World Bank Head Urges G8 To Take Action On Food, Oil Crisis

"World Bank President Robert Zoellick called on the Group of Eight leading nations Wednesday to take immediate steps to deal with soaring food and energy costs.

"I urge the Group of Eight countries, in concert with major oil producers, to act now to address this crisis," he said in a conference call.” [Dow Jones]

“ ‘We are entering a danger zone,’ Zoellick wrote in a July 1 letter to Japanese Prime Minister Yasuo Fukuda, who is chairing the G8 summit in Hokkaido next week.

‘What we are witnessing is not a natural disaster -- a silent tsunami or a perfect storm. It is a man-made catastrophe, and as such must be fixed by people,’ he said in the letter, which was also copied to leaders of the United States, Canada, France, Germany, Italy, Russia, Britain, and the United Nations.” [Reuters]

The New York Times adds that "Zoellick is also calling on more than two dozen countries to ease export bans on food, which he said have contributed to higher prices. The export bans make it harder to move food around the world. ... The World Bank is also increasing its own financial support for food and agriculture research, to make countries more productive in meeting their own food needs, Zoellick said."

“... Zoellick said countries were being hit by a combination of record oil and food prices, threatening more countries with rising poverty and social instability. Food riots have already occurred in some 30 countries and unrest over high fuel prices is spreading.

Ahead of the G8 summit in Japan on July 7-9, Zoellick said $US10 billion ($A10.48 billion) [is needed to meet short term needs of people hit hardest by the crisis].” [SBS ]

The Financial Times adds that “ He urged G8 leaders to guarantee $5bn-$6bn for the World Food Programme, advocate the lifting of food export restrictions and to look at a pooled reserve of food for emergencies, which would prevent countries to build national food stocks.

The World Bank estimates that for 41 countries, the impact of high food, fuel and other commodity prices since January 2007 represents a negative shock to their gross domestic product of between 3 and 10 per cent.”

" Mr. Zoellick said another pressing need was to get seed and fertilizers to small farmers, especially in Africa and for countries to ease export bans and restrictions which he said have contributed to higher world food prices. He said some 26 net food exporting countries have maintained or introduced such measures. Mr. Zoellick said the Group of Eight should work with the UN to call on governments around the world to ensure access to local purchases for the WFP and for humanitarian purposes. He said he hoped the UN would take up this call during its September meetings." [Aki Press]

World Bank Urges Aging Eastern Europe To Take In Immigrant Workers.

 “Countries in Eastern Europe will have to open up to new waves of immigrants to prevent their economies being hobbled by labor shortages caused by rapidly aging populations, [World Bank's Chief Economist for Europe and Central Asia, Pradeep Mitra]…warned Wednesday. …

Launching a World Bank [Innovation, Inclusion and Integration] report on the region's economy, Mitra said falling birth rates were expected to lead to Ukraine's population falling by a fifth by 2025. Bulgaria, Georgia, Belarus, Latvia, Russia and Lithuania are all expected to see population declines of more than 10 percent over the same period.

Millions of Eastern Europeans have left to work in Western Europe since the fall of communism and the EU's relaxing of border controls. Their homelands are already suffering labor shortages and Mitra said that even if they attract the emigrants back they will still have to consider new sources of labor. But he acknowledged concerns that the influx of outsiders could stir racism and xenophobia in nations unused to living with large numbers of foreign residents. …” [The Associated Press/Factiva]

Dow Jones notes that “The largest economies in Eastern Europe want to join the Euro zone as quickly as possible, despite their public skepticism about the process, a senior World Bank official said Wednesday. …

These countries have had large budget deficits that have forced them to delay their Euro entry plans, Mitra said. He noted that the region is eager to see how Slovakia's economy performs when it starts using the euro in January. Mitra was discussing a report he wrote, published Wednesday, about the transition of former communist countries to market economies. His main finding was that countries that have integrated with the EU have performed better than their peers. …” [Dow Jones/Factiva]

SeeNews reports that “East European countries and ex-Soviet states have put the crisis of the 1990s behind them, but they need to innovate, include all their citizens in the development of the countries, and integrate with the broader global economy if they want to sustain growth, a World Bank report said on Wednesday. …

The study says that weak job growth in South Eastern Europe is the result of vigorous downsizing in state-owned and privatized firms, more than offsetting strong job growth in the firms that have always been private. Resources must be used more efficiently, and pensions and healthcare systems must be reformed, to avoid those becoming sources of acute fiscal pressure, the Bank said. …

In order to accomplish innovation and knowledge absorption the countries must adopt new products and processes, upgrade old products and processes, license technology, improve organizational efficiency, and certify quality. The report shows that certain key aspects of the business environment in the region are maturing and converging towards those in developed market economies. …” [SeeNews (Bulgaria)/Factiva]

G8 Leaders To Consider Global Food Crisis Control System

“The G8 major countries are set to consider establishing a food crisis control system to stockpile food for countries needing help in emergencies, informed sources said Wednesday. …It will be the first time for an annual summit of major countries to compile a document exclusively on food problems. …

The special statement is set to call for a system that can help countries in need of support in times of crisis by utilizing stockpiled foods contributed mainly by the G-8 countries, according to a draft of the statement. …

As for medium- and long-term measures, the draft G8 statement calls for further investments in developing countries with high potential for increasing food production. In addition, the statement urges the early development and use of nonfood biofuels such as those made from plant fibers. The G8 countries are likely to agree on a plan to set up meetings of experts to oversee the implementation of measures in the statement, the sources said. [Jiji Press (Japan)/Factiva]

In related food crisis news, The Guardian reports that “The G8's push for greater biofuel use has been a significant factor in driving 760 million people into food insecurity and putting them at risk of hunger in the past two years, Action Aid says today.

Released before next week's G8 summit …the charity's report, Cereal Offenders, says the 82 percent rise in food commodity prices since 2006 has directly pushed 260 million people into risk of hunger as a result of the rich world's drive for biofuels. …” [The Guardian (UK)/Factiva]

Meanwhile, The Independent writes that “The world's richest nations will today be told by Gordon Brown to stop backsliding on their pledges to double aid to Africa by 2010. The Prime Minister will risk a clash with world leaders at next week's G8 summit in Japan over their failure to honor pledges to boost aid made three years ago. …

Brown's four-point plan for the annual G8 gathering includes a $60 billion boost for health care in developing nations, to recruit more health workers; extra money to meet shortfalls in a $1 billion fund to stop 72 million children missing out on a primary education; and a food-crisis package. The Prime Minister will also work to find a resolution to the stalled world trade talks, arguing that failure in the next few weeks would deprive millions of a way out of poverty. …” [The Independent (UK)/Factiva]

FT notes that “Efforts by the G8 to enter a closer dialogue with new economic powers such as China and India are being undermined by the rich nations' unwillingness to listen fully to the emerging nations' concerns, according to one of their -representatives.

A year ago the G8 launched what it planned as an ‘equal and enduring partnership’ with five emerging economies, but …in spite of some progress the ‘developed countries have basically set the agenda’, Lourdes Aranda, Mexico's Deputy Foreign Minister and coordinator on the G8 for the five countries, believes. …She said the G5 would also like to focus more on issues such as technology transfer from developed to developing countries - for instance regarding climate change - and on efforts to improve healthcare systems in poor countries. …” [The Financial Times (UK)/Factiva]

Development Partners Pledge $1.7 Billion Support

“Ghana's development partners have announced a $1.7 billion support for 2008 to accelerate implementation of programs under the country's Growth and Poverty Reduction Strategy II. The declaration came at the end of the 15th Ghana Consultative Group Meeting of government officials, development experts, partners and civil society organizations in Accra.

…Ishac Diwan, World Bank Country Director, said attention was paid at the meeting to the oil and food price shocks and how it could impact on the country's growth prospects. He said the country had shown enough economic stability, which had enabled it to withstand the shocks. …

The meeting discussed the results, achievements and challenges of Ghana's development and poverty reduction efforts on the theme: Ghana's Aid Policy-A Joint Approach to Accelerated Development. Highlights of the meeting included a long-term national development plan being prepared by the National Development Planning Commission and the Annual Progress Report on Ghana's Growth and Poverty Reduction Strategy II. …” [Accra Mail (Ghana) and All Africa/Factiva]

Some 1.5 Billion People May Starve Due To Land Erosion-FAO

“Rising land degradation reduces crop yields and may threaten food security of about a quarter of the world' population, the United Nations Food and Agriculture Organization (FAO) said on Wednesday.

‘An estimated 1.5 billion people, or a quarter of the world's population, depend directly on land that is being degraded,’ FAO said in a statement presenting a study based on data taken over a 20-year period. Long-term land degradation has been increasing around the world and affects more than 20 percent of all cultivated areas, 30 percent of forests and 10 percent of grasslands, FAO said. …” [Reuters/Factiva]

AP adds that “…Severely affected areas include parts of Africa, southeastern Asia, southern China, Australia, the Pampas of South America, Siberia and North America. Degradation, a long-term decline in the ecosystem and productivity of land, is mainly caused by mismanagement, the Rome-based agency said. Its consequences include lower productivity, inadequate food supply, migrations and the loss of biodiversity.

The [Land Degradation Assessment in Dry lands] study does not analyze further causes of land degradation, but experts said climate change is also believed to be a possible cause. …The agency said that more than 20 percent of all cultivated areas, 30 percent of forests and 10 percent of grasslands are degrading. …” [The Associated Press/Factiva]

Xinhua notes that “ … ‘Land degradation also has important implications for climate change mitigation and adaptation, as the loss of biomass and organic soil matter releases carbon into the atmosphere and affects the quality of soil and its ability to hold water and nutrients,’ said Parviz Koohafkan, Director of the FAO's Land and Water Division. …

Some 22 percent of degrading land is in very arid to dry-sub humid areas, while 78 percent of it is in humid regions. The study found that degradation is being driven mainly by poor land management. Comparing with previous assessments, the present study shows that land degradation since 1991 has affected new areas; meanwhile some historically degraded areas were so severely affected that they are now stable having been abandoned or managed at low levels of productivity. …” [Xinhua/Factiva]

Also in this Edition: Briefly Noted...

Briefly Noted… President Bush called Wednesday for Congress to renew his global AIDS initiative and urged other nations to live up to their own promises to fight poverty and disease on the African continent.  [The New York Times/Factiva]

The International Monetary Fund (IMF) on Wednesday increased lending to Madagascar by $30 million to help the island cope with high oil and fuel prices and cyclone damage, and urged it to lift a rice export ban. The increase will be reflected in the IMF's $89.8 million loan arrangement with Madagascar. The Fund on Wednesday also approved the disbursement of $35.3 million to Madagascar under the program. [Reuters/Factiva]

Kenya's economy is expected to expand by four percent in 2008 owing to the impact of the post-election violence, the International Monetary Fund (IMF) said Wednesday. An IMF review mission, which visited the country from June 23 to July 2, said the economy had already picking up, but key sectors like tourism will take time to regain their former standing. [Agence France Presse/Factiva]

Brazilian President Luiz Inacio Lula da Silva told visiting Japanese Economy, Trade and Industry Minister Akira Amari on Wednesday that Brazil plans to develop bioplastics as part of the country’s contribution to the environment, Amari told reporters. [Kyodo News (Japan)/Factiva]

Chinaannounced a major strengthening of capital controls last night in an attempt to limit the amount of speculative hot money entering the economy and frustrating its efforts to contain inflationary pressures. In an announcement on its website, the State Administration of Foreign Exchange, the country's foreign exchange regulator, said exporters would be required to park revenues in special accounts while the authorities verified the funds were the result of genuine trade. [The Financial Times (UK)/Factiva]

The Philippine’s government is borrowing $900 million from the World Bank and the Asian Development Bank this year to shore up the peso and tame inflation, which was expected to have hit double-digit levels last month, the highest in close to 10 years, Finance Secretary Margarito Teves said. [Manila Standard/Factiva]

India’s 4.8 million truckers on Wednesday launched a nationwide, indefinite strike against rising diesel prices and government taxes in an attempt to capitalize on public discontent over a sharp increase in inflation. [The Financial Times (UK)/Factiva]

SpainVice President Fernandez de la Vega announced on July 2 that Spanish ODA will be relatively more restricted in the next two years than it was in previous periods due to the current economic constraints. The government expects to compensate for this in the future by reaching the 0.7 percent of GDP goal by 2012. [Agencia EFE/Factiva]

With the approval of these projects and signing of their respective credit agreements, Albania marks the official graduation from IDA to IBRD, i.e. from soft IDA credits (concessional financing) for very low income countries into IRBD loans (commercial financing) for middle income countries. [Albanian-ATA English News Service/Factiva]

The World Bank has advised Serbia to commit to more fiscal discipline and said rejigged reforms designed to boost control over public spending and improve the business climate would be backed by a new lending plan, World Bank Country Manager Simon Gray told Reuters in an interview late on Tuesday. [Reuters/Factiva]

The US will pledge $400 million in aid to Kosovo next week at a donors conference expected to raise more than $1 billion for the newly independent state, Assistant Secretary of State Dan Fried said on Wednesday. [Reuters/Factiva]

Millions of European gypsies’ still face wide-spread discrimination, the European Commission said Wednesday. In a report, the EU's executive body notes that Roma are particularly exposed to high poverty and unemployment, and that if they are working it is usually as black-market labor. [Agence France Presse/Factiva]

The World Bank has awarded a $7 million feasibility study to engineering group Coyne et Bellier, part of French utility group Suez, local media reported on July 2, 2008. The feasibility study is related to the project for setting up a canal which will link the Red Sea and the Dead Sea in the Middle East [French News Digest (Bulgaria)/Factiva]

Fifteen Japanese business leaders announced Wednesday the creation this fall of a new organization for joint initiatives between the government and business community to disseminate Japan's advanced environmental technologies around the world. The planned body is provisionally called the business council for global energy conservation and will be funded by the business community. [Kyodo News (Japan)/Factiva]

Severe adverse effects from climate change can be avoided at reasonable cost but only if politicians stop talking and start acting, a major report from PricewaterhouseCoopers (PwC) says today. Updating a study it conducted two years ago, it calls on leaders of the G8 leading economies… to commit themselves to firm timetables for emissions reductions at next week's summit in Tokyo. It now estimates the cost of a 50 percent reduction in global carbon emissions by 2050 at around 3 percent of global economic growth, at the top of the 2-3 percent range it estimated in 2006. …[The Guardian (UK)/Factiva]

Japan and Middle Eastern leaders agreed Wednesday on a project to bring thousands of badly needed jobs to the West Bank… Israel, Jordan and the Palestinian Authority said in talks in Tokyo that they aimed to start building a Japanese-funded agro-industrial park in the region by early next year. The initiative ‘will contribute to creating a future viable Palestinian state, living in co-existence and co-prosperity with Israel,’ the four participants said in a joint statement. [Agence France Presse/Factiva]