US, Japan, Britain Urges Support For Global Warming Fund As G8 Meet

“US Treasury Secretary Henry Paulson urged other G8 industrialized nations Friday to back a special fund of up to $10 billion to provide money for developing nations to fight global warming. The threats of climate change and sharing views on soaring oil and food prices were among the topics on hand at a Group of Eight finance ministers' meeting opening Friday.

US Treasury Secretary Henry Paulson appeared with his counterparts from Japan and Britain, and World Bank Group President Robert Zoellick, to encourage G8 nations to back the fund called Climate Investment Funds. …Zoellick said the developing world is being hit by climate change, including droughts, floods, poverty and hunger.

‘These funds offer an opportunity to take action on change now,’ he said. ‘The Climate Investment Funds are a concrete step forward toward meeting the challenge of global climate change.’ …” [The Associated Press/Factiva]

In related G8 news, Dow Jones writes that “…Ministers are expected to discuss, among other things, how best to reshape the global financial system so that a repeat of the sub-prime mortgage-inspired fallout - amplified by the use of structured financial products - doesn't recur.

Meanwhile, the Financial Stability Forum… is also expected to tell the finance ministers that there has been progress in implementing steps to make the global financial sector more robust. …” [Dow Jones/Factiva]

Reuters notes that “Global powers may agree to make it easier for poorer nations to access emergency cash to help cope with soaring commodity prices, British finance ministry sources said on Thursday. Officials are hopeful of making progress on the issue at a meeting of leading finance ministers in Japan this weekend where Britain will push for sustainable remedies to the current commodity price shock rather than knee-jerk reactions. …” [Reuters/Factiva]

In a separate piece, Reuters reports that “The International Monetary Fund (IMF) has emphasised the risk of global inflation in a report prepared for Group of Eight (G8) finance ministers who meet this week, a source who has read the report said on Thursday.

The threat of inflation is expected to take centre stage at the meeting in Osaka on Friday and Saturday. The ministers are in broad agreement that rising oil and commodity prices are fueling inflation worldwide….” [Reuters/Factiva]

Donors Commit $20 Billion Aid For Afghan Reconstruction

“Japan and other donor countries Thursday ended their talks aimed at supporting the reconstruction of war-torn Afghanistan by pledging fresh aid totaling $20 billion. Declaring the success of the Afghan assistance conference in Paris, which brought together 67 countries and more than 10 international institutions, French Foreign Minister Bernard Kouchner said the aid commitments exceeded the anticipated amount of some $17 billion and doubled from $10.5 billion pledged at the previous meeting held in London in 2006. …” [Jiji Press (Japan)/Factiva]

WP notes that “…The slow progress in combating the country's entrenched problems was a theme of Thursday's conference. Many people warned that international donors had to radically change their mind-sets about how to promote development and security in Afghanistan.

One problem highlighted by the World Bank was that two thirds of donor support flows directly to bilateral projects rather than being channeled through the government's budget.  As a result, the government gets no credit for helping the people, its legitimacy suffers and its employees do not develop the capacity to do the work themselves.” [The Washington Post/Factiva]

AP writes that “…Diplomats said the exact figures could take days to sift through - but were uniform in their insistence that the pledges far outpaced their best expectations. Such aid conferences are just a benchmark for overall fundraising for Afghanistan….In one effort to make Afghan finances more transparent, the donors announced a plan for Afghan and international officials to conduct joint audits of Afghan government programs. …Donors, in a final statement, encouraged the UN representative in Afghanistan and other UN officials to lead coordination of the aid committed Thursday. …” [The Associated Press/Factiva]

Paris Club Expresses Growing Concern Over "Vulture Funds"

The Paris Club of donors has once again expressed its growing concern over the actions of the so- called ‘vulture funds’ that were taking advantage of the efforts of its members to help the Heavily Indebted Poor Countries (HIPCs).

Addressing the press on the sidelines of an annual meeting in the French capital, Xavier Musca, Paris Club president, said there was need to ensure that vulture funds did not take advantage of genuine efforts to provide relief to the world's poorest economies. The annual Paris Club general meeting, which is currently underway in Paris, is being attended by representatives of the private sector, including banks and investment funds as well as other members of the international financial community, according to reliable sources. …” [Xinhua/Factiva]

FT writes that “…The Paris Club fears that unless emerging markets agree to co-ordinate their lending policies with developed countries, the latter will be reluctant to grant further debt relief in future because it may simply be used to pay off loans supplied by other countries.

Musca said the Paris Club was also worried by the rise of vulture funds, which could make big profits at the expense of poor countries. …Some $2 billion of debt was estimated to be at stake in current legal cases brought by venture funds against their debtors. Musca said the Paris Club wanted to make it harded for venture funds to buy sovereign debt from creditors.

This meant working with poorer countries so that they could keep track of their creditors and alert international financial institutions when their debt might be put up for sale. The Paris Club would encourage the World Bank to buy up sovereign loans rather see them fall into the hands of vulture funds. It would also pay for their lawyers in legal disputes and encouraging countries not to sell their loans, he said. …” [The Financial Times (UK)/Factiva]

UN Climate Chief Spurs Talks On New Global Warming Pact

“UN climate chief Yvo de Boer called on industrialized countries on Thursday to start showing some of their cards in a slow-paced poker game whose prize is a new pact to tackle global warming.

De Boer, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC), said talks unfolding among senior officials here marked ‘the first time that people are getting down to serious negotiations’ for a historic deal in Copenhagen in December next year. … Looking at specifics, de Boer said developing countries were still awaiting a signal from industrialized economies about what they intended to put on the table, especially ‘the critical ingredient’ of money. …” [Agence France Presse/Factiva]

AP notes that “…Changing the base year for measuring carbon emissions is just one radical idea under consideration by delegates from 170 countries negotiating a new climate pact set to take effect in 2012. Also being discussed are proposals to give industrialized countries credit for building low-carbon nuclear power stations in developing countries, to give nations credit for helping to avoid deforestation, and various schemes to raise the trillions of dollars needed in the coming decades to help poor countries adapt to the effects of their changing climates. …” [The Associated Press/Factiva]

Reuters adds that “…Hoping to speed work on the building blocks of a hugely complex treaty, the 170-nation talks agreed to ‘invite parties to submit ideas and proposals’, especially in writing to sharpen focus. A next session will be held in Ghana in August. … [de Boer] told reporters the talks needed more details, for instance on how to raise funds to help developing nations. …‘This is the first time people are really getting down to serious business ... zooming in on technology, finance and adaptation,’ de Boer told reporters. ‘It's a negotiation, not just a friendly discussion any more.’…” [Reuters/Factiva]

Saudis Plan To Grow Crops Overseas

“Saudi Arabia has unveiled plans to develop large-scale overseas agricultural projects to secure food supplies, revealing that Riyadh is in discussions with Ukraine, Pakistan, Sudan, Turkey and Egypt.

Abdullah al-Obaid, the Deputy Agriculture Minister, told the FT the government was planning to set up projects of at least 100,000 hectares in several countries to grow crops such as wheat, corn, rice, soybeans and alfalfa, a feed for livestock.

Obaid said the plan to set up new agricultural projects was driven by the rise in food prices, the need to secure future food sources and the desire to offer opportunities to the Saudi private sector. Obaid said officials had contacted many countries, which had reacted positively…

These included agreements that a certain percentage of whatever was produced was exported back to Saudi Arabia; that the governments would negotiate a bilateral agreement to protect any investments; and that the Saudi private sector would be the main investor, either alone or as part of a joint venture. The government's role would be to facilitate and ‘cover’ the investment, as well as help with infrastructure. …” [The Financial Times (UK)/Factiva]

Also In This Edition… Briefly Noted…

Ethiopia has launched an urgent appeal to international donors for more than $300 million of emergency aid. A total of 4.6 million people are now thought to need food aid, because of the drought which struck most of the country in the early part of this year. [BBC News (UK)]

World Bank Group President Robert Zoellick will visit Russia on June 16-17. He is expected to meet with the Russian leadership, the World Bank press service reported.    Meanwhile, Zoellick is planning to sign a memorandum on mutual understanding between the World Bank Group and the Russian Bank of Development and Foreign Economic Affairs. [ITAR-Tass (Russia)/Factiva]

Mali is asking international development aid donors to help bridge a financing gap of $6.6 billion for the 2008-2012 period at a special round table which started Thursday. The two-day round table, organized jointly with the UN Development Program (UNDP), was called to try and raise funds for development programs and the fight against poverty. [Agence France Presse/Factiva]

Madagascar will sell nine million tons of carbon offsets in a voluntary scheme to help protect one of its biggest and most pristine forests, a conservation group said on Thursday. Environmental campaigners are placing huge hope in offset schemes that let polluters pay for cuts elsewhere in emissions of the greenhouse gases blamed for climate change. [Reuters/Factiva]

The Nigerian-based International Institute of Tropical Agriculture (IITA) has come up with a new yield-enhancing system of rice production to help the continent battle rising food shortages and prices, an official told AFP. The new system aims at increasing yields per unit area, is based on the Asian way of paddle-field rice planting. It is to be adapted to conditions in rain-fed wetlands of West Africa. [Agence France Presse/Factiva]

Argentina's debt levels are higher than when in 2001 it crashed into sovereign debt default, …, a report to be issued next week says. Despite a radical restructuring three years ago, public debt is $114.7 billion or 56 percent of GDP, compared with $144.2 billion, or 54 percent of GDP, in 2001when Argentina's economy was much larger, the paper says. [The Financial Times (UK)/Factiva]

The UN on Thursday outlined plans to restructure its nine-year mission to Kosovo, as the territory prepares to adopt a new constitution. Under the plan unveiled by UN chief Ban Ki-moon on Thursday much of the responsibilities of the UN mission which has run Kosovo since 1999 would be handed over to the EU. [Agence France Presse/Factiva]

A World Bank’s Internal Evaluation Group report reviewing the Doing Business survey said that there was no statistically significant relationship between the indicators and growth rates. [The Wall Street Journal/Factiva]

The International Monetary Fund on Thursday urged Ukraine to keep monetary policy tight and to adopt a more flexible exchange rate in the face of record inflation and uncertainties over growth prospects. IMF directors expressed concern that some macroeconomic vulnerabilities have increased, the Fund said in its annual review of Ukraine's economy. [Reuters/Factiva]

Unsafe blood transfusions and medical practices in Central Asia may contribute, and in some cases have already contributed, to the spread of communicable diseases in the region, particularly HIV, according to the new World Bank report entitled Blood Services in Central Asian Health Systems: A Clear and Present Danger of Spreading HIV/AIDS and Other Infectious Diseases. [AKIpress (Kyrgyzstan)/Factiva]