authors involved in the report.

Asia Pulse (Hong Kong) writes that New Zealand has received top marks in a World Bank survey on "Doing Business in 2006." The country was ranked No. 1 in terms of ease of doing business, in the survey of 155 countries conducted by the Bank's International Finance Corp division. Australia was sixth on the list, which assessed how easy it is to establish and maintain a business. Fiji, Tonga and Samoa ranked 34th, 36th and 39th, respectively.

The Pacific News Agency Service (Australia) also reports on the World Bank's "Doing Business" 2006 report.

Briefly Noted

Reuters reports US lawmakers on Monday urged the International Monetary Fund to erase the debts of 18 poor countries, as mandated by the Group of Eight nations, while aid groups warned the deal may be under threat. Six members of the House of Representatives Financial Services and International Relations panels, including Iowa Republican James Leach and California Democrat Maxine Waters, wrote to IMF Managing Director Rodrigo Rato urging the fund to cancel the debts "without further delays or conditions." Development activists and aid groups have warned that debt forgiveness pledged to 18 of the world's poorest nations may not emerge from an IMF board meeting on Wednesday in the form envisioned at a G8 leaders' summit in Scotland this summer. Oxfam and Jubilee USA said six nations -- Ethiopia, Madagascar, Mauritania, Nicaragua, Senegal and Rwanda

-- may have to wait for their debt write-offs until they meet certain economic goals mandated by the IMF.

Reuters notes the World Court in The Hague found on Monday that Uganda violated the sovereignty of the neighboring Democratic Republic of Congo and was responsible for human rights abuses there during a 1998-2003 war. The court added Uganda was responsible for acts of plunder in Congo by failing to ensure that its soldiers respected the country's natural resources.

Business News Americas writes Argentina's government is talking with the World Bank about the possibility of receiving a package of loans for $3 billion over three years, mostly for road infrastructure and sanitation, local press reported. "Now the [World] Bank is considering with the Argentine government the possibility of a package of loans for $3bn over the next three years, of which 80 percent would be for road and sanitation infrastructure, among other things," World Bank representative in Argentina, Alieto Guadagni, was quoted as saying.

Reuters, Dow Jones, and Business News Americas write that the IFC on Monday released a draft study foreseeing little harm from a pair of Uruguay pulp mills, but said it would take at least two months to decide whether to finance the projects. The IFC report was much anticipated in both Uruguay and Argentina where a political battle has brewed over the proposed plants, to be built on the banks of the Uruguay River which forms a natural border with Argentina. While the IFC declined to say whether the study negated Argentina's claims that the plants would pollute the region and disrupt local communities, its review found air emissions and water discharges from the mills would be safe.

The Australian writes in Tuesday's editorial that the picture of enemies putting aside their weapons and uniting in a practical cause involving mutual self-interest is a familiar plot in fiction. The World Bank thinks it can become reality in the Middle East, where Israel, Jordan and the Palestinian Authority face a common threat to a cradle of their cultures. As the daily reported yesterday, the Bank last week persuaded the US, some European countries and even Japan and China to join the peoples who live near the Dead Sea in trying to prevent it from dwindling almost to a pond this century, provided a feasibility study backs a scheme to pipe seawater from the Red Sea. The pipeline project could cost $1.7billion, but would enable hydroelectric power -- the run would be mostly downhill, since the Dead Sea's valley is as far below sea level as you can go on land -- and fresh water from desalination.

Agence France Presse writes US Secretary of State Condoleezza Rice on Monday appointed Frank Wisner, a seasoned diplomat, as Washington's special envoy for upcoming talks on the future status of the Serbian province of Kosovo.

The New York Times reports US President George Bush's foreign aid program aimed at reducing poverty in well-governed developing countries announced its second-largest grant yesterday. It will give $236 million to Armenia over five years, but warned the country's rulers that the assistance would be suspended or canceled if its record on political rights continued to deteriorate.

Kyodo News (Japan) writes that China said Tuesday it will co-host with the European Commission and the World Bank in Beijing next month a meeting aimed at tackling avian influenza. The January 17-18 meeting will aim to assess the amount of funds needed to deal with the disease and establish a way to manage such funds, Chinese Foreign Ministry spokesman Qin Gang said at a regular press briefing.

Reuters reports the IMF's executive board will meet on Friday to discuss a lending deal for Iraq, the lender said on Monday. An IMF financing pact is a critical step for Iraq's ability to borrow money oversees and necessary to trigger a debt relief deal approved by the Paris Club of creditor nations last year.

Reuters notes Antonio Fazio resigned on Monday as Bank of Italy governor, finally succumbing to intense political pressure after he was embroiled in a bank takeover scandal. Attention now turns to Fazio's successor and it is not yet fully clear how he will be chosen. Under current rules, the BOI governor is picked by the bank's superior council and the decision is ratified by the government and the state president.

BBC News Online writes that new research from the US shows that trade can significantly affect emissions of greenhouse gases. Researchers found that US imports of goods from China cause a greater production of carbon dioxide than if the goods were made in the US. Factories in developing countries tend to use more energy than in the west. The researchers say emissions control measures such as the Kyoto Protocol could "export" carbon-intensive industries to the developing world.

Reuters writes that a bill cutting $39.7 billion from a broad range of domestic programs was headed for a final vote in the US Senate this week after the House of Representatives narrowly approved it early on Monday. The vote is tentatively set for Wednesday. The spending-cut bill also would make a significant change to US trade policy. If enacted, it would repeal a trade law known as the "Byrd amendment" that allows the government to distribute some duties it collects on foreign goods to US companies involved in trade disputes with foreign competitors. Under a compromise, the law, which has been declared illegal by the World Trade Organization, would be repealed after a two-year grace period. BBC News reports UN secretary-general Kofi Annan has been given one of the most prestigious environmental awards, the Zayed Prize. The citation noted his "personal leadership" on sustainable development. The 1,360 scientists whose research contributed to the Millennium Ecosystem Assessment were also honored, as were activists from Trinidad and Indonesia.