Click here for search results
Online Media Briefing Cntr
Embargoed news for accredited journalists only.
Login / Register

Headlines For Tuesday, July 7, 2009

Donors Commit Funds To Help Promote Trade In Developing Countries

Donors formally committed funds on Monday to the $50 billion Global Trade Liquidity Program (GTLP), triggering the first disbursements to importers and exporters in developing countries to help reverse the decline in trade resulting from the economic crisis.


GTLP funds will start to disburse through the first four participating banks providing trade finance through a network of more than 500 banks in over 70 developing countries across all regions, the World Bank said in a statement released in Geneva.


Program partners and banks, which have together mobilized more than 6 billion U.S. dollars, gathered in Geneva on Monday at an event hosted by World Trade Organization (WTO) Director-general Pascal Lamy and World Bank Group President Robert Zoellick, to mark the launch of the GTLP following its announcement at a meeting of the G20 nations in April. …” [Xinhua/Factiva]


FT notes that “…Speaking at the launch in Geneva, Zoellick said the program would provide ‘significant support for trade in developing countries’. ‘Companies often used to finance trade from their own retained earnings, which may have been used up during the crisis,’ said Bernard Hoekman, Director of the World Bank's international trade department.


The program is kicking off with more than $6bn (€4.3bn, £3.7bn) in new funds, $2.5bn from the World Bank, the African Development Bank and other donors, and the rest from the commercial banks - Standard Chartered, Citigroup, Rabobank and Standard Bank of South Africa. More funds would be forthcoming shortly, Zoellick predicted. …” [The Financial Times (UK)/Factiva]


Reuters adds that “Asia-focused bank Standard Chartered Plc said its core banking business would be boosted by its participation in a new global financing program providing liquidity for poor-country exporters.


‘The fund will allow us to do a lot more. We will be able to help companies where they need it most,’ Karen Fawcett, senior managing director at London-listed Standard Chartered told Reuters on Monday after the launch of a facility that aims to unlock $50 billion in trade.  …‘The international organisations will provide some risk mitigation and we will be able to provide larger (credit) lines,’ Fawcett said. …” [Reuters/Factiva]

Japan To Provide 1.5 Trillion Yen To Indonesia In Event Of Crisis

”Japan will be ready to provide up to 1.5 trillion yen to Indonesia through a currency swap if the Southeast Asian country experiences a financial crisis, the Finance Ministry said Monday.


The Japanese and Indonesian governments reached a basic deal on the currency swap arrangement in Tokyo, the Japanese ministry said, adding they will likely sign an official pact by the end of this year. The currency swap is part of Japan's set of new programs, announced in May, to help other Asian countries in the event of a financial crisis. …” [Kyodo News (Japan)/Factiva]


FT notes that “…It brings the headline amount that Japan is prepared to lend Indonesia under its yen and US dollar swap agreements to $27.8 billion. Japan's finance ministry said it was in place as a precautionary measure to give Indonesia emergency funds during a crisis period.


Only 20 percent of the new money is likely to be tapped, however, because Indonesia would have to secure funding from the International Monetary Fund before it could access the remainder. …The move is part of a broader objective of garnering more economic and political clout in the region amid the growing influence of China, and taps the Y6,000bn bilateral currency swap scheme Tokyo promised in May to Asian countries. It is also working on agreements with Thailand and the Philippines. ..” [The Financial Times (UK)/Factiva]

Economic Crisis Hurts HIV Fight: World Bank, UN

“The economic crisis has disrupted HIV prevention and treatment programs, including causing shortages of anti-retroviral drugs, a report by UNAIDS and the World Bank said Monday.


‘In 22 countries in Africa, the Caribbean, Europe and Central Asia, and Asia and Pacific, disruption of HIV prevention and treatment programs is expected over the course of this year as a result of the global economic crisis,’ said the report.


Eight countries were already facing shortages of anti-retroviral drugs or other disruptions, added the report, which compiled responses from 71 countries where 3.4 million people receive treatment. It added that in 34 countries, respondents said there is already an impact on prevention programs. [Agence France Presse/Factiva]


Meanwhile in health related news AP reports that “The UN may need more than $1 billion this year to help poor countries fight the swine flu pandemic, the world body's Secretary-General Ban Ki-moon said Monday.


‘The funding has not been flowing as we have been expecting,’ Ban said. ‘We are now mobilizing all resources possible.’


The money is needed to ensure the poorest countries get vaccine supplies and antivirals if the global epidemic continues to spread, he told a news conference. …Health officials are concerned that people in poorer countries and those fighting other health problems like malaria, tuberculosis, malnutrition and pneumonia might be more susceptible to swine flu. …” [The Associated Press/Factiva]


Reuters notes that “The Global Fund to Fight AIDS, Tuberculosis and Malaria is facing a budget hole of about $3 billion as the recession dries up foreign aid, the Geneva-based funding body said on Friday.


Spokeswoman Marcela Rojo said that $170 million is still needed to pay for the programs the Global Fund committed to supporting last year, and it will need $2.5 billion to $3 billion to maintain and finance programs planned for 2010. …


Question marks over funding for the Global Fund's long-term programs may raise public health threats, because patients receiving AIDS and tuberculosis drugs need to keep taking the treatment to avoid developing resistance to it. …” [Reuters/Factiva]

Ease Burden Of Risk On Consumers, Says OECD

Rules to protect consumers and improve financial literacy must be at the heart of efforts to preserve private pension savings and to prevent a repeat of the credit crisis, according to a report by the Organisation for Economic Co-operation and Development (OECD). ‘More and more institutions are trying to transfer risks to their customers,’ said Bruno Levesque, head of financial education at the OECD.


In particular, the OECD had been concerned about the high proportion of homes in Eastern Europe purchased with mortgages in foreign currencies, subjecting households to risks they might not understand, let alone be able to hedge.


Levesque said the OECD believed it was insufficient to attempt to prevent future financial crises simply by imposing tougher regulations on banks: it was the consumers who bought financial products that needed protection and better information. …” [The Financial Times (UK)/Factiva]


AFP adds that “…New OECD guidelines, intended to prevent a repetition of the sub-prime loan crisis and its fallout, also say that lenders should be made legally responsible for checking how much money a customer needs to borrow and whether borrowers ‘will be able to meet their payments.’…


‘Financial services firms must make sure their customers understand what they are letting themselves in for when they sign up for mortgages, consumer loans and other products,’ the OECD said, presenting new guidelines on Tuesday. …


The OECD urged governments to put a legal obligation on sellers of financial services ‘to provide clear language in all mortgage agreements.’ They should offer a clear summary of terms and conditions, explain the implications of missing a payment deadline, spell out the interest rate and fees charged and the total cost of credit. …” [Agence France Presse/Factiva]

Commentary: Alliance for Change

A commentary by France President Nicolas Sarkozy and Brazil President Luiz Inácio Lula da Silva published in the NYT writes: “The summit meeting which is taking place in L’Aquila, Italy, at which the G8 (Britain, Canada, France, Germany, Italy, Japan and the US) is joined by South Africa, Brazil, China, India, Mexico and Egypt, will be the first since we realized the extent of the financial and economic crisis we are facing. …


The need to reform global governance did not spring from the crisis. Well before its outbreak, the multilateral system was conspicuously unrepresentative and lacking in coherence. The ability of international institutions to respond to the serious challenges of today’s world needs to be reinforced and their mandates reviewed. …


The meetings between the G8 and the G5/G6 are another example of the need to include emerging countries in the discussions on the future of the world economy and in tackling major global challenges. Not only do the emerging countries represent a huge portion of the planet’s landmass and population, but also (and increasingly) of global consumption and production. Never has international cooperation been more necessary. …


Now we must go further. International financial organizations, such as the International Monetary Fund and the World Bank, must give greater weight to the dynamic emerging economies in their decision-making processes. The decisions taken by the G-20 to improve the regulation and oversight of international finance, to curb speculation, to crack down on tax havens and money laundering centers, and to foster growth must be implemented.


With the crisis, the threat of protectionism has loomed larger. The conclusion of the World Trade Organization’s Doha Round is an urgent task, with a view to reaching an ambitious, comprehensive and balanced agreement, which will especially benefit developing countries, and particularly poorer ones, and reinforce multilateralism on trade. …


Other dangers, too, threaten peace and development. Climate change poses a major challenge to global governance. A far-sighted outcome is needed in Copenhagen next December to achieve our common goal of preventing serious climate change and limit to 2 degrees Celsius the increase in global temperature. …


Other global challenges include organized and transnational crime, terrorism, drug and human trafficking, pandemics, and food security. Our responses to those threats are often insufficient because of the fragmentation of international organizations or their tendency to duplicate work already done by others.  


Brazil and France wish to offer to the world their shared vision of a new multilateralism adapted to our multipolar world. We simply cannot address the problems of the 21st century with the international institutions inherited from the 20th century.


Along with other world leaders, we must forge an ‘Alliance for Change’ in order to promote this vision of a more democratic world order, one founded in greater solidarity and justice. That is what the citizens of the world expect of us. In that way alone will we rise to the challenges besetting our century.” [The New York Times]

Also in this Edition, Briefly Noted…

Rwandan President Paul Kagame in a speech to the G8 Africa Business Forum urged G8 leaders on Monday to consult poor nations more, saying some in the developing world were skeptical of economic recipes handed down by rich countries. [Reuters/Factiva]


Brazilian President Luiz Inacio Lula da Silva said on Monday that Brazil will be in conditions to debate with the rich countries as an equal in the G8 Summit in Italy.  In his weekly radio show ‘Breakfast with the President,’ Lula said he believes that due to the current global economic scenario, no big decision can be made without taking into consideration the position of the BRIC countries (Brazil, Russia, China and India).  [Xinhua/Factiva]


The Panama Canal Authority will disclose the economic offers to build a new set of locks for the canal from the three bidding groups on Wednesday, during a public ceremony to be held in Panama. The authority will say which of the three groups offers the lowest bid to build the new locks. [Dow Jones/Factiva]


The World Bank has committed $1.7 billion in fiscal year 2009 to help Pakistan cope amid the global economic crises, the institution's highest ever year-on-year support to the country. This represents an increase of $1,064 billion over FY08. [Asia Pulse/Factiva]


The UN in Afghanistan urged international donors on Monday to improve aid coordination by channeling more money through the Afghan government and criticized donors who do not declare their spending. [Reuters/Factiva]


Euro zone finance ministers disagreed on Monday over whether they should have a single representation at international financial institutions, despite being increasingly willing to speak with one voice. European Commission President Jose Manuel Barroso also said the time was not right yet for the EU to have just one seat at the International Monetary Fund. [Reuters/Factiva]


Jadranka Kosor became the first woman prime minister in Croatia's history on Monday and vowed to take quick steps to fight the worst economic crisis in years and revive the EU accession talks. [Reuters/Factiva]


A day after the signing of the Agreement for membership in the International Monetary Fund and the World Bank, Kosovo institution leaders signed an agreement acknowledging the debt to these institutions. The Kosovar leaders pledged to take over a part of the debt inherited from former Yugoslavia amounting to EUR 381 million. [BBC Monitoring European/Factiva]


World Bank Chief Economist for finance and the private sector Simon Djankov has been appointed as Bulgaria’s Finance Minister. [The Wall Street Journal/Factiva]


French President Nicolas Sarkozy and UK Prime Minister Gordon Brown called Monday for greater international resolve to tackle the recession as they put the need to support economic growth ahead of renewed budgetary discipline. Speaking at a summit in Evian, they expressed their concern that tentative hopes of a recovery could be crushed if other leading economies failed to kick-start bank lending or curb rising protectionism. [The Financial Times (UK)/Factiva]


The UN General Assembly on Monday endorsed a second term for Supachai Panitchpakdi of Thailand as head of the UNCTAD. [Agence France Presse/Factiva]


Rich countries must agree to cut greenhouse gases with immediate effect, ensuring emissions do not rise when economic output picks up, according to an influential group of government ministers. The group - which included senior government representatives from the US, Europe, India, Japan, Australia, Russia and several developing countries - also urged that global emissions should peak by 2020. [The Financial Times (UK)/Factiva]


Developing countries need money now to grapple with global warming and the G8 summit this week could energize troubled climate negotiations if it decided to make significant funds available, UNFCCC Executive Secretary Yvo De Boer said Monday. [The Associated Press/Factiva]

Permanent URL for this page: