Tuesday, November 09, 2010

G20 Agenda at Seoul, South Korea

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Re:  G20 Agenda at Seoul, South Korea

This summary is prepared by the External Affairs Department of the World Bank. All material is taken directly from published and copyright wire service stories and newspaper articles. The daily summary and other news can be found on the World Bank's external website at http://www.worldbank.org/news. For inquiries call (202) 473-7660 or send a written request to the News Bureau.
Tuesday, November 09, 2010
Today's Headlines:
  • G20 Leaders Meet Amid Strains Over Currencies, Trade
  • G20 Summit: Poor Nations Also On The Agenda
  • Unemployment Near 8 Percent Across G20: ILO
  • Leading Economies Set To Diverge In Recovery: OECD
  • Remittances To Developing Countries Resilient In Recent Crisis: World Bank_______________________________________________________________________________

G20 Leaders Meet Amid Strains Over Currencies, Trade. 
"Tensions over currencies and trade gaps are simmering ahead of a summit of global leaders this week as America's move to flood its sluggish economy with $600 billion of cash triggers alarm in capitals from Berlin to Beijing....Export-reliant nations, many of them poor, fear the US Federal Reserve move will drive more cash into their markets in search of higher returns, driving their currencies even higher and hurting manufacturers that provide jobs and security for fast-growing populations. At the same time, China has maintained tight control over its currency, the yuan, adding to criticism it is kept artificially low and gives Chinese exporters an unfair export advantage...." [Associated Press/Factiva]

BBC adds that "...one solution - proposed by World Bank President Robert Zoellick - is to return to a modern version of the gold standard. Unlike the original gold standard... he does not advocate rigidly fixing the value of currencies against the price of gold.

Instead, Zoellick suggested that a future system of flexible exchange rates should reference gold - instead of the US dollar - as a common point of valuation. The implication of Zoellick's suggestion is that countries like China would rely much less on buying US dollars, and more on buying gold and other currencies to build up their reserves...." [BBC News]

AFP writes that meanwhile, "...South Korea and the US have floated the idea of a numerical limit on trade surpluses or deficits, with the US proposing four percent of GDP. But the plan for a fixed target ran into strong opposition from China, Germany and other nations.

G20 finance ministers last month set no specific targets but pledged to work to reduce excessive current account imbalances and maintain them at 'sustainable' levels. Persistently large imbalances, assessed against 'indicative guidelines' to be agreed later, would warrant an assessment by the International Monetary Fund...." [Agence France Presse/Factiva]

G20 Summit: Poor Nations Also On The Agenda.
"Although this week's G20 summit is focusing on currency turmoil, the summiteers are also putting together a plan to give the G20 a big role in spurring development in poor nations.... But the development world is large and fractious with dozens of agencies jockeying for position to dole out aid, advice and research. Three of South Korea's major initiatives have all faced problems - ones seeking to eliminate tariffs and quotas on the world's poorest countries, direct more money into infrastructure spending, and create a 'knowledge platform' where developing-nation governments could examine cases studies on subjects like creating free-trade zones...." [The Wall Street Journal]

Meanwhile, AFP adds that "...Oxfam on Tuesday urged the G20 leaders to toughen taxes on major financial firms and spend some of the money on the world's poorest people.... 'Financial transaction taxes are an idea whose time has come,' it said in a statement. Taxes on financial transactions on stocks, bonds, currency and other trades could raise at least $400 billion a year, it said, citing a study....

The World Bank estimates more than 64 million people have been pushed into extreme poverty by the recent economic meltdown. 'It is wrong that people in poor countries should pay for the mistakes made by some of the richest people in the world.'..." [Agence France Presse/Factiva]

The Guardian reports that "...campaigners for a 'Robin Hood' tax - sometimes called a Tobin tax - on financial deals received a boost Tuesday when the first in-depth study of the idea found that transaction taxes were feasible and would allow the government to double Britain's annual aid budget. Research by the Institute for Development Studies (IDS) at Sussex University showed that a 0.005 percent tax on foreign exchange trades alone might raise around $26 billion a year worldwide....

But the study found it would be harder to tax transactions in complex derivative deals and discovered no evidence that a Robin Hood tax would lead to lower levels of financial volatility...." [The Guardian (UK)]

Unemployment Near 8 Percent Across G20: ILO. 
"Unemployment in the G20 leading world economies is close to 8 percent of the total workforce and looks set to keep growing strongly, the International Labor Organization (ILO) said on Monday. In their Update on Employment and Labor Market Trends in G20 Countries, the ILO said some 70 million people were out of work in G20 countries by mid-2010, over half of them in the richer members...." [Reuters/Factiva]

AFP adds that "...despite some positive signs, including a pickup in employment growth in most of the G20 nations in the second quarter of 2010, the ILO warned that jobs growth 'has not been strong enough to reverse the slack that accumulated in the labor market during the economic crisis.'

'Over the next 10 years the world will need to generate 440 million jobs, just to absorb new entrants into the labor force of which 210 million are in G20 countries,' the report said. Most of the good news came from emerging nations, where the ILO forecast that employment would be eight percent above pre-crisis levels by 2015...." [Agence France Press/Factiva]

The Financial writes that "...the ILO is urging the G20 to intensify its focus on 'productive employment and job-intensive growth policies' at its summit in Seoul....

'Unemployment is not the only issue', says ILO Department of Statistics Director Rafael Diez de Medina, noting that the ILO had found declining hours of work and labor force participation rates in high income economies and a significant increase in the number of discouraged workers.

'This is quite worrying,' he added, 'since they are not part of the unemployment figures and have a clear impact on social cohesion. Time-related underemployment has stabilized in 2010, but remains high in several countries of the G20.'...." [The Financial (Georgia)]

Leading Economies Set To Diverge In Recovery: OECD.
"The world's leading economies are set to diverge as they recover from the global economic crisis, with the US, Germany, Japan and Russia gaining pace while China, Britain, France and India slowing down, the Organization for Economic Cooperation and Development (OECD) said on Monday. The OECD said the forecasts were based on its composite leading indicators (CLI) index.

The indices for China and another emerging market powerhouse, Brazil, 'continue to point strongly downwards, edging below the long term trend and implying that the level of industrial production will fall below its longer-term trend,' the report said...." [Agence France Presse/Factiva]

Dow Jones notes that "...the OECD's composite leading indicator of economic activity in its 33 member countries was unchanged at 102.8 in September for the fourth straight month. This indicates that developed economies as a whole are set for 'steady expansion' and are unlikely to slip back into recession, the Paris-based think tank said.

But even within the G7 leading developed economies there are divergences. ... There are also differences between the foremost developing economies, with the leading indicator rising for Russia from August and falling for Brazil, China and India...." [Dow Jones/Factiva]

Xinhua adds that "...five major countries in Asia which did well in early 2010 - China, India, Indonesia, Japan and South Korea - would enter a stage of downturn. The OECD predicted that growth in Brazil and China would slow down with their CLIs moving below 100 points. The levels of industrial production will fall below their longer-term trend in these two economies, said the OECD...." [Xinhua/Factiva]

Remittances To Developing Countries Resilient In Recent Crisis: World Bank.
"Remittances to developing countries were a resilient source of external financing during the recent global financial crisis, with recorded flows expected to reach $325 billion by the end of this year, up from $307 billion in 2009, the World Bank said on Monday in its latest Migration and Remittances Factbook 2011....

'Remittances lead to more investments in health, education, and small business. With better tracking of migration and remittance trends, policy makers can make informed decisions to protect and leverage this massive capital inflow which is triple the size of official aid flows,' World Bank Director of Development Prospects Hans Timmer noted...." [Xinhua/Factiva]

AFP adds that "...the five countries receiving the greatest amount of money were India, China, Mexico, the Philippines and France, the World Bank said. India received $55 billion from its overseas residents while China received $51 billion, and Mexico $22.6 billion. The Philippines received $21.3 billion from its residents abroad, while French nationals residing overseas sent $15.9 billion home.

The World Bank estimates that there will be another 6.2 percent rise in the amount of funds sent home by immigrants in 2011 to $346 billion, and another 8.1 percent and in 2012 to $374 billion...." [Agence France Presse/Factiva]

Also in This Edition, Briefly Noted... US President Barack Obama on Monday announced a US-Indian partnership to promote food security in Africa, harnessing technology to battle starvation. [Reuters/Factiva]

Gabon has cancelled a major offshore drilling auction, after deciding it had more to gain from selling rights individually to energy companies. [Agence France Presse/Factiva]

Britain has cut over $12.1 million in direct aid to Uganda, citing slow progress in punishing ministers and other public officials accused of misappropriating funds for a Commonwealth meeting. [Business Daily (Kenya)]

At least 120 people in Haiti's capital, Port-au-Prince, are being tested for cholera, health officials say. Doctors have told the BBC the disease is clinically present in the city, but there is no official confirmation. [BBC News]

Spain will grant Bolivia $445 million in the coming five years for the development of basic infrastructure, sanitation, health and food security, Spanish Foreign Minister Trinidad Jimenez said Monday. [Xinhua/Factiva]

US President Barack Obama has backed India for a permanent seat on the UN Security Council. [Financial Times]

Burma's main military-backed political party, the Union Solidarity and Development Party (USDP), says it won about 80 percent of votes in the first election in 20 years. The main pro-democracy party, the NLD, boycotted the poll but other opposition groups have alleged widespread fraud. [BBC News]

Urgent action is needed to reverse inefficient farming methods and boost the world's supply of rice in order to prevent rising poverty and hunger, UN International Fund for Agricultural Development President Kanayo Nwanze told a world rice congress in Hanoi on Tuesday. [Agence France Presse/Factiva]
Acute respiratory infections, such as pneumonia and influenza, are responsible for 4.25 million deaths each year, accounting for at least 6 percent of the world's disability and deaths, said a report released by the World Lung Foundation (WLF) Tuesday. [Xinhua/Factiva

Belai Habte-Jesus,MD,MPH
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