Belaruson track to receive $2.5bn IMF loan

“Belarus, …is set to secure a $2.5bn (£1.7bn, €1.8bn) International Monetary Fund emergency loan to help it weather the global economic crisis.

The country would be the fifth former communist state to obtain IMF support in recent months, following Georgia, Hungary, Ukraine and Latvia. Unlike those countries, which were hit by the international credit crunch largely because of their reliance on foreign loans, Belarus has been driven into the IMF’s arms because of a sharp decline in Russian economic aid and exports to Russia. [Financial Times]

Belarus' central bank sharply devalued the Belarusian ruble Friday, allowing the currency to plunge 20 percent to help stop the hemorrhaging of its reserves…

The National Bank said the devaluation was aimed at raising the competitiveness of the Belarusian economy, which has been battered by the global financial crisis. It also was a condition of a $2.5 billion loan from the IMF announced Wednesday. [Associated Press]

…The devaluation was a condition for a $2.5 billion IMF loan that was approved last Wednesday…

Belarus has been badly hit by the global financial crisis and the National Bank set its dollar/Belarusian ruble exchange at 2,650 Belarusian rubles as of January 2, compared with 2,200 previously. The euro was up to 3,703 against 3,077 before the devaluation. [RIA Novosti]

Amid fears of further devaluation, Belarusians have been using their weakened rubles to buy U.S. dollars and euros, as well as household appliances imported from the West. Mall officials told RFE/RL that appliance prices are likely to rise. [Radio Free Europe]

Chile Government Announces $4 billion Economic Stimulus Package.

“Chilean President Michelle Bachelet Monday evening announced an economic stimulus package totaling $4 billion, or 2.8 percent of the country's GDP.

The package, which will be financed with funds from the country's Sovereign Wealth Funds and a sovereign bond issue, will increase 2009 public spending by some $1.5 billion, forcing the government to post a fiscal deficit of 2.9 percent this year, thereby suspending the law that forces the government to post a structural surplus of at least 0.5 percent of GDP. …” [Dow Jones/Factiva]

AP adds that “…Bachelet's measures include granting a one-time payment of $63 for all poor children under 18. The payments, to be made in March when the school year starts, are aimed at helping 3.7 million people. …The plan also includes tax incentives and measures to provide small businesses with easier access to financing. …” [The Associated Press/Factiva]

Reuters writes that “…Bachelet said the plan aimed to create 100,000 jobs, would increase public spending by nearly $1.5 billion, with $700 million of that destined for public works projects and would include handouts for the most vulnerable families as well as a temporary cancellation of stamp duty.

 The package also would lower employer contributions for small- and medium-sized companies, include income tax rebates and would deprive the government of around $1.5 billion in fiscal income, Bachelet said. …” [Reuters/Factiva]

Indonesia To Spend Savings To Boost Economy.

“Indonesia announced on Monday plans to spend rapidly $3.56 billion saved from the 2008 budget on infrastructure projects and tax breaks to stimulate the economy and mitigate the impacts of the global economic crisis.

Sri Mulyani Indrawati, the Finance Minister, said much more money could be available if conditions warranted it. She said this could come from either a $5.5 billion standby budget facility co-coordinated by the World Bank or new bonds. She claimed international demand for Indonesian debt was mounting because yields were many times higher than anything available in the west. …” [The Financial Times (UK)/Factiva]

Reuters adds that “…The planned spending, equivalent to about 1.4 percent of forecast 2009 GDP, comes as Indonesia sees weaker demand for commodities amid a global economic slowdown. With parliamentary and presidential elections due this year and economic growth set to slow, the government has earmarked $6.55 billion for projects such as roads, water and sanitation plants, irrigation, airport, ports, and railroads. …” [Reuters/Factiva]

The Jakarta Post writes that “…the government said Monday the money could help the economy grow by as much as 5 percent this year and keep the unemployment rate flat. …

The stimulus will in part come in the form of tax reliefs, direct funding for certain business sectors worst hit by the crisis, additional financing schemes for infrastructure projects and net safety programs. ‘With this stimulus, we hope the economy will keep on running and secure jobs for many people,’ Mulyani said. …” [The Jakarta Post (Indonesia)/Factiva]

UNICEF, Asia-Pacific Countries Convene To Address Impact Of Economic Crisis On Children

“The UN Children's Fund (UNICEF) and countries from East Asia and Pacific regions convened in Singapore Tuesday to discuss policies and measures to address impact of the current economic crisis on children.  

The UNICEF said at a press conference Tuesday morning that the global financial crisis is amplifying the effects of the food and fuel prices crisis. Reduced food consumption, particularly among poor families, can lead to stunted physical growth and decreased intellectual capacity of children. And more children were forced to leave school because of the falling household income. …” [Xinhua/Factiva]

AFP notes that “…Despite budgetary constraints, there is no reason to cut back on social spending, said Anupama Rao Singh, Director for East Asia and the Pacific at the UNICEF. …

Infant mortality is expected to increase between 3.0 and 10 percent and the malnutrition rate among children could rise by 10 percent, she said, without specifying exactly the number of youngsters at risk. …

While economies in the region have been affected by the global slump, many are still expected to post economic growth, although at a slower pace, Singh said. …She suggested that social protection programs be made an integral part of government stimulus packages aimed at reviving economies. That would create jobs for teachers, healthcare workers and social workers, she said. …” [Agence France Presse/Factiva]

In a commentary published in The Bangkok Post Singh writes that “…Most governments in the region have responded to the food price spikes with schemes such as price controls, subsidies, cash transfer for food, food rations, school feeding programs, guaranteed compulsory education or financial incentives for teacher education. But inadequate coverage is still an issue.

The World Bank reported two years prior to the current crises that interventions to improve child nutrition outcomes could generate benefits that are many times the cost of the interventions. There is a strong case for placing children at the centre of social protection systems. …”[The Bangkok Post/Factiva]

IRRI Leads New Initiative To Boost Food Security In Asia

“A new multilateral initiative was launched Tuesday to boost food security in South Asia by substantially increasing crop yields and income of millions of farmers in the region, the International Rice Research Institute (IRRI) said.

…The initiative, to be led by IRRI, will bring together a range of public and private sector organizations to enable sustainable cereal production in India, Pakistan, Bangladesh and Nepal. The project will be supported with a $19.59 million grant over three years from the Bill and Melinda Gates Foundation and a $10 million grant over three years from the US Agency for International Development (USAID).

Achim Dobermann, IRRI Deputy Director General for research, said the support to the new initiative signals an increasing recognition worldwide that agricultural research needs committed, long-term funding. …” [Trend News Agency (Azerbaijan)/Factiva]

AP notes that “…The 10-year program, led by the Philippines-based IRRI …aims to produce an additional 5 million tons of grain annually and increase the income of 6 million rural poor in Bangladesh, India, Pakistan and Nepal by at least $350 a year. …

The initiative will focus on eight hubs in the four targeted countries, which play a major role in feeding close to a quarter of the world's population. South Asia is home to 40 percent of the world's poor, with nearly half a billion people subsisting on less than $1 a day. …” [The Associated Press/Factiva]

Also in this Edition; Briefly Noted…

The authorities in Angola say they have closed part of the border with the Democratic Republic of Congo to prevent the spread of the deadly Ebola virus. Angolan officials said all movement of people from northern Luande Norte province to DR Congo would be stopped. [BBC News]

Turkish Economy Minister Mehmet Simsek said Turkey would try to finalise a deal with the International Monetary Fund (IMF) in February, Dunya newspaper reported on Tuesday. Talks between the IMF and Turkey on a new loan agreement are due to resume on Jan. 8 as the country looks to bolster its economy to cope with the impact of the global financial crisis. [Reuters]

The Gaza Strip’s main hospital warned on Monday that dozens of patients may die because it has lost its electricity and faces the prospect of running out of fuel for back-up generators within three days. “Our situation is very desperate,” Hassan Khalaf, the director of Shifa Hospital, said on Monday. [Financial Times]

International agriculture researchers and donors announced a plan Tuesday to substantially boost crop yields in South Asia and help farmers increase their income to avoid a repeat of last year's food crisis. [Associated Press]

No candidates have come forward to challenge the reappointment of Pascal Lamy as director-general of the World Trade Organisation when his term of office expires this year. Trade experts said the uncontested selection was evidence of the respect Mr Lamy had gained among both rich and poor countries, but it also reflected the WTO's struggle to remain relevant given the troubled state of global trade talks. [Financial Times]

The US is to establish what it calls "the largest area of protected sea in the world" around its Pacific islands. Commercial fishing and mining will be banned in the protected zones which include the Marianas Trench, the deepest area of ocean on the planet. The area totals 500,000 sq km (190,000 sq miles) of sea and sea floor. [BBC News]