IMF, World Bank & IFI Round-Up

The World Bank Group on Nov. 5 announced the launch of a new trust fund to encourage investors to increase investment in the West Bank and Gaza. The fund is co-sponsored by the European Investment Bank, the Government of Japan, and the Palestinian Authority, and will be administered by the Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group. Merza Hasan, Executive Director for Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Maldives, Oman, Qatar, Syria, United Arab Emirates, and Yemen, is heading the World Bank Group delegation to the launch.

The World Bank approved a USD 350 million loan for Bangladesh to build more power plants to meet peak demands, the Bank said at the weekend. Poor electricity supply costs Bangladesh nearly 2 percent in GDP growth each year, the Bank said. With the financial assistance, a 300 megawatt (MW) power plant will be built at Siddhirganj, 20 km (13 miles) southeast of Dhaka, to meet demand during peak periods. A gas turbine power plant will also be built at Siddhirganj, along with a 60-km natural gas pipeline from Bakhrabad to Siddhirganj to improve the reliability of gas supply and an 11-km transmission line to serve more consumers

The director-general of the World Trade Organization (WTO), Pascal Lamy, said on Nov. 4 he would seek a second term as head of the organization and renewed his vow to conclude the Doha round of talks to open up world trade. In a letter to the chairman of the WTO General Council, Bruce Gosper, he said that concluding the Doha round would go a long way towards establishing a multilateral trading system and ensuring that opening up trade would serve developing countries goals Lamy said he would fight for when he took the job. Speaking in Geneva, Lamy again stressed the vital role of reaching a Doha round agreement to help fend off protectionist pressures and restore trust, drawing parallels with 1929 and the infamous Smoot-Hawley Tariff Act of the 1930s that deepened the Great Depression.

Emerging-market bonds gained Nov.4, extending their biggest rally since 2001 to a seventh day, as lower money-market rates eased investor concern that a credit squeeze will cut choke off lending to developing nations. Emerging-market assets were rebounding from a record tumble in October as interest-rate cuts by central banks and as much as USD 3 trillion of emergency credit help drive down the London interbank offered rate, or Libor, that banks charge each other for loans, Bloomberg reported. Ecuador led gains today, with the spread on the country’s bonds contracting 3.65 percentage points to 27.15 percentage points, according to JPMorgan.

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