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Monday, July 18, 2011

World Bank chief slams US leadership on trade deal

Robert Zoellick, a former U.S. trade negotiator under President George W. Bush, labeled as "excuses" Obama administration complaints that the so-called Doha round of global commerce talks are structurally flawed.

"I think the facts speak for themselves on whether you have excuses or leadership," he told reporters at the World Trade Organization in Geneva.

U.S. trade officials responded Monday that the administration has been a chief proponent of an ambitious Doha round, but that the way it was framed early on — putting emerging trade powers like China on a level with some of the world's poorest countries — doesn't match the new reality.

"Unfortunately, in part because of the structure of the negotiations, there has been little appetite for that sort of ambition by other major trading partners," said Carol Guthrie, spokeswoman for the U.S. Trade Representative's office in Washington.

Zoellick said the talks need American leadership if they are to produce a new free trade deal. When the negotiations to slash tariffs worldwide were launched in the Qatari capital in 2001, many predicted the result would add billions of dollars to the global economy.

Trade diplomats now say the original targets set for the round are beyond reach because of unbridgeable differences between the United States and major developing countries such as India, China and Brazil. Instead, negotiators are looking to agree a "Doha light" package that would allow countries to save face after 10 years of costly and fruitless talks.

"The mini-deal will probably be about as hard as the big deal," Zoellick warned. Rather than aim for a more modest agreement, he urged WTO members to "double down on Doha." If countries are ambitious but fail, it will be easier to apportion blame, he said.

The World Bank chief predicted that only a push by political leaders would end what he termed a "death watch" on Doha.

"The world needs a global growth strategy and opening trade drives growth," said Zoellick. "We've seen it with proven effectiveness all throughout the past 60 or 70 years."

First Boston Corporation

First Boston Corporation was a New York-based, bulge bracket, investment bank, founded in 1932 and acquired by Credit Suisse in 1990. Together with its sister investment banks, it was referred to as CS First Boston after 1993 and part of Credit Suisse First Boston after 1996, the First Boston part of the name was phased out by 2006.

First Boston Corporation was created in 1932 as the investment banking arm of the First National Bank of Boston. It became an independent firm after passage of the Glass–Steagall Act, which required commercial banks to divest securities businesses in the wake of the 1929 stock market crash. First National Bank of Boston continued as a commercial bank, ultimately becoming part of Bank of America. The young First Boston investment bank was cobbled together from the investment banking arms of major commercial banks. For example, several key members of Chase Harris Forbes Corporation, the securities affiliate of Chase National Bank, joined the new investment bank in 1934.

The 1940s
In 1946, Mellon Securities Corporation, the former investment banking arm of Mellon Bank, merged into the First Boston Corporation. Mellon's franchise with industrial and governmental clients led to some major deals: initial public debt offerings for the World Bank and Hydro-Québec, and a share offering for Gulf Oil Corporation in 1948 (the largest IPO to date).
By 1947, the First Boston Corporation surpassed $1 billion in new capital issues, and in 1959 it reintroduced the credit of Japan to the American markets with the first offerings by its government since 1930.

The 1970s
As of 1970, First Boston was considered to be part of the bulge bracket along with Morgan Stanley, Dillon Read and Kuhn Loeb.
By 1970, the Firm was raising more than $10 billion in new capital annually for underwriting clients. In 1971, The First Boston Corporation listed on the New York Stock Exchange developed its equity, sales, research, and trading operations. In 1978, First Boston began its highly successful London operations in partnership with Credit Suisse (see “Relationship with Credit Suisse” below) and became a leading Eurobond trader and underwriter.

The 1980s - Relationship with Credit Suisse
Credit Suisse’s relationship with First Boston began in 1978, when White Weld & Co. was bought by Merrill Lynch. As a result, White Weld dropped out of its London-based investment banking partnership with Credit Suisse. First Boston stepped in, creating Financiére Crédit Suisse-First Boston, a 50-50 joint venture widely known as Credit Suisse First Boston. Ironically, First Boston was not Credit Suisse's first choice for the partnership. When White Weld stepped out, Credit Suisse had unsuccessfully approached Dillon Read, which a couple decades later was acquired by Swiss Bank Corporation, to form the core of that firm's U.S. investment banking business. Swiss Bank Corporation itself subsequently merged with Credit Suisse archrival Union Bank of Switzerland to form UBS AG.
First Boston sat at the top of merger and acquisition league tables in the 1980s, thanks to the team led by Bruce Wasserstein and Joe Perella, which orchestrated such transactions as the leveraged buyout of Federated Stores, which earned First Boston $200 million in fees, and Texaco’s hostile takeover of Getty Oil. A 1985 Fortune Magazine article called First Boston “the archetypal deal factory”, a year in which it did $60 billion in M&A deals placing it second after Goldman Sachs. By 1987, M&A advisory work contributed half of First Boston's profit and Wasserstein asked the management committee to divert resources to his unit from bond trading. After being rebuffed, Wasserstein and Perella quit and set up their own firm, Wasserstein Perella & Co.

The 1990s - Credit Suisse First Boston
Conflict with Credit Suisse First Boston, or CSFB, in Europe began creating problems for Credit Suisse. First Boston Corporation in New York and CSFB in London had their own management teams, with competing salesmen in each other’s territory and in the Pacific region. In 1996, Credit Suisse purchased the remaining stake of CS First Boston from its management and rebranded the European, U.S., and Asia Pacific investment banks as Credit Suisse First Boston, making one global brand. In the late 1990s, CSFB purchased the equity division of Barclays Bank, Barclays de Zoete Wedd ("BZW"). BZW was considered second-tier and CSFB reportedly bought BZW from Barclays for £1 plus assumption of debt - primarily to obtain BZW's client list.
At the same time, the newly global CSFB became a leading high tech banker, acting as lead (or co-lead) underwriter in the IPOs of and Cisco Systems, as well as one time high fliers such as Silicon Graphics, Intuit, Netscape and VA Linux Systems. CSFB also did significant deals for Apple Computer, Compaq and Sun Microsystems among others. In 2000, at the height of the tech boom, technology deals generated $1.4 billion in revenue for CSFB. The head of CSFB’s tech group, Frank Quattrone, reportedly made $200 million in bonuses between 1998 and 2000.
[edit]The 2000s - Acquisition of DLJ, Restructuring and the End of "First Boston"
In 2000, Credit Suisse First Boston spent $13 billion to buy Donaldson, Lufkin & Jenrette (also known as DLJ) as stock markets were peaking. By the time the acquisition closed in 2001, stock markets were down significantly. The deal led to a culture clash that triggered the departures of key bankers. In order to keep top bankers, CSFB handed them three-year guaranteed contracts, swelling costs relative to revenue and leading to two years of losses at the investment bank.
After the collapse in technology shares in 2001, Credit Suisse replaced CSFB’s CEO Allen Wheat with Morgan Stanley's John Mack, who was charged with turning around the investment bank. Mack fired 10,000 employees, or one-third of CSFB's workforce, although many former DLJ bankers continued to collect guaranteed pay long after they were gone. Also in 2001, the U.S. Securities and Exchange Commission and the Justice Department began investigating how CSFB allocated IPOs of technology companies. The probe led to the conviction of Frank Quattrone in 2004, who was found guilty of urging employees to destroy documents after he learned about the investigation. He was ultimately acquitted of substantially all charges upon appeal in 2006.
Credit Suisse retired the First Boston name on January 16, 2006, in order to “allow Credit Suisse to communicate as an integrated organization to clients, employees and shareholders.” The move led some to speculate that the name change reflected the diminished luster of the once great First Boston name as a result of years of mismanagement and scandal.

Paul Wolfowitz

Paul Dundes Wolfowitz, born December 22, 1943 is a former United States Ambassador to Indonesia, U.S. Deputy Secretary of Defense, President of the World Bank, and former dean of the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University. He is currently a visiting scholar at the American Enterprise Institute, working on issues of international economic development, Africa and public-private partnerships, and chairman of the US-Taiwan Business Council.
He is a leading neoconservative. As Deputy Secretary of Defense, he was "a major architect of President Bush's Iraq policy and ... its most hawkish advocate." Donald Rumsfeld in his interview with Fox News on February 8, 2011 said that Wolfowitz was the first to bring up Iraq after 9/11 attacks during a meeting at presidential retreat at Camp David. After serving two years, he resigned as president of the World Bank Group "ending a protracted and tumultuous battle over his stewardship, sparked by a promotion he arranged for his companion.

Personal history
The second child of Jacob Wolfowitz (1910–1981) and Lillian Dundes, Paul Wolfowitz "was born in Brooklyn, New York, into a Polish Jewish immigrant family, and grew up mainly in Ithaca, New York, where his father was a professor of statistical theory at Cornell University. According to Shelemyahu Zacks, Jacob Wolfowitz "fought at the time for the liberation of Soviet Jewry. He was a friend and strong supporter of the state of Israel, AIPAC member and had many friends and admirers there. Strongly influenced by his father, Paul Wolfowitz became "a soft-spoken former aspiring-mathematician-turned-policymaker ... [whose] world views ... were forged by family history and in the halls of academia rather than in the jungles of Vietnam or the corridors of Congress .His father ... escaped Poland after World War I. The rest of his father's family perished in the Holocaust.
Wolfowitz read about the Holocaust and Hiroshima as a boy and calls them "the polar horrors".Speaking of the influence of the Holocaust on his views, Wolfowitz said:
"That sense of what happened in Europe in World War II has shaped a lot of my views ... It's a very bad thing when people exterminate other people, and people persecute minorities. It doesn't mean you can prevent every such incident in the world, but it's also a mistake to dismiss that sort of concern as merely humanitarian and not related to real interest.
Before moving to Ithaca, in the fall of 1952, the Wolfowitzes lived in Manhattan: "I was born in Brooklyn but we grew up in Manhattan, one block down on Morningside Drive ... from the President of Columbia who for part of that time was Dwight Eisenhower. After teaching for a year at Cornell, his father took a one year sabbatical accompanied by his family, spending half the time at UCLA, and half at the University of Illinois at Urbana-Champaign. In 1957, Paul Wolfowitz lived in Israel, while his father was a visiting professor at the Israel Institute of Technology (Technion IIT), in Haifa.

Cornell University
Wolfowitz entered Cornell University in 1961, on full scholarship and was a member of the Telluride Association, a non-profit organization founded in 1910. He lived in the Telluride House in 1962 and 1963, while philosophy professor Allan Bloom served as a faculty mentor living in the house. Wolfowitz later studied with Albert Wohlstetter, who became a defense specialist at the Political Science department at the University of Chicago. In August 1963, he and his mother participated in the civil-rights march on Washington organized by Martin Luther King, Jr. Wolfowitz was a member of the Quill and Dagger society.
Wolfowitz graduated in 1965 with a Bachelor's degree degree in mathematics and chemistry. Against his father's wishes, Wolfowitz decided to go to graduate school to study politics. "One of the things that ultimately led me to leave mathematics and go into political science was thinking I could prevent nuclear war.

University of Chicago
Wolfowitz attended the University of Chicago where Leo Strauss was teaching. He completed his PhD dissertation under Albert Wohlstetter. In the summer of 1969, Wohlstetter arranged for his students Wolfowitz, Wilson, and Richard Perle to join the Committee to Maintain a Prudent Defense Policy which was set up by Cold War architects Paul Nitze and Dean Acheson.
From 1970 to 1972, Wolfowitz taught in the Department of Political Science at Yale University, where one of his students was I. Lewis "Scooter" Libby. In 1972, Wolfowitz earned a Ph.D. in political science from the University of Chicago, writing his doctoral dissertation on "nuclear proliferation in the Middle East".

Arms Control and Disarmament Agency
In the 1970s Wolfowitz served as an aide to Democratic Senator Henry M. Jackson, who influenced several neoconservatives, including Wolfowitz and Richard Perle. Jackson was a Cold War liberal supporting higher military spending and a hard line against the Soviet Union, while also supporting social welfare programs, civil rights, and labor unions.
In 1972 U.S. President Richard Nixon, under pressure from Senator Jackson, dismissed the head of the U.S. Arms Control and Disarmament Agency (ACDA) and replaced him with Fred Ikle. Ikle brought in a new team including Wolfowitz. Wolfowitz wrote research papers and drafted testimony, as he had previously done at the Committee to Maintain a Prudent Defense Policy. He traveled with Ikle to strategic arms limitations talks in Paris and other European cities. He helped dissuade South Korea from reprocessing plutonium that could be diverted into a clandestine weapons program.
Under President Gerald Ford, the American intelligence agencies came under attack over their annually published National Intelligence Estimate. According to Mann: "The underlying issue was whether the C.I.A. and other agencies were underestimating the threat from the Soviet Union, either by intentionally tailoring intelligence to support Kissinger's policy of détente or by simply failing to give enough weight to darker interpretations of Soviet intentions." Attempting to counter these claims, the new Director of Central Intelligence, George H.W. Bush formed a committee of anti-Communist experts, headed by Richard Pipes, to reassess the raw data. Based on the recommendation of Richard Perle, Pipes picked Wolfowitz for this committee, which was later called Team B.

Deputy Assistant Secretary of Defense for Regional Programs
In 1977, during the Carter administration, Wolfowitz moved to the Pentagon. He was U.S. Deputy Assistant Secretary of Defense for Regional Programs for the U.S. Defense Department, under U.S. Secretary of Defense Harold Brown.
In 1980, Wolfowitz resigned from the Pentagon and became a visiting professor at the Paul H. Nitze School of Advanced International Studies (SAIS) at Johns Hopkins University. According to the Washington Post; "He said it was not he who changed his political philosophy so much as the Democratic Party, which abandoned the hard-headed internationalism of Harry Truman, Kennedy and Jackson."
[edit]State Department Director of Policy Planning
Following the 1980 election of President Ronald Reagan, the new National Security Advisor Richard V. Allen formed the administration's foreign policy advisory team. Allen initially rejected Wolfowitz's appointment but following discussions, instigated by former colleague John Lehman, Allen offered Wolfowitz the position of Director of Policy Planning at the Department of State.
President Reagan's foreign policy was heavily influenced by the Kirkpatrick Doctrine, as outlined in a 1979 article in Commentary by Jeane Kirkpatrick entitled "Dictatorships and Double Standards".
Although most governments in the world are, as they always have been, autocracies of one kind or another, no idea hold greater sway in the mind of educated Americans than the belief that it is possible to democratize governments, anytime, anywhere, under any circumstances.... (But) decades, if not centuries, are normally required for people to acquire the necessary disciplines and habits.
Wolfowitz broke from this official line by denouncing Saddam Hussein of Iraq at a time when Donald Rumsfeld was offering the dictator support in his conflict with Iran. James Mann points out: "quite a few neo-conservatives, like Wolfowitz, believed strongly in democratic ideals; they had taken from the philosopher Leo Strauss the notion that there is a moral duty to oppose a leader who is a 'tyrant.'" Other areas where Wolfowitz disagreed with the administration was in his opposition to attempts to open up dialogue with the Palestine Liberation Organization (PLO) and to the sale of Airborne Warning and Control System (AWACS) aircraft to Saudi Arabia. "In both instances," according to Mann, "Wolfowitz demonstrated himself to be one of the strongest supporters of Israel in the Reagan administration."
Mann stresses: "It was on China that Wolfowitz launched his boldest challenge to the established order." After Nixon and Kissinger had gone to China in the early 70s, U.S. policy was to make concessions to China as an essential Cold War ally. The Chinese were now pushing for the U.S. to end arms sales to Taiwan, and Wolfowitz used the Chinese incentive as an opportunity to undermine Kissinger's foreign policy toward China. Instead, Wolfowitz advocated a unilateralist policy, claiming that the U.S. did not need China’s assistance but that the Chinese needed the U.S. to protect them against the far-more-likely prospect of a Soviet invasion of the Chinese mainland. Wolfowitz soon came into conflict with Secretary of State Alexander Haig, who had been Kissinger’s assistant at the time of the visits to China. On March 30, 1982, The New York Times predicted that "Paul D. Wolfowitz, the director of policy planning ... will be replaced," because "Mr. Haig found Mr. Wolfowitz too theoretical." Instead, on June 25, 1982, George P. Shultz replaced Haig as U.S. Secretary of State, and Wolfowitz was promoted.

Rural Development Ministry signs $1 billion loan agreement with World Bank

Government of India and the World Bank today signed a Credit Agreement of US$1 billion (approximately Rs. 4,600 crores) for the National Rural Livelihoods Project (NRLP). The Project will strengthen the implementation of the Government of India’s newly launched National Rural Livelihoods Mission (NRLM). The NRLM is one of the world’s largest poverty reduction initiatives, aiming to reach 350 million people (almost a quarter of India’s population), with an outlay of approximately US$ 6.5 billion.

Welcoming the NRLP, Minister for Rural Development, Mr. Jairam Ramesh said “I am delighted that the NRLP is being launched. This is a critical project that will help scale up our battle against poverty across the country, through the activation of self-help groups, skill building, and other innovative livelihood interventions among BPL households. NRLP will specifically focus on 12 states which have the highest number of poor people, thereby creating a major impact on poverty. The NRLM will help us move 70 million BPL households out of poverty over the next ten years through a time-bound, demand driven process.”

Ramesh further said that about 30 million women were engaged in self-help groups and their target would reach 70 million in the next decade.

"I think it's the most important flagship programme that is being launched as part of the UPA-II. It was launched a couple of months ago in Rajasthan by the Prime Minister Manmohan Singh and the Chairperson of the UPA and it is a very ambitious programme because of what it does," said Ramesh.

"Today, roughly, 30 million poor women in the country are members of self-help groups and in the next ten years, we want to increase the coverage of 30 million poor women to 70 million," he added.

The NRLP would also assist in the management of various programmes as well as schemes under National Rural Livelihood Mission (NRLM), by shifting the focus of expenditure-based allocation, to provide quality technical assistance and result- based financing.

The agreement would also aid in the development of partnerships with the private sector, civil society as well as other significant institutions in India.

NRLP would extensively support implementation of NRLM in 100 districts and 400 blocks of 12 high poverty states including Bihar, Chhattisgarh, Jharkhand, Gujarat, Maharashtra, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, West Bengal, Karnataka and Tamil Nadu, accounting for 85 percent of the rural poor in the country.

"The large part of NRLM, the core of NRLM is based on the experience of Andhra Pradesh and to a lesser extent Kerala. The two states, which have had the maximum success in women's self, help groups and I am delighted that one state that has really run forward with NRLM is Bihar," said Ramesh.

"What Bihar is doing is trying to replicate what Andhra Pradesh has done over the last 10 years. I am sure other states like Chhattisgarh, Madhya Pradesh, Rajasthan, Assam, Jharkhand and Orissa would also follow suit," he added.

The NRLM is one of the world's largest poverty reduction initiatives aimed at reaching out to 350 million people, almost a quarter of India's population.

Afghanistan Awarded $52 Million World Bank Grant for Resources

World Bank signed grant agreement worth $52 million with Afghan Ministry of Finance to assist and support programs of Afghan government in various sectors of extraction of natural resources effectively and transparently. Related to signing the agreement, Hazrat Omar Zakhilwal, minister of finance said “Afghan government’s top priority is to enhance effective and transparent development of Afghan natural resources and for organizing the rich resources of the country, the government will act according to Afghan rule and laws and international norms”. Meanwhile, Wahidullah Shahrani, minister of mines, said, “Improvement of mining industry is vital enough for long-term economical growth of Afghanistan, augmentation of income, job facilities to thousands Afghans and maintenance of stability in the country.” He also mentioned remarkable reforms in the past 12 months at the Ministry of Mines particularly in the administration structures of the ministry and asserted it has been a big achievement in transparency sector. Briefing the reports related to results of the first project of World Bank, Josephina Bassinette, acting director for World Bank, said, “Results of the first project of world Bank are very important for the improvement of Afghan natural resources, particularly in capacity building and receiving certainty for maintenance transparency in mining sector including its nomination in EITI, which an international standard for organizing income obtained through industry of minerals and hydrocarbon. He added World Bank is to support Afghan government to everlastingly improve its natural resources.

Developing Afghanistan’s natural resources in an open, transparent and efficient manner is a top priority in the government’s agenda,” Omar Zakhilwal, Minister of Finance, said today in an e-mailed statement. “The government remains committed to ensuring the country’s rich mineral potential is managed according to internationally accepted norms and procedures for the benefit of the people of Afghanistan.

World Bank President Robert Zoellick: U.S. ‘dumbing down’ global trade talks

World Bank President Robert Zoellick is urging the United States to take the lead in pushing the moribund Doha-round free-trade talks forward. He said open trade is the best way to help the struggling global economy. Zoellick delivered his blunt assessment at a World Trade Organization meeting in Geneva on Monday.

Zoellick said practically everybody in the world is in dire economic straits. He noted Europe is struggling with the eurozone. The United States is bogged down with debt and deficits, and is in desperate need of a growth strategy. He said Japan is coming out of a nuclear disaster and is struggling with low growth.

“So, it seems to me that in addition to the work on sovereign debt and deficits, the world needs a global growth strategy," said Zoellick. "And, opening trade drives growth. It is the best driver of structural forms that the world has seen. We have seen it with proven effectiveness all throughout the past 60 or 70 years. So, why not revive Doha?”

That is a question more easily asked than answered. Zoellick has invested a lot of his time and his capital as a trade negotiator in Doha. He helped launch the Doha Round of free-trade talks in 2001, and remains deeply disappointed that 10 years later an agreement remains elusive.

The Obama administration indirectly shifted the blame for Doha back on Zoellick, saying that the talks were stymied because of how they were “initially structured” under a framework Zoellick helped develop when he worked for Bush.

That structure has also been criticized by Zoellick’s successor, former U.S. trade representative Susan Schwab, who in a recent Foreign Policy article said the talks were “doomed.” Administration officials said the framework in particular gives now-powerful developing countries such as China too much flexibility to keep parts of their economy closed.

“The Obama administration has been the chief proponent of greater ambition in the Doha round,” said a senior administration official who spoke on the condition of anonymity. “Unfortunately, in part because of the manner in which the negotiations were initially structured, there has been little appetite for that sort of ambition by other major trading partners.”

The current talks began in 2001. But instead of the encompassing trade pact initially envisioned, negotiators are now seeking a narrower deal, acknowledging that they cannot resolve disputes such as demands by developing nations for cuts to U.S. farm subsidies and U.S. demands for more access to service, agricultural and other protected markets in places such as India and Brazil.

Zoellick argued that the administration’s unwillingness to cut farm and ethanol subsidies, for example, made little sense when the United States is looking for ways to rein in public spending. “It’s a missed opportunity for a pro-growth strategy at a time when the U.S. — and the world — could use one,” Zoellick said, arguing that leaders of major nations as a whole seemed to “think small” when it came to Doha.

He included his former boss, Bush, in the group.

Zoellick’s term expires next year. He has not indicated whether he wants to stay in the job, which by tradition is chosen by the United States, one of the bank’s major funders. The Obama administration recently played down speculation that Secretary of State Hillary Rodham Clinton wants the job.

Azure Power Gets $16 Million Loan From U.S. Exim Bank for Solar

U.S. Export-Import Bank approved about $25 million in loans for two solar projects in India that will buy devices from First Solar Inc. (FSLR) and Abound Solar Inc.
The bank will provide a $9.2 million loan to Punj Lloyd Ltd. (PUNJ), a New Delhi-based engineering company, for 18 years, according to an e-mailed statement today. It also approved a $16 million loan to Azure Power, an Indian solar developer backed by the World Bank, for 16 1/2 years.
Punj Lloyd will use solar photovoltaic panels from Loveland, Colorado-based Abound Solar, while Azure Power will use thin-film modules from First Solar. Both developers are building 5-megawatt projects in western Rajasthan state.

The bank has granted $75 million in funds for four Indian solar projects and has $500 million in the pipeline, supporting 315 megawatts of solar plants, it said in an e-mailed statement.

Azure Power's project in western Rajasthan will repay the loan over 16.5 years using electricity sales to NTPC Vidyut Vyapar Nigam, a state-run power trader, under a 25-year purchase agreement, the Indian company said in an e-mailed statement.

First Solar Inc. is the largest maker of thin-film panel.

Hosni Mubarak coma claim in dispute

Former president Hosni Mubarak is in a full coma after his health suddenly deteriorated," Egyptian state TV reported Sunday night, July 17, shortly after a cabinet reshuffle was carried out in Cairo to placate rising dissent five months since his overthrow.
But the reports of his state of health are conflicting: Lawyers say he went into a coma after a stroke, while the director of the Sharm el Sheikh hospital denies this.
Aged 83 and suffering from cancer, Mubarak has been confined to a Sharm el-Sheikh hospital since April when he suffered a heart attack during questioning. He and his sons face trial on August 3 on charges of corruption and murder.
The cabinet reshuffle came as Egypt sank ever more deeply into lawlessness and economic stagnation.
City streets are plagued by robbers and outlaws. Many districts have set up vigilante militias to protect life and property. Tens of thousands continue to rally in Tahrir Square against the new rulers, the Supreme Council of Revolutionary Forces’ (SCAF) – and not only in Cairo, but in Suez, Ismailia and Alexandria. They say they are staging what they call "the second Egyptian revolution" – this one against the 25 generals led by Field Marshall Muhammad Tantawi, whom they accuse of stealing the revolution from the Egyptian people and putting the Mubarak regime back in place.
Whether or not the ousted president survives the next few hours is immaterial for the Egyptian street. DEBKAfile's Egyptian sources report that the demonstrators of Tahrir Square no longer believe the military junta can save the country. They suspect the generals are deliberately letting the situation deteriorate, said one opposition source, "to generate anarchy as the pretext for postponing the promised general and presidential elections, already put off once from September to November,"
"The junta wants to be sure of winning the election before it fixes on the date," he said.
Grievances are rife: SCAF heads are accused of having 10,000 political activists detained in the last two months and subjecting some to torture – "just like in the old days." The protesters don't believe the Mubaraks will ever be put on trial and allege that to officials of the former regime are given derisory sentences for corruption and the authorities refrain from confiscating their ill-gotten property.
"The revolution triumphed, Mubarak was toppled, but the machinery of his regime lives on," said another protester.

As well as speedier reforms, the protesters want an end to what they say are delays in trying former regime officials responsible for killings during the revolt.

There were two main driving forces for the millions of protesters who forced Mr Mubarak from power: a lack of jobs due to an economy that favoured Mr Mubarak's cronies and the brutality of the state's security services, which included torture.

The economy has deteriorated since then. Much of the economy relies on tourism and tourists remain concerned about Egypt.

On the second issue, much of the public is angry that figures who were such key players in the former regime remain in power.

Mr Mubarak is due to face trial on August 3 over corruption and the killings of hundreds of protesters in the lead-up to his ouster.

Reports of his ill health have been greeted with great scepticism as many people believe they will be used as an excuse to avoid trial.

Many Egyptians are concerned that key figures in the military will allow this to occur, as they also have reasons to fear a trial in which their own role in propping up Mr Mubarak could be exposed.

Another concern is that after almost 30 years of having no political parties other than Mr Mubarak's, alternative parties that may want to contest a free election do not have enough time to organise.

There is a fear that only two organisations have any real structure - Mr Mubarak's National Democratic Party, which could reappear under a different name; and the Muslim Brotherhood, which, although banned under Mr Mubarak, ran candidates as independents and has a structure of sorts.

World Bank commits US$75 million for basic services

The World Bank (WB) office in South Sudan has announced it is committing $US75 million to support government and citizens of the new nation in the provision of basic services.

Addressing a press conference at the bank’s premises in Juba on Monday, Ian Bannon, acting country head for Sudan, said WB encourages the government of the new nation to adopt participatory policy and give more attention to agriculture and private sector. He said he does not expect the education system in South Sudan to be like that of Demark but that of South Africa and other developing countries is attainable in the coming years.

"This is a wonderful, historic moment for the people of south, and the world bank pledges to be a strong partner as we help to transform a day of independence into decade of development", said WB president, Robert B. Zoelick at the independence day celebrations on 9 July.

South Sudan has suffered from decades of civil war, and has some of the lowest human development indicators in the world. Over half of the population lives below poverty line. The 2009 national household survey indicated that 38% of the population walks more than 30 minutes one way to collect drinking water. 50% use wood or grass as the primary source of lighting. 96% use firewood or charcoal as their primary fuel for cooking. 15% of households own a phone, this increases to 59% in urban areas compared to 8% in rural areas.

Bank official said speedy attention to the most urgent needs was one of the main recommendations of the World Bank’s 2011 development report on conflict, security and development. While attaining nationhood changes south Sudan’s political framework and governance arrangements, south Sudanese still face enormous development challenges particularly those of inclusion.

"The bank’s priority remains helping South Sudan to provide comprehensive and inclusive development for its people. Ensuring inclusive governance, providing jobs and livelihood for its people and building well enough institutions that can provide basic services, these are the building blocks of a new nation that the government must strive to towards," said Ezekwesilli.

The statement explains that the South Sudan transitional trust fund will be used to rapidly increase the coverage of child immunisation, provision of vitamin A, de-worming, and selected services for rural mothers and children. It will also increase rural livelihoods opportunities and improve rural access by supporting a project to provide feeder roads in areas with high agricultural potential.

In addition the trust fund will help create jobs through grants to 200 entrepreneurs, increasing outreach to women entrepreneurs, and building up a micro-finance client base of 30,000 individuals.

The WB and International Monetary Fund have been subject to criticism because it relinquishes economic autonomy from the state borrowing money. Their loan is subject to the “Washington Consensus” - conditionalities of trade liberalisation and so on. They also focus upon empowerment of the private sector, in some cases to the detriment of the public sector. There policies are often seen as developed world-centric.

As the global financial crisis continues with riots in Greece and plummeting Italian government bonds, it is not a good time to be in debt. However, South Sudan needs a cash injection to bring its infrastructure up to speed and for it to fulfil its economic potential.

Robert Zoellick

Robert Bruce Zoellick,ˈtsœlɪk,  born July 25, 1953) is the eleventh president of the World Bank, a position he has held since July 1, 2007. He was previously a managing director of Goldman Sachs, United States Deputy Secretary of State (resigning on July 7, 2006) and U.S. Trade Representative, from February 7, 2001 until February 22, 2005.
President George W. Bush nominated Zoellick on May 30, 2007 to replace Paul Wolfowitz as President of the World Bank.On June 25, 2007, Zoellick was approved by the World Bank's executive board.

Zoellick was born in Naperville, Illinois, the son of Gladys and William T. Zoellick. His family is of German origin and he was raised Lutheran. He graduated in 1971 from Naperville Central High School, graduated Phi Beta Kappa in 1975 from Swarthmore College as a history major, and received his J.D. from Harvard Law School and a Master of Public Policy degree from Harvard University's John F. Kennedy School of Government in 1981. In 1992, he received the Knight Commander's Cross of the Order of Merit of the Federal Republic of Germany for his eminent achievements in the course of German reunification.
In 2002, Zoellick was awarded an honorary Doctor of Humane Letters from Saint Joseph's College in Rensselaer, Indiana. On May 30, 2007, President George W. Bush nominated Zoellick to become president of the World Bank, with Paul Wolfowitz formally stepping down on June 30.

Upon graduation from Harvard Law School Zoellick served as a law clerk for Judge Patricia Wald on the United States Court of Appeals for the District of Columbia Circuit.
Government service (1985–92)
Zoellick served in various positions at the Department of the Treasury from 1985 to 1988. He held positions including Counselor to Secretary James Baker, Executive Secretary of the Department, and Deputy Assistant Secretary for Financial Institutions Policy.
During George H. W. Bush's presidency, Zoellick served with Baker, by then Secretary of State, as Under Secretary of State for Economic and Agricultural Affairs, as well as Counselor to the Department (Under Secretary rank). In August 1992, Zoellick was appointed White House Deputy Chief of Staff and Assistant to the President. Zoellick was also appointed Bush's personal representative for the G7 Economic Summits in 1991 and 1992.
Business, academia, and politics (1993–2001)
After leaving government service, Zoellick served from 1993 to 1997 as an Executive Vice President of Fannie Mae. Afterwards, Zoellick was appointed as the John M. Olin Professor of National Security at the U.S. Naval Academy (1997–98); Research Scholar at the Belfer Center for Science and International Affairs at the John F. Kennedy School of Government; and Senior International Advisor to Goldman Sachs.
Zoellick signed the January 26, 1998 letter to President Bill Clinton from Project for a New American Century (PNAC) that advocated war against Iraq.
During 1999 Zoellick was, for a short period, the head of the Center for Strategic and International Studies (CSIS).

U.S. Trade Representative (2001–5)
Zoellick was named U.S. Trade Representative at the beginning of the younger Bush's first term; he was a member of the Executive Office, with the rank of Ambassador. According to the U.S. Trade Representative website, Zoellick completed negotiations to bring China and Taiwan into the World Trade Organization (WTO); developed a strategy to launch new global trade negotiations at the WTO meeting in Doha, Qatar; shepherded Congressional action on the Jordan Free Trade Agreement and the Vietnam Trade Agreement; and worked with Congress to pass the Trade Act of 2002, which included new Trade Promotion Authority. He also heavily promoted the Central American Free Trade Agreement over the objections of labor, environmental, and human rights groups.

Deputy Secretary of State (2005–6)
Zoellick (right) with Jan Pronk, the United Nations' special representative to Sudan.
On January 7, 2005, Bush nominated Zoellick to be Deputy Secretary of State. Zoellick assumed the office on February 22, 2005. The New York Times reported on May 25, 2006 that Zoellick could soon announce his departure. Zoellick agreed to serve as Deputy Secretary of State for not less than one year. He was seen as a major architect of the Bush administration’s policies regarding China.
On September 21, 2005, Zoellick created a major stir on both sides of the Pacific by giving a remarkably candid speech to the National Committee on U.S.-China Relations. In the speech, he not only introduced the notion of China as a "responsible stakeholder" in the international community but sought to allay fears in the US of ceding dominance to China.
In addition, Zoellick chartered a new direction in the Darfur peace process. During a trip to a Darfur refugee camp in 2005, he wore a bracelet with the motto, "Not on our watch." Zoellick was seen by many as the administration's strongest voice on Darfur. His resignation catalyzed groups, such as the Genocide Intervention Network, to praise his record on human rights issues.

President of the World Bank (2007–present)
Zoellick also serves or has served as a board member for a number of private and public organizations: Alliance Capital, Said Holdings, and the Precursor Group; and as a member of the advisory boards of Enron[23] and Viventures, a venture fund; and a director of the Aspen Institute's Strategy Group.
He has also served on the boards of the German Marshall Fund and the European Institute and on the World Wildlife Fund Advisory Council, and was a member of Secretary William Cohen's Defense Policy Board Advisory Committee.
He is a member of the Council on Foreign Relations

In 2005 Tom Barry, the policy director of the International Relations Center, wrote that Zoellick "regards free trade philosophy and free trade agreements as instruments of U.S. national interests. When the principles of free trade affect U.S. short-term interests or even the interests of political constituencies, Zoellick is more a mercantilist and unilateralist than free trader or multilateralist."
Gavan McCormack has written that Zoellick used his perch as U.S. trade representative to advocate for Wall Street's policy goals abroad, as during a 2004 intervention in a key privatization issue in Japanese Prime Minister Junichiro Koizumi's re-election campaign. McCormack has written, "The office of the U.S. Trade Representative has played an active part in drafting the Japan Post privatization law. An October 2004 letter from Robert Zoellick to Japan’s Finance Minister Takenaka Heizo, tabled in the Diet on August 2, 2005, included a handwritten note from Zoellick commending Takenaka. Challenged to explain this apparent U.S. government intervention in a domestic matter, Koizumi merely expressed his satisfaction that Takenaka had been befriended by such an important figure… It is hard to overestimate the scale of the opportunity offered to U.S. and global finance capital by the privatization of the Postal Savings System."
In a January 2000 Foreign Affairs essay entitled "Campaign 2000: A Republican Foreign Policy," he was one of the first of those now associated with Bush's foreign policy to invoke the notion of "evil," writing: "There is still evil in the world—people who hate America and the ideas for which it stands. Today, we face enemies who are hard at work to develop nuclear, biological, and chemical weapons, along with the missiles to deliver them. The United States must remain vigilant and have the strength to defeat its enemies. People driven by enmity or by a need to dominate will not respond to reason or goodwill. They will manipulate civilized rules for uncivilized ends." The same essay praises the "idealism" of Theodore Roosevelt and Woodrow Wilson.[citation needed] Two years earlier, Zoellick was one of the signatories (who also included Donald Rumsfeld, Paul Wolfowitz, Richard Perle, Elliott Abrams, Zalmay Khalilzad, John R. Bolton, Richard Armitage, and Bill Kristol) of a January 26, 1998 letter to President Bill Clinton drafted by the Project for the New American Century calling for "removing Saddam Hussein's regime from power.

World Bank chief blames Barack Obama for Doha trade talks deadlock

GENEVA — World Bank chief Robert Zoellick attacked plans on Monday to accept a watered down World Trade Organization free trade deal in place of an overall accord, saying this was defeatist.
"The fate and state of the Doha Round is deeply disappointing," Zoellick said on the opening day of a WTO review conference.
"If leading negotiators think small, they will act small and they (will) miss big opportunities. Dumbing down Doha is defeatist.
"A mini-deal won't do much for growth and it will leave the WTO behind the big changes that we're touching on today," Zoellick said.
Launched in the Qatari capital in 2001, the Doha Round of negotiations for a global free trade deal has stalled amid disagreements between developed and developing countries over proposed tariff cuts on industrial goods and subsidy reductions in the farm sector.
Member states are now considering a mini-deal on areas specific to the poorest states by December but Zoellick believes that negotiators should still aim for the bigger goal.
"I urge the WTO ... to think big again. Otherwise, the trade agenda will switch elsewhere," he warned.
In particular, Zoellick called for US leadership in getting a deal.
"In my view, it would be good if a key developed country could or would lead," noted the former US trade chief.
The United States could make concessions, Zoellick pointed out, since it is "going to be cutting its agriculture subsidies as part of" current talks in Washington on the public finances.
US farm subsidies are among key sticking points holding up a Doha deal.

Zoellick, who was the US's chief trade negotiator under George W Bush, told reporters in Geneva: "I think the facts speak for themselves on whether you have excuses or leadership."

The Doha development round of negotiations was launched in the Qatari capital in November 2001 with the intention of spreading the benefits of free trade from rich western countries to poorer nations of Africa, the Caribbean, Latin America and Asia. But attempts to open up markets in the manufacturing, agricultural and service sectors have foundered as a result of disagreements between the round's five big players: the United States, the European Union, India, Brazil and China.

Pascal Lamy, the WTO's director general, is resigned to the US continuing to adopt a hardline stance until after Obama has sought re-election in November 2012, but has floated the possibility of a so-called "Doha light" that would salvage some parts of the negotiations, including a package for developing countries.

"The mini-deal will probably be about as hard as the big deal," Zoellick warned at the launch of a programme in Geneva designed to disseminate data on trade.

Privately, many trade negotiators agree with the assessment of the World Bank chief that it will be hard to get the US to agree even to a slimmed-down Doha round, since it would leave Washington with nothing to show for 10 years of talks. Zoellick said that rather than settle for a more modest agreement, the 150-plus WTO members should aim for more. "I urge the WTO members to get bolder: double down on Doha." If countries were ambitious but failed, it would be easier to apportion blame, he said.

The World Bank chief predicted that only a push by political leaders would end what he called a "death watch" on Doha.

"The world needs a global growth strategy and opening trade drives growth," said Zoellick. "We've seen it with proven effectiveness all throughout the past 60 or 70 years."

Thursday, June 2, 2011

World Bank revises Kenya’s growth down

NAIROBI - Kenya must improve urban infrastructure for rapid economic growth, the World Bank said Thursday in its June 2011 Kenya Economic Update.

"Kenya is at the beginning of a major transformation that will shape its development prospects for decades to come," Johannes Zutt, World Bank Country Director for Kenya is quoted as saying. "Every year, Kenya's population grows by about one million people, who are healthier, better educated and moving to cities. With improved urban infrastructure and connectivity, particularly through the port of Mombasa, Kenya's new entrepreneurs will increasingly find new paths to prosperity."

The report focuses on the need for Kenya to expand and modernize the port of Mombasa as well as to strengthen the competitiveness of its coastal cities, which are Kenya's gateway to the thriving markets on the Indian Ocean. It should also improve the infrastructure within and between Mombasa and Nairobi, Kenya's gateway port.

Kenya could become a middle income country in the next decade if its economy grows at 6% a year, the report said.

In the short-term, the Kenyan economy will need to navigate through another economic storm and manage rising inflation caused by higher food and fuel prices,” said Ms Jane Kiringai, the bank’s senior economist.

She was speaking in Nairobi during the launch of the institution’s 4th edition Kenyan economic update, ‘Turning the Tide in Turbulent Times: Making the most of Kenya’s demographic change and rapid urbanisation.’

The projection comes a few days after fellow Bretton Woods Institution, International Monetary Fund (IMF), revised its projection from 5.7 per cent to 5.4 per cent.

Analysts at PineBridge Investments revised their growth projections to 4.5 per cent from 5 per cent, while their CfC Stanbic Bank counterparts have cut it to 4.3 per cent from 5.4 per cent.

The revised growth estimates by the WB and other analysts are, however, faster than the government’s 3.5 per cent and 4.5 per cent projection announced by Planning Minister Wycliffe Oparanya last month.

They are understandable, since the country is grappling with an inflation that has been rising for the last seven months to stand at 12.95 per cent in May, fuelled by high international oil prices in the face of a weak shilling and food shortage.

This has forced the Central Bank of Kenya to try supporting the shilling and tame inflation by withdrawing Sh3.2 billion from the economy.

The minister of planning and Vision 2030 Wycliffe Oparanya had earlier projected a lower GDP growth of between 3.5 and 4.5 per cent for this year, citing similar factors but said proposals such as higher strategic oil and food reserves could be used to stabilise long-term growth.
Finance minister Uhuru Kenyatta, however, has differed with his planning counterpart and projected a 6.1 percent economic growth rate for the year.

World Bank loaning Brazil $6B for social programs

BRASILIA --The World Bank is set to nearly double its financing in Brazil to $6 billion in the coming fiscal year to support development projects and continued economic growth in the country, World Bank President Robert Zoellick said Wednesday.

Speaking to journalists ahead of scheduled meetings with Brazilian authorities this week, Zoellick said lending to Brazil could rise from an average of $3 billion currently, and that more than half of the new financing would go to projects in the country's less-developed Northeastern region.

Brazil President Dilma Rousseff has made eradicating extreme poverty in Brazil the cornerstone of her social programs. Details on her poverty program are expected to be released Thursday.

Brazil’s government says 16 million people live in extreme poverty in the nation, surviving on $45 a month.

Zoellick says the World Bank promise of loans up to $6 billion is double what the Bank has provided to Brazil on average in the past.

Zoellick and World Bank Brazil Director Makhtar Diop said the bank was hoping to take advantage of a virtuous cycle in the Northeast to continue stimulating development there.

"For the first time ever the Northeast region is growing at a faster pace than the rest of the country, so we need to help reinforce this trend," Diop said.

The World Bank officials said the financing would go to help support critical infrastructure and social projects, including education programs, particularly by helping overcome existing fiscal constraints for states in greater need. In addition, they said they hoped to stimulate greater market development and more competition in the region.

Also as part of the effort, the officials said the bank would provide support for stalled public-private partnerships in the region.

"We need a quality legal framework," said Diop. "If you don't have a good legal framework for public-private partnerships, they don't advance."

Zoellick said that bringing equitable financing initiatives to countries like Brazil is important to maintain a recent global growth trend in which nearly half of all growth has been produced in developing countries.

"For example, Brazil has done very well recently with commodities, but commodity booms tend not to last forever," he said. "It will be very important for Brazil to develop other sectors such as services and manufacturing."

The World Bank currently has $13.3 billion in outstanding disbursed loans to Brazil, for projects in 19 of the country's 27 states.

Regarding possible rebalancing of power at the World Bank in the context of bringing greater voice to developing countries at the institution, Zoellick said he believed the process would happen as a natural trend over time.

"Over the longer term, these will be questions for the shareholders to determine," he said.

He admitted that the presidency of the institution might also eventually be handed to a representative from a developing country as qualified candidates emerged.

"What we can do for now is try to advance people through the ranks, and depending on the international politics involved maybe they will be chosen," he said. "That's the best way I can try to help prepare for these types of changes.