“Ministers unequivocally supported Kim’s vision and stated that we can count on the World Bank Group as a partner in the endeavor of ending extreme poverty and boosting shared prosperity,” said Marek Belka, the chairman of the Development Committee.
“Kim renewed our zeal for the Bank Group’s core mission of a world free of poverty. There is a historic opportunity at our reach to make critical progress.”
The communiqué also called on the Bank Group to pay special attention to countries and regions with the highest incidence of poverty and to Fragile and Conflict-Affected Situations (FCS), as well as to the particular challenges facing small states.
A new analysis of extreme poverty released by the World Bank earlier this week showed that there are still 1.2 billion people living in extreme poverty (21 percent of the developing world population in 2010). Despite recent impressive progress, Sub-Saharan Africa still accounts for more than one-third of the world’s extreme poor.
The communiqué also stressed that the goal of shared prosperity--fostering income growth of the bottom 40 percent of the population in every country--will not be achieved without addressing inequality. Investments that create opportunities for all citizens and promote gender equality are an important end in their own right, as well as being integral to creating sustained economic growth. Shared prosperity also means focusing on those who, although not currently poor, are vulnerable to falling into poverty.
The committee also gave its vote of confidence for the International Development Association (IDA)--the bank’s fund for the poorest--as a critical tool to carry out the bank’s mission, and called for a robust IDA17 replenishment with strong participation from all members.
It welcomed IDA17’s overarching theme of maximizing development impact, including further leveraging synergies with the group’s private sector arm, the International Finance Corporation (IFC) and its political risk insurance agency, Multilateral Investment Guarantee Agency (MIGA). Furthermore, the committee recognized IDA17’s focus on inclusive growth, gender equality, FCS and climate resilience, including disaster risk management.
The role of the private sector to promote growth and job creation in achieving the goals was also noted in the communiqué.
With a proper enabling environment, adequate infrastructure, and policies that promote competition, entrepreneurship and job creation, the private sector can support shared prosperity and offer real opportunities to all citizens, especially women and young adults, it said.
IMF Focuses on Jobs Growth
The International Monetary Fund (IMF) on Saturday wrapped up its spring meetings with calls for a mix of policies to boost growth and employment worldwide.
“The meetings saw a strong and common recognition that achieving growth and jobs cannot rest on one policy alone,” said Tharman Shanmugaratnam, the head of the IMF’s International Monetary and Finance Committee, Xinhua reported.
“No single bullet exists to whisk the world back to pre-recession levels of employment and growth,” he added.
Warning against an overreliance on monetary policy alone to solve the world’s economic woes, Shanmugaratnam called for a better blend of monetary, fiscal and structural strategies, with an emphasis on medium-term fiscal and structural reforms.
“There was a very strong desire to see us focus...on getting growth back to normal,” he told a news briefing on Saturday. And a very strong desire to see a return to some normality on jobs in both emerging and advanced economies.
Earlier this week, IMF Chief Christine Lagarde said the global economy has entered a three-speed recovery, emerging economies are faring well, countries including the United States are on the mend, and the eurozone and Japan are not yet out of the woods.
This latest picture features rapid growth among emerging economies, with developing Asian countries and sub-Saharan Africa leading the pack with 75 percent growth over the last five years.
After a year of stifled performance, overall Asian growth is set to pick up steam this year and hit 5.75 percent, up by half a percentage point from the previous year.
In China, growth is on track with earlier predictions, at a rapid clip of around 8 percent this year, and is projected to pick up to 8.25 percent next year.
Japan’s stimulus is expected to help sustain growth at 1.5 percent this year, the IMF said.
Brookings Institution Senior Fellow Barry Bosworth echoed ongoing IMF recommendations that export-led countries, especially those in Asia, boost domestic demand from newly wealthy consumers to shore up their economies against the crisis-riddled West.
The lesson for the emerging markets is to reduce their reliance on exports to the global market and shift to greater emphasis on development of their domestic markets, the former White House economist told Xinhua. That is what China has been trying to do.
Slow Spending Cuts
The IMF earlier this week urged Washington to adjust the pace of spending cuts, predicting that the sequester--a spate of automatic spending cuts that kicked off on March 1--would slow US growth by 0.5 percent.
Lagarde last week told US media that the country should cut spending somewhat but avoid making the cuts too massive or brutal.
But Bosworth contended that current US government policies should remain unchanged, arguing the IMF contributed to problems by pushing for fiscal restraint too quickly after the financial crisis.
American Enterprise Institute researcher Daniel Hanson contended that the IMF’s recommendations were self-contradictory.
There was criticism of both austerity and fiscal largesse, he told Xinhua. “If you don’t want the US to cut spending, but you also want them to have less debt, then what exactly do you want them to do?”
The eurozone will see little to no growth, with the economies of Greece and Spain in tatters amid massive unemployment. Cleaning up the region’s troubled banking system is among IMF’s top concerns, and the IMF has called for recapitalizing, restructuring or--where necessary--shutting down banks.
Bosworth contended that the banking system fixes are moving too slowly, arguing that Europe’s banks are under-capitalized and that the European Central Bank and individual governments are not acting quickly enough.
Sri Lanka Will Grow By 6.5%
The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in its latest report has forecast Sri Lanka’s economy to grow by 6.5 percent this year, marginally up from 6.2 percent in 2012 but lower than the Central Bank estimate of 7.5 percent.
The UNESCAP Annual Report also stated that in 2013 Sri Lanka’s GDP growth is expected to improve due to the easing of both monetary and fiscal policies, and improved performance in all major sectors, mainly the agricultural sector which had suffered a setback in 2012 due to adverse weather conditions, Adaderana.lk reported.
Analyzing the growth trends in 2012, the report stated that a strong growth momentum continued in the first quarter of the year but moderated from the second quarter onwards in response to policy tightening and weakening global demand.
“Growth projections by the UNESCAP, IMF and ADB indicate that Sri Lanka needs more time to stabilize the economy and address structural imbalances before steering the economy on a sustainable growth path,” Institute of Policy Studies Executive Director Saman Kelegama told media while presenting an analysis of the report on Friday.
Despite lower than expected growth numbers, Kelegama insisted that Sri Lanka was faring better than most South Asian countries. With the exception of Bhutan, all South Asian countries will grow at less than 6.5 percent in 2013.
Since the end of a three decade war in 2009, Sri Lanka’s growth accelerated, hitting 8 percent growth in 2010 and 8.3 percent growth in 2011. However, in 2012, growth slumped to 6.4 percent amid declining exports and growing trade deficit.
Markets Warn G20 Of EU Trading Tax Risk
The world’s top financial markets have urged G20 finance ministers to oppose European plans to levy a tax on trading, warning it will damage global economic growth.
In a joint letter to the ministers, meeting in Washington this week, associations representing New York, London, Hong Kong and other financial markets, said the proposed Financial Transaction Tax would hurt the world economy at a time of significant uncertainty, CNNMoney wrote.
Eleven EU countries have agreed to enact the tax with the aim of raising billions of euros from the financial services industry and deterring speculation.
If this goes ahead, the impact will go well beyond the 11 member-states who are currently considering the proposal, said Simon Lewis, the head of the UK-based Global Financial Markets Association (GFMA), one of the signatories to the letter.
“At a time of poor economic growth in many parts of the world, that is completely counter-productive,” he said.
The countries planning to introduce the tax include the eurozone’s top four economies, namely Germany, France, Italy and Spain.
While the tax is only set at 0.1 percent of financial transactions and 0.01 percent of derivatives, analysts say the levy will have big economic consequences that will reverberate around the world. If levied on each party to a transaction, the costs could spiral out of control.
The associations’ letter explains that the tax will apply to all transactions where the buyer or seller resides in one of the 11 nations, and also if a security is issued in one of participating countries. That means that if a French company sells corporate bonds to a Japanese bank, the tax will still apply and hit both parties.
Fourfold Rise in ISACO Sales
Iran Khodro Company’s (IKCO) Spare Parts and After Sales Services (ISACO) in 2012 exported $3.3 million worth of spare parts, indicating a fourfold growth compared with the corresponding figure of last year.
Behnam Afkham, ISACO’s export manager, said, “Since March 20, 2012, we received more than $6 million worth of orders for spare parts from the countries importing IKCO’s products.”
He recalled that by the end of the last Iranian year (March 20, 2013), close to 60 percent of the orders were supplied and the rest are currently being processed.
“This is while, given the decline in import of foreign spare parts and the customs obstacles in reproducing spare parts, all the exported spare parts were manufactured domestically,” he said.
Afkhami noted that despite the West’s unilateral sanctions, during December 20, 2012-March 20, 2013, the company’s exports grew tenfold compared with the corresponding figure of last year.
“In addition to the increase in the volume of spare parts sale, the number of the countries willing to buy ISACO’s products, particularly Commonwealth of Independent States countries and those located in the Middle East, also has risen,” he said.
Founded in 1962, the Iranian car producer is currently regarded as one of the leading automakers in the Middle East.
Iran Building Cement Factory in Iraq
Iran is constructing the first cement factory in Iraq.
The factory, financed by Khoy’s Azarabadegan Cement Factory, is under construction in Al-Muthanna province, south of Iraq, Shata News reported.
The project has progressed by 10 percent.
The equipments and facilities of four main production lines of the factory have been designed by Iran’s specialized workforce.
The factory is to produce 2 million tons of cement per year. Khoy’s Azarabadegan Cement Factory has made investment worth $245 million for construction of the unit in Iraq in the past two years.
The required clinker is secured from Iran. The factory’s products will be produced with an Iranian brand.
Iran ranks fourth worldwide in terms of cement production. Iran’s capacity for producing cement is 76 million tons and its real production rate has reached 66 million tons.
The country has the highest cement production rate across the region and exports 14 million tons of the product annually. Iraq and Afghanistan are top destinations for Iran’s cement.
Iran Proposes TRACECA Expansion
Iran has proposed the expansion of the eastern axis from Bandar Abbas to Chabahar, Mashhad and Sarakhs at the conference of the transport corridor of Europe-Caucasus-Asia(TRACECA) member -states.
The conference was held in the Ukrainian capital, Kiev, from April 16-18, Tavana News Agency reported.
Shahriar Afandizadeh, Iran’s deputy roads and urban development minister, made the proposal while referring to Iran’s role as a member of this corridor.
TRACECA’s transit corridor has 13 members, namely, Iran, Kyrgyzstan, Kazakhstan, Turkmenistan, Georgia, Ukraine, Bulgaria, Armenia, Romania, Azerbaijan, Uzbekistan, Turkey and Moldova.
Afandizadeh, who is also the Iranian government’s special envoy for transit affairs, added that the most important issue discussed in the assembly was the strategic development plan of TRACECA’s corridor. The plan pertains to two durations: activities implemented till 2012 and those scheduled till 2015.
He also noted that a review of transport infrastructures up to 2015 by the members was one of the key issues discussed.
The International Monetary Fund forecasts that Uzbekistan’s gross domestic product (GDP) could grow 7 percent this year and the inflation rate could stand at 10.9 percent.