Sunday, April 6, 2008

G8 development ministers call for food price steps

Enlarge Photo Loaves of bread sit ready for sale on the shelves of a Wal-Mart store in...
Sun, Apr 6 06:25 PM
By Yoko Nishikawa

TOKYO (Reuters) - Development ministers from the world's rich nations on Sunday called for action to confront soaring food prices, which they say hurt developing nations as well as donors' efforts to help them.
Ministers from the Group of Eight (G8) industrialised nations said development assistance needed to be strengthened and partnership between traditional donors and new donors, such as emerging Asian countries, increased.
But rising food prices, which were not on the official agenda for the meeting and partly for that reason did not make it into the chair's summary statement, became a hot topic on the second day of the two-day meeting in Tokyo.
"Spikes in food prices cause serious problems for development as a whole, especially for Africa, and we shared the view that this is something the international community needs to tackle," Japanese Foreign Minister Masahiko Komura, who chaired the meeting, told a joint news conference by the G8 ministers.
"The problem of food will directly hit lives of poor people. We reached a common determination that there is the need to take necessary steps," he added, without specifying details.
Earlier this month, World Bank President Robert Zoellick called for a new coordinated global response to deal with spiralling food prices exacerbating shortages, hunger and malnutrition around the globe.
Severe weather in producing countries and a boom in demand from fast-developing countries have pushed up prices of staple foods by 80 percent since 2005. Last month, rice prices hit a 19-year high; wheat prices rose to a 28-year high and almost twice the average price of the last 25 years, Zoellick added.
Alain Joyandet, France's secretary of state for cooperation and French-speaking countries, told the G8 news conference France was concerned about the rising cost of food, which he said could affect donors' aid programmes.
Some Asian countries that attended "outreach meetings" with the ministers from Britain, Canada, France, Germany, Italy, Japan, the United States and Russia on the sideline said problems of rising food prices should be taken up at a G8 summit on July 7-9 in Japan, a Japanese Foreign Ministry official said.
But the official said there had not been enough time to discuss any concrete steps to tackle food prices this weekend.
The ministers' meeting, which lays the groundwork for development issues at the G8 summit, took place halfway into the calendar for the U.N. Millennium Development Goals, a set of eight globally agreed targets to be reached by 2015.
The goals, set in 2000, range from halving the number of people living in poverty on less than $1 a day, to providing universal primary education and halting the spread of HIV/AIDS.
Experts say most countries may fail to meet them -- a concern expressed by Komura on Sunday.
The development ministers also expressed concerns about a decline in global official development assistance in 2007 from a year earlier, citing latest OECD figures.
Komura said Japan, which slipped to fifth place from third in overseas aid spending in 2007 as it cut such assistance by 30 percent, was determined to reverse a decline in its official development assistance, but did not give any timeframe.

More than 50 percent chance of U.S. recession: Greenspan

By Sonya Dowsett Sun Apr 6, 6:15 AM ET
MADRID (Reuters) - There is more than a 50 percent chance the United States could go into recession, former Federal Reserve chairman Alan Greenspan told El Pais newspaper in an interview published on Sunday.
However, the U.S. has not yet entered recessionary state marked by sharp falls in orders, strong rises in unemployment and intensive weakening of the economy, he said.
"We would have to see signs of this intensification: there are some, but not many yet," he said. "Therefore ... I would not describe the situation we are in as a recession, although the chances that we'll have one are more than 50 percent."
A sharp downturn in the U.S. housing market has led to a full-blown credit crisis that has reverberated throughout the U.S. financial system.
The economy has become increasingly important in the U.S. presidential campaign, topping the list of voters' concerns heading into the November election.
Greenspan, the U.S. Fed chairman from 1987 to 2006, endorsed the Republican presidential candidate John McCain in the interview.
"I'm Republican and I support John McCain, who I know very well and who I respect a lot," he said.
The economies of the United States and the European Union were at a crossroads after a long period of economic growth without inflation, he said.
"This period is going to be much more difficult, from the point of view of monetary policy, than the period during which I was chairman of the Federal Reserve," he said.
Turning to Europe, he pinpointed Spain as having a bigger real estate bubble than the United States, exposing it to the global credit squeeze.
"The real estate bubble in Spain has been bigger than most other European countries, even bigger than the one in the United States," he said. "In that sense, one would have to presume that there is more vulnerability."
Spain has been the fastest-growing major European economy for more than a decade due to a housing boom during which house prices tripled, but the global credit crisis coupled with higher interest rates have put a sharp brake on growth.
He gave a broadly positive overview of other European economies.
(Reporting by Sonya Dowsett; Editing by Paul Bolding)


Tuesday, April 1, 2008

CHINA and INDIA on the rise

The Baton Passes to Asia
Published: March 31, 2008

Roger Cohen
It’s the end of the era of the white man.
I know your head is spinning. The world can feel like one of those split-screen TVs with images of a suicide bombing in Baghdad flashing, and the latest awful market news coursing along the bottom, and an ad for some stool-loosening wonder drug squeezed into a corner.
The jumble makes no sense. It just goes on, like the mindless clacking of an ice-dispenser.
On the globalized treadmill, you drop your eyes again from the screen (now showing ads for gourmet canine cuisine) to the New Yorker or Asahi Shimbun. And another bomb goes off.
There’s a lot of noise and not much signal. Everywhere there is flux and the reaction to it: the quest, sometimes violent, for national or religious identity. These alternate faces of globalization — fluidity and tribalism — define our frontier-dissolving world.
But in all the movement back and forth, basic things shift. The world exists in what Paul Saffo, a forecaster at Stanford University, calls “punctuated equilibrium.” Every now and again, an ice cap the size of Rhode Island breaks off.
The breaking sound right now is that of the end of the era of the white man.
I’d been thinking about this at Dubai airport in the middle of the night, as the latest news came in from the United States of the bloody end to the mother of all spending binges. I was watching the newly affluent from other parts of the world — Asians and Arabs principally — spend their way through the early-morning hours.
The West’s moment, I thought, is passing. Money and might are increasingly elsewhere. America’s little dose of socialism from Ben Bernanke and Hank Paulson might stave off the worst but cannot halt the trend.
Then I arrived in Hong Kong. The talk was all about how U.S. economic woes could impact Chinese growth. Might it tumble to 8 from over 11 percent? And what of India, powering along with growth of a mere 8 percent or so?
The West should have such troubles! Even revised downward, these growth rates are at levels Europe and the United States can only dream of.
Decoupling — another Hong Kong buzzword — is not possible in an interlinked world: export-led Asian economies are vulnerable in some measure to U.S. troubles. But that measure dwindles as the Chinese, Indian and Vietnamese domestic markets explode.
Asian statistics can be numbing. With one third of humanity, the numbers get big. There are now 450 million cell phones in China.
But take another — the likelihood that some 300 million people will move from rural to urban India in the next 20 years — and you get a sense of the shifts underway. By 2030, India will probably overtake Japan as the world’s third-largest economy behind the United States and China.
But in the end, transformation is not about numbers. It’s about the mind. Come to Asia and fear drains away. It’s replaced by confidence and a burning desire to succeed. Asian business leaders are rock stars. The culture of education and achievement is fierce. China is bent on beating the U.S.A.
What you feel in Asia, said Claude Smadja, a prominent global strategist, is “a burst of energy, of new dreams, and the end of the era of Western domination and the white man.”
Hong Kong purrs. Its efficiency and high-speed airport train make New York seem third-world. All the talk of Shanghai rising and Hong Kong falling was wrong: they’re both booming. Mainland Chinese tourists come here in droves to play and spend.
I went to see Frederick Ma, Hong Kong’s secretary for commerce. He’s suave in that effortless Hong Kong way, the shrewdness wrapped in a soothing patter of bonhomie. How is it that this is the only place on earth where people think of what you want before you’ve thought of it yourself?
He eased seamlessly from talk of mind-boggling infrastructure plans involving bridges and high-speed trains to a gentle lament for America.
“I am very worried about the U.S. economy right now,” he said. “When I was visiting last November, I asked a banker friend what’s going on, and she told me that a Wall Street problem was soon going to be a Main Street problem.”
Yep, it’s a Main Street problem all right when people lose their homes and realize overnight they’re illiquid and have 1930s visions as Bear Stearns goes “Poof!” in the night.
Everything passes. In the 17th century, China and India accounted for more than half the world’s economic output. After a modest interlude, the pendulum is swinging back to them at a speed the West has not grasped.
It’s the end of the era of the white man; and, before it even began in earnest, of the white woman, too.
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