Millennium Targets At Risk Without New Funds – UN

  “The world will struggle to meet the Millennium Development Goals (MDGs) on eradicating extreme poverty unless rich countries boost their international aid budgets, UN Secretary-General Ban Ki-moon said on Monday. Presenting a report at the mid-point to the international targets' deadline, the UN chief faulted a lack of development funds for ‘mixed’ progress toward the commitments made in 2000… 

Ban said it should be possible to reach the much-trumpeted international goals by 2015 if wealthy countries ‘act now’ to bolster international aid flows, and the G8 … meet their pledge to double aid to Africa by 2010. …

Only five countries - Denmark, Luxembourg, the Netherlands, Norway and Sweden - have met a long-standing UN target of devoting 0.7 percent of gross national income to development aid. Last year, donors gave net aid disbursements worth $103.9 billion, or 0.3 percent of their combined national income. …” [Reuters (07/02)/Factiva]

AFP adds that “…some 20 UN agencies released a report showing progress to date and areas where more efforts are needed - saying the results are ‘predictably, uneven.’ …  

Worldwide, the number of people in developing countries in extreme poverty fell to 980 million in 2004 from 1.25 billion in 1990. However, this success is ‘unequally shared,’ and due mostly to rapid economic growth in south and eastern Asia. …” [Agence France Presse (07/02)/Factiva]  

Xinhua writes that “…According to the report, although impressive reductions in extreme poverty have been achieved in Southern, Southeastern and Eastern Asia, the poverty rate in Western Asia actually doubled from 1990 to 2004. And despite the gains in sub-Saharan Africa, the region's poverty gap remains the highest in the world.  

Great challenges also remain in the fight against AIDS, reducing women deaths in pregnancy and childbirth and providing access to basic sanitation in poor countries. …” [Xinhua (China, 07/02)/Factiva]

AP reports that “…Some countries, such as China, have made great strides over the past 7 1/2 years, the report says. But success has remained elusive in other places, such as sub-Saharan Africa, where no country is on track to meet goals of halving extreme poverty, ensuring universal primary education or stemming the AIDS pandemic by 2015. … 

Other worrying data show more than 500,000 women still die each year from treatable and preventable complications during pregnancy or childbirth. Half the population in the developing world lacks basic sanitation, and carbon-dioxide emissions rose to 29 billion metric tons in 2004, from 23 billion in 1990. …”  [Associated Press (07/02)/Factiva]

The Guardian notes that “…The UN study coincided with a report from the British charity WaterAid which said attempts to hit the MDGs were being hampered by under-investment in clean water and proper sanitation.

WaterAid warned Britain and the other big donors that investment in health and education would be undermined if almost 5,000 children a day continued to die from diarrhea and miss school to fetch water. …” [The Guardian (UK, 07/02)/Factiva] 

Women Benefit The Most From Migrations

 “It was common knowledge that the 200 million migrants who left their country of origin in order to improve their living conditions and wages were sending back ‘to their country’ some $200 million each year. However, consequences on improving lives of the poorest populations weren’t well known. The World Bank has thus undertaken research to better understand these 3 percent of the world population who contribute twice as much as ODA towards the development of poor countries.

Women seem to be the main beneficiaries of migration phenomenon as shown in the International Migration, Economic Development and Policy study co-directed by Caglar Ozden and Maurice Schiff, and published on Thursday June 28th.

Pakistani girls with one member of the family abroad are benefiting from a 54 percent school enrollment rate increase, vs. 7 percent for boys. Ghazala Mansuri, one of the researchers participating in the World Bank study explains this phenomenon by the preference given to boys when revenues are low, which tend to be less true when the family budget is improved by remittances sent by the expatriate family member.

Again in Pakistan, girls from migrants’ family remain two years more in school than girls who do not have a family member abroad. …Migration has a real impact on the demographic transition and upon women fertility rate; migrants adopt the same behavior as in countries where they went to work. …” [Le Monde (France, 06/30)/Factiva]

Obstacles On The Road To Prosperity

 In a commentary published in daily Bangkok Post, World Bank Lead Economist Kazi Matin writes “Ten years on from the 1997 East Asian financial crisis, Thailand is wealthier, has fewer poor people, is more integrated globally and regionally and less vulnerable, externally and financially.

But even as the country celebrates its successful recovery, new challenges loom, which could slow growth and poverty-reduction if not properly handled. Thailand could find itself in a ‘middle-income trap’' with low rates of private investment, of innovation and of productivity-growth … resulting in a slowdown in its targeted transition to a higher-income status. …

The development strategies that economies such as Thailand needed to make the transition from low-income to middle-income were different from those that are now needed to transition from middle-income to high-income status. Not only that, but these strategies are also more complex to implement. What is interesting is that middle-income countries on average have grown more slowly over the last two decades than low-income developing countries and the rich developed countries. This is the challenge that Thailand faces.

Among other things, countries that are successfully making a transition towards high-income status have begun to depend more on total factor productivity growth than growth in factors of production through specialization in selected sectors and areas with significant potential for economies of scale and technological leadership. …

There is clearly evidence that Thailand is beginning to move into areas that have significant scale economies and potential for technological leadership. The automotive sector is one and the electronics sector is the other. There is also potential in services such as tourism and medical services sectors as well as in IT, logistics and in ‘farm-to-table’' agriculture. The government and private sector is exploring these possibilities, but this may be happening too slowly, with Thailand falling behind. ...

At the socio-political level, successfully transitioning countries such as Thailand will have to promote a rising level of social cohesion and clean government even as they ensure productivity growth through innovation and specialization. …

Thailand's growth will have to be increasingly based on productivity growth through innovations and specialization, and that will be a necessity, as many middle-income countries in Latin America and the Middle East have found out during the last two decades. This will require private investment to go to sectors with potential for technological and innovation leadership.

The government could focus on some key actions that reduce policy uncertainty and unpredictability (which should be easy), lower costs of private investors (reduce regulations; improve infrastructure) and enhance skills (IT education, tertiary education in science and technology, higher secondary education). In order to ensure that this transition to more productive and specialized investments happens, it will also be important to increase integration within the country to reduce inequity, and to continue the process of improving governance.” [Bangkok Post (Thailand, 07/02)]

Summit Focuses On United States Of Africa Plan

  “Leaders of the African Union (AU) began a three-day summit in Accra Sunday focused on plans to forge a confederation of states with an acknowledgement the continent's current system of governance had to improve.  

AU Commission President Alpha Oumar Konare launched the …conference …with a progress report of some of the continent's hotspots…he also urged the leaders of the 53 nations that make up the world's poorest continent to fully think through how they could best strengthen their institutions. … 

While previous summits have been dominated by crises in individual countries, the latest gathering is almost entirely devoted to debating the creation of what has been dubbed by some as the United States of Africa. …” [Agence France Presse (07/01)/Factiva]

Reuters writes that the “…debate on Sunday on forming a federal state as championed by Libya's Muammar Gaddafi, but other leaders warned tough decisions were ahead before such a dream could be fulfilled.  

Konare… supported an integrated continent in his summit opening speech but said many problems must be overcome, including the future of existing pan-African bodies and regional economic blocs. …He said if integration was to move ahead, the summit must decide whether his weak AU commission should be given executive powers and whether the existing pan-African parliament should be transformed from a talking shop to a body with real decision-making clout. ...He added that eight regional economic communities across the continent must not be made into political blocs, which would hinder continental unity. …” [Reuters (07/01)/Factiva]

The Nation reports that “…Delivering the official opening speech shortly afterwards, Ghana's President John Kufuor who is the new AU chairman noted that the Accra Summit is devoted exclusively to discussing proposals for a continental government. … 

He also noted that the establishment of the AU nine years ago was seen as merely the first step towards the ream of dream of African political and economic union. …  

But, human rights groups from the continent supported Gaddafi. They called for the removal of visa requirements between Africa's more than 50 states and the lifting of commercial barriers in the world's poorest continent, whose trade and transport links lag far behind other parts of the world. …They also urged African leaders to study introducing direct elections across the continent from 2009 onwards to appoint members of a legislating African parliament that would truly represent Africa's nearly 1 billion people. …” [The Nation (Kenya, 07/02) and All Africa/Factiva]

Mercosur Summit Concludes In Paraguay

“The Common Market of the South (Mercosur) concluded its 33rd summit meeting on Friday in …Asuncion, vowing to overcome internal differences obstructing the bloc's functioning.

In the final declaration, participants expressed ‘willingness to remain united,’ agreeing to facilitate the exports of Mercosur's smaller countries as part of the cohesion measures …

At the summit, the Mercosur states also agreed to extend the validity of the common tax from 2012 to 2020. …The member states agreed to broaden the initiative of local currency payments in regional trade in the second half of 2007.

The Mercosur states also reiterated their commitment to strengthening environmental protection efforts. At the conclusion of the summit, Paraguay handed over Mercosur's rotating presidency to Uruguay.” [Xinhua (China, 06/30)/Factiva]

In a separate piece, Xinhua reports that Mercosur on Friday had “asked rich countries of the World Trade Organization (WTO) to show necessary flexibility and political resolution for reaching a deal in the Doha Round talks. …

Calling for efforts from the US, the EU and all other industrialized nations, the statement demanded a substantial cut in agricultural subsidies, freer market access for farm products and tangible and effective policies on special and differential treatment to developing nations. …” [Xinhua (China, 06/29)/Factiva]

Dow Jones writes that “Presidents of South America's Mercosur trade bloc approved steps to speed cross-border shipments of meat and vegetables on Friday, but postponed action on other key issues. The midyear summit produced relatively few new agreements, but was filled with expressions of unity - perhaps meant to counter evidence of political feuds in the 16-year-old trade group. …” [Dow Jones (06/29)/Factiva]

In a separate piece, Dow Jones notes that “Bolivia will continue to supply gas to Argentina, Bolivia's President Evo Morales assured his Argentine counterpart, President Nestor Kirchner, at the Mercosur summit in Paraguay, according to television news reports. …

During the same summit …Kirchner called for Mercosur's energy integration, according to other reports. Kirchner didn't provide details of what this energy integration would mean, but reporters highlighted the fact that for the first time, the Argentine president acknowledged that the country is suffering an energy crisis. …” [Dow Jones (06/30)/Factiva]

Also in this Edition: Briefly Noted...

Briefly Noted… Bangladesh's economy is set to remain healthy due to buoyant exports, strong remittance flows and reform measures, the International Monetary Fund said on Friday, also suggesting the authorities raise rates in the wake of higher inflation.  [Reuters (06/30)/Factiva] 

Afghan President Hamid Karzai, UN Secretary-General Ban Ki-moon and Italian Foreign Minister Massimo D'Alema gather in Rome this week to discuss how to strengthen Afghanistan's frail justice system. From reconstructing buildings destroyed by fighting to training magistrates, the challenges to establish the rule of law in Afghanistan are enormous, experts say. [Associated Press (07/02)/Factiva]

The World Bank granted Turkey two loans totaling $822 million last Thursday. A loan of $500 million and a maturity of 10 years aims to support the government's program to promote growth and employment. Another loan of $322.15 million was granted to assist the Istanbul Municipality Infrastructure Project. [Turkish Daily News (07/02)/Factiva]

The International Monetary Fund criticized Romania on Friday for plans to raise pensions sharply, saying the move is likely to stoke inflationary pressures and give a new boost to the current account deficit. The Romanian parliament cleared a draft law on Thursday nearly doubling state pensions in the next two years. [Reuters (06/29)/Factiva]

Serbiamust persist with reforms in the public sector and state-run enterprises if it wants to consolidate its success on the macroeconomic front and ensure further growth, a senior IMF official said on Friday. Harald Hirschhofer, International Monetary Fund resident representative in Serbia, hailed the country's hard-won success in taming inflation, but said more was needed to ensure long-term macroeconomic stability. [Reuters (06/29)/Factiva] 

Central banks in countries around the world are holding a record amount of foreign exchange reserves to keep their currencies stable and protect against unforeseen shocks. And while US dollars remain by far the preferred foreign exchange holding,  the 13-nation Euro currency is No. 2 and starting to gain on the greenback, data from the International Monetary Fund showed.[Associated Press (06/29)/Factiva]