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September 2016

Campaign Art: Reducing poverty through education

Davinia Levy's picture
People, Spaces, Deliberation bloggers present exceptional campaign art from all over the world. These examples are meant to inspire.
 
Education is one of the most powerful tools to reduce poverty and combat inequality. According to UNESCO’s Global Education Monitoring Report: universalizing secondary education completion in low income countries by 2030 would increase per capita income by 75% by 2050 and bring poverty elimination forward by 10 years.

The Asian Institute of Management, an international management school based in Manila, Philippines, published the video below to illustrate how increased education translates into increased earnings and better functioning societies.
 
Towards Zero Poverty in the Philippines Project

3 hindrances to expanding pensions in Kenya

Rose Kwena's picture



Did you know that in Kenya less than 15% of the population is covered with old age security? This means that many Kenyans are facing a vulnerability of retiring into poverty. But this is not accidental since established factors identified in studies commissioned by Retirement Benefits Authority (RBA) necessitate this situation.  

However, Kenya is starting to tackle some of these factors and to help increase pensions coverage to reach more Kenyans to help reverse the state of affairs.

1. A chief factor limiting pension growth is that the formal sector is creating fewer jobs. Despite the positive economic growth registered in the country, employment growth in the formal sector is slow. For example, only 128,000 out of the 841,600 new jobs created in 2015 were formal. This has a direct effect on the pension services since the structure of the industry is still highly biased towards the formal employment model.
Transactions that facilitate employers and employees to contribute are generally conducted from the pay slip, and formal employers adhere more to the regulations and legislation on the issue compared to those who operate informally. As a result, millions of citizens have been cut off from the pension system.   

Luckily, this gap is slowly being narrowed by Individual Pension schemes that are specifically targeting the informal sector workers. An example of this is the Mbao pension scheme. The Plan is an inventive idea that adapts a savings product to marginal population groups and contributes to their improved social and economic security.

Growing the ‘economic pie’ in Armenia

Laura Bailey's picture
In earlier posts, I highlighted the importance of creating equal opportunities for all of Armenia’s girls and boys – to learn, to grow, and to choose the ways in which they can contribute to their economy, their society, and their country. I believe that a more diversified and resilient economy, with a fuller range of options for both men and women, can help slow outmigration and ‘brain drain’, and help Armenia grow in a sustainable way.

In addition to our discussions here in Armenia about encouraging women’s participation in the labor market, we’ve also been talking about the ways in which men’s lives and livelihoods are disadvantaged, such as the persistent higher mortality rate for men throughout their adult years. And, we’ve been wondering: how do dynamics like these affect the economy and society as a whole?

Chart: High-Tech Exports on the Rise in South Asia

Erin Scronce's picture

 

In South Asia, high-tech exports comprise a much larger share of total manufactured exports today than they did in 1990. In fact, the percentage of high-tech exports more than doubled between 1990 and 2014, and have been trending upwards for the past 3 years. Aircraft, computers, and pharmaceuticals are all examples of high-tech exports, which rely on large outlays of research and development. As South Asia seeks to become more globally competitive, these industries can help propel the region's countries into middle-income levels.

Find more trade data from South Asia
Read the latest trade news and research from the World Bank Group 

To trade or not to trade elephant ivory? That’s going to be the question.

Quy-Toan Do's picture

Quy-Toan Do (World Bank), with Andrei Levchenko (University of Michigan) and Lin Ma (National University of Singapore)
As the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) convenes its 17th Conference of the Parties later this month, the elephant conservation policy space continues to be polarized, with some countries advocating for a continuation of the complete ban on international legal trade in ivory while others, such as Namibia and Zimbabwe proposing to resume a regulated international trade in their legal ivory stocks. The legal ivory trade is generally opposed by countries with small or declining elephant populations that are against the consumptive use of wildlife. They fear that a legal trade will increase demand for ivory and thereby increase poaching in their countries. On the other hand, the legal trade is supported by countries with stable or growing elephant populations, who believe in sustainable consumptive use. They feel that a continued ban on the ivory trade penalizes them for their conservation successes and removes an important incentive for the conservation of elephants and other wildlife and their habitats by providing funding for management and incentives to local communities.

Some regions within countries are lagging behind. What can we do about it?

Sangmoo Kim's picture
Extremes of wealth and poverty in Dhaka, Bangladesh.  Photo by Laura Elizabeth Pohl / Bread for the World via Flickr CC
Extremes of wealth and poverty in Dhaka, Bangladesh.
(Photo by Laura Elizabeth Pohl / Bread for the World via
Flickr CC)
Many developing economies have experienced fast growth in recent years. With such growth comes an increasing spatial concentration of economic activity—as documented in the World Development Report—leading to rapid urbanization in those economies.

While some cities have grown, others still lag behind. Such inequalities in development are usually characterized by weak economic performance, low human development indicators, and high concentration of poverty. For example, Mexico achieved incredible growth as a nation, yet per capita income in the northern states is two or three times higher than in the southern states. Disparities in other social and infrastructure metrics are even more dramatic.

Understanding institutional investors for infrastructure – The collaborative model

Rajiv Sharma's picture


One of the key objectives for our research program at the Stanford Global Projects Center is to understand how the largest sources of capital in the world can be channeled into critical infrastructure and development projects most in need of it. In particular, we focus on long-term institutional investors (pension funds and sovereign wealth funds) and private development firms at one end of the spectrum, and government procurement agencies and departments at the other. We are essentially trying to assist in overcoming a number of inefficiencies that seem to be apparent in linking the original source of capital to projects on the ground. In this blog post, we would like to highlight some of the latest trends and issues confronting the institutional investor space; in subsequent blogs, we will showcase some of the work we have done at the government procurement level to facilitate investment.

Does superior information make us more discerning? What Uber drivers can teach us about learning and rationality

Roxanne Bauer's picture

In 1957, Herbert A. Simon (Nobel Prize in economics 1978) introduced the concept of bounded rationality that recognizes that in decision making, human rationality is limited by the information we have, our own cognitive biases, our training and experience, and the finite amount of time we have to make a decision. Individuals and firms do the best they can with the information they have, and since they don’t have time to evaluate and rationally pick the optimal solution, they simplify their choices and go with one that is satisfactory rather than rationally optimal—this is called stastificing.

Behavioral economics accounts for this by attempting to incorporate psychological insights. While most economists agree that there are some limits to the reasoning capabilities of individuals and firms, there has been much discussion about where and how to account for bounded rationality.  On the spectrum between perfect rationality and the total absence of it, where are humans?

To explore this question, let’s take a look at cabdrivers and Uber drivers.

Djibouti: Where forced displacement and migration meet

Varalakshmi Vemuru's picture
Also available in: Español
In the context of the upcoming UN High Level Meeting on Addressing Large Movements of Refugees and Migrants, this blog offers a field-level perspective from Djibouti on refugee and migrant movements. To prepare the Development Response to Displacement Impacts Project, I visited the Ali Addeh refugee camp in Ali Sabieh region, which has been hosting predominantly Somali refugees for over two decades now, and Obock town, which is hosting Yemeni refugees in Merkazi refugee camp following the 2015 crisis, and Horn of Africa migrants in town.  
 
At Ali Addeh, we were confronted with two startling realities. The first was that consequent droughts had led to a depletion in the livestock ownership of local host pastoralist populations. This left them more vulnerable and impoverished than the refugees in the camps. A refugee woman, fetching fuel wood, emphasized that local host communities needed urgent development support and interventions.
The port of Obock, where the journey begins. (Photo: Benjamin Burckhart)
The second reality was the near absence of the age group of 16-30 year olds, both boys/men and girls/women, in both the refugee camp and among host communities. Discussions revealed that this group saw limited economic opportunities in the local environment and had moved to the capital city pursuing low skilled informal jobs with low remuneration. When we tracked these youth, we found that many were stranded in "Balbala," a shanty town adjoining Djiboutiville, the capital city. Poor skills and lack of resources had left them more vulnerable than before. Some of course had made an onward journey to Obock to explore a journey to the Middle East and Europe.

A visit to Obock town in Djibouti brought to fore another stark reality but this time at the regional level of the Horn of Africa (HOA). In 2015 nearly 100,000 people – nationals from the different HOA countries and inhabitants of refugee camps in the region – had traversed the harsh Djiboutian terrain, where deaths by dehydration is common, to reach Obock. The town is considered the gateway to Middle Eastern countries with Yemen being the first and closest destination.

Consultations with the International Organization for Migration (IOM), United Nations High Commissioner for Refugees (UNHCR), local government staff, local community members and migrants themselves, revealed to us that despite the conflict in Yemen and the reverse movement of people into Djibouti, there wasn’t a significant drop in the number of youth attempting the onward journey. The only thing that had changed was the time it took for these migrants to leave the Djiboutian shores for Yemen – the increased cost of the boat ride across the Bab el Mandeb Strait linking the Horn of Africa to the Arabian Peninsula – had resulted in migrants working odd jobs in Obock to put together this additional money.

A visit to IOM’s Migration Response Center brought us face to face with a number of migrants. Some were undergoing medical treatment for injuries sustained and/or diseases contracted either during the journey to Djibouti, or
IOM Migration Response Center in Obock. (Photo: Benjamin Burckhart)
while in Yemen and caught in the conflict. Over 3,300 African migrants have died since 2006, through unsuccessful efforts at crossing into Yemen across treacherous waters. Others were awaiting the processing of their papers to be sent back to countries and communities of their origin. There was essentially an assemblage of battered bodies and broken spirits.
 
For us, the situation brought into sharp focus the debate at the global, regional and national levels on delineating the causes and consequences of forced displacement versus voluntary and involuntary migration for the HOA. In Djibouti, there are various patterns of movement. Internal displacement of Djiboutians moving from rural to urban areas is attributed to droughts. Youth, both refugees and locals, are moving from underdeveloped regions of Djibouti to cities in search of better lives and economic opportunities. Movement of people especially youth from Djibouti and other HOA countries to the Middle East via Obock and Yemen is motivated by again, the search for a better life.

These movements within and through Djibouti, regardless of whether it is considered forced displacement as the result of conflict and persecution, or migration have more commonalities than differences in terms of costs – the hardships faced by those attempting these movements; the vulnerability to physical, sexual and psychological exploitation; trauma, disease and death; and shattered dreams and broken spirits. The commonalities also extend to solutions – investments in countries and regions to enhance opportunities for social and economic well-being for local communities, especially the youth, and efforts to enhance skills and competencies to enable safer and facilitated migration to mitigate the vulnerability.

The specific case of Djibouti, that is one among many others, therefore exemplifies the crossing of and even the merging of forced displacement and migration paths over time. The motivation for the refugees and migrants to move, and routes used are similar, with refugees from Ali Addeh becoming economic migrants by moving out of Djibouti, their first country of asylum.

These realities from the ground demand a pause and reflection on what sustainable and durable solutions can be proposed, as we work to strengthen collaboration between development partners, humanitarian agencies, country governments and regional organizations.

Opening markets: Mexico uncovers and slashes local barriers to competition

Marialisa Motta's picture

In the state of Chiapas, Mexico — where nearly 1 million people live in moderate to extreme poverty — bus fares have been too high, and the availability of buses has been limited. Over four years, consumers on a single route have paid $2.5 million more than necessary. Tortillas in states across Mexico are more expensive than they need to be. In one state, firms overcharge for road construction by an estimated 15 percent, making it difficult to provide the high-quality transport services for cargo and construction materials that are necessary to build a logistics hub to diversify the state economy beyond petroleum. Another state has a very dynamic economy, hosting a greater density of industrial parks than comparable states. Given the positive spillover effects — industrial activity boosting local employment, demand, and purchasing power — the state expected growth in retail markets. Yet, stores have not been opening. Yet another state relies on tourism to generate business opportunities and jobs, including for poor people. However, until recently, tourists found that commercial establishments in the state’s primary municipality closed in the evenings and at night, often preventing them from going shopping.
 
What do these examples have in common? Local barriers to competition.

In the past few years, the Mexican Federal Competition Authority (COFECE) and Better Regulation Authority (COFEMER), internationally recognized institutions, as well as the World Bank Group, have pointed out that subnational regulations restrict competition in local markets. In many municipalities in Mexico, regulations and government interventions allow market incumbents to deny entry to new firms, to coordinate prices, to impose minimum distances between outlets, or to grant incumbents exclusive rights to artificially protect their dominant position. In total, a lack of vigorous marketplace competition costs the Mexican economy about one percentage point of GDP growth each year – a shortfall that affects the country’s poorest households by an estimated 20 percent more than its richest households. Most countries, however, have never systematically scrutinized local barriers to competition.


 
To address such issues effectively, competition policy experts from the World Bank Group’s Trade & Competitiveness Global Practice have developed an innovative tool – the Subnational Market Assessment of Competition (SMAC) – to systematically identify, prioritize and support the removal of local barriers to competition. (The SMAC is built from the World Bank Group Markets and Competition Policy Assessment Tool, or MCPAT.) The World Bank Group designed the SMAC to prioritize the reform of the rules and practices that most severely prevent healthy competition in the primary sectors for each state’s economic development.


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