World Bank Says China To Play Greater Role In Bank's Development Plans Overseas

 “China is starting to play a bigger role in the World Bank and can be an important partner in helping development in places such as Africa as it becomes an aid giver instead of an aid recipient, the Bank's President said Tuesday.

Robert Zoellick said he welcomed the news that China, which once received grants from the World Bank's International Development Association (IDA), is now a contributor to it. …” [The Associated Press/Factiva]

Xinhua reports that “China is in need of overseas expertise, rather than financial aid, in order to solve a number of problems ranging from environmental protection to education reform, said Zoellick. …

Zoellick said that he has been involved in discussions with senior Chinese government officials on issues like the reform of the health, education and pension systems, on energy efficiency and environmental protection, and on the growing urban-rural gap. …” [Xinhua/Factiva]

AFP notes that “China and other developing countries must place a much greater priority on adapting to climate change, Zoellick said on Tuesday. ‘For developing countries the adaptation challenge is as important, if not more so, than the mitigation challenge, but there has been less work on adaptation,’ Zoellick told reporters…However he said that the World Bank was willing to help countries such as China in regards to issues of concern to them, such as developing some of the clean energy technologies. …”  [Agence France Presse/Factiva]

            AFX adds that “…Zoellick praised China's efforts to reduce pollution and increase energy efficiency, and also said that the World Bank would provide support as China tries to create the sort of institutions that will enable it to transform its economy.  

Zoellick…said that around 75 percent of the World Bank's projects in China since 2005 have involved environmental protection. …Zoellick also pointed out that the World Bank was currently involved in drawing up a ‘low-carbon growth study’ with China's regulator, the National Development and Reform Commission. …” [AFX/Factiva] 

Reuters reports that “The World Bank is planning joint projects in Africa with China's Export-Import Bank…Zoellick, wrapping up a four-day trip to China, said the pros and cons of the country's push into Africa had been an important topic during his talks with senior officials including Ex-Im Bank Governor Li Ruogu.  

Chinese investors were building infrastructure and generating revenues for poor countries. But tapping Africa's natural resources also highlighted the need to ensure transparency and avoid corruption, Zoellick told a news conference. …” [Reuters/Factiva]

Palestinians Raise $7.4 Billion

“Led by Europe, international donors on Monday pledged $7.4 billion over three years to help Palestinians as new peace talks begin with Israel…

World leaders at the conference urged Israel to ease limits on Palestinian movement in the West Bank and Gaza Strip, following up on a warning from the World Bank that without an easing of the sweeping physical and administrative restrictions donors may be wasting their money. …” [The Associated Press/Factiva]

            Xinhua reports that “…UN Secretary General Ban Ki-moon said the Paris conference is an opportunity for the international community to reaffirm their commitment towards the process and to ensure that the commitment translates into a new and better reality on the ground. …” [Xinhua/Factiva]

            FT writes that “…Saudi Arabia promised $750 million over three years, Kuwait and the United Arab Emirates $300 million each and the US $550 million. The UK pledged $500 million. The EU remains the single biggest donor, with $640m for 2008 alone. …

The Paris conference marks a crucial element of an invigorated international drive to revive the peace process. Improving the lives of Palestinians and encouraging them to build an effective security structure is seen by the west as an essential step that should reassure Israel and facilitate political negotiations. …” [The Financial Times (UK)]

IHT notes that “…The total for 2008 alone, according to the conference's final declaration, was $3.4 billion. …

It was the largest Palestinian donor meeting since 1996, and the latest in a string of aid-raising events for the Palestinians over the years. The Palestinians are one of the highest aid-dependent populations in the world; government salaries account for 27 percent of the Palestinian Authority's gross domestic product, according to a new World Bank report. …” [The International Herald Tribune]

China's Economy Smaller In New Study: World Bank

“The size of China's economy is overestimated by some 40 percent, but it remains the world's second largest using a ranking based on purchasing power, the World Bank said Monday.  

In a report ranking the world's economies for 2005, the World Bank said its updated survey using ‘purchasing power parity’ (PPP) shows a much smaller value for China than earlier estimates…The [International Comparison Program] study carried out by the World Bank and other partners was ‘the most extensive and thorough effort to measure the relative size of 146 economies using the PPP method which strips out the effect of exchange rates, a Bank statement said. …” [Agence France Presse/Factiva]

 WSJ notes that “…The program collected data on the prices of more than 1,000 goods and services in 100 countries to come up with a ‘purchasing power parity’ figure for converting national currencies into dollars. …

The program used purchasing power parity statistics to rank national wealth and poverty. The nations with the highest GDP per capita are Luxembourg, Qatar, Norway, Brunei and Kuwait, all of which are tiny economies. By looking at individual consumption, the richest are Luxembourg, the US, Iceland, the UK and Norway.  

The poorest nations on earth, as ranked by GDP per capita, are, in order, Democratic Republic of Congo, followed by Liberia, Burundi, Zimbabwe and Guinea-Bissau. …” [The Wall Street Journal/Factiva] 

AP writes that “The World Bank said the economies of China and India are about 40 percent smaller than earlier estimates after it revised calculations using consumers' relative purchasing power to measure economic might.  

The new figures released by the World Bank on Monday differ from conventional GDP figures, which are calculated by simply converting local statistics into US dollars - but don't take into account the wide variations in the purchasing power of a dollar from country to country. … 

Under the new estimates, the number of Chinese living on less than $1 a day …is nearly 300 million. The earlier estimates put that figure at 100 million. …” [The Associated Press/Factiva]

Reuters adds that “…The report shows that 12 countries account for more than two-thirds of the world's output, and five of those are emerging economies: China, India, Russia, Brazil and Mexico. Overall, the results show that the size of the world economy measured in PPP terms is smaller than previously estimated. Asia's economies are one-third smaller than previously thought, largely because of the downgrades to China and India, while Africa's are one-fourth smaller.” [Reuters/Factiva]

World Bank Approves 400 Million U.S. Dollars Loan To Bosnia-Herzegovina

“The World Bank has approved to support development programs in Bosnia-Herzegovina with $400 million in the next four years…The new lending arrangements during the 2008-2011 lending cycle come on top of some $200 million already available as part of ongoing projects, said Marco Mantovanelli, the World Bank Country Manager in Bosnia-Herzegovina.  

Mantovanelli told a news conference that the Bank's Board of Executive Directors approved a new strategy last Friday….” [Xinhua/Factiva]

            AFP notes that “…The project is aimed at supporting investment in infrastructure, regional development, transport and energy, as well as helping to reform both the private and public sectors. Bosnia could receive even more funding if it accelerated the reform process, Mantovanelli said. … 

Mantovanelli said Bosnia would move from soft loans to more commercial deals with the International Bank for Reconstruction and Development during the four-year period. …” [Agence France Presse/Factiva]

  Reuters reports that “…The Bank approved a $25 million loan for Bosnia's road infrastructure and disbursed a $32 million loan that had been earlier pledged for the improvement of the business environment, Mantovanelli told a news conference. …

‘We want to link our assistance to reforms because the path to Europe will require some reforms and we are ready to be partners in that,’ Mantovanelli said. He said the Bank wanted to support growth and an environment conducive to growth so that Bosnia can continue to improve conditions for investments and job creation. …” [Reuters/Factiva]

UN Moves To Boost Farm Output As Food Prices Climb

“The United Nations' world food body outlined steps on Monday meant to help the world's poorest nations combat soaring food prices, including a new voucher program for farmers and a review of food-guzzling biofuels. …  

            Speaking to reporters in Rome, FAO chief Jacques Diouf said the FAO was ready to allocate an initial $17 million of its own funds to a voucher program so that poor farmers could pay for materials like seeds and fertilizer needed to boost farm output. … More investment in rural infrastructure could also boost food supplies, as would easier-to-access financing for food imports in poor countries, he said. Diouf also raised the issue of biofuels, saying they would be examined at a high-level conference on food security in June. …” [Reuters/Factiva]   

            NYT adds that “… Diouf suggested that all countries and international agencies would have to ‘revisit’ agricultural and aid policies they adopted ‘in a different economic environment.’ For example, with food and oil prices approaching records, it may not make sense to send food aid to poorer countries, but instead to focus on helping farmers grow food locally. …” [The New York Times/Factiva]   

            FT writes that “… The warning came as wheat prices on Monday jumped to an all-time high, soybean prices hit a fresh 34-year high and corn rose to an 11-year high on strong demand and tight supplies reflected in extremely low global inventories. …

            Although the voucher system is a small-scale project with an initial FAO budget of $17 million, Diouf said it had the potential to increase crop production in poor countries by up to 20 percent. …” [The Financial Times (UK)]

Also in this edition; briefly noted…

The 34th summit of the Mercosur opened Monday in Montevideo, focused on the imbalance of economic development among its member countries. Paraguay and Uruguay applied for bilateral trade deals outside Mercosur without losing full membership status. The meeting will also strive for the elimination of double taxation through a common external tariff arrangement. [Xinhua/Factiva]

Main roads and highways now reach more than 90 percent of China's 1.3 billion people and have brought enormous economic benefits well worth the estimated $122 billion cost, officials said on Tuesday.  [Reuters/Factiva]

 China's position as the world's major supplier of low-cost labor could be eroded by an ageing population, the authorities have warned. There are six workers for each retiree in China, but that could narrow to two-to-one between 2030 and 2050, the National Committee on Ageing says. [BBC News (UK)]

The International Monetary Fundon Monday urged Ukraine to tighten macroeconomic policy and rein in government spending to prevent inflation from flaring up in an otherwise strong economy. [Reuters/Factiva]

Poland's GDP growth is still expected to hit 5.5 percent in 2008 in spite of prognoses for the global economy, Polish Deputy Finance Minister Katarzyna Zajdel-Kurowska told Polish news agency PAP on Monday.   [Xinhua/Factiva]

The European Commission said on Monday it had struck a new trade agreement with Cameroon, the latest to do a deal with Brussels and avoid the prospect of higher EU import tariffs from January 1.   [Reuters/Factiva]