Growth In Remittances To Latin America Slows: IADB

“The amount of money sent home by Latin American migrant workers grew at a sharply slower pace last year as the US economy ran into trouble and the dollar's value fell.  

The Inter-American Development Bank, or IADB, said in a report on Tuesday that Latin American migrants in the US and around the world sent $66.5 billion in remittances to their home countries last year… Remittances grew at a rate of 16 percent in 2006 and 25 percent in 2005, and had shown double-digit increases since the IADB started tracking them in 2000, the bank said. …” [Reuters/Factiva]

The Miami Herald adds that remittances “…rose 7 percent in 2007, the first year ever the growth rate has been in single digits. The explanation is that the region's top recipients Mexico and Brazil are weighing down the averages, said Don Terry, president of the Multilateral Investment Fund (MIF), the unit of the IADB that has been looking at remittance trends since 2001. …  

The slowdown is of concern because remittances play such a vital role for many of the region's economies, surpassing the combined amounts obtained from foreign direct investments and development assistance provided by countries and institutions like the World Bank. …” [The Miami Herald/Factiva]  

EFE reports that remittances to Mexico “…grew by barely 1 percent last year to $24 billion, while money transfers to Brazil fell 4 percent to some $7.1 billion. …Terry said that in the case of Mexico, emigrants were less willing to send money home than in the past because of fears of a tightening of immigration laws and the weakness of the US economy.  

In the case of Brazil… the flow of remittances from the US has fallen because of rising economic opportunities in the South American nation and the 24 percent rise of the Brazilian real against the dollar. …” [EFE/Factiva]  

FT adds that “…All this suggested that tighter law enforcement against illegal migrants, especially at a state and municipal level in areas where Mexicans tend to be the dominant immigrant group, was playing a role. …Emigrants from the Andean countries who have tended to move to Spain rather than the US were also continuing to send back money at a high rate. …” [The Financial Times (UK)]

Dow Jones notes that “…In contrast, remittances to countries in Central America increased 11 percent to $12.4 billion last year. Money transfers to countries in the Andean region rose 5 percent to $11.6 billion, the MIF said. …” [Dow Jones/Factiva]

Global Carbon Market Expanded 80% To $60 Billion In 2007: Survey

“The global carbon market expanded 80 percent in 2007 from the previous year to $60 billion, with the total traded volume growing 64 percent to 2.7 billion tons, according to a market survey report released Tuesday.

The strong growth in both value and volume indicates that a greater number of market participants believe the carbon supply-demand situation will become tighter in the future due to a shortfall in the supply of carbon available for trading, Point Carbon said. …

Combined with its additional analysis, it presented an overview of the carbon market in 2007, an outlook for 2008 and expectations for the remainder of the first Kyoto period and beyond during an annual conference, which opened in Copenhagen on Tuesday. …” [Kyodo News (Japan)/Factiva]  

Reuters notes that “Evidence is slim that the EU's four-year old carbon market is sufficiently penalizing emissions of the greenhouse gas carbon dioxide, in the fight against climate change, analysts said on Tuesday. …  

Europe's carbon price now, if reflected globally for years to come, would do no more than limit global warming to about 3 degrees centigrade, said one leading climate scientist. ‘We really need a higher price, clearly this is not good enough,’ said Rajendra Pachauri, Chair of the Intergovernmental Panel on Climate Change Pachauri was referring to prices of $20-50 per tone of avoided carbon dioxide (CO2) by 2030, adding that a price of up to $100 by 2030 was a better target. …” [Reuters/Factiva]

AFP reports that “EU leaders will meet from Thursday with environmental policy high on the agenda…The 27 EU heads of state and government recognize that ‘the risk of carbon leakage is a concern in certain sectors particularly exposed to international competition,’ according to a draft statement prepared ahead of the summit. ‘Carbon leakage’ is a term coined to describe the phenomenon of industry moving from a more regulated to a less regulated, and cheaper, country. … 

The summit could relaunch debate over a ‘carbon tax’, which would allow the EU to levy taxes on industrial goods imported from countries which are not doing as much to reduce greenhouse gas emissions. …” [Agence France Presse/Factiva]

Meanwhile in a separate piece, Reuters writes that “The EU wants developing countries to make more effort to cut their ballooning greenhouse gas emissions rather than rely on carbon offset schemes, a European Commission official said on Tuesday. … ‘If developing countries continue to be only offset suppliers we simply will not reach (desired) emissions levels,’ the Commission's Head of Emissions Trading, Yvon Slingenberg, told a carbon market conference in Copenhagen. …” [Reuters/Factiva]

EU Delegation Eyes Business Opportunities

“The first ever European Union delegation comprising members of the private sector from Belgium, Czech Republic and Greece last week completed a trade investment cooperation assessment mission to Ethiopia.   

This mission, which was conducted under the Private Sector Liaison Officer (PSLO), had as its objective to bring together, for the first time, a mixed nationality business delegation to two African countries-Ethiopia and Sudan- to get first hand information on the business environment and identify investment potentials. The mission also aimed…[to review]…the World Bank group's portfolio and related business opportunities in the region. Members of the delegation visited projects underway in the country and met and held discussions with senior government officials including Prime Minister Meles Zenawi.  

The PSLO network is a network of business intermediary organizations working…[with the support of the World Bank Groups products and services]… to foster trade and investment between countries… [the] PSLO representative for Greece, Theodoros Axilithiotos, after the meeting with Prime Meles, told The Daily Monitor that Meles was ‘very much pleased’ and that the government of Ethiopia was happy to accommodate them in whatever means necessary to encourage and maintain the relationship …

Launched in Europe in September 1999 as a joint World Bank, IFC and MIGA initiative, the PSLO network includes today some 100 PSLOs in 79 countries. The network consists of liaison officers - private sector communication professionals - appointed, based in and financed by their respective business intermediary organization.” [The Daily Monitor (Ethiopia) and All Africa/Factiva]

Dollar, Euro on Strong Side - IMF's Lipsky

“The International Monetary Fund (IMF) believes that both the soaring Euro and the slumping dollar are overvalued when examined in a broader global trade context, a top IMF official said on Tuesday.

‘We do find the Euro is on the strong side. But we also find the dollar is somewhat on the strong side, in part because the dollar trades very, very significant amounts with economies whose currencies are significantly undervalued,’ IMF First Deputy Managing Director John Lipsky said in an interview.

‘The Euro zone's trading pattern is different from that of the US, and the US is particularly heavily involved with trade, among others, with Asian economies whose currencies are significantly undervalued by our judgment,’ Lipsky added. On another point, Lipsky told Reuters reporters he disagreed with the perception the European Central Bank and the Federal Reserve were working in opposite directions. …” [Reuters/Factiva]

WSJ reports that “ … After a meeting hosted by the Bank for International Settlements, ECB President Jean-Claude Trichet addressed the dollar's movements by appealing for central-bank cooperation and warning about the dangers of big changes in major currencies.

Following his comments, the Euro fell to an intraday low of $1.5312, from $1.5335 earlier in the day and from a record $1.5465 Friday. The dollar also has hit an eight-year low against the yen. … Trichet said central bankers had no technical discussion yesterday on coordinating money-market operations. But his main points helped frame the issues rising from the weak dollar -- financial turmoil and slowing global growth -- which are likely to take center stage at the meeting of the Group of Seven leading nations in Washington next month. …” [The Wall Street Journal Europe/Factiva]

Meanwhile, NYT writes that “Impelled to take extraordinary measures for the second time in less than a week, the Federal Reserve moved on Tuesday to subdue the deepening crisis in credit markets by stepping up as lender of last resort. In an action that sent stock prices soaring, the central bank offered to let the biggest investment banks on Wall Street borrow up to $200 billion in Treasury securities in exchange for hard-to-sell mortgage-backed securities as collateral. And the Fed made clear that it was prepared to do more as needed. The move, which was coordinated with central banks in Europe and Canada, came on the heels of two similar actions on Friday, in which the Fed offered up to $200 billion in 28-day cash loans to banks and big financial institutions. …” [The New York Times]

FT adds that “The initial reaction was dramatic across all markets, with shares surging, bonds falling, the dollar rallying and the cost of credit insurance falling, as investors who had bet on worsening conditions scrambled to close out their trades. As the day progressed the effect abated in some markets, but equities powered ahead, while credit conditions improved though they remained strained. The S&P 500 rose 3.71 percent, its biggest percentage rise since October 15, 2002. Banking stocks led the way, with the S&P Financials index gaining 7.42 percent. European stock markets also rose, with the FTSE 100 index closing more than 1 percent higher at 5,690.4. …” [The Financial Times (UK)]

Editorial: The New Face Of Hunger

In an editorial published in The Washington Post, UN Secretary General, Ban Ki-moon writes: “The price of food is soaring. The threat of hunger and malnutrition is growing. Millions of the world's most vulnerable people are at risk. An effective and urgent response is needed.   

The first of the Millennium Development Goals, set by world leaders at the UN summit in 2000, aims to reduce the proportion of hungry people by half by 2015. This was already a major challenge, not least in Africa, where many nations have fallen behind. But we are also facing a perfect storm of new challenges. … The effects are widely seen. Food riots have erupted from West Africa to South Asia. In countries where food has to be imported to feed hungry populations, communities are rising to protest the high cost of living. … Experts believe that high food prices may be here to stay. Even so, we have the tools and technology to beat hunger and meet the Millennium Development Goals. We know what to do. What is required are political will and resources, directed effectively and efficiently.   

First, we must meet urgent humanitarian needs. … Second, we must strengthen UN programs to help developing countries deal with hunger. … Third, we must deal with the increasing consequences of weather-related shocks to local agriculture, as well as the long-term consequences of climate change -- for example, by building drought and flood defense systems that can help food-insecure communities cope and adapt. Last, we must boost agricultural production. World Bank President Robert Zoellick has rightly noted that there is no reason Africa can't experience a ‘green revolution’ of the sort that transformed Southeast Asia in previous decades. …

Simply improving market efficiency can have a huge effect. Roughly a third of the world's food shortages could be alleviated to a significant degree by improving local agricultural distribution networks and helping to better connect small farmers to markets. But that is for the future. In the here and now, we must help the hungry people hit by rising food prices. That means, for starters, recognizing the urgency of the crisis - and acting.” [The Washington Post/Factiva]   

Briefly Noted

Funding for two new fuel refineries proposed in South Africa would be available on a strict financial basis if the projects were commercially sound, World Bank Policy Div-IBRD Oil, Gas &Mining Coordinator, Eleodoro Mayorga Alba, told a meeting Tuesday. [The Star (South Africa)/Factiva] 

Following international and local criticism of its new nationalization legislation, Paul Mangwana, Indigenization Minister, insisted that not all foreign-owned firms would be forced to sell 51 percent of their shares to indigenous Zimbabweans. [The Financial Times (UK)]

President Ernest Bai Koroma has pledged to open up Sierra Leone to foreign business to try to unlock the potential of its mineral reserves and miles of pristine beaches after a civil war. He said foreign donors were showing renewed confidence and, with a little more time, the country could become a leading investment destination in West Africa. [Reuters/Factiva]

The Bush administration, together with US and foreign business organizations, challenged a World Bank proposal that would allow developing countries to use their own contracting rules for Bank-funded projects. [The Washington Times/Factiva]

China announced details Tuesday of plans to restructure government departments, including the creation of a special ministry to tackle environmental problems, such as air and water pollution. The scheme also includes the creation of a commission to coordinate energy policy. [Kyodo News (Japan)/Factiva]  

The developed world should go on a climate change diet rather than lecture China over its rising greenhouse gas emissions, Chinese Foreign Minister Yang Jiechi said Wednesday. Yang told reporters that China's per capita emission of the gases linked to global warming remained less than one third the average in developed countries. [Agence France Presse/Factiva]

The Chinese government is considering shifting emphasis from the country's large, state-run hospitals to a parallel health-care system with thousands of smaller primary-care clinics, according to people familiar with the matter. [The Wall Street Journal/Factiva]

All international participants should have a say in the establishment of rules for sovereign wealth funds, said Chinese Foreign Minister Yang Jiechi Wednesday when asked to comment on the code of conduct being established by the EU and International Monetary Fund. [Xinhua/Factiva]

The Philippines failed to buy enough rice on Tuesday to boost its inventories and faced prices more than 40 percent higher than two months ago in the latest sign of a rapid tightening of the global rice market. [The Financial Times (UK)]

The UN Economic and Social Commission for Asia and the Pacific has launched a new database to promote the development of telecenters - community centers where people in the poorest and most remote areas can have access to computers and the Internet, the world body announced on its website Tuesday. [Xinhua/Factiva]

Slovakia no longer wants to receive financial assistance from the World Bank and wants to provide money for the Bank's development programs, says a document that the Slovak Finance Ministry published on its website. [CTK Business News (Czech Republic)/Factiva]

The European Commission is seeking to take more power into its hands to strike deals to protect European companies investing abroad, a role traditionally undertaken by the EU’s member states and agreed in bilateral investment treaties. [The Financial Times (UK)]

The Organization of the Islamic Conference members will convene in Dakar on Thursday and Friday as oil from Nigeria is increasingly an alternative to Middle Eastern crude and as conflicts in Sudan and Chad have become the focus of urgent international missions. [The Associated Press/Factiva]

The International Energy Agency has convened talks with global oil experts to help determine whether current oil prices are justified by market fundamentals. The talks, to be held in Paris on Monday, highlight concern among rich countries' policymakers about the causes of the recent oil price rises and its implications for inflation and monetary policy. [The Financial Times (UK)]

Japanese researchers said Wednesday they were in the final stage of developing a painless bird flu vaccine which is sprayed up the nose instead of being injected. The nasal spray could make it easier to vaccinate people in developing countries with limited medical resources, which have borne the brunt of avian influenza since an outbreak in 2003. [Agence France Presse/Factiva]