Structural and conceptual changes mentioned by CubaÕs acting President Raul Castro must begin with the agricultural and livestock sectors.

Increasing food production is the main challenge to be faced by the Cuban economy this year, to improve people’s quality of life.
It was one of the recurrent themes raised at the popular debates convened on the government’s initiative in the second half of 2007.
“The agricultural sector is still a long way from satisfying the pressing need to get more goods to market, in order to bring prices down, cut imports, and elicit a favorable change in public opinion,“ admitted Osvaldo Martinez, chair of the commission on economic affairs in the National Assembly of People’s Power, Cuba’s parliament.
According to the authorities, the shortcomings of domestic food production are being exacerbated by the high international market prices of staple foods. Because of the price hikes, the country spent an extra 286 million dollars in 2007, out of its total food import bill of 1.5 billion dollars.
To ensure delivery of the basic basket of foods, sold to families at state subsidized prices, the government forecasts an expenditure of 945 million dollars in 2008. Regulated food distribution on a ration book system guarantees some essential goods to every Cuban citizen, but the basket covers only part of their total food needs.
“I understand that the country spends a lot on ration book provisions, but I can’t feed my children on this alone,“ a woman who was buying her food for January told Ipsnews.net.
Like most Cubans, she has to buy the rest of her family’s basic needs in the free farmers’ markets, and pay for goods either in national or convertible currency. This takes the largest share of her family’s income: together with her husband, they make about 800 pesos a month.
Their monthly income is equivalent to 33 Cuban convertible pesos, or CUC, the only dollar-pegged currency that is permitted to circulate in the country. The state exchange shops sell CUCs at 25 Cuban national pesos, or 1.25 dollars.
In his December 28 report to parliament on the state of the economy and his ministry’s plans for 2008, Planning Minister JosŽ Luis Rodriguez said food intake per person had risen to 3,287 kilocalories and 89.9 grams of protein a day, “out of which between 62 and 64 percent is available at subsidized prices.“
Among the challenges for the coming year, Rodriguez said “making progress in substituting imported foods like rice, beans, milk, fruit and wheat flour, as well as animal feed, with domestic production is among the immediate priorities.“
Economists and authorities appear to be in agreement that the structural and conceptual changes mentioned by Cuba’s acting President Raul Castro on July 26, 2007 must begin with the agricultural and livestock sector. In his speech, Castro said it was “imperative“ to increase production, especially of foods.
However, the last session of parliament had not yet approved the long expected reforms in this area. Castro only repeated that the country is working on this vital issue with the urgency it requires, because of its direct and daily impact on the life of the people, especially those with the lowest incomes.
In his view, raising wages to the level where they can satisfy workers’ needs “is one of the most important and complex of the problems that must be solved gradually, sustainably, and without expecting overnight or magic solutions.“
The Cuban economy grew 7.5 percent in 2007, below the 10 percent projected by the authorities, because of the fall in construction work and agricultural production due to “climate effects throughout the year,“ according to Rodriguez, who forecast gross domestic product (GDP) growth of eight percent for 2008.
The Cuban government’s estimate of economic growth has included a weighted value for the medical, educational and sports services provided to the population, without describing the method by which it is computed.
These services are offered free at every level to the entire population.

Multilateral Investment Guarantee Agency (MIGA) said on January 2 that it has provided its first-ever guarantee for Shariah-compliant project financing.
The $427 million guarantee will support investments into a new container terminal in Djibouti, which is expected to significantly improve port facilities and help the country become a major business hub in East Africa, AP reported.
The nation of Djibouti is strategically located on one of the fastest-growing East-West international shipping routes at the crossroads of Asia, Europe, the Gulf region, and East Africa. Development of the port and transport sector is at the heart of Djibouti’s poverty reduction strategy.
The terminal is being developed jointly by Dubai Port World, one of the largest marine terminal operators in the world--and a state-owned port company.ÊWhen construction is completed, the port will have an annual capacity of 1.5 million TEU (twenty-foot equivalent container units).
“Djibouti’s port is the economic backbone for growth and employment in the country,“ says Elena Palei, Acting Head of Infrastructure at MIGA. “We are pleased to be able to work in partnership with Dubai Port World and its financiers to help Djibouti meet the full potential of its location.
MIGA’s guarantees are protecting the investments of Dubai Port World as well as those of the financing banks, Dubai Islamic Bank PJSC, Standard Chartered Bank and West LB, against the risks of transfer restriction, war and civil disturbance, expropriation, and breach of contract.
By improving container facilities in Djibouti, the project is expected to increase port traffic and open up new opportunities for investment and growth, including attracting other African countries to use the port as a gateway too. Currently more than 85 percent of total traffic in the port is destined for, or originates from, landlocked Ethiopia.
A state-of-the-art container terminal could establish Djibouti as a gateway for the Common Market for Eastern and Southern Africa (COMESA) members, and in light of trade flows through that part of the world, promote regional integration through trade development.
MIGA’s participation is allowing the syndication of a significant amount of financing provided by several banks on favorable terms and conditions under an Islamic financing structure. MIGA will reinsure $50 million with the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) under MIGA’s facultative reinsurance program. This is MIGA’s first collaboration with ICIEC at the project level.
MIGA’s presence played an important role in mitigating perceived political risks for the banks and enabled the project sponsors to raise the financing needed to make the project a reality. This is the first project MIGA has supported in Djibouti, which joined the agency in January 2007.

The IMF and the World Bank are helping to develop local bond markets in emerging market economies and developing countries.

The International Monetary Fund (IMF) and the World Bank are stepping up their active engagement in emerging market countries to help them develop local bond markets to reduce their reliance on bank loans and broaden investment opportunities.
In a world of large-scale capital flows, the development of a local bond market has become a priority for many emerging market countries. Well-functioning local bond markets make a vital contribution to the efficiency and stability of financial intermediation and to economic growth.
Many emerging market countries have liberalized their capital accounts, improved their macroeconomic environment, and made advances in financial innovation--steps that have increased capital inflows to these countries.
The challenge for many of these countries is to develop sound markets and instruments that will enable market participants to share and transfer risks to those most able and willing to bear them.
The IMF and the World Bank have been helping countries pursue that goal, in line with a Group of Eight (G-8) action plan for developing local bond markets in emerging market economies and developing countries. The plan was issued last year at the G-8 meeting in Potsdam, Germany, followed by an implementation report issued after the IMF-World Bank Annual Meetings in October 2007.
Among the areas in which the two institutions’ commitment has been evident are the Financial Sector Assessment Program (FSAP), technical assistance, and a joint work program.
FSAP
A joint IMF-World Bank initiative introduced in May 1999, the FSAP aims to increase the effectiveness of efforts to promote sound financial systems in member countries. Supported by experts from a range of national agencies and standard-setting bodies, work under the program seeks to identify the strengths and vulnerabilities of a country’s financial system; determine how key sources of risk are being managed; ascertain the sector’s developmental and technical assistance needs; and help prioritize policy responses.

Technical Assistance
Both the IMF and the Bank have provided significant technical assistance in response to country requests. Traditionally, IMF financial sector technical assistance focused on central banking and bank regulation. However, as countries have moved toward second-generation reforms, the focus of the IMF’s Monetary and Capital Markets (MCM) Department has been broadened to cover issues related to capital markets and asset-liability management. The Bank is also promoting a local currency bond fund that represents an important new channel for focusing technical assistance work.
Collaboration
The International Finance Corporation/World Bank Capital Markets Advisory Group and the IMF’s MCM Department have been coordinating closely on issues related to local capital market development. The teams hold regular monthly meetings to coordinate in the following areas:
-Regulatory and supervisory frameworks and trading, settlement, custody, and delivery mechanisms: Through International Organization of Securities Commissions assessments carried out under the FSAP, and as part of individual country and regional advisory programs, the IMF and the Bank have identified reform priorities in various countries and stand ready to offer technical assistance, in coordination with other international financial institutions, to address weaknesses in these areas.
-Public debt management and market development: Ongoing country assistance activities in debt management and debt market development include the recent formulation of an augmented work program for monitoring and improving frameworks for public debt management; and a sharper focus on helping countries develop effective debt management strategies.

Last year Nokia finally pulled itself together and reestablished itself as the dominant player in the mobile phone market.

With a credit crunch still stalking the corridors of the world’s banks, it’s hardly surprising they were the big losers on the BBC’s Global 30 last year.
Citigroup (down 47.3 percent over 12 months) and HSBC (down 7.3 percent) can hardly have been expected to have had a good year. The chief executives of Citigroup and Merrill Lynch were forced out of their jobs, and several big banks have had to go cap in hand to China, Singapore and Abu Dhabi for capital injections.
But Mitsubishi’s fate (down 25.9 percent) in Japan is more unexpected after its early protestations that its sub-prime mortgage related losses were minimal. Whatever economists may claim about the prospect of Asia decoupling from the US and European markets, the pull of globalization is strong, and the sub-prime virus has been breeding in the globalization incubator.
Of the six biggest fallers this year on the Global 30, five are Japanese. It’s worth looking at the broader indices too: the Nikkei 225 was the worst performing of all the Asian markets and the worst performing major market anywhere.
The recovery that so many believed was well under way, fizzled out over the summer. Even Toyota (down 21.1 percent) and Canon (down 13.5 percent) fell as investors worried about their ability to keep exports booming in the face of a possible US recession and a possible fall in the US dollar against the yen (neither of which has in fact happened).
East Japan Railway managed a small gain of 16 percent. It has large and constant revenue from its huge real estate, travel, and restaurant businesses, and thus has all the characteristics of a sound defensive stock, a safe haven in uncertain times.
For good returns one only had to look over the water to China, where China Mobile rose a staggering 92.5 percent. But even here the future does not look that encouraging and the gravy train has slowed.
The stock hit a high at the end of October, and has since come off 13 percent, largely in the light of the government’s professed desire to have more competition in the domestic market. The giant Chinese oil production company CNOOC (up 74 percent) followed the same pattern, falling back in the last two months as investors grew wary of its expansion plans.
However high oil, copper, gold, zinc and nickel rise, being in commodities (like BHP Billiton, up 66.1 percent) does not guarantee a good share performance.
BP, still cursed by its polluting of its Prudhoe Bay site in Alaska, humiliated by the resignation of Lord Browne, and chased now in court by victims of the 2005 Texas refinery blast, gained just 5 percent.
2007 was the year in which Nokia finally pulled itself together and re-established itself as the dominant player in the mobile phone market, with about 38 percent of the market in unit sales, leaving its closest competitors Samsung and Motorola trailing in its wake. But the future is not quite so assured.
It has warned of tough times ahead as the average price of phones fall and margins get squeezed, especially in China, India and Eastern Europe.