Archive for September 29, 2011

WORLD BANK & UNCHR AID TO SALVE HUNGER IN THE HORN OF AFRICA

September 29, 2011

WORLD BANK & UNCHR AID TO SALVE HUNGER IN THE HORN OF AFRICA

Erle Frayne D. Argonza

A graciously good news has been coming out lately from the enclaves of international organizations as their respective institutions have been stretching out their tentacles and logistics in aid of the famine victims in the Horn of Africa.

In my past notes, I already shared the information about the interventions done by the International Organization for Migration (IOM), United Nations Development Programme (UNDP) and Food & Agricultural Organization (FAO) in the relief and rehabilitation efforts for the hungry 11 Millions of affected Africans. As of late, the World Bank and the UN High Commission for Refugees (UNHCR) have entered the scene in aid of the miserable millions.

As of this writing, the World Bank and UNHCR jointly reported that their synergy will benefit approximately 550,000 famine victims. That represents 5% of the total of 11 Millions of pauperized hungry refugees, though it is already appreciable a move as other organizations, inclusive of international NGOs, are also on the move to aid others.

Below is a summary of the aid coming from the World Bank news rooms.

[Philippines, 26 September 2011]

Source: http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23001986~pagePK:34370~piPK:34424~theSitePK:4607,00.html

World Bank, UNHCR Join Efforts in an Emergency Response to Malnutrition and Disease in Horn of Africa Refugee Camps

Press Release No:2012/074/AFR

Some 550,000 people, mostly women and children, expected to benefit

WASHINGTON, September 15, 2011 – Over half a million people, mostly women and children, will be able to access nutrition, health and sanitation services in refugee settlements along the Somali border in Kenya and Ethiopia as a result of a US$30 million grant which the World Bank announced today.

The grant is drawn from the $250 million earmarked for the Horn of Africa drought through the Crisis Response Window (CRW) recently established as part of the International Development Association (IDA)—the World Bank Group’s fund for the world’s 80 poorest countries—to respond in a timely manner to emerging crises in low-income countries.

The $30 million grant will be administered by the United Nations High Commissioner for Refugees (UNHCR) under the Horn of Africa Emergency Health and Nutrition Project, which is one of several initiatives undertaken by the World Bank to respond to one of the worst droughts in the Horn of Africa sub-region in more than half a century.

The drought has caused deaths, widespread hunger, massive displacement, and loss of means to survive in Ethiopia, Kenya, and Somalia, where the United Nations has declared a famine. Nearly 13.3 million people across the sub-region are in need of immediate humanitarian assistance.

Specifically, the grant will help reinforce ongoing UNHCR relief efforts with an emphasis on the most vulnerable, notably women and children. Targeted activities include measures to combat malnutrition (such as nutritious food and micronutrient supplements); basic health services, including pediatric and maternal care; and immunization. In addition, grant resources will be used to expand access to safe water and sanitation services, and to prevent and treat common illnesses such as diarrhea, measles, and malaria.

“When communicable diseases are addressed in densely populated environments such as refugee settlements, it is not only refugees who benefit, but also their host communities,” said António Guterres, UN High Commissioner for Refugees. “The funds granted today will allow us to expand coverage of essential health, nutrition, and sanitation services in the largest refugee camps in the Horn of Africa.”

Over the 18-month span of the project, it will help address the immediate needs of refugees in targeted camps, including those in the Dadaab complex in Kenya and the Dollo Ado area of Ethiopia, where there are nearly 600,000 Somali refugees.

Data collected at the camps shows alarming rates of severe acute malnutrition, especially among children under five years of age. Water shortages are also frequent. New refugees arriving at these sites are weak and prone to illness, and children are particularly at risk of dying of malnutrition and diarrheal diseases.

“The scale and severity of the Horn of Africa drought compels development agencies, governments, and NGOs to work in close collaboration in ways that maximize the comparative advantage of all partners,” said Obiageli Ezekwesili, World Bank Vice President for the Africa Region. “This approach ensures that we do not lose sight of the links between short-term crisis mitigation and the long term development outlook.”

The deadly nature of the drought has prompted the World Bank’s Board to allow unprecedented measures. This is the first grant through the Crisis Response Window issued directly to a UN agency. It is also the first time that the implementing entity’s procedures – not World Bank procedures – will be used through the life of this project, thus enabling an exceptional application of the 2008 Fiduciary Principles Accord signed between the Bank and the United Nations to this IDA operation.

Contacts:
World Bank: Kavita Watsa, (+1) 202 473 8302, kwatsa@worldbank.org
UNHCR: Fatoumata Lejeune-Kaba, (+41) 79 249 3483, lejeunek@unhcr.org

For more information, please visit: http://www.worldbank.org/afr or
http://www.unhcr.org/pages/4e1ff4b06.html

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CHALLENGE TO ARABS: BUILD STRONG FINANCIAL INSTITUTIONS!

September 29, 2011

CHALLENGE TO ARABS: BUILD STRONG FINANCIAL INSTITUTIONS!

Erle Frayne D. Argonza

The Arab Spring has revealed the chasm that divides the youth and older generations in the Middle East & North Africa or MENA. The development gains across the MENA has been very uneven to say the least, with state weaknesses singled out as the greatest bottlenecks to prosperity.

Beyond the surface however lies even greater realities about weak institutions in the MENA. Such weaknesses could have generated the disappointments and frustrations of the pan-Arab youth, frustrations that have erupted to social turmoil that called for the overthrow of established regimes.

It is even further revealing to note the weak financial institutions across the MENA, which could baffles us somehow. MENA was among those that introduced zero-interest financing in antiquity, a framework and ‘best practice’ that drove wealth generation to successes of immense proportions.

Below is a special report from the World Bank’s news rooms concerning the rather baffling financial weaknesses in the MENA. The clear challenge to Arabs of the day is: reform your financial institutions!

[Philippines, 26 September 2011]

Source: http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23001053~pagePK:64257043~piPK:437376~theSitePK:4607,00.html

Building Financial Institutions as Solutions to Frustration and Exclusion

Press Release No:2012/072/MENA

An agenda for the Middle East and North Africa

WASHINGTON, September 15, 2011 – Financial systems across the Middle East and North Africa (MENA) proved resilient during the global financial crisis and subsequent political shocks but have failed to provide access to finance, contributing to the region’s relatively weak growth performance and inability to generate jobs. This in turn has contributed to the deep-seated frustrations of the region’s large youth populations, say the findings of a new World Bank report.

“We began work on this report with our partners in the Arab Monetary Fund, the Islamic Development Bank and the Union of Arab Banks, well before the Arab Spring,” says Roberto R. Rocha, Senior Adviser and principal author of Financial Access and Stability: A Road Map for the Middle East and North Africa. “Many of our findings now have even sharper relevance in the light of the protests that have reflected popular discontent with systems where opportunities are few, competition limited and access to finance constrained.”

The report describes MENA’s financial sectors as dominated by large, well-capitalized banks, but largely undiversified and uncompetitive. Essential non-banking financial institutions such as insurance companies, mutual and pension funds, leasing, and factoring, are not well developed with few exceptions. Equity markets are large in many countries, but mainly dominated by financial institutions and infrastructure companies. Private fixed-income instruments and markets remain negligible.

And notably, the region’s banking systems have failed to provide broad, sound and equitable access to finance. They have very high loan concentration ratios, reflecting the focus of banks on providing loans to large and well-connected enterprises and industrial groups while only 20 percent of MENA’s small and medium enterprises have a bank loan or a line of credit, one of the lowest shares among emerging regions. This has constrained their capacity to grow and generate jobs.

The number of deposits and loan accounts per adult are also low by international standards and microfinance penetration remains disappointing. The lack of access to finance is also reflected in the low share of mortgage loans in loan portfolios.

“We see large numbers of university graduates who don’t have access to opportunities and jobs; we see young couples who can‘t get married because the housing finance market is almost non-existent,” says Loic Chiquier, Director of Finance at the World Bank. “All this just increases the sense of economic exclusion and political discontent.”

The lack of access to finance is due to weaknesses in financial infrastructure, insufficient competition in the banking sector, and gaps in the legal framework preventing the development of alternative sources of finance. The report recognizes that the structure of MENA’s banking systems is evolving in the right direction, but that levels of competition are still weak. The reduction in the share of state banks bodes well for the future, says Rocha but banking systems remain less competitive than those in other regions, due to a massive presence of the state in some countries, stricter entry requirements, weak credit information systems preventing a level playing field between small and large banks, weak regulation of large exposures and connected lending, and lack of competition from capital markets and non-banking institutions.

“We’ve had a fantastic working relationship with our partners in building the statistical and analytical basis for these findings and conclusions and I think there is wide acceptance that while the financial sector is now part of the problem, it needs to be – and can be – part of the solution,” says Rocha.

This would mean implementing a comprehensive and integrated agenda for improving access and preserving stability, he adds. The report examines how this agenda needs to include three sets of mutually reinforcing reforms to be successful: the strengthening of financial infrastructure, improvements in bank competition, and the development of non-banking institutions and financial instruments. Critical though is complementing these reforms with a financial stability agenda ensuring that financial systems remain resilient as access is expanded and new risks emerge. Experience from elsewhere, notably central Europe, had shown the dangers of quickly improving access to finance without shoring up stability.

Contacts:
In Washington: Tina Taheri, (202) 725-0719, ttaheri@worldbank.org;
Esther Lee Rosen, (248) 935-0510, erosen@worldbank.org

For a link to the report, please click here.

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