TOP UN ASIA-PACIFIC OFFICIAL PUSHES FOR POOLING OF FISCAL RESOURCES TO BEAT RECESSION

Large-scale government stimulus packages are closed off to many nations across Asia and the Pacific, the top United Nations official for the region told a gathering of senior finance and central bank representatives, promoting a cooperative approach to jump-starting economies out of the global recession.

"We need to recognize that not all countries have the fiscal space to implement counter-cyclical measures at significant scales due to budget constraints," Noeleen Heyzer, Executive Secretary of the UN Economic and Social Commission for Asia and the Pacific (ESCAP), said yesterday.

Shrinking resources and other fiscal issues have left several countries in the region with little room to manoeuvre in their efforts to reignite suffering economies, Ms. Heyzer said in a message to the regional high-level workshop on the role of monetary, fiscal and external debt policies in responding to the financial crisis.

In her address, Ms. Heyzer pointed to the international community's response to the crisis and noted that the Asia-Pacific region, with over $4 trillion in foreign exchange reserves, can work together to spur recovery and restore economic growth.

Ms. Heyzer added that ESCAP can bring countries together to share experiences and coordinate their development activities for greater regional results, as exemplified by the high-level meeting in December 2008 in Bali, Indonesia, on the food and fuel hike, financial market meltdown and climate change crisis.

"The huge scale of government spending in the pipeline in many countries offers an unprecedented opportunity to design policies that will bring about more inclusive and sustainable development," she told participants at the four-day workshop in Dhaka, Bangladesh.

The ESCAP workshop looking into various economic policies used by governments in the region to deal with the global financial crisis, hosted by the Bangladesh Bank, has brought together top officials from the finance ministries and central banks of Bangladesh, Bhutan, Cambodia, China, Fiji, India, Laos, Malaysia, Maldives, Nepal, Pakistan, the Philippines, the Republic of Korea, Russia, Sri Lanka, Thailand and Viet Nam.

Also attending are experts from international organizations, including those from the Asian Development Bank (ADB), the International Monetary Fund (IMF), the UN Development Programme (UNDP), World Bank and civil society organizations.
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Brazil, Russia Trade Treasury Bills For IMF Clout

Brazil and Russia are set to unload US Treasury bonds as they acquire $10 billion each of new International Monetary Fund (IMF) securities designed to bolster the institution's aid programs, officials in the countries said Wednesday. The moves are part of a bid by the so-called BRIC nations -- Brazil, Russia, India and China -- to play a bigger role at the IMF and other international institutions...." [The Wall Street Journal/Factiva]

Xinhua writes that "...Brazilian Finance Minister Guido Mantega...said the [IMF] loan will be made in the form of bonds, thus it will not affect Brazil's foreign exchange reserves, which currently total about $200 billion. With the loan, Brazil will join the group of 47 countries which regularly finance the IMF's operations. 'In the past, the IMF helped Brazil. Now, Brazil will loan to the IMF to make the international trade viable,' Mantega said...." [Xinhua/Factiva]

AFP adds that "...IMF Managing Director Dominique Strauss-Kahn welcomed the move, saying 'Brazil once more reaffirms its strong role as a leading emerging market economy.' He added, in a statement: 'The Brazilian authorities have shown great leadership and engagement in the whole process of IMF reform and expansion of our funding, and I am pleased that Brazil is clearly showing its strong support to the international economic and financial system.'..." [Agence France Presse/Factiva]

IMF Urges Europe To Fix Financial System.

"The International Monetary Fund (IMF) urged European policymakers Monday to accelerate work to tackle lingering financial system weakness by writing off bad loans at financial institutions. 'To secure recovery and a return to self-sustaining growth, policymakers need to take further decisive action, especially in the financial sector,' the Washington-based lending institution said in its annual assessment of the eurozone economy...." [Kyodo/Factiva]

Deutsche Welle adds that "...the IMF also called for more aggressive efforts to stabilize the ailing banking sector.... The agency said that 'tentative signs of improvement' from the crisis had 'yet to germinate into a recovery' and warned that the banking sector still was exposed to pressure...." [Deutsche Welle/Factiva]

AP writes that "...the IMF called on the European Central Bank to keep considering unconventional options 'including active credit easing' or printing more money to stimulate growth. It said the ECB should also explore any margin for cutting interest rates under 1 percent level 'as soon as possible.' But it warned that reducing rates under the current level, the lowest ever for the euro area, needed to be judged against possible adverse effects on money markets. Lower rates could see investors pull money out of the euro area to get a higher return elsewhere...." [Associated Press/Factiva]

IMF Boosts Loan To Serbia To EUR2.9 Billion.

"The International Monetary Fund (IMF) said Friday it had sharply increased its loan to Serbia to EUR2.9 billion to help the country cope with a worse-than-expected impact from the global economic crisis. The IMF's initial, 15-month Stand-By Arrangement financing for Serbia, approved on January 16, had been set at $394 million...." [Agence France Presse (5/16)/Factiva]

Reuters adds that "...the agreement allows for the immediate release of about $1.07 billion, the IMF said, also noting that the agreement will last through mid-April 2011. The IMF said Serbia's external and financial environment has deteriorated 'abruptly and relentlessly' since the original loan agreement was designed in late 2008...." [Reuters (5/16)/Factiva]

Dow Jones reports that "... 'With the global economy in recession, Serbia's exports and imports have plunged, and capital flows have largely dried up. The outlook has deteriorated markedly and remains subject to downside risks. Economic activity is likely to shrink this year, with limited prospects of recovery in 2010,' IMF Deputy Managing Director Murilo Portugal said in a statement...." [Dow Jones (5/16)/Factiva]

Opinion: Spending And Support Sees Region Through Global Crisis.

In an opinion piece appearing in the FT, International Monetary Fund (IMF) Middle East Director Masood Ahmed writes, "Oil prices have dropped from $147 a barrel to between $50 and $60 over the past year, leading to a collapse of export revenues for Middle Eastern and North African oil producers.... Yet growth...remains higher than in many regions.... This year, the oil exporters of the [region] will see their non-oil gross domestic product... expand at more than 3.5 percent. Real GDP in the region...should also grow at about the same rate.... What explains this resilience?

Part of the explanation is that banks in the region had little exposure to the toxic assets that have created turmoil elsewhere. Also, countries in the region have not been affected to the same extent by the sharp declines in export volumes...or the withdrawal of capital flows.... Another dimension of the answer lies in decisive policy actions.... But the most important factor behind the resilience of the Middle East and North Africa is that the region's oil exporters have decided to maintain high levels of capital spending by drawing upon reserves accumulated during the boom years....

An important uncertainty is whether this resilience will remain if the recession in Europe is prolonged, which will be particularly important for North Africa.... Fortunately, most of the region's governments are adapting their fiscal and monetary stance and a few have also been able to draw upon the IMF and donors to supplement their limited financing capacity. But the best outcome for all countries in the region would be a speedy return to positive growth and well-functioning financial markets in the world as a whole...." [Financial Times/Factiva]

IMF: Europe Needs Further Steps To Repair Financial Sector.

"Europe's financial sector needs further efforts to restore confidence and ensure the region's economy recovers, the International Monetary Fund said Tuesday. The IMF, which expects the EU economy to shrink 4 percent this year, says the banks in the 27-nation bloc need continued liquidity provision and 'credible loss recognition.' Concern is growing that European banks aren't doing enough to bolster their finances...." [Dow Jones/Factiva]

FT adds that "...publishing the European Region Economic Outlook on the crisis in Europe, the IMF made clear that key European institutions have been found wanting in their hour of need, leaving national policymakers to co-ordinate policies to stem the recession. 'We need more Europe and not less Europe,' said IMF Director for Europe Marek Belka. 'Europe is the most economically integrated market economy in the world and yet the policies to address the crisis have been undertaken at a national level.'..." [Financial Times/Factiva]

AFP writes that "...Belka also suggested the European Central Bank, which has taken its key rate to a record low of 1.0 percent, had scope to go even further, but stressed that other non-conventional monetary measures were becoming more important. 'Macroeconomic policies will need to continue to support demand while keeping an eye on the medium and longer run,' the IMF report said.... It said Europe's emerging economies would shrink by 4.9 percent in 2009 but that a recovery in this zone in 2010 would be slightly stronger than in Europe's advanced economies...." [Agence France Presse/Factiva]

Gulf Economies To Contract, Says IMF.

"The Gulf's largest economies are expected to contract this year as Opec-mandated cuts in oil production and declining petroleum revenue erode growth. The International Monetary Fund (IMF) said Sunday that real gross domestic product in Saudi Arabia, the United Arab Emirates and Kuwait would shrink after a slump in oil prices spurred the cartel to reduce output.... 'The bottom line is that nearly all countries in the region will be seriously affected by the global crisis in important but different ways,' the IMF said in its MENA Regional Economic Outlook...." [Financial Times (5/11)/Factiva]

However, AP adds that "...IMF Mideast and Central Asia Department Director Masood Ahmed said the region as a whole was likely to weather the financial crisis better than other parts of the world because of 'prudent financial and economic management' and the ability of oil-exporting countries to draw upon hefty cash stockpiles accumulated during boom times.... Non-exporting countries are at greater risk, particularly if the recession dragging on the economies of trading partners in the West and elsewhere proves lengthy. A drawn-out global downturn could lead to significantly higher levels of unemployment and poverty, Ahmed added...." [Associated Press (5/10)/Factiva]

Reuters reports that "...while Gulf banks are financially sound, indicators 'may not fully capture risks posed by high credit growth and concentration in real estate', the IMF said, adding any sharp deterioration in bank balance sheets could delay recovery...." [Reuters (5/10)/Factiva]

IMF Approves $2.8 Billion Loan To Crisis-Hit Ukraine.

"The International Monetary Fund (IMF) on Friday approved a long-delayed $2.8 billion loan for crisis-stricken Ukraine, citing signs of growing political stability and more promising economic policies. The impact of the global financial crisis on Ukraine has been compounded by its turbulent political climate, but the IMF said there have been indications of improvement...." [Associated Press (5/8)/Factiva]

AFP adds that "...the approval was given by the IMF's executive board on completion of the first review of Ukraine's economic performance under a two-year stand-by credit arrangement totaling $16.5 billion approved in November 2008. The latest loan raised the total Fund disbursements to Ukraine so far to $7.3 billion, the IMF said in a statement...." [Agence France Presse (5/8)/Factiva]

Reuters reports that "...the IMF board waived a number of previously held conditions, allowing authorities to continue with exchange rate restrictions, multiple currency practices and the imposition of import restrictions. It has allowed for a budget deficit of 4 percent of gross domestic product, against an initial demand for a balanced budget. Differences over the budget deficit first stalled the loan program in February...." [Reuters (5/8)/Factiva]

UN ENVIRONMENT CHIEF CALLS ON GOVERNMENTS TO INVEST IN ‘NEW GREEN DEAL’

The head of the United Nations Environment Programme (UNEP) has called on governments to invest a significant amount of their $3 trillion-worth of stimulus packages in a new "green economy" to defeat the crises facing the world.

Governments must play their part in shaping and focusing markets to deliver long-term environmental benefits if the world is to surmount the current food, fuel, financial and economic crises it faces, said UNEP Executive Director Achim Steiner in a speech at Tel Aviv University yesterday.

Mr. Steiner told the audience that time and again resource-efficient, low-carbon and environmentally friendly products and processes have failed to make their way out of research laboratories. "The market failed to read the writing on the wall or see the climate and energy security street signs coming up fast on the international highway."

He noted that the oil crisis of the late 1970s and early 1980s saw around $1 billion of investment into research and development in solar powered energy halving the cost per unit of electricity, not enough for commercialization.

"The oil price dropped and so did widespread enthusiasm for solar power. Only now are generation prices beginning to fall towards competitiveness [but] we have wasted nearly three precious decades," he added.

He noted, however, a UNEP Policy Brief for a Global Green New Deal, which highlights the benefits of investing a significant amount of proposed government economic stimulus money on five key sectors from renewable energy to sustainable transport.

"The question now is how will the around $3 trillion-worth of stimulus packages be spent-on the old brown economy or a new green one that might set the stage for a truly sustainable century?" asked Mr. Steiner.

The Brief – developed with economists, the World Bank, the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) among others – spotlights how some economies, including China, Korea, the United States and the United Kingdom, have already committed part of their stimulus packages to green investments.

Mr. Steiner stressed that investing 1 per cent of global gross domestic product (GDP) into five key sectors could be key to a "Global Green New Deal."

These areas include raising the energy efficiency of old and new buildings, as well as investing in renewable energies including wind, solar, geothermal and biomass.
The three other areas are sustainable transport including hybrid vehicles; high-speed rail and bus rapid transit systems; the planet's ecological infrastructure including freshwaters, forests, soils and coral reefs; and sustainable agriculture including organic production.

"The Policy Brief also calls for a range of specific measures aimed at assisting poorer countries to reach the Millennium Development Goals (MDGs) and green their economies," noted Mr. Steiner.

The measures include an expansion of microcredit schemes for clean energy, reform of subsidies from fossil fuels to fisheries and the greening of overseas development aid, he said.

"Japan, which has already launched a multi-billion yen green stimulus package for its economy, has just announced a $5 billion loan fund for developing economies seeking to boost their renewable energy sector," he pointed out.
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GENERAL ASSEMBLY AGREES ON TERMS OF UN SUMMIT ON FINANCIAL CRISIS

The United Nations will convene a global summit in June to assess the impact of the world economic crisis on development, it was announced today, after the General Assembly agreed on the arrangements for the conference.

"In the midst of the most serious economic downturn since the Great Depression, we now have the opportunity and the responsibility to search for solutions that take into account the interests of all nations, the rich and the poor, the large and the small," Assembly President Miguel D'Escoto stated after the 192-member body adopted a resolution on the 1 to 3 June summit.

Mr. D'Escoto has been tasked with organizing the UN Conference on the World Financial and Economic Crisis and its Impact on Development, which was called for by participants at a financing for development meeting held in Qatar in late 2008.

Last month, he travelled to a number of countries to build support for participation at the highest level in the June meeting, and he plans to visit several more in the weeks ahead.

"In agreeing to hold this United Nations conference at the highest level, Member States are recognizing the vital importance of assuring that all nations have an opportunity to participate equally and fully in the common search for solutions that meet the concerns and needs of all countries, large and small," said Mr. D'Escoto.

He stressed that, in this effort, it is vital to draw on "technical expertise and practical wisdom" from all over the world, and from countries at every stage of development, as well as from international organizations, academia, private sector organizations, and civil society.

In addition to the impact of the crisis on development, the conference will also focus on ongoing discussions on reforming and strengthening the international financial and economic system and architecture.

A Commission of Experts appointed by Mr. D'Escoto and chaired by Nobel Laureate Joseph Stiglitz has stated that international finance structures must be drastically overhauled in the face of the current global economic crisis.

The panel, as well as the meeting later this month of the Economic and Social Council with the World Bank, International Monetary Fund (IMF) and World Trade Organisation (WTO), are expected to contribute to the preparations for the June summit.

Mr. D'Escoto will likely circulate a draft outcome text for the summit for negotiation in early May.
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GLOBAL FINANCE STRUCTURES MUST BE REVAMPED, SAYS UN EXPERT PANEL

International finance structures must be drastically overhauled in the face of the current global economic crisis, a panel of experts convened by the United Nations General Assembly said today, calling on wealthier nations to direct one per cent of their economic stimulus packages to help developing countries address poverty.

A coordinated approach – bringing together not just the so-called Group of Eight (G-8) or even Group of 20 (G-20) nations, but the "G-192" representing all members of the Assembly – is needed to pull the world out of the recession, according to the recommendations of the Commission of Experts on Reforms of International Finance and Economic Structures.

Chaired by Joseph Stiglitz, winner of the 2001 Nobel Prize for Economics, the nearly two dozen-member body stressed that many poorer countries lack the resources necessary to tackle the crisis, and developed nations should not attach inappropriate conditionalities to such funds.

"The nature, the severity of this crisis has really opened up opportunities for change for reform that I think would not have been conceivable even a few months ago," Mr. Stiglitz told reporters.

The experts also called for the International Monetary Fund (IMF) to increase the availability of funds for hard-hit nations.

A new global reserve system must be put into place to promote economic stability and equity, the Commission said, as this would ease the deflationary effects of the massive accumulation of reserves that countries believe are necessary to brace themselves against global instability. Such a system would offset the risk of a drop in value of a major reserve currency.

Other recommendations included the creation of an elected and representative Global Economic Coordination Council, as part of the UN, to meet annually at the head-of-State level to assess development and serve as a "democratically representative alternative to the G-20."

Further, a financial regulatory board and competition authority – which would both answer to the Coordination Council – could prevent the expansion of multi-national firms that threaten competition or become problematic when they become too big to fail, the experts said.

The creation of a new international credit facility, under the aegis of the World Bank, would provide additional credit to developing countries without pro-cyclical conditionalities, and the governance of such an entity would represent both new donor countries and take into account concerns of developing countries.

"We see the United Nations system, which includes the Bretton Woods institutions, has the institutional capacity, the expertise, and the global presence to respond in significant and practical ways" to the current crisis, Assembly President Miguel D'Escoto said today.

An interactive dialogue, expected to wrap up tomorrow, is under way at UN Headquarters on the panel's recommendations. The results of the three-day gathering will help lay the groundwork for the International Conference on the Global Economic and Financial Crisis and its Impact on Development slated to be held in New York in June.
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EFFORTS TO END CURRENT GAZA ‘IMPASSE’ IMPERATIVE – UN POLITICAL CHIEF

A top United Nations official today called for progress to be made in implementing a January Security Council resolution – which calls for a durable ceasefire in Gaza, free access for relief workers and the re-opening of crossings – to break the current impasse and lift the cloud of uncertainty hanging over the region.

Two months have passed since unilateral ceasefires were declared to end the three-week offensive launched by Israel on 27 December with the stated aim of ending rocket attacks by Hamas and other groups.

At least 1,300 Palestinians were killed and some 5,300 were injured in the heavy bombardment and fighting in the densely populated areas of Gaza, which also reduced homes, schools, hospitals and marketplaces to rubble.

"Despite international engagement and support, very little concrete progress has been made on key issues" outlined in resolution 1860, Under-Secretary-General for Political Affairs B. Lynn Pascoe told the Council in an open meeting.

"The intolerable situation at Gaza's crossings remains the key impediment to bringing help – and hope – to the people of Gaza," he stressed.

Although the amount of goods entering Gaza has increased and the Israeli Cabinet announced earlier this week that more food would be allowed into the area, "the quality and quantity of imports are insufficient compared to needs," Mr. Pascoe underscored.

He repeated the UN's call on Israel to meet its obligations under international humanitarian law and open the crossings to allow supplies and reconstructions materials in to help rebuild Gaza.

The International Monetary Fund (IMF) has warned that the ongoing restriction on the entry of cash into the area and the inability of many, including Palestinian Authority (PA) employees, to withdraw their salaries from banks is impacting the livelihoods of some 500,000 Gazans.

"We continue to be concerned that, despite Egyptian efforts, no ceasefire regime is in place," Mr. Pascoe told the meeting, which heard from dozens of speakers.

In spite of stepped-up efforts, no breakthrough has been made in securing the release of Israeli captive Gilad Shalit and hundreds of Palestinian prisoners.

Further, without a ceasefire in place, violence continues in the area, the Under-Secretary-General said, with over 100 rockets and mortars having been fired into Israel from Gaza and 12 Israeli airstrikes during the reporting period.

"We call for an end to all acts of violence, and for respect for international humanitarian law by all parties," he stated.

Mr. Pascoe also noted that the Board of Inquiry set up by Secretary-General Ban Ki-moon to investigate incidents involving death and damage at UN premises in Gaza during the hostilities will submit its report early next month.

He called on the so-called diplomatic Quartet – comprising the European Union (EU), Russia, the United States and the UN – and the international community to take concerted action to bring stability to Gaza and revive the Middle East peace process.

"We need to have both Israeli and Palestinian governments that are clearly committed to the two-State solution," the official said. "We need a combination of negotiations, the implementation of commitments on the ground, and a strategy for de-escalating tensions and addressing the urgent humanitarian needs in Gaza."
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Sri Lanka: No Let-Up in Army Shelling of Civilians

We receive reports of civilians being killed and wounded daily in the 'no-fire zone, while the Sri Lankan government continues to deny the attacks. The Tamil Tigers' use of civilians as human shields adds to the bloodshed."

Brad Adams, Asia director at Human Rights Watch

Tamil Tigers Unwilling to Release Their Hold on 150,000 People

The Sri Lankan army, despite government denials, is indiscriminately shelling the "no-fire zone" in northern Sri Lanka where thousands of civilians are trapped by the Liberation Tigers of Tamil Eelam (LTTE), Human Rights Watch said today, citing new information from the region. More than 2,700 civilians have reportedly been killed over the last two months, and the number of casualties rises daily.

"We receive reports of civilians being killed and wounded daily in the 'no-fire zone, while the Sri Lankan government continues to deny the attacks," said Brad Adams, Asia director at Human Rights Watch. "The Tamil Tigers' use of civilians as human shields adds to the bloodshed."

A doctor at the makeshift hospital in Putumattalan, inside the government-declared "no-fire zone," told Human Rights Watch over the phone early today that dozens of dead and wounded civilians were being brought to the hospital daily. The interview was interrupted by shelling, audible over the phone; the doctor later explained that an artillery shell had struck approximately 250 meters from the hospital, killing two civilians and wounding seven others. Another shell struck about a kilometer from the hospital, also killing and wounding civilians.

When Human Rights Watch spoke to the doctor at about 5 p.m., he said the hospital had received 14 bodies and 98 wounded that day. He told Human Rights Watch that the shelling appeared to come from the direction of government positions three kilometers to the west.

The doctor described another artillery attack inside the no-fire zone on March 21, 2009:

"Between 10 and 11 a.m. on March 21, a shell hit a shelter about 200 meters from a church in Valayanmadam [three kilometers south of Putumattalan]. When I went to the site in the evening, two bodies were still lying at the site, while three bodies had already been buried. Nine people had been injured."

The Sri Lankan government continues its official denials of any attacks in the no-fire zone, including in discussions with top international officials. For example, in his phone conversation with the United Nations secretary-general, Ban Ki-moon, on March 17, President Mahinda Rajapaksa claimed that "no firing whatever was being carried out on the No Fire or Safe Zones declared by the security forces."

Collecting accurate information from the conflict zone is extremely difficult, as the government continues to block access for media and independent observers.

Civilian casualties in the 25-year-old armed conflict with the LTTE have skyrocketed since January. According to a UN document reprinted in the media, the UN country team in Sri Lanka has documented 2,683 civilian deaths and 7,241 injuries in the six weeks from January 20 to March 7. A copy of the patient list from the makeshift hospital in Putumattalan on file with Human Rights Watch contains the names of 978 people brought to the hospital from March 1 to March 10. According to the list, 79 adults and 40 children died, while 646 adults and 213 children were injured.

Human Rights Watch said that the LTTE continued to prevent 150,000 Tamil civilians from leaving the conflict zone and effectively used them as human shields. During the last two months LTTE only permitted about 4,000 injured civilians and their caretakers to be evacuated by ferryboat by the International Committee of the Red Cross (ICRC).

In one incident reported to Human Rights Watch, a local employee of an international aid agency was wounded and several of his family members killed by a shell that hit a shelter in Putumattalan on March 21. According to information that the aid agency received from its staff on the ground, the employee sustained serious head wounds and his situation is considered critical unless he receives medical treatment. Despite several days of negotiation, however, the LTTE has refused to allow the ICRC to evacuate the man.

On March 17, another aid volunteer was wounded as a result of shelling in the no-fire zone. He did not get needed medical attention and died.

The situation of the civilians trapped in the conflict zone is aggravated by the acute shortage of food, sanitary facilities, and medication, as international humanitarian agencies cannot deliver sufficient supplies to the conflict area.

A volunteer at the hospital today told Human Rights Watch: "It is really difficult for people to find food, and you can see that over the last four weeks people have lost weight and they get sick because of lack of nutritious food, [lack of adequate] bathing and toilet facilities, as well as lack of medicines in the hospital. We are in a very, very desperate situation. People are suffering."

Top UN officials, including the secretary-general, the under-secretary-general for humanitarian affairs, and the high commissioner for human rights, as well as a number of concerned states, have called on the Sri Lankan government and the LTTE to make protecting civilians a top priority and to take all necessary measures to halt the spiraling humanitarian disaster.

"The Sri Lankan government has responded to broad international concerns with indignation and denials instead of action to address the humanitarian crisis," said Adams.

Human Rights Watch called on the UN Security Council to put Sri Lanka on its agenda and to address urgently the deteriorating situation. It also called on Sri Lanka's key bilateral partners, such as Japan, the United States and India, to make the safety of the trapped civilians a top priority in any discussions of financial assistance.

Last week, Human Rights Watch sent a letter to members of the board of the International Monetary Fund (IMF) about the government's request for a US$1.9 billion loan to address its financial crisis and, according to the Sri Lankan Central Bank's request, to "continue with the resettlement, rehabilitation and reconstruction work in the Northern Province." It has asked the IMF to finalize negotiations on the loan by March 31.

In its letter, Human Rights Watch emphasized that the government's current policies and practices are counterproductive to the stated goal of the IMF loan and urged that IMF board members discuss concrete action the government needs to take to alleviate the humanitarian crisis in the north.

EU Seeks Doubling Of IMF Funds

EU leaders have agreed to seek a doubling of International Monetary Fund (IMF) resources to enable it to help countries in the global economic downturn, according to a final draft to be presented at an EU summit on Friday.

The draft made no reference to the size of the possible EU contribution to any doubling. EU officials said late on Thursday the bloc would make a contribution of $75 billion, but wanted to consult first with other G20 countries.

The EU argues the IMF needs a greater role in surveillance and in providing more funds it can offer in emergency loans to countries in financial trouble.

EU leaders were also to go over contentious plans to spend $6.8 billion of unused EU budget funds for new power grids and green energy. The European Commission wants to spend freely on projects that will decrease the environmental burden on the continent.

However they declined other calls to open their purses. They resisted US pressure to expand the bloc's fiscal-stimulus plans and said they aren't ready to boost the EU's $25 billion emergency fund for struggling economies.

US Lawmakers Back Increased Funding For IMF

Lawmakers on Wednesday said they support US Treasury Secretary Timothy Geithner's call to significantly increase funding for the International Monetary Fund (IMF). Senate Foreign Relations Committee Chairman Senator John Kerry said there was bipartisan support on the panel for providing additional resources. He spoke at a press conference following a meeting with IMF Managing Director Dominique Strauss-Kahn and World Bank President Robert Zoellick.

The US share of the IMF's New Arrangements to Borrow (NAB) is about 20 percent, meaning the US could contribute about $100 billion to the facility under the proposed expansion. In addition, Kerry said there was general agreement at the committee meeting for some amount of increase in IMF funding.

Strauss-Kahn said he supports not only the increase in resources but also more voting power within the IMF for emerging economies. Zoellick expressed concern about trade protectionism and warned senators about the negative effects of countries restricting imports. 'The danger of protectionism, whether of a creeping or overt type, would really make a situation that is very bad much worse,' said Zoellick.

Bulgaria In Better Position Than Neighbors - EBRD

Bulgaria is financially more stable than some of its neighbors but its economy would be deeply affected by the global downturn, European Bank for Reconstruction and Development (EBRD) President Thomas Mirow said on Tuesday.

But analysts say years of budget surpluses and hefty fiscal and forex reserves protect Bulgaria in comparison with regional peers.

The EBRD will increase investment in Bulgaria by 25 percent to almost EUR 250 million. Nearly half of the funds will reach local banks to ease access to trade credit as banks are growing more reluctant to lend.

The EBRD will also finance energy and EU funds projects. The resources will be made available to companies that have proved their viability but have been pressed by the financial crisis. They will be supported to increase their productivity, Mirow explained.

However, Bulgaria's reliance on foreign capital places it in a vulnerable position, the International Monetary Fund (IMF) said Tuesday. The IMF suggests that Bulgarian authorities prioritize maintaining confidence in the country's banking system, which it describes as well-capitalized, liquid and highly profitable.

IMF Sees An Even Deeper Recession

The International Monetary Fund (IMF) is poised to reduce its global economic outlook for the fourth time since October.

Speaking in Lisbon Tuesday, Teresa Ter-Minassian, an adviser to IMF Managing Director Dominique Strauss-Kahn, said the Fund now expects the world's gross domestic product to contract by 0.6 percent this year, compared with a January forecast for growth of 0.5 percent.

The eurozone economy was forecast to contract by 3.2 percent in 2009, she said. The US would shrink by 2.6 percent and Japan 5 percent, making it the worst-hit big economy. The IMF in Washington said the figures cited by Ter-Minassian were 'unofficial' and 'out of date'.

Until now, the IMF has only said it will cut its global 2009 growth forecast to 'below zero' after worse-than-expected fourth quarter data. Strauss-Kahn told Reuters last week that advanced economies were moving too slowly in ridding banks of problems assets, which could jeopardize a global recovery in 2010. "The scenario will be worse, but the managing director has already said this" Ter-Minassian said.

BRIC Nations Call For More Balanced IMF.

Brazil, Russia, India & China (BRIC) Saturday sought a re-balancing of representation on the executive board and the International Monetary and Financial Committee of the International Monetary Fund (IMF). The demand was made at the G20 finance ministers' meeting being held near London.... They also asked for speeding up of the second phase of voice and representation reform in the World Bank group by April 2010.

The BRICs said it was necessary for developing countries to have a greater voice and representation. Similarly, leadership of the IMF and World Bank should not be subject to 'nationality or regional considerations.'

In related news, it was reported that the G20 summit should find ways to give other states a say in decisions by the world's richest to mitigate disasters like the US mortgage loan crisis, Russian President Dmitry Medvedev said Saturday.

Reiterating Russia's view that global finance needs sweeping reform, Medvedev said new tools and rules were needed 'so that the problems which start in one state will not trigger the hardest chain reaction' in others..

G20 Backs Rescue Funds Boost As Crisis Summit Looms.

G20 finance ministers promised money on Saturday to rescue troubled emerging market economies. Ministers from the world's largest economies also pledged to regulate hedge funds and start closer checks on credit ratings agencies to prevent a repeat of the financial crisis.

'We are committed to deliver the scale of sustained effort necessary to restore growth,' the ministers said in a statement promising extra money for the International Monetary Fund (IMF) and regional lenders such as the Asian Development Bank (ADB).

Besides the IMF and ADB, the G20 finance ministers said they would review the capital needs of African Development Bank (AfDB) and the Inter-American Development Bank (IDB) at the annual meeting this year and called on the European Bank for Reconstruction and Development (EBRD) to 'promptly review its statutory capital constraints to give leeway to interventions'. This was urgent because Eastern European economies are in crisis.

It has been reported that the technical details of the deal to provide the [IMF] with additional resources were not finalized at the weekend but Japan has already signed a deal with the fund to provide a loan worth $100 billion. The US is seeking to increase the funding by extending the New Arrangements to Borrow facility, under which 26 of the fund's members agreed in 1998 to lend it up to $50 billion at times of crisis.

Spain's portion of a possible $250 billion increase in funding for the IMF would be in the order of $3 billion, Spanish Finance Minister Pedro Solbes said Saturday. Solbes said the cash would come from central bank reserves.

Manuel Pushes For A More 'Multilateral' Fund.

The reform of the International Monetary Fund (IMF) is an essential part of the battle to stem a drift towards nationalism and protectionism, South African Finance Minister Trevor Manuel has told the FT.

At the G20 finance ministers' meeting, South Africa will call for developing countries to be given greater weight in the governance of the IMF, but Manuel also called for the creation of a new executive body in which ministers and central bankers would have greater powers, a change he calls 'pivotal'.

South Africa and Australia are chairing a G20 committee on the IMF. Manuel is separately chairing a panel of experts looking at ways to make the institution a more effective global financial watchdog.

In a related story, Xinhua reports that Chinese Premier Wen Jiabao called on Friday for reforms of the internal governance structure of the IMF to fend off financing and investment risks, balance rights and obligations and pay more attention to the interests of developing countries.