G7 Finance Ministers Confirm Link With Emerging Economies

“The G7 major economic powers on Saturday confirmed their strong link with emerging economies, Japanese government officials said. G7 Finance Ministers met with their counterparts from China, Indonesia, South Korea and Russia to weigh the impact of the US sub prime woes.  

…[I]n an ‘outreach’ session, the ministers agreed that the industrialized and emerging economies cannot exist alone, and that they would affect each other as if they were moving toward a ‘common destiny.’ The session followed the G-7 Finance Ministers' discussion earlier in the day with Central Bank Governors from Britain, Canada, France, Germany, Italy, Japan and the US. …” [Kyodo News (Japan, 02/09)/Factiva]

The Guardian reports that “…In a statement issued after a day of talks in Tokyo at the weekend, the leaders said economic fundamentals remained ‘solid’ but that downside risks remained. …With European nations more concerned about inflation than demand, no agreement was reached on a coordinated response, such as a blanket cut in interest rates. While the US has cut rates and passed a $168 billion fiscal stimulus package to boost demand, other leaders focused on improving transparency among financial institutions.  

The G7 report did, however, call on banks to bolster confidence in their sector with better liquidity risk management and full disclosure of their sub-prime losses, which, according to one estimate, could reach $400 billion. …” [The Guardian (UK, 02/11)/Factiva]

Meanwhile with regards to the “green fund initiative”, The Independent reports that “…The communiqué noted that the fund would complement ‘existing bilateral and multilateral efforts in providing financial support for the deployment of clean technologies in developing countries’ and the G7 acknowledged the need to ‘scale up’ investment in developing countries to support them in joining international efforts to deal with climate change. …” [The Independent (UK, 02/11)/Factiva]

FT notes that “The International Monetary Fund (IMF) can play only a limited - largely analytical - role in spotting brewing financial crises, according to Dominique Strauss-Kahn, the Fund's Managing Director. His remarks came as G7 meeting in Tokyo, instructed the IMF to work more closely with the Financial Stability Forum and jointly report on ‘identifying potential vulnerabilities and enhancing early warning systems’. The IMF was in a much better position than the thinly resourced FSF to monitor, and possibly prevent, emerging crises in global finance, officials said. …” [The Financial Times (UK, 02/11)]

Russia To Settle Part Of Debt To World Bank By July

“Russia expects to settle ahead of schedule most of its $5 billion debt to the World Bank in the first half of 2008, [Deputy Finance Minister Dmitry Pankin]…said on Friday. …” [RIA Novosti (Russia, 02/08/Factiva]

            Interfax reports that “…The part of the debt to be repaid ahead of schedule will depend on the size of penalties for early repayment, which would determine how beneficial this step would be, Pankin said. ‘We need to receive calculations from the World Bank to decide how much and what loans we will repay ahead of schedule,’ he said.  

Russia also needs to decide on the date when the debts are to be cleared, Pankin said. It is assumed now that Russia's liabilities will be calculated as of the end of March or early April 2008, he said. Russia's overall debt to the World Bank amounts to about $4.5 billion. The Finance Ministry suggested earlier that some $3.2 billion out of the amount could be repaid early.”

[Interfax (Russia, 02/08)/Factiva]

Malaysia Launches Last Billion-Dollar Project Ahead Of Polls

“Malaysian Prime Minister Abdullah Ahmad Badawi Monday launched a major development project worth billions of dollars to fuel growth in resource-rich Sarawak on Borneo Island.  

He said the government would spend an initial $1.54 billion to kickstart the Sarawak Corridor of Renewable Energy, the last of five programs that form a long term economic blueprint. The announcement came ahead of elections expected in March and would focus on developing the state's energy sources, hydropower, coal, natural gas and petroleum. …” [Agence France Presse (02/11)/Factiva]

            AP notes that “…The plan envisions Sarawak receiving private investments worth $103 billion through 2030 to fund projects in a wide range of sectors, including energy resources such as hydroelectric dams and coal-fired power stations.  

Abdullah said … the plan was expected to generate 1.6 million jobs and slash the state's poverty rate to 1 percent in 2030, down from the current 7.5 percent. … 

Thirteen agreements were signed Monday between Sarawak's government and several companies, including one with global miner Rio Tinto Ltd. to supply power to a planned major aluminum smelter. …” [The Associated Press (02/11)/Factiva]

Reuters adds that “…The blueprint… aims to transform the sprawling timber- and energy-rich state on Borneo Island into an oil and gas, aluminum, marine engineering and fisheries hub. …” [Reuters (02/11)/Factiva]

New Technologies Must Tackle Climate Change: UN Official

“New technologies are the only way to tackle climate change, a special adviser to the UN Secretary- General said in New Delhi Saturday.

‘Rapid economic growth and climate change mitigation cannot go together as long as we stick to current technologies,’ Jeffrey D. Sachs, director of the Earth Institute told delegates at the valedictory session of the Delhi Sustainable Development Summit. …

Sachs said policy makers must focus on these technological changes right now, rather than on economic measures to reduce carbon dioxide emissions into the atmosphere. ‘These changes require upfront public R and D funding, especially for demonstration projects, plus a supportive regulatory environment.’ …” [Xinhua (02/09)/Factiva]

            In related climate change news, AP reports that “The UN General Assembly is bringing business leaders, activists and government officials together for a debate on climate change starting Monday to keep up the momentum for a new treaty by 2009 to fight global warming. …  

Nearly 100 countries have signed up to speak and 20 are sending ministers, assembly spokesman Janos Tisovszky said Friday. Secretary-General Ban Ki-moon…will address Monday's opening session along with General Assembly President Srgjan Kerim. …” [The Associated Press (02/11)/Factiva]

More Investments Needed For Growth (New World Bank Representative [in The Philippines] Calls For Less Regulation).

“The government needs to further relax business regulations to attract more foreign and domestic investments if the country wants to sustain its economic momentum …Bert Hofman, the new World Bank Country Director for The Phillipines, told reporters in Lake Sebu in his first official visit to the countryside to inspect a World Bank anti-poverty project. …  

Hofman noted that economic growth last year was spurred by the services sector, as well as remittances from overseas Filipino workers which have fuelled the country's consumption-led economy. …  While he lauded the Philippines' macroeconomic policies, Hofman said the investment climate in the country has to improve to draw the interest of more investors. …  

Hofman also pointed out that salaries in the country must be competitive and not too expensive, since one of the factors that investors consider in putting up business, especially in the manufacturing sector, is labor cost. …

Generally, the Philippines is still lagging behind in infrastructure development compared to many countries in the Association of Southeast Asian Nations, he said.” [Business World (Philippines, 02/11)/Factiva]

Food Prices To Stabilize In Year Or Two - IFAP

“Skyrocketing grain prices will stabilize near acceptable levels in a year or two as farmers boost production and stocks, the President of the International Federation of Agriculture Producers (IFAP) [Jack Wilkinson] said on Friday. …  

Governments in developing countries should collaborate with farmers and use the high prices as an incentive to increase production, satisfy local needs, reduce reliance on imports and even make an income from it. …  

Wilkinson said only a few countries did not have capacity nor resources to grow any food. In most cases bad policies or lack of them altogether have hampered production all along. …Wilkinson said he believed farmers from Africa and Central and Eastern Europe will emerge as important actors in the fight against short supplies. The Canadian farmer also warned that developed economies should watch out how an increase in grain prices is being translated into real food prices. …” [Reuters (02/08)/Factiva]

Also in this edition; Briefly Noted… The World Bank is planning to develop health facilities in Congo and help set up a National Health Development Plan in the country, according to World Bank Country Director Marie Francoise Marie Nelly. [Panapress (02/08)]

A dozen countries from around West and Central Africa meet in Guinea on Monday to discuss how they can derive greater long-term economic benefit from their mining sectors. The two-day meeting - backed by the World Bank, the African Development Bank, West African regional grouping ECOWAS and the French Development Agency (AFD) - will share ideas on improving agreements with foreign firms and managing mining revenues. [Reuters (02/10)/Factiva]

Indonesiawill host an international environmental conference in Bali in June to address efforts to reduce exports of hazardous waste from industrialized nations to developing countries, Jakarta Post reported on its website on Sunday. [Xinhua (02/10)/Factiva]

Afghanistan's acting Counter-Narcotics Minister Khodaidad said Sunday he expected the country's opium output to be slashed by between 30 and 50 percent this year. He told reporters that compared to last year between 15 and 20 percent less land had been planted with opium poppies, which are due to be harvested from April. [Agence France Presse (02/10)/Factiva]

World Bank Vice President for the Middle East and North Africa Region Daniela Gressani said the World Bank would raise financial aids to Yemen during 2008-2009, praising the steps Yemen has taken to achieve financial and administrative reforms. [Organisation of Asia-Pacific News Agencies (02/09)/Factiva]

The Palestinian population in the West Bank, Gaza and Arab East Jerusalem grew by about 30 percent in the last decade, according to census data published on Saturday. [Reuters (02/09)/Factiva]

Turkey will be urged this week to give more support to the proposed Nabucco natural gas pipeline, following mounting EU concern about Ankara's commitment to the project. Jozias van Aartsen, EU's coordinator for natural gas projects in Southern Europe, will visit Ankara on Thursday to press Prime Minister Recep Tayyip Erdogan, to tackle some of the obstacles facing the plan. [The Financial Times (UK, 02/11)]

US President George W. Bush said on Sunday he would sign a $152 billion package on Wednesday that is aimed at keeping the world's largest economy out of recession with tax rebates and business investment incentives. [Reuters (02/10)/Factiva]