Friday, February 17, 2012

World Bank Warns Developing Nations of Slowing Growth

WASHINGTON — The World Bank is urging developing nations to start planning for a major slowdown in global growth this year.

Times Topic: World Bank

In a report released Tuesday, the Washington-based bank lowered its growth forecasts for high-income and low-income countries, saying it expected the world economy to expand an aggregate 2.5 percent in 2012, down from about 2.7 percent in 2011. In its previous estimate, in June, it forecast growth of 3.6 percent in 2012.

The bank also warned of the continued threat of a global financial shock “similar in magnitude to the Lehman crisis,” because of the possibility that a major European economy could be shut out of the global debt markets. In that case, the bank estimated the damage to the world’s economic growth would rival the recession of 2008 and 2009.

“The largest economy in the world is weakening,” Justin Yifu Lin, the bank’s chief economist, said in an interview, referring to the European Union. “The message for developing countries is to start preparing now.”

The report was issued as forecasters warned of slower growth in the United States. Estimates of the nation’s annual pace of growth reached as high as 4 percent in the final months of 2011. But economists contend the strength came in part from temporary measures, including wholesalers restocking their inventories and consumers saving less and spending more over the holidays.

Economists say they expect many headwinds in early 2012: rising oil prices as the United States and European countries confront Iran; the risk of a tax cut for American wage earners expiring; a strong dollar rendering American exports less competitive; and continued repercussions from the sovereign debt crisis in Europe.

In the report, the biannual Global Economic Prospects, the bank predicted that high-income countries, including the United States, France, Japan and Germany, would grow 1.4 percent in 2012. It forecast a mild contraction of 0.3 percent in the 17 countries that use the euro. Developing countries will grow 5.4 percent, down from a forecast of 6.2 percent in June, the bank said.

The reason for the global slowdown is twofold, said Andrew Burns, head of global macroeconomics at the World Bank and the main author of the report. First, developing countries like Turkey, India, Russia and Brazil were “overheating” in the rebound after the recession and have tightened monetary policy to help curb inflation, he said. Second, he added, the euro zone crisis has frightened investors, and austerity budgets adopted in countries, including Italy and Greece, have weighed on growth.

Mr. Burns said those trends created a “dangerous dynamic,” with the slowdown in emerging economies sapping growth from advanced economies, and the downturn in advanced economies worsening prospects for emerging markets. “The events are feeding off of one another,” he said.

A worst case in Europe could lead to significant hardship for emerging economies, the report said. Commodity prices could fall as much as 24 percent, hurting government revenue in export-dependent nations. Global trade volumes could fall by more than 7 percent. Countries in Central Asia and Eastern Europe would be hit hardest, the bank said.

But even if catastrophe does not occur, growth looks weaker, the bank said. For instance, the World Bank estimates world trade will expand only 4.7 percent in 2012, down from 12.4 percent in 2010.

Last summer, the World Bank noted significant “contagion from Europe to developing countries,” Mr. Burns said. Risk-averse investors slashed financing to emerging markets, with gross capital flows falling to $170 billion in the second half of 2011 from about $309 billion in the same period in 2010. In addition, borrowing costs began to rise in developing countries.

The bank said developing economies should prepare for declining investment from abroad, less-robust exports, and reduced remittances. Governments should rigorously stress test their financial institutions, plan major infrastructure projects to help support demand and ensure the viability of their social safety nets, the report said.

Mr. Lin said advanced economies should consider more immediate fiscal stimulus to support growth, locally and globally. “They need to carry out structural reforms in the long-term,” he said. “But in the short term, they need an intervention to provide a short-term boost to demand.”

He warned that emerging markets have less room for fiscal and monetary stimulus than they did in 2008 and 2009, even though they have more capacity than many developed countries. Many high-income countries, including the United States, are already struggling with heavy debt loads, limiting the possibility of fiscal stimulus. And central banks have already overextended their balance sheets and pushed interest rates close to zero, limiting monetary stimulus, Mr. Burns said in an interview.

The International Monetary Fund, the World Bank’s sister organization, echoed its warnings about the dangers slowing trade and uncertainty about Europe pose to emerging markets.

In a speech Monday, David Lipton, the fund’s first deputy managing director, said there was reason for optimism, given the lessons learned in the 2008 crisis. But, he warned: “Europe could be swept into a downward spiral of collapsing confidence, stagnant growth and fewer jobs. And in today’s interconnected global economy, no country and no region would be immune from that catastrophe.”

The fund is expected to update its World Economic Outlook on Jan. 24. It said it would cut its growth forecast from predictions it issued last September.

World Bank officials emphasized the importance of confidence, given uncertainty about Europe and worries about slowing growth. Mr. Burns said investor sentiment “could have an enormous impact cumulatively.”

Monday, February 13, 2012

Venezuela: Government to Pull Out of Nationalization Proceedings

Venezuela said Wednesday that it had begun the process of pulling out of a World Bank arbitration forum that is considering about 20 cases involving property nationalized by President Hugo Ch├ívez’s socialist government. The Foreign Ministry said that its participation in the forum, the International Center for Settlement of Investment Disputes, was banned by Venezuela’s Constitution, which it said required disputes to be settled in Venezuelan courts. It said that the move was meant to defend Venezuelan sovereignty and that the center was biased in favor of multinational corporations. The cases before the center include one brought by Exxon over the nationalization of its share in a heavy oil project. A World Bank spokesman could not confirm that the organization had received notice of Venezuela’s action.

Saturday, February 11, 2012

Panel Urges World Bank to Change Antigraft Plan

LOS ANGELES (AP) — Whitney Houston, who ruled as pop music's queen until her majestic voice was ravaged by drug use and her regal image was ruined by erratic behavior and a tumultuous marriage to singer Bobby Brown, died Saturday. She was 48.

Beverly Hills police Lt. Mark Rosen told reporters outside the Beverly Hilton that Houston was pronounced dead at 3:55 p.m. in her room on the fourth floor of the hotel. Her body remained there and Beverly Hills detectives were investigating.

"There were no obvious signs of any criminal intent," Rosen said.

Houston's publicist, Kristen Foster, said the cause of death was unknown.

Rosen said police received a 911 call from hotel security about Houston at 3:43 p.m. Saturday. Paramedics who were already at the hotel because of a Grammy party unsuccessfully tried to resuscitate the singer, he said.

Houston's end came on the eve of music's biggest night — the Grammy Awards. It's a showcase where she once reigned, and her death was sure to cast a heavy pall on Sunday's ceremony.

Her longtime mentor Clive Davis was to hold his annual concert and dinner Saturday at the same hotel where her body was found, and a representative of the show said it would proceed.

Producer Jimmy Jam, who had worked with Houston, said he anticipated the evening would become a tribute to her, and he expected there to be one at the Grammys as well.

Houston was supposed to appear at the gala, and Davis had told The Associated Press that she would perhaps perform: "It's her favorite night of the year ... (so) who knows by the end of the evening," he said.

Houston had been at rehearsals for the show Thursday, coaching singers Brandy and Monica, according to a person who was at the event but was not authorized to speak publicly about it. The person said Houston looked disheveled, was sweating profusely and liquor and cigarettes could be smelled on her breath.

Two days ago, she performed at a pre-Grammy party with singer Kelly Price. Singer Kenny Lattimore hosted the event, and said Houston sang the gospel classic "Jesus Loves Me" with Price, her voice registering softly, not with the same power it had at its height.

Lattimore said Houston was gregarious and was in a good mood, surrounded by friends and family, including daughter Bobbi Kristina.

"She just seemed like she was having a great night that night," said Lattimore, who said he was in shock over her death.

Aretha Franklin, her godmother, also said she was stunned.

"I just can't talk about it now," Franklin said in a short statement. "It's so stunning and unbelievable. I couldn't believe what I was reading coming across the TV screen."

The Rev. Al Sharpton said he would call for a national prayer Sunday morning during a service at Second Baptist Church in Los Angeles.

"The morning of the Grammys, the world should pause and pray for the memory of a gifted songbird," Sharpton said in a statement.

In a statement, Recording Academy President and CEO Neil Portnow said Houston "was one of the world's greatest pop singers of all time who leaves behind a robust musical soundtrack spanning the past three decades."

"Her powerful voice graced many memorable and award-winning songs," Portnow said. "A light has been dimmed in our music community today, and we extend our deepest condolences to her family, friends, fans and all who have been touched by her beautiful voice."

At her peak, Houston was the golden girl of the music industry. From the middle 1980s to the late 1990s, she was one of the world's best-selling artists. She wowed audiences with effortless, powerful, and peerless vocals that were rooted in the black church but made palatable to the masses with a pop sheen.

Her success carried her beyond music to movies, where she starred in hits like "The Bodyguard" and "Waiting to Exhale."

She had the perfect voice and the perfect image: a gorgeous singer who had sex appeal but was never overtly sexual, who maintained perfect poise.

She influenced a generation of younger singers, from Christina Aguilera to Mariah Carey, who when she first came out sounded so much like Houston that many thought it was Houston.

But by the end of her career, Houston became a stunning cautionary tale of the toll of drug use. Her album sales plummeted and the hits stopped coming; her once serene image was shattered by a wild demeanor and bizarre public appearances. She confessed to abusing cocaine, marijuana and pills, and her once pristine voice became raspy and hoarse, unable to hit the high notes as she had during her prime.

"The biggest devil is me. I'm either my best friend or my worst enemy," Houston told ABC's Diane Sawyer in an infamous 2002 interview with then-husband Brown by her side.

It was a tragic fall for a superstar who was one of the top-selling artists in pop music history, with more than 55 million records sold in the United States alone.

She seemed to be born into greatness. In addition to being Franklin's goddaughter, she was the daughter of gospel singer Cissy Houston and the cousin of 1960s pop diva Dionne Warwick.

Houston first started singing in the church as a child. In her teens, she sang backup for Chaka Khan, Jermaine Jackson and others, in addition to modeling. It was around that time when music mogul Clive Davis first heard Houston perform.

"The time that I first saw her singing in her mother's act in a club ... it was such a stunning impact," Davis told "Good Morning America."

"To hear this young girl breathe such fire into this song. I mean, it really sent the proverbial tingles up my spine," he added.

Before long, the rest of the country would feel it, too. Houston made her album debut in 1985 with "Whitney Houston," which sold millions and spawned hit after hit. "Saving All My Love for You" brought her her first Grammy, for best female pop vocal. "How Will I Know," ''You Give Good Love" and "The Greatest Love of All" also became hit singles.

Another multiplatinum album, "Whitney," came out in 1987 and included hits like "Where Do Broken Hearts Go" and "I Wanna Dance With Somebody."

The New York Times wrote that Houston "possesses one of her generation's most powerful gospel-trained voices, but she eschews many of the churchier mannerisms of her forerunners. She uses ornamental gospel phrasing only sparingly, and instead of projecting an earthy, tearful vulnerability, communicates cool self-assurance and strength, building pop ballads to majestic, sustained peaks of intensity."

Her decision not to follow the more soulful inflections of singers like Franklin drew criticism by some who saw her as playing down her black roots to go pop and reach white audiences. The criticism would become a constant refrain through much of her career. She was even booed during the "Soul Train Awards" in 1989.

"Sometimes it gets down to that, you know?" she told Katie Couric in 1996. "You're not black enough for them. I don't know. You're not R&B enough. You're very pop. The white audience has taken you away from them."

Some saw her 1992 marriage to former New Edition member and soul crooner Bobby Brown as an attempt to refute those critics. It seemed to be an odd union; she was seen as pop's pure princess while he had a bad-boy image and already had children of his own. (The couple only had one daughter, Bobbi Kristina, born in 1993.) Over the years, he would be arrested several times, on charges ranging from DUI to failure to pay child support.

But Houston said their true personalities were not as far apart as people may have believed.

"When you love, you love. I mean, do you stop loving somebody because you have different images? You know, Bobby and I basically come from the same place," she told Rolling Stone in 1993. "You see somebody, and you deal with their image, that's their image. It's part of them, it's not the whole picture. I am not always in a sequined gown. I am nobody's angel. I can get down and dirty. I can get raunchy."

Brown was getting ready to perform at a New Edition reunion tour in Southaven, Miss., as news spread about Houston's death. The group went ahead with its performance, though Brown appeared overcome with emotion when his voice cracked at the beginning of a ballad and he left the stage.

Before his departure, he told the sell-out crowd: "First of all, I want to tell you that I love you all. Second, I would like to say, I love you Whitney. The hardest thing for me to do is to come on this stage."

Brown said he decided to perform because fans had shown their loyalty to the group for more than 25 years. During an intermission, one of Houston's early hits, "You Give Good Love," played over the speakers. Fans stood up and began singing along.

It would take several years for the public to see the "down and dirty" side of Houston. Her moving 1991 rendition of "The Star Spangled Banner" at the Super Bowl, amid the first Gulf War, set a new standard and once again reaffirmed her as America's sweetheart.

In 1992, she became a star in the acting world with "The Bodyguard." Despite mixed reviews, the story of a singer (Houston) guarded by a former Secret Service agent (Kevin Costner) was an international success.

It also gave her perhaps her most memorable hit: a searing, stunning rendition of Dolly Parton's "I Will Always Love You," which sat atop the charts for weeks. It was Grammy's record of the year and best female pop vocal, and the "Bodyguard" soundtrack was named album of the year.

She returned to the big screen in 1995-96 with "Waiting to Exhale" and "The Preacher's Wife." Both spawned soundtrack albums, and another hit studio album, "My Love Is Your Love," in 1998, brought her a Grammy for best female R&B vocal for the cut "It's Not Right But It's Okay."

But during these career and personal highs, Houston was using drugs. In an interview with Oprah Winfrey in 2009, she said by the time "The Preacher's Wife" was released, "(doing drugs) was an everyday thing. ... I would do my work, but after I did my work, for a whole year or two, it was every day. ... I wasn't happy by that point in time. I was losing myself."

In the interview, Houston blamed her rocky marriage to Brown, which included a charge of domestic abuse against Brown in 1993. They divorced in 2007.

Houston would go to rehab twice before she would declare herself drug-free to Winfrey in 2009. But in the interim, there were missed concert dates, a stop at an airport due to drugs, and public meltdowns.

She was so startlingly thin during a 2001 Michael Jackson tribute concert that rumors spread she had died the next day. Her crude behavior and jittery appearance on Brown's reality show, "Being Bobby Brown," was an example of her sad decline. Her Sawyer interview, where she declared "crack is whack," was often parodied. She dropped out of the spotlight for a few years.

Houston staged what seemed to be a successful comeback with the 2009 album "I Look To You." The album debuted on the top of the charts, and would eventually go platinum.

Things soon fell apart. A concert to promote the album on "Good Morning America" went awry as Houston's voice sounded ragged and off-key. She blamed an interview with Winfrey for straining her voice.

A world tour launched overseas, however, only confirmed suspicions that Houston had lost her treasured gift, as she failed to hit notes and left many fans unimpressed; some walked out. Canceled concert dates raised speculation that she may have been abusing drugs, but she denied those claims and said she was in great shape, blaming WASHINGTON, Sept. 12 — The anticorruption drive led by Paul D. Wolfowitz as president of the World Bank, which shook the institution and contributed to his downfall, remains hampered by weak management, internal distrust and employee resistance to combating fraud, a panel of outside experts concluded Wednesday.
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The panel, led by Paul A. Volcker, a former Federal Reserve chairman, recommended that the bank’s new president, Robert B. Zoellick, work with the bank board to overhaul its antigraft operations and instill more confidence among bank employees and affected countries.

“This is not an easy problem,” Mr. Volcker said in an interview on Wednesday. “By far the most important thing is getting the entire bank on board with the importance of an anticorruption effort. This goes against decades of grain in the other direction. There’s been outright conflict in the bank as to whether to have an anticorruption function.”

The long-awaited report said it was impossible to quantify the losses from bid-rigging, bribes, poor quality of goods and services and other problems of graft in the operations of more than $20 billion a year in lending to poor countries.

“There is, however, a general sense that the losses are substantial,” it said. Current and former officials at the bank say that some form of fraud affects as much as 40 percent of the bank’s programs. Corruption was a signature issue of Mr. Wolfowitz, a former deputy defense secretary under President Bush who was forced to resign from the bank in May after the disclosure that in 2005 he had arranged for a pay and promotion package for Shaha Ali Riza, his female companion and a bank employee at the time.

His actions related to fighting corruption, like suspending aid to countries without consulting the bank’s board, ruptured his ties with the staff and directors. One effect was that the board and Mr. Wolfowitz agreed to bring in Mr. Volcker last year to examine the anticorruption efforts.

Mr. Zoellick welcomed the report for its “excellent and I hope most useful” recommendations, and he indicated that he would probably put most of them into effect. Aides close to the new president say that whether anticorruption efforts succeed will depend as much on his personal efforts to heal rifts at the bank as on managerial changes.

In an interview, Mr. Zoellick said many of the Volcker proposals were in line with plans he and his staff had already generated. “The most important recommendation is that anticorruption efforts are a vital function of the bank and need to be incorporated into everything we do,” he said.

By all accounts, Mr. Volcker, who had investigated the United Nations oil-for-food scandal in which Iraq siphoned off money from its oil sales, had to navigate many contentious charges and countercharges. Many of them focused on the activities of the institutional integrity unit led by Suzanne Rich Folsom, a Wolfowitz appointee and onetime Republican Party activist.

Many bank employees charged that under Ms. Folsom, the anticorruption campaign was waged selectively and unfairly against employees and countries and that it was intended to carry out the agenda of a conservative Republican distrustful of the bank’s mission.

Supporters of Ms. Folsom said, on the other hand, that they had been constantly stymied by bank employees who saw corruption as minor and as an acceptable cost of doing business in poorly governed countries.

The Volcker report, while exonerating the anticorruption team of unfairness or political motivations, said a “siege mentality” in the institutional integrity unit led to “excessive secrecy” about its activities and a refusal to share its findings with colleagues and people in the affected countries.

In general, the report said the bank had done a poor job in following up findings of corruption with remedial action in many countries, and it recommended that Mr. Zoellick select a top manager to oversee efforts to work with countries and regional bank officials to root out graft once it is uncovered. It also called for an outside panel of advisers to evaluate antigraft activities.

In a significant rebuke to Mr. Wolfowitz, the panel also recommended that the head of the integrity unit not serve as a counselor in the president’s office, as was done under Mr. Wolfowitz. Critics had charged that Mr. Wolfowitz and his top aides received information on corruption from Ms. Folsom that was not shared with colleagues, leading to financing decisions that rewarded or punished countries for political reasons, and to retaliatory actions against personnel without due process.

In the interview, Mr. Volcker said he and his investigators had found no evidence that the bank acted in favor of or against any country based on political motivations. “These questions of bias and so forth, we’ve found no substantiation of them,” he said. But he added that the follow-up on corruption charges was “cumbersome” and “slipshod.”

The panel also recommended that the anticorruption drive be carried out by a more diverse staff, a reference to the criticism that, under Mr. Wolfowitz, nearly 40 percent of the staff and most of the unit’s leaders were American.

A major question left by the report, especially among the bank’s 10,000 employees, was the future of Ms. Folsom’s leadership. Top aides to Mr. Wolfowitz have left the bank, and many bank employees have openly hoped that Ms. Folsom will follow.

But the report praised the operation of the integrity unit, and implicitly the performance of its director. Going further, Mr. Volcker said in the interview that she had done an outstanding job and that he had found no evidence to back up the charge that she had exhibited favoritism.

Mr. Zoellick also said he had no intention of removing Ms. Folsom, and Ms. Folsom, a lawyer with experience in corporate ethics matters, issued a statement praising the Volcker report and said she would not resign. “I am dedicated to the work of this department and the mission of the institution,” she said.

However, two people close to Ms. Folsom said that after the battles over Mr. Wolfowitz, and after being vindicated by the Volcker report, they would not be surprised if she left this year.

The panel also recommended that the integrity unit discontinue investigations into sexual harassment — Mr. Volcker said it was a “chronic problem” at the bank — and other forms of personal misconduct, which it said had been a distraction and a focus of bitterness among bank employees. These charges should be investigated by a unit in the human resources division, the report said.for cancellations.

Houston was to make her return to film in the remake of the classic movie "Sparkle." Filming on the movie, which stars former "American Idol" winner Jordin Sparks, recently wrapped.

Joint Effort Announced Against Tropical Diseases

Thirteen drug companies, the governments of the United States, Britain and the United Arab Emirates, the World Bank, the Bill and Melinda Gates Foundation, the Lions Club and other smaller charitable organizations on Monday announced a joint effort to tackle 10 neglected tropical diseases in a coordinated fashion.

The diseases, with multisyllabic names like lymphatic filariasis, visceral leishmaniasis and dracunculiasis, are almost never found in rich countries. Most are usually not fatal — but they still ruin the lives of subsistence farmers and rural craftsmen by causing blindness, grotesque swelling, chronic anemia, excruciating pain or other symptoms.

Although the diseases have different causes (like worms, flukes or parasites) and are spread by different vectors (like sandflies, tsetse flies or drinking water), some drugs that work against one will work against others. Leprosy, which is caused by bacteria, was one of the 10 diseases.

Some of these drugs lack markets in rich countries and so must be subsidized — although there are, for example, large sales of deworming drugs for pets and farm animals.

In an announcement at the Royal College of Physicians in London, the partners made various pledges; some drug companies increased the amounts of their donations, while others agreed to let their “libraries” of compounds be screened for new uses against tropical diseases. Margaret Chan, above right, director of the World Health Organization, and Bill Gates were among those at the news conference.

The governments and foundations pledged $785 million toward fighting the diseases, but some of that was reiteration of pledges made in the past.