An increasing number of countries are developing national strategies for financial education and implementing programs to enhance people’s financial capability. At least 36 countries have already established or are in the process of designing a national strategy for financial education according to the OECD. Boosting people’s ability to take sound financial decisions has emerged as a new policy objective, both in developed and developing countries. The recent financial crisis has reinforced the view that being financially capable is important. However, let’s take a step back. What do we know about how capable people are in different countries across the world in managing their finances? Which knowledge and skills gaps exist that could be filled with financial capability enhancing programs? Which populations are the least financially knowledgeable and capable and would benefit the most from any interventions?
Emerging Europe and Central Asia (ECA) is an interesting region because what you expect is not always what exists. Since this is written in honor of International Women's Day, discussing women’s labor market participation seems appropriate. The standard indicator used for this is the “female labor force participation” (LFP) rate, which is the proportion of all women between 15-64 years who either work or are looking for work.
Since much of the region has a common socialist legacy, you would expect to see similar labor market behavior among women. However, the proportion of women who work ranges from a low of 42 percent in Bosnia and Herzegovina to 74 percent of adult women in Kazakhstan. And it wasn’t 20 years of social and economic transition that led to this divergence. Even in 1990, the range was about the same. The exception was Moldova which saw a 26 percentage point decline.
- Russian Federation
- Kyrgyz Republic
- Bosnia and Herzegovina
- Europe and Central Asia
- Labor and Social Protection
- Social Development
- Macroeconomics and Economic Growth
- labor market
- international women's day
Eleven of the less prosperous members of the European Union – Bulgaria, Croatia1, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic, and Slovenia (EU11)—have remained attractive destinations for Foreign Direct Investment (FDI). The Czech Republic, Estonia, and Slovakia witnessed FDI levels in 2012 similar to pre-crisis levels. Poland and Bulgaria also experienced large gains in FDI in 2012.
Financial Markets…US treasuries gained and the benchmark 10-year bond yield edged down 1 basis point to 1.66%, after rising as high as 1.7% earlier, while the 30-year bond yield slid by 2 bps to 2.83% in early Friday session after a government report on wholesale price in September showed domestic inflation remained muted.
The euro advanced 0.3% to $1.297 after dropping to a 10-day low of $1.283 yesterday, and it gained 0.4% to 101.7 yen amid speculation that a downgrade of Spain’s sovereign rating would put pressure on the government to finally request a sovereign bailout.
Spanish government bonds rose and 10-year Spanish bond yields fell 9 basis points to 5.67%, gearing for the lowest level in nearly a month, on the prospect of European Central Bank intervention to support its debt.
High-income Economies…Euro Area industrial production rose 0.6% (m/m) in August, the same pace as that recorded in July, with increases in France (+1.5% m/m), Italy (+1.7%), Spain (+1.3%), and Greece (+2.5%) offsetting a 0.4% fall in Germany, Eurozone’s largest economy. Despite the monthly increase, Euro Area industrial output was 2.9% lower in August compared to the same month in 2011.
The US Thomson Reuters-University of Michigan consumer sentiment index rose to 83.1 in October, the highest in five years, from 78.3 in September as consumers’ optimism about the overall economy improved.
US producer prices rose 1.1% (m/m) in September following a 1.7% rise in August, mainly due to an increase in gasoline prices. On a year-on-year basis, however, overall PPI inflation edged up to 2.1% from 2.0% in August. Core PPI which excludes food and energy remained flat compared to the previous month.
France’s current account deficit widened to 4bn euros in August from 2.6bn euros in July, as the trade deficit rose with an increase in energy-led imports offsetting an improved exports performance.
The Netherlands’ trade surplus narrowed to 2.2bn euros in August from 2.95bn euros in July, as imports rose +2.2% (m/m) from robust domestic demand, while exports fell 0.5%.
Singapore's GDP growth slowed to 1.3% (y/y) in the third quarter from 2.3% recorded in the second quarter, pulled down by a 1.5% (q/q) contraction driven by a decline in the manufacturing sector’s electronics cluster due to weak external demand.
Slovakia’s consumer price inflation eased to 3.6% (y/y) in September from 3.7% in August led by a slower pace of increase in utility prices.
Developing Economies…Bulgaria's consumer price inflation accelerated to 4.9% (y/y) in September from 3.9% in August, partly due to a sharp increase in food and fuel prices. Prices continue to advance rapidly in the second half of 2012 following an earlier period of decline.
India’s industrial production increased 2.7% (y/y) in August following a 0.2% contraction in July, led by a 5% growth of consumer goods production. India’s consumer price inflation eased to 9.7% (y/y) in September from 10.0% in August driven by a small decline in food inflation.
Malaysia's industrial production declined 0.7% (y/y) in August following a 2.9% increase in July, as manufacturing sector continued to struggle in the face of weak external demand.
Mexico’s industrial output growth slowed to 3.6% in August from 4.9% (y/y) in July, pulled down by a 0.8% (m/m) contraction in August, mirroring industrial developments in the United States.
The central banks of Indonesia, Peru and Singapore held their respective policy rates unchanged this week.
Imagine you need a car to commute long distances to your workplace or the closest supermarket, to visit your parents and to bring your child to school. Therefore, you want to spend the money you have been able to put aside on a large purchase: a new and reliable car. However, you do not know how to drive, nor how do you have even a basic understanding of any technical aspects of a car, not to mention any knowledge about how to maintain a car.
Also, imagine that everything you have heard so far about car dealers from your family, friends and neighbors is that they have a very bad attitude, do not act in your best interest and try to sell you overpriced vehicles with hidden fees and features you do not need. Given your lack of knowledge of how to choose and use a car and your lack of trust, would you still feel confident about approaching a car dealer? Most probably not.
This analogy also applies to one’s participation in financial markets. Especially in developing economies, where most globally unbanked people live. If you do not have knowledge of features and risks associated with financial products, do not know how to choose and use these products, lack any basic understanding of inflation, interest rates and compound interest, it is unlikely that you will participate in financial markets, or that you will benefit from them if you do. A lack of trust in financial service providers will do the same.
Success doesn’t just happen automatically – not in the economy, and not in any competitive arena of life. But by focusing your resources realistically in the areas of your greatest strength, you can maximize your chances of coming out on top. Perhaps in some long-vanished world of effortless monopolies and protected markets, passivity might once have been enough – but in a world of relentless global competition, a lazy laissez-faire abdication cannot deliver optimal results.
That lesson has come through clearly amid these elegiac end-of-summer days, as the world continues to bask in the Olympic afterglow of the Summer Games in London. The games lifted the spirits of sports-watchers worldwide – and the postgame analysis of just how the host country, Great Britain, ran up its highest medal count in 104 years has provoked some intriguing ideas about creating an “Olympic effect” for economic development.
Important developments today:
1. Crude oil prices fall from 9-week high
2. German producer price inflation falls to lowest in two years
Активно се търсят алтернативи на традиционната система от държавни училища и широко се предлагат радикални подходи за разширяване на тяхната отговорност. Например, в отличения с награда документален филм “Очакване на Супермен”.
Important developments today:
1. Moody’s downgrades 12 U.K. banks and 9 Portuguese institutions
2. U.S. employment growth in September bests economists’ estimates
3. German output falls less-than-expected after July’s surge; but orders slow
|China posted strongly positive real GDP growth in Q3-2010, fueled by a rapid expansion in domestic demand. The government has responded to signs of tightness, including a firming of inflationary pressures, by hiking policy rates—although real interest rates remain slightly negative. Reflecting the slowdown in industrial output mid-year, world oil consumption decelerated in Q3-2010. Nevertheless, oil prices have firmed since late-September, largely due to US-dollar weakness and investor search for yield. Based on latest available year-to-date data, FDI inflows to developing countries are expected to rise 17% in 2010 on a revival in M&A, supported by low funding costs. In contrast, FDI flows to high-income countries are expected to fall 4%, reflecting weaker short and medium-term growth prospects.|
|China reported vibrant 9.6% y/y real GDP growth in Q3-2010, despite policy normalization. he overall growth figure reflects strong domestic demand and is consistent with a pick-up in industrial production (7.9% in Q3, q/q, saar) following the pause in growth in the summer (3.9% in Q2). Robust retail sales and PMI surveys in September also underscore vibrant domestic activity. Inflationary pressures have picked-up slightly to 3.5% in Q3, up from 3% in the previous two quarters (q/q, saar). The contribution of net exports to growth was likely negative in Q3—with goods export growth slowing sharply to 4.1% from 33% in Q2, while imports rebounded to 9% after declining 7% in Q2 (volumes, q/q, saar). This better-than-expected performance is likely to be reflected in an upward revision to the Bank’s forthcoming growth forecast for China1.|
|World oil demand declined in Q3-2010, in line with the slower pace of the recovery and efforts in China to improve energy efficiency. Global demand increased 0.4mb/d, just somewhat stronger than its average increase of 0.33mb/d during 2000-2007. For the year as a whole, oil demand is projected to average 87.3mb/d, about 1% above the 2007 pre-crisis peak. Despite the slower demand growth and still ample spare capacity, the price of oil has risen—from $76/bbl in Q3-2010 to $81/bbl (as of October 28, simple average of Brent, Dubai and WTI)—partly reflecting the depreciation of the US-dollar and financial investor interest.|
FDI flows to developing countries (LMICs) are expected to rise 17% in 2010. The pick-up reflects both stronger M&A and Greenfield investment, and was likely supported by low funding costs in high-income countries (HICs) due to quantitative easing. Particularly large gains were recorded in East Asia and Pacific (China, Indonesia, Malaysia) and Latin America (Chile, Mexico). Europe and Central Asia (Bulgaria, Romania) and South Asia (India) saw slight declines in flows. FDI flows to HICs appear to have declined 4% since 2009 on sovereign debt concerns and weaker short and medium-term growth prospects. The aggregate figure reflects large divestments from some countries (Belgium, Iceland, U.K., Ireland). Overall, LMICs’ share of FDI flows is estimated to have increased to 37% in 2010—up more than three-fold since 2000. FDI flows to HICs and LMICs remain 60% and 30%, respectively, below their respective pre-crisis peak flows (posted in 2007 and 2008).
1China Quarterly Update, November 2010 (scheduled to be released in early-November).
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Alternatives to the traditional public school system are actively being sought and radical approaches for expanding school accountability are being widely touted. For example, in the award-winning documentary, Waiting for Superman.
While radical approaches are needed – given the desperate state of most public education systems; just see the poor results of most middle income countries in international assessments such as PISA and TIMSS – there are more mundane approaches, already in practice, that could be made to offer so much more. Giving public schools adequate resources, the right to make appropriate decisions, and holding them accountable through the publication of school results – in short, school autonomy – has been used in countries around the world since the mid-1960s. The school autonomy approach – be it known as school-based management, whole school development, comprehensive school reform, or parental and community participation – has been tried, evaluated, and proven successful at achieving a range of education goals in many different contexts.
Andrew Puddephatt’s Exploring the Role of Civil Society in the Formulation and Adoption of Access to Information Laws defines the main contours of Access to Information (ATI) movements in 5 countries (Bulgaria, India, Mexico, South Africa and the United Kingdom). In Bulgaria, ATI was established by an environmental eco-glasnost movement that emerged in a post-Communist society (glastnost meaning transparency). In India, the ATI movement was embedded in a larger, anti-corruption movement led by the rural poor communities. In Mexico, a group of social activists and experts from academia and media conducted a targeted campaign for ATI just as Mexico was joining the OECD, NAFTA, and the WTO. The campaign for ATI in South Africa grew out of a post-apartheid civil society which recognized that information (or the systemic denial of it) was a key factor in perpetuating racial, social and economic inequality. The movement for ATI in the United Kingdom was spearheaded by a specialist NGO that capitalized on a government in the process of implementing broader constitutional reforms.