Tensions and friction between the World Bank’s unit investigating corruption and the rest of the bank have undermined the lender’s efforts to fight graft, an independent panel said on Sept. 13. Led by former U.S. Federal Reserve Chairman Paul Volcker, the panel was asked by the World Bank to examine the role of the Department of Institutional Integrity, or INT, following concerns about its investigative practices.
In its findings, the panel said departments like INT “were not typically candidates for popularity prizes” but it found resistance by bank staff to the unit’s work were “particularly strong” due to distrust.The World Bank Sept. 12 raised its economic growth forecast for China this year to 11.3 percent, while warning its growing trade surplus and inflation were the main threats to healthy growth. Economic growth next year is expected to slow to below 11 percent, it added. The World Bank’s China Quarterly Update said China’s economic prospects remained sound, but rebalancing the growth pattern through further fiscal and structural policy measures remained major challenges, AFP reports. China’s soaring trade surplus is adding to excess liquidity and has helped push up asset prices, particularly the stock market, the report said, once again calling for a faster appreciation of the Chinese currency.
Recent upheaval in financial markets has underscored the need for a long-delayed global trade deal and countries must act now to avoid years of further delay, Europe’s trade chief said Sept. 11. “?The cost of remaining concessions that both developed and some, more competitive developing countries need to bring into the final package is small compared to the systemic gain of doing the deal – especially as global economic conditions are becoming more uncertain,” Peter Mandelson said, in prepared comments for delivery at the European Parliament. Reuters reports Mandelson added he hoped the U.S. would translate recent statements of commitment by President George W. Bush into concrete negotiating moves to help clinch a deal and he said Europe would go as far as it could with concessions.
Governments need to scrap subsidies for biofuels, as the current rush to support alternative energy sources will lead to surging food prices and the potential destruction of natural habitats, the Organization for Economic Co-operation and Development (OECD) warned. “The current push to expand the use of biofuels is creating unsustainable tensions that will disrupt markets without generating significant environmental benefits,”? say the authors of the study. It estimates the U.S. alone spends USD 7 billion a year helping make ethanol, with each ton of carbon dioxide avoided costing more than USD 500. In the EU, it can be almost 10 times that. It says biofuels could lead to some damage to the environment.
The World Bank should remain involved in rapidly emerging countries like China, Brazil and Russia but should look beyond pure economics and poverty reduction, the Bank’s watchdog agency said in a report released last week. The Independent Evaluation Group (IEG) said the Bank had been effective in spurring growth and poverty reduction but less so when it came to tackling inequality, corruption and environmental issues. The group reviewed the Bank’s work from 1995 to 2006 in a group of 86 so-called middle-income countries (MICs), including economic powerhouses like China. IEG Lead Evaluation Officer and author of the report Thomas O’Brien said the Bank should keep lending and providing technical and other expertise to these countries, but must also become more flexible and deliver new products and services geared for their needs.
The world’s largest reinsurer, Swiss Re, this week said that damage claims for natural disasters for the year were likely to nearly triple and cost the industry an estimated USD 35 billion in 2007. The insurance industry suffered some USD 12 billion in claims due to natural disasters in 2006, in what was regarded as a benign year, Swiss Re said in a statement? Uganda is no longer eligible to borrow certain African Development Bank funds because of the country’s high debt burden. The volume of Uganda’s current external debt is estimated to be about USD 1.8 billion? Tanzania will host a trade ministerial meeting on Africa’s place in global trade on October 1-2. The event is organized by the World Trade Organization, the African Development Bank and the World Bank?. The IMF has expressed concern over Tajikistan’s significant growth in external debt, which is currently at USD 886 million the head of the IMF mission for Tajikistan, Carlos Pinerua told journalists.