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This page was updated on: 01/26/10



Trade, Finance and Investment Media Reports Archives: 2010; 2009; 2008; 2007; 2006; 2005; 2003; 2002





Greater investment in agriculture and rural development is needed to combat poverty and meet the Millennium Development Goals (MDGs), according to the UN Food and Agriculture Organization (FAO). Marking the 40th anniversary of its Investment Center, which was established in collaboration with the World Bank in 1964, the FAO emphasized the development benefits of increasing funding to support agriculture in developing countries.


Links to further information

FAO press release, 14 December 2004



The Global Compact recently began an international effort to raise awareness on and increase commitment towards combating corruption. Launched on International Anti-Corruption Day, 9 December, the initiative will focus on providing information, guidance and tools to Global Compact participants over the next twelve months. The Global Compact, a voluntary corporate citizenship initiative supporting a list of principles on human rights, labor, the environment, added a tenth principle on anti-corruption in June 2004. The Global Compact will be collaborating with the UN Office on Drugs and Crime, Transparency International and the International Chamber of Commerce to hold several dialogue events and support the collection of corporate practice cases, which will be illustrated in a report to be published in the fall of 2005.


Links to further information

Global Compact website

International Anti-Corruption Day website





Several new trade negotiations have been announced in Asia, with China, Japan and India all in talks with ASEAN—the Association of Southeast Asian Nations. The agreement with China aims to create a free trade area covering almost one-third of the world’s population by 2015. Meanwhile, Japan and India are also in discussions to form trade agreements with ASEAN. Such deals, if realized, are believed to offer significant economic and development gains for the region. However, economists predict that they could have a more negative impact on the U.S economy.


Links to further information

ASEAN report, November 2004

ICTSD Bridges Weekly Trade News Digest, 1 December 2004



Not enough major companies are reporting properly on the risks and opportunities resulting from environmental and social considerations, according to a new report. Authored by the UN Environment Programme in cooperation with Standards & Poors and SustainAbility, two private companies, the report suggests that only three of the world’s 50 largest companies made fully public their assessments of major environmental and social risks. On the positive side, however, the authors did note that a vast majority of corporations are now using sustainability indicators in their reporting.


Green group shocks energy sector: In related news, conservation group WWF has criticized power companies for failing to respond to climate change. In a new report, Ranking Power, WWF reveals that a majority of companies scored less than one out of ten on criteria judging how effectively they have responded to climate change. The power sector is the single biggest source of greenhouse gas emissions.


Links to further information

Corporate sustainability report, November 2004

WWF report, November 2004





African countries’ hopes to increase their influence in the World Bank and International Monetary Fund and to seal a deal on debt relief were left unfulfilled at the joint annual meeting of the two organizations. The 2004 event, held in Washington, DC on 3 October, concluded without resolving calls for debt forgiveness for the world’s poorest countries. While Britain had been pressing its donor colleagues to agree to a comprehensive programme to provide debt relief for developing countries, its peers took a more cautious approach, with some preferring further discussions on the matter. Britain’s Chancellor of the Exchequer, Gordon Brown, had argued that the world’s most impoverished countries have been forced to service their foreign debt at the expense of spending on people’s health and education. While the issue remained unresolved as the meeting concluded, though, World Bank President James Wolfensohn expressed hope that the matter would be resolved soon.


Meanwhile, African leaders have been frustrated in their efforts to raise their influence on the World Bank-IMF boards. While Europe has 10 seats on the boards, Africa has just two. However, this issue remained unresolved as the joint meeting drew to an end. 


Links to further information

World Bank DevNews Media Center, 4 October 2004

BBC news service, 3 October and 4 October 2004





Trade liberalization by itself is no panacea for Africa’s poverty and underdevelopment problems, according to a new report. The 2004 Economic Report on Africa: Unlocking Africa’s Trade Potential found that trade liberalization must be carefully planned and combined with other policies aimed at economic development if it is to succeed. The report argued that some African countries have developed free trade policies that have been applied “haphazardly” and “with too little relevance to overall development objectives.” Gradual and targeted liberalization and “dynamic trade policies” are more helpful than liberalization per se, says the report.


Compiled by the UN Economic Commission for Africa, the new report also ranked countries on their competitiveness, praising Mauritius, Namibia, South Africa and Tunisia for their recent economic performances. It noted, though, that only five countries in the entire continent achieved the 7% annual GDP growth considered necessary to meet the Millennium Development Goal of halving poverty by 2015. The report also cautioned against protectionism in the US and other industrialized countries.


Links to further information

UN ECA press release, 29 September 2004

2004 Economic Report on Africa: Unlocking Africa’s Trade Potential



The campaign for Director-General of the World Trade Organization, which will fall vacant in August 2005, has begun in earnest with at least two candidates throwing their names into the ring. Trade minister Jayakrishna Cuttaree of Mauritius is believed to be interested in the post, while Sergio Marchi, a former Canadian trade envoy, is also reported to be applying. Carlos Perez del Castillo of Uruguay has already announced his candidacy. The top job is currently held by Supachai Panitchpakdi of Thailand, who took on the job in 2002. Elections may be held as early as December this year.


Links to further information

Geneva Watch, 17 September 2004

Trade Law Center for Southern Africa news report, 20 September 2004



Five countries from West Africa have inked a deal to create a regional monetary zone by July 2005. Ghana, Gambia, Guinea, Nigeria and Sierra Leone have launched the plan in the hopes of creating a stable currency. This is the second monetary zone for the region, with several other countries belonging to the West African Economic and Monetary Union, which is part of the longstanding CFA Franc zone.


In other news, Mexico and Japan have signed a free trade deal. The agreement, which negotiators have been working on since early 2003, raises the quota for tariff-free automobile imports from Japan, while Mexican officials hope it will wean the country away from its overwhelming reliance on the United States, which buys nine-tenths of its exports.


Links to further information

Business Week news, 27 September 2004

ICTSD Bridges Weekly Trade News Digest, 22 September 2004

Ghanaweb business news, 13 September 2004



Taxing financial transactions and arms sales were among the options presented in a key report recently released by France, Brazil, Chile and Spain at the UN General Assembly. The report, which seeks to contribute to the ongoing fight against world hunger and poverty, is the output of a Technical Group on Innovative Financing Mechanism headed by Jean Pierre Landau, French Inspector of Finances, which explored feasible and politically-acceptable alternatives to financing development aid. Other options presented included the UK-proposed International Financial Facility and incrementing the issuance of special drawing rights in the International Monetary Fund. The report further addressed options such as taking action against tax evasion and tax havens, increasing remittance benefits, socially responsible investment, and voluntary contributions through credit cards. While the report did not consider the potential for a carbon tax to finance development as originally intended, the group has agreed to discuss it in the future.


In related news, the lower house of the Belgian parliament recently approved a currency transaction tax, more commonly known as the Tobin tax. The proposed legislation is designed to attract a 0.02 percent tax on currency transactions and would cover transactions that take place if one of the parties or an intermediary is in Belgium or if the payment is made in the country. The money raised by the tax would be managed by the EU for development cooperation, promotion of social justice, conservation and protection of cultural heritage. India is also expected to pass a securities transaction tax in September. Proposed by its Finance Minister in July, the tax would draw 0.15 percent of every transaction in securities that occurs in a stock exchange in India. Options for utilizing the revenues raised include reducing fiscal deficit and supporting development and anti-poverty programmes in the country.


Links to further information

Report of the Technical Group on Innovative Financing Mechanisms

Inter Press Service New Agency, 19 August 2004

ZNet South Asia, 19 July 2004



The United States is supporting plans to give billions of dollars of debt relief to some of the world’s least developed nations, according to the Washington Post and other news sources. The plan follows years of lobbying from advocacy groups to write-off the huge debts incurred by many Third World countries in previous decades. It also follows reports suggesting that recent efforts to cut Third World debt are failing to achieve their aims.


The Heavily Indebted Poor Countries (HIPC) initiative, which was established in the 1990s to help reduce poor countries’ debt problems, will be the subject of discussions at the upcoming annual joint World Bank-International Monetary Fund meeting taking place in early October. The initiative has canceled some debt, but as much as US$90 billion remains outstanding for the countries covered by the scheme.


World Bank Lending Safeguards Queried

Meanwhile, environment and conservation group Friends of the Earth has accused the World Bank of planning to water down its environmental and social criteria for lending money to the private sector. The proposals are part of a review of the International Finance Corporation, which is the part of the Bank that lends to the private sector.


Links to further information

Jubilee Debt Campaign news service, September 2004

Friends of the Earth press release, 17 September 2004

IFC Policy Review website





The International Finance Corporation (IFC) has launched the public consultation phase for the update of its Environmental and Social Safeguard Policies and the review of its Policy on Disclosure of Information. Established in 1956, IFC is a member of the World Bank Group and the largest multilateral source of loan and equity financing for private sector projects in the developing world. Both initiatives are being undertaken with the aim of improving IFC’s effectiveness as a development bank, bettering the social and environmental performance of IFC-financed projects, and enhancing transparency.


According to the Inter Press Service, the review is critical as a number of key public and private institutions, including the OECD and the Equator Principles – a framework for financial institutions to manage environmental and social issues in project financing, follow IFC’s lead on social and environmental standards. IFC uses nine performance standards to manage social and environmental risks and impacts and to enhance development opportunities in private sector financing for its eligible member countries. The standards outline recommendations on how to address issues such as labor conditions, pollution prevention, community health and safety, biodiversity conservation, and indigenous peoples. The review will also consider and incorporate recommendations from the Extractive Industries Review, an independent assessment of the World Bank’s involvement in oil, gas and mining projects (see story below). NGOs have called on IFC to set higher goals for its environment, social and disclosure policies, and watchdog groups are cautioning against possible “white-washing.”


The public consultation process comprises four regional consultation workshops, stakeholder meetings, web-based consultation, and several topic specific meeting tackling issues such as labor standards, indigenous peoples’ rights, biodiversity, and the role of the private sector in human rights. Revised draft documents will be posted in January 2005 for a 30 day public comment period, and new policies are expected to be approved by the IFC Board of Director in February 2005.


Links to further information

IFC Consultation Process


Inter Press Service News Agency, 18 August 2004 http://www.ipsnews.net/africa/interna.asp?idnews=25134



The World Bank’s recent rejection of calls to end their financial support for some oil and gas projects has been called into question yet again – this time by the British Government. The Bank has been engaged in a review of its involvement in the oil, gas and mining sectors since 2001 when it launched the independent Extractive Industries Review (EIR) process that was headed by former Indonesian Environment Minister Emil Salim. While Bank officials agreed on new rules designed to ensure that funding for oil and gas projects did not go to corrupt states, they stopped short of pulling out of such projects entirely, as the EIR final report, which was released in December 2003, had proposed.


The Bank’s decision has already been criticized by a number of Nobel Laureates and many environmental groups. In mid-August, the British Government added its concerns, arguing that the focus of future funding should be renewable forms of energy, not fossil fuel schemes.


Responding to the recent criticism, World Bank President James Wolfensohn has argued that a range of energy options need to be available in order to bring electricity to the 1.6 billion people in developing countries who currently live without it. He has argued in favor of “continued but selective engagement” in oil, coal and gas projects, combined with an increased focus on renewables.


Bank launches new lending policy

In related news, the World Bank has overhauled its guidelines for policy-based lending, replacing one of its main lending instruments – Adjustment Lending – with Development Policy Lending. The new approach, which is the result of two years’ consultation, aims to be less prescriptive and more inclusive than its predecessor.


“The Bank got too prescriptive [in the past] and, in fact, was presenting a one-size fits all to governments. This [new] broader approach will form the basis for [future] Bank support,” said Bank Vice President James W. Adams in a recent interview. The new approach is also supposed to take into account questions of sustainability. “Unlike the original policy in which there was little mention of environment or social issues, there is now a reference to the importance of vetting what we are doing to ensure that environmental or social effects are properly reviewed,” said Adams.


Links to further information

Extractive Industries Review website

ENS Newswire, 16 August 2004

Washington Post, 3 August 2004

World Bank press release, 10 August 2004

World Bank interview, 10 August 2004



Investment issues have been taken off the agenda of the World Trade Organization’s Doha round of trade talks. The topic reportedly fell victim to opposition from developing countries during the latest negotiations held in July. While these negotiations succeeded in getting the Doha round back on track after the collapse of talks held in Cancun, Mexico, in 2003, investment rules are not on the Doha agenda.


“WTO members made official what had long been apparent… that no work [on investment] will take place within the WTO during the Doha Round,” reported IISD’s Invest-SD Bulletin in August.


Some experts have expressed concern at the multilateral “vacuum” that seems to exist on investment issues. Meanwhile, the United States, European Union, and other major trading powers are continuing to work on developing bilateral treaties.


Links to further information

IISD Invest-SD News Bulletin, August 2004

WTO Doha Work Programme, August 2004



UK companies are far ahead of their European rivals in their treatment of the environment and in their record on human rights, according to a new report. A survey of the 300 largest corporations in Europe found British companies leading the pack in five sectors, including energy, finance, retail, telecommunications, and utilities. Nordic countries also posted strong results, while business from Greece, Italy, Portugal and Spain received the lowest scores.


Top 20 sustainable stocks announced

In other business news, the world’s top 20 listed companies for 2004 have been announced by The Progressive Investor, a newsletter published by SustainableBusiness.com. The list is based on an analysis of companies’ records both on sustainability and financial strength. Companies such as Canon, Swiss Re and Electrolux made the list.


Links to further information

WBCSD website (posted from the Ethical Corporation magazine), August 2004

Progressive Investor newsletter, August 2004


JULY 2004



Key trade talks in Geneva have ended in a deal that will revive the stalled Doha round of negotiations – but only after a marathon negotiating session that ran 24 hours beyond the agreed deadline. The talks were viewed as a key opportunity to get the Doha round of trade negotiations back on track after the collapse of talks at a major ministerial conference held in Cancún, Mexico, in September 2003. The late July 2004 deadline was set earlier this year in an effort to regain the lost momentum in the World Trade Organization before other political events, such as the upcoming US elections later this year, placed the diplomatic focus elsewhere. Informal and formal discussions have been taking place since March. During the past two weeks, delegates had focused on a draft “Framework Text” on the Doha round circulated on 16 July. A second revised draft was then distributed on 30 July.


The flurry of diplomatic activity culminated in recent few days in a meeting of the WTO’s General Council. Originally scheduled for 27-29 July, the Council extended its deadline to midnight on Friday, 30 July. However, with delegates still inching towards an agreement as the late night deadline passed, negotiators agreed to continue their talks. After a further 24 hours of apparently “grueling” discussions, an agreement was finally reached late on Saturday, 31 July.


Commenting on the deal, WTO Director-General Supachai Panitchpakdi has labeled it a “historic breakthrough,” arguing that it will greatly enhance members’ chances for successfully completing the Doha negotiations. Dr. Supachai claimed that the earlier Cancún deadlock was now broken.


Agriculture pact praised: The deal includes a crucial agreement on proposals to cut the subsidies farmers receive in wealthy nations such as the United States and those in the European Union. The breakthrough is viewed as critical for many developing countries, which rely on agricultural products for export earnings. An agreement on the cotton trade was also being hailed by several African countries as a critical part of the deal.


“For the first time, member governments have agreed to abolish all forms of agricultural export subsidies by a date certain. They have agreed to substantial reductions in trade distorting domestic support in agriculture,” said Dr. Supachai.


As well as farming subsidies, the final compromise package also covers other key areas such as market access for industrial products, services, trade facilitation, investment, competition policy, transparency in government procurement, and development issues, including special and differential treatment for developing countries, technical assistance, and the needs of least developed countries.


It is estimated that a successful agreement on the Doha round could pump an additional US$520 billion into the global economy by 2015 – with the lion’s share going to developing countries.


Links to further information

BBC news reports, 31 July 2004


WTO summary of the final negotiations and key outcomes, 31 July 2004


Final version of the WTO framework agreement, 31 July 2004


Revised draft text for the WTO framework, 30 July 2004


Original draft text for the WTO framework agreement, 16 July 2004




The World Bank and the International Monetary Fund (IMF) recently celebrated their 60th anniversary. Founded during the United Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire in July 1944, the IMF and the World Bank, also known as the Bretton Woods Institutions (BWI), were established after World War II to create a stable international financial system and a global framework for economic cooperation and development. The Bank addresses economic development and poverty reduction, while the Fund focuses on the stability of the international financial system. As part of the celebrations, a virtual exhibition was launched illustrating the history of the founding of the two institutions complete with anecdotes and pictures from archives culled from a variety of sources.


The anniversary was also commemorated by protesters in various parts of the world, including London, Jakarta and Bolivia. Celebrations in Washington, DC, where the BWIs are headquartered, were marked by a divergence of opinions of the effectiveness of the institutions. From the BWI’s perspective, it has been 60 years of a “strong and prosperous global economy that benefits all the world’s citizens,” while according to the Washington Times, the protesters who were demonstrating outside the World Bank saw the legacy of the BWIs as 60 years of “plundering third-world economies, devastating the environment and using debt as a weapon to keep poor nations in indentured servitude.”


Links to further information

Virtual Bretton Woods 60th Anniversary Exhibition


Washington Times, 23 July 2004


Friends of the Earth press release, 22 July 2004




A new United Nations panel has been established to look at levels of international support for Africa’s development. Announced by UN Secretary-General Kofi Annan at the recent African Union summit, the 13-member panel, which includes development experts, politicians, and economists, is expected to support the implementation of the New Partnership for Africa’s Development (NEPAD) established in 2001. The panel will begin by evaluating the quality and quantity of existing international support for Africa’s economic development. Reporting directly to UN Secretary-General Annan, the panel will be chaired by former Nigerian Foreign Minister and Commonwealth Secretary-General Emeka Anyaoku.


Links to further information

UN News Center, 20 July 2004



UN TO CONSIDER GLOBAL TAXES                                     

The United Nations is studying proposals for global taxes as a means to generate innovative sources of financing for development. The proposals to be considered include a carbon tax on fuel use, a tax on currency transactions, an arms sales tax, a global lottery and a tax on international airline travel.


The issue of global taxation is heavily opposed by powerful nations such as the United States, Japan and Germany, but other key countries are seriously considering the idea. France and Germany, backed by Chile and UN Secretary-General Kofi Annan, signed a declaration in January re-launching the concept of taxing arms sales and financial transactions to boost funding for global development efforts in combating poverty and hunger. The declaration also supported the United Kingdom’s proposal to “frontload” development aid through capital markets via an International Finance Facility (IFF). The European Union is divided on the establishment of an IFF, with EU Commission Poul Nielsen stating at UNCTAD XI in June 2004 that “a sleight of hand with the rules of public finance - that mortgages future aid programmes - is no substitute for the hard political task of securing and sustaining the will to provide increased aid, now and for many years to come. This leads me to say that the IFF is really not the right way to go. Fighting global poverty is not something we should leave to be paid for by our children and grandchildren.”


The results of the UN study will be presented to the General Assembly in September  2004.


Links to further information

Inter Press Service News Agency, 8 July 2004


Agence France Presse, 30 January 2004




Written comments forwarded to the GEF to date caution against a performance-based allocation (PBA) framework that would hamper delivery of assistance that the GEF is mandated to deliver. During the negotiations for the third GEF replenishment in 2002, the GEF Council agreed to establish, by the end of 2004, a PBA system for the allocation of GEF resources based on global environmental priorities and country-level performance relevant to those priorities. In May 2003, a working group of technical experts was established to prepare elements of a framework, and a final report on the PBA was presented to the Council in November 2003. At its May 2004 meeting, the Council requested the GEF Secretariat to prepare a study of options to strengthen the current system of allocating GEF resources, and agreed to convene a seminar in September 2004 to advance its work on the PBA, in particular, to assist the GEF Secretariat to prepare a more elaborated proposal. In response to a request for comments, GEF Council members – Colombia, Denmark, France, Germany, India, the Netherlands and Pakistan – have recently provided written comments on the proposed PBA framework.


Responses thus far underscore the need for a simple, flexible and transparent system that does not detract from the GEF’s overarching priorities. Country comments indicate concerns regarding, inter alia: the proposed indicators that would be used to evaluate performance; the use of existing PBA systems such as those adopted by the International Development Association or multilateral development banks; the focus on biodiversity and climate change, which are just two of the GEF’s six focal areas; and the subjectivity of assessments on country environment policy. Some comments warn that countries needing GEF support but lacking the capacity to launch the GEF programme would be penalized, and that country needs and capacity will not be considered. India further stressed that the PBA should not include macro-level indicators or governance reforms that have no specific relevance to the GEF’s mandate. The Netherlands noted that poor country performance should not be absolute barrier GEF funding, and with Germany opposes an ex-ante system where budgets are fixed according to country performance.


Links to further information

GEF web updates, July 2004




Negotiators discussing an overall framework for the Doha trade round have yet to reach agreement with a key deadline just days away. Sources close to the talks report that agreement on a number of central issues remains elusive. Intense negotiations were reported at World Trade Organization headquarters in Geneva throughout late June and into early- to mid-July. In recent discussions on agriculture – a critical issue for many delegations – New Zealander Tim Groser, who is chairing the talks, indicated that a framework text on the issue was under preparation. However, no major breakthrough was reported.


A meeting of the Group of 90, a coalition of developing and least developed countries, saw participants agreeing on elements they would like to see included in the framework. The G-90’s discussions, which took place in Mauritius from 12-13 July, covered key issues such as agriculture, industrial market access, and trade facilitation. Ministerial level talks of the ‘Five Interested Parties’ group (Australia, Brazil, the EC, India and US) were also held recently, in Paris, from 10-11 July. Meanwhile, the Group of Ten, an alliance of food-importing countries such as Japan and Switzerland, met in Geneva on 5 July in an effort to help move negotiations forward. Members reportedly criticized the ‘Five Interested Parties’ group for a lack of transparency and for excluding other groups from their discussions.


With the outcome of the latest negotiations still in doubt, many experts were urging a last-ditch effort to ensure that this opportunity to advance international trade was not lost. A draft framework is expected to be released on 16 or 17 July, with negotiations likely to continue through to the end of the month. The next WTO General Council meeting, scheduled for 27-29 July, is seen as a key deadline for agreeing on a framework for the next trade round. WTO Director General Supachai Panitchpakdi has called the July deadline a “window of opportunity” to make progress before other factors, such as presidential elections in the United States, begin to intrude on the political landscape.


Links to further information

ICTSD Bridges Weekly News Digest, 14 July 2004


BBC news report, 11 July 2004


WTO press release, 12 July 2004




UNEP recently announced that it will work with major institutional investors to develop a set of globally recognized principles for responsible investment by September 2005. Launched on 15 July, the “Responsible Investment Initiative” follows a June meeting of over 40 investors and fund managers in Paris at which participants proposed a global alliance of investors to guide responsible investment best practice. The initiative was launched in response to this proposal and to a UNEP study, “The Materiality of Social, Environmental and Corporate Governance Issues to Equity Pricing,” in which UNEP worked with a group of fund managers and brokerage houses to explore the impact of environmental, social and governance issues on share prices.


Links to further information

UNEP press release, 15 July2004

The Materiality of Social, Environmental and Corporate Governance Issues to Equity Pricing


JUNE 2004



The success of talks to kick-start the Doha round of trade negotiations remains in doubt as the late-July deadline approaches. Progress at the political level was being reported in mid-June at the 11th ministerial meeting of the UN Conference on Trade and Development, particularly on agriculture issues. However, at the negotiating level, the Chair of the World Trade Organization’s Agriculture Committee, New Zealand’s Tim Groser, reportedly told delegates that a draft negotiating framework was “nowhere near ready.” Talks between Australia, Brazil, India, the EU and US held on 22 June apparently saw disputes over a US proposal on tariff reductions. The discussions took place ahead of a Committee meeting scheduled for late June.


In other WTO meetings, the Committee on Trade and Environment reported slow progress in a gathering held on 21 and 22 June, while the Council for Trade-related Aspects of Intellectual Property Rights (TRIPS) postponed a decision on permanently amending rules on pharmaceutical products in a meeting held on 16 June. Trade publication Bridges Weekly reported discussions on genetic resources, traditional knowledge and folklore as “stagnant.”


Links to further information

ICTSD Bridges Trade Weekly News Digest, 23 June 2003




World Bank President James Wolfensohn recently highlighted that progress on the environment has been “alarmingly slow,” stating that developed countries are assuming too little responsibility for addressing the world’s environmental problems. Wolfensohn cautioned that the environment-related goal adopted by world leaders at the 2000 Millennium Summit might not be attainable, citing the “fundamental imbalance in the global environment equation” as a key reason. Noting that an additional 2 billion people will be added to the planet over the next 25 years, he urged developed countries to increase investment toward addressing environmental concerns in poorer countries to ensure that growth is achieved in an environmentally sustainable way and that its effects on poverty and human well-being would not be disastrous.


Links to further information

UN wire, 2 June 2004



MAY 2004



The world’s least developed countries need a combination of increased aid and trade liberalization to avoid sinking further into poverty, according to a new report from the UN Conference on Trade and Development (UNCTAD). The report makes the case for an increase in aid to build up the production base of the world’s poorest countries so they can benefit from trade liberalization. It warns against simply opening markets without providing sufficient ongoing aid, stressing that the two must occur together. UNCTAD fears that, unless a new approach is taken to the problems faced by the world’s least developed countries, the number of people forced to live in extreme poverty will jump more than 40 percent by 2015, to almost half a billion.


Links to further information

UNCTAD press statement, 27 May 2004

UNCTAD report, May 2004


UN DESA is collaborating with the World Economic Forum with a view to mobilizing public private partnerships (PPPs) and tapping into the potential of the business community to help implement poverty reduction and sustainable development goals. A Memorandum of Understanding between the two entities has formalized the partnership, which seeks to contribute to the UN Financing for Development follow-up process and involves a year-long project comprising a series of multistakeholder workshops. These expert workshops will explore how PPPs can enhance the reach and effectiveness of development assistance, and how the climate for private investment can be improved through leveraging multilateral development banks and aid agencies and building capacity in the area of financial governance. The output of these workshops will be reported to the 2005 UN High-level Dialogue on Financing for Development.


Links to further information

UN Financing for Development informational flyer on the partnership

UN news, 10 May 2004


APRIL 2004



OECD countries have agreed on a revised version of the OECD’s Principles of Corporate Governance. Responding to issues that have challenged investor confidence in recent years, the revised principles urge governments to ensure effective regulatory frameworks and advise companies to be truly accountable. Other recommendations include calls for: disclosure of corporate governance policies; strengthening the rights of investors and increasing shareholder rights in board nominations and executive compensation; and rating agencies and analysts to avoid conflicts of interest.


First published in 1999, the OECD Principles of Corporate Governance are used as one of 12 key standards by the Financial Stability Forum to ensure international financial stability and by the World Bank in its work to improve corporate governance in emerging markets. A revision of the Principles was called for by OECD governments to incorporate developments in the corporate sector and the revised guidelines is the product of a consultation process involving representatives of government, businesses and professional bodies, trade unions, civil society organizations and international standard-setting bodies.


Links to further information

The Revised Corporate Governance Principles




Some of the world’s largest banks are set to join the squabble over the World Bank’s continuing support for oil and coal projects. A major independent review for the World Bank published in January caused an international dispute when it called for an end to funding for oil, gas, and mining projects in developing countries. The recommendation, contained in the “Extractive Industries Review” report prepared by former Indonesian Environment Minister Emil Salim, was apparently greeted with skepticism by key figures within the World Bank. Now, a group of major banks are reportedly throwing their weight behind those opposed to the recommendation. Last year, 20 large banks signed onto the Equator Principles, which commit companies to honor the social and environmental standards used by the World Bank. According to the Financial Times, some of these banks are worried they could be pressured to stop supporting extractive industries should the World Bank adopt all the recommendations in the report.


Links to further information

Invest-SD, IISD’s Investment Law and Policy News Weekly, 5 April 2004


Financial Times news report, 5 April 2004




World trade is set to grow by as much as 7.5 percent in 2004, continuing the recovery experienced last year, according to the World Trade Organization. Figures released in early April show that higher-than-expected economic growth in the US and Asia in 2003 fuelled increased trade volumes. With global GDP growth set to increase to 3.7 percent this year, trade is likely to continue to expand. However, WTO economists have cautioned that any slow down in import growth in the US, or a drop-off in Europe’s demand-driven recovery, could affect their forecasts.


Commenting on the latest figures, WTO Director-General Supachai Panitchpakdi warned that, in order for the full benefits of trade to be realized globally, existing trade distortions must to be addressed. “The best way to do that is to bring about a successful conclusion to the Doha Development Agenda,” he said.

Links to further information

WTO press release, 5 April 2004




Europe’s dominant role in selecting the managing director of the International Monetary Fund has been challenged by Egypt’s most senior IMF representative, Shakour Shaalan. The Egyptian has nominated three candidates for the IMF’s top position, defying a convention that European representatives select who should serve as managing director. Traditionally, the significant levels of European and US financial support for the Bretton Woods Institutions have resulted in Europeans leading the IMF, while Americans take the top job at the World Bank.


However, developing countries are seeking a greater say in selecting the IMF’s next director. Shaalan has nominated Stanley Fischer, Andrew Crockett and Mohamed al-Erian for the post. Fischer is a Zambian-born US citizen, while Crockett is British and Al-Erian holds Egyptian and French citizenship. According to some reports, Shaalan’s initiative has received US and British support, while Japan, another major player, has yet to take an official position.


European representatives are believed to have narrowed their options down to a handful of possible candidates, including outgoing Spanish Finance Minister Rodrigo Rato, European Bank for Reconstruction and Development President Jean Lemierre, and EU Competition Commissioner Mario Monti. European Trade Commissioner Pascal Lamy has also reportedly expressed an interest in the post.


Links to further information

UN Wire new service, 1 April 2004


All Africa news service, 24 March 2004


IDEAs Network commentary by C.P Chandrasekhar, 6 April 2004



MARCH 2004



The Executive Directors of the International Monetary Fund are requesting that the Fund’s new Managing Director be selected from among the best candidates, regardless of nationality. In the past, the job has always gone to a European, while the World Bank presidency has always gone to an American. According to the Financial Times, the IMF Executive Directors representing Asia, Africa, Latin America and the Middle East, together with directors from Russia, Australia and Switzerland, are calling for the new IMF chief to be chosen through an open and transparent process.


The leading candidate for the position is Rodrigo Rato, finance minister of Spain’s outgoing government, who while supposedly backed by some European governments does not enjoy the endorsement of France’s Jacques Chirac, who is supporting the candidacy of Frenchman Jean Lemierre. German Chancellor Gerhard Schröder is also expected to not endorse Rato.


In an editorial published in the Korean Herald, Sebastian Edwards, former Chief World Bank Economist for Latin America, said Horst Kohler’s resignation from the Fund’s Managing Director “offers a unique opportunity to reform the embattled international financial institution. What the IMF needs, as a first step toward comprehensive reform, is a new leader with solid technical training, a broad vision and firsthand experience in dealing with the macroeconomic risks faced by emerging and transition economies.”


Links to further information

World Bank press review, 22 March 2004

Korean Herald, 22 March 2004



Progress has been reported in several bilateral trade negotiations involving various countries from the Americas, Europe and Asia. The European Union and Canada have been in discussions to strengthen bilateral ties, and a high level meeting in Ottawa held recently confirmed the framework for an EU-Canada Trade and Investment Enhancement Agreement.


In other bilateral discussions, the US and the Dominican Republic have announced that a deal has been reached to bring the Dominican Republic into the US-Central American Free Trade Agreement. The US and Colombia are set to start free trade negotiations in May, while the US has also signed an investment framework agreement with Qatar, which could also lead to a free trade deal.


Meanwhile, Mexico and Japan have agreed a free trade agreement after 16 months of negotiations. The deal covers more than 300 agricultural products, and is likely to help Mexico’s export sector. It also abolishes Mexican tariffs on steel products from Japan over the next 10 years.


Links to further information

Bridges Trade Weekly News Digest, 24 March 2004


Bridges Trade Weekly News Digest, 18 March 2004


Canada’s Foreign Affairs and Trade Department, March 2004



Politicians from three major developing countries have pledged to increase South-South cooperation. At a meeting held earlier this month in New Delhi, foreign ministers from India, Brazil and South Africa have signed-off on plans to increase cooperation across a range of areas, including trade, science and technology, and poverty eradication. The ministers endorsed a new ‘Agenda for Cooperation’ and a ‘Plan of Action’ that set out their shared goals, and agreed to support a new India-Brazil-South Africa (IBSA) Fund for Alleviation of Poverty and Hunger.


Links to further information

South Africa’s Foreign Affairs Department press releases, 4-5 March 2004




The Hindu newspaper online, 6 March 2004


ICTSD Bridges Weekly Trade News, 10 March 2004



The Doha trade round could be back on track by the middle of the year, according to several key figures involved in the process. Top negotiators from the United States and Europe have spoken in favor of a midyear meeting to establish the “negotiating frameworks” for the Doha trade round. WTO Director-General Supachai Panitchpakdi has also spoken publicly about his hopes to hold a high-level General Council meeting in July, although whether it would involve ministers or be formal or informal remains unclear. The deadline for concluding the Doha trade round is currently set for January 2005, although many commentators believe this target date may need to be extended.


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ICTSD Bridges Weekly Trade News, 3 March 2004




The United States has been called on to take the lead in the Doha trade talks – and warned about heading down a unilateral path on global issues. In a recent speech to the National Press Club in Washington, DC, WTO Director-General Supachai Panitchpakdi urged the US to take the initiative in the current Doha round, warning that it had a lot to lose should negotiations fail. He also rubbished the idea that there is an alternative to the WTO, calling the idea a “fiction” that is “both naïve and dangerous.” He also claimed that multilateralism has become more important than ever to advancing US interests, and said the Doha round offered a “once-in-a-generation opportunity” to eliminate trade distortions, strengthen trade rules and open markets across the world.


Meanwhile, the Bush administration has released its annual trade policy report, setting out its aims for 2004. The report reiterates the government’s policy of pushing for global, regional and bilateral trade agreements, an approach reflected in the numerous initiatives pursued in recent months. Reflecting on the past year’s work, the report highlights free trade agreements with Chile, Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua and Morocco. Talks are also being held with Bahrain, the Dominican Republic, Thailand and the Southern African Customs Union, while negotiations are also slated with Colombia, Panama and Peru.


Links to further information

WTO Press Release, 26 February 2004


Invest-SD, IISD’s Investment Law and Policy News Weekly, 5 March 2004






Six Nobel Prize winners have urged the World Bank to stop financing all oil and coal projects through a letter presented at a recent meeting in Melbourne. The letter comes on the heels of the Extractive Industries Review - a two-year examination of the World Bank’s role in funding oil, coal and gas-mining projects in developing countries, which was drafted by former Indonesian Environment Minister Emil Salim in consultation with various industry, government and environmental group representatives. According to recent news reports, the Bank’s management team rejected a key recommendation that funding for such industries should be phased out. Senior bank officials apparently felt that some fossil fuel projects stimulate economic growth and reduce poverty, two of the institution’s main aims.


In their letter, Archbishop Desmond Tutu, Jody Williams, Sir Joseph Rotblat, Rigoberta Menchu Tum, Betty Williams and Mairead Maguire urge the World Bank “in the strongest possible terms to embrace the spirit of the report and accept the recommendations in their entirety when devising a strategy for moving forward …War, poverty, climate change, greed, corruption, and ongoing violations of human rights – all of these scourges are all too often linked to the oil and mining industries. Your efforts to create a world without poverty need not exacerbate these problems. The review provides you an extraordinary opportunity to direct the resources of the World Bank Group in a way that is truly oriented toward a better future for all.”


Links to further information

UN Wire, 23 February 2004


AllAfrica.com, 23 February 2004


Extractive Industries Review website




One of the UK’s leading politicians has defended plans to support a massive increase in aid spending among donor countries. Britain’s Chancellor of the Exchequer, Gordon Brown, has responded strongly to criticism of his recent calls for an extra US$50 billion a year in aid to be raised by the world’s industrialized nations. Mr. Brown, who is responsible for setting the UK’s finance policies, has called for innovative new methods to raise the additional funding experts believe is required to meet UN targets on poverty agreed in 2000 during the Millennium Summit. His ideas, which include a proposal to float bonds on the financial markets, have reportedly met resistance in some quarters, including a number of policy makers in Washington.


However, the Chancellor has defended his position, arguing that increasing aid should be a priority for the world’s wealthiest nations. “We must act, not only because it is morally right but because it is now essential for stability and security,” he claimed in an article co-written with World Bank President James Wolfensohn for The Guardian newspaper. Brown hopes to push for progress this year during talks on the proposed international finance facility, and again in 2005, when Britain will chair the G8 meeting of the world’s largest economies.


Links to further information

The Guardian newspaper, 16 February 2004




A new trade pact negotiated by the US and Australia has received a mixed response in both countries, with some experts expressing concerns at the deal’s environmental consequences. The bilateral trade treaty, which was announced earlier this month, was hailed by both sides as a success that would deliver valuable trade benefits for both nations. The new deal is the first free trade agreement between the United States and another industrialized country in 16 years.


However, critics have said the treaty fails to deliver some of the hoped-for economic benefits, particularly on Australia’s side, where key breakthroughs on trade in sugar and other commodities were not achieved. The deal has also fallen foul of some US lobby groups, with the Grocery Manufacturers of America saying it did not go far enough. Meanwhile, a number of experts are also concerned at the environmental impacts of the new trade agreement. The Humane International Society is reportedly fearful that the agreement, which removes tariffs on canned tuna, could threaten Australia’s tuna stocks, some of which are already considered to be overfished. In Tasmania, the treaty has been slammed by the local Green Party, which claimed it could result in the island being exposed to genetically engineered crops.


Links to further information

ENS Newswire, 11 February 2004


ICTSD Bridges Weekly Trade News, 12 February 2004




The Board of Directors of the Millennium Challenge Corporation (MCC) met for the first time in February to launch the corporation that will administer the Millennium Challenge Account (MCA), an assistance initiative that will total $5 billion annually by 2006, representing a near 50% increase over current U.S. core development assistance. Announced by US President George Bush in 2002, the MCA is intended to “reward sound policy decisions that support economic growth and reduce poverty.”


Countries eligible to borrow from the International Development Association and with national per capita incomes up to $1,415 will be considered in fiscal years 2004 and 2005. Countries with incomes below $2,975 can be considered in FY 2006. Countries must demonstrate commitment in all three identified policy areas – good governance, investment in health and education of their citizens, and promotion of economic freedom – in order to qualify for assistance. Sixteen indicators developed by the World Bank, IMF and other international institutions have been selected to evaluate and monitor performance in these policy areas. MCA critics say the initiative might harm ineligible poor countries that will have to compete for smaller amounts of traditional aid.


Chaired by US Secretary of State Colin Powell, the MCC also comprises Secretary of the Treasury John Snow as Vice Chairman, US Trade Representative Robert Zoellick, USAID Administrator Andrew Natsios, and an additional five member who are yet to be appointed. During its first meeting, the board appointed Alan Larson, US Under Secretary of State for Economic, Business, and Agricultural Affairs, as its interim CEO, approved the list of candidate countries eligible for MCA assistance, and endorsed the corporation’s bylaws. A report on selection criteria and methodology will be forwarded to Congress in early March following which it will be open to public comment for 30 days. The MCC Board will meet again in May to select the eligible countries who will then be invited to develop a proposal to receive MCA assistance.


Links to further information

US Department of State press release, 3 February 2004


USAID press release, 3 June 2002


Millennium Challenge Account website



Costa Rica has announced its intention to join the Central American Free Trade Agreement (CAFTA), a treaty concluded last year between El Salvador, Guatemala, Honduras, Nicaragua, and the United States. The agreement is designed to cut tariffs on goods and to open up trade in services.


In other trade-related news, a recent summit in the Republic of Congo saw 11 heads of State from central Africa pledge to establish a free trade zone by 2007. Meanwhile, Singapore and South Korea have expressed their intention to sign a free trade agreement by the end of the year, while Brazil has proposed a trilateral trade pact with India and South Africa.


Links to further information

ICTSD Bridges Weekly News Service, 4 February 2004






The Organisation for Economic Co-operation and Development is inviting the public to comment on a draft revision of its Principles of Corporate Governance adopted by OECD governments in 1999. The OECD Principles recommend minimum requirements for best practice in corporate governance. While non-binding, they serve as a reference for corporate governance initiatives globally, underpinning the corporate governance component of the World Bank/IMF reports on standards and Codes, and providing a reference for national legislation and regulation. Revisions and reinforcements of the Principles were called for by OECD governments in response to recent corporate scandals. The final revised version of the Principles is planned for submission and approval at the annual OECD Council Ministerial in May 2004.


Links to further information

OECD press release, 12 January 2004



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