Emerging market countries are helping to maintain strong global growth but a sharp rise in food prices is further fuelling significant inflation risks, G10 central bankers’ spokesman Jean-Claude Trichet said on Monday. Trichet said the group of central bankers favor markets that are “as competitive as possible“ as they believe only these can really tame inflationary risks such as the sharp jump in food prices, Bloomberg wrote.
“At a global level, global growth remains significant despite the slowing down observed in a number of industrialized economies and clearly thanks to the remarkable resilience of a great number of emerging economies,“ he said. “We see ongoing growth at a significant level ... even if somewhat lower than in the previous year,“ added Trichet, who is also head of the European Central Bank.
He told reporters after a meeting of the Group of 10 central bankers at the Bank for International Settlements in Basel that inflationary risks were “significant“ owing to oil, commodities and food price increases.

President Vladimir Putin on Monday signed into law limits on foreign investment in key sectors of the Russian economy in one of his last acts before stepping down on Wednesday.
Putin signed the law on “The conditions for foreign investment in economic enterprises with strategic importance for the defense of the country and the security of the state“ on Monday, the Kremlin said in a statement, AFP wrote.
Under the terms of the law any private foreign company wanting to buy more than 50 percent of a company in any of 42 strategic sectors will need authorization from a commission made up of economic and security officials.
Foreign state-controlled companies will have to go through the same procedure if they plan to acquire more than 25 percent in a Russian company that is included on the list, according to the text of the decree.
The new law has been under discussion for two years and has raised concern among the foreign investor community in Russia as it would widen the powers of the FSB security service, successor to the KGB, in business transactions.

Chinese stock markets are bracing for fresh pressure in May when a massive number of new shares will become freely tradable after being locked up under local regulations, AFP wrote.
A total of 284.1 billion yuan ($40.6 billion) worth of shares will become freely tradable in May at the expiry of a mandatory lock-up period, the Shanghai Securities News reported on Tuesday.
This is up nearly 90 percent from 150 billion yuan of newly tradable shares in April but was still in line with the monthly average for the whole year, according to the paper.
China’s stock market hit a historic high in October, but then slumped by nearly half in the ensuing months, partly due to the overhang of these shares.
Only in late April did the market stage a rally, encouraged by a decision by Beijing policy makers to cut a stock transaction tax to one third.
Out of the shares that will become tradable in May, slightly more than half will be in Bank of Communications, the newspaper said.

Swiss banking giant UBS on Tuesday announced a net loss of 11.535 billion Swiss francs (7.075 billion euros/ $10.972 billion) for the first quarter due to US subprime-related positions, Reuters reported.
The bank said it would cut 2,600 jobs this year and continue the downsizing in 2009 if the tough business conditions continued, and reported writedowns of 19 billion Swiss francs for the first quarter.
The results were in line with a warning the bank issued in April saying it expected a net loss of about 12 billion Swiss francs for the first three months of this year.
UBS said the year began with “tough business conditions“ which it expects will continue. “The impact will affect all of UBS’s businesses and it requires the firm to manage costs, resources and capacity very actively,“ the bank said.
It said it will cut 2,600 jobs from its investment bank unit by the year-end, most through redundancies.
Headcount will also be trimmed in other departments, mainly through natural attrition and internal redeployment, added UBS, which is also Switzerland’s biggest bank.

Nearly 34 years after the first FAO conference--and dozens of UN resolutions and voluminous reports later--the developing world is facing another global food shortage, along with skyrocketing prices.

As the Food and Agriculture Organization (FAO) readies for a summit of world leaders next month, Secretary-General Ban Ki-moon Monday defended the Rome-based UN agency, which has come under fire for its failure to help meet the growing challenges of hunger worldwide.
According to Ipsnews.net, the harshest attack came last week from Senegalese President Abdoulaye Wade, who described the FAO as a “bottomless pit of money, largely spent on its own functioning, with very little effective operations on the ground.“
Asked to respond, Ban told reporters Tuesday: “In view of the gravity and seriousness of the situation, I can understand and sympathize with the frustrations of many African leaders, including President Wade of Senegal.“
“But I would like to underscore that since its founding in 1945, the FAO has been leading the international community’s efforts to help promote the production and productivity (of food), and provide necessary humanitarian assistance to many people affected by food shortages,“ he added.

Extravagance
Wade said the FAO, headed by Jacques Diouf of Senegal, should be merged with another Rome-based UN agency, the International Fund for Agricultural Development (IFAD), to establish a single mega agriculture body. Currently, some of the functions of the two UN agencies overlap.
If such a body is created, he said, it should be located in Africa, not in a western capital.
Wade was also critical of the extravagance of UN agencies and humanitarian non-governmental organizations (NGOs). He said they “will use (aid money) on all sort of tricks--administration, trips and costs of luxury hotels for so-called experts, instead of on concrete actions on the ground.“
Meanwhile, there are several factors responsible for the food crisis, including the shortcomings of international organizations such as the FAO and other UN agencies, all of which failed to anticipate the gravity of the current disaster.
The World Bank, a sister institution of the United Nations, also has to share some of the blame for the current crisis because of declining funds for agricultural research over the years.
Asked about the under-sourcing for research, World Bank President Robert Zoellick admitted his institution’s failure but also singled out the shortcomings of governments.
Idle Seminars
The FAO hosted the first major World Conference on Food in Rome in 1974, which proclaimed that “every man, woman and child has the inalienable right to be free from hunger and malnutrition in order to develop their physical and mental faculties.“
The goals of the conference included the eradication of hunger, the need for food security and the reduction of malnutrition “within a decade“. But the goals were never reached.
In November 1996, the FAO hosted another five-day World Food Summit, which adopted a Rome Declaration on World Food Security and a Plan of Action to eradicate or minimize global hunger.
The current crisis, not surprisingly, has triggered a third Food Summit, also in Rome from Jun. 3-5, where another elaborate plan is due to be unveiled by heads of state and governments.
Still, nearly 34 years after the first FAO conference--and dozens of UN resolutions and voluminous reports later--the developing world is facing another global food shortage, along with skyrocketing prices.
The price of rice alone--a staple in many Asian countries--rose to 980 dollars per metric ton last week compared with $460 in March.