While countries around the world reap the benefits of an expanding digital environment, development challenges persist, adversely impacting low-income countries from achieving that same rate of growth.
The 2016 World Development Report (PDF) recently highlighted these findings in addition to three factors that contribute to a government’s responsiveness towards these digital changes.
According to the report, public services tend to be more amenable to improvements through digital technologies if the proposed system allows for fluid feedback, a replicable development process, and an outcome that can be easily measured and identified.
A couple of years ago Room to Read, a non-profit organization for improving literacy and gender equality in education in the developing world, implored viewers to try to not to read anything at all in a popular ad.
Structural transformation depends not only on how much countries export but also on what they export and with whom they trade. In my new IMF working paper with Rahul Anand and Kalpana Kochhar, we break new grounds in analyzing India’s exports by the technological content, quality, sophistication, and complexity of India’s export basket. The paper can be found here. Here are few key pieces of evidence from our paper:
Technological content of India’s exports
The evolution of Indian exports has not followed a “textbook” pattern. The pattern of evolution points to a dichotomy in the Indian economy – a well integrated, technologically advanced services sector and a relatively lagging manufacturing sector. The share of service exports in total exports has grown to over 32 percent in 2013 from 28 percent in 2000. On the other hand, the share of manufacturing exports in total export has declined to 67 percent from nearly 80 percent during 1990-2013.
The growth in service exports has been more rapid, resulting in the share of services exports in total exports to increase rapidly over the last decade. This can be explained by technological changes. Many services do not require face-to-face interaction, and can be stored and traded digitally. These services are called modern services. Modern services are the fastest growing sector of the global economy. This is particularly evident in India, where modern services exports account for nearly 70 percent of the total commercial services exports (compared to around 35 percent in EMs) (see Figure 1).
Successful leaders —presidents of countries, chief executives of corporations, or middle managers of counties — focus on a few priorities by deploying the right resources, reviewing progress, and unblocking constraints.
Shahbaz Sharif, the chief minister of the Pakistani province of Punjab (population 100 million) and a tireless, hard driving manager, built a 27 km mass transit system in Lahore in less than a year in 2012-13. This visible show of results, according to many observers, helped his landslide victory in the 2013 election.
Did a specialized unit deliver for the chief minister? No. Just a group of well-chosen, motivated civil servants and, of course, the impending election deadline.
What is therefore fundamentally new or useful about the current ferment in the “science of delivery”? The “delivery unit” approach can work wonders, according to Sir Michael Barber, who headed the Delivery Unit in the United Kingdom from 2001 to 20015 and has distilled his advice into 57 rules in a recent book.
As we today mark UN Women’s Day, it is worth considering what the inequality between men and women costs South Asian countries and what can be done about it.
One big cost of inequality is that South Asian economies do not reach their full potential. In Bangladesh, for example, women account for most unpaid work, and are overrepresented in the low productivity informal sector and among the poor. Raising the female employment rate could contribute significantly to Bangladesh achieving its goal in 2021 of becoming a middle-income country. Yet even middle-income countries in South Asia could prosper from more women in the workforce. Women represent only 34 percent of the employed population in Sri Lanka, a figure that has remained static for decades.
Improvements in the education and health of women have been linked to better outcomes for their children in countries as varied as Nepal and Pakistan. In India, giving power to women at the local government level led to increases in public services, such as water and sanitation.
Just as the costs of inequality are huge, so is the challenge in overcoming it. The gaps in opportunity between men and women are the product of pervasive and stubborn social norms that privilege men’s and boys’ access to opportunities and resources over women’s and girls’.
It takes a special type of woman to be an entrepreneur.
I didn’t quite know what to expect when, earlier this year, I met with a group of women entrepreneurs in Karachi who are participating in the World Bank Group’s womenXprogram. I had read a lot about the low numbers of women running businesses in Pakistan, the challenging environment they operate in, and their many constraints. But I was struck by the positivity and drive of the women I met. They shared with me how they are improving their business and financial practices, building their confidence, and expanding their networks.
Take for instance, Mussarat Ishaq, who runs Al-Karam Packages. Mussarat was a Karachi-based housewife, pregnant with her third child, when her husband divorced her. With no work experience, little education, no money and no plan, she learned the ropes of polythene production and with a business partner, started out small – purchasing the raw material from local markets, using outdated machinery to produce plastic bags, and supplying them to small businesses in their area. Today, they have purchased more sophisticated equipment and they employ 250 employees, working to provide low-cost, high-quality, reusable and environment-friendly packaging materials to Pakistani clients.