South Africa Economy to Shrink 1.5%, World Bank Says

By Nasreen Seria

June 22 (Bloomberg) -- South Africa’s economy will probably contract 1.5 percent this year, the first drop in output in 17 years, as commodity prices plunge and exports decline, the World Bank said.

Economic growth will probably rebound to 2.6 percent in 2010, the Washington-based World Bank said in its Global Development Finance report. In March, the lender forecast 1 percent growth this year and 3.1 percent in 2010.

Recessions in the U.S., Europe and Japan have slashed demand for commodities, undermining growth in countries such as South Africa, the world’s largest producer of platinum, and Zambia, the continent’s biggest copper producer. The World Bank also cut its 2009 growth forecast for sub-Saharan Africa to 1 percent from a previous estimate of 2.4 percent.

“Output and incomes in the region have been negatively affected by falling commodity prices, falling volume demand for metal and mineral exports, and declining remittances and tourism,” the World Bank said. “The risks for the sub-Saharan Africa region are heavily tilted to the downside.”

The World Bank’s forecasts are lower than those of the International Monetary Fund, which said on April 22 that South Africa’s economy will probably contract 0.3 percent this year, while economic growth in sub-Saharan Africa will slow to 1.7 percent.

UNHCR annual report shows 42 million people uprooted worldwide

The number of people forcibly uprooted by conflict and persecution worldwide stood at 42 million at the end of last year amid a sharp slowdown in repatriation and more prolonged conflicts resulting in protracted displacement. The total includes 16 million refugees and asylum seekers and 26 million internally displaced people uprooted within their own countries, according to UNHCR's annual "Global Trends" report released today.

The new report says 80 percent of the world's refugees are in developing nations, as are the vast majority of internally displaced people – a population with whom the UN refugee agency is increasingly involved. Many have been uprooted for years with no end in sight.

Although the overall total of 42 million uprooted people at year's end represents a drop of about 700,000 over the previous year, new displacement in 2009 – not reflected in the annual report – has already more than offset the decline.

"In 2009, we have already seen substantial new displacements, namely in Pakistan, Sri Lanka and Somalia," UN High Commissioner for Refugees António Guterres said. "While some displacements may be short-lived, others can take years and even decades to resolve. We continue to face several longer-term internal displacement situations in places like Colombia, Iraq, the Democratic Republic of the Congo and Somalia. Each of these conflicts has also generated refugees who flee beyond their own borders."

The report counts 29 different groups of 25,000 or more refugees in 22 nations who have been in exile for five years or longer and for whom there are no immediate solutions in sight. This means at least 5.7 million refugees are living in limbo.

France, UN warn against Madagascar military option

France and the United Nations both warned on Tuesday against military intervention to resolve Madagascar's political crisis, a day after African economic bloc the Common Market for Eastern and Southern Africa (Comesa) said such a move should not be discounted.

The international community is urging the Indian Ocean island's feuding political parties to forge a negotiated settlement following the military-backed ouster of former leader Marc Ravalomanana in March.

Political turmoil has gripped the country since the beginning of the year, hurting economic growth and prompting several donors, including the International Monetary Fund (IMF) and the United States, to freeze non-emergency aid.

UN envoy Tiebile Drame said Comesa, a 19-member group of Eastern and Southern African nations, should focus its efforts on supporting the political process.

On Monday, the economic bloc called for a return to democracy in Madagascar and said military intervention to restore constitutional order could be an option.

Russia ventures back to Africa

Russian President Dmitry Medvedev embarks on a four-nation tour of Africa this week in a drive to reassert Moscow's clout in a former Soviet sphere of influence.

After a two-day visit to Egypt starting on Tuesday, Medvedev will make an ambitious foray into Nigeria, Namibia and Angola on Wednesday until Friday for talks to expand the country's economic footprint in Africa.

Medvedev's visit follows a 2006 trip to South Africa and Morocco by his mentor and predecessor Vladimir Putin, who became the first Kremlin chief to visit sub-Saharan Africa.