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August 2016

Boon or bane: Trade agreements in Malaysia

Smita Kuriakose's picture

In the past several decades Malaysia has witnessed strong economic growth and has become one of Asia’s newly industrialized countries. In one generation it transitioned successfully from low to upper-middle-income status, due in large part to outward looking policies, trade, and foreign direct investments (FDI) — which contributed to the successful diversification of the economy. Today, Malaysia faces the challenge of escaping the middle-income trap as its productivity slows and it becomes less competitive.
 
Free trade agreements (FTAs) such as the Trans-Pacific Partnership (TPP) and Malaysia EU-FTA bring the potential for greater market access for Malaysia. This new generation of free trade agreements offers opportunities for Malaysia to strengthen reforms beyond tariff reduction, covering commitments such as competition and investment policies, non-tariff measures, intellectual property rights, labour standards, and opening up government procurement for competition.  With a market-friendly government and a strong track record of reforms, there are new opportunities for reinvigorating structural reforms to support private sector-led economic growth. Accelerating productivity growth is a key element of the 11th Malaysia Plan, which aims to bring Malaysia to high income status by 2020.
 

Cambodia is now a lower-middle income economy: What does this mean?

Sodeth Ly's picture
Two decades of economic growth have helped make Cambodia a global leader in reducing poverty.
The success story means the Southeast Asian nation that overcame a vicious civil war now is classified as a lower-middle income economy by the World Bank Group (WBG).
 
The new classification this year is based on thresholds set by the WBG in a system with roots in a 1989 paper that outlined the methodology. The table below shows the different levels of classification based on Gross National Income (GNI): 
 
Threshold GNI in July 2016
Low-income <$1,025
Lower-middle income $1,026 - $4,035
Upper-middle income $4,036 - $12,475
High-income > $12,476
 

Time to think differently: How to help the internally displaced in Georgia

Ewa Sobczynska's picture
In the early 1990s and 2008, secessionist conflicts led to the internal displacement of 6 percent of Georgia’s population, making it one of the countries with highest incidences of internal displacement.
 
We tend to think that the displaced will be able to go home soon, but in reality, they remain displaced for years. A total of 246,974 men, women and children from the Georgian regions of Abkhazia and South Ossetia are still unable to return, now living in the capital city of Tbilisi and in smaller urban and rural areas close to their regions of origin.
 
Mother and baby
Mother and baby in Tbilisi. (Photo: World Bank)

After more than 25 years since the first wave of displacement, Georgia’s internally displaced are a diverse group. Some live in independent private housing, are employed and have managed to provide good education to their children. Others continue to live in collective centers, are spatially and socially isolated from the rest of the population, and have been chronically poor and unemployed since they became displaced.

While meeting the immediate needs of the displaced is important at the outset, such changes over time suggest that we need to think differently about how better to support them in the long term.
 
One example is the monthly benefit of 45 Lari (approximately 20 USD) provided to all internally displaced citizens by the Georgian government, regardless of their levels of poverty or employment. Some of the country’s poor, who have not been displaced, have begun to question this benefit.
 
After all, why should someone who is not poor, receive such support?
 
In 2014, the Government of Georgia asked the World Bank to study this question. Should the benefit for the internally displaced be adjusted, and what are the implications, including social and poverty impacts? Here are some of the main observations from the report, Transitioning from Status to Needs Based Assistance for IDPs: A Poverty and Social Impact Analysis, which our team prepared: 
  • Georgia’s displaced and non-displaced are equally likely to be poor. However, the displaced tend to rely on social transfers, remittances, and informal jobs, and are more likely to be unemployed for long periods of time. Those in rural area have significantly less information, opportunities for employment, or access to good quality education and services.
  • Those who still live in non-renovated, public collective centers experience inadequate living conditions. These households are often socially isolated, separated from friends and family and unable to form ties in uncertain housing conditions. Regardless of income, these households remain extremely vulnerable.
  • The displacement "status," – i.e., formal recognition of having been displaced from a conflict area – has a strong symbolic and political value among the entire Georgian population. To the displaced it signifies hope of returning to their homeland. To others it signals the state’s commitment to reintegrating the two occupied territories. For many – rich or poor – holding this status is a matter of dignity.
Research confirms the diverse economic and social situations of the displaced. It also recognizes the political difficulties of removing such a symbolically important benefit, or targeting it exclusively to the poor.
 
But given fiscal constraints in Georgia, providing benefits to those that do not necessarily need them is problematic in the long term. In this regard, the report supports the eventual phasing out of the benefit, already initiated by the Georgian government, while taking steps to help those in need, with the following recommendations: 
  • Livelihoods support is essential especially for households at risk of falling into poverty, with activities that are tailored to the diverse needs of this population, their skills and  location. Access to land for those in rural areas with agricultural skills, and access to finance and training for those who are entrepreneurial, are two activities that could work well with these groups.
  • Addressing housing conditions and supporting access to private housing is important. Currently, 80 percent of government assistance for the internally displaced goes for housing. These resources could gradually be reallocated towards livelihood assistance for the poorest. 
  • The poorest households, eligible for social assistance, should be encouraged to apply to the Targeted Social Assistance program – the regular social assistance program for vulnerable Georgians.

It is perhaps most important to ensure that the population, both displaced and not, understands why these reforms are necessary. The time has come for an adjusted approach, so that scarce resources can be used more effectively to benefit those in need, especially the poor and vulnerable.
 

Refugee team carries bittersweet message to the world

Farhad Peikar's picture
Also available in: Español

Thousands of spectators rippled to their feet while millions of others around the world joyfully watched live images on TV as the first-ever Refugee Olympic Team (ROT) marched in Brazil’s Maracanã Stadium for the Opening Ceremony. Comprised of five South Sudanese runners, two Congolese judokas, two swimmers from Syria and a marathoner from Ethiopia, the six male and four female athletes were selected from a pool of 43 possible candidates.  Their inclusion was one of the top feel-good moments of the 2016 Olympic Games in Rio because the 10-athlete-team not only carried the Olympic flag, but also a message of hope for millions of young people that have been driven from their homes.
 
However, while there is much to celebrate and many to praise for this unprecedented and historical initiative in the world of sports, in an ideal world such a team should not exist at all. The few joyful moments - compounded with our cheers - should not obscure the realities of unmatched human suffering in refugee camps worldwide. The very existence of such a team reminds us that the world has collectively failed over 65 million displaced people in helping them return home or find a new place to call their permanent home. These athletes represent a community that is running away from regional conflicts, civil wars, aggressions, genocides, famines, poverty, and diseases— some of which are so deep-rooted that finding viable solutions seems elusive.

Media (R)evolutions: Film industry will grow in coming years- mostly in Asia Pacific

Roxanne Bauer's picture

New developments and curiosities from a changing global media landscape: People, Spaces, Deliberation brings trends and events to your attention that illustrate that tomorrow's media environment will look very different from today's, and will have little resemblance to yesterday's.

The film industry will see a great deal of movement and huge shifts in audiences over the next five years, but will be strong overall. Much of the growth will be attributable to a 12% growth rate in the Asia Pacific region.  Predominant areas of growth will include box office revenue, electronic home entertainment, event cinema, and local-language production throughout the world.  Video game adaptations are also growing rapidly. For example, Universal Pictures released “Warcraft” in the U.S. on June 10, garnering dismal reviews and only $45.9 million at the box office since then, while in China the film made $65.1 million in its opening weekend and a total of $ $219.7 million by the end of June, where it was supported by an elaborate marketing campaign. Thanks to these robust Chinese earnings and another $412.6 million world-wide it became the highest grossing film adaptation of a videogame ever.

This graph shows strong growth across the film industry, according to PricewaterhouseCoopers' annual Global Entertainment and Media Outlook and reported in The Hollywood Reporter.


Progress creates opportunities to address exclusion: Observations from the 4th LGBTI Human Rights Conference

Nicholas Menzies's picture
Foto: Andrés Scagliola, Intendencia de Montevideo
Photo: Andrés Scagliola, City of Montevideo

While many of the struggles that LGBTI people face are all too familiar – violence, stigma, discrimination – we’ve just returned from the fourth Global LGBTI Human Rights Conference in Uruguay full of stories of positive change.  We’re invigorated about the increasing potential for the Bank to be a valuable partner to our clients and LGBTI citizens around the world.

Modernizing weather forecasts and disaster planning to save lives

Lisa Finneran's picture

© Angela Gentile/World Bank

Is it hot outside? Should I bring an umbrella?
 
Most of us don’t think much beyond these questions when we check the weather report on a typical day. But weather information plays a much more critical role than providing intel on whether to take an umbrella or use sunscreen. It can help manage the effects of climate change, prevent economic losses and save lives when extreme weather hits. 

Poverty and exclusion among Indigenous Peoples: The global evidence

Gillette Hall's picture
Flower Hmong women, Bac Ha market, Vietnam. Photo: Tran Thi Hoa/World Bank
There are about 370 million Indigenous people in the world today, according to estimates. Present in over 90 countries, indigenous communities represent about 5% of the world’s population but make up 15% of the world’s extreme poor, and 1/3 of the rural poor. They live, own and occupy approximately one quarter of the world’s lands and waters which represents 80% of the world’s biodiversity. But research shows they are just as much urban as they are rural. According to a recently published report Indigenous Latin America in the Twenty-First Century, nearly half of Latin America’s indigenous population now live in urban areas. Wherever they live, Indigenous Peoples face distinct pressures, including being among the poorest and most marginalized in their societies.
 
Where are these 370 million people, who are they, and why they are so overrepresented among the poor?
 
Only about 8% of the Indigenous Peoples around the world reside in Latin America, a far smaller number than most people surmise. On the other hand, over 75% live in China, South Asia and Southeast Asia, according to World Bank’s first global study of poverty among Indigenous Peoples across the developing world, Indigenous Peoples, Poverty, and Development

Moving toward financial inclusion in East Asia and the Pacific

Leora Klapper's picture

Surging account ownership among the poor. The highest rate of account ownership among women in developing countries. Widespread formal saving.

Those are some of the key financial inclusion trends in East Asia and the Pacific, as outlined in a new policy note drawing on the 2014 Global Findex database.

Since 2011, about 700 million adults worldwide have signed up for an account at a formal financial institution (like a bank) or a mobile money account. That means 62 percent of adults now have an account, up from 51 percent three years ago.

East Asia and the Pacific made an outsized contribution to this global progress. About 240 million adults in the region left the ranks of the unbanked; 69 percent now have an account, an increase from 55 percent in 2011 (figure 1). Poor people led the regional advance, as account ownership among adults living in the poorest 40 percent of households surged by 22 percentage points — to 61 percent. Much of the growth was concentrated in China — which saw account penetration deepen on the bottom of the income ladder by 26 percentage points — but China was hardly alone. In both Indonesia and Vietnam, account ownership doubled among adults living in the poorest 40 percent of households.

Grievance Redress Mechanism: A case of Nepal’s Hello Sarkar

Deepa Rai's picture

A section of a footpath is swept away by landslide near the international airport in Kathmandu, Nepal. The roads are slippery and difficult to walk on or even drive due to potholes and delayed maintenance in the valley. These are just few difficulties that I endure during my everyday commute, but what do I actually do about it? I complain about it with my friends, we all nod in agreement and we get on with our everyday chores.

Pranish Thapa, on the other hand, is an exception. A 17 year old student, he has complained on issues ranging from public infrastructures, abuse of power, the quality of education, good governance or the lack of it, etc... His complaints have gone beyond 3000 over the last five years. He lodges his grievances through Hello Sarkar, which literally means Hello Government in Nepali.

Pulled by the abstract of the event organized by Martin Chautari, I decided to see how the case of Grievance Redress Mechansim (GRM) is working in Nepal. The event information stated: Hello Sarkar aims at making the government more accountable to the people by addressing citizens’ grievances on public service delivery directly. It is located at the heart of the state machinery, the Office of the Prime Minister and the Council of Ministers. Concerned citizens can approach the system via phone (toll-free number- 1111), mobile texts, email, social media or website.


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