CEE's dramatic gains could follow China model, says World Bank

“Central and Eastern Europe could sustain the high productivity growth of the last nine years, following the model of China, according to a report by the World Bank.

"The high rates of productivity growth in the [CEE] region since 1999 should not be viewed merely as a one-time productivity boost during the course of recovery following transition," according to the report "Unleashing Prosperity " Productivity Growth in Eastern Europe and the former Soviet Union."

From 1999 " 2005, CEE and Central Asia as a whole grew by 5.7 percent annually. A comparative study shows only China, which grew more than 8 percent during the same period, fared better. [EE Times/United Business Media]

After output plummeted in the early 1990s as the region retooled from centrally-planned to market economies, productivity has jumped since 1999, fuelled by better policy, greater trade and global integration, it said in a statement."The rise in productivity in the region has brought higher sales and more profits to businesses so they can pay more in wages and invest in new technologies," said Shigeo Katsu, Vice President for the World Bank's Europe and Central Asia Region.

Katsu said that for the region to continue to catch up with the richer West, governments should do more to eliminate red tape and barriers preventing firms from competing and work to improve productivity among the region's workers. [The Guardian/Reuters]

“These are no longer economies in the transition period,” said co-author of the World Bank report Paloma Anos Casero…The study states that ordinary restructuring and exploitation of cheaper manpower is no longer enough for them to develop further. The report suggests that in order to increase productivity…capital acquired by competitive companies and people who are able to work in modern branches of industry and services [are needed]….This, in turn, means investments in new technologies and education….The study conducted by the World Bank experts was the first one of this kind in history. [The News (Poland)]

World Bank increases microfinance

“The World Bank and Standard Chartered have joined up to boost microfinance projects in Asia and Africa…Microfinance involves lending small amounts to usually poor people without collateral, whose needs are not met by traditional banking, often women. [BBC]

The International Finance Corp, the World Bank's private-sector lender, said it will invest $45 million (23.1 million pounds) in credit-linked notes issued by Microfinance Institutional Loans for Asia and Africa (MILAA) established by Standard Chartered to expand its lending to the microfinance sector…The transaction will enable Standard Chartered to issue additional credit to microfinance institutions that deliver loans to small companies or to the poor who do not have access to mainstream banking in developing countries.

"This transaction will unlock more funding for microfinance," said Peter Sands, Standard Chartered Group's chief executive, in a joint statement with the IFC. "We believe improving access to finance is a key lever in reducing poverty and catalyzing broader social and economic development," Sands added. [Thomson Reuters]

Loan sizes vary, but the average loan issued by Grameen Bank, which was founded by [MuhammadYunus, 2006 Nobel Peace Prize winner] in 1983, is 100 dollars. Large global banks such as Standard Chartered have begun to show increased interest in the sector in recent years. Citigroup and ING have also set up microcredit programs. [Agence France Press]

Standard Chartered says it already provides backing for 48 microfinance firms in 15 nations in African and Asia, benefiting 1.2m people. [Kenya Broadcasting Corporation]

African Development Bank president says food crisis undermining efforts to reach poverty goals

“The head of the African Development Bank said Thursday the energy and food price crises were undermining Africa's chances of meeting its poverty eradication goals.

Donald Kaberuka, in Maputo for a bank meeting on Wednesday, warned against food export bans and taxes, and urged wealthy countries to donate food to the world's hungriest nations. [International Herald Tribune]

In his opening speech, AfDB president Donald Kaberuka said the economic impact of surging food prices, power shortages and global warming would all be debated during the two-day gathering of African finance ministers and experts.

Kaberuka said that although the continent's overall economic performance was improving, more was needed to lift living standards for the average African.

"The strong growth rate for Africa, which is averaging nearly six percent, has not yet been enough to translate into a big fall in poverty levels," said Kaberuka. [Agence France Presse]

The African Development Bank (AfDB) said yesterday that its next five-year plan would focus on economic growth for the attainment of the Millennium Development Goals on the continent…[he] noted that economic growth of the past decade had not resulted in poverty reduction on the African continent but instead had often led to inequalities which created social tensions. [SAPA]

“BRIC” Nations Summit Seeks to Turn Economic Might Into Clout

“The four largest emerging economies are sending their foreign ministers to Yekaterinburg, Russia, to meet on May 16 for the first time outside the venue of the United Nations. On the agenda are such non-economic issues as weapons proliferation, counter-terrorism, energy and climate change.

A trilateral meeting of Russia, India and China (RIC) on Thursday precedes the BRIC meeting on Friday.

A communiqué to be adopted at the RIC meeting would, for the first time, outline positions of the countries on issues, including Afghanistan, North Korea and Iran. This reflected an enhanced degree of mutual understanding within the triangle. [The Hindu]

Xinhua reports that   “diplomats will also discuss international cooperation on climate change, disarmament and non-proliferation, the fight against terrorism, organized crime and drug trafficking,....BRIC, a term created by economists of investment bank Goldman Sachs, groups the world's four most prosperous emerging economies which have been playing an increasingly important part in the world's trade and economic development over the past years. [Xinhua]

China, the world's most populous country, is expected to overtake Germany as the third-largest economy this year, the IMF says. India is the world's largest democracy. With 10 straight years of economic growth, Russia is the world's biggest energy exporter, while Brazil is the No. 2 food producer after the U.S. [Bloomberg]

European Expansion Beats Forecasts, Led by Germany

“European economic growth accelerated more in the first quarter than economists estimated as the strongest German expansion in 12 years powered the euro region through the global slowdown. [Bloomberg]

The figures, which were about double what most economists expected, suggested that the European economy was demonstrating a resilience that seemed unlikely as recently as last autumn. The numbers do obscure, however, severe slowdowns in Ireland and Spain, which have been battered by the global housing decline, and a probable recession in Italy, economists said. [International Herald Tribune]

The relatively sunny outlook for German manufacturers has also helped avert a sudden contraction in credit, a much-feared outcome of the financial crisis that is now vexing the U.S. economy but seems an increasingly remote possibility in Europe.

Germany, the world's largest exporter, is also profiting immensely from thriving economies in Eastern Europe, the Middle East and Asia. [Thomson Reuters]

Eastern Europe's transition to a market economy and its high levels of investment from the euro zone have put national economies in a much stronger position. [International Herald Tribune]

Brazil, Germany Sign Cooperation Deal On Environment, Energy

“Brazilian's President Luiz Inacio Lula da Silva and visiting German Chancellor Angela Merkel on Wednesday signed cooperation agreements on environment and renewable energy.   The two leaders also officially reaffirmed their strategic partnership launched six years ago.   Merkel paid a brief visit to Brasilia, the capital of Brazil, on her way to the Fifth Latin America, Caribbean and European Union Summit, which will take place in Lima, Peru's capital city, on Friday.

Under the agreements, a loan of 52 million euros (about 80 million U.S. dollars) will be granted for the development of renewable energy and a non-refundable grant of 40 million euros (61 million dollars) will be allocated for sustainable projects and the preservation of the Amazon rainforest in Brazil.The energy agreement, which is valid for 15 years, stresses how to ensure energy supplies in a sustainable way, especially through raising energy effectiveness and the use of alternative energy.” [Xinhua News Agency/People’s Daily(China)]

[Reuters(UK)/Factiva] notes that   "There are statistics that raise concerns about deforestation, the process of displacement between soybeans, beef and the rain forest," Merkel said… Rich nations also needed to do more to support environmental protection in developing countries, Merkel said. Industrial countries have not lived up to their obligations. "If we want to be taken seriously here, we need to make the payments and aid we pledged," Merkel said.   Lula said Brazil was the most interested of all countries in protecting the Amazon but that the millions of people living there also had a right to prosperity.”

In addition, [Associated Press/Factiva] also reports “German Chancellor Angela Merkel warned that biofuel production should not come at the expense of the environment… “Biofuels are a way toward replacing classic fossil energy sources, but only if they are cultivated sustainably,”   Merkel said as she met Brazilian President Luiz Inacio Lula da Silva.   Brazil is the world's largest ethanol exporter and second-largest producer, and is home to about 70 percent of the Amazon rain forest.”

Also in this edition: Briefly noted…

World Bank Group President Robert B. Zoellick said the institution was ready to help the victims of China's earthquake as he expressed his condolences following the disaster that hit the central province of Sichuan on May 12, killing about 15,000 people. The World Bank stands ready to support the Chinese Government in any way it may find useful in the recovery and reconstruction process, Mr. Zoellick wrote in a May 12 letter to Chinese Premier Mr. Wen Jiabao. [Thai News Service]

Rapid productivity growth has boosted incomes in eastern Europe and the former Soviet Union by more than 50 percent over the last decade, lifting about 50 million people out of poverty, the World Bank said on Thursday. After output plummeted in the early 1990s as the region retooled from centrally-planned to market economies, productivity has jumped since 1999, fuelled by better policy, greater trade and global integration, it said in a statement. [The Guardian]

Chinapredicted that the death toll from Monday's mega-earthquake will top 50,000, as the government approved the first group of foreign experts to help with relief efforts -- a stark acknowledgement that the complexities of the disaster are proving too big to handle alone. The announcement Thursday that a Japanese team of relief workers would be able to join the hunt for survivors follows days of frustration for many foreign disaster experts, who have offered help but so far been politely refused by Beijing. [The Wall Street Journal]

With veto-proof margins, Congress on Thursday sent President Bush a bill boosting farm subsidies and money for food stamps to help the poor deal with rising grocery prices.  [The Wall Street Journal]

Senior eurozone officials called Thursday for a single voice for the bloc on the international stage, in the face of warnings its sometimes divided members would first need to agree on what to say.  Eurogroup head Jean-Claude Juncker urged French President Nicolas Sarkozy in particular to push for a single eurozone seat to be established at the International Monetary Fund."President Sarkozy during his electoral campaign ... said that there should be a single representation at the IMF," he told a conference in Brussels on the shared European currency. [Agence France Presse]

The United States is considering allowing Japan to sell imported US rice on the global market, blocked by their bilateral agreement under the WTO, in an effort to curb soaring prices, a US trade official told AFP Thursday. "In light of the food price crisis, some have called upon Japan to release its rice stocks onto the international market," the US official said on condition of anonymity. [Agence France Presse]

Growing enough food to alleviate shortages in African countries is not easy, but an agro-ecologist in Ethiopia thinks he has the answer: bio-farming.  The technique uses animal waste products to produce energy and fertilizer, which grows feed, that the animals eat, producing meat as well as new waste. The African Union recently endorsed the concept, and countries such as Ethiopia, Mozambique, Mauritius and Kenya are already committed to big bio-farming projects. VOA's Pete Heinlein visited a model bio farm in Addis Ababa and has this report. [Voice of America]

The government of the Republic of Congo has announced a series of new measures aimed at fighting against the specter of soaring food prices that has continued to raise the cost of living in the country. In order to remedy the situation, the government has decided to reduce VAT from a high of 18 percent to 5 percent on all essential products and 5 percent for those handled by the General Taxation Directorate, said a statement published Wednesday. [Xinhua News Agency]

The national parliament [of Rwanda] is planning to establish a Public Accounts Committee (PAC) before the end of this year. The decision was made by the lower house of parliament to harmonize the system with the other East African Community (EAC) member states and will take effect after parliamentary elections slated for September. "After several decades of misrule, war and genocide, Rwanda has endeavoured to carry out major legal and institutional reforms to enhance good governance. This included the establishment of the Office of the Auditor General (OAG) for effectiveness and efficiency," said Constance Mukayuhi Rwaka, a member of parliament. [BBC Monitoring Africa]

The World Bank is seeking an independent verification agent for water connections in Kampala. The multinational chief lender will finance the services through the global partnership on output- based aid, eConsultant website http://econsult.worldbank.org, indicated. The project would provide access to piped water services to poor households living in the city suburbs. [New Vision/All Africa Global Media via COMTEX]