The World Bank has offered loans totaling USD 5 billion for developing countries to invest in projects to combat and adapt to climate change. The bank announced its new Climate Investment Fund on the second day of the Bangkok Climate Talks. About 1,200 delegates from 163 countries have gathered to begin engineering a new international pact on climate change to replace the Kyoto Protocol. Warren Evans, director of the World Bank’s environment department, said the initiative was part of a three-year scheme aimed at providing low-interest loans for clean technology, climate change adaptation and sustainable forestry management projects in developing countries, which are the most vulnerable to climate-change effects.
Growth in East Asia is expected to slow to 7.3 percent in 2008 from 8.7 percent in 2007 as exports soften because of the economic slump in the US, the World Bank said in its East Asia & Pacific Update. The East Asian region’s economic performance will most likely be affected by the global economic slowdown, soaring fuel and food prices and the subprime credit crisis, but the Bank believes East Asia’s strong economic fundamentals will provide a cushion. Although the World Bank is expecting a “long period of escalated prices” for commodities, it warned that introducing subsidies to soften the blow of high prices to consumers must be carefully considered.
Global central banks’ currency reserves rose at the end of the fourth quarter, while the dollar’s share of these holdings edged up despite claims of steady diversification away from dollar assets. Data from the International Monetary Fund released on March 31, which covers about two-thirds of the world’s foreign exchange reserves, showed that currency holdings rose to USD 6.391 trillion in the fourth quarter, up around 6 percent from the previous three months.
Sovereign wealth funds, which rose 18 percent to USD 3.3 trillion last year, will reach USD 10 trillion in 2015, thanks to rising oil prices and Asian countries’ growing trade surpluses, the think-tank International Financial Services London (IFSL) said. Including other sovereign investments, such as pension reserve funds or funds owned by state-owned corporations, and other official forex reserves, sovereign funds in a broader sense hit USD 14.7 trillion in 2007, IFSL said. Non-commodity sovereign funds doubled their total assets from three years ago to USD 1.2 trillion last year and may see their share of global sovereign funds increase to 40 percent by 2010 and 50 percent by 2015, up from 36 percent in 2007, IFSL said.