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By admin, 2010/03/13 06:07

The Palestinian economy is declining and becoming more dependent on foreign aid, as the Israel-imposed economic restrictions have increased, the World Bank said in a report released on Wednesday.

In the 65-page monitoring report prepared for a conference of donor countries in the United States later this month, the World Bank said the International Monetary Fund (IMF) notes a 0.5-percent drop in gross domestic product (GDP) of the Palestinian territories in 2007.

\”With a growing population and a shrinking economy, real per capita GDP is now 30 percent below its height in 1999,\” the report said, adding that if the Palestinian economy had kept the average growing pace recorded from 1994 to 1999, 6 percent per year, the GDP per capita would have nearly been 85 percent higher than the current figure.

Meanwhile, the report said as the Palestinian economy declines, it is becoming increasingly aid-dependent. The World Bank said the Palestinian National Authority (PNA) has received 1.2 billion US dollars so far this year to support its operating budget, yet a total of 1.85 billion dollars is needed for the whole year.

\”Thus, external aid will be at least 32 percent of GDP\” in 2008, said the report, which also cited the IMF as predicting that the GDP would grow moderately by 0.8 percent this year.

The fiscal crisis has persisted despite the fact that the PNA has carried out \”profound\” fiscal reform and has also taken efforts to enhance its public financial management, said the international body, adding that the PNA must continue on that path.

As of 2009, the PNA calls for 1.3 billion dollars in budget support, yet \”it is questionable whether the current level of budget support can be reduced,\” said the report.

Israeli restrictions increased 

The report said, reason for it being questionable is the growth-restraining restrictions imposed by Israel.

Although the Jewish state has announced a series of measures to support the Palestinian economy, and although it has removed some traffic barriers in the West Bank, indicators show that economic restrictions have increased, said the report.

\”Beyond a few that yielded positive results in terms of movements of goods and people,\” the obstacles that have been removed were found \”to be of minor or no significance,\” said the report, adding that a most recent survey found \”a slight deterioration in access because of the increased number of barriers.\”

The report stressed that the economic restrictions \”involve more than roadblocks and checkpoints… and extend to a system of physical, institutional and administrative restrictions that form an impermeable barrier against the realization of Palestinian economic potential.\”

\”With due regard to Israel\’s security concerns, there is consensus on the paralytic effect of the current physical obstacles placed on the Palestinian economy,\” said the report. It explained that such restrictions prevent the Palestinians from gaining access to economies of scale, access to natural resources and access to an investment horizon.

Turning to the Gaza Strip, the report said that the closure policy Israel imposed a year ago continues to erode the industrial backbone of the Hamas-ruled enclave, and is resulting in the collapse of the municipal sector.

Although an Egypt-brokered truce has took effect since mid-June, little progress has been made so far toward improving the living conditions of the population in the poverty-stricken territory.

Other factors curbing the Palestinian economic growth include that Gaza has been essentially excluded from the economic revival efforts, and that the aid has been largely ad hoc, leaving the PNA with little ability to plan finances, said the report.

\”The challenge moving forward with the removal of economic restrictions is to go beyond isolated gestures towards a profound revision in the fundamentals of the Palestinian economy,\” the World Bank said in its conclusion.

(Xinhua News Agency September 18, 2008)

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By admin, 2010/03/13 06:06

World Bank President Robert B. Zoellick has called on leaders of the G8 as well as the major oil producers to act now to deal with surging food and energy prices, warning that the world is now \”entering a danger zone\”.

Zoellick\’s call is contained in a July 1 letter to the head of the upcoming G8 summit in Japan, in which the Bank, World Food Program (WFP) and International Monetary Fund estimate that about 10 billion dollars is needed to meet short term needs of people hit hardest by the crisis.

\”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,\” Zoellick said in the letter made available to Xinhua on Wednesday.

\”I urge the Group of Eight countries, in concert with major oil producers, to act now to address this crisis. This is a test of the global system to help the most vulnerable, and it cannot afford to fail,\” said the World Bank chief.

He said the G8 made a commitment at the Gleneagles Summit in 2005 to boost overall development aid, to Africa in particular, by 2010, noting such aid was needed now, more than ever, as Africa accounted for two thirds of the countries most under stress by the food and fuel crisis.

\”For 41 countries, the combined impact of high food, fuel and other commodity prices since January 2007 represents a negative shock to GDP of between 3 and 10 percent,\” he said. \”These numbers translate into broken lives, and stunted potential. For the most vulnerable, especially poor children, they mean malnutrition, reduced resistance to disease, and too often death.\”

\”Record oil prices and high and rising food costs threaten a growing number of countries with rising poverty and social instability. Already we have seen food riots in over 30 countries, and unrest over high fuel prices is spreading. The urban poor are especially affected by the double hit of food and fuel,\” he warned.

In his letter, Zoellick urged the G8 to consider two new measures to \”improve the world\’s ability to cope with an on-going food crisis.\”

The first was a UN assessment on guaranteeing a portion of funding for the World Food Program. The second was to study the merits of an internationally coordinated \”virtual\” humanitarian strategic reserve system for food emergencies.

\”The international community is facing an unprecedented test in this new era of globalization: the question is whether we can act swiftly to help those most in need, \”he said.

\”For globalization to work successfully and achieve its promise, it must be inclusive and sustainable. This means acting now in the interests of the poor who are most affected by this double jeopardy of food and fuel crisis, and who are least able to help themselves,\” he added.

(Xinhua News Agency July 3, 2008)

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By admin, 2010/03/13 06:05

Yesterday the World Bank\’s Board of Executive Directors approved
a loan of US$96 million to the People\’s Republic of China to help
finance the Second Guangdong Pearl River Delta Urban Environment
Project. The project will help reduce water pollution in the Pearl
River system in Guangdong Province through a package of key
initiatives, including wastewater treatment and sludge disposal,
industrial pollution control and water quality monitoring, sediment
removal from waterways, and flood protection and river embankment
improvements. 

The Pearl River Delta (PRD) region in China\’s southern Guangdong
Province is among the fastest growing regions in China, averaging
nearly 14 percent per annum in recent years, mostly due to large
inflows of foreign direct investment in manufacturing. Many parts
of the PRD are largely devoted to export processing. However, the
high economic growth in the PRD has come at a heavy environmental
cost. Lack of proper treatment of industrial and domestic
wastewater which is discharged into the river systems has led to
serious deterioration in river water quality in the PDR region, and
poses a serious threat to drinking water sources, including the
drinking water supply to Hong Kong. It also renders the river
system unsuitable for irrigation, aquaculture, and potential
recreational uses. 

To address the problem, Guangdong provincial government
announced a major plan to clean-up the PRD rivers in 2002. It is an
eight-year campaign which will invest more than US$5 billion in the
construction of wastewater treatment systems in cities and towns in
the PRD region. 

\”The World Bank is supporting this ambitious plan through a
series of environmental initiatives in the Pearl River Delta
region,\” said World Bank Urban Sector Coordinator and project
leader Tom Zearley. \”Our first PRD urban environment project was
approved in 2004 and focused on financing wastewater treatment
facilities and other investments in the provincial capital of
Guangzhou, which is the biggest single source of pollution. This
new project will include two additional PRD cities of Foshan and
Jiangmen, which together generate about 15 percent of the pollution
going into the PRD rivers. Through implementation of the project,
we hope to reduce domestic source pollution entering the Pearl
River system from the two cities, and thus deepen and extend the
Guangdong provincial government\’s efforts to clean-up the PRD
rivers.\”

In Foshan, the project will finance expansion of a wastewater
treatment plant, construction of a centralized sludge treatment and
disposal facility, improvements to river embankment for flood
protection, and establishment of a water environment management
information system and water quality monitoring facilities. It will
also support staff training and a study of environment cost for GDP
growth and \”green\” economic planning.

In Jiangmen, the project will help improve wastewater management
through expansion of a wastewater treatment plant, construction of
interceptors, secondary sewers, pumping stations, and sludge
treatment and disposal facilities, and improvements in water
quality monitoring system. The project will also provide technical
assistance to enhance operational and business management
capacities of the new Jiangmen Biyuan Wastewater Company.

The total project cost is US$188 million, and Bank finances
US$96 million.

(China.org.cn March 22, 2007)

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By admin, 2010/03/13 05:49

Senior managers of the Export-Import Bank of China and the World Bank came
together Monday in Washington to sign a Memorandum of Understanding
aimed at building collaboration between the two organizations for
development, with a particular focus on Africa.

Mr. Li Ruogu, Chairman and President of Eximbank and Mr. Juan
Jose Daboub, Managing Director of the World Bank, signed the
Memorandum of Understanding that is designed to facilitate deepened
cooperation.

Established in 1994 Eximbank is China\’s state policy bank for
international economic development and cooperation. It serves as a
key channel of financing for exports, overseas construction
contracts and overseas investment projects and is the only arm for
concessional on-lending.

Over the past year, the World Bank has established a strong
working partnership with Eximbank. This has included a series of
workshops, seminars and training events on a variety of topics,
including fiduciary and financial management, procurement,
environmental safeguard analysis and social impact
analyses. 

\”This signing represents an important step forward in our joint
cooperation supporting improved development results for the poor
and vulnerable, especially in Africa,\” said Mr. Daboub who has just
completed an eight-day official visit to China. \”This collaboration
draws on the complementary strengths of each organization –
notably, China\’s development experience and the World Bank\’s
expertise in analysis and capacity building.\”

Over 400 million people have left the ranks of the extreme poor
in China over the past 20 years. China is well placed to share its
successful experience with other developing nations.

\”The solution to all kinds of development challenges is to have
economically sustainable growth,\” said Mr Li Ruogu. \”We welcome
this Memorandum of Understanding and the opportunities for
collaboration towards this end that it represents.\”

(China.org.cn May 22, 2007)

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By admin, 2010/03/13 05:48

In view of China\’s strong growth of its service sector, the World Bank (WB) raised its forecast for China\’s 2008 economic growth to 9.8 percent in a report released on Thursday.

In April, it forecast a 9.4 percent growth, down from the 9.6 percent prediction made in the beginning of 2008 and 10.8 percent made in mid 2007.

The upward revision this time largely reflected data showing stronger service sector growth of China\’s revised GDP data, said the World Bank in a Quarterly Update for China.

China\’s National Bureau of Statistics has raised the country\’s GDP growth for last year by half a percentage point to 11.9 percent, the fastest since 1994. The increased GDP volume was also driven by services industry growth, according to the bureau.

The WB report said most developing and emerging markets, like China, would outperform high-income countries as they were less directly exposed to the financial turmoil and would see a modest, orderly slowdown.

China\’s economic growth had moderated to a more sustainable pace, which in part reflected less buoyant investment, but the country\’s domestic economy was holding up well, it said.

Exports, backed up by the country\’s strong international competitiveness and a robust domestic economy, would support China\’s growth for 2008 amid weak and uncertain global prospects, it claimed.

It noted that although damages of the earthquake hitting southwestern China in May to the affected area was huge, the macroeconomic impact was likely to be modest as the affected area accounted for only a small part of China\’s economy.

(Xinhua News Agency June 19, 2008)

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By admin, 2010/03/13 05:47

The World Bank has unveiled an initiative to help developing
countries recover assets stolen by corrupt leaders and
officials.

\”We at the World Bank, in partnership with the international
community, want to help developing countries recover assets that
have been stolen by former corrupt leaders,\” said World Bank
President Paul Wolfowitz.

\”This is a moral obligation. Recovering even a portion of the
stolen assets will help fund development and social programs, or
badly-needed infrastructure.\”

The Stolen Asset Recovery (StAR) Initiative was discussed
yesterday as part of the institution\’s Governance and
Anti-Corruption Strategy in a working session with country
delegates and representatives of international agencies.

\”The recovery of stolen assets is a practical problem,\” said
Hilary Benn, Secretary of State for International Development of
the UK. \”This initiative is really timely. It\’s about each of us
playing our part.\”

The cross-border flow of proceeds from criminal activity,
corruption and tax evasion is estimated at US$1-1.6 trillion – half
of this from developing and transition economies. Corrupt money
associated with bribes received by public officials from developing
and transition countries is estimated at US$20-40 billion.

The World Bank is pursuing the StAR Initiative jointly with the
United Nations Office on Drugs and Crime (UNODC).

Proposals on the table for further discussion include:
Persuading all jurisdictions to ratify and implement the UN
Convention Against Corruption; helping developing countries build
capacity for requesting mutual legal assistance for asset recovery;
and developing partnerships to share information and
experience.

In recent years, nearly 4,000 corrupt Chinese officials fled
overseas with more than US$50 billion of illicit money.

(China Daily April 17, 2007)

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By admin, 2010/03/13 05:46

The World Bank has called on donors to further boost aid as investment in developing countries heads for a \”perfect storm.\”

In a statement issued as development experts prepare for the International Conference on Financing for Development in Doha, Qatar over the weekend, the Bank said it is imperative that donors meet their Gleneagles commitments to debt relief and scaled-up aid. At present, G7 countries are falling 30 billion U.S. dollars short of these goals.

\”Developed country policymakers must avoid putting in place policies and structures that undermine the interests of developing countries,\” said World Bank President, Robert B. Zoellick in a statement from the Bank\’s offices in Nairobi on Friday.

\”Courageous steps have been taken by many developing country governments in recent years to introduce and maintain sound macroeconomic and fiscal policies. They now find themselves at the mercy of a crisis not of their making. A retreat to protectionism or economic nationalism by developed countries will hurt them even further.\”

In a paper prepared for the Doha Follow-up Conference on Financing for Development to Review the Implementation of the Monterrey Consensus, the Bank said developing countries are facing a \”perfect storm,\” with a convergence of slowing world growth, a withdrawal of equity and lending from the private sector, and higher interest rates.

It said investment, the main driver of developing country growth over the past five years, will be hard hit by the financial crisis, and remittances from developing country migrants – a powerful poverty reduction mechanism – will likely decline in line with the global slowdown.

All this, it said, comes in the wake of the severe food and fuel price crises, which placed a heavy fiscal, economic and social burden on many developing countries.

\”This is not just about finance, as crucial as that is,\” Zoellick said. \”In a world where developing countries represent new drivers of global growth, we must learn to listen to their experiences, and we must take better account of their needs.

\”Financing for development is no longer about the old paradigm of aid dependency or charity, it is about an investment in a stable, prosperous and inclusive future – that means having more and different voices at the table, and accepting that the North must learn to listen to the South.\”

Reflecting deteriorating global conditions, the World Bank has revised its 2009 growth forecast downward. The volume of global trade is projected to contract in 2009, the first decline since 1982.

Developing country growth in 2009 is now forecast at 4,5 percent, nearly two percentage points lower than previously estimated; growth in high-income countries, many of which are already in the midst of recession, is now expected to be marginally negative in 2009.

Heading the World Bank delegation to Doha, Justin Yifu Lin, the World Bank\’s Chief Economist and the first such appointee from a developing country, said \”This unfolding crisis highlights the extent of our global connectedness and has left us in a position whereby, in the next year, developing countries could account for all of the world\’s GDP growth. In this transformed world, empowering developing and emerging countries is imperative.\”

\”Financing for development should focus more on adapting to countries\’ conditions and aspirations,\” said Lin.

\”It should be geared toward working with governments and stakeholders in those countries to support practical economic development programs. Helping nations pursue economic development and long term prosperity should be the goal of development finance. We must not lose sight of this principle amidst the current crisis. \”

To meet growing needs, President Zoellick has announced that the Bank Group will front load the 42 billion dollars it has available to support low-income (IDA) countries over the next three years, and rely on its strong capital basis to lend up to 100 billion dollars to developing countries over the same period.

IFC, the private sector arm of the Bank Group, is also increasing support, doubling the Global Trade Finance Program to three billion dollars, launching a global equity fund with support from Japan to recapitalize distressed banks, and establishing a new facility to provide roll-over financing to existing, viable, privately funded infrastructure projects facing financial distress.

(Xinhua News Agency November 28, 2008)

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By admin, 2010/03/13 05:45

World Bank President Robert Zoellick joined the call on Wednesday for the lifting of food trade restrictions in face of soaring food prices.

\”We need an international call to remove export bans and restrictions,\” Zoellick told reporters on the sidelines of a world summit on the food crisis hosted by the United Nations Food and Agriculture Organization (FAO).

\”These controls encourage hoarding, drive up prices and hurt the poorest people around the world who are struggling to feed themselves,\” he added.

One day earlier, UN Secretary General Ban Ki-moon also urged some countries to immediately lift restrictions on food exports.

\”Some countries have taken action by limiting exports or by imposing price controls … They only distort markets and force prices even higher,\” Ban said in an opening address to the summit, which kicked off Tuesday.

The three-day meeting of world leaders was the first global response to the recent cycle of food prices hike, aimed at winning donor pledges for urgent aid as short-term solutions and also to generate longer term strategies to safeguard food production.

Echoing Ban earlier remarks, Zoellick called for \”safety net support, school feeding, food for work, maternal and child programs, conditional cash transfers and budget support\” for the poorest countries which were hit hardest by the food price hike.

(Xinhua News Agency June 5, 2008)

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By admin, 2010/03/13 05:44

China has made remarkable success in poverty reduction despite challenges ahead, according to a report released by the World Bank recently.

In a new paper, \”The developing world is poorer than we thought but no less successful in the fight against poverty,\” the Bank revised estimates of poverty since 1981, finding that 1.4 billion people in the developing world were living on below 1.25 US dollars a day in 2005, down from 1.9 billion in 1981.

In China, the number of people living on less than 1.25 dollars a day in 2005 prices has dropped from 835 million in 1981 to 207 million in 2005.

The World Bank\’s earlier 2004 estimate had 130 million people in China living on below 1 dollar a day based on the 1993 consumption purchasing power parity (PPP). Thus, the new calculations reveal more poor people than assumed earlier, \”but China\’s remarkable success in reducing poverty still stands,\” said the report.

The new estimates, which reflect improvements in internationally comparable price data, offer a much more accurate picture of the cost of living in developing countries and set a new poverty line of 1.25 dollars a day.

They are based on the results of the 2005 International Comparison Program (ICP), released earlier this year.

Martin Ravallion, director of the World Bank\’s Development Research Group, hailed China\’s progress in reducing poverty.

\”China\’s been enormously successful against poverty,\” he said. \”I don\’t think we\’ve ever seen anything in human history that\’s comparable.\”

\”In our numbers it\’s quite striking, we estimate that 84 percent of the population of China was living on below 1.25 dollars a day in 1981,\” he said.

\”If you\’d have gone to China at that time or maybe in the late 1970s, you would have been in one of the poorest countries, particularly in rural areas, in the world. There\’s no question,\” he noted.

China\’s success against absolute poverty \”has clearly played a major role in this overall progress,\” said his report, noting \”the developing world outside China is not on track to reaching the Millennium Development Goals for poverty reduction.\”

The overall numbers of poor people outside China have remained fairly flat, with about 1.2 billion people living below that 1.25-dollar marker outside China. Within China, the number has fallen by 600 million over that time period.

But Ravallion also warned that China is \”poorer than we thought\”, for there are still about 16 percent of the population living below poverty line now in China.

Justin Lin, chief economist and senior vice president for Development Economics at the World Bank, explained that there were many distortion in the economic sectors, which slowed China\’s efforts of poverty reduction.

\”My advice to the Chinese government, my government back home, is to continue the market-oriented reform, and to make the economic growth more sustainable,\” said Lin, a former university professor and the first chief economist of the World Bank from a developing country.

(Xinhua News Agency October 23, 2008)

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By admin, 2010/03/13 05:43

Senior managers of the Export-Import Bank of China and the World Bank came
together Monday in Washington to sign a Memorandum of Understanding
aimed at building collaboration between the two organizations for
development, with a particular focus on Africa.

Mr. Li Ruogu, Chairman and President of Eximbank and Mr. Juan
Jose Daboub, Managing Director of the World Bank, signed the
Memorandum of Understanding that is designed to facilitate deepened
cooperation.

Established in 1994 Eximbank is China\’s state policy bank for
international economic development and cooperation. It serves as a
key channel of financing for exports, overseas construction
contracts and overseas investment projects and is the only arm for
concessional on-lending.

Over the past year, the World Bank has established a strong
working partnership with Eximbank. This has included a series of
workshops, seminars and training events on a variety of topics,
including fiduciary and financial management, procurement,
environmental safeguard analysis and social impact
analyses. 

\”This signing represents an important step forward in our joint
cooperation supporting improved development results for the poor
and vulnerable, especially in Africa,\” said Mr. Daboub who has just
completed an eight-day official visit to China. \”This collaboration
draws on the complementary strengths of each organization –
notably, China\’s development experience and the World Bank\’s
expertise in analysis and capacity building.\”

Over 400 million people have left the ranks of the extreme poor
in China over the past 20 years. China is well placed to share its
successful experience with other developing nations.

\”The solution to all kinds of development challenges is to have
economically sustainable growth,\” said Mr Li Ruogu. \”We welcome
this Memorandum of Understanding and the opportunities for
collaboration towards this end that it represents.\”

(China.org.cn May 22, 2007)