September 2008

Still upset about the failure of the latest round of Doha talks? Don't worry - there are still many ways to improve the outlook for international trade. You can take Simeon Djankov's advice over on the Doing Business blog and reduce the delays related to trade. Or, according to a new World Bank working paper, you could make trade more transparent. In Governance, Corruption, and Trade in the Asia Pacific Region, authors Kazutomo Abe and John S. Wilson estimate huge gains for trade and GDP due to reforms that improve transparency:

[T]he reforming economies in APEC stand to benefit significantly in regard to GDP and welfare gains with the type of reform we examine here. In particular, Vietnam could expect an increase in real GDP by more than 30 percent in Case 1. Russia, Philippines and Thailand’s GDP and welfare would rise substantially, as well. The benefits to Malaysia and China would be almost one year’s growth. The estimated global benefits here with transparency reform, US$406 billion in Case 1 and US$290 billion in Case 2 in the 2006 prices are larger than those reported in previous work on trade facilitation.

See how the populations of 34 countries could fit into China's provinces.

And for another take, see how China is an island.

Etant donné l’appréciation de l’Euro vis-à-vis du dollar, la question de la parité du Franc CFA (qui est fixé à l’Euro) doit être encore soulevée.  L’appréciation est comparable à celle des années 1985-1993 [voir graphique].  Pendant cette période, les économies des pays de la zone CFA ont connu une forte diminution de leur compétitivité, des exportations, et de croissance économique.  Dans la plupart des pays, la pauvreté a augmenté.   Il faut se rappeler que le

When asked about the East Asian financial crisis of the late 1990s, Ethiopian Prime Minister Meles Zenawi reportedly said, “I wish we had their problems.”  I was reminded of this quip when thinking about the current financial crisis in the U.S. and its possible impact on Africa.  In the U.S., there is a constant fear that turmoil in financial markets will spill over to the real sector—in terms of slow growth and unemployment. 

A recent paper by Hamid Davoodi shows that, in Swaziland, the problem is a lack of real-financial sector linkages.  Most financial sector indicators—private sector lending, money supply and bank deposits as a percentage of GDP—are going down, not up.  One reason may be that about 60 percent of land is owned by tribal chiefs and held in public trust.  Since no one has ownership rights, no one can use land as collateral, and so borrowing and lending are limited.

A new World Bank working paper called The Sub Prime Crisis: Implications for Emerging Markets makes an argument that the world may not quite be ready to hear, at least not so soon after the implosion of Wall Street. Authors William Gwinner and Anthony Sanders delicately explain in the abstract that "[i]t is possible to extend mortgage lending down market [in emerging markets] without repeating the mistakes of the subprime boom and bust." You don't have to start worrying about this question quite yet, though. Subprime mortgages still seem to be pretty rare in emerging markets:

[E]merging markets have been slow to move down market with mortgages. Mortgage lending is typically less than 20 percent of GDP in emerging markets, while it ranges between 40 and 100 percent of GDP in developed countries.

The authors lay out a lot of "lessons learned" that could help guide policymakers in emerging markets. Perhaps it would make good reading for policymakers in the U.S. as well!

Among the visitors to 2008 Global Development Marketplace: Sustainable Agriculture for Development today was World Bank Group President Robert B. Zoellick.

Among the 22 winning projects in the DM2008 competition was Agricultural Cooperatives for Biodiversity Conservation in Cambodia, and collecting the award were Enterprise Planner Adviser Karen Nielsen and Technical Adviser Tom Clements (in photo).

"W'e're quite excited about having our project recognized as one of the more innovative ones," said Nielsen, clutching her team's award.

Under the project, "Wildlife-friendly" products grown in conservation-protected areas in Cambodia will be marketed nationally, including at tourism centers, by cooperatives in 10 villages.

September 2008. Yesterday, suddenly, our apartment got lukewarm water the color of weak tea. I was delighted.

In Ulaanbaatar, as in cities of the former Soviet Union, hot water and heat for buildings is produced in a power plant and piped throughout the city. You can still see thick, insulated pipes running above ground, and arching up and over roads. Very ugly, but cheaper than putting them underground.

Every year, the hot water supply is shut off for maintenance and cleaning of pipes. This usually lasts a few weeks in major cities, and can last for months in smaller ones. In my district, there was major pipe work done. Because of this I have never had hot water in Mongolia. They promised it in June, then August. Then in mid-September, when the heat is supposed to go on. It makes me long for the simple bak mandi bathing system I had in Aceh.

I was in Vienna last week to attend an impressive event called the Public-Private Partnership on Remittances, organized by my colleagues Massimo Cirasino and Peer Stein. Amid the technocratic, technical, and tactical treatise on payment systems, a high point for me was the launch of Remittance Prices Worldwide, a new World Bank remittance price database.

For the first time there is one database, painstakingly gathered and meticulously organized with the lay user in mind, dedicated to the cost of sending remittances in over 120 important remittance corridors. Transparency is expected to help educate consumers and generate competition among remittance service providers. Indeed a few stats are eye openers: it costs less than $8 to send $200 from Spain to Brazil (less than 4%). By contrast, sending the same amount from Germany to China can cost nearly $50 (or 25%)!

Leaders have been talking about reducing remittance costs since 2004, if not earlier. Yet, until now, there were no real indicators of how costs are falling. Mexico began putting out remittance cost data from about 13 US cities to several Mexican cities, and we saw a 56% decline in remittance costs between 1999 and 2004. The hope is that the new database will have a similar cost reduction effect. That would reduce the drain on poor migrants' incomes and increase their ability to send more help home.

Three DM2008 jurors who are past grant winners are sharing their well-learned lessons with the hundred finalists.

Take 2006 winner Florence Cassassuce (in photo at right), who brought her water-purifying UV-light bucket to 900 villagers on the rural outskirts of La Paz in Baja California, Mexcio. Cassassuce, implementing her project with the advice of World Bank Senior Environmental Specialist Ricardo Hernandez Murillo, installed 3,500 buckets toward the goal of 6,00, ahead of schedule. But the original buckets didn't always work well, especially in the field, and improvements had to be made with better, and faster, plastic-injection manufacturing.