TOKYO, May 19--The Middle East region is now facing a number of risks, including geopolitical instability, energy security, climate change and global economic imbalances, said a report released here Friday by the World Economic Forum (WEF).
The report was composed by the Global Risk Network of the WEF, a three-day event which opened here Friday, in collaboration with the Gulf Research Center.
According to the report, any short-term supply disruption, such as the result of a terrorist attack, would undermine the economic foundations of current economic growth in the Middle East.
At present, up to 90 percent of Persian Gulf exports are hydrocarbons, Xinhua said. The report suggested that whether the oil price remain high or eventually fall back, economic diversification must be a top priority in the region.
“In the long term, concentration of hydrocarbon resources in the Middle East may hasten the end of the oil era,“ it said.
The report said this region is also vulnerable to global economic imbalances and globalization.
It pointed out that for the countries already integrated into the global economy such as the Persian Gulf states, the petrochemicals and energy-intensive industries could be hit by protectionism in countries such as Saudi Arabia where the benefits of free trade have not been felt throughout the population.
“A backlash from globalization would most likely reduce exposure to global competition, allowing protected industries to remain uncompetitive and reducing productivity growth as a result.“
Another risk facing the Middle East region is the climate change, which is expected to lead to an overall rise in temperatures across the region and political tensions between countries with access to fresh water and those without, the report said.
The World Bank suggested water available per person in the Middle East and North Africa region could fall by half by 2050.
In addition, the Middle East suffers from international terrorism on multiple levels: as a direct victim of attacks, a perceived center of instability, and a perceived source of terrorism in terms of personnel, training and ideology.

BONN, Germany, May 19--A UN conference on climate change ended here on Friday with a UN official saying it had taken an important step towards comprehensive negotiations on a successor to the Kyoto Protocol, AFP reported.
A conference on the Indonesian island of Bali in December is to thrash out a new treaty to limit greenhouse gases to take effect after the Kyoto Protocol expires in 2012.
The United Nations Framework Convention on Climate Change (UNFCCC), the parent of the Kyoto agreement, said this week’s meeting in the western German city of Bonn had laid the ground for Bali.
“We have come closer to broadening negotiations on a post-2012 regime by resolving some of the outstanding issues and clarifying which building blocks of a future agreement need to be put in place,“ UNFCCC Executive Secretary Yvo de Boer said.
Among the issues discussed by the 191 signatories to the UN convention -- of which 173 signed up to Kyoto--were how to enhance the transfer of ’clean’ technologies and how to avoid deforestation, which is estimated to account for more than 20 percent of the world’s greenhouse gas emissions.
“The fact that European, American and Australian business groups here in Bonn have been calling on governments to adopt long-term, legally binding emission reduction targets is a strong signal that they feel the carbon market will be an important part of any 2012 agreement,“ De Boer said.
Carbon trading operates on the principle that governments cap the level of greenhouse gas emissions, and then allow companies to obtain permits to emit a set level of pollution.
If they exceed the limit, they must buy permits from other companies which have reined in their emissions.
Companies with lower emissions are therefore rewarded by paying less.
The United States and Australia have never signed up to Kyoto and therefore do not participate in carbon trading.
The Bonn meeting was the first chance for experts to react to the findings of a fourth UN assessment report on climate change released in Bangkok on May 4.
It concluded that nations have the money and technology to save the world from the worst ravages of global warming, but warned they must act immediately to succeed.

A worker at an oil storage plant in Changzhi, in northern China's Shanxi province.

BALI, Indonesia, May 19--Understanding Asia is key to understanding the future of the global oil market, according to two of the world’s biggest energy agencies, UPI said.
At the fifth joint workshop between the Organization of Petroleum Exporting Countries and the International Energy Agency that concluded Friday, the head of the Paris-based IEA said both exporters and users need to understand the uncertainties shaping Asian oil demand.
“Unless we maintain a good understanding of what is happening in Asia we have no chance of making an accurate assessment of global trends, something that is necessary if IEA and OPEC member countries are to overcome their concern over security of supply and security of demand respectively,“ said Claude Mandil. OPEC Secretary-General Abdulla el-Badri, meanwhile, pointed out that there was considerable uncertainty about the required investment needed to meet expected demand for oil in Asia.
The world’s crude oil supply was adequate and the Organization of Petroleum Exporting Countries did not plan to cut production, Abdalla el-Badri, secretary-general of the Organization of Oil Exporting Countries (OPEC), said.
“The price that you see now is $62-$65. That’s fine,“ he said in Jakarta. “The shortage is not from production, but from problems in refinery.“ He did not elaborate.
El-Badri said OPEC members were producing 30-million barrels a day while world demand was for 80-million barrels.
Crude oil for June delivery fell 35c to $62,82 a barrel in after-hours electronic trading on the New York Mercantile Exchange.
Protests at a pipeline facility in Nigeria, OPEC’s sixth-largest member, had not disrupted oil supply, said el-Badri.
A growing world economy may push oil demand to as high as 94-million barrels a day in five years, said Purnomo Yusgiantoro, Indonesia’s energy minister. About 45% of the demand growth would come from east Asia, he said.

ROME, May 19--World cereal production in 2007 is on track to reach a record level of 2.095 billion tons, a rise of 4.8 percent over 2006 levels, the UN Food and Agriculture Organization (FAO) said in a tentative forecast, according to Xinhua.
But with stocks at their lowest level over the past two decades, total supplies would still be barely adequate to meet increased demand, boosted by the fast-growing bio-fuels industry, according to the FAO.
International prices for most cereals have risen significantly in 2006 and 2007 so far and are likely to remain high in 2007 and 2008, according to FAO’s latest Crop Prospects and Food Situation report. As a result, the cereal import bill of the low-income food deficit countries (LIFDCs) is forecast to increase by about one-quarter in the current season.
Expectations for the world wheat harvest are down slightly since the FAO’s April forecast, but at just below 621 million tons production is still expected to be 4 percent above the previous year’s level.
FAO’s early and tentative forecast for world rice production in 2007 points to a slightly larger crop at some 422 million tons, which would match the 2005 record.
For the LIFDCs as a group, the report predicts 2007 cereal output to be similar to last year’s good level. However, excluding China and India, the largest producers, the aggregate crop of the remaining countries is forecast to decline slightly.
In North Africa, a sharp decline is expected in 2007 cereal production, reflecting dry conditions in Morocco that are expected to halve the country’s wheat production this year.
Despite improved food supplies in many of the countries normally most at risk from food insecurity, following record or bumper 2006 cereal crops food difficulties persist in 33 countries worldwide.
Emergency assistance is required for large numbers of vulnerable farmers in Bolivia affected by serious crop and livestock losses following drought and floods during the 2007 main cropping season.
In the Democratic People’s Republic of Korea, despite steady recovery in agricultural production over the past few years and a recent pledge of 400,000-ton-food aid by the Republic of Korea, the food supply situation for millions of people remains a serious concern, the report said.
In Zimbabwe, the report anticipates food shortages for millions of vulnerable people struggling under the deepening economic crisis and skyrocketing inflation, currently considered to be the highest in the world, the FAO said.

WASHINGTON, May 19--The resignation of World Bank President Paul Wolfowitz would help the institution battered by a crisis of governance to resume the battle against poverty in South Asia, according to a senior bank official, reported IANS.
“The World Bank is an institution committed to helping developing countries in the battle against poverty,“ Praful Patel, Vice President, South Asia Region said Friday.
“For over a month--while our work has continued strongly--the institution has been battered by a crisis of governance. The decision that has been reached to make space for new Bank leadership allows us to draw a deep breath and return our full attention to continuing the development work at hand,“ he stated.
Never before have the countries of South Asia had such a great opportunity to end mass poverty, he said. Reforms have resulted in over a decade of sustained growth which in turn has opened new pathways for South Asia to accelerate growth to new highs of 8 to 10 percent.
“Reducing poverty on this scale is a huge challenge which will also require deep progress in human development; it will require that all South Asian citizens have a chance to improve their lives irrespective of gender or caste or religion,“ Patel said.
“It will require massive investments in infrastructure and improvements in the investment climate. And as the World Bank itself has experienced these past painful weeks, it will require a vigilance over the systems of governance that we all have in place, whether we be institutions like the Bank or nation states,“ he said.
Similarly in countries, the systems that are put in place to govern expenditures, to ensure transparent human resources policies, to manage power in ways which do not give favor to some and exclude others, are all questions of good governance, Patel said.
As a development partner the Bank engaged the countries of South Asia on issues key to their development agendas. And as a global institution it also bring shared experience on challenges like HIV/Aids, on avian flu, on finding ways to mitigate the effects of climate change.

NEW YORK, May 19--The world’s largest software maker Microsoft said Friday it was taking over aQuantive, a global digital marketing company, for six billion dollars.
The software giant said in a statement that it hopes the deal will enable it to expand its presence in the growing world of online advertising from which rivals such as Google already reap rich revenues, AFP said.
Microsoft said it had agreed to buy Seattle, Washington state-based aQuantive in an all-cash transaction valued at 66.50 dollars per share. The digital marketing firms employs 2,600 workers.
The software behemoth said it planned to wrap aQuantive into its online services business division.
“This deal expands upon the company’s previously outlined vision to provide the advertising industry with a world class, Internet-wide advertising platform,“ Microsoft said.
“The advertising industry is evolving and growing at an incredible pace, moving increasingly toward online and IP-served (Internet protocol-) platforms, which dramatically increases the importance of software for this industry,“ Microsoft’s chief executive Steve Ballmer said.
Microsoft said the deal would not significantly dent its finances.
aQuantive’s technology will allow Microsoft to deliver ads to third-party Web sites, something that should mesh with Microsoft’s existing plans for delivering ads onto other platforms such as video games on its XBox, which connects to the Internet. Microsoft currently delivers ads mostly to its own Web sites, such as MSN.

WERDER-HAVEL, Germany, May 19--Finance ministers from the world’s eight wealthiest countries met Saturday in the second and final day of talks that will lay down guidelines for the major Group of Eight summit next month.
Officials from Germany, Italy, Britain, Japan, Canada, Russia, the United States and France were set to focus on the push for sound financial management in Africa, a key issue facing the G-8 in the wake of a massive push to combat poverty on that continent, reported AP.
Meeting at a resort on the shore of Lake Schwielowsee, the attendees included Gordon Brown, Britain’s next prime minister and US Deputy Treasury Secretary Robert Kimmitt, who came instead of his boss, Henry Paulson.
The ministers started a two-day meeting free of one potential irritant--the future of World Bank President Paul Wolfowitz, who announced his resignation on Thursday. European ministers had been pressing for the departure of the American, who canceled a planned trip to the gathering outside Berlin.
A final communique on the meeting was expected later Saturday but Germany’s finance minister, Peer Steinbrueck, cautioned against expecting a fast agreement on how to make hedge funds more transparent.
Germany has made tighter supervision of hedge funds a focus of its G-8 presidency and has been agitating for a voluntary code of conduct in the light of the rapid expansion of the funds, which carry high risks and are often exempt from rules and regulations.
However, Steinbrueck conceded that a time-consuming process of discussions, between governments and within the industry, would be needed to come up with a way of avoiding “systemic risks for the world’s financial markets, especially for the US“
The issue is contentious with some G-8 members. Britain, the United States and Japan are still on the fence over any strict guidelines.
However, calls for action are contentious with some G-8 members, including Britain and the United States and Japan still on the fence over any strict guidelines. Concerns about foreign currency exchange rates--the rising euro, weak dollar and China’s yuan--were expected to be an issue on the sidelines of the G-8 meeting. However, since no central banker is attending, they were not a focus.