Steve Mnuchin stopped Trump from making Ivanka head of the World Bank

Jim Yong Kim threw the global financial development sector into a state of disarray: The former academic and health official announced he would be stepping down the following month from his role as president of the World Bank…creating worries that the America First champion would pick somebody ill suited for the global role…

As the White House moved to select its new leader, one name very dear to the Trump’s heart kept floating around: his daughter Ivanka Trump…two sources, not authorized to speak publicly, tell The Intercept the talk of Ivanka at the helm went far beyond the realm of Beltway chatter: Trump very much wanted Ivanka as World Bank president, and it was Mnuchin who actually blocked her ascent to the leadership role.

It came incredibly close to happening,” said one well-placed source.

Representatives for Mnuchin and Ivanka Trump did not respond to requests for comment, nor did the World Bank or the Trump Organization.

Since Mnuchin, Ivanka and Meathead won’t comment (yet) don’t expect chapter and verse of how Mnuchin won out. Sooner or later, it will come out. The worst crap always does!

New Asian infrastructure development bank approves their first loans

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A new Chinese-led development bank has approved its first loans and expects to suffer no impact from Britain’s vote to leave the European Union, the bank’s president said Saturday at its first annual meeting.

The Asian Infrastructure Investment Bank, launched in January with 57 member governments, already has received expressions of interest from possible additional members, said Jin Liqun at a news conference. He said observers from 24 other nations attended the meeting.

The bank reflects China’s rapidly growing financial might and desire for a bigger voice in global finance, which is dominated by the United States and Europe.

Despite initial U.S. opposition, the AIIB attracted unexpectedly wide support from American allies including Britain, France, Australia and South Korea.

Washington and Japan have refrained from seeking membership…

No doubt Obama is happy at least one client state is obedient.

The bank’s board approved a total of $509 million in loans Friday for a power project in Bangladesh, slum-upgrading in Indonesia and road-building in Pakistan and Tajikistan, according to Jin, a former chairman of China’s sovereign wealth fund…

China, the world’s second-largest economy, has the bank’s biggest voting stake with 26 percent of shares and has pledged to put up most of its initial $50 billion in capital but has no veto power. India has the second-largest voting stake at 7.5 percent and Russia is third with 5.9 percent.

“AIIB is owned by all its members,” said Jin. “This is not China’s bank.”

China has chosen not to borrow from the AIIB to avoid “crowding out” other borrowers but might do so in “special cases,” Jin said…

The AIIB initially was seen as a potential rival to the World Bank and Asian Development Bank…But the Asian bank forged cooperative relations with them and pledged to adhere to global standards.

In a reflection of that cooperation, the World Bank contributed to the Indonesia project. Money for the Pakistan project also came from the ADB and the British government. The Tajikistan project is co-financed by the European Bank for Reconstruction and Development.

Golly. Cooperation working somewhere. Which is not a surprise, of course, unless all your news only comes from sources inside the Beltway around Washington, DC.

Can President Kim end World Bank backing for coal-fired power?


Creeps like the Koch Bros. should be required to live downwind

In a closed meeting on Tuesday evening, the World Bank put before its executive directors a proposal to stop funding the development of new coal plants globally. Despite provisions that would grant exceptions to allow funding for a few rare coal plants, this proposal is a big step forward for an agency that has supported some of the world’s largest and dirtiest coal plants for years. It is also a key opportunity for World Bank President Dr Jim Yong Kim to lead the World Bank into a clean energy future.

Kim is already poised to be a leader in the fight to address climate disruption. Shortly after joining the World Bank as president one year ago this month, he commissioned a report that detailed the catastrophic effects the world would see if global temperatures rose by just four degrees Celsius. Since then, Kim has repeatedly called on countries around the world to take action now in order to avert such a crisis in the future.

Unfortunately, the World Bank’s actions haven’t lived up to Kim’s rhetoric. In the past five years alone, the bank has financed more than $5bn in carbon-intensive coal plants. Currently, it is considering financing a new coal power plant in Kosovo that would burn lignite coal – the dirtiest and most toxic form of coal available. This plant would be built in a country where, according to the World Bank’s own statistics, coal already kills 835 people every year.

…The tide at the World Bank may be turning. In his “climate action” speech last month, President Obama called for an end to public financing of dirty coal plants abroad. On the heels of that announcement, the World Bank released a draft energy strategy that would ban funding for new coal generation, with some rare exceptions. Although we would prefer to see the door closed on coal for good by eliminating even those loopholes, the bank’s new energy plan still marks real progress under Kim’s leadership.

Ending the financing of coal plants globally would also free up scarce public funds for investment in decentralized clean energy projects. According to the International Energy Agency (IEA), the only way the 1.3 billion people who still do not have access to electricity will be able to get it is through this type of off-grid, decentralized clean energy. Indeed, the IEA argues that to achieve universal electrification, the 70% of rural areas currently without power must be serviced with off-grid renewable energy…

Jim Yong Kim showed he was up to the test, but we’ll be watching closely to make sure this policy is backed up by real action.

Keep on rocking in the Free World!

Even if you get to wear thousand-dollar-suits and arrive at meetings in a Mercedes S-class chariot, confronting the fossil fuel flunkies ain’t ever anything more than a polite version of mud wrestling. And they control both the dirt and the gold.

BRICS development bank ready to roll

The New Development Bank being launched by the BRICS group of emerging economies plans to raise money both on local markets and internationally…

The bank, with an initial capital of $50 billion, is being introduced at an organisational summit of the BRICS countries – Brazil, Russia, India, China and South Africa – in the Russian city of Ufa…

Kundapur Vaman Kamath, 67, a former executive with India’s largest private bank, ICICI Bank, was appointed president of NDB in May this year. The bank is headquartered in Shanghai, China.

The bank, which the BRICS countries see as an alternative to the World Bank, will have its capital expanded to $100 billion within the next couple of years. It plans to issue its first loans, yet to be agreed, in April – a plan K.V. Kamath said was on track…

He added that the NDB will seek international and local agencies ratings – a necessary step for issuing debt…

K.V. Kamath added that there were no specific deals yet in the pipeline and no limit had been set on the size of loans.

The size of the loan “will depend on what is the structure of the loan, what is a need of a borrowing country and then we will look at it,” he said.

One positive side of global growth is the new capability of banking based in developing nations – for developing nations. Not the least of which is the absence of colonial-era strictures required by present and former imperial governments.

France, Germany and Italy add to UK joining AIIB – refusing Obama’s demands

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“If they don’t pay attention, we break both legs next time”

A senior US diplomat said it was up to individual countries to decide on joining a new China-led lending body, as media reports said France, Germany and Italy have agreed to follow Britain’s lead and join the Asian Infrastructure Investment Bank (AIIB).

Accommodation seems to be all that’s left to Obama since threats didn’t work.

A growing number of close allies were ignoring Washington’s pressure to stay out of the institution, the Financial Times reported, in a setback for US foreign policy.

In China the state-owned Xinhua news agency said South Korea, Switzerland and Luxembourg were also considering joining.

The Financial Times, quoting European officials, said the decision by the four countries to become members of the AIIB was a blow for Washington…

The bank is also seen as contributing to the spread of China’s “soft power” in the region, possibly at the expense of the United States.

The AIIB was launched by Beijing in 2014 to spur investment in Asia in transportation, energy, telecommunications and other infrastructure. It is touted as a potential rival to the western-dominated World Bank and the Asian Development Bank.

China said earlier in 2015 that a total of 26 countries had been included as founder members, mostly from Asia and the Middle East. It plans to finalise the articles of agreement by the end of the year…

Obama, the State Department, Congressional clown show members who fancy their foreign policy cred – all joined in to try to prevent this new international funding source from acceptance by our allies. At least those who acquired the title by generally obeying White House orders.

Didn’t work. Didn’t happen.

The bank will be welcome throughout the developing world, throughout the 3rd World. Like Chinese foreign policy it doesn’t come with social strings. The intent is to aid in the building of infrastructure – which means we probably should apply from poor states like New Mexico as a matter of need. We ain’t getting anything from Congress. That’s for sure.

The rap on both the World Bank and the IMF is that they have to answer to conservative voices in the United States and the European Union. Conservative voices not so focussed on the funds as social welfare – which they consider to be at least a mortal sin. Money is doled out through an eyedropper. Proof of reduction in socially productive programs required on a daily basis.

The chuckle is – for a lot of reason including holding a place in line for future exchanges dealing RMB, the Chinese currency, EU nations often the most conservative when criticizing other nation’s social practices – still want to be seen as caring and participating and maybe even profiting from a more open and less-political form of moneylending.

The United States OTOH is “above all that”. So to speak.

Quotes on climate change from Davos

Some key quotes from the session Tackling Climate, Development and Growth at Davos 2015:

Christine Lagarde, Managing Director, International Monetary Fund

“It’s a collective endeavour, it’s collective accountability and it may not be too late.”

“At this point in time, it’s macro critical, it’s people critical, it’s planet critical.”

“As I said two years ago, we are at risk of being grilled, fried and toasted.”

Paul Polman, CEO, Unilever

“Tackling climate change is closely linked to poverty alleviation and economic development; I would call them different sides of the same coin…”

“The first thing we need from the business community, and the business leaders themselves, is commitment. If you’re not committed, you’re more destructive at the table than if you’re really committed and you want to solve it…”

Michael Spence, William R. Berkley Professor in Economics and Business, NYU Stern School of Business, Italy

“…We have a choice: between a energy-efficient low carbon path and an energy-intensive high carbon path, which at an unknown point of time ends catastrophically. This doesn’t seem like a very hard choice.”

“We have to go very quickly… we have a window of a very small number of years… after which we cannot win the battle to mitigate fast enough to meet the safety goals… if this year goes badly it would be a massive missed opportunity.”

“This is the chance to do something we’ve never done before, to come together in a process of top down agreement, and bottom up energy, creativity and commitment. It will be a moral victory.”

I don’t think the Koch Bros. went to Davos. Their profits roll out from the fiefdom of the United States. What foreign holdings they rely on – are obedient.

I don’t think Jim Imhofe or Mike Huckabee were invited. I doubt anyone who is a serious player in the world of modern industrial, technology-driven capitalism would extend an invite to John Boehner or Mitch McConnell — or Mary Landrieu.

If you’re bright enough to be a world-class player in international commerce – including the governments actively trying to grow their national economies – you had better have modern science as part of your core skill set. Along with an understanding of political economy over the past seventy years.

No matter if your personal bent is conservative or liberal, denial of reality sufficient to get you elected to Congress from Kansas or Texas doesn’t aid global logistics or long-range marketing.

If you care to view the full session Tackling Climate, Development and Growth at Davos 2015, it’s available to watch.

BRICS nations found bank to rival Western-dominated World Bank and IMF

The so-called BRICS countries agreed to form an international development bank with aspirations to challenge the dominance of the World Bank and the International Monetary Fund.

Leaders of Brazil, Russia, India, China and South Africa said Tuesday that the New Development Bank will start with $50 billion in capital and $100 billion as a currency reserve fund for liquidity crises…

Still, the BRICS bank, which could add more member nations, represents a bid to expand the influence of the BRICS emerging markets and act as a counterbalance to institutions run by the U.S. and other developed nations…

As developing countries began playing a larger role in the world economy, their leaders repeatedly complained that they have not been given correspondingly larger voices in international financial institutions such as the World Bank and the IMF, both based in Washington. The U.S. typically appoints the World Bank president, and European countries appoint the IMF chief.

“International governance structures designed within a different power configuration show increasingly evident signs of losing legitimacy and effectiveness,” said the official statement signed by the BRICS leaders, who met in Fortaleza, Brazil, on Tuesday. “We believe the BRICS are an important force for incremental change and reform of current institutions toward more representative and equitable governance.”

Brazilian President Dilma Rousseff, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, Chinese President Xi Jinping and South African President Jacob Zuma hammered out some of the final details before signing the agreement Tuesday.

Among the terms are that the bank will be in Shanghai, its first president will be from India, and the first chair of the board of directors will be from Brazil…

Analysts expect that other countries – like Indonesia, Mexico or Turkey – will join the bank over time. Certainly, they and their neighbors have no shortage of conflicts with restrictions important to the fiscal bears directing the IMF or the World Bank.

I doubt anyone expects either of the banks under the thumb of the US [and to a lesser extent, the EU] to modernize, to actively support the developing nations in any goal beyond being a source of cheap labor, raw materials, for Western corporations.

Mitt Romney’s fair share – a question of ethics and leadership


Romney’s favorite flag

Mitt Romney’s income taxes have become a major issue in the American presidential campaign. Is this just petty politics, or does it really matter? In fact, it does matter – and not just for Americans.

A major theme of the underlying political debate in the United States is the role of the state and the need for collective action. The private sector, while central in a modern economy, cannot ensure its success alone. For example, the financial crisis that began in 2008 demonstrated the need for adequate regulation.

Moreover, beyond effective regulation (including ensuring a level playing field for competition), modern economies are founded on technological innovation, which in turn presupposes basic research funded by government. This is an example of a public good – things from which we all benefit, but that would be undersupplied (or not supplied at all) were we to rely on the private sector.

Conservative politicians in the US underestimate the importance of publicly provided education, technology, and infrastructure. Economies in which government provides these public goods perform far better than those in which it does not.

But public goods must be paid for, and it is imperative that everyone pays their fair share. While there may be disagreement about what that entails, those at the top of the income distribution who pay 15% of their reported income (money accruing in tax shelters in the Cayman Islands and other tax havens may not be reported to US authorities) clearly are not paying their fair share.

There is an old adage that a fish rots from the head. If presidents and those around them do not pay their fair share of taxes, how can we expect that anyone else will? And if no one does, how can we expect to finance the public goods that we need?

RTFA for more detail and insight.

Joseph Stiglitz, a Nobel laureate in economics, is a Professor at Columbia University. He’s innovated studies of taxation, development, trade, and technical change. He was Senior Vice President and Chief Economist of the World Bank.

World Bank says planet’s economy to ‘shrink’ in 2009


Wholesaler stacking crates of apples in Nanjing
Daylife/Reuters Pictures

The global economy will shrink this year for the first time since World War II, the World Bank has said. The bank’s forecast is gloomier than other estimates, which still foresee some growth.

By the middle of 2009, industrial output could be as much as 15% lower than 2008, while trade may record the biggest decline in 80 years, it said. Developing countries face a financing shortfall of up to $700bn (£497bn) this year, the bank added. The sharpest trade losses will be in East Asia, it said, where there are many large exporters…

The crisis will make poor countries more reliant on development assistance because, as richer countries borrow more, it will become more difficult for poorer countries to raise debt, it said. Only one quarter of the most vulnerable countries have the ability to finance measures to ease the impact of the downturn, said the World Bank, and its president Robert Zoellick called for investments to create jobs and “avoid social and political unrest”.

“Channelling infrastructure investment to the developing world, where it can release bottlenecks to growth and quickly restore demand, can have an even bigger bang for the buck and should be a key element to recovery, ” he added.

Phew! No kidding this is gloomy!

I think they’re too negative about the overall situation in the Far East. Internal, domestic consumption especially in China is stable and still on the increase to some extent. Characterizing these economies as exclusively export-based isn’t accurate in a world-wide recession.

The Chinese government has recognized this and [1] is working to support increased domestic demand – which hardly needs a nudge – and [2] Keynesian reforms which already fit upgrading infrastructure and quality of life support already in progress.