G8 ministers commit to more efficient aid strategy for developing countries

by Silvia Marchetti

ROME, June 12 (Xinhua) -- The Group of Eight (G8) development ministers 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 current economic downturn.

Closing a two-day meeting, the ministers said in a final document they shared the view that "innovative financing is a critical element in contributing, along with traditional ODA (official development aid), to raising the resources needed to tackle the challenge of the economic crisis so as to mitigate its impact on development.

"In this difficult context, a change of scale and speed in the implementation of innovative financing mechanisms for development is most needed," said the statement.

However, 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 statement, 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, said the ministers.

"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," they added.

Thus, 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.

Over the two-day meeting on Thursday and Friday, discussion was focused on the impact of the economic crisis on developing countries and on measures to support low income economies to meet their challenges.

As developing countries have been hard hit by the global economic crisis, industrialized nations' efforts will focus on promoting foreign investments and international loans to increase sustainable development.

Among the commitments taken at the meeting, the G8 ministers stressed the need to "optimize the allocation of resources and maximize the impact of development assistance, investment, trade, debt relief, microfinance, small and medium enterprise financing."

In addition, it is essential to free financial flows from bureaucratic nets, promote public-private partnerships, stimulate the implementation of green technologies to combat climate change and advance in reform programs able to boost market forces and increase well-being in developing countries.

The ministers decided as well on the necessity to give emerging countries better representation at institutional organizations such as the International Monetary Fund and the World Bank.

"We have confirmed these commitments, they will be kept by the countries and the international organizations concerned," Italian Foreign Minister

Franco Frattini told reporters at the closing press conference.

"But that is not enough. We have to go beyond that and mobilize all available resources against the crisis in order to bring a response to the difficulties which developing countries are facing. A lot remains to be done, particularly for the weakest and most indebted countries," he added.

Discussion on Africa was at the center of the gathering. The ministers stressed the need to mobilize private capital to finance development of the continent's infrastructure and proposed to reduce by half the commission on remittances of immigrant workers.

Such a measure alone, proposed by current G8 presidency holder Italy, will free some 12 billion U.S. dollars to 15 billion U.S. dollars.

Frattini stressed the importance of Africa's role and the need of a "global partnership" with all developing countries.

Italy has put the issue of Africa on top of G8 agenda and Frattini promised that "Africa's voice will be heard" at L'Aquila summit in July.

The ministers also agreed that it was essential for donor countries to have greater effectiveness and more coordination.

Thus they decided to advance a cross-sector approach to sustainable development, based on the harmonization of cooperation initiatives in the various areas of development such as education, environment, health, food security and safety. The final goal is to optimize available resources and to increase potential economies' scale.

The meeting's final results will be presented to the G8 summit to be hosted by the Italian city of L'Aquila, which was partly destroyed by an earthquake on April 6.

The meeting was also attended by ministers from Brazil, China, India, Mexico, South Africa and Egypt, as well as deputies from the African Union and the New Partnership for Africa's Development.

Representatives from the UN Food and Agriculture Organization, the World Food Program, the World Health Organization and the World Bank also took part in the meeting.

The G8 development meeting opened amid strong protests. On Thursday, the anti-poverty group One led by Irish rock star "Bono" accused Italy and France of being so far behind on their aid pledges to Africa.

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 business leaders meet on Africa strategy against crisis

by Song Ying and Li Jianmin

CAPE TOWN, June 10 (Xinhua) -- The 19th World Economic Forum on Africa started on Wednesday in the coastal city of Cape Town, South Africa, under the theme of "Implications of the Global Economic Crisis for Africa".

The meeting comes as the global economic meltdown has mounted pressure on major economies in Africa, sucking the strength of traditional economic drivers like foreign investment, demand for raw material and oversea remittance.

Jiang Jianqing, co-chair of the World Economic Forum on Africa and chairman of the board of the Industrial and Commercial Bank of China, said at the press conference that the Davos meetings of the World Economic Forum he attended have inspired him a lot.

"It was my first time to take part in the Africa meeting of the forum, " Jiang said, "I desire to learn the opinions and suggestions of all sides on how to cope with the challenges brought by the global crisis."

Jiang and Liu Guijin, special representative of African affairs of the Chinese Foreign Ministry, would attend parts of the sessions of the forum.

Prior to the meeting, Head of Africa of the World Economic Forum Katherine Tweedie highlighted the urgency of exploring how macroeconomic shifts are shaping the global agenda and how these trends are affecting Africa's diverse economies.

"Most importantly, the meeting will facilitate interaction and dialogue that will allow our key leaders to address the immediate challenges posed by the crisis and fully explore the unique opportunities that Africa has at its doorstep in this new global arena," Tweedie said.

The talks attract over 800 participants from 50 countries. Five African leaders have confirmed their attendance, including Kenyan Prime Minister Raila Amolo Odinga, Lesotho's Prime Minister Pakalitha Mosislili, Rwandan President Paul Kagame, newly-elected South African President Jacob Zuma and his Zambian counterpart Rupiah Bwezani Banda.

Participants of the forum will try to seek practical solutions to foster better business practices and greater investment across the continent.

The first event of the meeting would be a highly interactive session to engage over 350 leaders in a brainstorming exercise. Leaders will examine the changing global landscape and determine the major challenges for which African countries need to be most prepared in the coming year.

The discussions will be based on five general themes in the fields of politics, business and economics, namely, Global Shifts; Regional Effects; Drivers of the Economy; Change Leadership; Collaboration across Borders; and Growth through Innovation.

Among high-profile topics to be discussed are Macroeconomic Shifts in the Global Agenda, Economic Crisis and Impact on Africa.

Economic deliberations will be closely linked to important social and environmental issues including food security, climate change, health care and education.

The 2010 FIFA World Cup in South Africa also draws the attention of business leaders in the world. They will try to explore the economic and social impacts of the international football event in the forum.

The closing plenary session of the platform scheduled for Friday afternoon will highlight the outcomes of the meeting and map out the future engagement of main stakeholders.

The Africa meeting followed the international talks in Jordan sponsored by the World Economic Forum to map out the Middle East response to the world economic crisis.

Special Report:
Global Financial
Crisis

IMF says Africa needs $2.5 bln bailout from economic meltdown

LAGOS, June 9 (Xinhua) --The International Monetary Fund (IMF) has predicted that the next year may witness dramatic increase in credit borrowings by African countries to the tune of 2.5 billion U.S. dollars as a result of biting effects of global economic meltdown, the Lagos based This Day newspaper reported Tuesday.

The IMF Country Chief and Resident Representative to Nigeria, David Nellor, made the disclosure while on a courtesy visit to the Minister of Labor and Productivity, Adetokunbo Kayode, in Abuja on Monday.

He singled out Nigeria as one country that has so far escaped from the immediate impact of the world financial crisis due to the accrued benefits from the fiscal reforms.

Nellor particularly pointed to the oil savings from excess crude oil account as well as the banking reforms as major contributory factors in the measure of financial stability being enjoyed by Nigeria.

"The crisis is clearly a big issue globally and each country has its own challenges and for several countries in Africa, they need finance," he said.

"If they don't have that finance, it means they will grow more slowly, so we anticipate this year a lot of borrowing will take place at concessional interest rates," he added.

He said the interest rate on IMF money borrowing to some countries is half percent.

"That is a concessional rate and we anticipate an increase this year of maybe 2 billion dollars or 2.5 billion dollars of additional borrowing from Africa to help countries tied all over during this crisis period," Nellor added.

Earlier in his welcome address, the Nigerian labor minister said Nigeria' s economic problem is not caused by the global economic crisis, but is principally based on the fact that there are inherent structural problems within the country's economy.

Kayode said what Nigeria requires from IMF at the moment is very strong beneficial support.

According to him, the World Bank did a report on the last 10 years of economic activities in Nigeria and the conclusion is that even though Nigeria has an across-the-board economic growth of between 7 and 8 percent, there is no commensurate growth in the number of the employment created.

He said his ministry had taken up the issue of rising unemployment rates and had adopted a number of policy measures aimed at redressing the situation.

"I believe IMF and all other international partners must assist us to see how we can tackle the issue of unemployment," he added.

Special Report: Global Financial Crisis

BHP boss cautiously optimistic on China economy

CANBERRA, May 27 (Xinhua) -- The head of Australian minerals giant BHP
Billiton is cautiously optimistic that China's economic situation will improve
in the months ahead, but warned global economic recovery will be slow and
protracted.

Chief executive Marius Kloppers told a minerals conference in Canberra on
Wednesday it would be another six months before there were clear signs of the
true situation for the company's markets in China and the Organization for
Economic Cooperation and Development (OECD).

Kloppers said there were a few reasons for optimism in China, including
early signs about growth, loan activity and in the construction and real estate
sectors.

"If all of these trends continue in the second quarter they will give us
some reason to be cautiously optimistic," he said.

Kloppers stressed the need for caution because there were still issues
around Chinese exports, adding the company did not expect in the medium term a
sharp return to overall economic activity.

"We probably believe as a company the economic recovery will be both slow
and protracted," he said. "The best we can say in the medium term is that
conditions remain uncertain."

In the U.S., there was still a downside risk with unemployment remaining a
problem. The economies of Europe, especially the U.K. and Germany, were still a
worry, and Japan was weak.

Special Report:
Global Financial
Crisis

Asia likely to see economic recovery by mid-2010: IMF economist

HONG KONG, May 8 (Xinhua) -- Asia, excluding the Chinese mainland, was experiencing larger-than-expected impacts from the global financial turmoil via trade links, and was likely to see economic recovery by mid-2010, said an IMF official on Friday.

"We expect that the recovery will come for Asia, excluding China, by the middle of next year," Joshua Felman, assistant director of Asia and Pacific Department of the International Monetary Fund (IMF), said in an interview with Xinhua in Hong Kong.

Felman, who made a presentation on IMF's latest regional economic outlook report for Asia and the Pacific, said the economic situation in Asia, generally speaking, had stabilized, and things would gradually improve, although recovery would take much longer.

"China will start to rebound much more quickly. In fact, it maybe rebounding even now, because the government is spending so much money to help lift the economy," he said.

But Vivek Arora, senior resident representative of IMF in China, was quick to sound a cautious note, saying that it was still too early to make a definite judgment that the China was already on the way to a full recovery, although there had been signs that the worst might have been over.

In fact, the IMF report cautioned against over optimism and even adjusted its forecasts for the regional economy downward significantly.

The impacts from export slowdown on the Asian economies had been larger than expected, it said.

Emerging Asia, including China's Hong Kong and Taiwan, as well as South Korea, Singapore, Thailand, among others, suffered a decrease of no less than 15 percent in the fourth quarter of 2008 on a seasonally adjusted annualized basis, said the IMF report.

Moreover, the impacts were likely to carry into the next couple of years, dimming the medium economic outlook to some extent, the report argued.

Stephen Roach, chairman of Morgan Stanley Asia, said he agreed with the views of IMF, adding the situation at present for China was largely different from the export slowdowns followed by quick rebounds in 1997-1998 and 2001-2002.

The drive from export growth was likely to remain weak over the medium term and it remains to see whether domestic demand growth was sustainable, he added.

Other economists, however, disagreed with the pessimism.

Sharp export slowdowns were more likely to be followed by quick rebounds, and the short-term outlook was not that negative, said Michael Spencer, managing director, chief economist and head of global markets research Asia Pacific, Deutsche Bank.

Arora said China was now on the right way in policy directions although challenges remained as to whether the surges in domestic demands would be sustainable.

Spencer, however, said he believed China would be able to get domestic demand to work as an economic engine, although it might take a long period of time.

Spencer also cautioned against oversupply of bank lendings, which he said was likely to do more harm than good if the trend of rapid growth continues into next year.

The IMF, however, maintained it was key to keep the credit financing system at work, as the credit condition in general remained fragile.

U.S. economy to turn up later this year: Bernanke

WASHINGTON, May 5 (Xinhua) -- U.S. Federal Reserve Chairman Ben Bernanke told Congress Tuesday that the economy will begin to rebound later this year but the recovery will probably be slower than usual.

"We continue to expect economic activity to bottom out, then to turn up later this year," said Bernanke in prepared testimony to the Congress' Joint Economic Committee.

He noted that the housing market is beginning to stabilize and that the sharp inventory liquidation that has been in progress will slow over the next few quarters.

"Final demand should also be supported by fiscal and monetary stimulus," said Bernanke.

"An important caveat is that our forecast assumes continuing gradual repair of the financial system; a relapse in financial conditions would be a significant drag on economic activity and could cause the incipient recovery to stall," he added.

But the Federal Reserve chief also warned that even after a recovery gets under way, the rate of growth of real economic activity is likely to remain below its longer-run potential for a while.

"We expect that the recovery will only gradually gain momentum and that economic slack will diminish slowly," he said, "In particular, businesses are likely to be cautious about hiring, implying that the unemployment rate could remain high for a time, even after economic growth resumes."

The U.S. economy shrank at an annual rate of 6.1 percent in the first quarter of 2009, slightly smaller than the 6.3 percent drop in the previous quarter.

The worse-than-expected decline marked the third straight quarter of contraction for the world's biggest economy and signaled little improvement in a deep recession.

Many analysts were predicting the U.S. economy would shrink less in the current April-June period as the government's stimulus begins to take hold.

Gold finishes higher on inflation worries, rising oil

CHICAGO, May 6 (Xinhua) -- Gold futures on the COMEX Division of the New York Mercantile Exchange rose slightly on Wednesday as the slowing job loss data foretold an economic recovery as well as inflation ahead. Silver and platinum ended higher, too.

Gold price for June delivery gained 6.70 U.S. dollars, or 0.7 percent, to settle at 911 dollars an ounce.

An unofficial institute, the ADP Employer Services, reported that private sector employment fell by 491,000 last month, much lower than the 708,000 jobs lost in March. The ADP report indicated meanwhile unemployment is likely to rise for several more months, but at a slower rate. This is considered one of the new signs that the economy is recovering.

However, the bullish job loss data raised the prospects of inflation ahead since the government's stimulus plan injected so huge an amount of money into the markets. Any economic improvement may lead to the possibility of inflation down the road, said analysts.

Safe-haven buying to hedge the inflation risk fueled gold to climb, despite the firm dollar in the day session.

The stronger crude oil provided another supportive factor to the precious metal with June delivery contract up more than 2 dollars to 55.90 dollars a barrel by the end of gold floor trading time.

July silver finished at 13.71 dollars per ounce, up 29 cents. July platinum rose 5.20 dollars to 1,143.190 dollars an ounce.

Bernanke rules out new round of massive financial bailouts in U.S.

WASHINGTON, May 5 (Xinhua) -- U.S. Federal Reserve Chairman Ben Bernanke Tuesday ruled out the possibility of a massive new round of bailouts to save the U.S. banking giants.

"I've looked at many of the banks and I believe that many of them will be able to meet their capital needs without further government capital," Bernanke told the Congress' Joint Economic Committee.

Media reported that about half of the 19 largest U.S. banks will be told to raise more capital after being "stress tested" by the government.

Citigroup, Bank of America, Wells Fargo and JPMorgan Chase are reported to be among those who will have to boost their reserves.

The U.S. government will release the details of the "stress tests" on Thursday.

Moreover, Bernanke told the Congress that the U.S. economy will begin to rebound later this year but the recovery will probably be slower than usual.

"We continue to expect economic activity to bottom out, then to turn up later this year," said the U.S. central bank chief.

But he also warned that even after a recovery gets under way, the rate of growth of real economic activity is likely to remain below its longer-run potential for a while.

"We expect that the recovery will only gradually gain momentum and that economic slack will diminish slowly," he said. "In particular, businesses are likely to be cautious about hiring, implying that the unemployment rate could remain high for a time, even after economic growth resumes."

The U.S. economy shrank at an annual rate of 6.1 percent in the first quarter of 2009, slightly smaller than the 6.3 percent drop in the previous quarter.

The worse-than-expected decline marked the third straight quarter of contraction for the world's biggest economy and signaled little improvement in a deep recession.

Looking ahead, many analysts were predicting the U.S. economy would shrink less in the current April-June period as the government's stimulus begins to take hold.

Egypt's central bank slashes key interest rates to boost economy

Special Report:Global Financial Crisis

CAIRO, Feb. 13 (Xinhua) -- The Central Bank of Egypt (CBE) said Friday that
it has decided to cut its key overnight interest rates by 1 percent to boost the
economic growth of the country.

The overnight interest rates will be cut by 1 percent to 10.5 percent for
deposits and 12.5 for lending, the CBE said in a statement.

The decision of the bank's monetary policies committee is meant to maintain
the country's economic growth rate due to a recent plunge of inflation rate,
reported the state MENA news agency, citing the statement.

According to earlier reports, Egypt's inflation rate was down to 14 percent
in January on a year-on-year basis as commodity prices ebbed worldwide.

The overall annual inflation rate was 14 percent in January, the lowest one
since April, compared with 18.7 percent in December, the country's Central
Agency for Public Mobilization and Statistics (CAPMAS) said Tuesday.

The Egyptian economic growth rate, recorded more than 7 percent in the past
three fiscal years, is likely to witness a slowdown due to the current
international financial crisis.

The CBE said it will take further measures to contain the negative
influence of the international financial crisis on the country's economy.

British ambassador to China: tackling climate change is compatible with economic recovery

Special Report:Global Financial Crisis

BEIJING, Feb. 7 (Xinhua) -- Britain's ambassador to China said Friday that "tackling climate change is compatible with economic recovery".

The ambassador's comments come in the wake of the meeting earlier this week in London between Chinese Premier Wen Jiabao and British Prime Minister Gordon Brown, at which they discussed environmental issues and plans for economic recovery.

Britain's ambassador William Ehrman wrote in an article entitled 'Why tackling climate change is an economic opportunity':"The perceived conflict between protecting economic growth (and jobs) and protecting the environment is being revealed as false."

"Through high-level meetings like the one that took place in London this week, and through the political statements emerging in the U.S., Europe, China and elsewhere, we are seeing the beginnings of an important shift, " said Ehrman, "We are learningthat tackling climate change is not merely compatible with economic recovery: it can actually help to unlock incentives for investment that will accelerate a global recovery and ease our dependence on oil."

According to Ehrman, when Premier Wen and Prime Minister Brownmet in London, they agreed on the importance of openness to free trade and co-ordinated macroeconomic policy responses to stimulate recovery, and used the occasion to reaffirm their commitment to tackling climate change through low carbon development in spite of the economic downturn."And that too is significant." Ehrman said.

"Tackling climate change will require leadership from all major countries in the world, but those countries that move first will be best placed to take full advantage of tomorrow's global economy. Many have already begun to respond."

"President Obama's Green Jobs package sets out new policies to put the U.S.A. on a low carbon path; the EU has already set ambitious targets to reduce our emissions by 60 percent by 2050, with the U.K. committing to do more."

"China too is taking a lead by announcing far reaching reforms to energy pricing policy as well as the inclusion of new money to promote energy efficiency in the fiscal stimulus package," stressed Ehrman in the article.

"Through all these interventions, the form of a sustainable, resilient recovery is becoming clear and its shape is low carbon, with an emphasis on major investment in energy efficiency, a fundamental shift towards renewables and nuclear power, a re-engineering of electricity grids to enable dynamic demand and supply, accelerated roll out of low carbon transport, increased research and development into new energy technologies, and up-graded investment in apprenticeships and science and engineering training programmes to ensure we have the skilled workforce that the low carbon economy will need," said Ehrman.

"Though a good beginning, these are just first steps," said Ehrman, the most recent scientific evidence presented a worsening picture of the sensitivity of the global climate to carbon emissions.

"In order to avert disaster we must, each one of us, redouble our effort," Ehrman stressed, "the U.K. will continue to work with China to achieve this and I am confident that through the collective action of governments, business, and of societies across the world, we can address this challenge."

IMF deputy chief sees growth return by year end

Special Report:Global Financial
Crisis

DAVOS, SWITZERLAND, Jan. 31 (Xinhua) -- The world
economy could return to growth by the end of this year after being hit hard by
the financial crisis, a senior official of the International Monetary Fund (IMF)
said Saturday.

"We believe that with the adequate policy response
... the world economy can return to growth by the end of this year and to trend
growth in 2010," John Lipsky, first deputy managing director of IMF told
delegates at the World Economic Forum in the Swiss ski resort of Davos.

He said the IMF will need at least another 500
billion U.S. dollars to expand its capital basis as more countries may rely on
its support to tide over the economic turmoil.

Speaking at the same panel discussion, Bank of Canada
Governor Mark Carney said he was more optimistic than a IMF forecast for next
year, based on reason that the stimulus programs installed by various
governments may take effect.

The latest IMF forecast on Wednesday said the world
economic growth is projected to plummet to 0.5 percent in 2009, the lowest in 60
years, before rebounding to 3.0 percent in 2010.

French Finance Minister Christine Lagarde warned that
the world economic crisis could provoke "social unrest."

"Social unrest and protectionism are the two major
risks of the world economic crisis," she said, adding that the risks were
increased by "having to engage taxpayers' money and by hampered growth."

She urged world governments to take decisive actions
before the leaders of the Group of 20 nations (G20) are due to meet in London in
April, a follow-up to their first summit on the financial crisis in Washington
last November.

"We need to give an extremely strong signal as early
as April 2 at the G20 meeting in London to restore confidence in the system,"
she said.

Meanwhile, Carney warned that banks have so far
underestimated the commitments made by governments to calm down the financial
markets, making the bailout efforts less effective.

"They are heavily, too heavily discounting the very
clear commitment from the G7 that no systemically important institution will be
allowed to fail. That is the first line of the Oct. 8 communique which was
literally typed in by the G7 finance ministers themselves," he said, "The power
of that and the degree of commitment to that has been underestimated."

World leaders call for global cooperation to address financial crisis

Special Report:Global Financial Crisis

Backgrounder: World Economic
Forum

DAVOS, Switzerland, Jan. 30 (Xinhua) -- Global
cooperation, rather than a retreat from globalization, is the best approach for
solving the current financial crisis, world leaders said here Friday.

When attending the World Economic Forum annual
meeting in Davos, Switzerland, leaders from Britain, Mexico, South Korea and
South Africa agreed that global cooperation could set a pattern for dealing with
other international challenges, such as climate change, poverty and energy
security.

Founder and Executive Chairman of the
World Economic Forum (WEF) Klaus Schwab (2nd L) speaks at the session "Why
We Need a New System of Global Cooperation?" at the Annual Meeting 2009 of
the WEF in Davos, Switzerland, on Jan. 30, 2009.(Xinhua/World Economic
Forum Swiss-Image.ch)
Photo
Gallery

They called for coordinated actions on a number of
areas, including fiscal and monetary policy measures to stabilize the global
financial system and revive economic growth, reform and recapitalization of the
major multilateral lending institutions, and a resumption of stalled free trade
talks to combat a dangerous turn to protectionism.

Public and private sectors should work together to
solve global problems, the leaders said.

"We need to recognize that these problems were
created by humans and can be solved by humans," British Prime Minister Gordon
Brown said.

"Rather than losing faith and letting the
protectionists take over, or returning to a failed laissez-faire model that says
there is nothing we can do, we have to grapple with these problems and prove we
can come together and solve them," he added.

Brown called on governments to consider "radical
options" for dealing with the problem, such as risk-sharing schemes that would
insure banks and other investors against further losses on toxic assets, saying,
"We need international discussion on what is the best model."

British Prime Minister Gordon Brown (2nd
R) speaks at the session "Reviving Economic Growth" at the Annual Meeting
2009 of the World Economic Forum in Davos, Switzerland, on Jan. 30, 2009.
(Xinhua/World Economic Forum Swiss-Image.ch)
Photo Gallery

Mexican President Felipe Calderon said one key lesson
from the previous crisis in the 1930s was the urgency for working out a policy
response, recognizing that delay increases both the economic damage and the
ultimate cost to taxpayers.

South Korean Prime Minister Han Seung-soo cited his
country's experience during the 1997-1998 Asian financial crisis as an example
of how great the costs of a financial rescue can be.

He said South Korea spent the equivalent of 16
percent of its GDP shoring up the country's corporations and financial
institutions during the crisis.

South African President Kgalema Motlanthe said
developed countries should put their own governance in order if they want to be
offered a better seat at the international table.

South African President Kgalema
Motlanthe speaks at the session "Reviving Economic Growth" at the Annual
Meeting 2009 of the World Economic Forum in Davos, Switzerland, on Jan.
30, 2009.(Xinhua/World Economic Forum Swiss-Image.ch)
Photo Gallery

Motlanthe also called for a speedy conclusion to the
stalled Doha Round of multilateral trade talks.

Meanwhile, the leaders warned that the financial
crisis might be generating a protectionist backlash in some countries, arguing
that such measures would risk a repetition of the disastrous collapse in world
trade during the 1930s.

Official: Kuwait summit serious step towards establishing Arab economic bloc

KUWAIT CITY, Jan. 17 (Xinhua) -- The General Union of
Chambers of Commerce, Industry, and Agriculture for Arab Countries said here
Saturday that the first Arab economic summit slated to be held on Jan. 19-20
will be a serious step to boost efforts to establish an Arab economic bloc.

Adnan Al-Qassar, Chairman of the union, made the
remarks in a speech at the inauguration of the "Private Sector and Civil Society
Forum" held ahead of the Arab economic summit.

Al-Qassar told the forum that achieving the economic goals of Arab countries required a thorough Arab vision that put in mind the collective needs of all countries.

Kuwait's Prime Minister Sheikh Nasser al-Mohammad al-Ahmad al-Sabah addresses the opening ceremony of a forum on Arab private sector and civil society in Kuwait City, Kuwait, Jan. 17, 2009. (Xinhua Photo)
Photo Gallery

The upcoming Arab economic summit, which would focus
on the global financial crisis, infrastructure in the Arab world and social
issues, provides chances of forging common action, said the official.

Al-Qassar voiced hope that the summit would take
serious decisions toward an Arab free trade area, the establishment of a customs
union by 2015, and founding a joint Arab market by 2020.

He emphasized the importance of dealing with
obstacles facing the transportation sector, setting policies for combating
unemployment, encouraging investment, supporting industries and projects, and
achieving Arab food security.

He also underscored the significance of unifying tax
and economic systems, improving the environment for joint Arab projects,
studying the possibility of establishing a fund to compensate countries that
would be harmed by integration.

The official called for developing infrastructure to
activate trade and investment among Arab countries especially in the fields of
transportation, communication, roads, railways, bridges, tunnels, ports, energy,
electricity, gas and agricultural projects.

Arab countries should approve a joint policy to keep
track of concepts related to economy, technology, and knowledge, Al-Qassar said.

The two-day Kuwait summit, the first one initially
designed to be devoted to economic issues, also adopted the Gaza crisis on the
agenda, according to Arab League Secretary General Amr Moussa.

The Arab economic summit has not lost its economic
nature because of discussing the tragic situation in the Gaza Strip, which has
been under intensive Israeli offensive for the past three weeks, said Moussa on
the sidelines of Saturday's forum.

Arab economic unity council proposes to enhance inter-Arab trade

KUWAIT CITY, Jan. 16 (Xinhua) -- Arab Economy Unity
Council called on Friday for strengthening efforts to boost bilateral trade
exchange and free trade in the Arab world.

Arab League Secretary General Amr Moussa
attends a press conference in Kuwait City, Kuwait, on Jan. 16, 2009.
Moussa on Friday highlighted the importance of the incoming Kuwait summit,
while conceding the ongoing Israeli offensive on the Gaza Strip shadows
the first-ever Arab economic gathering. (Xinhua/Noufal Ibrahim)

Photo
Gallery

The council has proposed a program to develop
inter-Arab trade, especially in light of the global economic crisis, in a
working paper to be submitted to the Arab Economic, Development and Social
Summit scheduled to be held in Kuwait on Jan. 19-20, said Kuwait's official news
agency KUNA.

The proposed program aims to raise the proportion of
inter-Arab trade in the total foreign trade of Arab states from 11.4 percent to
20 percent in five years, which requires a remarkable increase in the size and
value of inter-Arab trade equivalent of 7.5 billion U.S dollars, said the
report.

Arab League Secretary General Amr Moussa
attends a press conference in Kuwait City, Kuwait, on Jan. 16, 2009.
Moussa on Friday highlighted the importance of the incoming Kuwait summit,
while conceding the ongoing Israeli offensive on the Gaza Strip shadows
the first-ever Arab economic gathering. (Xinhua/Wang Haijing)
Photo Gallery

The council also made it clear in the program that
the trade gap in the various Arab commodities and goods estimated to be around
93 billion dollars annually.

The council said some Arab countries are witnessing a
surplus in some of their goods while others experience a deficit in the same
goods, stressing importance on a better Arab coordination to address this issue.

The upcoming Arab economic summit, the first ever in
the Arab world, would focus on the global financial crisis, infrastructure in
the Arab world and social issues, in addition to Gaza crisis, according to
coordinators for the summit.

Arab economic summit to discuss Iraq's reconstruction process

Special report: Tension escalates in Iraq

KUWAIT CITY, Jan. 15 (Xinhua) -- Iraqi Foreign
Minister Hoshyar Zebari said here Thursday that the first Arab Economic,
Development and Social Summit, to be held in Kuwait on Jan. 19-20, will include
a discussion on Iraq's reconstruction process, the Kuwait News Agency (KUNA)
reported.

Zebari made the remarks upon arrival at the Kuwaiti
capital to represent his country at an Arab foreign ministers meeting on Friday.

He said the Iraqi government "is making determined
efforts to encourage Arab countries and investors to invest in the
reconstruction process which will serve the interests of all partners."

He hailed that the historic Arab economic summit is a
timely event to enhance cooperation and economic integration among the Arab
countries amid the ongoing world economic recession.

The two-day Kuwait summit is the first for the
22-member Arab League to exclusively devote to Arab economic, development and
social matters. The summit is expected to map out steps to improve Arab nations'
economic and social development and strengthen Arab economic integration.

Following the Israeli offensive on the Gaza Strip, which has so far killed some 1,077 Palestinians and wounded over 5,000, the Gaza war is expected to top the agenda of the summit. Arab leaders are expected to review the latest developments in the Palestinian enclave, and to find a solution to end the Israeli attacks which began on Dec. 27 last year.

U.S. stocks trade flat as upbeat economic data offset flu concerns

Special Report:Global Financial Crisis

NEW YORK, April 28 (Xinhua) -- Wall Street traded
flat on Tuesday, as bigger-than-expected increase in consumer confidence and a
slower drop in home prices offset concerns about the swine flu outbreak and the
banking industry.

The U.S. Conference Board, an economic research
group, said its consumer confidence index rose to 39.2 in April, up from a
revised 26.9 in March. The reading marks the highest level since November and
surpasses the reading of 29.5 economists had expected.

Moreover, the Standard Poor's/Case-Shiller
index showed home prices in 20 major cities tumbled by 18.6 percent in February
from a year ago. It is the first time the index didn't set a record since
January 2007 and was slightly better than January's 19-percent decline.

Airlines stocks still got hammered on Tuesday on
fears that worried travelers would stay home, as the deadly swine flu virus is
rampant in Mexico.

Banking stocks were traded lower after the U.S.
government said Bank of America Corp. and Citigroup Inc. may need more capital.

The Dow Jones industrial average was down 8.05 points, or 0.10 percent, to 8,016.95. The Standard Poor's 500 index dropped 2.35points, or 0.27 percent, to 855.16. The Nasdaq composite index fell 5.60 points, or 0.33 percent, to 1,673.81.

Eurozone economic sentiment rebounds for first time in two years

BRUSSELS, April 29 (Xinhua) -- Eurozone economic sentiment picked up from a record low in April, for the first time since May2007, a survey conducted by the European Commission showed on Wednesday.

The economic sentiment indicator in the 16-nation bloc sharing the euro increased by 2.5 points to 67.2 in April, after having kept falling in the past two years and reached a record low of 64.7 last month.

In the 27-nation European Union (EU), the monthly indicator, based on business and consumer surveys, also rose by 3.5 points in April to 63.9.

The surveys are conducted in different sectors of the economy, namely industry, services, construction and retail trade, as well as among consumers.

The rebound in April resulted from a clear improvement in sentiment in industry and among consumers, which in both the euro zone and the EU rose by the same amount of 3 points, and a smaller increase in services, a rise of 1 point in both regions.

Retail trade sentiment grew by 2 points in the EU, but fell by 2 points in the euro zone. Construction, in contrast, declined in both areas, by 1 point in the EU and by 2 points in the euro zone.

The majority of EU member states registered an improvement in April. Among the largest ones, economic sentiment in Italy rose the most, up 6.4 points, followed by Britain and the Netherlands, up 5.1 and 4.2 points respectively, while the rise was less sizable in France and Germany, up 1.0 and 0.8 points respectively.

The financial services confidence indicator, which is not included in the economic sentiment, improved markedly in both areas, by 11 points in the EU and by 16 points in the euro zone.

Compared to March, managers' assessment of business situation and demand for their services augmented significantly. Managers' expectations of demand improved strongly and became positive for the fist time since October 2008.

Meanwhile, the business climate indicator (BCI) for the euro zone also increased in April, the first improvement since May 2008,the commission said in a separate survey.

The rise in the BCI reflected an improving situation in most of its underlying components. Managers' production expectations picked up clearly in April, while the production trend observed in recent months improved only slightly. Their assessment of current overall order books and stocks of finished goods recovered marginally from last month's level, though export order books continued to worsen.

However, the commission said the indicator remained at a very low level, pointing to another negative outcome for year-on-year industrial production growth in March, after the record fall registered in February.

"Given the current levels, it also suggests that annual industrial production growth will remain clearly subdued in April," it said.

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."