The Proposition: "Can state-owned banks play an important role in promoting financial stability and access?"
The other day, my colleague Roger Gorham, a transport economist working in Africa, shared with me an interesting story. He was in Lagos, meeting with stakeholders about setting up public-private partnerships for transport initiatives. One meeting revealed that, in an effort to improve service, a private entity had invested in new taxis for Lagos and in each had installed a GPS unit. This little revelation may not seem interesting, but it was very exciting to Roger, who also learned that the company has amassed more than 3 years of GPS tracking data for these taxis (which, incidentally, troll the city like perfect probes, nearly 24 hours a day, 7 days a week) and that this data could be made available to him, if he thought he might make some use of it.
Now, if you are reading this blog, chances are that you realize that with this kind of data and a little analysis, we can quickly and easily reveal powerful insights about a city’s transport network – when and where congestion occurs, average traffic volumes, key traffic generators (from taxi pick-up point data), occurrence of accidents and traffic blockages in real time, and even the estimated effects of congestion and drive cycle on fuel efficiency.
As Roger said, “They are sitting on a gold mine and don’t even know it….”
We opened our data
When we opened our data at the World Bank last April, we were excited by the possibility of users coming up with applications and uses of development data that we would have never come up with ourselves. What we did not expect, however, was the scale of response, creativity, and energy from the software development community, researchers, and other user groups from so many parts of the world.
We challenged developers
The Apps for Development competition challenged developers globally to apply their creativity, talents, and insights about social and economic indicators to create tools, games, or analysis that would help people better understand how to use large data sets to address development problems.
"One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors."
Remittances are recovering...
After steep declines in 2009, remittances to Central Asian countries Azerbaijan, Tajikistan, and Armenia are seeing healthy recovery. Kenya also saw a 17% jump in remittances in November 2010.
- weekly news
Earlier this month, I was invited to be a keynote speaker on the theme of "Education for Economic Success" at the Education World Forum, which brought education ministers and leaders from over 75 countries together in London.
Education is fundamental to development and growth. The human mind makes possible all development achievements, from health advances and agricultural innovations to efficient public administration and private sector growth. For countries to reap these benefits fully, they need to unleash the potential of the human mind. And there is no better tool for doing so than education.
A new paper by Laurence Chandy and Geoffrey Gertz at the Brookings Institution reports a remarkable acceleration in the pace of progress against absolute poverty since 2005, as can be seen in Figure 1 of their paper (found here). This would be great news if it could be believed, but there are reasons for doubt.
In “updating” the World Bank’s estimates using the Bank’s PovcalNet site, Chandy and Gertz have relied heavily on forecasts rather than estimates based on new surveys. Household surveys are the only credible method of measuring poverty. The technology has improved, but naturally the data take time to collect and process. We still do not have sufficiently recent surveys for many countries, especially in Sub-Saharan Africa, the region with the highest overall poverty rate. The next edition of the World Bank’s regular three-yearly updates of its survey-based estimates of global poverty measures is scheduled for release later this year, and will go up to 2008, and revise consistently back to 1980. (Information on the last update can be found here. The paper documenting the methods and testing their robustness can be found here.)
The annual BETT Show, which takes place every January in London, claims to be the "world's largest education technology exhibition and trade show", with over 600 exhibitors and 100 seminars. Those who visit it are typically overwhelmed by the vast scale of the exhibition space at London-Olympia, by the big crowds, and, for lack of a better term, all of the cool stuff. As in past years, I was fortunate to be able to participate in the Education World Forum (EWF), an annual gathering of 60+ education ministers that occurs during the two days before BETT begins (the last morning of the Forum actually takes place at BETT itself), and so was able to stay on and tour the BETT exhibition space. As in previous years, my goal was to visit every vendor and exhibitor.
In case it might be of any interest, and like I did back in 2009, I thought I would share some random impressions (ten of them, in fact) from this tour below:
When the government of Uganda released a report ranking the Police Force as the most corrupt institution in Western Uganda, a native NGO called the National Foundation for Democracy and Human Rights (NAFODU) responded with a series of measures to bring changes in the ways the Police Force is operated in order to restore public trust and confidence in the institution.
Damien’s earlier post called into question one commonly-held view of the cause of the spread of HIV in Africa, namely male promiscuity.
A paper by Pauline Leclerc and others (hat tip to Mark Gersovitz) seems to show that there is even greater uncertainty. Leclerc and co-authors tried to simulate the dynamics of the epidemic in Zambia but found that the parameters needed to fit epidemiological models were beyond what the data would allow.
In short, thirty years later, it appears as if we still don’t know what caused the disease to spread the way it did on the continent. Perhaps there is no single set of causes, and that the evolution of the disease is different in different parts of Africa. Perhaps we should move beyond epidemiological models and look to other disciplines for the answers.
At any rate, to fight the epidemic effectively, we need to know how and why it became an epidemic.
These are some of the views and reports relevant to our readers that caught our attention this week.
"People who argue for more transparency in development cooperation are often eager to point out all the merits of transparency. Unfortunately, often we are not very sure whether our claims are well founded. Even worse, there are very few examples who can illustrate how exactly, "more transparency" could look like. The International Aid Transparency Initiative which will be implemented by the first donors in 2011 is a concrete example of governmental and multilateral donors representing a large percentage of global ODA making aid information available and accessible.
Also, in non-governmental development cooperations efforts are underway to increase accountability and transparency. The UK-based NGO OneWorldTrust even created a website to map over 300 NGO accountability initiatives around the world. But there are few concrete examples of making the information about work of more than one NGO transparent and easily accessible."
In a blog post some weeks ago, I talked about how chance events can end up shaping our entire lives—and sometimes the lives of others too.
An unmistakable sense of achievement and enthusiasm emanated through the halls of the 7th South Asia Economics Student Meet held in Colombo, Sri Lanka last month. The theme of Economic Freedom and Poverty Reduction in South Asia brought together 192 of the top economics undergraduates from universities throughout the region to showcase their economic knowledge and talent.
Demonstrating superior knowledge, creativity, and critical thinking skills; the participants exchanged ingenious ideas in exploring creative solutions to regional economic challenges while making new friendships to pave the way for greater mutual learning as emerging leaders and future policy makers.
Students from universities in Bangladesh, India, Nepal, Pakistan, and Sri Lanka participated in the 3-day conference focusing on economic freedom. As Professor Bishwambher Pyakuryal from Tribhuvan University in Nepal noted, “countries with higher degrees of economic freedom also tend to have higher incomes and levels of development.”
When Chinese president Hu Jintao visited the US this month, many issues made headlines, but one that didn’t is nonetheless important: clean energy cooperation, competition, or both. This issue is a litmus test for the two superpowers’ ability to build a partnership based on mutual needs and opportunities. The outcome will affect our global economic, environmental and geopolitical future, and may influence the range of clean energy opportunities for emerging economies in fundamental ways.
Cooperation does exist between the US and China, with longstanding joint work on energy efficiency standards, and through a new but underfunded US-China Clean Energy Research Center. But the game has to be raised with higher-profile actions. Far more can be gained globally if a spirit of cooperation permeates the high-level political dialogue. These are not the only two nations to watch, but because they are the two largest emitters of greenhouse gases, and the two largest economies on the planet, signs of a shared vision of the future would mean a great deal.
The two countries need each other to build the clean energy economy. China needs energy to grow, and can drive the exponential growth needed to move renewable energy to the center of the global energy system. The US has a nimble and deep research and development system, and serial innovators and entrepreneurs whose Silicon Valley mentality has created wealth many times over. US capital market and enterprise management capacities are huge.
Small and medium-size enterprises (SMEs) account for close to 60 percent of global manufacturing employment. So it is no surprise that financing for SMEs has been a subject of great interest to both policymakers and researchers. More important, a number of studies using firm-level survey data have shown that SMEs perceive access to finance and the cost of credit to be greater obstacles than large firms do—and that these factors really do constrain the growth of SMEs.
In recent years a debate has emerged about the nature of bank financing for SMEs: Are small domestic private banks more likely to finance SMEs because they are better suited to engage in “relationship lending,” which requires continual, personalized, direct contact with SMEs in the local community in which they operate? Or can large foreign banks with centralized organizational structures be as effective in lending to SMEs through arm’s-length approaches (such as asset-based lending, factoring, leasing, fixed-asset lending, and credit scoring)? And how well do state-owned banks—for which expanding access to finance is often among their top objectives—serve SMEs?