You might find it hard to believe, but high prices of onions can trigger the fall of the government in India. In 1998, a supply side shock led to a sharp increase in onion prices in the country and most notably, in the state of Delhi. In the following elections, the ruling party was routed in large part due to its failure to control the price of onions in the capital state. Today, onion prices in India are up again, rising by over 100% in just three weeks in December.
For Africa’s poorest families, lighting is often the most expensive item in their budget, typically accounting for 10–15 percent of total household income. The energy poor in Africa spend about US$17 billion a year on fuel-based lighting sources. To put the full energy sector in perspective, independent estimates place worldwide spending on fuel-based lighting in developing countries at $38 billion.
Beyond household use, commercial use of fuel-based lighting can have even more acute economic impacts. Fishermen on Lake Victoria in Kenya, for example, often spend half their income for the kerosene they use to fish at night. Yet, while consuming a large share of scarce income, fuel-based lighting provides little in return. Fuel-based lamps, such as kerosene lamps, are costly, inefficient, and provide poor lighting. The smoke they emit causes respiratory and eye problems, while the flames from kerosene lamps are responsible for thousands of severe burns among children every year, along with untold numbers of devastating house fires.
But many African countries are making strides to put fuel-based power behind them. Kenya, for example, as I discuss in an article this week posted on InterPVNet, has one of the largest and most dynamic per capita solar PV markets among developing countries, with over 300,000 households having installed solar PV systems since the mid-1980s. Since 2000, annual sales for these systems have regularly topped 15 percent, and they account for roughly 75 percent of all solar equipment sales in the country. In addition, exciting and rapid developments in off-grid lighting with highly efficient long-lasting light emitting diodes (LED) lamps are also changing the set of options in formerly neglected markets.
"A great man does enough for us when he refrains from doing us harm.”
- Pierre Beaumarchais, The Barber of Seville, 1775
- Pierre Beaumarchais
Ask small farmers in semiarid areas of Africa or India about the most important risk they face and they will tell you that it is drought. In 2003 an Indian insurance company and World Bank experts designed a potential hedging instrument for this type of risk—an insurance contract that pays off on the basis of the rainfall recorded at a local weather station.
The idea of using an index (in this case rainfall) to proxy for losses is not new. In the 1940s Harold Halcrow, then a PhD student at the University of Chicago, wrote his thesis on the use of area yield to insure against crop yield losses. In the past two decades the market to hedge against weather risk has grown, especially in developed economies: citrus farmers can insure against frost, gas companies against warm winters, ski resorts against lack of snow, and couples against rain on their wedding day.
Rainfall insurance in developing countries is typically sold commercially before the start of the growing season in unit sizes as small as $1. To qualify for a payout, there is no need to file a claim: policyholders automatically qualify if the accumulated rainfall by a certain date is below a certain threshold. Figure 1 shows an example of a payout schedule for an insurance policy against drought, with accumulated rainfall on the x-axis and payouts on the y-axis. If rainfall is above the first trigger, the crop has received enough rain; if it is between the first and second triggers, the policyholder receives a payout, the size of which increases with the deficit in rainfall; and if it is below the second trigger, which corresponds to crop failure, the policyholder gets the maximum payout. This product has inspired development agencies around the world, and today at least 36 pilot projects are introducing index insurance in developing countries.
We’ve read a good deal recently about the democratization of research. UNESCO’s Science Report 2010 showed a growth in the developing-country share of science research. As UNESCO Director General Irina Bokovo put it in her Foreword:
“The distribution of research and development (R&D) efforts between North and South has changed with the emergence of new players in the global economy. A bipolar world in which science and technology (S&T) were dominated by the Triad made up of the European Union, Japan and the USA is gradually giving way to a multi-polar world, with an increasing number of public and private research hubs spreading across North and South.”
We usually think of schooling as a positive learning experience. However, sometimes this is not always the case. As recent news reports in the Hindu and on NDTV from India remind us, unfortunately for some children in low-income countries, schooling can be a nasty, brutal and short experience. They may suffer physical abuse, humiliation and be forced to endure the worst possible learning environments, while returning for the same punishment day after day after day.
Ireland and Portugal are seeing highest levels of emigration of the young and the skilled in decades.
Mobile money transfer is expanding into payment of pensions (M-Pesa in Tanzania) and collaboration with banks (India).
There are ongoing talks between India and UAE to raise the minimum wage of migrant workers.
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Any guesses? You may answer right away or you may be wiser and ask: “Best quality of life depending on what…?!” After all, ranking 192 countries (almost every country in the world) based on their quality of life is not a straightforward task!
Few would dispute China’s importance to the world economy today; from small villages to large cities, its presence is now felt almost everywhere. The Economist recently went so far as to call China “the indispensable economy,” reporting that more and more multinational companies are realizing an increased share of their revenues from inside Chinese borders.
The video posted above is the fourth in a series we are featuring on this blog. The interview was conducted in June, 2010, during a learning event jointly organized by the World Bank Institute’s Governance Practice and CommGAP entitled “The Political Economy of Reform: Moving from Analysis to Action.” Featured in the video is Kapil Kapoor, World Bank Country Manager for Zambia. From the informed vantage point of managing not only a country portfolio, but also webs of relationships among local and international stakeholders, Kapoor cogently argues that donors and development agencies must broaden their view of in-country engagement:
… I think we need to be paying much more attention to civil society groups. Over the longer term, there is no substitute from the people of a particular country putting pressure on their own governments to improve service delivery, to improve accountability, to improve transparency. Often, when such demands come from donors, it’s quite easy for governments to turn around and externalize the issue and say ‘But these are people who’ve got no stake in our economy… they’re outsiders…’