IMF, World Bank & IFI Round-Up

The Bush administration, together with US and foreign business organizations, challenged a World Bank proposal that would allow developing countries to use their own contracting rules for bank-funded projects, the Washington Times reports. A revised version of a proposal introduced last year would organize a pilot program to use “country procurement systems” in bank-supported operations. The proposal would cover infrastructure, rural development and similar sorts of projects in Third World countries. Businesses that work with the bank previously objected, fearing it would increase corruption in such countries as Nigeria, Zimbabwe and Azerbaijan. The US government entered the fray earlier this month when Commerce Secretary Carlos Gutierrez and a variety of business groups expressed misgivings in March 3 letters to World Bank President Robert B. Zoellick.

Responding to spiking food prices, the World Bank said on Monday that it will nearly double the amount in loans made to help boost agricultural production in Africa to USD 700 million from USD 420 million. ?Because you don’t want everything to be a short-term response, we are really trying to upgrade our efforts in terms of increasing agricultural production,? World Bank President Robert Zoellick told Reuters. World Bank lending for agriculture has averaged some USD 500 million a year, but there are plans to push it up to as much as USD 850 million in coming years, a bank official told Reuters.

A recent World Bank report on education places Egypt among the group of average performers with Tunisia, Lebanon, Iran, West Bank and Gaza, and Algeria. The report “The Road Not Traveled: Education Reform in the Middle East and North Africa” finds the middle performers group tends to closely track the top-performing countries (Kuwait and Jordan). The least performers group include: Djibouti, Yemen, Iraq, and Morocco. The middle performers seem to have their own specific mix of education achievements and challenges, the report finds. As for Egypt, the country has reached universal primary education and reduced the gender gap at all levels of instruction, literacy levels remain relatively low and the quality of education could be improved. The report argues that countries in the MENA region need to overhaul their education systems to meet the demands of an increasingly competitive world and realize the potential of their large and growing youth population.

The amount of money sent home by Latin American migrant workers grew at a sharply slower pace last year as the US economy ran into trouble and the dollar’s value fell. The Inter-American Development Bank, or IADB, said in a report March 11 that Latin American migrants in the US and around the world sent USD 66.5 billion in remittances to their home countries last year? Remittances grew at a rate of 16 percent in 2006 and 25 percent in 2005, and had shown double-digit increases since the IADB started tracking them in 2000, the bank said.

The outlook for the global economy deteriorated for a fourth month in March amid declining faith in Asia’s ability to dodge the US slump, a survey of Bloomberg users on five continents showed. The Bloomberg Professional Global Confidence Index fell to 13.1 from 14.3 in February. Respondents in Asia were the most pessimistic about worldwide growth and a gauge of confidence in their own economy fell to 38.1 from 43.5. A reading below 50 indicates negative sentiment. Mounting pessimism may further undermine the global economy at a time when stocks are declining and the U.S. Federal Reserve has slashed interest rates with the US economy teetering on the brink of a recession. The world’s biggest banks and securities firms already wrote down about USD 188 billion of assets linked to mortgages for people with poor credit histories.

The World Bank’s Board of Executive Directors has approved a loan of USD 100 million to China to help improve the water supply and manage wastewater in a major urban area of Anhui Province ? around 400 kilometers west of Shanghai in the east of the country. The Bengbu Integrated Environment Improvement Project will focus on improving water management in the middle and lower reaches of the Huai River Basin. The Bengbu Municipality ? with a population of around 3.5 million ? has experienced frequent flooding that interrupts the local economy while facing continuing challenges from industrial pollution, inadequate wastewater collection and treatment, and an unreliable water supply.

The World Bank has approved a USD 15 million credit to Azerbaijan to improve living conditions, enhance economic opportunities and increase prospects for social integration for those displaced by the conflict with Armenia which ended in 1994. The additional financing to the Internally Displaced Persons’ (IDPs) Economic Development Support Project will support the scaling up of the micro-project component of the ongoing IDPs Economic Development Support Project to meet the needs of an additional 150,000 people living in Internally Displaced Persons (IDP) communities across Azerbaijan. The Additional Financing will also cover the operational cost of the Social Fund for the Development of Internally Displaced Persons (SFDI), the implementing agency of the Project.

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