| World Bank boss pleads with rich nations to dig deep and help poor World Bank president Robert Zoellick has warned failure by rich countries to top up a fund to help poor countries would "devastate" the fight against global povertyFailure by rich donor countries to provide fresh resources for a fund to help poor countries would "devastate" the fight against global poverty, the president of the World Bank has warned.Robert Zoellick said it was critical for the achievement of the eight millennium development goals that the developed world dig deep, despite financial constraints caused by the global recession.All 192 member states of the UN have committed to achieving the goals, including wiping out extreme poverty and reducing child mortality rates, by 2015.The bank is seeking donations to replenish its International Development Association (IDA) fund. This provides soft loans and grants to the 79 poorest countries. Zoellick wants to at least match the $41bn (£26bn) raised for the last three-year programme. "Lack of support for the IDA would devastate the effort to achieve the millennium development goals," Zoellick said. "What was very clear to me at recent UN meetings was that it is critical not to see these goals as independent, but to connect the dots that show their inter-relationship."And the IDA is maybe the only concessional funding system that offers grants or no-interest loans to allow countries with a sense of ownership to connect their development efforts with donor efforts from other countries."Officials from donor countries will meet in Washington today to gauge support for the 16th round of IDA funding, with the aim of making pledges by the year end.Britain was the biggest single donor to IDA 15, providing more than £2bn, but International development secretary Andrew Mitchell said it was too early to say how he would respond to the appeal.Mitchell said the UK's contribution would depend on his department's multilateral aid review, a study launched by the government into how well money provided by Britain is spent by international organisations such as the bank and UN."I don't want our position on the IDA to be arrived at by sticking a finger in the wind," Mitchell said in Washington, where he was attending the bank's annual meeting. "We will be generous. We will do our bit. But I want to know what other countries are going to do."Zoellick said the bank was also looking to fast-developing nations for support."We are asking former IDA beneficiaries to accelerate payments; we are making IDA recipients that are close to graduating out of the programme pay more; we are asking emerging donors to contribute to reflect growing economic weight; and we are looking to mobilise our own resources."Zoellick said the IDA was fundamental to achieving the millennium development goals. "I think we have a pretty good recognition of that, and I think our team did a pretty good job over the past couple of days of emphasising the results that are so important to donors and recipients."World BankGlobal economyDevelopmentUnited NationsLarry Elliottguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
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China's interest rate rise sends global markets into turmoil • Analysts see move as appeasing US government• Washington wants China to increase the value of the yuan• London's FTSE and other European market indices fall• Dow Jones down 146 pointsChina sent financial markets into turmoil after it increased its benchmark interest rate by 25 basis points with effect from tomorrow.The move to raise rates by a quarter percentage point was flagged by the Chinese authorities as an internal signal to property developers that rampant house price inflation was intolerable and would be controlled by the Beijing government.However, the rise was seen more widely as appeasing US policymakers, who have called for China to increase the value of its currency.The IMF warned earlier this month that the world economy was threatened by attempts to artificially depress currency values. China has long been accused by the US administration of maintaining low interest rates to keep the value of its currency low and exports cheap.The pound reacted by falling more than two cents against the dollar in mid-afternoon trading, while the euro was 1% lower on the day at $1.3805Stock markets reacted badly to the news with Germany's Dax down 41.10 points, or 0.6%, at 6475.53, while the CAC-40 in France was 20.99 points, or 0.6%, lower at 3813.51. The FTSE-100 index of leading British shares was down at 5,711, a drop of more than 30 points.In the US, the Dow Jones industrial average was down 146.18 points at 10,997.51.Hitendra Dave, head of global markets at HSBC India, said internal pressures led to the rise. "China hasn't raised so far and [they] have only been raising the reserve requirements. With all the asset price speculation, they had to raise rates to normalise policy. It is the local factors that led them to take this decision."Chris Turner, head of foreign exchange at the Dutch bank ING, said: "This is part of the moderate tightening cycle that we are seeing from Chinese authorities to balance their economy. It is part of the normalisation of interest rates in an economy which is growing at a modestly fast clip."The market is reacting like there is an increased risk of hard landing with the commodity currencies like the Aussie being sold off, but I don't think that is the case," he said.Simon Derrick, of Bank of New York Mellon, said the move was fuelling speculation that Beijing was involved in backdoor deals with the US administration to nudge its currency upwards."The move follows a clear need by the Chinese authorities to take out some of the heat from the economy. Whether this will lead to a broader move on its currency is open to debate. It certainly leads to speculation that the US and China are in some sort of a deal which will perhaps see the US taking a more gradualist approach to quantitative easing. The dollar has already moved higher after this news," he said.CurrenciesGlobal economyStock marketsEconomicsChinaPhillip Inmanguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
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