November 2008

I recently made a presentation on our outlook for remittances at the Money Transfers London conference. The discussions were lively and interesting and the topics included the impact of the EU payment services directive (PSD) and other regulatory changes for the money transfer industry, innovations in smart cards and mobile money transfers, and the impact of the current economic crisis, among others (see full conference agenda).

One development I found interesting was efforts to standardize training for Money Laundering Reporting Officers (MLROs) in the money transfer firms. To remain relevant in times of changing rules and regulations, these officials will need to be tuned to the messages coming from regulators not only through directives and websites, but also from speeches and interviews in the media.  

This conference and others organized by industry bodies such as the IAMTN are very useful because they provide a space for private sector participants to interact with regulators and development agencies, clarify new regulations and laws, and let us hear from practitioners on new developments and emerging technologies.

Each time I attend a meeting where public officials are gathered and the subject of the mass media comes up, the room lights up. The stories of deep frustration with the media simply flow out of them like melted butter out of a jug. The complaints are legion:

• Those terrible journalists distort my views.
• The media are instruments of terror...virtually.
• They don't get anything serious; they are lazy and uninformed.
• They are in bed with sinister forces, and corrupt proprietors.
• They are not to be trusted at all.
• As the discussion progresses, the authoritarian impulse comes out. You hear calls for strict regulation of the mass media in the particular developing country. Yes, the officials say, the media must be brought to heel, reigned in.

Amid all the news of the slowing global economy, I’m not sure anyone was too surprised that the World Bank’s latest China economic projections estimate the country’s economic growth, despite remaining relatively strong, will continue to slow in 2009. The latest edition of the China Quarterly Update, released Monday, also says that to continue growth, China needs to utilize already announced stimulus policies to rebalance its economy and improve standard of living and support long-term development.

Have questions about the report? Do you wonder what the future holds for China? Our own bloggers David Dollar and Louis Kuijs, who authored the report, will answer questions Monday in a live online chat. You can join them on Dec. 1 at 8 a.m. EST (13:00 GMT/UTC and 9pm in Beijing), or submit your questions now. Check it out here.

In debates over globalization, much attention is given to so-called 'North-South' relationships. Often, data on 'South-South' exchanges it too limited to say much. A new paper on Global Migration of the Highly Skilled by Theo Dunnewijk of United Nations University helps shed some new light on 'South-South' brain drain/brain strain/brain circulation (Hat tip: Giulio Quaggiotto). Previous datasets had overlooked diasporas of highly skilled workers in these countries:

• South Africa originating in Zimbabwe, Botswana, Namibia and Lesotho;
• Russia from Kazakhstan, Ukraine and Belarus;
• Ukraine, from Brunei Darussalam;
• Czechoslovakia (former) from Iran;
• Malaysia from China and India;
• Latvia from Israel;
• Romania from Moldova;
• Jordan from Palestine Autonomous Region;
• Tajikistan from Uzbekistan;
• Bulgaria from Greece

Is this brain drain, brain strain, or brain circulation? Dunnewijk doesn't tell us - a topic for another paper, perhaps.

What does it take to get the leasing sector off the ground? In IFC's experience, the first thing to take care of is legislation that makes leasing feasible. Tax treatment, customs regulations, and the ability to reclaim equipment all have a big influence on whether leasing companies will make it or not.

This is important for Mongolia. Although commodity prices are depressed right now, there is a huge amount of wealth in the ground. Getting it out will require a lot of equipment, everything from excavators to drills to vehicles, and more. And it's not only mining companies that will need equipment—the many Mongolian businesses that provide goods and services to the mining industry will need equipment too. These businesses will be an important part of mining-led economic growth in Mongolia.

The Economist reports this week on new research on the relationship between Health and Wealth. The long and the short of it is that improvements in health don't necessarily lead to higher incomes, as counterintuitive as that sounds at first. (As always, the causation may be running the opposite direction - higher incomes lead to better health.) In one of the papers, researchers from MIT looked at the impact of medical advancements like penicillin that improved health in developing countries but clearly were not the result of improved incomes in developing countries. They found that income per head dropped despite improvements in life expectancy.

According to the Economist, the researchers offered this explanation:

The reason was that increased life expectancy led to a higher population using a limited stock of things like land and capital, thus depressing income per person. Over time, reduced fertility, more investment and the entrepreneurial benefits of having more people could reverse some of this, but the data suggested that reductions in fertility in particular took a long time.

The December issue of Poverty in Focus, the magazine published by UNDP's International Poverty Centre, is out. This issue is fully devoted to the linkages between employment, economic growth and poverty reduction.

"What is the role of employment in the nexus of economic growth, poverty reduction and progress towards achievement of the UN Millennium Development Goals? Although employment is not an explicit component of the MDGs, it has a key role in economic and social development.

As labour is the main resource that most poor people are endowed with, labour intensive growth is the most effective way to reduce poverty. Employment is the key source of income, consumption and other material aspects of improved livelihoods. Moreover, it enhances also other dimensions of wellbeing including skills, physical abilities and self-respect."

Access the full issue on-line: Jobs, Jobs, Jobs - The Policy Challenge

Image credit: simonpocock at Flickr under a Creative Commons license.

If you want to know what movies are being shown on flights across the Pacific, ask me or my World Bank colleagues in the East Asia and Pacific region's Disaster Risk Management team. We have been passing one another by plane for the past month and a half. Responsible for coordinating disaster risk management efforts and activities for the region, we are a busy group, no doubt about it.

I have been in China for the past few weeks supporting the country team to appraise a package of support to China for recovery efforts following the May 12, 2008 Wenchuan Earthquake. One colleague participated in the recent Global Facility for Disaster Reduction and Recovery Consultative Group meetings in Copenhagen, Denmark and is now in Jakarta, Indonesia working with field staff, the country’s government, and partners on mainstreaming risk reduction into development programs. Another colleague of mine just returned from the Philippines and Vietnam, where she was stranded by flooding in Hanoi. In fact, she had to wade through knee-deep water when leaving a meeting at the Ministry of Finance. Of course, this represents just part of the team, since we work with a broader network of staff based in country offices who manage country-level programs and projects.

Much has been said lately about the prospects for global institutions to promote media democracy and good governance. The jury is still out, however. How can a diversity of trasnational actors, including intergovernment bodies, donors, UN agencies, civic groups and business, be effective? Are all actors equally positioned? If national governments retain power over key decisions shaping media environments, how do global actors manage to influence opportunities for media pluralism and participation?

Latin America offers an interesting petri dish to examine the germination of regional movements promoting media pluralism.

 As usual on Fridays, from Raj Nallari and Breda Griffith's lecture notes.

Gender and Monetary Policy: Introduction

The monetary system in any country comprises of banks and other financial institutions, such as credit unions, micro-credit schemes, and housing societies.  In more developed countries, stock markets, investment banks, insurance companies and other institutions also take deposits and provide financial services.  Monetary policy instruments are mainly money supply and interest rates, while regulations related to facilitating transactions of payments, assets, debts and credit.
 
The broad objective of monetary policy conducted by Central Bank of a country is to maintain low inflation (that will also ensure low real interest rates) and stable and realistic exchange rates by managing money supply and setting interest rates.  Low inflation, low real interest rates, and realistic exchange rates benefit the poor, while high inflation hampers growth, and the poor are unable to protect their consumption levels.  However, moderate inflation in the range of about 20-30% is observed not to have an adverse effect on GDP growth. But, inflation erodes the real incomes and as such, is harmful to the poor, who already have lower incomes. Overvalued exchange rates harm the living standards of the rural poor who are predominantly women who depend upon agricultural exports.

The global economic and financial crisis continues to unfold. In such an uncertain time, there are a lot of questions and few certainties. Leaders around the world have recognized that the developing world will surely take its fair share of punches. The World Bank, committed to fighting poverty, has announced it will increase lending to help support the developing countries, but what else can it do to help?

On Monday, Danny Leipziger, who heads up a network of 700 economists and professionals working on policy, lending, and analysis for the World Bank’s client countries, will answer your questions in a live online discussion Nov. 24 at 12 p.m. EST. Head over to this page now to submit questions, or check back Monday morning to read his answers.

UPDATED: The time of the live chat has been changed. It will now take place on Nov. 24 at 12:00 p.m. EST.