G8 development ministers agree on aid for developing nations

ROME, June 12 (Xinhua) -- Development ministers from the Group of Eight (G8) agreed Friday on a series of commitments to increase efficiency in financial aid allocation to developing countries, particularly Africa, in an attempt to tackle the impact of the economic crisis.

No concrete financial commitment to developing countries was made. The ministers simply reiterated what had previously been decided at London's G20 meeting in April and at Gleneagles summit in 2005 to reverse the negative economic impact and increase sustainable development in emerging countries.

According to the final communique, the development ministers stressed the need for "a strong, coherent and coordinated response to the economic crisis. The global economic slowdown, adding on the negative effects of energy and food crises, has severely disrupted economic growth worldwide," especially in developing countries.

"We must therefore act in a coordinated manner to prevent the economic crisis from turning into a deeper social crisis with all its possible consequences in terms of political instability and conflicts," the ministers said in the final document.

At the two-day meeting, the ministers agreed to increase "social protection mechanisms and safety nets to address vulnerable population groups who are hardest hit by the crisis" through a more efficient development strategy.

The meeting was attended by ministers from Italy, the current G8 presidency holder, Canada, Britain, France, Germany, Japan, Russia and the United States, as well as ministers from developing countries, namely China, India, Brazil, South Africa, Mexico and Egypt, and representatives from international organizations.

Special Report: Global Financial Crisis

World Bank moves to widen access

BEIJING, Feb. 13 -- The World Bank's board of governors has approved a
proposal to create an additional seat for developing nations on its executive
board. This move, if sealed by the bank's 185 members, will help developing
countries to have a majority of seats on the board. It would also help increase
the voting power of this bloc to 44 percent.

"Expanding the developing world's voice
is central to delivering effective aid and promoting shared prosperity and
development within a 21st century economic reality," World Bank Group
President Robert Zoellick said in a statement.(Photo: China
Daily)
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Gallery

The measure comes as a response to the criticism that it (and other
international organizations such as the IMF) faced last year for its failure to
foresee the global financial crisis.

At the G20 Summit in Washington last November, some developing nations had
pressed for a revision in the representation mechanism in international
financial institutions. This, they said, would enable them to have a better say
in the workings of these multilateral bodies.

"Expanding the developing world's voice is central to delivering effective
aid and promoting shared prosperity and development within a 21st century
economic reality," World Bank Group President Robert Zoellick said in a
statement.

The bank agreed to add a chair for Sub-Saharan Africa in addition to its
existing 24 seats on the executive board. This was part of the bank's "first
phase of reforms to increase the influence of developing countries". It also
pledged to undertake a comprehensive work program to realign bank shareholdings
and move toward an equitable voting arrangement between the developed and
developing countries.

Although the latest move comes as an important step to help reform the
World Bank's governance structure, experts have warned that bolder reforms are
needed going forward.

"It is an irreversible trend for the developing world to push reforms on
the international financial institutions, and the change in the World Bank's
representation is but a minor step on the road to making it more
representative," Hua Ercheng, chief economist with the China Construction Bank,
said.

The current management mechanism in international financial institutions
was out-dated as it largely reflected the political and economic landscape of
the early years after World War II, Hua said, pointing out that it was
unreasonable to still stick to the old governance model.

(Source: China Daily)

World Bank approves governance reforms for Africa

NAIROBI, Feb. 12 (Xinhua) -- The World Bank has approved a first phase of
reforms to increase the influence of developing countries within the World Bank
Group, including adding a seat for Sub-Saharan Africa to allow developing
countries a majority of seats on the Executive Board, and expanding voting and
capital shares.

A statement from the bank's office in Nairobi said on Thursday that these
reforms were initially agreed at the World Bank Group's Annual Meetings in
October 2008, ahead of the Spring 2009 target.

"Expanding the developing world's voice is central to delivering effective
aid and promoting shared prosperity and development within a 21st Century
economic reality," said World Bank Group President Robert B. Zoellick.

"Adding another seat for Africa, reaching developing country majority on
the Board, expanding developing country shares and laying the groundwork for
further reforms represent real change. I'm pleased our reform process is on
track. I encourage shareholders to take action now on governmental approvals of
the voting share changes, and to continue their efforts at further, more
ambitious, reforms."

With the Governors' approval, the amendment to the Bank's Articles of
Agreement to increase basic votes, which benefit smaller shareholders, now moves
to the 185 member countries for final approval.

In order to take effect the amendment must be approved by three-fifths of
member countries with 85 percent of votes.

According to the statement, this package of reforms include: creating an
additional Chair at the Board for Sub-Saharan Africa, which means that
developing countries can have the majority of seats on the Bank's Board,.

The reforms also included bringing the share of developing countries in
Bank voting power to 44 percent, aimed in particular at adding voice for the
low-income countries.

"As a second step, shareholders have agreed that the Bank should undertake
a comprehensive and intensive work program to realign bank shareholdings, moving
towards an equitable voting power between developed and developing countries,"
it said.

Such a work program, the statement said, would also include voice reforms
at the Bank's affiliated member organization, the International Finance
Corporation (IFC). Work on the second phase is already underway.

Participation of developing countries' nationals in the staff and
management of the World Bank plays an important role in the voice reform.

Already nearly two thirds of Bank staff and 42 percent of all Bank managers
are from developing countries. Since Zoellick became World Bank Group President,
seven of his nine senior appointments have been from developing countries.

It's possible for developing states' officials to hold key IMF posts

Special Report:Global Financial Crisis

by Wei Jing

WASHINGTON, April 28 (Xinhua) -- Having officials from developing countries hold key posts in the International Monetary Fund (IMF) "would happen in the future," said IMF's Managing Director Dominique Strauss-Kahn here on Tuesday.

During an interview with Xinhua, Strauss-Kahn characterized the traditional power-sharing structure at the World Bank and the IMF, the world's two leading financial agencies, as "the old world," where by the entities' by-laws, the World Bank president has to bean American citizen and the managing director of the IMF has to be a European.

Strauss-Kahn said the original arrangement under the Bretton Woods System that created the IMF was "a little bit outdated" right now, as people are living in a "new world."

As the global financial crisis spreads to more countries, many governments are requesting the IMF to strengthen its monitoring and surveillance functions to keep the world's major financial firms in check, in order to prevent similar crisis from happening again.

The IMF chief said although it is not up to the IMF to make new financial regulations for its member countries, the agency will exercise strong supervision once such regulations are in place.

"If an official from an emerging market country takes the lead of such a task within the IMF, the position and its occupier will undoubtedly attract worldwide attention," said Strauss-Kahn.

Strauss-Kahn's remarks echo emerging economies' calls for increasing their decision-*** power and influence within the organization.

The IMF chief said in an earlier interview with Chinese reporters that there are many ways to increase developing countries' say in the IMF, in addition to the augmentation of fund quota and voting rights among member states.

Strauss-Kahn also talked about the new "debt bonds" to be discussed and released by the IMF soon. The new type of bonds will give countries with large foreign reserves such as China a good investment opportunity, he said, as the IMF bonds will be "totally secure" and "have better returns than U.S. Treasury bonds."

EU vows to help developing countries tackle economic crisis

Special Report:Global Financial Crisis

BRUSSELS, April 8 (Xinhua) -- The European Commission (EC) on Wednesday
outlined a range of actions to help developing countries tide over the ongoing
economic crisis.

"The full impact of the current (economic) downturn on our partners is only
now becoming clear -- those least responsible for the financial crisis are among
those worst hit by its economic effects," said EC President Jose Manuel Barroso.

"The recession must not, cannot, will not be used as an excuse for going
back on our promises to keep on increasing aid," he said.

In a policy *** adopted on Wednesday, the EC pledged to keep its aid
promises made in 2005 -- aid comprising 0.56 percent of gross national income
(GNI) of the European Union (EU). To meet this goal, 20 billion euros (26
billion U.S. dollars) are needed by 2010.

EU aid was 49 billion euros (65 billion dollars) in 2008, representing 0.40
percent of GNI.

The EC, the executive body of the EU, wants greater use of its development
aid to leverage other funds, including through the European Investment Bank.

Every euro spent on aid should leverage up to five euros of private
investment, it said.

Another proposal is to bring forward and refocus existing commitments on
the most vulnerable. Overall, 4.3 billion euros (5.7 billion dollars) would
bring forward in 2009.

The commission is "frontloading" 3 billion euros (4 billion dollars), or 72
percent of its foreseen budget support to African, Pacific and Caribbean
nations. In addition, it will direct at least 500 million euros to allow
developing countries to continue social safety net spending. A further 800
million euros from an existing "food facility" would be made available in 2009.

The policy *** also wants to make existing aid more effective. A study
commissioned by the EC has shown that as much as 7 billion euros (9 billion
dollars) per year can be freed up by *** aid more effective.

Louis Michel, EU commissioner for development and humanitarian aid, said
that "we know what we must do: meet our aid targets, advance our money to have
an impact when it is most needed, refocus our existing programs to tackle the
crisis and then make every euro count."

Fidel Ramos: Developing, emerging economies should unite in face of crisis

Special Report: Boao Forum For Asia
2009

Backgrounder: Chronology of Boao Forum
for Asia

Special Report:Global Financial Crisis

BOAO, Hainan, April 17 (Xinhua) -- Fidel V. Ramos, former president of the
Philippines and now chairman of the Board of Directors of Boao Forum for Asia
(BFA), has urged the developing and emerging economies to unite to cope with the
financial crisis.

"I strongly agree with proposals that developing and emerging economies
need to unite and come up with a coordinated approach to cushion the impact of a
collapse of highly developed economies," he said in an interview with the
official publication of the BFA Annual Conference 2009. The session starts
Friday in south China's island province of Hainan.

The Asian ethic of "Prosper Thy Neighbor" is an imperative during hard
times, he said, noting that the global community is a huge neighborhood and
teamwork is the answer to finding a way out during these very trying times while
a "safe net" is needed to provide cushion for economies against the financial
crisis.

"These trying times also call for deeper cooperation and collaboration
amongst Asian countries, meaning greater regional investment and a trans-border
process for cooperation and common security," he said.

Ramos said the current global economic slowdown could be seen as a unique
opportunity for both global and regional reassessment, restructuring and reform.

"In Asia, it (the ongoing financial crisis) should promote genuine regional
economic integration and bring Asian countries even closer and spur
collaboration on practical and shared concerns such as water, energy,
environment and food security."

He showed confidence in Asian countries in the financial crisis.

"It is worth noting that most Asian economies remain in good shape," he
said. "China's massive stimulus package is being implemented with extraordinary
speed."

"Given that the two giants of Asia (China and India) are in fairly good
shape, I believe that Asia will emerge from this crisis in good shape."

He also warned that if the global remittance is seriously hurt by the
recession, it will throw millions of already poor people into greater poverty.