Oxfam tells Davos: Time to tax growing billionaire club

DAVOS, Switzerland - The Covid pandemic has created a new billionaire every 30 hours and now one million people could fall into extreme poverty at the same pace, Oxfam said Monday as the Davos summit returns.

The international charity said it was time to tax the rich to support the less fortunate as the global elite gathered at the Swiss mountain haven for the World Economic Forum after a two-year Covid-induced absence.

Oxfam said it expects 263 million people to sink into extreme poverty this year, at a rate of one million every 33 hours, as soaring inflation has added a cost-of-living crisis on top of Covid.

By comparison, 573 people became billionaires during the pandemic, or one every 30 hours.

"Billionaires are arriving in Davos to celebrate an incredible surge in their fortunes," Oxfam executive director Gabriela Bucher said in a statement.

"The pandemic and now the steep increases in food and energy prices have, simply put, been a bonanza for them," Bucher said.

"Meanwhile, decades of progress on extreme poverty are now in reverse and millions of people are facing impossible rises in the cost of simply staying alive," she said.

Oxfam called for a one-off "solidarity tax" on billionaires' pandemic windfall to support people facing soaring prices as well as fund a "fair and sustainable recovery" from the pandemic.

It also said it was time to "end crisis profiteering" by rolling out a "temporary excess profit tax" of 90 percent on windfall profits of big corporations.

Oxfam added that an annual wealth tax on millionaires of two percent, and five percent for billionaires, could generate $2.52 trillion a year.

Such a wealth tax would help lift 2.3 billion people out of poverty, make enough vaccines for the world and pay for universal health care for people in poorer countries, it said.

Oxfam based its calculations on the Forbes list of billionaires and World Bank data.

Agence France-Presse

World Bank, Gavi urge countries with excess COVID-19 vaccines to release them

WASHINGTON - World Bank President David Malpass and José Manuel Barroso, chair of the Gavi vaccine alliance, on Monday discussed the importance of countries with excess COVID-19 vaccine supplies releasing them as soon as possible, the World Bank said.

Malpass expressed his desire to work closely with Gavi on a 2022 strategy, including helping expand vaccine production capacity for developing countries, the bank said in a statement.

The two officials also discussed the need for more transparency by countries, suppliers and development partners on vaccine contracts, and regarding national export and supply commitments and requirements, the bank said.

"During their meeting, President Malpass and Mr. Barroso discussed challenges facing acquisition and deployment of COVID-19 vaccines by developing countries and the importance of countries with excess vaccine supplies releasing them as soon as possible," it said.

Malpass has been outspoken about the need to accelerate vaccinations to contain the pandemic and limit further economic damage. Last week, he warned the slow rollout of vaccines in Europe could weigh on the region's economic growth.

On Monday, the bank said it had committed $1.7 billion of $12 billion that it has made available for vaccine development, distribution and production in low- and middle-income countries, with around $4 billion expected to be approved by mid-year.

Malpass said those funds could be used to make co-payments to the COVAX vaccine distribution initiative, and to buy additional doses beyond the basic 20% population coverage.

With new variants of the virus emerging, public health officials have warned the world could lose the race between the coronavirus and the vaccines meant to stop it due to the slow pace of vaccinations in developing nations.

The World Health Organization is urging more political will to boost production of COVID-19 vaccines and share supplies, including through stalled intellectual property waivers on vaccines through the World Trade Organization. 

-reuters

World Bank will not provide loans to Greece - president

STOCKHOLM - The World Bank will limit its work in Greece to offering expertise, and will not provide loans, the bank's president, Jim Yong Kim, said on Tuesday.

"We will not lend money to Greece" because "this is not a country that qualifies, for example, for an IBRD loan," Kim told a press conference in Stockholm.

The International Bank for Reconstruction and Development (IBRD) is an arm of the World Bank which extends loans to governments, but Greece is classed as a "high income" country, rather than the "middle income" states to which it typically lends.

Hungary, another high income country, was made an exception to the US-based bank's rule in 2008 when it received a loan that was part of an aid plan coordinated by the European Union and the IMF.

The World Bank said in November that Greece had requested its expertise on the issues of how to improve its business climate, and how to boost growth.

On Tuesday, Kim suggested that Greece could benefit from the bank's experience in another area: "We have a lot of experience in assessing whether particular social sector expenditures are actually achieving the desired outcome," he said.

"For example we worked in Korea during the crisis in the 1990s, we worked in Indonesia. We worked in many countries that have had very similar experiences with the ones that countries in Southern Europe are going through," he added.

"We're hoping to be helpful whenever we can. But again, we're an organisation that works on request. People have to come to us."

source: interaksyon.com

Phl pushes for another credit rating upgrade

MANILA, Philippines – The Philippines will make its case for another credit rating upgrade in October as it highlights the country’s sound macroeconomic fundamentals capped by a respectable growth in the second quarter.

“We will have meetings with members of the ratings committee to give them the bigger picture of what is really happening here,” said Claro Fernandez, chief of the investor relations office of the Bangko Sentral ng Pilipinas (BSP).

Discussions will involve Philippine officials and representatives from Fitch Ratings, Standard & Poor’s Ratings Services (S&P) and Moody’s Investors Service, Fernandez said.This will take place on the sidelines of the annual meetings of the World Bank Group and the International Monetary Fund from Oct. 12 to 14 in Tokyo, Japan.

“Of course, we are hoping for an upgrade. In fact, we are already starting work for investment grade,” he added.

The country currently enjoys its highest credit rating from Fitch and S&P at one notch below investment grade, while Moody’s places the country two notches behind although with a positive outlook.

Credit rating measures the capacity and willingness of a country to settle its debts. A positive outlook means an upgrade is possible over the next 18 months.

The Aquino administration, which has enjoyed eight positive credit rating actions over the past two years, has been pushing for an investment grade status, which would not only lessen interests paid on our debts, but also open the country to more foreign investments.

“This is for them (credit rating agencies) to have a better appreciation of the Philippines. We want to constantly engage them into a discussion,” Fernandez explained.


Itinerary of the meetings – including the attendees – is still being finalized, he said.

Boosted by an acceleration of government spending and strong exports, the Philippine economy grew by 5.9 percent in the second quarter, bringing the first semester expansion to 6.1 percent. This is slightly better than the five- to six-percent target for the year.

Sought for comment, Moody’s Assistant Vice President Christian de Guzman said in an e-mail the debt watcher has been monitoring the Philippines closely.

“The Philippine rating is monitored on an ongoing basis and we respond to developments as necessary,” he said.

Philip McNicholas, Fitch director for Asia-Pacific said the second quarter growth was “broadly in line” with its expectations and that it will await further data before making an assessment.

“Fitch does not take rating actions based on a single data point,” McNicholas stressed.

S&P representatives declined to comment.

Fernandez said the government is continuing its dialogue and cooperation with the credit raters.

source: philstar.com

DOTC eyes World Bank loan, seeks consultants for Cebu bus rapid transit

MANILA - The Department of Transportation and Communication is eyeing a loan from the World Bank to finance the construction of a bus rapid transit service in Cebu.

In a statement, the DOTC said the BRT system - the first of its kind in the Philippines - is patterned after those in Bogota, Colombia; Curitiba, Brazil; Seoul, South Korea; and Guangzhou, China.

The Cebu BRT system will have 176 buses that will run through dedicated and exclusive bus-ways from Bulacao to Talamban, with a link to the South Road Property.

The service will benefit 330,000 passengers a day when it starts operations in 2015.

The buses will also traverse Cebu City’s business districts, residential areas, shopping centers and key tourist sites. It will have 33 stations along the corridor, with buses arriving at each station every 2-5 minutes.

The DOTC is inviting bids for consultancy services for the BRT project, which will have 2 phases, namely:

- Detailed engineering design and preparation of bidding documents for the engineering, structural, civil, architectural, electrical and mechanical design; and

- Supervision of the transit way and the supporting infrastructure during the construction.

source: interaksyon.com

Debt payments fall P48B Jan-May, at heels of 13-year low in debt-GDP share

Government debt payments—mostly owed to domestic creditors—fell P48 billion to P337 billion from January to May this year, the Bureau of Treasury said Wednesday.

The debt servicing expenses were 14 percent lower compared to P385 billion in the same period in 2011 and come soon after the relative size of the debt payments compared to the gross domestic product fell to a 13-year low of 50.9 percent.

The BoT said the national government spent P262.777 billion to settle obligations to domestic creditors—nearly all of whom are banks and financial institutions like insurance firms.

Foreign debt payments were smaller at P24.999 billion for principal components and P49.416 billion for interest.

The total debt stock as of April 30 stood at P5.075 trillion and consisted mostly of medium and long term tenors.

According to the Bangko Sentral ng Pilipinas, most of the country’s $62.9 billion of foreign debt—over 80 percent—have medium and long term maturities, while short term debt are less than 12 percent.

“US dollar-denominated accounts represented nearly half—49.5 percent—of total, Japanese Yen accounts accounted for 25.1 percent, and multi-currency loans from the Asian Development Bank and the World Bank, 11.6 percent,” the BSP said in a recent statement.

“The rest of the accounts comprising the 13.8 percent balance were denominated in 18 other currencies,” the BSP also said. — ELR, GMA News

source: gmanetwork.com

BPI mulls lending to farm sector

MANILA, Philippines - Bank of the Philippine Islands (BPI) plans to grant more loans to the agribusiness sector as the country's third-largest bank works to strengthen its partnership with the World Bank’s private-sector lending arm.

In a briefing on Monday, Alfonso L Salcedo, BPI corporate banking head, said the lender is aiming for a bigger presence in the agribusiness space, by extending loans to farmers.

"One thing that encourages me is we don't have to be limited to the renewable energy and sustainable energy space for agri. It could be anything such as agricultural loan," he said.

"Looking back, before we started this, we also don't have the expertise, we don't have the level of comfort, lending to the agri space at the lower level. So there is possible affiliation or expansion of this agreement, could allow to get into that in a big way," Salcedo said.

World Bank arm International Finance Corp. (IFC) and BPI had been working in the sustainable energy finance sector since January 2008 and renewed the partnership twice, first in September 2009 and then in January this year.

The two lenders had a risk-sharing agreement signed in December 2009 in which IFC guaranteed up to 50 percent of the qualified loans worth P2 billion. A new risk-sharing facility was signed to hike the total amount to P5 billion.

According to Jesse Ang, IFC country representative, agribusiness is an area that the private sector can work on to put the Philippines back on the global map when it comes to agricultural productivity. He said the country used to be an exporter of rice before becoming the world’s largest importer.

However, there are certain issues that the Philippines must solve first before it can achieve this.
"One is land reform that has been instituted but the problem with agrarian reform is that we just distribute land and we need to do more than that. We need to support farmers with knowledge, with financing and we need to look at successful land reform programs in other countries," Ang said.

"I think banks are being asked to lend to agriculture and agrarian reform - the Agri-Agra Law. And it's bit of a challenge for them and they're paying penalties essentially for not lending more in this space. What we'd like to do is if we could look into the agribusiness space, primarily on the advisory side," he said.

Ang said the IFC can assist banks like BPI through its agriculture specialists, who can look at farmer productivity and through its agricultural finance people to help private lenders' loan officers deal with farmer-borrowers.

"We need to change the focus to inclusive growth, not just growth itself and agribusiness is a logical area because one of the key reasons we don't grow is that we don't have enough jobs for unskilled labor. Most of our unskilled labor is in the agriculture sector. So that's why we want to look into this sector and we're appreciative of BPI's willingness to get into this sector as well," the IFC official said.

In the 1980s, BPI had Agri Bank, which became the precursor of BPI Direct, the lender’s Internet arm, said Aurelio Montinola III, the bank’s president.

The venture did not prosper then because interest rates in the 1980s were "so high,” he said. "And you know how it is in agri, the weather makes a big difference," Montinola said.
The bank is lending to cooperatives but it has yet to deal with farmers and other agricultural producers.

He said that once BPI gets over the technicalities of agribusiness lending, it can tap the IFC for a partnership similar to its SEF risk-sharing agreement.

BPI's SEF program won a $1.2-million grant from the G-20 SME Finance Challenge Award for its "innovative" financing scheme focused on energy projects of small and medium enterprises (SMEs).

It was the only East Asian winner among the 14 awardees in an online competition joined by 200 entries worldwide.

BPI said the grant would go to its internal capacity building, specifically of loan officers.. It can also be extended to the BPI Family KaNegosyo Loan program for SMEs and BPI Leasing to target energy efficiency companies.

source: interaksyon.com

World Bank: 75% of poor don't have bank accounts

(CNN) -- Three quarters of the world's poor are living without a bank account, impeded by physical distance from banks and by bureaucratic roadblocks, according to a World Bank report.

In a 2011 survey of 150,000 adults in 148 countries, it found that more than 75% of adults earning less than $2 per day are "unbanked" or do not use a formal financial institution.

Of 70,000 respondents without a bank account, 65% cited not having enough money to use one as the most important reason. Other top reasons included the cost of opening a bank account being too expensive and a lack of trust in banks.

"I hope policy makers will use this research to help make sure everyone, everywhere, has access to financial services," Her Royal Highness Princess Máxima of the Netherlands and the UN Secretary General's Special Advocate for Inclusive Finance for Development said in a news release.

Among regions surveyed, people in the Middle East and North Africa have most difficulties, with only 18% reporting an account. In high-income economies, nine out of 10 adults have an account at a formal financial institution.

Being 'unbanked' is linked to inequalities, according to The World Bank. The richest 20% of adults in developing countries are more than twice as likely to have an account as the poorest 20%.

Also, in developing economies only 37% of women have a bank account compared with 46% of men keeping their savings in financial institutions.

A bank account could enhance economic opportunities among the poor, as saving and borrowing enables them to start a business or invest in education. Instead, they often rely on money lenders charging high fees, the World Bank says.

"Providing financial services to the 2.5 billion people who are 'unbanked' could boost economic growth and opportunity for the world's poor," says World Bank Group President Robert B. Zoellick.

Mobile banking is becoming a popular alternative to money lenders among the poor, especially in Sub-Saharan Africa. These money transfers through mobile phones enable them to pay bills or make deposits through a text message without traveling or setting up a formal bank account.

Mobile banking is especially popular in Kenya, where about 7 in 10 adults have access to mobile money services, according to Safaricom, a leading mobile network provider that offers money transfers via text messaging through its M-Pesa service.

The world's poorest live in the Sub-Saharan Africa region, with almost 70% of adults living on less than $2 a day. In South Asia, almost 60%of people and just over 50% in Middle East and North Africa live on less than $2 a day, according to the World Bank Report.

source: http://edition.cnn.com/2012/04/19/business/poor-bank-accounts/index.html?hpt=hp_t3

Purisima Congratulates New WB Chief

MANILA, Philippines — Finance Secretary Cesar V. Purisima congratulated Dr. Jim Yong Kim for his election as the new president of World Bank (WB).

In a statement, the Department of Finance (DOF) head said the Philippines assures Kim of its continued support to the multilateral agency under his leadership as the Bank moves to ensure that sustainable and inclusive growth is experienced across all nations.

“We are eager to work with Dr. Kim, a development expert and an anthropologist, on strengthening the Bank's initiatives toward uplifting people's lives – a mission that Dr. Kim has lived throughout his work in international development," Purisima said.

Before the World Bank election, Purisima has already thrown his support behind the United States nominee to the top post.

“The Philippines and the World Bank group have already achieved significant milestones in eradicating poverty, strengthening governance, and boosting economic growth. We hope to further deepen this partnership with the Bank under Dr. Kim's leadership," Purisima said.

The World Bank, one of two multilateral organizations created by the Brettonwoods Agreement after the Great Depression, selected its new leader as Robert Zoellick, its current president, steps down by June 30.

Aside from Kim, Former Colombian Finance Minister Jose Antonio Ocampo and Nigerian Finance Minister Ngozi Okonjo Iweala were also nominated for the post traditionally held by an American.

The Finance chief pointed to Kim’s track record of working with the World Health Organization (WHO) as a “new focus” for the World Bank, “one that connects financial and economic stability to a direct and sustainable prosperity not only to nations, but more importantly to people.” Korean-born Kim is a former director of WHO’s Department of HIV/AIDS who led initiatives to treat 3 million people infected by the virus in the developing countries from 2003 to 2007. He is also a co-founder and board member of Boston-based Partners in Health which aims to provide universal access to primary health care to poor nations, especially on HIV/AIDS and tuberculosis.

“As we move toward the achievement of the Millennium Development Goals by 2015, Mr. Kim’s expertise in anthropology and development will surely be an asset to the World Bank,” Purisima said, referring to the set of goals agreed by the United Nations.

source: mb.com.ph

World Bank President Known Monday

WASHINGTON (AFP) – The World Bank will meet on Monday to decide which of three candidates will be its 12th president, after a historic campaign that saw the first serious challenge to US leadership of the institution.

According to a source close to the decision making process, the World Bank's board will convene Monday to choose between American nominee Jim Yong Kim and two candidates who embody developing countries' demands to have a bigger say in global governance.

Though Kim remains the odds-on favorite to win, Nigerian finance minister Ngozi Okonjo-Iweala and Colombian Jose Antonio Ocampo have transformed what is normally a US coronation into a fully-fledged battle of succession.

Thanks to a tacit agreement, the US, the Bank's biggest stakeholder, has always chosen its leader, with support from Europe, which in turn nominates the head of the International Monetary Fund.

Widely respected Nigerian finance minister Okonjo-Iweala and Colombian former finance minister Ocampo, have given voice to demands from Africa, Asia and Latin America, that the arrangement must end.

Forced onto the back foot, President Barack Obama and his administration have pushed back hard for Kim's nomination.

The Korea-born, US-raised physician has gone on a global charm offensive.

In an interview statement to the board of directors on Wednesday, Kim vowed to bring a listening ear and objectivity to the post.

As head of the World Bank, the president plays a crucial running an organization that doled out $57.3 billion last year and has more than 9,000 employees worldwide.

"If I were entrusted with the responsibility of leading this institution, you would find in me someone who asks hard questions about the status quo and is not afraid to challenge existing orthodoxies," he said.

A Harvard-trained doctor and anthropologist, Kim, 52, is the former director of the department of HIV/AIDS at the World Health Organization. He became the president of the Ivy League college Dartmouth, in New Hampshire, in July 2009. "You'd also find someone interested in listening – to the Board, to our clients, to staff both here and in the field and to stakeholders in the private sector and civil society."

source: mb.com.ph