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How Well did We Forecast 2014?

Shanta Devarajan's picture

A year ago, we polled Future Development bloggers for predictions on the coming year (2014).  Looking back, we find that many unforeseen (and possibly unforeseeable) events had major economic impact. 

We missed the developments in Ukraine and Russia, the spread of the Islamic State in Iraq, the outbreak of Ebola in West Africa, the collapse in oil prices and their attendant effects on economic growth.  At the same time, we picked the winner of the soccer World Cup, and got many of the technology trends right. Perhaps economists are better at predicting non-economic events.

Here’s the scorecard on the seven predictions made:
 

Why More Corruption Created Fewer Problems for Companies?

Sebastian Eckardt's picture

A Ukrainian paradox
 
Kremenchug Hydroelectric Power PlantVZ-UK002 When Ukrainians took the streets in the winter of 2013/14, protests – sparked by the then Government’s decision to suspend the signing of the association agreement with the EU – reflected widespread discontent over deep-seated corruption. From its independence over two decades ago, Ukraine has struggled with corruption and state capture.  So-called oligarchs dominate large sectors of the Ukrainian economy, extracting rents and controlling the state through direct representation in the Parliament. This allowed oligarchs to tap into rich sources of corruption, including energy subsidies, discretionary public procurement, privatization of state assets and wide spread tax fraud and evasion. These governance failures created an economy largely built around redistribution of rents. Arguably, this accounts for much Ukraine’s dismal economic performance despite an abundance of natural resources, qualified human capital and a strategic location in the center of Europe.

What will happen to the Middle East and North Africa region if the Ukraine crisis escalates?

Lili Mottaghi's picture
 Arne Hoel

Following Russia’s annexation of Crimea after the popular voting in early March, the European Union and recently the U.S. and Canada have imposed their first round of sanctions—an asset freeze and travel ban on some officials in Russia and Crimea. This week NATO's foreign ministers, warning that Russian troops could invade the eastern part of Ukraine swiftly, ordered an end to civilian and military cooperation with Russia. Should the crisis escalate, potential fallout on Middle East and North Africa (MENA) countries is likely. The effects would be transmitted directly through trade and indirectly through commodity prices.

Weekly Wire: The Global Forum

Roxanne Bauer's picture
These are some of the views and reports relevant to our readers that caught our attention this week. 

Compare your country - Aid statistics by donor, recipient and sector
OECD Data - Aid Statistics

Compare your country is a service provided by the OECD. It is based on the OECD's Development Co-operation Report 2013. EXPLORE THE MAP
 

More Than One in Five Worldwide Living in Extreme Poverty
Gallup

"Gallup's self-reported household income data across 131 countries indicate that more than one in five residents (22%) live on $1.25 per day or less -- the World Bank's definition of "extreme poverty." About one in three (34%) live on no more than $2 per day. The World Bank Group recently set a new goal of reducing the worldwide rate of extreme poverty to no more than 3% by 2030, but Gallup's data suggest meeting that goal will require substantial growth and job creation in many countries. In 86 countries, more than 3% of the population lives on $1.25 per day or less." READ MORE

Are Super Farms the Solution to the World’s Food Insecurity Challenge? Ten Questions You Need to Ask Yourself

José Cuesta's picture

Join me in a Twitter Chat on why global food prices remain high on Dec. 4 at 10 a.m. ET/15:00 GMT. I'll be tweeting from @worldbanklive with hashtag #foodpriceschat. Ask questions beforehand with hashtag #foodpriceschat. Looking forward to seeing you on Twitter.


Agriculture workers on a strawberry farm in Argentina. © Nahuel Berger/World Bank

Today there are 842 million who are hungry. As the global population approaches 9 billion by 2050, demand for food will keep increasing, requiring sustained improvement in agricultural productivity. Where will these productivity increases come from? For decades, small-scale family farming was widely thought to be more productive and more efficient in reducing poverty than large-scale farming. But now advocates of large-scale agriculture point to its advantages in leveraging huge investments and innovative technologies as well as its enormous export potential. Critics, however, highlight serious environmental, animal welfare, social and economic concerns, especially in the context of fragile institutions. The often outrageous conditions and devastating social impacts that “land grabs” bring about are well known, particularly in severely food-insecure countries.

So, is large-scale farming—particularly the popularly known “super farms”—the solution to food demand challenges? Or is it an obstacle? Here are the 10 key questions you need to ask yourself to better understand this issue. I have tried to address them in the latest issue of Food Price Watch.

Don’t Put All Your Exports in One Basket (That Means You, Resource-Rich Country!)

Gonzalo Varela's picture

Baku, Azerbaijan. Source - flickr.com/photos/9464116@N08/7816929566/in/photolist-cUKNPG-fdSCiF-feJL8Y-feaJrS-feurU8-feuqP6-feb4rd-fdVqvc-febfvm-fdVVrX-fdVQWB-fe7YGL-fdSz12-feb68j-feJFA5-fevRZT-fdSAzV-feaNqs-fdVWBi-feJK3C-feanKW-feap55-8Sgjmp-fe5RVE-fe5vvC-fdQwrK-fdQpv4-fe5y7w-fdQtuK-fe5KvW-fe5Agf-fe5Nbm-fe5CjQ-fe5HHs-fe5Sbs-djYTYR-8F59Fq-bkr5Tf-8E86t9-8c3pDH-8c6JB5-8AjSRo-8AjSUJ-8eGwJc-aDwLd2-8AjSWj-8E86Tb-8E4VK2-8E85Mo-a4NYwC-7ZnFFRDiversification of a country’s exports – increasing both the number of products it produces and the destinations of those products – is considered part of the path to development. Many economists and policy-makers see export diversification as an important means for increasing employment and speeding growth. Diversification also makes growth more stable, as it provides protection against shocks; a country that exports many products will not be hit so hard when the price of one falls, and similarly, a nation that exports to a wide variety of destinations will be shielded against a recession in one of them.

But new evidence contributes to a body of work suggesting that countries with an abundance of natural resources might be more prone to export concentration during spurts of high natural-resource prices – mainly in products, but also to a milder extent in trading partners – leaving them more vulnerable to price swings. 

Thriving Cities Will Drive Eurasia's Growth

Souleymane Coulibaly's picture

Cities have always been the driving forces of world civilizations. What Niniveh was to the Assyrian civilization, Babylon was to the Babylonian civilization.  When Peter the Great, third in the Romanov Dynasty, became Russia’s ruler in 1696, Moscow’s influence began to expand. Peter strengthened the rule of the tsar and westernized Russia, at the same time, making it a European powerhouse and greatly expanding its borders. By 1918, the Russian empire spanned a vast territory from Western Europe to China.

As Peter the Great and his successors strove to consolidate their reign over this empire, major social, economic, cultural, and political changes were happening in the urban centers. Moscow led these changes, followed by St. Petersburg, which was built as a gateway to filter and channel western civilization through the empire. By fostering diversification through connectivity, specialization, and scale economies, these cities started the structural transformation of the Russian empire away from depending on commodities and limited markets in a way that more effectively served local demand.

The Soviet era altered this dynamic.

Women in the Workforce – a Growing Need in Emerging Europe and Central Asia

Sarosh Sattar's picture

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.

Could Kyiv use a few PPPs?

David Lawrence's picture

Public-private partnerships (PPPs)—agreements between governments and the private sector to finance infrastructure or public services—haven’t taken off in Ukraine, at least not yet. From time to time you hear about a PPP conference or workshop, and USAID is funding a new initiative to promote them. Can PPPs make bad infrastructure ande useless heaters obsolete?There is a concessions law (from 1999) and a newer concessions law for roads (2008). But the overall business environment isn’t very good (152 out of 183 economies in Doing Business) and there are issues with corruption (also an unlucky 152 in Transparency International’s Corruption Perception Index).


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