Archive for the ‘world bank’ Category

Brazil, Russia want summit with India, China

November 26, 2008

Russia and Brazil agreed Wednesday to meet with India and China next year to create a new global financial architecture — a reflection of how economic power is shifting from the United States and Europe.

Brazil, Russia, India and China — emerging markets collectively known as the BRIC nations — “represent a powerful force,” President Luiz Inacio Lula da Silva said as he stood with Russian President Dmitry Medvedev, who agreed to host the 2009 summit.

Silva is pushing for big developing nations like Brazil to have a major role in drawing up new regulations for international finance and for a greater voice in the IMF and World Bank.

By SILVIA IZQUIERDO, Associated Press Writer

Medvedev said he and Silva discussed the creation of a “new financial architecture,” Russia’s ITAR-Tass news agency reported.

Silva and Medvedev did not say whether China and India have agreed to the summit, but finance minister of the four countries met on the sidelines of a G20 meeting in Sao Paulo that preceded their leaders’ summit in Washington this month.

The two leaders also discussed increasing cooperation in energy, agriculture and railways, signed a military technology cooperation accord and agreed to cooperate on a satellite program. Russia has a satellite navigation system, and Brazil launches its own rockets from a base in northeastern Brazil.

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Cyber Security: World Bank “Invited” Attack; “Gave Away” Millions of Dollars Through IT Office

November 2, 2008

The World Bank’s information security officer, a native of Sri Lanka,  set up a no-interest, $53 million bank loan to Sri Lanka’s government to help wire up that nation’s communications infrastructure — bypassing the World Bank’s normal vetting officials.

Over the past year, as FOX News reported three weeks ago, the bank has suffered a series of Internet attacks that penetrated at least 18 and perhaps as many as 40 of the bank’s data servers. Moreover, spyware was apparently installed on computers inside the bank’s treasury unit in Washington.

By Richard Behar
Fox News

In 1997, Mohamed Vazir Muhsin, a Sri Lankan accountant, was chosen by then-World Bank President James Wolfensohn as the first chief information officer in the institution’s history. Eight years later, Muhsin was unceremoniously thrown out the door, and the bank’s information security headaches reached migraine stage.

Early on in his tenure, Muhsin selected Satyam Computer Services, one of India’s largest and fastest-growing technology firms, to create and maintain the software programs that would make the bank’s information infrastructure into one of the world’s most important data bases. Both sides found the deal highly beneficial.

World Bank building at Washington.jpg
Above: World Bank, Washington D.C.

By late 2005, when he was accused of improper ties with Satyam and ousted from the bank, “Mohamed was arguably the most powerful person in the bank,” one insider who worked closely with Muhsin told FOX News.

So powerful, in fact, that he was able to conceive and arrange a bank loan in 2003 to his native Sri Lanka — bypassing the department that would normally have approved it. The project, known as “e-Sri Lanka,” involved a no-interest, $53 million bank loan to Sri Lanka’s government to help wire up that nation’s communications infrastructure.

The loan was highly controversial. At one stage, bank officials suspended the project after complaints that the World Bank’s information technology department had no business arranging loans to any government — let alone to one of “the world’s most unstable countries,” as the World Bank labeled strife-torn Sri Lanka in 2004. But after a Muhsin protege took charge of the bank’s South Asia department, the project moved ahead that same year without any further delays.

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http://www.foxnews.com/story/0,2933,445845,00.html

China’s Worst Nightmare: Unemployment

October 31, 2008

The global economic meltdown has dealt and enexpected blow to China: high unemployment amidst this population of 1.3 billion people.

By Simon Elegant
Time Magazine

When China’s President Hu Jintao made his first official visit to Washington in April of 2006, he encountered a string of diplomatic snafus that culminated in enduring several minutes of screaming from a protester admitted into the media stand. Still, U.S. officials say he and President George W. Bush developed a genuine personal rapport. At one point, Bush asked his counterpart which of the numerous challenges China faced was the most serious — which one kept Hu awake at night worrying.
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“Unemployment,” Hu reportedly answered without hesitating.
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These days, Hu must be suffering from serious insomnia. When that meeting in Washington took place, China’s economy was still expanding at a double-digit rate, creating enough jobs every year that many of the 20 million new job seekers who entered the market found some sort of gainful employment. Now GDP growth has dipped to around 9% and is expected to decline further as the worldwide financial crisis transmogrifies into a global recession. Already, scores of Chinese factories producing consumer goods like toys and plastics goods have shuttered in the southern industrial powerhouse of Guangdong, and thousands of unemployed workers have made their displeasure known with rowdy demonstrations last month.

It’s a situation that is only going to get much worse in the next few months, as the number of unemployed balloons. According to estimates by the Dongguan City Association of Enterprises with Foreign Investment, 9,000 of the 45,000 factories in the cities of Guangzhou, Dongguan, and Shenzhen — the heart of China’s industrial south — are expected to close before the Chinese New Year in late January. That could mean up to 2.7 million workers facing unemployment, the association said. And they called that number “conservative.”

Finding jobs for millions of unemployed is “the biggest challenge [China’s] leadership faces” says David Dollar, head of the World Bank’s China office in Beijing. The current crisis has greatly accelerated a process that was already underway as China’s economy has been shedding low-level factory jobs to transition to manufacturing higher value-added products and jobs in the service industry. “In a way, the crisis could work out well for China. It has the potential to help in rebalancing the economy away from production” to the creation of more jobs in the service sector, says Dollar. If GDP growth slows further to 8%, the government still can hit its job creation targets, but the speed with which the adjustment happens will be critical, he says. “We’re going to learn just how well the capital and labor markets work in China. The concern is if the adjustment is very quick, it could be difficult.”

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http://www.time.com/time/world/article/
0,8599,1855400,00.html?xid=rss-world

Gordon Brown’s New Rules for Our Global Economy

October 17, 2008

By Gordon Brown
The Washington Post
Friday, October 17, 2008; Page A25

This is a defining moment for the world economy.

We are living through the first financial crisis of this new global age. And the decisions we make will affect us over not just the next few weeks but for years to come.

The global problems we face require global solutions. At the end of World War II, American and European visionaries built a new international economic order and formed the International Monetary Fund, the World Bank and a world trade body. They acted because they knew that peace and prosperity were indivisible. They knew that for prosperity to be sustained, it had to be shared. Such was the impact of what they did for their day and age that Secretary of State Dean Acheson spoke of being “present at the creation.”

British Prime Minister Gordon Brown listens to questions after ... 
British Prime Minister Gordon Brown listens to questions after an EU summit in Brussels, Thursday Oct. 16, 2008. European Union leaders have agreed to stick to ambitious plans to cut greenhouse gases by 20 percent by 2020, but divisions over how to share out the cuts have been widened by fears over the impact of the financial crisis.(AP Photo/Yves Logghe)

Today, the same sort of visionary internationalism is needed to resolve the crises and challenges of a different age. And the greatest of global challenges demands of us the boldest of global cooperation.

The old postwar international financial institutions are out of date. They have to be rebuilt for a wholly new era in which there is global, not national, competition and open, not closed, economies. International flows of capital are so big they can overwhelm individual governments. And trust, the most precious asset of all, has been eroded.

When President Bush met with the Group of Seven finance ministers last weekend, they agreed that we all had to deal with not only the issue of liquidity in the banking system but also the capitalization and funding of banks. It was clear that national action alone would not have been sufficient. We knew we had to send a clear and unambiguous message to the markets that governments across the world were prepared to act in a coordinated manner and do whatever was necessary to stabilize the system and address the fundamental problems.

Confidence about the future is vital to building confidence for today. We must deal with more than the symptoms of the current crisis. We have to tackle the root causes. So the next stage is to rebuild our fractured international financial system.

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http://www.washingtonpost.com/w
p-dyn/content/article/2008/10/16
/AR2008101603179.html?hpid=opinionsbox1

Petraeus seeking broad support for U.S. strategy

October 16, 2008

By David Morgan

WASHINGTON (Reuters) – Even before he takes command of U.S. military strategy for Afghanistan and Pakistan, Gen. David Petraeus is reaching beyond the military sphere to encourage international support for stabilizing the region.
U.S. General David Petraeus addresses journalists after a meeting ... 
U.S. General David Petraeus addresses journalists after a meeting with British Prime Minister Gordon Brown at 10 Downing Street in London September 29, 2008.(Andrew Winning/Reuters)

Petraeus, whose innovative thinking is credited with helping save Iraq from civil war, met International Monetary Fund and World Bank representatives last week in preparation for new efforts in Afghanistan and Pakistan, officials said.

The move, unusual for a military commander, underscores the Pentagon’s emphasis on unifying military, economic, political and diplomatic aid to help the two countries cope with militant violence and economic dislocation, officials said.

On October 31, the Army general will become head of Central Command, responsible for American military interests in 20 countries across the Middle East and Central and South Asia.

“The purpose (of the World Bank and IMF meetings) was to touch base and note the Central Command’s interest in supporting comprehensive approaches in Pakistan, Afghanistan, and others,” said a military official close to Petraeus.

His arrival at Centcom is widely expected to reinvigorate U.S. strategy in Afghanistan, where U.S. and NATO efforts face grave challenges from an increasingly confident Taliban.

The United States has 32,000 troops in Afghanistan, including 19,000 under Centcom command and 13,000 under NATO.

Petraeus will launch a 100-day assessment of U.S. strategy for Afghanistan, Pakistan, Iran, Iraq and other countries in the Centcom region once he takes over, officials said.

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http://news.yahoo.com/s/nm/20081016/ts_nm/
us_afghan_pakistan_petraeus;_ylt=AkqqQ
Wz4hUqlL0Dq19UlHmKs0NUE

World Bank Under Cyber Siege in ‘Unprecedented Crisis’

October 10, 2008

By Richard Behar
Fox News

The World Bank Group’s computer network — one of the largest repositories of sensitive data about the economies of every nation — has been raided repeatedly by outsiders for more than a year, FOX News has learned.

It is still not known how much information was stolen. But sources inside the bank confirm that servers in the institution’s highly-restricted treasury unit were deeply penetrated with spy software last April. Invaders also had full access to the rest of the bank’s network for nearly a month in June and July.

In total, at least six major intrusions — two of them using the same group of IP addresses originating from China — have been detected at the World Bank since the summer of 2007, with the most recent breach occurring just last month.

In a frantic midnight e-mail to colleagues, the bank’s senior technology manager referred to the situation as an “unprecedented crisis.” In fact, it may be the worst security breach ever at a global financial institution. And it has left bank officials scrambling to try to understand the nature of the year-long cyber-assault, while also trying to keep the news from leaking to the public.

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http://www.foxnews.com/story/0,2933,435681,00.html

China Falls Short on Vows for Olympics

April 21, 2008

By Jill Drew and Maureen Fan
The Washington Post
Monday, April 21, 2008; Page A01
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BEIJING, April 20 — China has spent billions of dollars to fulfill its commitment to stage a grand Olympics. Athletes will compete in world-class stadiums. New highways and train lines crisscross Beijing. China built the world’s largest airport terminal to welcome an expected 500,000 foreign visitors. Thousands of newly planted trees and dozens of colorful “One World, One Dream” billboards line the main roads of a spruced-up capital. The security system has impressed the FBI and Interpol.
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But beneath the shimmer and behind the slogan, China is under criticism for suppressing Tibetan protests, sealing off large portions of the country to foreign reporters, harassing and jailing dissidents and not doing enough to curb air pollution. It has not lived up to a pledge in its Olympic action plan, released in 2002, to “be open in every aspect,” and a constitutional amendment adopted in 2004 to recognize and protect human rights has not shielded government critics from arrest.
A haze of pollution hangs over China's National Stadium, known as the bird's nest, the main venue for the Beijing Olympics beginning Aug. 8.
A haze of pollution hangs over China’s National Stadium, known as the bird’s nest, the main venue for the Beijing Olympics beginning Aug. 8. (By Greg Baker – Associated Press)
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The two realities show that when China had to build something new to fulfill expectations, it has largely delivered. But in areas that touch China’s core interests, Olympic pledges come second.
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“To ensure a successful Olympic Games, the government did make some technical and strategic efforts to improve the environment, human rights and press freedom. They did make some progress. But in these three areas, there’s a long, long way to go,” said Cheng Yizhong, an editor who tracks China’s Olympic preparations.
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With the Games less than four months away, the International Olympic Committee is scrambling to nail down specifics of how China will treat criticism of its actions during the event. Pressed this month, IOC President Jacques Rogge clarified that athletes would be allowed to speak freely in Beijing’s Olympic venues, calling it an “absolute” human right.
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“I can’t help but feel cynical about all this,” said David Wallechinsky, an Olympic historian, who said the IOC should have been more forceful with China earlier. “What are they going to do, take away the Games?”

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http://www.washingtonpost.com/wp-dyn/content/article/2008/04/20/AR2008042002044.html?hpid=topnews

Perils in The Price Of Each Grain of Rice

April 3, 2008

By David Ignatius
The Washington Post
Thursday, April 3, 2008; Page A17

You may have missed the front-page article in the New York Times last Saturday, with the one-column headline written in clipped newspaperese: “High Rice Cost Creating Fears of Asia Unrest.” But this little story could be an early warning of another big economic problem that’s sneaking up on us.

The new danger is global inflation — most worryingly in food prices, but also in prices for commodities, raw materials and products that require petroleum energy, which includes almost everything. Prices for these goods have been skyrocketing in international markets — at the same time the Federal Reserve and other central banks have been hosing the world with new money in their efforts to avoid a financial crisis.

That’s an explosive mixture. It risks a kind of inflation that would trigger panic buying, hoarding and fears of mass political protest. Actually, this is already happening in Asia, according to the Times.

The price of rice in global markets has nearly doubled in the last three months, reports the Times’s Keith Bradsher.
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Fearing shortages, some major rice producers — including Vietnam, India, Egypt and Cambodia — have sharply limited their rice exports so they can be sure they can feed their own people.

Bradsher summarizes the evidence that food shortages and inflation are fueling political unrest: “Since January, thousands of troops have been deployed in Pakistan to guard trucks carrying wheat and flour. Protests have erupted in Indonesia over soybean shortage, and China has put price controls on cooking oil, grain, meat, milk and eggs. Food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen.”

World Bank President Robert Zoellick rang the alarm bell in a speech yesterday. He noted that since 2005, the prices of staples have risen 80 percent. The real price of rice rose to a 19-year high last month, he said, while the real price of wheat hit a 28-year high.

Zoellick warned that this inflation is having political repercussions: “The World Bank Group estimates that 33 countries around the world face potential political and social unrest because of the acute hike in food and energy prices.” To cope with the topsy-turvy economy, Zoellick made an innovative proposal that countries running a surplus, such as Saudi Arabia and China, devote 1 percent of their “sovereign wealth” funds to investment in Africa‘s poor countries. That could yield up to $30 billion in development spending.

Now, cut to the Federal Reserve. At a time when global inflation is raging, you might expect that the central bank’s first priority would be to dampen inflationary expectations in the United States. But because of its worries about a financial meltdown, the Fed has been doing the opposite — drastically cutting interest rates in an effort to unclog the financial markets. The cheap money didn’t stop the Wall Street bank run — it was the Fed’s bold plan to absorb subprime debt that did that — but it may well add fuel to the inflation fire.

Related:
Lowly Rice Grain Impacts Global Economy

Vietnam and India move to limit rice exports

Inflation and Food Shortages?

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http://www.washingtonpost.com/wp-dyn/content/article/2008/04/02/AR2008040202997.html?hpid=opinionsbox1

A Revisionist Tale: Why a Poor China Seems Richer

December 21, 2007
HONG KONG — Should China be treated differently because it may not be so rich after all? That is one of the central questions raised by new calculations from the World Bank that suggest the Chinese economy may not be as large as previously thought.To be sure, some economists question whether the new figures are more accurate than the old ones, but others argue that they paint a picture of a poorer China that warrants reconsideration of the West’s efforts to change Chinese currency policies.The World Bank issued preliminary figures on Monday that recalculated the economic output of 146 countries, including China, after excluding differences in domestic prices and currencies.

The calculations of so-called purchasing-power parity, which compare the buying power of citizens around the world, put China’s output at roughly 40 percent less than the bank’s previous estimates.

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http://www.nytimes.com/2007/12/21/business/21yuan.html?_r=1&oref=slogin

China’s Economy: Not So Fast, Jack

December 19, 2007

Investors Business Daily
December 18, 2007

Competition: The common wisdom is that China‘s large and fast-growing economy could overtake the U.S. as soon as 2012. Not so fast. New data suggest China’s not quite as big as economists once thought.

The World Bank’s latest estimates for the global economy contained a stunner of a statistic: China accounts for just under 10% of the world’s total output — or about 40% smaller than thought.

At $5.3 trillion based on 2005 data, China’s economy is still No. 2. But it has considerably more ground to make up before passing the U.S. in absolute size — if, in fact, it should ever do so. Total world output in 2005 was $55 trillion. The U.S. produced $12.4 trillion of that — with a population only one-fourth the size of China’s.

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http://news.yahoo.com/s/ibd/20071218/bs_ibd_ibd/20071218issues01