Pakistan floods: World Bank to lend $900m for recovery

17 08 2010

The World Bank is to loan $900m (£574m) to Pakistan to help it recover from its worst ever flooding.

The devastating floods have affected up to 20 million people and left some 2,000 dead, say officials.

But the UN says international aid has been slow and that it has raised only a third of the $460m (£294m) needed for emergency relief.

Pakistan’s High Commissioner to Britain said it could take five years and $15bn (£9.6bn) for the country to recover.

The World Bank funds will come through the reprogramming of planned projects and the reallocation of money, a World Bank spokesman said.

“We are reprioritising to make the funds immediately available,” he told Reuters news agency.

Health officials have warned that disease could spread quickly among the millions of displaced people and that 3.5m children are at risk.

Maurizio Giuliano, of the UN Office for the Coordination of Humanitarian Affairs (OCHA), warned that Pakistan would face “a second wave of deaths” from water-borne diseases and food shortages unless more aid arrived soon.

Continue Reading: http://www.bbc.co.uk/news/world-south-asia-10994989

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Gabon moves to diversify economy

17 08 2010

Gabon has signed deals to diversify its economy in an attempt to be less reliable on its dwindling oil reserves.

The government has announced contracts with Asian companies worth $4.5bn billion dollars.

President Ali Bongo signed the agreements on the eve of the country’s 50th anniversary of its independence from France.

The projects will revamp infrastructure and create about 50,000 jobs.
New partners

Gabon’s oil output has been declining for years and the new deals are presented as the first steps towards diversification.

The largest deal is the with OLAM, a Singapore-based company which plans to develop a huge palm oil plantation in the south east.

The government wants to become the leading palm oil producer in Africa.

In terms of infrastructure, the OLAM deal involves the construction of a refinery, and there are plans for a possible port.

Continue Reading: http://www.bbc.co.uk/news/business-10985014





Eurozone inflation hits 20-month high

16 08 2010

Inflation in the eurozone hit a 20-month high last month, European Union data has shown.

Annual inflation in the 16-nation bloc rose to 1.7% in July, up from 1.4% in June and the highest rate since November 2008, Eurostat said.

The figure was boosted by more expensive fuel costs for transport, and higher alcohol and tobacco prices.

Across all 27 nations in the European Union, prices were up 2.1% in July, compared with a rise of 1.9% in June.

Some countries – Finland, Greece, Spain, Portugal and Romania – raised their rates of VAT in July, which also helped to push prices higher.

“The core inflation rate is slightly higher but with the VAT hikes that there have been in the eurozone, that’s not surprising,” said Astrid Schilo, Europe economist at HSBC.

On a month-on-month basis, prices in the eurozone fell 0.3% in July, and in the wider EU fell 0.2%.





Trickle-Up Economics?

16 08 2010

You’ve probably heard of trickle-down economics: the idea that tax cuts for the wealthy manage to also help the middle class and poorer. Well, in the world of marginal tax rates, welcome to trickle-up economics: the idea that tax cuts for the middle class and poorer also help the rich.

This is a point that has gotten somewhat overlooked in the debate about the Bush tax cuts, which are scheduled to expire at the end of this year.

President Obama has proposed that the tax cuts for the very wealthiest Americans expire as planned, but that the tax cuts for all other American households be extended. One interesting quirk of our tax system, however, means that the tax cuts for the “middle class” also benefit Americans who are much richer than “middle class.” In fact, these “middle class” tax cuts benefit richer Americans more than they benefit middle-class Americans.

Here’s a chart, from the Center on Budget and Policy Priorities, showing the average tax savings for each income group that comes from the Obama administration’s tax proposal, rather than letting the tax cuts expire in their entirety:

Continue Reading: http://economix.blogs.nytimes.com/2010/08/13/trickle-up-economics/?ref=economy





China marches towards world’s No. 2 economy

16 08 2010

China's GDP was smaller than Japan's in 2009 but the IMF expects that wont be the case by the end of this year. But China still trails the United States by a wide margin.


China is on track to overtake Japan as the world’s second-largest economy after the United States, figures released Monday show.
Japan’s gross domestic product, or GDP, totaled $1.29 trillion for the three months ending in June, the nation’s Cabinet Office announced. China’s official figure for the same period was $1.34 trillion.

Economist Frederic Neumann at HSBC in Hong Kong said China is forecast to overtake Japan by the end of the year — making China the world’s No. 2 economy. However, official annual figures won’t come until early 2011.

The International Monetary Fund expects China’s output to reach $5.4 trillion by the end of 2010. By comparison, it estimates Japan’s GDP at $5.3 trillion.

Another analyst says the whole matter is academic.

“Basically, China’s underlying growth rate is going to be about 8 percent over the next decade. Japan’s underlying is going to be about 1 percent,” said Jesper Koll, an economist with JPMorgan in Tokyo. “In 10 year’s time, the Chinese economy will be twice the size of the Japanese economy.”

Continue Reading: http://money.cnn.com/2010/08/16/news/international/japan_china/index.htm





Australian unemployment in surprise pre-election jump

13 08 2010

Australia’s unemployment rate rose to 5.3% in July, according to official figures released just ahead of the country’s national elections.

About 24,600 more people were out of work, raising the rate from June’s 5.1%. Analysts had predicted no change.

The country’s Labor government has played on its economic record which saw Australia avoid recession – largely thanks to demand for commodities.

Some observers say the data will hurt the government in the 21 August vote.

However, experts said the unexpected rise may be partly explained by revised population figures which showed there were more people in the potential workforce than previously thought.

Continue Reading:  http://www.bbc.co.uk/news/business-10948845





German economy sees ‘record’ growth of 2.2%

13 08 2010

The German economy grew by 2.2% in the three months to the end of June, its fastest quarterly growth in more than 20 years, official figures show.

“Such quarter-on-quarter growth has never been recorded before in reunified Germany,” the national statistics office, Destatis, said.

The main reason for the higher-than-expected growth was strong exports, helped by a weaker euro.

The eurozone economy grew by 1% during the quarter.

This compares with growth of 0.2% in the first three months of the year, the area’s official statistics agency, Eurostat, said.

The French economy grew by 0.6% in the second quarter, also up from 0.2%, while the Spanish economy grew by 0.2%, compared with 0.1% in the previous three months.

The pace of growth in the Italian economy remained the same, at 0.4%.

Continue Reading: http://www.bbc.co.uk/news/business-10962017