Foreign Investment In China Drops 22.5 Percent In April.

"China's foreign direct investment dropped 22.5 percent from a year earlier in April, marking the seventh month of decline as corporations cut spending amid the global economic crisis, the Chinese Ministry of Commerce (MoC) said Friday...." [Kyodo (Japan)/Factiva]

Xinhua adds that in the first four months of 2009 "...the figure shrank to $27.67 billion, said MOC spokesperson Yao Jian. In April alone, the investment dropped... to $5.89 billion, the seventh straight monthly fall, said Yao.... The number of new foreign-funded ventures also saw a 34.2 percent decline to 6,241 in the first four months, as companies became more prudent about expanding...." [Xinhua/Factiva]

AFP reports that "...the data was released at the end of a week in which a series of statistics showed the economy was still severely impacted by the global financial crisis. On Wednesday, the government said industrial output... had grown by 7.3 percent in April from a year earlier, a weakening from 8.3 percent growth in March....However, economists told state media Friday they did not expect the steep declines in foreign direct investment to continue for much longer. 'The economy's contraction is likely to relax in the second half of the year,' Dong Xian'an, an analyst with Southwestern Securities, told China Daily...." [Agence France Presse/Factiva]

Mexico To Seek Compensation For Swine Flu. "Mexico will seek economic compensation for damages suffered during the swine flu outbreak, which drove away thousands of tourists - a critical source of foreign revenue, the country's health minister said Thursday. 'There are grounds to apply for compensation ... for the country that has been hardest-hit' by the virus, Health Minister Jose Angel Cordova said at a news conference....

Cordova said compensation for lost tourist revenue could come from the World Bank or the Inter-American Development Bank (IBD).... The flu's impact was expected to cost the economy around $2.3 billion - around 0.3 percent of gross domestic product - and Mexico has launched a $1.06 billion business support program to help counter the damage...." [Agence France Presse/Factiva]

Xinhua adds that "...in an outbreak, 'the nation that gives the most information is the nation that suffers most,' Cordova told a press conference. 'Without international support, nations with disease outbreaks are punished for their honesty,' he argued...." [Xinhua/Factiva]

AP reports that "...swine flu has infected Mexico's relations with China and other countries that have canceled airline flights and halted some trade.... [The Mexican government] rebuked Cuba, Ecuador, Argentina and Peru for banning flights to Mexico, saying they were acting 'incongruously with our traditional ties of friendship.'...[Additionally,] Haiti rejected a Mexican ship last week carrying 77 tons of food aid because of swine flu fears...." [Associated Press/Factiva]

Interview: Africa Yet To Feel Full Force Of Slowdown.

In an interview with Reuters, International Finance Corporation (IFC) Sub-Saharan Country Director Saleem Karimjee said, "Africa's economies are yet to feel the full force of a consumer slowdown in the West, which is likely to cause some corporate failures but nothing like on the scale of other regions... 'My concern in Africa is that the real sector will start to hurt, and it hasn't yet felt all of the impact of the crisis,' said Karimjee.... As the crisis evolves into a wider recession, affecting the spending habits of consumers in Europe and the US, any related African economy would feel a direct squeeze, Karimjee said. 'It's hard to predict -- how will the average family in the UK change their shopping behavior because of the crisis?' he told Reuters in an interview Tuesday, saying his views did not necessarily reflect the official ones of the IFC. 'Will they stop buying roses every week and buy them only two weeks and how will that affect the cut-flower industry in Kenya?' he said. 'This is the cycle I feel has not yet been fully experienced in Africa.'...

However, despite the occasional but inevitable failure in manufacturing and other industries, there was little risk of a domino-effect ripple through its still relatively unsophisticated banking system, Karimjee said. 'I don't think the banks are exposed to the extent that the few failures you will see in the real sector will cause them to crash,' he said...." [Reuters/Factiva]

World Bank Says Global Economy To Shrink 1-2 Percent

The global economy is on track for its worst recession since the 1930s with output likely to shrink by 1-2 percent this year, World Bank President Robert Zoellick told the Daily Mail newspaper. Central and eastern European countries were particularly vulnerable, he said, urging rich nations to do more to fill the financing gap left by an exodus of capital from the developing world.

The Daily Mail writes in an interview with Zoellick that when Zoellick looks across the horizon he sees mounting problems for both the industrialized and developing world. The global economic meltdown is costing lives. He says: "Our estimates are that because of the drop in growth, another 200,000 to 400,000 children will die each year. So that is certainly the wrong direction".

As matters stand, Zoellick is doing all in his power to try and fill the financing gap for the developing world left by the withdrawal of frightened bankers from the global capital markets. "We have about an extra $100 billion of lending to countries that are qualified to borrow, but these are not the very poorest countries". Zoellick also wants to gear up lending through the Bank's concessional arm, the International Development Association (IDA) "We have $42 billion for the 80 poorest countries... we are trying to front load that as much as possible"