Avian Flu: World Bank Says Needs And Funding Assessment Required

The global bird flu conference to be held Monday in Geneva should allow us to assess the needs of countries hit and threatened by the bird flu and to assure funding of prevention programs, Jim Adams, Vice President and Head of Network at the World Bank told Agence France Presse in an interview.

           
Adams said the objective for Geneva is to obtain a clear assessment of the needs, for which the participation of all countries is necessary – both to discuss particular country situations as well as explaining the specific programs that these countries wish to establish in order to tackle the problem.

           
The question of financing will obviously depend initially on the engagement by the governments with regard to animal health because if they succeed in this area, the subsequent financial implications will be reduced, Adams said. “We are above all interested in the medical implications if the epidemic suddenly spreads,” Adams said. “It is clear that it is necessary to immediately control the situation by spending limited amounts that will allow us to save money in the future. Adams added that the economic costs of the SARS epidemic in 2003 cost millions of dollars in a very short time.”

           
In response to whether or not the Bank was optimistic about the adoption of a global action plan in Geneva, Adams said that the Bank is optimistic that there will be a needs assessment. Another important aspect is the technical response to the problem: important work was undertaken by the World Bank, the World Health Organization (WHO) and the Food and Agriculture Organization (FAO), and we have a good idea of the best means to establish animal surveillance programs, selective culling and animal vaccination.

           
In related news, Kyodo News (Japan) writes that speaking at a global health summit sponsored by Time magazine in New York on Thursday, UN Secretary General Kofi Annan outlined seven steps countries should take to prevent a global pandemic, including investing more to monitor the current spread of the disease and compensating farmers in developing countries for culling their poultry. ''If they are not compensated, they are not going to tell you when their birds are sick,'' Annan warned. Developing countries, where families often live side by side with poultry they raise for food and income in backyard farms, are most at risk for the spread of the current strain of bird flu.

           
The Associated Press notes the Secretary General also said developing nations should restructure traditional living arrangements in which people live in close proximity to live poultry. Annan also promoted improving access to antiviral medications, more sharing of research, more advance planning on how to keep national infrastructures running in the event of an influenza pandemic and better communication with the public. "If other pandemics have taught us anything, it is that silence is deadly," he said.

           
In related news, Kyoto News writes that at a separate event sponsored by the UN Economic and Social Council, a panel of UN officials gathered at UN headquarters to discuss the current situation and highlight priorities in both preventing and dealing with a possible outbreak. ''The situation calls for collective action,'' said Pakistani Ambassador Munir Akram, who is president of the Economic and Social Council. ''Donors and the international financial institutions should consider setting up a fund to help countries put in place preparedness and response plans and to compensate farmers and producers for losses incurred in culling their poultry.'' Louise Fresco, an Assistant Director at the Food and Agriculture Organization, said that while $425 million is needed to combat avian flu, only $30 million has been pledged so far. David Nabarro, the UN Senior Coordinator for bird and human flu, stressed preparedness, collective action and communication between officials and the public as some of the challenges facing the United Nations in dealing with a pandemic.

           
During a news conference following the panel, David Heymann of the World Health Organization could not quantify the potential human toll of a pandemic. ''This virus can become more virulent as it mutates, more strong; it can become less virulent. No one knows, no one can give you that answer. So the risk is there, it's a true risk, but it can't be quantified,'' Heymann said.

More than 600 delegates are expected to attend a three-day meeting co-sponsored by the WHO, FAO, World Organization for Animal Health and World Bank in Geneva starting next Monday to discuss the details in implementing prevention and contingency plans.

WTO Chief Urges Effort in Talks on Industrial Goods, Services

Agence France Presse reports that WTO chief Pascal Lamy on Thursday called for more effort in talks to liberalize commerce in industrial goods and services, despite enduring differences in farm negotiations. During a meeting of ambassadors from the 148 trading nations in the WTO, Lamy said progress is needed across the board, officials said. In the WTO talks, the European Union is fighting fire with fire, hitting back with demands for more concessions on manufactured goods and services, such as banking, in the face of criticism from other key WTO players who claim its offer to cut customs duties on agricultural imports lacks bite. Brussels has said it is ready to cut its farm tariffs in a range of 35 to 60 percent, provided it sees something in exchange.

           
The news agency further notes that according to a European diplomat, senior officials from the four parties met in Geneva on Thursday to discuss another part of the EU proposal: farm products that are labeled "sensitive" and thus exempt from deep tariff cuts under WTO rules. Although the EU's sparring partners remained "skeptical," they will now be able to provide their trade chiefs with detailed figures ahead of the London meeting, the diplomat said.        

The International Herald Tribune reports that over the strong objections of the White House, the US Senate took a step Thursday to hold on to farm subsidies that are at the core of an American proposal aimed at breaking the deadlock at global trade talks.

           
The move came as a senior US trade delegation prepared to travel to Europe next week to push the European Union to make greater compromises to lower agriculture barriers. Rob Portman, the United States trade representative who is scheduled to meet with other trade ministers in London on Monday, helped revive stalled trade talks last month when he offered to reduce some US farm subsidies by as much as 60 percent. He also told the World Trade Organization that he would propose other changes in farm programs as long as the other major trade partners offered similarly meaningful subsidy cuts.

           
But on Thursday, the Senate raised no objections to extending those subsidies by four years, to 2011. The White House had wanted the Senate to let stand the expiration date of 2007, when Congress is scheduled to rewrite the entire farm program. Now, critics contend, it will be harder to convince US trading partners that the farm lobby is willing to give up some of its approximately $19 billion in annual subsidies.

           
Reuters further adds that farmers will see $22.7 billion in crop subsidies and land stewardship payments this year, according to an Agriculture Department estimate released just before the Senate vote. The vote was a reversal from three years ago, when senators voted overwhelmingly for a lower cap.

           
Reuters finally notes that France on Thursday revived the prospect of vetoing a global trade deal, saying European Union negotiators had gone too far with their latest offer to cut farm tariffs to keep the struggling talks alive. Just days before the world's major trading powers are due to discuss the EU offer in London, France again turned up the heat on EU Trade Commissioner Peter Mandelson. "The proposal that we have before us is not compatible with the mandate, and the technical analysis that we are carrying out with our EU partners will show this," French Farm Minister Dominique Bussereau told the French Senate.

The Economist meanwhile writes on Friday that for Hong Kong to be a success, the Europeans must move further on farm tariffs and the G20 must offer something on industrial goods and services. This is still possible. The most important negotiators are meeting in London on November 7th; more will gather in Geneva the next day. There is too little time before Hong Kong to agree every detail of the Doha negotiating framework. But there is enough to make some broad political deals. Will that happen? Optimists point out that although all sides bluster about the inadequacy of others' proposals, nobody seems to have given up. Importantly, no one has yet talked publicly about downgrading expectations for Hong Kong.

Cambodian Garment Exports Increase Amid Chinese Slowdown

Following the imposition of restrictions on Chinese textile imports in the United States and European markets, Cambodia's economy has improved considerably through its garment exports to these two main markets, Kyodo News (Japan) reports the World Bank said Thursday.

           
In a statement released in Cambodia, the World Bank said, ''Cambodia's economic prospects for 2005 have improved considerably, mostly as a consequence of garment exports being higher than originally expected, in part due to the imposition of restrictions on Chinese textile imports in the US and EU markets.'' The garment industry, the single largest foreign exchange earner, grew by 25 percent in 2004, with 65 percent of shipments to the United States, 29 percent to the European Union and 6 percent to other markets.

           
The sector absorbs the most labor in Cambodia, with about 230,000 workers being employed in more than 200 garment factories across the country. The World Bank warned, however, that despite the continued expansion of Cambodia's garment exports, soaring oil prices in 2004-2005 have led to deterioration in the country's terms-of-trade as the cost of oil imports has risen considerably.

           
And after years of civil strife and political turmoil, a booming construction industry is also a source of economic growth. ''The construction sector contributed 10.4 percent to economic growth in 2004. Growth of residential construction in Phnom Penh was remarkably strong in 2004, rising by 31 percent over 2003, and commercial construction also increased markedly,'' the Bank said. ''Growth in the construction sector is projected to remain strong in 2005 at about 11 percent.'' ]

           
Still, poverty in Cambodia remains a concern. ''Although it is hard to draw firm conclusions with regard to trends in the country as a whole given the lack of a nationally representative baseline in 1993-94, backward projection suggests that poverty in Cambodia fell from about 47 percent in 1993-94 to 35 percent in 2004,'' the Bank said.

           
The Associated Press further notes that Ken Loo, secretary general of Cambodia's Garment Manufacturers Association, said the positive export trend continued past midyear, with a four percent increase in the export of garment products from Cambodia during the first nine months of this year over the same period in 2004. "The buyers are unable to shift all their orders to China, so some remained in Cambodia. Some (even) came back. That has definitely helped to ensure that our exports did not decrease but in fact increased like this," he said.

           
Xinhua adds World Bank's Senior Country Economist for Cambodia Rob Taliercio attributed the success also to "the prudent monetary and fiscal policies that the government has adopted, and acceleration in the pace of structural reform." This growth has translated into poverty reduction and improved welfare. Based on an assessment of the new Cambodia Socio-Economic Survey, it is estimated that the poverty rate had come down from around 47 percent in 1993/94 to 35 percent at present. "These gains have been largely due to the peace dividend and due to the strategy of global (joining WTO) and regional integration (joining ASEAN) that Cambodia has pursued aggressively," said Nisha Agrawal, the Bank's manager for Cambodia.

           
The Bank's report, however, called the government "to carefully monitor the widening gap between rural and urban areas," which the Bank said has increased over the last decade. Rob Taliercio said, "To sustain these gains in the coming decade, Cambodia can no longer rely on the old strategies but will instead need to rely much more on implementing a reform program to tackle the governance challenges that it now faces."

Kenyan President Signs New Bill To Battle Graft

Kenya's President Mwai Kibaki has signed into law a new bill aiming to cut corruption in the East African government's spending, a spokesman said on Friday, reports Reuters.

           
Late last month, the International Monetary Fund said it was happy with Kenya's work towards meeting fiscal and monetary targets, but called for a tougher fight against corruption. The IMF, World Bank and other donors see the procurement bill as a way of improving transparency and cutting graft. Mutua said Kibaki signed the bill on Thursday, three months after it was approved by parliament. The Public Procurement and Disposal Bill is designed to open up the award of Kenyan government contracts to public scrutiny, and has been a key demand of leading donor countries. "This bill opens up the way for us to make the procurement process much faster and more transparent," government spokesman Alfred Mutua told the news agency. "More people will be able to compete in tenders, and procurements that previously took six months to a year to complete could now take as little as two or three months."

           
The Nation (Kenya) writes that the law is designed to open up government purchases, especially those dealing with national security, to public scrutiny. The new law creates the Public Procurement Oversight and the Public Procurement Advisory authorities as well as the Public Procurement Administrative Review Board. The oversight board, which will be headed by a director-general, will monitor procurement systems and ensure the act is followed and help in its implementation. The advisory board will approve the authority's expenditure, while the review board will receive complaints about purchases and the awarding of tenders and contracts. Among its requirements is that foreign contractors partner with local firms to do business with the government. According to the law, international companies that win government tenders are to subcontract local firms to supply locally-available goods, among a raft of other requirements.

           
In related news, Reuters further reports the Kenyan government has invited foreign observers to monitor a controversial referendum on a new constitution to dispel fears of ballot fraud voiced by a number of cabinet ministers, its spokesman said on Thursday. Kenyans will vote on November 21 to approve or reject a proposed new constitution, the first complete overhaul since a charter was drawn up on the eve of independence from Britain in 1963. Government spokesman Alfred Mutua told a news conference that those invited included the African Union, the United Nations, the European Union, the Carter Foundation and the Commonwealth Secretariat.

Interview: Wolfowitz, The World Bank, And China

Following a recent visit to China in October, World Bank President,Paul Wolfowitz was interviewed by local Caijing Magazine. The interview, which was published in the magazine’s October 31 issue, was picked up by Reuters.

Caijing Magazine: Did you get a chance on this trip to see what's really going on in China?

Wolfowitz: Yes, but you have to realize that in a short visit like this, you just get a feeling for things. You know what's really going on, you know a lot before you come, because you have many excellent sources, information, and staff here. This trip was a chance to see concretely, by visiting Gansu, the challenges China's poor provinces face. They're not just in Gansu, but also just outside Beijing, in Hebei province, and all over the country, especially the rural areas.

Caijing Magazine: China has been the World Bank's biggest borrower, but as its reserves continue to grow, China doesn't need to borrow as much money. How do you foresee the Bank's new role in China?

Wolfowitz: If you had asked me that before I came, my answer would have been that the money is useful in a certain way, because it makes little discussions real. But the value in the Bank's discussions is often called knowledge transfer -- although I don't think that's quite the right description, I think exchanging ideas is the right description. What really hits home for me after the visit is that that's not new -- that's the contribution of the Bank from the very beginning. What's so impressive about China and its people is their willingness to learn from outside, not to be frozen in dogma from the past, to maintain neither a historical view that is arrogant, or a view just based on recent success. It's not that China doesn't have a lot to be proud of or to teach the rest of the world. But this willingness to learn from the world is quite impressive, and it's the key to China's success.

It's been very interesting for me to see how much that's been the role of the Bank from the very beginning. It's helpful that there are concrete projects involved. Just having an academic discussion doesn't advance thinking as much as saying, OK, we had this discussion, there is a deforestation project in Gansu, let's spend some money to see if our solution works. The combination of academic and real resources with the exchange of ideas is so unusual.

           
Caijing Magazine: What's your vision for the Bank? In what direction do you want to lead it?

Wolfowitz: Well, in general, I think the most important thing is to try to make a breakthrough for the poorest countries in the world, particularly in Sub-Saharan Africa. The second priority is to continue the success of China, India, Brazil, Mexico and other successful developing countries. It's partial success, and there are still many poor people, so there is a lot of work left to do there. And finally, the third challenge is to help manage some of the problems that come from all of this successful development, like the huge demand for energy resources. I wouldn't suggest that this is primarily the World Bank's problem, but this is something to which we can contribute, to be more efficient about managing resources in the developing world.

Caijing Magazine: The World Bank is the world's most important organization for poverty reduction and development, and you are an advocate of democracy. How do you see the relationship between democracy and development?

Wolfowitz: You can't generalize. Every developing country is different. And I don't think that the same political institution works in every country. I do think our mission in the World Bank is development. We'll focus on that. I think there are two connections. Number one, in whatever way it happens, government accountability to the people is crucial for development. There is more than one way for that to happen. But if governments are not accountable, and pay no attention to the effect of their policies on their people, they can make the most horrible mistakes in history. Democracy is one way to create accountability, but it is not the only way. But the second thing, I think, is that countries become more modern as they advance. They need representative institutions for stability, and as people are more educated and more advanced, they demand it. That's why you see the kind of changes in much of East Asia. It's a trend and a direction - not inevitable, but it's very strong.

Also in this Edition: The Hidden Wealth Of The Poor; Also Reports…; Briefly Noted…

The Hidden Wealth Of The Poor. In a special survey on microfinance, The Economist writes that a World Bank report by Thorsten Beck, Asli Demirguc-Kunt and Soledad Martinez published last month shows a strong correlation between lack of financial access and low incomes. Earlier research by the first two authors and Ross Levine concluded that a sound financial system boosts economic growth and particularly benefits people at the bottom end of the income league.

           
A long-term study in Thailand by Robert Townsend of the University of Chicago and Joe Kaboski of Ohio State University showed that families with access to credit invested more, consumed more and saved less than those without such access. What makes microfinance such an appealing idea is that it offers “hope to many poor people of improving their own situations through their own efforts,” says Stanley Fischer, former chief economist of the World Bank and now governor of the Bank of Israel. That marks it out from other anti-poverty policies, such as international aid and debt forgiveness, which are essentially top-down rather than bottom-up and have a decidedly mixed record.

Also Reports…Le Monde (France) reports that until now, the bird flu epidemic had its economic impact limited to East Asia. However, the possibility that the epidemic will cause far more damage is far from being tabled, according to a report published by the World Bank on Thursday. “While the costs of dealing with the bird flu epidemic have so far been limited to around 0.1 percent of GDP, following the culling of birds and the implementation of better animal health surveillance systems, the potential impact of a serious pandemic is of grave concern," noted Milan Brahmbhatt, principal author of the World Bank’s twice yearly report on the evolution of the East Asian economies.

The Associated Press, The Irish Times, The Irish Independent, The Irish Examiner, The Wall Street Journal Europe, Asia in Focus, Asia Pulse, Business World (Philippines), Thai News Service, Bangkok Post, Business Times Singapore, Strait Times (Malaysia), and the Hindustan Times (India) also report on the World Bank’s ‘East Asia Update.’

Le Figaro (France) writes that the Chinese authorities know that increase in inequality is a threat for the social stability of the country. So far, Beijing believed that unrestrained growth, between seven and nine percent over many years, would be enough to ensure social prosperity. However, the recent increase of social movements in China tends to demonstrate the contrary. The country needs to find a more appropriate development model, emphasized a World Bank report published Thursday. Although the Chinese economy should reach a 9.3 percent growth rate, the largest growth in the world, Beijing will have to propose solutions or else, the social consequences could amplify.

           
Asia Pulse, Shanghai Daily, China Daily; Straits Times (Malaysia), Market News International; La Tribune, and Les Echos (France) also report on the World Bank's ‘Quarterly China Update.’

Briefly Noted… Reuters writes that security is deteriorating in Sudan's Darfur region despite the presence of African Union peacekeepers, and the United Nations should take a fresh look at imposing sanctions on Sudanese officials, a top US official said on Thursday. "One thing that we should look at very seriously are stronger sanctions against the government in Khartoum, which is the source of the violence in Darfur -- sanctions not against the country as a whole, but against the leadership," said John Bolton, the US ambassador to the United Nations.

           
La Tribune (France) notes that the tenth global economy in terms of GDP in 2004, Mexico, is also one of the 15 most unequal countries in the world. Still, if inequalities persist in the Aztec country, poverty is loosing ground. The country was praised by the World Bank for the its program to fight poverty, called Oportunidades. Put in place in 1997 after the devaluation of the peso in 1995, which considerably increased poverty levels, the program offers support to families who sent their children to school. The World Bank is so enthusiastic that it has encouraged a number of neighboring countries to use Oportunidades as a model to create their own poverty action programs. In Mexico, however, the program doesn’t lack critics. Some studies have shown that the decrease in poverty could have as much to do with remittances as with the program itself.

           
The Associated Press notes the Russian Finance Ministry said Thursday that the government's rainy-day oil fund would pass $50 billion by year's end and was forecast to reach nearly $80 billion by the end of 2006. The so-called Stabilization Fund was designed as a tool to pay down foreign debt and keep Russian goods competitive on world markets by moderating the massive inflow of petrodollars that might cause a swift strengthening of the ruble. With the coffers bursting, some lawmakers and government leaders have called for the fund to be tapped to pay for social programs. President Vladimir Putin has insisted that it will be used only for its original purpose, however.

           
Reuters writes China will become the world's top tourist destination by 2017, three years earlier than World Tourism Organization predictions, Xinhua news agency said on Friday. The WTO has forecast China will receive 137 million inbound tourists in 2020, but that goal will likely be achieved earlier due to the current boom in tourism, Xinhua said, citing an official at the National Tourism Administration. China received 41.76 million tourists who spent at least one night last year, ranked fourth in the world. China earned $25.7 billion from tourism last year, Xinhua said, providing jobs for some six million people. But increasing numbers of Chinese are also traveling overseas, many for the first time, as years of double digit economic growth puts more money in people's pockets.

           
AFX writes rescuers tried today to reach dozens of Pakistani villages left without any aid since last month's quake as survivors marked the last day of the Muslim holy month of Ramadan. International and Pakistani helicopters made renewed attempts to get to devastated areas that were cut off by the October 8 quake, which has so far killed 73,000 people in one of the biggest disasters of the past century. “The problem is of means of transportation,” army Brigadier Zafar Ali told Agence France-Presse in Muzaffarabad, the shattered capital of Pakistan-administered Kashmir.

           
BBC News Online further adds that India says there will be delays to opening up some crossing points in Kashmir in the efforts to get aid to earthquake survivors. India and Pakistan had agreed to open five points on Kashmir's de facto border that will also allow some families to be reunited. But only three will be open on the scheduled date, 7 November, India says.

           
The Indian Express writes the World Bank has expressed regret that a report prepared jointly by Confederation of Indian Industry (CII) and the World Bank had been “misrepresented” by political leaders to prove their claims that corruption was rampant in Karnataka under the chief ministership of S M Krishna, currently the Maharashtra Governor.