Archive for the ‘World Bank’ Category

More relatively-poor people in a less absolutely-poor world

July 5, 2012 Comments off

More relatively-poor people in a less absolutely-poor world
Source: World Bank

Relative deprivation, shame and social exclusion can matter to the welfare of people everywhere. The authors argue that such social effects on welfare call for a reconsideration of how we assess global poverty, but they do not support standard measures of relative poverty. The paper argues instead for using a weakly-relative measure as the upper-bound complement to the lower-bound provided by a standard absolute measure. New estimates of global poverty are presented, drawing on 850 household surveys spanning 125 countries over 1981-2008. The absolute line is $1.25 a day at 2005 prices, while the relative line rises with the mean, at a gradient of 1:2 above $1.25 a day. The authors show that these parameter choices are consistent with cross-country data on national poverty lines. The results indicate that the incidence of both absolute and weakly-relative poverty in the developing world has been falling since the 1990s, but more slowly for the relative measure. While the number of absolutely poor has fallen, the number of relatively poor has changed little since the 1990s, and is higher in 2008 than 1981.

World Bank’s Country Strategy for India (2013-16)

June 27, 2012 Comments off

World Bank’s Country Strategy for India (2013-16)
Source: World Bank

The World Bank is holding a series of consultations to seek inputs on its proposed Country Program Strategy (CPS) for India for 2013-2016. The CPS is the Bank’s roadmap for engagement in the country over the next four years. Oriented toward results, the CPS aims to support India’s development agenda of faster, sustainable and more inclusive growth as outlined in the government’s upcoming 12th Five Year Plan.

The CPS identifies key areas where the World Bank’s assistance can have the greatest impact on poverty reduction. This, in turn, determines the level and composition of the World Bank Group’s financial, advisory, and technical support to the country over a four-year period.

The CPS is developed in consultation with country authorities, civil society organizations, development partners, the media, the private sector, and other stakeholders. Consultations provide a platform for the World Bank Group to tap into the experience and knowledge of a broad range of stakeholders, and listen to their ideas about how the Bank can work with them to help the country meet its development challenges. Discussions not only cover the country’s long-standing development agenda but also the new challenges thrown up by unprecedented economic growth, and the recent slowdown.

WB Urges Developing Countries to Strengthen Domestic Fundamentals, to Weather Global Economic Turmoil

June 14, 2012 Comments off

WB Urges Developing Countries to Strengthen Domestic Fundamentals, to Weather Global Economic Turmoil
Source: World Bank

Developing countries should prepare for a long period of volatility in the global economy by re-emphasizing medium-term development strategies, while preparing for tougher times, says the World Bank in the newly-released Global Economic Prospects (GEP), June 2012.

A resurgence of tensions in high-income Europe has eroded the gains made during the first four months of this year, which saw a rebound in economic activity in both developing and advanced countries and an easing of risk aversion among investors. Since May 1st, increased market jitters have spread. Developing and high-income country stock markets have lost some 7 percent, giving up two-thirds of the gains generated over the preceding four months. Most industrial commodity prices are down, with crude and copper prices down by 19 and 14 percent, respectively, while developing country currencies have lost value against the US dollar, as international capital fled to safe-haven assets, such as German and U.S. government bonds.

So far, conditions in most developing countries have not deteriorated as much as in the fourth quarter of 2011. Outside of Europe and Central Asia and the Middle-East and North Africa, developing country credit default swap (CDS) rates, a key indicator of market sentiment, remain well below their maximums from the fall of 2011.

Sustainable low-carbon city development in China

May 20, 2012 Comments off

Cities contribute an estimated 70 percent of the world’s energy-related greenhouse gases (GHG). Their locations, often in low-elevation coastal zones, and large populations make them particularly vulnerable to the impacts of climate change. But cities often take steps, even ahead of national governments, to reduce GHG emissions. So it is with China’s cities, which are well placed to chart a low-carbon growth path to help reach China’s national targets for reducing the energy and carbon intensity of its economy. China’s cities will need to act on multiple fronts, in some cases scaling up elements of existing good practice, in others changing established ways of doing business. Actions affecting land-use and spatial development are among the most critical to achieving low-carbon growth as carbon emissions are closely connected to urban form. Spatial development also has very strong ‘lock-in’ effects: once cities grow and define their urban form, it is almost impossible to retrofit them because the built environment is largely irreversible and very costly to modify. Furthermore, cities need energy-efficient buildings and industries. They need a transport system that offers alternatives to automobiles. They need to shift to efficient management of water, wastewater, and solid waste. And they need to incorporate responses to climate change in their planning, investment decisions, and emergency-preparedness plans.

Full Document (PDF)

Measuring financial inclusion : the Global Findex Database

May 7, 2012 Comments off

Measuring financial inclusion : the Global Findex Database

Source:  World Bank
This paper provides the first analysis of the Global Financial Inclusion (Global Findex) Database, a new set of indicators that measure how adults in 148 economies save, borrow, make payments, and manage risk. The data show that 50 percent of adults worldwide have an account at a formal financial institution, though account penetration varies widely across regions, income groups and individual characteristics. In addition, 22 percent of adults report having saved at a formal financial institution in the past 12 months, and 9 percent report having taken out a new loan from a bank, credit union or microfinance institution in the past year. Although half of adults around the world remain unbanked, at least 35 percent of them report barriers to account use that might be addressed by public policy. Among the most commonly reported barriers are high cost, physical distance, and lack of proper documentation, though there are significant differences across regions and individual characteristics.
+ Full Paper (PDF)

Food security and storage in the Middle East and North Africa

April 21, 2012 Comments off
Source:  World Bank
In times of highly volatile commodity markets, governments often try to protect their populations from rapidly-rising food prices, which can be particularly harsh for the poor. A potential solution for food-deficit countries is to hold strategic reserves, which can be called on when international prices spike. But how large should strategic stockpiles be? This paper develops a dynamic storage model for wheat in the Middle East and North Africa (MENA) region, where imported wheat dominates the average diet. The paper uses the model to analyze a strategy that sets aside wheat stockpiles, which can be used when needed to keep domestic prices below a targeted price. This paper shows that if the target is set high and reserves are adequate, the strategy can be effective and robust. Contrary to most interventions, strategic storage policies are counter-cyclical and, when the importing region is sufficiently large, a regional policy can smooth global prices. This paper shows that this is the case for the MENA region. Nevertheless, the policy is more costly than the pro-cyclical policy of a targeted intervention that directly offsets high prices with a subsidy similar to food stamps.

+ Full Paper (PDF)

Financing of firms in developing countries : lessons from research

April 20, 2012 Comments off
Source:  World Bank
This paper reviews and synthesizes theoretical and empirical research on the role of finance in developing countries. First, the paper presents the stylized facts about firms in developing nations as well as the legal, financial and broader institutional framework in which these firms operate. Next, the paper focuses on the financing choices available to small and medium firms in developing countries and highlights areas needing additional research.

+ Full Paper (PDF)

Does a picture paint a thousand words ? evidence from a microcredit marketing experiment

April 19, 2012 Comments off
Source:  World Bank
Female entrepreneurship is low in many developing economies partly because of constraints on women’s time and mobility, which are often reinforced by social norms. This paper analyzes a marketing experiment designed to encourage women to adopt a new microcredit product. A brochure with the same content but two different covers was randomly distributed among male and female borrowing groups. One cover featured five businesses run by men, while the other showed identical businesses run by women. Men and women responded to psychological cues. Among men who were not business owners, had lower measured ability and whose wives were less educated, the responses to the female brochure were more negative, as did female business owners with low autonomy within the household. Women with relatively high levels of autonomy had a similar negative response to the male brochure, while there was no effect on female business owners with autonomy. Overall, these results suggest that women’s response to psychological cues, such as positive role models, may be affected by their level of autonomy at home, and more intensive interventions may be required for more disadvantaged women.

+ Full Paper (PDF)

Accounting for water quality in monitoring access to safe drinking-water as part of the Millennium Development Goals: lessons from five countries

March 7, 2012 Comments off

Accounting for water quality in monitoring access to safe drinking-water as part of the Millennium Development Goals: lessons from five countries (PDF)

Source:  Bulletin of the World Health Organization
To determine how data on water source quality affect assessments of progress towards the 2015 Millennium Development Goal (MDG) target on access to safe drinking-water.
Data from five countries on whether drinking-water sources complied with World Health Organization water quality guidelines on contamination with thermotolerant coliform bacteria, arsenic, fluoride and nitrates in 2004 and 2005 were obtained from the Rapid Assessment of Drinking-Water Quality project. These data were used to adjust estimates of the proportion of the population with access to safe drinking-water at the MDG baseline in 1990 and in 2008 made by the Joint Monitoring Programme for Water Supply and Sanitation, which classified all improved sources as safe.
Taking account of data on water source quality resulted in substantially lower estimates of the percentage of the population with access to safe drinking-water in 2008 in four of the five study countries: the absolute reduction was 11% in Ethiopia, 16% in Nicaragua, 15% in Nigeria and 7% in Tajikistan. There was only a slight reduction in Jordan. Microbial contamination was more common than chemical contamination.
The criterion used by the MDG indicator to determine whether a water source is safe can lead to substantial overestimates of the population with access to safe drinking-water and, consequently, also overestimates the progress made towards the 2015 MDG target. Monitoring drinking-water supplies by recording both access to water sources and their safety would be a substantial improvement.

China 2030: Building a Modern, Harmonious, and Creative High-Income Society

March 3, 2012 Comments off

China 2030: Building a Modern, Harmonious, and Creative High-Income Society
Source: World Bank

China should complete its transition to a market economy — through enterprise, land, labor, and financial sector reforms — strengthen its private sector, open its markets to greater competition and innovation, and ensure equality of opportunity to help achieve its goal of a new structure for economic growth.

These are some of the key findings of a joint research report by a team from the World Bank and the Development Research Center of China’s State Council, which lays out the case for a new development strategy for China to rebalance the role of government and market, private sector and society, to reach the goal of a high income country by 2030.

The report, “China 2030: Building a Modern, Harmonious, and Creative High-Income Society”, recommends steps to deal with the risks facing China over the next 20 years, including the risk of a hard landing in the short term, as well as challenges posed by an ageing and shrinking workforce, rising inequality, environmental stresses, and external imbalances.

Removing Barriers to Trade in Africa

February 16, 2012 Comments off
Source:  World Bank
Key Findings
+ The African market remains highly fragmented; preventing enormous opportunities for cross-border trade from being exploited and in turn generating new jobs.
+ Effective regional integration is more than simply removing tariffs—it is about addressing the barriers that undermine the daily operations of ordinary producers and traders of both goods and services.
+ The incidence of barriers to regional trade fall most heavily, and disproportionately, on the poor and on women, and is preventing them from earning a living in activities where they have a comparative advantage—catering for smaller, local markets across the border.
+ Action is required at both the supra-national and national levels. Regional communities can provide the framework for reform but responsibility for implementation lies with each member country.
+ The donor community can help countries understand the political economy resistance that lies behind the fact that despite public pledges for integration, actual barriers to trade remain in place.

Job Trends: Slow and Steady Recovery Continues, With Encouraging Signs in Developing Countries in Eastern Europe

February 15, 2012 Comments off
Source:  World Bank
+ Overall, the employment picture in middle-income countries continued a gradual recovery.
+ Signs of a strong resurgence were seen in Eastern Europe and Central Asia.
+ Latin America’s rebound appeared to be moderating, while trends in East Asia were positive.

Golden Growth: Restoring the lustre of the European economic model

January 27, 2012 Comments off
Source:  World Bank
The report documents the impressive achievements of the European growth model over the last 50 years. Accounting for the stresses it is experiencing and assessing the longer-term challenges that Europe will face, the report then evaluates the six principal components of the model: Trade, Finance, Enterprise, Innovation, Labor, and Government. It finds that the European growth model has been a powerful engine for economic convergence, helping developing countries in Europe catch up to their richer neighbors and become high-income economies. But recent changes in and outside Europe necessitate change. The report proposes the adjustments needed to make trade and finance work even better, to encourage enterprise and innovation in parts of Europe which have begun to lag, and address shortcomings in the functioning of labor markets and governments. The changes proposed would restart the European convergence machine, make Europe’s enterprises competitive, and help Europeans afford the highest standards of living in the world.

World Bank Projects Global Slowdown, with Developing Countries Impacted

January 26, 2012 Comments off

World Bank Projects Global Slowdown, with Developing Countries Impacted

Source:  World Bank

Developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects, says the World Bank in the newly-released Global Economic Prospects (GEP) 2012.
The Bank has lowered its growth forecast for 2012 to 5.4 percent for developing countries and 1.4 percent for high-income countries (-0.3 percent for the Euro Area), down from its June estimates of 6.2 and 2.7 percent (1.8 percent for the Euro Area), respectively. Global growth is now projected at 2.5 and 3.1[1] percent for 2012 and 2013, respectively.
Slower growth is already visible in weakening global trade and commodity prices. Global exports of goods and services expanded an estimated 6.6 percent in 2011 (down from 12.4 percent in 2010), and are projected to rise by only 4.7 percent in 2012. Meanwhile, global prices of energy, metals and minerals, and agricultural products are down 10, 25 and 19 percent respectively since peaks in early 2011. Declining commodity prices have contributed to an easing of headline inflation in most developing countries. Although international food prices eased in recent months, down 14 percent from their peak in February 2011, food security for the poorest, including in the Horn of Africa, remains a central concern.

Full Report

A vulnerability approach to the definition of the middle class

January 1, 2012 Comments off
Source:  World Bank (working paper)
Measurement of the middle class has recently come to the center of policy debate in middle-income countries as they search for the potential engines of growth and good governance. This debate assumes, first, that there is a meaningful definition of class, and second, that thresholds that define relatively homogeneous groups in terms of pre-determined sociological characteristics can be found empirically. This paper aims at proposing a view of the middle class based on vulnerability to poverty. Following this approach the paper exploits panel data to determine the amount of comparable income — associated with a low probability of falling into poverty — which could define the lower bound of the middle class. The paper looks at absolute thresholds, challenging the view that people above the poverty line are actually part of the middle class. The estimated lower threshold is used in cross-section surveys to quantify the size and the evolution of middle classes in Chile, Mexico, and Peru over the past two decades. The first relevant feature relates to the fact that the proposed thresholds lie around the 60th percentile of the distribution. The evidence also shows that the middle class has increased significantly in all three countries, suggesting that a higher number of households face lower probabilities of falling into poverty than they did in the 1990s. There is an important group of people, however, which cannot be defined as middle class from this perspective, but are not eligible for poverty programs according to traditional definitions of poverty.

Full Paper (PDF)

Five Key Lessons for Latin America and the Caribbean from the Great Recession

December 31, 2011 Comments off

Five Key Lessons for Latin America and the Caribbean from the Great Recession

Source:  World Bank

As 2011 comes to a close, the global economy is facing yet another economic slowdown. Based on household survey data from 2010 and labor market indicators through the third quarter of 2011, the World Bank draws key lessons from the impact of the Great Recession of 2008/2009 and the quick recovery on Latin America and the Caribbean’s poor and explores their implications for poverty reduction in the region going forward.

According to the new brief, On the Edge of Uncertainty: Poverty Reduction in Latin America and the Caribbean during the Great Recession and Beyond, even during the recession Latin America managed to reduce poverty levels. Then, as it quickly rebounded in 2010, poverty dropped even faster — by 12.6 million — and continued to decline throughout 2011. Today, we can safely say that moderate poverty in Latin America has dropped by 73 million since 2003.

On the Edge of Uncertainty: Poverty Reduction in Latin America and the Caribbean (PDF)

Outlook for Remittance Flows 2012-14

December 25, 2011 Comments off
Source:  World Bank
  • Officially recorded remittance flows to developing countries are estimated to have reached $351 billion in 2011, up 8 percent over 2010.
  • For the first time since the global financial crisis, remittance flows to all six developing regions rose in 2011. Growth of remittances in 2011 exceeded our earlier expectations in four regions, especially in Europe and Central Asia (due to higher outward flows from Russia that benefited from high oil prices) and Sub-Saharan Africa (due to strong south-south flows and weaker currencies in some countries that attracted larger remittances). By contrast, growth in remittance flows to Latin America and Caribbean was lower than previously expected, due to continuing weakness in the U.S. economy and Spain. Flows to Middle East and Africa were also impacted by the “Arab Spring”.
  • Following this rebound in 2011, the growth of remittance flows to developing countries is expected to continue at a rate of 7-8 percent annually to reach $441 billion by 2014. Worldwide remittance flows, including those to high-income countries, are expected to exceed $590 billion by 2014.
  • However, there are serious downside risks to this outlook. Persistent unemployment in Europe and the U.S. is affecting employment prospects of existing migrants and hardening political attitudes toward new immigration. Volatile exchange rates and uncertainty about the direction of oil prices also present further risks to the outlook for remittances.
  • Remittance costs have fallen steadily from 8.8 percent in 2008 to 7.3 percent in the third quarter of 2011. However, remittance costs continue to remain high, especially in Africa and in small nations where remittances provide a life line to the poor.
  • There is a pressing need to improve data on remittances at the national and bilateral corridor level. This would make it possible to more accurately monitor progress towards the ‘5 by 5’ remittance cost reduction objective.

Brazil and Sub-Saharan Africa: South South Partnering for Growth

December 16, 2011 Comments off
Source:  World Bank

Key Findings

  • Brazil and Sub-Saharan Africa are re-establishing a robust engagement, after over 200 years. The two regions are natural partners with strong historic and cultural links and similar geological and climatic conditions. Because of these shared conditions, Brazilian technology is easily adapted to Africa.
  • Brazil has emerged as one of the world’s strongest economies and is playing an important role in redefining “the global south” in the changing world architecture. Africa is rapidly changing and Brazil has expressed growing interest in supporting and taking part in its development.
  • Brazil’s economic growth, its success in narrowing social inequality and its development experience offer lessons for African countries.
  • Countries in Sub-Saharan Africa have requested cooperation from Brazil in five key areas: tropical agriculture, tropical medicine, vocational training, energy and social protection.
  • Brazil’s trade with Sub-Saharan Africa increased between 2000 and 2010 from U$2 billion to U$12 billion; with expectations of continuous growth in the coming years. There are some obstacles that are being addressed like ease of transport (air and maritime) and telecommunications.
  • South-South partnering will play a major role in global knowledge, trade and investments in the coming years.
  • The World Bank can play a key role in supporting ongoing partnerships between Sub-Saharan Africa and Brazil and South-south relations as a whole.

Full Report (PDF)

Report Highlights Progress on Debt Relief in Highly Indebted Poor Countries, but Challenges Remain

December 15, 2011 Comments off
Source:  World Bank

A joint World Bank-IMF report released today shows significant progress in reducing the debt burdens of some of the world’s poorest countries.

The report, Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI) –Status of Implementation and Proposals for the Future of the HIPC Initiative, shows that 36 out of 40 HIPCs have reached the debt relief decision point, the stage in which they qualify for debt relief, and 32 of them have reached the completion point, where debt is irrevocably cancelled, and also benefited from debt relief under the MDRI.

The report, which was discussed by Board of Executive Directors of the World Bank and the Board of the IMF last week, notes that debt relief under the initiatives to the 36 post-decision point countries represents almost 35 percent of their 2010 GDP. Together with debt relief under traditional mechanisms and additional relief from Paris Club creditors, this assistance is estimated to reduce the debt burden for these countries by about 90 percent relative to pre-decision point levels. In addition, poverty reducing spending increased by more than three percentage points of GDP, on average, between 2001 and 2010, while debt service payments declined.

Nevertheless, some challenges remain. Progress toward the Millennium Development Goals (MDGs) has been uneven — only a quarter of completion point HIPC countries are on track to meeting the MDG1 to eradicate extreme poverty and hunger. Other challenges include providing debt relief to countries that are still at the pre-decision point stage, encouraging full participation of all creditors, ensuring the full financing of both HIPC and the MDRI, and addressing the issue of commercial creditor litigation.

Full Report (PDF)

East Asia and Pacific Economic Update – Navigating Turbulence, Sustaining Growth

November 24, 2011 Comments off

East Asia and Pacific Economic Update – Navigating Turbulence, Sustaining Growth
Source: World Bank
From press release:

Growth is still strong in developing East Asia, but continues to moderate mainly due to weakening external demand, underscoring the need for governments to refocus on reforms to increase domestic demand and productivity, says the World Bank in its latest East Asia and Pacific Economic Update released today.

The report, issued biannually, projects that amid uncertainties in Europe and a global growth slowdown, real GDP in developing East Asia will increase by 8.2 percent in 2011 (4.7 percent excluding China) and by 7.8 percent in 2012. Domestic demand in middle-income countries was the largest contributor to growth in the region, although it is easing driven by the normalization of fiscal and monetary policy.


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