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Mexico Takes Key Step Toward MIGA Membership
WASHINGTON, DC, October 22, 2007—Mexico today took an important step closer to full membership in the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group.
Mexican Secretary of Finance Agustín Carstens signed MIGA’s Convention on behalf of the Mexican government at a ceremony on Monday, October 22, at World Bank headquarters in Washington, DC. He was joined by World Bank Group President Robert B. Zoellick, MIGA Executive Vice President, Yukiko Omura, Pamela Cox, World Bank Vice President for Latin America and the Caribbean, and Jorge Familiar, World Bank Executive Director.
To complete the membership process, Mexico must pass legislation to legalize the membership, as well as make its required capital contribution to the agency.
Membership in MIGA will allow investors from Mexico to receive political risk insurance (guarantees) for eligible investments into other developing member countries. Eligible foreign companies seeking to invest in Mexico may also receive MIGA guarantees. MIGA’s coverage protects investments against the risks of transfer restriction, expropriation, breach of contract, and war and civil disturbance (including terrorism).
“This association will contribute to Mexico’s efforts to promote economic growth, by increasing foreign investors’ confidence in our country,” said Secretary Carstens. “In this way, more resources will be available for the generation of employment opportunities, poverty reduction, productivity and competitiveness enhancement, all of which will result in better living standards for Mexican families.”
In 2006, foreign direct investment (FDI) into Mexico surpassed $19 billion, according to UNCTAD, while outward flows reached $5.8 billion. The 2007 World Investment Report ranks Mexico 49th out of 141 economies in terms of outward FDI performance, and the top FDI recipient in Latin America and the Caribbean.
“We welcome Mexico into MIGA,” said Omura. “Mexico is a regional leader in outward FDI and is increasing its global reach. We are eager to support the role of Mexican investors in the economic development of other developing countries. ‘South-South’ investment—an increasing source of FDI into other developing countries—is a strategic focus for MIGA.”
Omura added that investors are also expressing interest in MIGA’s support for investments into Mexico, particularly infrastructure projects, which typically are accompanied by a unique set of risks at the municipal (or subsovereign) level.
For more on MIGA, visit www.miga.org.
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World Bank Partners with ABN AMRO to Issue Eco 3Plus Note
First Posted October 24, 2007—
The World Bank partnered with 183-year-old Dutch bank ABN AMRO this fall to issue World Bank bonds boosting both World Bank projects and climate-friendly companies.
ABN-AMRO, recently acquired by a consortium led by Royal Bank of Scotland, sold about 150 million euro of World Bank Eco 3Plus bonds within a month of their launch September 17, says Frans Kuijlaars, Senior Vice President and Head of Benelux Sales, ABN AMRO Markets.
The bonds, with a guaranteed minimum return of 3 percent, help finance anti-poverty World Bank projects. The bonds' upside return is tied to the performance of an index of companies that focus on climate issues and the environment.
“Experience has shown us that investors are indeed interested in sustainability and green investments but they also expect a good return,” says Kuijlaars. “We believe that you should not have to give up return to make green investments. So, this product's success is based on its appeal to investors as a green product, a safe product with a solid base yield plus an attractive upside potential.”
The companies on ABN AMRO’s Eco Index are spread around the world and operate in eight sectors: water, waste management, geothermetrics and alternative fuels, platinum and palladium used in catalytic converters (automobile pollution control equipment), wind power, water-powered energy, bio-ethanol and solar energy.
The minimum investment in the six-year World Bank Eco 3Plus notes is 1,000 euro, but the average investment so far has been 50,000 euro. The guaranteed return of 3 percent allows investors to gain the benefit of investing in climate friendly companies that may otherwise be inaccessible without taking on much risk, adds Kuijlaars.
The bonds mark the first time ABN AMRO opened up its retail distribution network to an outside issuer for this type of product. Although ABN AMRO had previously talked informally over a number of years with the World Bank about partnering on a bond issue targeted at the retail market, discussions didn’t occur until July on the Eco3 Plus note, Kuijlaars says.
“With market interest in the Netherlands for green products, the development by ABN AMRO of the Eco Index and a retail product that paid a minimum return to investors, the timing was finally right for this World Bank bond,” he explains.
The Eco Index itself grew out of ABN AMRO’s increasing concern about climate change, says Suellen Lazarus, a senior advisor at ABN-AMRO. ABN AMRO, named this June by the Financial Times as the Sustainable Bank of the Year, created a virtual network called Eco Markets. The network consists of different business lines, each devoted to developing products to address the challenges of climate change.
“In terms of our business, our clients are looking for assistance in addressing the risk and opportunities of climate change. Our clients want to capitalize on those opportunities, and you get first-mover advantage, and so we are developing products that help our clients respond. The Eco Index is one of those things that have come out of this work,” she says.
“It’s not a one-shot game. We really are committed to it, and it’s basically all around our organization,” adds Kuijlaars.
For its part, the World Bank wanted to use its funding program “as a vehicle to raise the visibility of what the World Bank actually does in the world, as we do not have a budget for this type of advertising,” says George Richardson, the World Bank’s Principal Financial Officer for Capital Markets.
ABN AMBRO sent brochures to 15,000 private banking clients and direct mail to 100,000 retail investors describing the World Bank Eco 3Plus Note, the Eco Index, and the kinds of World Bank projects the bonds would support, such as improvements to primary education in the Philippines, investments in health care and education in Brazil, and combating TB and HIV/AIDS in Russia.
The effort has built awareness about the World Bank in the Netherlands and has allowed the World Bank to “reach mom and pop,” says Lazarus of ABN-AMRO. “They can have a stake in the World Bank.”
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Finance Sector Has Vital Role In Global Social And Environmental Challenges
World News - In an editorial published in Australian daily newspaper The Age, UN Environment Program (UNEP) Executive Director, Achim Steiner writes: “It has been 15 years since 28 banks, with $2 trillion in assets, gathered in New York to sign a UN Environment Program commitment to sound environmental management…Since then, the commitment … has grown into a unique public-private partnership, with 175 banks, insurers and asset managers from 38 countries. Today it is known as the UNEP Finance Initiative, or simply UNEP FI.
A conference in Melbourne that began Wednesday and continues today comes just 24 hours before UNEP launches its flagship Global Environment Outlook 4, a report that underlines Earth's declining natural capital that supports the $60 trillion world economy.
Since UNEP FI began, financial services and capital markets have operated in a rapidly changing and globalized economy that has delivered the hope of prosperity for more people but at the same time has intensified collective environmental and social challenges. …
We cannot underestimate the influence of financial services and the potential impact of the world's most powerful private institutions on delivering a more intelligent management of the environment and its nature-based assets. …
Enhanced understanding of environmental and social risks means companies are also gaining a growing appreciation of the scale of new market opportunities stemming from the need to finance and insure the ideas, technologies and companies that will provide solutions to our collective challenges. In the coming years, the sector will be judged on how its core business rolls out financial products that allocate capital and fully integrate environmental and social factors.
Along with other UN efforts, UNEP stands ready to work with banks, insurers and investment companies to make sustainable development the key to future and long-lasting business success. …” [The Age (Australia)/Factiva]
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UN Needs Parliamentary Assembly to Spur Reform
Canada and Canadians have made substantial contributions to the founding and development of the United Nations. Today, at this critical time, the push for democratization and UN reform cry out for Canada's leadership and support.
Warren Allmand, President, World Federalist Movement Canada notes "We have given the UN responsibility for a great many tasks, but we also need to give it the requisite tools to do its job. We must strengthen the UN and international law now. We all know the consequences of failure. Will we be destined, as in 1919 and 1945, to start all over again from the ashes of another global catastrophe?"
Faced with “daunting challenges” to peace, development and human rights and an organization stretched to its limits, Secretary-General of the United Nations Ban Ki-moon remains optimistic, noting that a recent poll found large majorities (74 percent) believe the United Nations should play a stronger role in the world, whether in preventing genocide and defending nations under attack or aggressively investigating human-rights abuses. Recent polls also demonstrate strong popular support for the democratization of the UN system and the end of tight control of the UN by a few countries.
While the UN makes slow progress in its transformation to meet the challenges of the twenty-first century, the creation of a Parliamentary Assembly (UNPA) as an advisory body would immediately provide a layer of democratic oversight and would accelerate the process of making the UN more accountable and more transparent. Dr. Michael Byers, Canada Research Chair in Global Politics and International Law at UBC states “The Canadian Government should make realization of a UNPA a key element in our contribution to promoting world-wide peace and democracy.”
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Imf: Technology, Not Trade, Is Worsening Inequality
“Advancing technology, rather than globalization, has been the driving force behind rising inequality in developed and developing countries alike, the International Monetary Fund (IMF) said Tuesday.
Technology, like foreign direct investment, has raised incomes for skilled workers, widening the gap between rich and poor in most countries around the world, the IMF said in a portion of its latest World Economic Outlook. …
Technology not only raises demand for skilled workers, it also automates and destroys jobs for low-skilled workers, the IMF said. Much uncertainty surrounds the study because data were limited and not always directly comparable across countries, the fund said. Also, the spread of technology is facilitated by trade and globalization, the IMF said.
But in general, goods and services trade tended to make the poor better off by lowering prices. Agricultural exports were particularly effective in helping the poor because jobs were created and wages rose in areas where the poorest live. …” [Dow Jones/Factiva]
The Fund didn't include the effects of immigration in its study, Lall said, because of a lack of global data. In rich countries, some economists argue, migration from poor countries can boost inequality because the migrants compete for low-end jobs with native workers. …” [The Wall Street Journal/Factiva]
In the analytical chapters of its World Economic Outlook released in advance of the October 17 publication of the forecast, the IMF said the durability of the global economic expansion is likely to persist. …” [The Associated Press/Factiva]
FT writes that “The economies of eastern Europe are vulnerable to a reversal of the surge of private capital that has poured into emerging markets in recent years, the IMF says …
The IMF says most emerging markets now have much stronger current account positions and have been building up foreign exchange reserves. Eastern Europe is an exception, though. ...” [The Financial Times (UK)/Factiva]
AFP notes that “The IMF has lowered its 2008 global growth forecast to 4.8 percent from a previous estimate of 5.2 percent, German sources told AFP Tuesday. The IMF slashed its estimate for US economic growth next year to 1.9 percent from the previous forecast of 2.8 percent, the sources added. …” [Agence France Presse/Factiva]
AFX adds that “Global economic growth has been faster, broader and more stable since 2004 than at any time in the previous 30 years, the IMF said…
Not only has growth averaged 5.2 percent a year from 2004-2006, but 'in important ways, the global economy has recently displayed greater stability than observed even in the 1960s …” [AFX/Factiva]
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Overseas Development Spending Soars To Record High, Up By Almost 17%
“The government's overseas aid spending will soar by almost 17 percent a year to form a new record high, Alistair Darling, the [UK] chancellor, said yesterday.
The announcement was widely welcomed by overseas development groups who said the plans put Britain firmly on track to achieve the targets set at Gleneagles. The comprehensive spending review revealed that the Organization for Economic Co-operation and Development's measure of official development assistance, which includes money spent by other departments such as the Foreign Office on peacekeeping in Darfur and the Congo, will go up by 16.9 percent a year on average to reach GBP9.1 billion by 2010-11. This represents 0.56 percent of national income - the highest ever share. …
The government says the increased money, which builds on annual growth to The Department for International Development (DFID)'s budget of 9.2 percent in the 2004 spending review 2004 and 8.1 percent in the 2002 spending review, means that its four aid goals will be met on time.
These include the UN target of spending 0.7 percent of national income on development assistance by 2013, the EU's interim target of 0.56 percent of income by 2010-11, delivering Britain's share of extra $50 billion in aid promised by the G8 at Gleneagles in 2005 and ensuring half of this extra money goes to Africa. …” [The Guardian (UK)/Factiva]
The Times adds that “…The extra cash represents a quadrupling of aid between 1997 and 2010 and will be used to accelerate progress towards the millennium development goals by providing a total of GBP8.5 billion for education by 2015 and GBP1 billion for the Global Fund for Aids, malaria and tuberculosis. …” [The Times (UK)/Factiva]
FT notes that UK “…government will spend GBP 400 million in the next three years subsidizing technologies to combat climate change and GBP 2.4 billion on flood defenses to cope with its effects.
GBP 800 million will go to poor countries through the World Bank, to help them invest in clean energy and protect their environment. [The Financial Times (UK)]
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India's 10-Pct Growth Target Is Achievable With Reforms: OECD
“India can reach its target of annual economic growth of 10 percent by 2011 if the country concentrates reforms on reducing the role of the state in the economy, an Organization for Economic Cooperation and Development (OECD) report said on Tuesday.
The [Economic Survey of India] … urged the government to loosen ‘restrictive’ labor laws and ‘inefficient’ regulation of product markets, continue privatizations and simplify the country's tax systems.
It also suggested increasing competition in the financial market sector and concentrating public action on boosting public investment in infrastructure and improving education and development measures for the poor. …” [Agence France Presse/Factiva]
Reuters adds that “…India's privatization program needed to be revitalized as there were many loss-making state enterprises and both the productivity and profitability of publicly owned firms had been lower than those in the private sector. …
The OECD said India was on track to meet its fiscal deficit target of 3 percent of GDP by 2008/09, but there was a need to raise the savings rate further and improve the quality of spending. It called for the insurance and retail sectors to be opened up further. …” [Reuters/Factiva]
AFX notes that “…Economic growth could be made more inclusive by achieving faster growth in regular employment, as opposed to casual and self-employment. Although regular employment has risen, it still represents only 15 percent of total employment and its growth has been almost exclusively in the smaller, least productive enterprises, the survey said. …
The survey called for eased employment protection laws by consolidating some 46 central and 200 state labor laws. …
Further, excessive regulation of markets is a barrier to technology diffusion and lowers the speed with which labor productivity catches up to the level of the best performing economies. Overall, regulation in India is more restrictive than in any other OECD country, the survey noted. …” [AFX/Factiva]
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Panama: WB Opens New Office and Appoints Representative
WASHINGTON – Pamela Cox, the World Bank’s Vice President for Latin America and the Caribbean, announced the institution’s plans to open an office in Panama City as well as the appointment of Frederic de Dinechin as the new Bank representative based in Panama City.
“With a rapidly expanding program in Panama and a Government committed to tackling persistent poverty and inequality, the World Bank is opening a country office in Panama City,” explained Ms. Cox. “As the new representative for Panama, Frederic de Dinechin will provide leadership to the country team in the implementation of the new Country Partnership Strategy,” she added.
Mr. de Dinechin will support the implementation of the new Country Partnership Strategy (CPS) for Panama, which is expected to be discussed by the institution’s Executive Board of Directors this month. The strategy highlights investment operations to spur greater economic dynamism in rural areas while protecting Panama's rich environmental assets, as well as support for more effective social services on, health, education, and water and sanitation, especially for Panama's more vulnerable populations.
“On this occasion I would like to express my sincere gratitude for the Bank’s decision to open an office in Panama,” said Héctor E. Alexander H., Minister for Economy and Finance of Panama. “The announcement is seen as a reflection of the good relationship between the World Bank and Panama in recent years. We look forward to the opportunity to receive Mr. de Dinechin as Country Representative, whom we have known for his excellent performance,” added Minister Alexander.
Frederic de Dinechin said the following about his announcement: “I am honored to be named as the Bank’s representative in Panama. I look forward to working closely with the local and rural communities, and I strongly believe that proximity to our clients and stakeholders will greatly help the success of our partnership.”
De Dinechin, a French national, joined the World Bank in 1997 as a Land Information Specialist. Prior to his appointment, Mr. de Dinechin worked as a Senior Land Administration Specialist in the World Bank’s Agriculture and Rural Development Unit for Latin America and the Caribbean.
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World Bank Online: Increased Competition, Better Skills Vital to Stimulate Innovation in India
WASHINGTON, D.C. - India is increasingly becoming a top global innovator for high-tech products and services, but the country can do much more to reach its full innovation potential, especially by bringing the benefits of innovation to the poor, says a World Bank report released today.
Innovation in India must be thought of as improving practices across the entire
economy, the report says. While India is emerging as a top global innovator in
sectors such as biotechnology and information technology, less than 3 percent
of the Indian workforce is in the modern private sector, while roughly 90
percent remains in the informal sector. The disparities in productivity levels
across firms within manufacturing sectors is wider in India than in countries
such as China, Mexico, the Russian Federation, and the Republic of Korea. The
output of the economy could increase more than five-fold if all enterprises
could achieve national best practices based on knowledge already in use in
India.
The report stresses that new domestic R&D and knowledge needs to be better
converted to commercial use. Of the top 50 applicants for patents in India
between 1995 and 2005, 44 were foreign firms. Only 2 were private Indian firms.
Actions are needed to promote commercialization and to strengthen links among
industries, universities, and public R&D laboratories.
India would also especially benefit from fostering more inclusive innovation,
the report says. This could be achieved by promoting more formal R&D efforts
for the poor people and more creative grassroots efforts by them, as well as by
improving the ability of informal enterprises to better use existing knowledge.
Full text of the report are available online http://go.worldbank.org/GOIFSXUF10
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Egypt to Host the World Economic Forum on the Middle East Next May in Sharm El Sheikh
Cairo, Egypt – Representatives of the World Economic Forum and the Egyptian Ministry of Trade and Industry met today in Cairo to sign a Memorandum of Understanding that marks the official start of preparations for the World Economic Forum on the Middle East meeting on 17 to 19 May 2008 in Sharm El Sheikh. The Memorandum of Understanding was signed between Rachid M. Rachid, Egypt's Minister of Trade and Industry, and André Schneider, Managing Director and Chief Operating Officer of the World Economic Forum.
The World Economic Forum on the Middle East will feature a fresh and future-oriented approach to shaping the agenda of the Middle East and North Africa. Building on the Forum's unique reputation as a neutral platform for dialogue and discussion, the programme will stimulate participants to think creatively and collaboratively about the future of the region. The emphasis will be on facilitating new connections, provoking innovative ideas and providing fresh perspectives. More than 1,200 participants drawn from the highest level of government and business worldwide are expected to take part in the meeting.
“Enthusiasm, drive and professionalism characterized the meeting in 2006 and I know that 2008 will only be better. I look forward once again to a fruitful relationship and, more importantly, to the Forum on the Middle East’s concrete success in May. Egypt is a perfect choice to bring leaders both globally and from across the region together - it's a chance for businessmen and women, politicians and others to address the problems that are holding back development in the Middle East,” André Schneider said.
According to Minister Rachid M. Rachid, the World Economic Forum’s decision to return to Egypt “amounts to a vote of confidence by the global community in Egypt’s efforts to state the course of reform and market liberalization.” This is an important time to turn the spotlight on the challenges and opportunities that a modern Middle East faces and Egypt is well placed to host this world-class event. “At a regional level, Egypt continues to play its traditional role in brokering efforts to bring peace and stability to the region. At home, Egypt is actively engaged in reforms to open up its economy and society to the opportunities of globalization,” he added.
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Doing Business 2008: Large Emerging Markets Reforming Fast
WASHINGTON, D.C. - Thanks to reforms of business regulation, more businesses are starting up, finds Doing Business 2008 - the fifth in an annual report series issued by the World Bank and IFC. Countries in Eastern Europe and the former Soviet Union reformed the most in 2006/07 - along with a large group of emerging markets, including China and India.
This year Egypt tops the list of reformers that are making it easier to do
business. Egypt greatly improved its position in the global rankings on the
ease of doing business, with reforms in five of the 10 areas studied by the
report. And for the second year running, Singapore tops the aggregate rankings
on the ease of doing business.
Besides Egypt, the other top 10 reformers are, in order, Croatia, Ghana, FYR
Macedonia, Georgia, Colombia, Saudi Arabia, Kenya, China, and Bulgaria. Another
11 countries - Armenia, Bhutan, Burkina Faso, the Czech Republic, Guatemala,
Honduras, Mauritius, Mozambique, Portugal, Tunisia, and Uzbekistan - had three
or more reforms. Reformers made it simpler to start a business, strengthened
property rights, enhanced investor protections, increased access to credit,
eased tax burdens, and expedited trade while reducing costs. In all, 200
reforms - in 98 economies - were introduced between April 2006 and June 2007. http://media.worldbank.org/secure/
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China To Collect Dividends From State Firms From '08
Dow Jones writes that “…China said Thursday it will formally start collecting dividends from firms owned by the central government starting from next year, moving the dividend-collection program past a trial phase. Despite steps, such as interest-rate hikes, to slow loan and investment growth, China's investment growth remains rapid, raising the risk of excess production capacity, partly because many Chinese firms pay for new plants or other projects on their own, using retained profits.
“The collection of dividends from state firms, which include major companies such as China's largest steelmaker, Shanghai Baosteel Group Corp. and Asia's largest oil refiner, China Petroleum & Chemical Corp. (SNP), could help Beijing slow investment growth by reducing the amount of funds companies have on hand for investment projects.
“The dividend plan, which the World Bank has also advocated, is part of a set of rules posted on the central government's Web site Thursday that govern how the local and central governments collect returns on their stakes in firms, as well as how they use the funds. Other returns on capital covered in the rules include gains on stake sales.” [Dow Jones/Factiva]
Reuters adds that “China's cabinet on Thursday ordered all state-owned firms to start paying dividends next year in a move it said would better distribute the country's wealth and beef up the authorities' control over the economy.
“All companies in which the state has a stake will be required to hand over to the government an unspecified share of their 2007 earnings, including operating profits, investment gains and proceeds from share sales, the State Council said in a statement published on its Web site.” [Reuters/Factiva].
AFP writes that “…The plan, which reportedly has been under debate for some time, will mark the first time in a decade that state enterprises have been obliged to pay dividends to the government.
“Observers expect the move to help rein in investments at a time when many companies pour their dividends into new projects at the risk of creating huge over-capacity. It is also likely to boost government coffers as the Chinese state is facing huge obligations due to its ageing population. …” [Agence France Presse/Factiva]
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Macedonia Becomes First Nation to Provide Computer Workstations for Every Student
NComputing's Breakthrough Virtual PC Technology Enables 180,000 Low-Cost Workstations on Classroom Desktops Nationwide
REDWOOD CITY, CA - NComputing, provider of the world's most affordable solutions for PC access, announced that its multi-user virtual desktop software and low-cost virtual PC terminals will be used to equip every school child in the Republic of Macedonia with a rich individual computer experience. The most ambitious national undertaking ever to standardize all schools around a single technology platform, the "Computer for Every Child" project of the Macedonia Ministry of Education and Science will deploy 180,000 NComputing-enabled workstation seats, enough to provide virtually every elementary and secondary school student in the nation with his or her own classroom computing device.
NComputing's multi-user virtual desktop software and low-cost virtual PC terminals, along with supporting Linux-based PCs, were proven in Macedonia tests to deliver a rich PC experience at less than half the cost of any other proposed solution, including low-cost desktop and laptop PCs and other thin client options, according to Ivo Ivanovski, Macedonia'sMinister for the Information Society. Huge additional advantages in reduced maintenance and replacement costs made the choice of NComputing even more compelling. With half the students attending school in the morning, and half attending in the afternoon, 180,000 workstations will provide a 1-to-1 computing experience -- one virtual PC at each student's desk -- for the country's entire public school student population.
"The Computer for Every Child initiative is the largest and most important education project undertaken in the 15-year history of the Republic of Macedonia," according to Ivanovsky. "Our goal is to build a knowledge-based economy in which our entire workforce is educated in using information and communication technology within the next five years. Yet, like most school systems around the world, Macedonia's education system has limited financial and infrastructural resources to address this challenge. By adopting NComputing's low-cost virtual PC technology, Macedonia is taking the lead in providing computer-based education for school children."
"We at NComputing believe that providing PC access to the next billion users -- those who cannot afford the cost of an individual PC -- is the single biggest challenge facing our industry today. Perhaps the most important segment of this under-served mass market is school children, including students in the United States and other developed countries, as well as those in developing nations," said Stephen Dukker, Chairman and CEO of NComputing. "We're gratified that NComputing's technology can be an important part of the solution in Macedonia and around the world."
NComputing's corporate mission is to provide affordable PC access to under-resourced markets around the world, including schools and users in developing and developed countries. The company's revolutionary technology allows a single PC to be shared by multiple simultaneous users -- each running their own applications. Setup is simple, and begins with software on the shared PC that creates multiple virtual user desktops. Standard monitors, keyboards and mice then plug into very low-cost, highly reliable virtual PCs (also known as access terminals). As a major leap forward in green computing, NComputing solutions draw between one and five watts of power for each added user, versus 115 for a typical PC. Neither IT staff nor end users require special training, and the system is compatible with Windows, Linux and standard PC applications. Pricing is as low as $70 per seat.
With NComputing's X300, up to seven users can simultaneously share a single PC. The cost and power savings are critical in school deployments, including in Macedonia, because budgets and electricity are often limited. Macedonia also chose NComputing's technology because maintenance and replacement costs are a fraction of what they are for traditional PC deployments. NComputing's solid-state virtual PC terminals have no moving parts and require little or no maintenance, so the principal maintenance costs follow only the shared PCs and monitors. In addition, in an upgrade cycle to newer PCs, only the PCs themselves, not the virtual PC terminals, need to be replaced.
Through a global network of resellers, NComputing also offers the L-series, which connects via Ethernet at any distance from a shared PC or server on either Local Area Networks or over the Internet. The number of L-series virtual PCs supported is limited only by the power of the shared PC. Hundreds can be supported on virtualized servers.
When completed, Macedonia's Computer for Every Child initiative will have deployed approximately 160,000 NComputing virtual PC terminals and 20,000 NComputing-enabled PCs (which each also support a student on the attached monitor) running the Ubuntu Linux-based operating system. The Haier Company, a diversified manufacturer and PC maker, and one of China's largest and most respected companies, won the contract for procurement and installation. The project will enable a range of innovative educational programs, including interactive web-based classes in which specialized experts teach lessons in such areas as mathematics, biology, chemistry and physics to multiple schools and classrooms around the country.
NComputing's multi-user system software and low-cost virtual PC terminals represent the next generation of thin computing, in which multi-user computing finally becomes affordable and accessible, and the user-experience equals that of a dedicated PC. The Macedonia project is at the same time, the largest known thin client and desktop Linux deployment ever undertaken.
"This project would not have been possible 5 years ago," said Ivanovski. "Today's least expensive desktop PCs are so powerful we use less than 10% of their capacity and NComputing's technology puts this wasted power to work."
In a brief 18 months after starting active shipments, NComputing has sold more than 500,000 seats, including more than 200,000 to U.S. schools, providing technology that addresses the needs of under-served markets worldwide, as well as those of small business and enterprise customers. The company's technology is being sold and deployed in more than 80 countries -- including thousands of schools, corporate and small business offices, and villages and cities in Africa, Europe, Asia and South America.
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World Bank Lifts China's 2007 Growth Forecast To 11.3 Percent
“The World Bank on Wednesday raised its economic growth forecast for China this year to 11.3 percent, while warning its growing trade surplus and inflation were the main threats to healthy growth. …Economic growth next year is expected to slow to below 11 percent, it added.
The World Bank's [China Quarterly Update] said China's economic prospects remained sound, but rebalancing the growth pattern through further fiscal and structural policy measures remained major challenges.
China's soaring trade surplus is adding to excess liquidity and has helped push up asset prices, particularly the stock market, the report said, once again calling for a faster appreciation of the Chinese currency. …” [Agence France Presse/Factiva]
AP notes that “…The higher growth forecast was in line with other experts who raised their own estimates after Beijing reported unexpectedly strong growth of 11.9 percent for the most recent quarter. … A moderate slowdown could help Beijing's efforts to narrow its huge… trade surplus and rein in pressures for prices to rise, the Bank said. China's swollen current account surplus, the broadest measure of trade, should be equal to about 12 percent of total economic output this year, the bank said …” [Associated Press/Factiva]
Reuters writes that “….China would not escape unscathed from a downturn in the US and other key markets but was in a strong financial position to cushion the impact, the Bank said …
‘There may even be a scenario thinkable where the international community would look at China to stimulate world demand,’ [World Bank Lead Economist] Bert Hofman … told a news conference to present the report. …
If China were to ease fiscal policy in the event of a surprisingly sharp global downturn to boost domestic demand and tilt its economy away from exports, it would provide a valuable contribution to the rest of the world…
To prevent the economy from overheating, China's central bank has raised interest rates four times this year and the World Bank said further increases would be needed - even though it added that demand so far had been growing broadly in line with supply. …” [Reuters/Factiva]
Dow Jones notes that “…The World Bank said it expects China's consumer price index to rise 4.6 percent this year, up from its previous forecast of 3.2 percent and above Beijing's target of under 3 percent. It expects the CPI to rise 3.8 percent next year. …” [Dow Jones/Factiva]
AFX adds that “…The report noted that there are no serious demand and price pressures yet, but rapid growth runs the risk of outpacing supply eventually. ‘The authorities are rightly aiming at avoiding excess demand and the spillover of high food prices into generalized inflation, and mopping up liquidity and raising interest rates will continue to be needed,’ the Bank said. …” [AFX (Hong Kong)/Factiva]
Kyodo News reports that “…Louis Kuijs, a senior World Bank economist in Beijing, said, ‘Higher food prices are a global phenomenon and experts in these markets are not really forecasting significant reductions, so higher food prices may remain over the coming months.'’
Analysts say the rising cost of food is a worry for the government because it will particularly hit China's millions of rural poor, fuelling fears of social unrest. …” [Kyodo News (Japan)/Factiva]
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Despite Many Challenges, World Faces Brighter Future: Report
“Despite daunting challenges posed by global warming, water, energy, unemployment and terrorism, the world faces a brighter future with fewer wars, higher life expectancy and improved literacy, according to [2007 State of the Future] report released Monday. …
Published by the World Federation of UN associations, a global network of associations in more than 100 member states, the study noted that the number of African conflicts fell from a peak of 16 in 2002 to five in 2005 and the number of refugees around the world is falling.
It said the world economy grew at 5.4 percent last year to 66 trillion dollars while the global population rose 1.1 percent, increasing the average world per capita income by 4.3 percent. … The study said that over a billion people (17.5 percent of the world's total) are now connected to the Internet. …” [Agence France Presse/Factiva]
Turkish Daily News reports that “…On the negative side, it pointed to hikes in CO2 emissions, terrorism, corruption, global warming and unemployment and a decrease in percentage of voting populations.
Persistent inequality was illustrated by figures showing that two percent of people own 50 percent of the world's wealth while the poorest 50 percent own only one percent. The income of the richest 225 people in the world equals that of the poorest 2.7 billion or 40 percent of the global population, the report said. …” [Turkish Daily News/Factiva]
AP writes that “Organized crime may have brought in more than $2 trillion in revenue last year, about twice all the military budgets in the world combined, a report issued Monday said. … [It] said organized crime entities generated income from money laundering, counterfeiting and piracy, and the trafficking of drugs, people and arms. …
The report called organized crime one of the most pressing global issues that needs to be addressed in the next 10 years. …” [Associated Press/Factiva]
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The World Bank and Middle-Income Countries: Business as Usual?
The Independent Evaluation Group's new report-Development Results in Middle-Income Countries (MICs)-finds that the World Bank's work with MICs over the past decade has contributed to the growth and significant poverty reduction achieved by those countries. Indeed four-fifths of respondents to an IEG survey of opinion-leaders in MICs said they value the Bank's programs and services.
The report also notes that the Bank's work needs to yield stronger results in dealing with inequality, corruption and the environment. It makes a clear recommendation: that the Bank should continue to engage with middle-income countries, but depart from business as usual for a greater impact.
The evaluation builds upon a broad base of evaluative evidence, including an emphasis on the perspectives of leaders in middle-income countries themselves. It proposes four key steps for the World Bank to deepen its impact.
First, the Bank must become more agile to respond to swiftly changing conditions in MICs. Second, it needs to draw upon MICs' own capacity and knowledge more systematically both to help low-income countries and to tackle global challenges. Third, in order to extend its impact well beyond a limited financial role, the Bank must work with partners in MICs more consistently to create innovations and jointly demonstrate best practices that can be replicated nationally and globally. Fourth, the Bank and the International Finance Corporation, the Group's private-sector arm, need to collaborate more closely to offer clients integrated support combining public and private sector solutions.
To learn more about the evaluation findings and to download or order a free copy of the report, please visit: http://www.worldbank.org/ieg/mic
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UN Warns Of Unrest As Food Price Inflation Hits Developing Countries
“Developing countries face serious social unrest as they struggle to cope with soaring food prices, the United Nations' top agriculture official has warned. Jacques Diouf, Director General of the UN's Food and Agriculture Organization, said surging prices for basic food imports such as wheat, corn and milk had the ‘potential for social tension, leading to social reactions and eventually even political problems’.
Diouf said food prices would continue to increase because of a mix of strong demand from developing countries; a rising global population, more frequent floods and droughts caused by climate change; and the biofuel industry's appetite for grains. ‘That combination of factors would most likely lead to increases in food prices,’ Diouf told The Financial Times. Signs were seen in Mexico this year where mass protests were triggered by rising corn prices. Diouf said food represented about 10-20 percent of consumer spending in industrialized countries, but up to 65 percent in developing nations. ‘If we continue to see an increase in their [food] prices and in their import bill for food, there is a serious potential situation,’ Diouf said.
The warning comes as wheat prices are at a high, forcing developing countries such as India and Egypt to pay record prices for imports in what cereal traders described as ‘panic buying’ to beef up reserves. …” [The Financial Times (UK)]
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FORUM ANNOUNCES THE CREATION OF A COMMUNITY OF GLOBAL GROWTH COMPANIES
Dalian, People’s Republic of China – Revealing a bold new initiative of the World Economic Forum Community, comprised of the 1,000 foremost global enterprises, Klaus Schwab, Founder and Executive Chairman, World Economic Forum, announced the creation of a new community of fast-growing companies destined to join the ranks of global multinationals in the next 5 to 10 years. “These are a very special group of companies that have not really been understood,” said Schwab.
In his opening remarks of the Inaugural Annual Meeting of the New Champions, Schwab had set the goal of 100 Founding Global Growth Company Members. Today, he welcomed 125 Founding Members, clearly signalling that the time is right for this new initiative. 40% of the members are from Asia; 26% hail from Europe; 20% are based in the Americas; and 14% come from Africa and the Middle East. “This is a truly global community,” said Schwab.
Schwab’s remarks followed a lively panel on the essential elements – the leadership DNA – of Global Growth Companies. The panellists, CEOs of five of the world’s most successful companies, listed traits that included: the constant drive for innovation, adherence to openness and flexibility, recognition of core competencies, allocation of resources on a global scale and, particularly, recruitment and retention of talented individuals.
“The war for talent is something that is going to differentiate companies,” said Sir Martin Sorrell, Group Chief Executive, WPP, United Kingdom. Qualified individuals are increasingly mobile, and likely to change jobs many times during their careers. “The war for talent is over,” said L. Kevin Kelly, Chief Executive Officer, Heidrick & Struggles International, USA. “Talent won.”
Maintaining a strategic vision and fire after a business has grown into an established company is also a significant challenge. “The most important obstacle to success sits in your own company,” said Ben J. Verwaayen, Chief Executive Officer, BT, United Kingdom. Too many employees aim to please their employers first, clients second.
Closing the meeting, Dai Xianglong, Mayor of Tianjin, People's Republic of China, offered his “heartfelt thanks” to the Forum for its selection of his city for the second Annual Meeting of the New Champions. That meeting will take place in Tianjin, People’s Republic of China on 25-27 September, 2008.
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WBG: Economic growth, inequality and opportunity creation in Latin America and the Caribbean with close to US $8 billion
Over 40 % of total IBRD lending went to the region
25 % of IFC's funding went to micro-enterprises, SMEs, and housing finance
MIGA focused on addressing pressing infrastructure needs
WASHINGTON - The World Bank Group (WBG) mobilized close to US $8 billion financing to public and private sector projects and programs in Latin America and the Caribbean, aimed to address the persistent inequality in the region and foster sustainable growth during fiscal year 2007, ending June 30, according to figures released by the WBG September 4, 2007.
World Bank
Latin America and the Caribbean (LCR) became the largest beneficiary of lending services provided through the International Bank for Reconstruction and Development (IBRD). IBRD committed US $ 4.35 billion, over 40% of total IBRD lending, and International Development Association (IDA) committed US $200 -US $132 million in credits and US $ 68 million in grants-totaling US $4.5 billion.
"We are responding to these challenges with customized lending services, innovative financial tools coupled with global analysis, technical advice and knowledge", said Pamela Cox, World Bank's Vice President for Latin American and the Caribbean. "Countries in the region vary considerably in levels of economic and social development as well as access to private financial investments, and we are adapting our modalities of support to these circumstances".
In spite of recent progress, Latin America and the Caribbean is still the region with the highest level of inequality in the world after Africa.
IBRD aims to reduce poverty in middle-income and creditworthy poorer countries by promoting sustainable development through loans, guarantees, risk management products, and analytical and advisory services, and IDA helps the world's poorest countries by providing interest-free loans and grants for programs that boost economic growth, reduce inequalities and improve people's living conditions.
Recipients in LCR are using these funds in 56 projects designed to overcome poverty and enhance growth - for example, by improving education and health services, promoting private sector development, building infrastructure, and strengthening social equity, governance and institutions. Argentina, Colombia, Brazil and Peru were the largest borrowers, receiving World Bank lending of US $3.6 billion for 26 projects in areas such as public health, infrastructure, education and rural development.
New lending in fiscal 2007 included a US $300 million loan to Argentina to expand the government's health care program, Plan Nacer, which is helping reduce infant mortality by increasing access to basic health services for uninsured mothers and children; a US $300 million loan to Colombia to promote business productivity and investment, and a US $150 million development policy loan in Peru that will help to define standards and set goals in primary education, health, and nutrition so that families can better measure their children's progress.
The region's main development challenge continues to be persistent social inequality. Some 47 million people (more than 8% of the population) still live in extreme poverty. IBRD's mission is to help LCR countries achieve sustained growth with equal opportunity access to jobs, services, and assets: reduce poverty and inequality; and strengthen natural resource management.
Latin American governments have adopted conditional cash transfer programs to break the cycle of poverty. The programs provide cash to poor families on the condition that they make verifiable investments in human capital, such as regular school attendance or the use of basic health care services and the World Bank supports them in countries like Brazil, Colombia, the Dominican Republic, Ecuador, El Salvador and Jamaica.
LCR is richly endowed with natural resources and holds the world's greatest concentration of biodiversity. Sustainable use of these resources poses many challenges, including in the area of water, land, forest management and strengthening environmental policy and institutions. Countries in the region are increasingly playing a leadership role in efforts to address global issues such as climate change and the World Bank is supporting both country-specific and regional initiatives in the areas of clean energy and carbon finance.
International Finance Corporation (IFC)
IFC has also been very active in the region, with another record year of investments in the private sector, and a strong emphasis on addressing market gaps and on sustainability.
"Although market conditions have improved significantly, many segments of the region's economy continue to be underserved, including small and medium enterprises and people with lower and middle incomes. IFC is expanding its focus in these areas," said Atul Mehta, IFC's Director for Latin America and the Caribbean. "We also continue helping clients raise their environmental, social, and corporate governance standards to be more competitive in an increasingly global marketplace," he added.
This fiscal year, 25 % of IFC's commitments in the region were focused on micro enterprises, SMEs, and housing finance, with a total investment of US $437 million in 18 projects. With this strategy, IFC has increased its developmental impact in the region. For example, in 2006 IFC's microfinance clients reached over 2,656,000 micro entrepreneurs with loans of up to US $2.2 billion, while IFC's banking sector clients reached 99,320 SMEs, with loans of close to US $7 billion.
In fiscal year 2007, IFC committed US $1.78 billion for 68 private sector projects in Latin America and the Caribbean and mobilized an additional US $1.12 billion through syndicated loans and structured finance, making it another record year. IFC has tripled its local currency financing in just two years, with 30.3 % of commitments representing US $540 million equivalent.
IFC's advisory services in the region have also expanded significantly with emphasis on improving the business environment by simplifying municipal regulations and procedures. This program has helped register more than 20,000 new firms across the region, bringing them into the formal economy and improving their access to finance.
Multilateral Investment Guarantee Agency (MIGA)
Also active in the region is MIGA, a member of the World Bank Group. During the fiscal year 2007, MIGA supported six projects with US $501 million in guarantees and undertook five technical assistance projects in the region. At year-end, MIGA's gross guarantee exposure stood at US $1.5 billion, 28 percent of the agency's outstanding portfolio. Projects supported by MIGA have delivered significant development, particularly in helping to address the region's pressing infrastructure needs.
For example, during the fiscal year, MIGA provided US $61.4 million in investment insurance for the construction of three new energy transmission lines in Brazil. The projects respond to a need to compensate for low investment levels in the country's energy sector, a result of austerity programs in the 1980s. Given that most of Brazil's energy is produced by hydroelectric dams subject to fluctuations in water levels due to drought, the interconnected electrical system will allow for a more efficient and reliable delivery of energy.
"MIGA's involvement in Brazil illustrates the added value of the World Bank Group when it comes to middle-income countries," said MIGA's Executive Vice President, Yukiko Omura. "Critical infrastructure projects are often exposed to a unique set of risks, including oversight from local municipalities which may be less experienced in dealing with private sector issues. MIGA specializes in mitigating this type of 'sub-sovereign' risk, working with governments and investors to keep investments and their development benefits on track."
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The Middle East Has Real Economic Development Opportunity, According To World Bank
“The Middle East has a ‘real opportunity to reach a superior level of economic development,’ World Bank Vice President for the Middle East and North Africa, Daniela Gressani said Tuesday.
In an interview with EFE during the International Youth Forum in the Egyptian tourist town of Sharm el-Sheikh, Gressani said that ‘now is the time to work.’ ‘We have a real opportunity to go the next level of development and it is necessary that we do it now,’ Gressani pointed out.
… ‘More than 25 percent of the population is now between 12 and 24 years. They are the healthiest, most educated and best prepared generation.’ In Gressani’s opinion, those individuals must be integrated into the economy to improve productivity which she sees as the key to those countries’ progress and development.
According to [her], World Bank programs designed for Middle Eastern countries ‘have had a very positive impact that have led to an increase in private investment and economic growth.’ ‘This region, and Egypt is an example, has taken very important steps in liberalization, increasing private sector initiatives and increasing competition,’ she added. Even so, there are elements that Gressani considered could use work, such as legal regulation that affect international trade and the educative system which need to be reoriented toward the labor market to avoid brain drain. …” [Agencia EFE and Diario de Leon (Spain)/Factiva]
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World Bank Group Directs $34.3 Billion in 2007 to Boost Growth and Overcome Poverty
WASHINGTON - During fiscal year 2007, ending June 30, the World Bank Group committed US $34.3 billion in loans, grants, equity investments, and guarantees to its members and to private business in its member countries - up $2.7 billion (7.8 percent) from fiscal year 2006. The recipients are using these funds in more than 620 projects designed to overcome poverty and enhance growth - for example, by improving education and health services, promoting private sector development, building infrastructure, and strengthening governance and institutions.
"During Fiscal Year 2007, the World Bank Group provided over $34 billion of
financial support for developing countries to invest in practical plans to move
from poverty to prosperity," said World Bank Group President Robert B.
Zoellick. "But we can and should do more. Given the great needs among diverse
developing countries, the World Bank Group can make its capital work for people
by creating development solutions for all. That would help advance an inclusive
and sustainable globalization."
IDA commitments were $11.9 billion, 25 percent higher than the previous year,
and the highest in IDA's history. IBRD commitments in FY07 totaled $12.8
billion. IFC committed $8.2 billion for private sector development in
developing countries, an all-time high, which topped last year's total by $1.5
billion ? $3 billion of the total, went to IDA countries. Of MIGA's $1.4
billion in guarantees, $387 million went to projects in IDA countries. MIGA's
exposure in IDA countries now stands at 41% of its portfolio.
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CB Richard Ellis Group, Inc. Acquires India Affiliate
LOS ANGELES - CB Richard Ellis Group, Inc. announced the acquisition of a majority interest in CB Richard Ellis South Asia Pte Ltd (CBRE India), a CB Richard Ellis affiliate company that is a premier, full service provider operating in 30 cities across the rapidly growing India market.
CB Richard Ellis' expansion in the India market comes at a time of strong
economic activity, continued growth of FORTUNE 500 corporate space occupiers,
loosened restrictions on foreign investment resulting in higher capital flows
into real estate, and increased commercial and residential real estate
development.
CBRE India, based in Delhi, has been the CB Richard Ellis affiliate in
India since 1994, and today has a staff of over 1,000 professionals providing
a full spectrum of real estate services, including Leasing, Property and
Facilities Management, Investment Sales, Project Management, Consulting
Services and Valuation/Appraisal.
Over more than a decade, CBRE India has executed more than 22 million sq.
ft. of leasing transactions and approximately 30 million sq. ft. in project
management assignments, and advised major corporations throughout the world on
their real estate strategies in India. For example, CBRE India has arranged
lease transactions for global companies including Goldman Sachs, Cisco
Systems, McAfee and JPMorgan Chase and Hewlett-Packard. CBRE India also
manages 40 million sq. ft. of commercial properties and corporate facilities.
Robert Blain, President of CB Richard Ellis Asia-Pacific, said: "The
acquisition of CBRE India fits perfectly with our strategy of achieving the
leadership position in major business centers around the world. We see India -
along with China and Japan -- as one of the key drivers of our growth in Asia.
We have worked closely with CBRE India as our affiliate, and have now cemented
even closer ties as the economy and real estate market in India continue to
boom."
Anshuman Magazine, Chairman and Managing Director of CBRE India, said:
"CB Richard Ellis is the world leader in commercial real estate, and our new
status as a majority owned operation will enable us to better tap into a
wealth of resources and the industry's most extensive and capable global
platform. We are very enthusiastic about this move, and look forward to
expanding the range of services we can offer our clients - in India and around
the world."
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Russia - Concern about prosecutor's comments as he announces 10 arrests in Politkovskaya murder
MONTREAL - The arrests, announced today, of 10 people including interior ministry and FSB (security service) officials for last October's murder of journalist Anna Politkovskaya have taken nearly a year and are the first concrete sign of progress in the case, although, according to Vladimir Putin in December, it has been assigned "the best police and judicial professionals," Reporters Without Borders said.
"We hope this announcement has not been made solely to defuse the
protests of NGOs and questions from journalists who want the case solved," the
press freedom organisation said. "We have in the past seen announcements by
the Russian authorities that have been made just for effect. And most of the
investigations into the murders of journalists have never been concluded."
Reporters Without Borders continued: "We are concerned that unnamed
persons 'outside Russia' have been identified as the masterminds of
Politkovskaya's murder. Contrary to what the prosecutor-general says, there
were people inside the country interested in silencing her and the
investigation should be looking into this."
The organisation also regretted that the identity and motives of the
suspects are still unknown. "The confidentiality of the investigation and the
presumption of innocence are essential but it is important that we should be
able to obtain more information quickly and it is perhaps also time that a
trial date is set."
Today's announcement of the arrest of 10 suspects was made by
prosecutor-general Yuri Chaika, who claimed that Politkovskaya's murder was
carried out by a group led by "the head of a Moscow crime ring of Chechen
origin" that included former and current interior ministry and FSB officials.
Four days ago, the head of the Russian commission that was set up
specially to investigate the murder, Alexandre Bastrykin, said "six versions
of the Anna Politkovskaya murder are being examined" and "good prospects are
emerging that it will solved."
At a news conference today, Chaika said persons based "outside Russia"
who wanted to "destabilise the country" were behind her murder. "As regards
the murder's motives, the results of the investigation (...) lead us to the
conclusion that the persons who had an interest in eliminating Politkovskaya
could only live outside Russia," he said.
Politkovskaya, who wrote extensively about human rights violations in the
northern Caucasus for the newspaper Novaya Gazeta, was gunned down in her
central Moscow apartment building on 7 October 2006. She told the BBC shortly
before her death that President Putin had deliberated provoked terrorist acts,
including the hostage-taking in a Moscow theatre in 2002. Her murder, which
was widely condemned internationally, highlighted the dangers that opposition
journalists face in Russia.
Reporters Without Borders defends imprisoned journalists and press
freedom throughout the world. It has nine national sections (Austria, Belgium,
Canada, France, Germany, Italy, Spain, Sweden and Switzerland). It has
representatives in Bangkok, London, New York, Tokyo and Washington. And it has
more than 120 correspondents worldwide.
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Bankers Target The 'Unbanked': Latin American Bankers Meet In Miami To Discuss Technology, Marketing And Ways To Attract Millions Who Use Just Cash
“Much like their American counterparts, Latin American banks are facing stricter regulation, greater competition and higher costs for training and technology. But financial institutions in Latin America face the additional challenge of trying to draw millions of people out of strictly cash economies into the use of banking and credit services.
As much as 65 percent of the region's population is made up of so-called ‘unbanked’ people. Adding new clients, along with coping with technological and marketing hurdles, was the focus for hundreds of Latin American bankers at the Strategic Conference on Technology and Marketing held Thursday at Miami's Intercontinental Hotel. Around 790 people are attending the three-day event sponsored by the Latin American Banking Federation. It wraps up today.
After a series of banking crises in the 1990s, Latin American banks have strengthened their banking practices and updated their technology - sometimes after acquisition by foreign banks. But now they must expand their client base.
Micro-lending is one of the key ways to reach out to people who have never used financial services before, according to Nancy Barry, who served as chief executive of Women's World Bank for 16 years and now runs her own consulting business. ‘This is a huge market with potential,’ Barry said, adding that micro-lending can lead to people becoming familiar with other banking services.
She also described other innovations in Latin America that expose people to using automatic payment or debit cards or paying off loans, such as kiosks in Brazil where residents can pay their bills or Mexico's Banco Azteca, an outgrowth of credit offers that started in the group's Elektra department store.” [The Miami Herald/Factiva]
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Colombia: World Bank Approves US$30 Million to Improve Rural Competitiveness
WASHINGTON - The World Bank’s Board of Directors today approved a US$30 million loan to support Colombia’s efforts to increase rural competitiveness and build up entrepreneurship in poor rural communities through partnership schemes with the commercial private sector.
“About 68 percent of the people living in Colombia’s rural areas are poor, most of them small farm families,” said Miguel Lopez-Bakovic, World Bank Country Manager for Colombia. “This project will help reduce rural poverty by enabling small producers to compete successfully in the national and global marketplace.”
Under the Second Rural Productive Partnerships Project, small farmers’ producer organizations will gain access to relevant markets by entering into a productive partnership with private sector companies, with the support of financial institutions, government and civil society. At the same time, agribusiness firms will be able to expand food processing activities by securing supplies from small producers.
The project builds upon the success of the ongoing Productive Partnerships Support Project which has allowed the creation of 117 partnership schemes with the commercial private sector, benefiting 10,400 rural families. These include partnerships to improve farm infrastructure, such as irrigation canals, aquaculture facilities, greenhouses, machinery, equipment and special studies. These schemes have generated additional income and employment, stimulated social cohesion in rural areas, spread entrepreneurial culture, and generated local capacity to implement rural partnerships.
The new project aims to finance at least 300 additional partnerships and reach 25,300 small and medium-sized farm families. The project activities will have national coverage but focus on the departments that have potential for development through agriculture.
This US$30 million, fixed-spread loan from the International Bank for Reconstruction and Development (IBRD) is repayable in 17.5 years, and includes a grace period of 5.5 years.
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West Africa Invests To Curb Youth Emigration
“West Africa's Economic and Monetary Union (UEMOA) will invest $6 billion on regional infrastructure over five years to raise living standards and curb youth emigration, an official said on Tuesday.
Foreign donors pledged around $5 billion at a roundtable in Dakar last November and UEMOA member states … a further $472 billion CFA ($970 million) for a host of projects - the costliest of which will be linking the region's rail networks and building new roads. … The first phase of the plan, which involves drilling 3,000 bore holes to access water deep under the ground, has already begun and it aims to make it easier to cultivate crops and rear animals in the region's vast swathes of arid land. …
Around four-fifths of the cash will be spent on investment in infrastructure to improve and connect some of West Africa's few international railway lines, including lines from Malian capital Bamako to Abidjan and Niamey, the capital of Niger.” [Reuters/Factiva]
The BBC writes that “… Thousands of migrants try to enter Europe illegally each year and hundreds die on often perilous sea journeys. ‘This wave of migration, it is tragedy for Africa,’ Amadou Diop, an UEMOA adviser, told The BBC. ‘You can improve the situation of people in our sub-region in terms of development, in terms of health, in terms of education. If we have success…, it is sure that people will have the opportunity to stay at home.’
The BBC's James Copnall in Ivory Coast says the aim of the UEMOA's eight members is a grand one: to create a Francophone West African bloc so prosperous no-one will want to leave. … [I]f people can earn money on their farms, there will be less reason for them to swell the desperate masses living on the edges of West Africa's big cities - and become prime candidates to seek to emigrate.
It is estimated that last year 6,000 people died after they took wooden boats to the Spanish Canary Islands, although many more do make it to Europe.” [The BBC (UK)]
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Up From The Bottom Of The Pile - Latin America's Economies
“Much of the news coming out of Latin America in recent years has been of radical populists proclaiming ‘revolution’ or, as Venezuela's Hugo Chávez would have it, ‘21st century socialism’. … So it might be hard to believe that in many countries in the region, and especially in Brazil and Mexico, Latin America's two giants, things are in fact going better today than they have done since the mid-1970s.
The region is in its fourth successive year of economic growth averaging a steady 5 percent. In most places inflation is in low single digits. And for the first time in memory, growth has gone hand-in-hand with a current-account surplus, holding out hope that it will not be scotched by a habitual Latin American balance-of-payments crunch. What is more, financial stability and faster growth are starting to transform social conditions with astonishing speed. The number of people living in poverty is falling, not only because of growth but also thanks to the social policies of reforming democratic governments. The incomes of the poor are rising faster than those of the rich in Brazil (where income inequality is at its least extreme for a generation) and in Mexico.
In both these countries a new lower-middle class is emerging from poverty. Low inflation, achieved through more disciplined public finances and trade liberalization, has brought falling interest rates. Credit has at last returned. So these new consumers are buying cars and DVD players or taking out mortgages. …
Another caveat is that for all its recent progress, Latin America remains a long way from enjoying widespread affluence. In the region as a whole, some 38.5 percent of people remain poor according to national definitions. The gains are still fragile. But the lessons for governments are clear. To bolster the new middle class, it is crucial to keep inflation low. So is improving the shoddy education imparted in the region's schools and universities. And businesses in the region are still held back by lack of transport infrastructure and an excess of red tape.
The commodity bonanza won't last forever, so now is the time to fix these things. Do so and Latin America's democracies could turn an important corner, in which inequality, poverty and populism give way to prosperous middle-class democracies where the majority has an interest in stability.” [The Economist (UK, 08/18)/Factiva]
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German Chancellor Calls for More Market Transparency
“In the aftermath of recent turbulence on the global financial market, German Chancellor Angela Merkel reiterated her call for greater transparency, especially as far as hedge funds are concerned.
‘In the case of hedge funds, we need to know where the capital comes from and how high the credit risks are,’ Merkel said in an interview for Bild am Sonntag, which was published on Sunday. Merkel stressed that the world's top rating agencies should also be more open about the way they calculate their ratings. ‘In the future it should be clear what the basis of their ratings of companies is,’ Merkel said. ‘There can't be some black box from which something comes out and which no one understands. …” [Deutsche Welle (Germany, 08/19)/Factiva]
Reuters writes that “ … Merkel's comments reflected her frustration over Germany's failure to get an agreement among Group of Eight industrial nations on how to improve the transparency of hedge funds. She said the developments in recent weeks show ‘how urgent it is that we have greater transparency on international financial markets.’ ‘It's unsatisfactory that that it takes so long to agree on the appropriate international measures,’ Merkel added. …” [Reuters (08/18)/Factiva]
AFP adds that “… In recent days, central banks around the world have pumped tens of billions of dollars into the global financial system amid signs that private banks and firms are having trouble raising funds and rolling over debt. The crisis was sparked by concerns that US homeowners would be unable to make repayments on so-called subprime mortgages, which had been repackaged as complex financial instruments and sold to other investors including hedge funds. …” [Agence France Presse (08/18)/Factiva]
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Mexicans Getting Left Behind
“As Mexico's newly staffed Finance Ministry begins to chart the country's economic course, it carries some heavy baggage: years of weak growth, apparently entrenched poverty and highly skewed market concentration.
‘Economic growth over the past 20 years has been slightly above two percent,’ said Fausto Hernandez, an economist at the Centre for Economic Research, ‘which is really very bad for a country like Mexico with so many needs.’ Economists say if the Mexican economy continues to grow at the same pace it has over the past two decades, its gross domestic product per capita will reach $14,764 (U.S.) by the year 2028. China's GDP per capita - currently less than $6,500 -- will have grown to $39,000. It is a pill hard to swallow for a country with 43 free trade agreements, a border with the world's greatest economic power, and a firm belief in the panacea of market forces. Behind those dismaying figures lies another: the growth rate in productivity. According to Miguel Messmacher, the Finance Ministry's Harvard-trained chief of economic planning, "Over the past 25 years, productivity growth has been zero in Mexico." Currently, labour productivity is only a third of the OECD average, says the Organization for Economic Co-operation and Development….
At 4.8 per cent, Mexico's GDP growth in 2006 was the fastest in six years. Yet according to the OECD, even a sustained 4 per cent growth rate for Mexico "is barely enough to keep per capita living standards rising at the same rate as the OECD average. Convergence toward these much higher living standards would require faster actual growth for many years." [The Globe and mail/Factiva, 08/13/07]
In related news, The Associated Press reports that “more than a third of Mexican migrants are under age 25, driven to leave the country because of poverty and Mexico's inability to keep young people in school, the National Population Council said…. The government agency estimated that 220,000 Mexicans aged 15 to 24 left the country each year from 2000 to 2005, about 38 percent the total number of migrants who headed abroad, mainly to the United States, during the period. At 19 percent of the general population, people in that age bracket are twice as likely to migrate as the rest of the populace. Cesar Garces, the head of the council, said 47 percent of Mexico's youth live in poverty, and that only seven in 10 of Mexico's 15-year-olds, half of its 17-year-olds and 29 percent of its 20-year-olds are still in school. But he said the percentage of Mexicans with at least a high school education has grown from 8 percent in 1970 to 42 percent now.” [The Associated Press/Factiva, 08/11/07]
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Asia's Labor Force To Grow By 200 Million, Says ILO
“Asia's economies face the challenge of finding jobs for an extra 200 million workers between now and 2015, according to a new International Labor Organization (ILO) report out Monday.
It said the region will have its work cut out to improve the quality of jobs on offer and ensure the benefits of Asia's future economic growth are distributed more evenly as the labor force - currently 1.8 billion - increases. …
Visions for Asia's Decent Work Decade: Sustainable Growth and Jobs to 2015 … report said the service economy would be the main source of new jobs and by 2015 would have become the biggest single sector employer, representing about 40.7 percent of the region's jobs. …”
[Agence France Presse (08/13)/Factiva]
FT writes that “…Asia’s workforce is expected to increase by 221 million to 2 billion by 2015 as countries such as Iran, Bhutan, Cambodia and Pakistan continue to benefit from a rise in the proportion of ‘prime working-age’ people, between 25 and 54. But the life of this ‘demographic dividend’ would be limited...
The ILO warns that more developed regions such as Singapore, South Korea and parts of China are likely to hit the ‘demographic cliff’ even earlier. …More than a quarter of the people in some “developed economies” are expected to be older than 65 by 2015. …
Problems facing employers and politicians include: increasing migration by millions seeking better paid work abroad; the growing movement of people from the land to cities, with the region’s urban population expected to grow by 350 million by 2015, while the rural population is expected to rise by only 15 million; rising income inequalities; and the need to improve job opportunities particularly for women. …” [The Financial Times (UK, 08/12)]
Kyodo News notes that the report “… also says that environmental degradation, depletion of natural resources and climate change could seriously undermine economic growth in the coming decade.
The report calls on governments to pay more attention to sustainable development, to introduce clearer and more accountable employment policies and to adhere to international standards for workers' rights to address some of these problems. …
The study says that the number of workers living on less than $2 a day has fallen significantly in the past decade, but it warns that nearly 70 percent … still work in … the ‘informal’ economy, taking low-productivity jobs with little or no social … protection. …” [Kyodo News (08/13)/Factiva]
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Indonesia’s Supermarket Boom Offers New Opportunity for Traditional Markets & Farmers
World News - Modern retailing and supermarkets are booming in Indonesia, growing at 20 percent a year since the lifting of restrictions in 1998. In fact, they now account for 30 percent of the food retail business. The national output of fresh fruits and vegetables has doubled to US$10 billion from 1994-2004 and is increasingly reflected in changing patterns of food consumption. Indonesians consumption of fresh produce was 50 per of their of expenditure on rice in 1994, it rose to increased to 75 percent in 2004 and, in urban areas, it now stands at 100 percent. i.e. urban Indonesians, are spending the same amount of money on rice as they are on fresh fruit and vegetables. Nearly all of this produce is home grown and while imports have nearly tripled over the last decade, they still account for only 3% domestic consumption.
These findings are part of a report Horticultural Producers and Supermarket Development in Indonesia released by the World Bank in Jakarta today.
Report Highlights
Among the main findings of the report is the comparative disadvantage of traditional wholesale markets in competing with suppliers of better quality produce either from abroad or from smart new domestic wholesalers. Large inter-island traders and a new-generation of Indonesian wholesalers who are specialized, capitalized, and dedicated to the modern food industry are making it harder for traditional markets to compete.
While fresh fruit and vegetables account for 8 percent of supermarket sales and up to 15 percent of urban retail, a high share – 80 percent of the fruit sold and 20 percent of vegetables - are imported. Fruit and vegetables from China and Thailand in particular are usually cheaper and at the same time of a higher quality, making it difficult for local farmer to compete. “Indonesian farmers trying to sell to supermarkets are really handicapped by extremely poor supply chains,” says the lead author of the report Shobha Shetty. “Moving over poor roads, lacking cold chains and logistics services while dealing with entrenched bad business practices, Indonesian farmers face formidable odds. Yet, retailers see a large opportunity for local produce in supermarkets if these supply chain problems could be resolved.”
At present, the percentage of farmers participating in the new supermarket sector is small, around 15 percent. These are mainly small farmers – but they are the elite in terms of landholdings, capital, facilities such as irrigation tanks and education. Their profits are also 10-30 percent higher than farmers in the traditional sector.
However, traditional markets which service the bulk of farmers and are controlled by district governments, also act as a buffer and a reality check on modern chains. They sell residual produce, including that which fails to meet demanding quality control checks of supermarkets. They sometimes sell to the modern sector in times of scarcity or sudden loss of supplies. Importantly, traditional markets serve to place a cap on the growth of modern sector market power and in reality, the market segments are as much complementary as competitive.
Addressing the Challenges
The modernization of agricultural marketing in Indonesia has occurred largely as a result of market-driven, private initiatives, rather than government intervention. Results from this study indicate there are distinct roles for the public and private sector in this transformation. In the wake of decentralization, regional governments also have a major role to play in creating an efficient marketing infrastructure, together with the removal of complex licensing requirements and informal taxes.
Traditional retail markets need improved hygiene and sanitary standards, infrastructure (pavement, road, building, and stalls), cold chain systems, etc. so they can compete with supermarkets. Overall, this will create an efficient system linking processors and packers to the modern procurement system and create an incentive to upgrade the supply chain. It will also reward good quality differentiation at the production level, a key point of weakness at present.
Key recommendations for policy makers include:
Agricultural Support Services: The main challenge for policymakers is to increase the supply of fresh produce from small farmers to modern supermarkets. The first option is for direct support through investments in public goods and services notably agricultural research and extension services so they are more in line with the needs of the market. The results of this study indicate that farmers can be supported with technical and management assistance, post-harvest handling technology assistance, factor input assistance, etc.
The study also indicated that there is little evidence of strong farmers/producer organizations to facilitate joint marketing, purchase of inputs etc. D evelopment of farmer groups, grower associations, and new-generation cooperatives is another challenge. Providing market intelligence to those working in the supply chain and facilitating business linkages among farmers, wholesalers and supermarkets through business meetings, exhibitions, and business visit programs is a key role for the local governments.
Rural Infrastructure: One of the factors reducing competitiveness of fresh local produce is the high cost of transportation to the production zones. Good quality telecommunications and a paved-road network are essential if local farmers are to compete with imports. This is especially an issue as horticulture crops in Indonesia are often produced in remote, high-altitude areas where these infrastructure facilities are often missing.
Access to Financial Services: The study also shows the core constraint to a dynamic agricultural sector in Indonesia remains the lack of financial services to small farmers and suppliers. This also results in lower productive investments all along the supply chain. Since the payment of supermarkets is generally delayed for up to 40 days, cash flow problems may affect suppliers, farmers and wholesalers. The government can facilitate agreements with the modern retail association (APRINDO) and the banking system so that they provide a guarantee for the amount of sales the supermarket owes, so that small/medium farmers or even wholesaler can get access to commercial bank loans.
Land Rental Markets: Active land rental markets contribute significantly to the horticulture boom. However, the study shows that only a small percentage of the land is titled. Thus, public land registration needs to be widely socialized and farmers encouraged to register their land. Land titles will give full rights to the landowner and provide the land rental market with the necessary legal support.
This is a two-pronged policy that focuses on “structural competitiveness” and “customized competitiveness”. Improving “structural competitiveness”, which reduces the overall costs of supermarkets procurement and levels the “playing field” for traditional retailers and wholesalers includes: enforcing healthy business practices, improving rural infrastructure, improving the quality and relevance of the agricultural extension service etc.
In addition, governments should promote policies that support “customized competitiveness” so suppliers and farmers can enter the supply chains for supermarkets through access to market intelligence, improving enforcement of standards all along the supply chain, land titling, and developing innovative financial services that cater to the needs of the major actors in the supply chain. “The modernization of food retail in Indonesia offers a great opportunity for those in the horticultural sector to improve the quality of their produce and supply the growing demands of the urban market, which now makes up half the population,” says Shobha Shetty.
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Zoellick Charts Bank’s New Direction
“Robert Zoellick, the new President of the World Bank, …laid out his views on what role his institution should play in helping create tomorrow’s economic success stories and why it was vital that rich countries such as Japan should continue to contribute. …
Zoellick has been in the job only a month but he has already begun to recalibrate the Bank’s mission … In a briefing to journalists in Tokyo yesterday, the outlines of that new thinking began to take shape.
First, it was clear there would be more stress on the importance of infrastructure than in recent years. …He said it was in rich countries’ self-interest to support his institution’s agenda for the developing world, including what was expected to be a greater stress on global warming. …
He was also keen to bring countries such as China, India and Brazil into a broader consensus on development goals so that they complemented, rather than undermined, multilateral efforts.. …” [The Financial Times (UK)]
“…Zoellick urged Japan on Thursday to maintain its donations to [ International Development Association- IDA] at the current level and boost official development assistance even under its severe fiscal conditions as such an action will benefit Japan. ” [Kyodo News]
… [Also] Zoellick said “Jin Renqing, China’s Finance Minister, had said he wanted to attend an IDA donors’ meeting in November in Dublin”. …[The Financial Times (UK)]
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| Briefly Noted...
• The World Bank has agreed to offer $561,000 to finance 600 Angolan
demobilized soldiers and 100 widows in Angola's eastern province of Moxico
before the end of this year, a governmental official said on Wednesday.
[Xinhua (China)/Factiva]
• Paraguay's economic program is delivering growth while inflation falls,
the International Monetary Fund (IMF) said on Wednesday in an assessment
of the country's economic outlook. Paraguay's growth will rise to 5
percent this year from 4.3 percent in 2006, core inflation should fall
below 5 percent by December, foreign exchange reserves have climbed above
$2 billion and the currency has stabilized, the IMF said.
[Reuters/Factiva]
• Afghanistan and Tajikistan will build a 1,000-megawatt hydro-power plant
jointly on the river Pyandzh, the press service of Tajik President Emomali
Rakhmon announced. The World Bank, the Asian Development Bank, the Islamic
Development Bank and the donor countries involved in the rebuilding effort
in Afghanistan are expected to fund the project, it said. [The Times of
Central Asia/Factiva]
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| Asian Development Bank: Asia's Rich-Poor Gap Growing
"The gap between rich and poor in China and other Asian countries is
growing, hurting anti-poverty efforts and possibly fueling unrest, the
Asian Development Bank (ADB) said in [the Key Indicators 2007: Inequality
in Asia] report.
China has had Asia's second-biggest and second-fastest-growing wealth gap
since the 1990s, exceeded only by war-wracked Nepal on both counts, the
bank said in an annual survey.
China has seen thousands of protests in recent years, some of them
violent, over land seizures and other economic grievances blamed on the
growing gap. ..." [Associated Press/Factiva]
Kyodo News writes that "...The study, by the bank's economists Ifzal Ali
and Juzhong Zhuang, said developing Asia's stellar GDP growth rates have
masked rapidly rising relative and absolute inequalities, leading to two
faces of Asia - a 'shining Asia' and a 'suffering Asia.'...
For developing Asia as a whole, per capita GDP at 2000 constant prices
increased from $424 to $1,030 between 1990 and 2005, growing at an annual
rate of 6 percent, a pace with few parallels in history, according to the
study. ...
Using the $1-a-day poverty line established by the World Bank in 1990, the
incidence of extreme income poverty declined from 34.6 percent to 18
percent between 1990 and 2005.
However, it said poverty incidence measured by $2-a-day is still very
high. ..." [Kyodo News (Japan)/Factiva]
Reuters adds that "...The bank blamed the widening gap partly on
globalization, which it said favors the well educated at the expense of
the less skilled, and recommended a range of policies to redistribute
wealth and create more equal opportunities. ...
The bank said its findings did not mean Asia should turn its back on
integration into the world economy or on market reforms.
Rather, 'enlightened and active' state policies were needed to give
everyone a fair crack at enjoying the fruits of rapid growth... Reversing
a decline in public services was key.
To help the poor, the ADB called for more public investment in
agriculture, access to basic health services and a switch in spending from
tertiary to primary education. ..." [Reuters/Factiva]
AFX reports that "...Ali noted that key drivers of inequality in Asia
...include slowing public investment in rural infrastructure, a breakdown
of services to disseminate technology, and globalization. ... Policies
should provide a safety net for those in poorer circumstances, enabling
access to basic healthcare and education, while also improving governance
and accountability in the delivery of public services, Ali said."
[AFX/Factiva]
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| Briefly Noted
Sierra Leone's economic growth should quicken to an inflation-adjusted rate of 9 percent this year from 7.5 percent in 2006 as the country recovers from civil war, Central Bank chief James Rogers said.
Zimbabwe's upcoming wheat harvest is likely to be the worst since the country gained independence in 1980, state media reported Sunday.
Burundi's Central Bank Governor Saturday was arrested on charges of embezzling State funds and detained in the capital's central prison, officials said. [Agence France Presse
The Serbian government on Friday sent countries involved in negotiations over Kosovo a list of proposed rules for the talks, amid reports it was ready to cede some elements of sovereignty to Kosovo. The proposal envisages direct talks between Belgrade and Pristina, held without a deadline.
Indonesia will ask the World Bank to convert $60 million's worth loans to marine and coral reef conservation into grants following the contribution of the national waters absorbing 43.6 percent of the world's carbon dioxide.
Sources have told Business Recorder on Sunday that Pakistan's government had received the proposal of building up its strategic oil reserves from the World Bank to increase storage capacity from 22 days to 40 days reserve.
In a statement released by the International Monetary Fund (IMF) on behalf of the African Caucus, Mozambique's Finance minister, Manuel Chang, gave a positive reading to an informal meeting earlier this week between Dominique Strauss-Kahn and the African governors and welcomed his commitment to focus on Africa.
UK should create a new foundation to promote higher education links with India and China, a parliamentary committee said in a report released on Sunday. The Education and Skills Committee said the foundation - offering scholarships and fellowships and jointly funded by the government and the private sector - would allow British universities to access increased research funding.
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| US House Shifts $16 Billion Toward Renewable Energy
"The US House of Representatives on Saturday passed a Democratic rewrite
of US energy policy that strips $16 billion in tax incentives away from
Big Oil and puts it toward renewable energy sources like wind and solar
power.
The 786-page bill, passed in a rare Saturday vote, was a top priority for
US House Speaker Nancy Pelosi, and is an amalgam of bills assembled by
about a dozen of the chamber's committees in recent months. Republicans
called it a 'no-energy bill' because it lacks new drilling incentives, and
they derided the new emphasis on renewables as 'green pork.' ... The bill,
the New Direction for Energy Independence, National Security, and Consumer
Protection Act and the related tax title would spur a massive
redistribution of federal incentives to wind, solar, geothermal and away
from producing energy from oil, natural gas and coal. ... The bill sets
new standards for appliances and building efficiency codes, and spurs
possible renegotiation of faulty Gulf of Mexico drilling leases signed by
the Clinton administration that left about $2 billion on the table. ..."
[Reuters (08/04)/Factiva]
AFP notes that "... The bill will have to be reconciled with a Senate
version, which passed last June, but is more restrained and emphasizes
slightly different priorities. ... A provision in the bill calls for
gradual steps to reduce the role of fossil fuels in generating energy,
imposing for the first time a federal standard, under which utilities will
have to provide 15 percent of their electricity from wind, solar and other
renewable energy sources by 2020. This standard, according to
congressional officials, will likely result in a reduction carbon dioxide
emissions - a major contributor to global warming - by 500 million tons.
..." [Agence France Presse (08/05)/Factiva]
Dow Jones writes that "... Friday, the White House's Office of Management
and Budget said US President George W. Bush would veto Pelosi's energy
bills - including a tax package - and warned they would raise energy
prices and could slow future oil and gas production. ... Among the
criticisms the White House outlined, the administration said repeal of a
series of laws enacted in the Energy Policy Act of 2005 | |
