Crisis Leading to Opportunities: IFC CEO
The economic crisis is leading to unexpected opportunities for some, Lars Thunnell, CEO of the International Finance Corporation, the private-sector arm of the World Bank, told CNBC’s “Worldwide Exchange.”
Speaking to CNBC in London, Thunnell said that the IFC was stepping up its operations in response to the "ripple effects" that the crisis was having on trade, investment and remittances.
“We are stepping up our trade finance programs, which, especially when it comes to letters of credit which are used by the poorest countries, becomes very, very important,” he said, adding that the IFC was also trying to step up commodity financing programs given the increase in food costs.
Deleveraging by many Western banks and insurance companies in poorer countries and emerging markets meant that the IFC could help create "regional consortiums" to buy the assets now being sold off by the West, he said.
“We’re seeing banks in Asia, be they Chinese or Korean or Japanese, seeing the opportunity to step in…and replace these structures.”
Thunnell said that the IFC was trying to combat concerns over global food security and food prices by persuading companies to see the increase in demand as an economic opportunity.
“We are trying to find ways of improving and securing the food supply chain” he said. “But there is one good bit of news to come out of higher food prices, and that is that it’s now good business to get engaged [with investment]. Now, we’re seeing everything from bigger companies to the small farmers actually investing in their increased production, and in the whole supply chain.”
He said that one major example of this investment came in the installation of "cold chains" and refrigerated warehouses and trucks to combat wastage, particularly in Africa where 40 percent of the food produced perishes during transportation and never reaches the marketplace.