Afghanistan's Steps Toward Creating A Democratic, Postwar Government

Afghans vote Sunday for a national parliament and provincial assemblies, the last formal step on a path to democracy laid out after US-led forces ousted the Taliban in 2001, reports The Associated Press. Afghanistan and its Western backers hope the vote will sideline a Taliban insurgency has that threatened to subvert the elections and killed more than 1,200 people in the past six months.

Interior Minister Ali Ahmad Jalali tried to reassure the 12.5 million registered voters. Jalali said 55,000 police officers, 28,000 soldiers and about 20,000 militia troops and intelligence agents have fanned out across the country to safeguard the voting. Some 20,000 troops from a US-led coalition force and a separate 11,000-strong NATO-led force are also on alert. In a brief state radio speech, Karzai said officials and security forces "have prepared well" and urged citizens to be alert and report anything suspicious.

The Voice of America writes that if all goes according to plan Sunday, President Hamid Karzai will have to justify decisions and actions to a 249-member lower house of parliament. The new Afghan parliament can be expected to carp and criticize the chief executive, as legislatures around the world generally do. Karzai was once routinely labeled the Mayor of Kabul, because of the limited power of his government. Local warlords, many with their own armed militias, ruled in the countryside. But now, analysts say, Karzai has managed to persuade many of the proud regional leaders to enter the political process.

The Hindustan Times (India) adds that few of the roughly 2,800 candidates have a firm grasp on what they would be called upon to do if elected. Most can neither read nor write. With almost every other citizen below the age of 15, the voters who participated in the last parliamentary election of 1969 are few and far between. Election results for the 249 seats are expected at the earliest at the end of October, but at this point, one thing is clear: There is much work ahead for the inexperienced parliamentarians, the daily writes. They not only will have to decide on new laws and approve the nation's budget, but they also will have to scrutinize all legislation already passed by the government of President Hamid Karzai, who was directly elected in October. But with parties not allowed to run and with more or less independent candidates competing, it's unclear whether the Karzai administration will have a working majority of supporters in parliament.

Agence France Presse meanwhile reports that Afghanistan's landmark election campaign officially ended Friday, two days before the nation goes to the polls to choose its first parliament in 30 years. Authorities banned campaign rallies, TV adverts and all other forms of electioneering in the final 48 hours before the vote on Sunday, which sees 5,800 candidates vying for almost 250 seats in parliament. "The reason for the silence period is to allow voters to very carefully consider their choices without being distracted by campaigning," said Bronwyn Curran, spokeswoman for the joint UN-Afghan election management team.

The International Herald Tribune further notes that the young people of Afghanistan stand out as particularly motivated and politically aware and are seen by some as an important constituency in the coming parliamentary elections. An estimated 70 to 80 candidates under age 30 are running for the Wolesi Jirga, the lower house of Parliament, where the minimum age is 25; about 150 are under 35. That is relatively few of the 5,800 candidates, yet it is raising hopes that a new generation of leaders will start to emerge in this war-ravaged country.

The Financial Times meanwhile reported Thursday that Afghanistan's elections will fail to produce a sustainable democratic political culture, according to the head of the European Union's official observer mission. Emma Bonino, a former EU commissioner, said this was because of flaws in the voting system, the presence of warlord-backed candidates and the marginalization of political parties by President Hamid Karzai. Bonino expressed frustration in an interview with the Financial Times that her 60-strong independent team of long-term observers had been prevented from carrying out its mission in five of Afghanistan's 34 provinces because of the insurgency in the south and east of the country. Bonino's criticisms of the parliamentary and provincial elections speak volumes given that the EU has funded about 40 percent of their $159 million cost and is keen for them to be the basis for political institutions to provide a counterweight to the US-backed Karzai government.

World Leaders Demand Greater UN Role

World leaders nearing the end of a three-day summit urged the United Nations to play a bigger role on the world stage, in everything from the fight against terrorism to protecting immigrant rights to easing the crunch caused by high oil prices, The Associated Press reports.

After the last speeches on Friday, the 191 UN member states will adopt a document that takes a step toward revamping the United Nations to meet the challenges of the 21st century and adds new impetus to the fight against poverty. But bitter disagreements meant most substantive measures had to be left out. Demands by world leaders for the UN to play a bigger role highlighted that, while Washington and others want serious reform before the UN tackles new challenges; the UN’s image is still strong in much of the world. Leaders also stressed repeatedly that more needs to be done toward progress on the Millennium Development Goals (MDGs), though major differences remained on what to do, and who should pay.

The Economist writes that the draft declaration on UN reform is not wholly devoid of substance. It calls for the creation of a Peace building Commission to supervise the reconstruction of countries after wars; the replacement of the discredited UN Commission on Human Rights by a supposedly tougher Human Rights Council; the recognition of a new “responsibility to protect” peoples from genocide and other atrocities when national authorities fail to take action, including, if necessary, by force; and an “early” reform of the Security Council. Although much pared down, all these proposals have at least survived.

In related news, The Los Angeles Times reports that British Prime Minister Tony Blair said Thursday that the world will never be able to give Africa as much help as it needs, but if current promises to double aid to the continent are kept, it will make a massive difference. Nigerian President Olusegun Obasanjo and European Commission President Jose Manuel Barroso also appeared at the session, saying that pledges to double African aid by 2010 made in July at the Group of 8 summit in Gleneagles, Scotland, could still fall apart. A new UN Development Program report shows that the MDG of improving living standards -- cutting the poverty rate in half by 2015 -- may be met. Lagging behind, however, are the remaining seven targets: Donors frequently fail to deliver their full pledges, the report says, and if present trends continue, most poor countries will miss almost all the goals, some by "epic margins." The poorest 19 countries have actually slipped backward in the last 15 years, it says.

Further, Reuters reports that Andrew Natsios, head of the US Agency for International Development (USAID) said on Thursday that the cost of the clean-up from Hurricane Katrina may reduce the amount of US overseas aid and countries have been told to lower their expectations. He said he did not expect a major "hold" on US funds but had been speaking at the UN General Assembly about the possible impact. Another senior US official, who is familiar with decision-making on aid issues, said countries would have to make an "excellent case" for additional help. The official, who asked not to be named in accordance with State Department rules, said he anticipated there might be problems convincing Congress to give more foreign aid when the need was so great at home.

“The World Is Better Prepared To Face The Third Oil Shock:” Francois Bourguignon

In an interview published in French daily Le Figaro, François Bourguignon, Senior Vice President and Chief Economist of the World Bank, discusses the global oil situation.

Le Figaro: “Can oil prices go down again?”

Bourguignon: “This is unlikely, as the world’s oil unused capacities stand at less than 2 million barrels a day, and are comprised of heavy oil, which the market isn’t fond of. Tensions around the provision of oil are likely to last because it will take time to build up new capacity.”

Le Figaro: “When can we expect a rise in production?”

Bourguignon: “It should take 8 to 10 years for Iraq, which can currently produce 5 to 6 million barrels a day, to increase its production capacities. Exploiting heavy oil reserves would be faster, but would require new refineries to be built. The situation is complicated. At $65 a barrel, it is more profitable to make certain oil investments that will reduce costs for end users. But solutions, on the supply side as well as on the demand side, do have immediate effects and require prices to remain relatively high to operate. The volatility in oil markets over the last three decades has discouraged investments. In the US, for example, not a single refinery has been built since 1976. Stakeholders are waiting to make sure oil prices do not go down before they invest.”

Le Figaro: “’Haven’t experts underestimated China’s consumption?”

Bourguignon: “Indeed, they have underestimated China’s demand. China, which also consumes a lot of coal, needs more oil then planned. Additionally, China’s energy consumption per GDP production unit is higher than that of developed countries. Globalization also consists in delocalizing industrial activities to developing countries whose industries consume more oil.”

Le Figaro: “Isn’t this a perverse effect?”

Bourguignon: “Up to now, it is true that the industries of developing countries have expanded without caring about energetic efficiency and greenhouse gas emissions. This will change in the future. That said, we shouldn’t put globalization on trial. That some countries like China have an economic growth rate of 8 to 9 percent is a good thing and explains their energetic needs. That they consume more because they are less efficient is not an essential issue.”

Le Figaro: “What effect will the increase in oil prices have on global economic growth, and more particularly on that of developing countries?”

Bourguignon: “It is estimated that for each additional $10 on a barrel, growth in developing countries is cut by 0.3 percent within the following twelve months. This slowdown is shared amongst all countries. It has the strongest effects on the and purchasing power of importing countries. Until 2004, the increase in oil prices for some of these countries was compensated by the fact that they also exported raw resources whose prices also increased. But in 2005, prices for these resources stagnated, or even receded, while oil prices continued to increase. Poor countries are more vulnerable than others. In Sub-Saharan Africa, we have calculated that purchasing power will decrease by 2.7 percent of GDP, because oil is a primary import. A European country like France will only experience a loss of buying power equivalent to 0.5 percent of GDP.

Developing countries sometimes try to compensate the increase in crude prices by subsidizing gas. The temptation to subsidize has always been strong in countries that produce oil, such as is the case in Indonesia and Nigeria. Their populations and governments tend to consider it legitimate to pay low prices for what they produce in large quantities. But this is not a good solution. Indonesia, for example, while still a producing country, has become a net importer of oil.”

Le Figaro: “What about oil importing countries? Don’t they subsidize prices?”

Bourguignon: “Yes they do. It is a fairly general tendency to subsidize energy, including in China, to facilitate the growth of the industry. This behavior leads to over consumption of energy, which is not desirable, neither economically nor environmentally. The rise in oil prices should be an opportunity to learn how to use oil more efficiently.”

Le Figaro: “Is the oil crisis susceptible to turn into an economic and financial crisis like it did in the seventies and eighties?”

Bourguignon: “Economies have become more flexible when faced with a shock. Currencies have exchange rates that fluctuate freely and can act as buffers. Therefore, the strong increase in oil prices will not necessarily lead to incontrollable variations in balance of payments followed by a monetary crisis.”

Le Figaro: “Can the price of oil and the resulting increase in transport costs affect international exchanges?”

Bourguignon: “Freight rates have already increased due to the intensification of international trade, and now because of fuel prices. For some countries that are located far from their closest neighbors, like Madagascar, this can be a handicap. But it cannot affect the growth of international exchanges, which are strong.”

Iraq Violence Slows Rebuilding, World Bank Says

Violence in Iraq has slowed reconstruction and economic recovery more than expected, the World Bank said on Thursday in a grim assessment of the country's immediate hopes for recovery, reports Reuters.

In a report released to Reuters, the World Bank said deadly attacks had spooked private investors and slowed physical reconstruction, while oil production and electricity were disrupted by sabotage. The violence, which has killed 170 people in just the past 48 hours, has also squeezed the country's budget with spiraling security costs despite revenues fattened by higher oil prices, said the bank, the globe's biggest development lender. "Continued insecurity, political uncertainties and weak public institutional capacity have resulted in mixed economic results and slower-than-expected reconstruction over the past 24 months," said the report, discussed by World Bank member countries on Thursday.

Sabotage to oil infrastructure had stagnated production and exports and that would likely slash economic growth to 3.7 percent in 2005 from an initial strong rebound of 46.5 percent in 2004, the bank said. Thanks to a soaring oil price, revenues exceeded projections by some $2.25 billion as of Aug. 1, it added, but the bank warned oil exports could grow only if a vulnerable northern pipeline was kept operational.

For 2006, the bank said economic growth should climb again to 17 percent if security and oil output improved and then decline slowly to 7 percent by 2010. The bank warned there was no room for relaxed fiscal discipline or a sharp decline in the oil prices that are keeping Iraq's budget afloat. Oil was trading around $63 a barrel on Thursday. "These are considerable risks, particularly because insecurity remains high and oil prices are potentially volatile," the World Bank said.

The government's ability to allocate resources effectively and track spending was limited, it noted. Most of Iraq's 192 state-owned enterprises are idle because of damage from war and looting, while salaries and pensions of the 500,000 employees were covered by the budget, the bank said. It estimated at least 2 million Iraqis were unemployed -- about 30 percent of the total workforce -- with families heavily dependent on government subsidies for food, fuel and utilities. The agricultural sector had become an important employer despite low productivity, it added.

In its own plans for Iraq over the next two years, the World Bank said its objective was to help Iraq's fledgling government strengthen its institutions. Restoring basic services, especially electricity, was critical and was the biggest concern for Iraqis, even more than national security, it said, quoting Iraqi opinion polls. The bank said it planned to expand support to improve water supplies and sanitation facilities that were a health risk. The security situation, it said, had created an "unprecedented" working environment for the bank, which evacuated its staff from Iraq after the deadly bombings of UN offices in August 2003. It said it had found ways for its staff members to work in the country but lack of security made it difficult for them to move about.

In other news, The Financial Times reports that Iraq is poised to announce today the successful completion of the first phase in the restructuring of Saddam-era commercial debt. The first phase of the deal, orchestrated by JP Morgan and Citigroup, the US banks, involves about $750 million of debt owed to the private sector. About 78 percent of those who had claims on this amount accepted the offer, which will pay them 10.25 percent of the principle and past due interest. Only about 2 per cent rejected the terms outright.

This first batch is only a small portion of what is thought to be more than $20 billion in commercial claims, the daily writes. Claims owed to the private sector amount to about 15 percent of some $125 billion of total outstanding debt that makes Iraq, relative to the size of its economy, one of the most indebted countries in the world. The rest is owed to various creditor nations. However, it is a rare piece of good news for Iraq and is likely to be welcomed as a sign that the war-torn country is making headway in putting long-standing financial issues behind it. Resolving these debts is also seen as a critical step towards creating a cohesive policy for economic reconstruction in the future.

The Associated Press finally notes that the United Nations plans to print and distribute 5 million copies of Iraq's draft constitution to Iraqis before the Oct. 15 referendum on the charter, a UN spokesman said Thursday. Farhan Haq said officials hoped the Iraqi parliament would sign off on the text by Sunday. Haq wouldn't give any specifics about the cost of printing and distributing the text but said it would fall under the $25.4 million provided by the European Union, Canada, Denmark, Britain and the United States to support constitutional activities. He said the 5 million copies probably will be printed in Baghdad, and that the main challenge would be distributing the document through local Iraqis and UN networks.

UN Treaty To Fight Global Corruption Goes Into Force

A global treaty to fight corruption goes into force in 90 days, empowering nations to prosecute officials accused of stealing public funds and to override bank secrecy laws to ensure stolen public money can be recovered, reports The Associated Press.

Ecuador on Thursday became the 30th country to notify the United Nations that it had ratified the UN Convention Against Corruption, the number needed to put the document into effect. The treaty has been signed by 128 nations. The treaty covers a broad range of issues, including bribery by corporate bodies, embezzlement, fraud, theft and extortion. It also provides broader powers to fight money laundering. "This dream has become a reality," the executive director of the UN Office of Drugs and Crime, Antonio Maria Costa, said in inviting other countries to join the convention.

Officials in the past have given the example of over $9 million in bribes deposited by a former Mexican prosecutor in a US bank. After six years of haggling, the United States turned over less than one-tenth of that amount to Mexico in 2003. Costa said he had recently visited Nigeria and concluded that "of the several billions of dollars stolen over just a few years, especially by former President Sani Abacha, only a fraction can be found." He said stolen funds tended to be dispersed among yachts, airplanes and villas, as well as divided up among many bank accounts.

He conceded the United Nations could not act as an enforcer of the treaty, which instead provides countries with the means to pursue criminals. Costa said it would be up to individual nations to decide whether to go after high-level criminals. The treaty allows the screening of officials through financial disclosures and checks on whether their wealth matches their incomes.

Reuters adds that the convention has been four years in the making. The treaty enables illegally acquired assets to be seized and calls on governments to give law enforcement authorities more time to pursue corruption cases through long statutes of limitations for crimes such as bribery and embezzlement of public funds. It eliminates banking secrecy protections for those under investigation and says acts in support of corruption or which obstruct justice in corruption investigations also should be considered crimes. Developing nations including many African states were eager for a treaty covering asset recovery, particularly those where high-level corruption plundered the national wealth.

Also in this edition: Clinton Calls For Investment In Conflict Areas At Conference; New Thinking About An Old Problem - Poverty In Latin America; Also Reports…and Briefly Noted...

ClintonCalls For Investment In Conflict Areas At Conference.The creation of an insurance program against terror attacks would go a long way toward encouraging the private sector to invest capital in places like Gaza that are desperate for economic development but beleaguered by conflict, former President Clinton said Thursday, reports The Associated Press. "I would just like to ask that you consider setting up some sort of insurance structure," Clinton said at a panel discussion that included King Abdullah of Jordan, British Prime Minister Tony Blair and Secretary of State Condoleezza Rice. "Then I think we'd have a lot more success in getting venture capital in there." 

The panel was for the opening session of the Clinton Global Initiative conference, a program led by the former president to tackle poverty, climate change, religious strife and other worldwide issues. None of the panelists offered an opinion on the feasibility of terrorism insurance, but all agreed on the importance of private investment in the region to spur job creation and other development. The conference is bringing together 800 participants -- from heads of state to business executives to nonprofit-sector leaders -- and is requiring that attendees make written pledges about what they plan to do to help over the next year. Participants who fall short of their pledges can't come back next year, organizers said.

The Washington Post adds that the inaugural meeting stretches over three days of seminars and speeches, bringing together 800 movers and shakers who paid $15,000 each for a seat. Each of the attendees is required to commit to doing something to improve the world. More than 50 commitments have been made, totaling more than $300 million. Clinton announced four specific commitments which included a $100 million Africa investment fund and a plan to fight HIV-AIDS through micro-enterprise development. One commitment was made by the Clinton initiative itself -- a pledge that all of its activities would be "carbon neutral," promising to mitigate the effects of plane travel and conference preparation by financing renewable energy projects that replace fossil-fuel energy sources.

Agence France Presse reports that roundtable discussions on relations between Islam and the West, how to finance clean energy and investment in the developing world will be addressed by presidents Olusegun Obasanjo of Nigeria and Viktor Yushchenko of Ukraine, World Bank chief Paul Wolfowitz, tycoons George Soros and Rupert Murdoch, head of the Irish Republican party Sinn Fein Gerry Adams, intellectuals like Nobel prize winner Elie Wiesel and Queen Rania of Jordan. The Middle East will be the subject of a special session on Friday featuring Israeli deputy prime minister Shimon Peres, US special envoy James Wolfensohn and another former US peace broker Dennis Ross. UN Secretary General Kofi Annan will speak on Saturday before Clinton announces his plan of action at the end of the conference.

New Thinking About An Old Problem - Poverty In Latin America. It is the biggest of a new generation of social programs across Latin America, known as “conditional cash transfer” schemes (CCTs), writes The Economist. The aim is to alleviate today's poverty, in Brazil's case by transferring up to 95 reais a month to poor families, and to short-circuit tomorrow's, by making the transfers conditional: beneficiaries must have their children vaccinated, and their health monitored, and keep them in school.

Although CCTs are a Brazilian invention, the first large-scale program began in Mexico. Originally called Progresa and now Oportunidades, it now provides government cash transfers to 5 million Mexican families, or nearly a quarter of the population. As in Brazil, there are conditions attached. The payments are made every two months, to female heads of household. One element, of around $10 per month, is to help with food. A larger element is to help buy school supplies and pay for transport to and from school. If a child misses more than 15 percent of class days, or fails a grade twice, these payments are suspended. The payments are also made conditional on the family's regular visits to health clinics.

Similar schemes now exist in half a dozen Latin American countries, though the details vary. The fiscal cost is relatively modest: Brazil's Bolsa Família costs the federal government 0.36 percent of GDP, far less than social insurance schemes. Not only do the poor get cash, but an incentive to use government services. Prior to Oportunidades, says John Scott of CIDE, a university in Mexico City, it was the middle class that would take advantage of health services, rather than the poor. Now poor people go to the doctor more than in the past.

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he success of the new schemes turns on effective administration. In Mexico, a visit to a government office is normally a far from efficient process. Simple tasks, like getting a driving license, can take hours in apparently overstaffed offices. By contrast, in an Oportunidades regional office in Apan, a town of 40,000 people in the state of Hidalgo, it takes less than ten seconds for each woman in a queue which snakes out into the street to pick up her allotment of cash. All this would have been impossible without computerization, notes Rodrigo García-Verdú, a researcher at Mexico's central bank. The ability to crunch numbers on a massive scale, he says, is part of what has allowed the program to be better than any previous social spending in reaching the people it is intended to reach. It also has made it possible to evaluate the effects.

On their own, the cash-transfer schemes can alleviate but not abolish poverty. Even Oportunidades does not reach the poorest of Mexico's rural poor, who live in communities so small that they do not have schools or health clinics within reach. Secondly, getting more children to attend school is only as effective as the schools themselves. Mexico spends a fairly large percentage of GDP on education, but its students still lag badly on standardized tests. The same goes for Brazil. Schools that Ocara's education secretary calls “apathetic” are unlikely to teach much, even if students stay until age 15, as Bolsa Família requires. Thirdly, cash transfers might generate some jobs, but in Ocara locals say that employment will come only when water does, and that depends on investment by the hard-pressed federal government.

Avoiding such dependence will require further changes to Bolsa Família. There is talk of “complementary programs” to shepherd people into productive work, a strong point of Chile's program. Teenagers could get bonuses for graduating from school, as they do in Mexico, rather than dropping out after their benefits expire, as happens now. There is more to be done in coordinating federal, state and local programs. But a start has been made, concludes The Economist.

Also Reports…Serbia does not often come top of global economic league tables. But according to the World Bank's latest report on “Doing Business” around the globe, the country slashed more red tape last year than any of the 154 other countries in the study, write The Economist. This January, Serbian entrepreneurs needed 15 days and a deposit of EUR500 ($650) to start a business, compared with 51 days and euro5,000 a year earlier. Taxes are now easier to pay, debts easier to collect and temporary workers easier to hire. As a result, start-ups have boomed: the number of registered firms leapt by 42% in 2004.

Thankfully, the Bank's indicators are helping to solve the problems they measure. “It is like sports,” says Simeon Djankov, an author of the report, “If you keep score, no one wants to lose.” In the past, the Bank has been coy about publishing its full league table, for fear of offending the governments at the bottom. But this year there is nowhere for the losers, such as Burkina Faso (ranked 154th), Egypt (141st) or even Italy (70th, below Kenya) to hide. Djankov reckons that 21 different reforms over the past two years were inspired by the “Doing Business” audit, which costs just $2m to carry out and disseminate. It is, in short, a promising way for the World Bank itself to do business.

Business Day (South Africa) meanwhile writes that like most of these global comparative studies, the World Bank's survey, Doing Business in 2006, should be handled with extreme caution -- even though South Africa doesn't do at all badly in the rankings. The methodology is rather lawyer-heavy, relying largely on input from legal and accounting firms. So while it provides a picture of what's on the statute books, it may not tell us whether, for example, the problem is the regulations themselves or merely bureaucratic incompetence. The survey also does not look at macroeconomic or other aspects of investor-friendliness. So, for example, while New Zealand comes top in the world for ease of doing business, that doesn't necessarily mean investors will flock there. Importantly, too, the survey suggests that the answer may not be in abolishing regulations but rather in seeking a simple but effective regulatory environment. Nordic countries are fairly heavily regulated, but all rank in the survey's top 30.

The Thai News Service; Business Times Singapore; Dow Jones; The Miami Herald also report on “Doing Business in 2006: Creating Jobs.”

Briefly Noted…Dow Jones reports Ecuador President Alfredo Palacio said Thursday that his country is going to make good on all of its debt obligations. "It's an assurance from Ecuador to the world," Palacio said. "You can rest assured Ecuador will pay what it owes." Palacio spoke at a luncheon sponsored by the Ecuadorian American Association. It was his first visit to New York as president. The audience included representatives of several investment houses and oil and other companies. About the $100 million loan recently suspended by the World Bank, Barreiro said she expects to reopen talks with World Bank officials next week in Washington, where she will participate in the annual International Monetary Fund meeting, she said.

Reuters writes Venezuela intends to increase purchases of Argentine debt to up to $1 billion after buying $557 million of the South American nation's debt earlier this year, President Hugo Chavez said on Thursday. "We intend, hopefully, to buy up to $1 billion," Chavez told reporters in New York when asked about Venezuela's plans to purchase Argentine debt. The Venezuelan government insists the purchase of Argentine bonds is a good business deal and says the agreements are an alternative to the failed policies of the United States, the IMF and the World Bank in the region.

The Associated Press reports Brazilian officials announced the creation Thursday of an exchange where companies can buy and sell carbon credits in order to meet emissions limits under the Kyoto protocol. The exchange will conduct negotiations between the world's biggest polluters and countries that can clean the atmosphere -- like Brazil. Guilherme Fagundes, chief of special projects for the Brazilian Futures and Commodities Exchange, said that by the end of the year, the exchange will offer carbon credits mostly to foreign companies that must keep their emissions of greenhouse gases in line with Kyoto Protocol.

Dow Jones reports the World Bank has been accused of abusing Kyoto carbon credit rules in the Czech Republic to get cheap assets for its investors, according to a report released Thursday. "It's very clear. The calculations are basically distorting the figures," said Petr Hlobil of CEE Bankwatch Network, an international non-governmental organization that monitors the social and environmental impacts of financial institutions in central and eastern Europe. The report claims that only 3 out of the World Bank's 16 carbon projects in the Czech Republic actually meet eligibility requirements for carbon credit sales under the Kyoto Protocol, but that the bank is nevertheless pushing ahead to claim credits worth around $1.5 million for electricity generation from small hydropower plants.

Reuters notes rocker turned aid activist Bob Geldof gave world leaders an unflattering four out of 10 on Thursday for helping Africa beat poverty. The Irish campaigner, who championed the Live 8 global music campaign in July to "make poverty history", also said rich countries were backsliding on commitments to level the playing field on trade. "I'm not thrilled," Geldof told a joint news conference with British Prime Minister Tony Blair at UN headquarters. "We have actually seen a claw back on the language on trade at Gleneagles." Blair said it was time to call the bluff of leaders who promised to scrap tariffs and trade barriers that price poor African nations out of the market. He said world trade talks in Hong Kong in December would be the test of rich nations' commitment to help the poor.

Kyodo (Japan) writes the World Trade Organization ended three days of farm trade talks Thursday, with some participants arguing tariff cut margins and other numerical targets should be discussed ahead of the WTO ministerial meeting in Hong Kong in December, a trade source said. The WTO initially planned to discuss farm trade issues for another day on Friday at an informal meeting but this was canceled. The next farm trade talks at the WTO headquarters in Geneva are scheduled to be held Oct. 17. 

The Washington Times writes that despite the high-profile push for African aid that dominated July's Live 8 rock concerts and the Group of Eight summit of wealthy nations in Scotland, the world's poorest continent remains mired in debt. The question - said Salih Booker, executive director of Africa Action, a Washington-based advocacy group - is: "Who owes whom?" Booker said World Bank and IMF loans come with heavy conditions and are "designed to benefit the interest of the wealthy countries. John Page, chief economist with the World Bank's Africa Region section, defended the record of multilateral lenders in the face of an extremely difficult problem. "We are here to help, not to lead. However, we can't write a blank check and hand it to African countries," he said. "We would be irresponsible if we didn't put our views and policies on the table for economic development in Africa. However, we are very careful in being respectful to the wishes of national governments and finding that balance between their views and our views."

Xinhua notes the Asian Development Bank (ADB) said it will help the Chinese Government to tap the potential of nongovernmental organizations (NGOs) to boost state-led poverty reduction efforts, through a technical assistance (TA) grant for $1 million. The grant, from ADB's Poverty Reduction Coordination Fund, financed by the Government of the United Kingdom, will support the design and demonstration of models for NGO participation in government-funded poverty alleviation efforts at the village level, the bank said in a statement made available to the news agency Thursday.

The Guardian (UK) notes Britain will lead a drive to have Iran referred to the UN security council, with the possibility of sanctions being imposed if the newly elected hard-line president does not stop uranium enrichment or restart negotiations with Europe and America. Reflecting the level of concern about Iran's intentions, foreign secretary Jack Straw was due to meet President Mahmoud Ahmadinejad yesterday on the sidelines of the United Nations summit to try to resolve the stand-off. Straw was making a joint approach with French prime minister Dominique de Villepin and German foreign minister Joschka Fischer.

Reuters reports the world economic growth is set to power ahead through 2006, well above long-term averages despite concerns about rocketing energy costs, a leaked copy of the International Monetary Fund's twice-yearly World Economic Outlook showed Thursday. Citing an advance copy of the report, due to be published by the IMF next week, German newspaper Handelsblatt said the fund will cut its global growth forecast for 2006 to 4.3 percent from the 4.4 percent rate it expected in April. It retains its 4.3 percent call for 2005, the report said. A 4.3 percent growth rate this year and next would see the world economy still expanding at almost half a percentage point above the 3.9 percent average of the past 10 years. The forecast also exceeds relatively bullish private sector forecasts from banks such as Goldman Sachs, which sees 4 percent world growth this year and next.

US politicians should stop blaming Asia and demanding currency revaluations as the remedy for its ballooning trade deficit, according to a group of influential economists in a report published today, writes The Financial Times. The report, commissioned by two leading European think-tanks, the Centre for Economic Policy Research and the International Centre for Monetary Banking Studies, reflects growing concern over global economic imbalances ahead of the annual meetings of the International Monetary Fund and the World Bank next week. The report attributes unprecedented trade imbalances to mismatches between savings and investment in Asia, in oil exporters and in the US rather than a simple desire of Asian countries to build trade surpluses by artificially holding down their currencies or a worldwide savings glut.

The Associated Press reports US President Bush is urging Congress to approve a massive reconstruction program for the hurricane-ravaged Gulf Coast and promising that the federal government will review the disaster plans of every major American city. The government failed to respond adequately to Hurricane Katrina, Bush said Thursday night from storm-damaged New Orleans as he laid out plans for one of the largest reconstruction projects ever. The federal government's costs could reach $200 billion or beyond. Disaster planning must be a "national security priority," he said, while ordering the Homeland Security Department to undertake an immediate review of emergency plans in every major American city.