Tag Archives: Developing country

Reform could harm developing economies: World Bank

By Karolina Tagaris | Reuters

LONDON (Reuters) – Plans by leading economies to reform the global financial system could disadvantage the developing world and risk looking outdated by the time they are enforced, a topWorld Bank official said on Sunday.

Vincenzo La Via, the institution’s chief financial officer, said solutions for advanced economies are not necessarily a good fit for developing countries.

“Failing to take the developing world seriously enough, ignoring unintended consequences and imposing one-size-fits-all solutions could undermine efforts to establish a more stable global financial system,” La Via wrote in a guest column for the Financial Times.

“The alternative is standards that ignore shifting realities, threatening the world with more uncertainty.”

Basel III, the new capital standards agreed by regulators last year to reduce bank sector shocks, require banks to hold top-quality capital totaling 7 percent of their risk-bearing assets.

But La Via said emerging market economies may not be able to meet the capital-raising rules or to borrow internationally, forcing local banks to compete against heavy borrowing by advanced economies.

Regulators’ approach to safeguarding the world’s top banks has overlooked the effect on developing countries and the global economy, said La Via, who also represents the World Bank of the Financial Stability Board.

“The big subsidiary in a developing country may not seem that important within its global group. But its failure could be devastating for the local economy and could spark global contagion.”

La Via also said developing countries should also be given a bigger say in efforts by European and U.S. regulators to improve accounting standards to make sure they are global.

“If developing countries’ concerns are not taken into account, they will have little incentive to adopt them. This could provide opportunities for regulatory arbitrage, with riskier financial transactions moving to the least-regulated markets,” he said.



Planet could be ‘unrecognizable’ by 2050

AFP News

A growing, more affluent population competing for ever scarcer resources could make for an “unrecognizable” world by 2050, researchers warned at a major US science conference Sunday.

The United Nations has predicted the global population will reach seven billion this year, and climb to nine billion by 2050, “with almost all of the growth occurring in poor countries, particularly Africa and South Asia,” said John Bongaarts of the non-profit Population Council.

To feed all those mouths, “we will need to produce as much food in the next 40 years as we have in the last 8,000,” said Jason Clay of the World Wildlife Fund at the annual meeting of the American Association for the Advancement of Science (AAAS).

“By 2050 we will not have a planet left that is recognizable” if current trends continue, Clay said.

The swelling population will exacerbate problems, such as resource depletion, said John Casterline, director of the Initiative in Population Research at Ohio State University.

But incomes are also expected to rise over the next 40 years — tripling globally and quintupling in developing nations — and add more strain to global food supplies.

People tend to move up the food chain as their incomes rise, consuming more meat than they might have when they made less money, the experts said.

It takes around seven pounds (3.4 kilograms) of grain to produce a pound of meat, and around three to four pounds of grain to produce a pound of cheese or eggs, experts told AFP.

“More people, more money, more consumption, but the same planet,” Clay told AFP, urging scientists and governments to start making changes now to how food is produced.

Population experts, meanwhile, called for more funding for family planning programs to help control the growth in the number of humans, especially in developing nations.

“For 20 years, there’s been very little investment in family planning, but there’s a return of interest now, partly because of the environmental factors like global warming and food prices,” said Bongaarts.

“We want to minimize population growth, and the only viable way to do that is through more effective family planning,” said Casterline.