Energy Shortage Key Hurdle To Afghanistan's Development: IMF

“An energy shortage in Afghanistan is fuelling investor concerns aside from the volatile security situation compounded by a flourishing drug trade, the International Monetary Fund (IMF) warned Wednesday. …  

The IMF [mission chief for Afghanistan, Mohamad] Elhage welcomed the Afghanistan government's intention to link subsidy disbursements to the state-owned electricity company to concrete reform benchmarks. This, he said, should help modernize the sector and boost electricity supply. The IMF report noted that no new Afghan exports outside the ‘traditional base’ that included carpets, minerals, and horticulture products, had been developed, citing low capacity, the high cost of capital, and lack of electricity. …” [Agence France Presse/Factiva]

Reuters notes that “A thriving Afghan opium crop earned farmers about $1 billion in 2007 and together with resurgence in violence was hampering economic development, the IMF said on Wednesday. …Still, Elhage praised the Afghan government for a strong performance under a three-year IMF-supported economic program. …Elhage said revenue performance had doubled as a percentage of GDP and strengthened the fiscal situation, while private banking was expanding. …” [Reuters/Factiva]

Dow Jones adds that “…However, the deteriorating security situation remains a threat to foreign investment and fiscal improvement, said Elhage. …  

The IMF expects Afghanistan's economy to rebound to 13.5 percent in the 2008 fiscal year ending March 19 as the agricultural sector recovers from a drought that helped slow 2007 growth to an estimated 6.1 percent pace. …In its review, the IMF said the country must continue on the route toward fiscal sustainability given its reliance on foreign aid, as well as accelerate structural reforms. …” [Dow Jones/Factiva]

AFX reports that “[t]he IMF…report … said economic growth over the medium term will depend critically on confronting governance issues, overcoming infrastructure bottlenecks (particularly in the electricity sector), and implementing structural reforms in support of private sector activities. …  

Revenue mobilization requires further efforts aimed at capacity building and introduction of a broad-based consumption tax, while maintaining a transparent and equitable trade regime and the role of capital notes should be expanded to better manage liquidity and improve the effectiveness of monetary policy, the IMF said. …” [AFX/Factiva]

UNEP Calls For End To Barriers On Fast-Growing "Green Economy”.

“A global ‘green economy’ is now emerging but governments must move fast to scrap the many barriers and fossil-fuel subsidies that hamper it, the UN Environment Program (UNEP) said on Wednesday. … the Nairobi-based agency said investment in environmentally-friendly projects was rising fast and more and more corporations were driving to save energy, thus helping to combat carbon emissions. …

But oil, gas and chemicals are among the industries doing little or nothing to cut their contribution to the greenhouse-gas problem, the agency said, presenting the [Year Book 2008] report at a conference in Monaco gathering environment ministers and the UNEP governing council. …” [Agence France Presse/Factiva]

Reuters notes that “Governments should use public money aimed at deflecting the threat of recession to spur savings by backing energy efficiency too, the head of the UNEP, Achim Steiner, said. UNEP is hosting 154-nation climate change talks this week in Monaco aimed at show-casing the need for government investment in the fight against climate change. … 

Business is already working to fight climate change, the report said, citing institutional investors which demand that companies they invest in adhere to environmental standards. ‘What has been missing so far is the political will and policy coordination that is needed to unleash the full creative capacity of the private sector,’ [the UNEP report] said. …” [Reuters/Factiva]

In a separate piece, Reuters adds that “Germany will spend $177 million a year on projects to help developing and former communist countries fight and adapt to climate change from 2008 to 2012, Environment Minister Sigmar Gabriel said.  

Germany would raise $588.7 million annually by auctioning carbon emission permits called European Union Allowances (EUAs) to its industry from 2008-12 under the European carbon trading scheme, he said on Wednesday. …” [Reuters/Factiva]

Brain Drain From Poorer Countries Not So Big –OECD

“The belief that rich countries are draining poorer ones of their best-qualified people is largely unfounded, the Organisation for Economic Co-operation and Development (OECD) said in a report [titled A Profile of Immigrant Populations in the 21st Century] published on Wednesday. …  

While the brain drain towards developed countries was not as big as some might have believed, the OECD said there were particular problems in the healthcare sector, but that conclusive data was still proving hard to come by. India was the chief supplier of doctors to the wealthy world while the main source of nurses was the Philippines. …” [Reuters/Factiva]

FT adds that “…The effect of the ‘brain drain’ was felt more heavily in small African and Caribbean countries. More than 40 percent of the highly-skilled population in Jamaica, Haiti, Trinidad and Tobago, Mauritius and Fiji were living abroad.

By comparison the proportion of people holding a tertiary degree emigrating from large countries such as Brazil, Indonesia, Bangladesh, India and China was less than a few percentage points. Latin America provided the biggest number of migrants, 19 million to OECD countries, followed by Asia which provided 16 million.” [The Financial Times (UK)]

WSJ notes that “In most of the world's developed countries, immigrants are more likely to be overqualified for a job than local workers… ‘As education around the world improves, the pool of highly skilled migrants is getting larger,’ said Jean-Christophe Dumont, a senior OECD economist who worked on the report, in an interview.  

He said countries with small populations and poor education systems are the hardest hit by the loss of skilled workers. …There also is a gender dimension to the brain drain: Women from developing countries with university degrees are also more likely to immigrate to OECD countries than highly skilled men: 17.6 percent versus 13.1 percent. …” [The Wall Street Journal/Factiva]

World Lawmakers Hold Brazil Talks On Climate Change

“Around 100 lawmakers from Brazil, India, China, South Africa and Mexico met Wednesday to discuss proposals on how to combat climate change to be presented at the G8 summit in Tokyo in July.   

The GLOBE forum (Global Legislators Organization for a Balanced Environment) aims to agree on a post-2012 climate change settlement and submit it to the leaders of powerful G8 countries. …” [Agence France Presse/Factiva]

AP adds that “Scores of legislators and officials from China to Cameroon were considering approval of a document demanding ‘ambitious absolute emission reductions for developed countries’ to fight climate change.  

Proposals in the draft document included a global carbon market in which nations would be able to trade and sell credits, sharp increases in funding for developing countries to reduce emissions and even a worldwide ban on incandescent light bulbs. …” [The Associated Press/Factiva]

Xinhua reports that “China Wednesday called on the international community to observe the principles and framework set by the Kyoto Protocol and the UN Framework Convention on Climate Change (UNFCC). The appeal was made by Cao Bochun, Vice Director of the Environment and Resources Protection Committee of the Chinese National People's Congress…

‘Common but differentiated responsibilities’… should be the basis and precondition for a rational move in handling climate change, he said. … The capability of the mini-thermal power plants closed by the Chinese government in 2007 as an environment-protection measure reached some 14.3 million kilowatts, he said, adding that the drive will continue. …” [Xinhua/Factiva]

Study Urges New Focus In Hunt For Emerging Diseases

“Health experts are mostly looking in the wrong places for the next AIDS, Ebola, or bird flu and should shift resources from rich countries to the developing world most likely to spawn the next big disease, researchers say.  

Many of the emerging disease danger zones were most likely to be found in the developing world, where abundant wildlife bumps up against growing human populations, the researchers wrote in a study published in the journal Nature on Wednesday. These areas are important because about 60 percent of the infections that have emerged since 1940 originated in animals before jumping to humans, the international research team said. The HIV virus that causes AIDS has been traced to chimpanzees and Ebola may have come from bats, for example. …” [Reuters/Factiva]  

The Guardian reports that “… Researchers from the Zoological Society of London, the Wildlife Trust and Columbia University analyzed databases of outbreaks and found 335 cases of emerging diseases between 1940 and 2004. Of these, 60.3 percent were infections which also affected animals, and 71.8 percent were known to have triggered disease in humans after spreading from wildlife.

The research … identifies ‘hotspots’ where new diseases are expected to come from wildlife, driven by the proximity of dense human populations and high levels of biodiversity. The global pattern of diseases was closely linked to regions with high rainfall and biodiversity, alongside rapid growth in the human population….” [The Guardian (UK)/Factiva]

AFP adds that “… More than 20 percent of emerging infectious diseases derive from a growing imperviousness to drugs, such as extremely drug-resistant tuberculosis (XDR-TB), chloroquine-resistant malaria and verocytotoxigenic Escherichia coli, a highly dangerous strain of intestinal bug. …

Peter Daszak, Executive Director of the Consortium for Conservation Medicine at Wildlife Trust, New York said the priority should be to set up monitoring networks in developing countries that would identify a threat from the outset and circumscribe it, rather than let it spread like wildfire around the globe thanks to jet travel and trade. …” [Agence France Press/Factiva]  

Briefly Noted

Also in this Edition Briefly Noted…

Ivory Coast and the World Bank are studying cocoa-sector reform, Finance Minister Charles Koffi Diby said Wednesday during a news conference, without providing further details. [Dow Jones/Factiva]

South Africa can expect a slowing economy and a widening current account deficit for the next three years but it remains on a stable footing, Finance Minister Trevor Manuel said Wednesday during the release of a widely anticipated budget. [The Financial Times (UK)]

Liberians called for more trade, less aid on Wednesday as they prepared to welcome US President George W. Bush, who winds up his African tour. [Reuters/Factiva]

Nigeria's National Assembly passed a final version of the 2008 budget ($24.7 billion total spending) on Wednesday that foresees a 21 percent hike in proposed expenditure and an even sharper increase on what the government actually spent last year. [Reuters/Factiva]

World Bank Vice President for Latin America and the Caribbean, Pamela Cox said that Brazil should remain protected from the international financial crisis because despite maintaining strong ties with the US economy, the country does not depend exclusively on American consumers.[Gazeta Mercantil (Brazil)/Factiva]

Brazilian Foreign Minister Celso Amorim said Wednesday that the Brazilian government would give priority to the development of strategic relations with Argentina and enhance bilateral cooperation in all fields. He made the remarks at a summit of the Foreign Ministers of South America and Arab Countries (ASPA) in Buenos Aires. [Xinhua/Factiva]

Venezuelasaid Wednesday it has paid $1.8 billion in compensation to French, Norwegian and Italian oil companies for nationalizing key oil fields in the Orinoco basin in 2006. France's Total, Norway’s Statoil and Italy’s ENI gained the settlement after they accepted the book price for the assets Venezuela's state-run PDVSA oil company took over. [Agence France Presse/Factiva]

The Philippine government has decided to stop borrowing money from abroad for new infrastructure and development projects, opting instead to finance them locally. As a result of the decision financing for at least 11 pending government projects costing more than $2.5 billion in total will not come from so-called official development assistance, as had been planned. [The International Herald Tribune]

The Philippine government Thursday announced plans to clean up the Meycauayan River described as one of the most polluted places on the planet. The river, which runs through areas that host the country's jewellery and leather industries, feeds into commercial fish farms downstream that supply most of Manila's freshwater fish. [Agence France Presse/Factiva]

Indonesia is willing to resume sharing of bird flu virus samples only if nations agree on a fair and equitable framework, President Susilo Bambang Yudhoyono said on Wednesday. [Reuters/Factiva]

Japanmoved closer on Thursday to adopting a cap-and-trade system with mandatory emissions limits after the Japan Business Federation softened its staunch opposition. [Reuters/Factiva]

  Bosnia's central parliament passed a 2008 budget on Wednesday of $887 million, an increase of 17 percent from last year. [Reuters/Factiva]

Lithuania's government needs to resist the temptation to cut taxes or boost spending ahead of elections if it wants to achieve a soft landing from strong growth, the International Monetary Fund said on Wednesday. [Reuters/Factiva]

The European Bank for Reconstruction and Development is planning to sign new projects worth over $1 billion in Kazakhstan, Dow Jones reports. Half of the total amount will be allocated to the banking sector, which is struggling to come to terms with the new financial environment with tighter liquidity. [Global Insight Daily Analysis/Factiva]