This summary is prepared by the External Affairs Department of the World Bank. All material is taken directly from published and copyright wire service stories and newspaper articles. The daily summary and other news can be found on the World Bank's external website at http://www.worldbank.org/news. For inquiries call (202) 473-7660 or send a written request to the News Bureau.
__________________________________________________________________________________
Friday, March 04, 2011
__________________________________________________________________________________
Today's Headlines:
- FAO Warns On Oil As World Food Prices Hit Record
- IMF Warns Food Prices To Stay High
- IMF's 2008 Quota And Voice Reforms Take Effect
- World Bank Urges Zambia To Enforce Taxation On Mines
- Geithner Warns US Lawmakers Not To Slash Aid
_______________________________________________________________________________
FAO Warns On Oil As World Food Prices Hit Record. "Global food prices hit a record high in February, the United Nations said Thursday, warning that further oil price spikes and stockpiling by importers keen to head off unrest would hit already volatile cereal markets…. The UN Food and Agriculture Organization's Food Price Index hit its second straight record last month, driven by rising grain costs and tighter supply to further pass peaks seen in 2008 when prices sparked riots in several countries…." [Reuters/Factiva]
Al Jazeera adds that "…global oil prices were also viewed as a crucial variable by the FAO. David Hallam, the director of the FAO's trade and market division, said: 'Unexpected oil price spikes could further exacerbate an already precarious situation in food markets….This adds even more uncertainty concerning the price outlook just as plantings for crops in some of the major growing regions are about to start.'…" [Al Jazeera]
AP notes that "…oil prices can drive up food prices by raising the cost of transportation and production for farmers and food processors. Higher gasoline prices also encourage ethanol producers to buy more corn and blend it into fuel. That can further raise corn prices. 'This is what happened in 2007-2008,' said FAO Senior Economist Abdolreza Abbassian. 'The longer these prices remain high, the more we have to think that it could have a spillover effect into the grain sector, especially in coming weeks and months.'…" [Associated Press/Factiva]
IMF Warns Food Prices To Stay High. "The world faces a prolonged period of high food prices, the International Monetary Fund (IMF) has warned, arguing that the main reason for the sharp rise in agricultural commodities prices is a structural shift in demand….In an article published on Thursday, IMF commodities economists wrote that… 'Policymakers - particularly in emerging and developing economies - will likely have to continue confronting the challenges posed by food prices that are both higher and more volatile than the world has been used to.'…" [Financial Times]
Reuters adds that "…IMF spokeswoman Caroline Atkinson said the Fund was 'extremely concerned' with rising food prices because of its impact on the poor. She said governments should not subsidize products and instead should target their assistance at poor households. Atkinson said central banks should 'accommodate first-round impacts of food prices with a focus on making sure that there is not a longer-term impact in pushing up inflation on a permanent basis.'..." [Reuters/Factiva]
AFP reports that "…beyond rising food prices, Atkinson pointed to building inflation in some rapidly growing emerging economies. Some emerging countries are 'getting to the point of potential overheating and therefore central banks have been quite appropriately beginning to tighten monetary policy,' she said, citing Brazil's monetary tightening…." [Agence France Presse/Factiva]
IMF's 2008 Quota And Voice Reforms Take Effect. "The 2008 Quota and Voice Reforms of the International Monetary Fund (IMF) entered into force Thursday, representing an important milestone to reinforce IMF legitimacy. The reform provides for quota increases for 54 countries, with the largest gains going mainly to dynamic emerging market countries, ranging from Korea, China and Turkey, to Brazil and Mexico. The reform will also enhance the influence of low-income countries in the IMF's decision-making, including in its 24- member Executive Board, according to a statement released by the IMF…." [Xinhua/Factiva]
Balkans Business News adds that "…the 2008 reforms were followed by another governance reform package agreed by the IMF's membership in December 2010 that, once effective, will lead to a combined shift of about 9 percent of quota shares to dynamic emerging market and developing countries….Once both packages are implemented, IMF representation will better reflect the world economy as it looks today.
'It means we will have the top 10 shareholders that really represent the top 10 countries in the world, namely the United States, Japan, the four main European countries, and the four BRICs,' IMF Managing Director Dominique Strauss-Kahn said…." [Balkans Business News (Cyprus)]
AFP writes that "… 'I commend our members for taking the required action to ratify this package of reforms adopted in 2008,' said Strauss-Kahn. But the work of the member states is not finished, he recalled, urging the swift ratification of 'the next step in this process' to further align IMF representation with global economic realities…." [Agence France Presse/Factiva]
World Bank Urges Zambia To Enforce Taxation On Mines. "Zambia needs to improve its technical capacity to enforce taxation in its copper mining sector in order to redistribute copper resources to help other sectors develop… World Bank Senior Economist Julio Revilla said…. Despite huge investment, Zambia's mining sector only contributes about 9 percent to the country's gross domestic product and less than 3 percent to the country's tax revenue. [Dow Jones/Factiva]
The Post adds that "…responding to questions from journalists at the launch of the Bank's strategy for Africa, Revilla said the major economic problem Zambia had was growth led by a single sector…. He said that… Zambia needed to improve its technical capacity to enforce taxation….He also advised the country to convince investors in the mining sector to re-invest their profits locally…." [The Post (Zambia)]
Meanwhile, The Zambia Daily Mail reports that "…Fitch has assigned Zambia a B+ sovereign rating in recognition of the huge economic strides the country has made….The agency says the country has a stable economic outlook. The rating comes on the heels of global recognition of Zambia's economic achievements in the World Bank and the International Finance Corporation's 2011 'Doing Business' report. In the report, Zambia was named one of the world's top 10 reformers for ease of doing business…." [The Zambia Daily Mail]
Geithner Warns US Lawmakers Not To Slash Aid. "China will come to dominate Africa and other developing regions if Washington stops supporting the World Bank and similar institutions, US Treasury Secretary Tim Geithner warned Thursday. With Republicans in Congress threatening to cut foreign aid budgets in a determined attack on government spending, Geithner told the Senate Foreign Relations Committee it was a matter of US national interest to keep supporting the World Bank and other multilateral development institutions…." [Agence France Presse/Factiva]
In related news, Dow Jones writes that "…Geithner said rising commodity prices are fueling inflation in emerging markets and leaving US consumers with less money to spend. 'Rising global commodity prices – including for food and oil – are causing hardship in many parts of the world,' Geithner said…. Geithner said that the impact of rising prices is more severe in developing countries, where consumers spend a larger percentage of their income on basics like food and fuel….." [Dow Jones/Factiva]
In a separate article, AFP reports that "…the proposed cuts to US foreign aid could undo food security efforts in developing nations and spark unrest requiring US military intervention, activists and officials warned Thursday…. Democratic Senator Amy Klobuchar noted that poverty and food shortages helped ignite the unrest sweeping the Middle East and North Africa, and said US foreign aid helps keep both in check…. Klobuchar was echoing a warning made earlier this week by Secretary of State Hillary Clinton, who said… that the plans to slash the US foreign aid budget would undermine US efforts to stabilize North Africa and the Middle East…." [Agence France Presse/Factiva]
Also in This Edition, Briefly Noted… The challenge of governance and leadership in Africa is particularly acute and had undermined the continent's improved economic performance over the past decade, World Bank Vice President for Africa Obiageli Ezekwesili said Thursday. [Dow Jones/Factiva]
Higher food and fuel prices could complicate economic management in the Democratic Republic of Congo during an election year in the central African country, the International Monetary Fund said on Thursday. [Reuters/Factiva]
The UN and African Union called Thursday for a second postponement of Benin's presidential vote this weekend amid allegations that a million people have been left off the electoral roll. [Agence France Presse/Factiva]
At least six women were shot dead in the Ivory Coast on Thursday as they protested against the continued rule of Laurent Gbagbo, according to witnesses and the UN. [The New York Times]
Brazil is managing the risk of an overheating economy effectively, but needs to embrace structural reforms to ensure sustainable growth, International Monetary Fund Managing Director Dominique Strauss-Kahn said on Thursday. [Reuters/Factiva]
A court in Brazil has approved a controversial hydro-electric project in the Amazon rainforest, overturning an earlier ruling that blocked construction of the Belo Monte dam. [BBC News]
South Korea's quota in the International Monetary Fund (IMF) has risen to 1.41 percent, reflecting the country's expanding economic influence, its finance ministry said Friday. [Xinhua/Factiva]
The Pakistani government has halved a 9.9 percent increase in domestic fuel prices in a concession to a partner in the ruling coalition. The decision however has re-ignited fears over the country's soaring budget deficit which is forecast to rise to 8 percent of gross domestic product in the financial year to June, up from a target of 4.7 percent. [Financial Times]
Tunisia's interim president Fouad Mebazaa has said that voting for a council of representatives to rewrite the constitution would be held by 24 July. [BBC News]
Posts
