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Small states (SST)

Meet the Innovators: Tech Entrepreneurs Forge a New Future for the Western Balkans

The countries of the Western Balkans – which include the states of the former Yugoslavia, along with Albania – are not exactly world-famous for their entrepreneurial spirit. Yet if you look at their societies more carefully, you’ll soon find a surprising number of new companies dotted throughout the Western Balkans. They’re already setting their sights beyond smaller domestic markets: They’re looking to Europe, and the world.

Your Neighbors Are Making You Sick

Luis Andres's picture

Why Sanitation Access Doesn’t Work Unless the Entire Village Buys In

Jitender is a four-year old boy with forward-thinking parents. Although it’s common in his village, in the Indian state of Uttar Pradesh, for most people to defecate in the open, his parents have taken  the lessons of the government’s sanitation campaign to heart. They know that open defecation spreads disease—so they construct a private toilet that hygienically isolates their waste from human contact. Nonetheless, a few months later, Jitender develops persistent diarrhea. He is often dehydrated, loses weight, and becomes pale. His immune system is weakened by multiple bouts of disease, and for the next several years he struggles with recurrent illness. He has trouble keeping up with his schoolwork, and, more perniciously, even though he ate more than enough calories each day, the diarrhea eventually caused malnourishment. He remains small for his height and suffers from subtle intellectual deficits that make it difficult for him to follow the teacher’s lessons even during those periods when he does manage to attend. Because of his low marks, his family isn’t able to fulfill their dream of sending him on to university. The village takes note of Jitender’s example and concludes that improved sanitation doesn’t provide much, if any, benefit. This is a fictional story; however, similar stories are being heard every day in South Asia.

Confessions of a mobile phone skeptic in the Pacific

Laura Keenan's picture


I must admit to being notoriously bad with a mobile phone. I forget to take it with me, leave it in parks and cafés and have never migrated to a smart phone – a simple old Nokia handset is my trusty aide. And on my part this has probably contributed to some skepticism about the discussion of development and mobile phones – which can sometimes seem a little evangelical.

End Discriminatory Laws, and Transformative Change Can Follow

Tazeen Hasan's picture

A woman in South Africa. © Trevor Samson/World BankIn September 2013, four elderly sisters in Botswana were finally and definitively allowed to remain in the ancestral home where they had spent most of their lives — the result of their own tenacity and determination that a young nephew could not step in and take ownership of a property they had lovingly maintained.

This landmark decision by the highest court in Botswana, the Court of Appeal, followed five years of efforts by women’s networks and legal associations who helped the sisters bring their claim. The judges decided that customary laws favoring the rights of the youngest male heir were simply out of date.

“The Constitutional values of equality before the law and the increased leveling of the power structures with more and more women heading households and participating with men as equals in the public sphere and increasingly in the private sphere demonstrate that there is no rational and justifiable basis for sticking to the narrow norms of days gone by when such norms go against current value systems,” wrote Justice Lesetedi of the Botswana Court of Appeal.

The reform of discriminatory laws can lead to transformative change.

Western Balkans: Through Science, Innovation and Collaboration, a Program for Shared Prosperity

Paulo Correa's picture


 

You’d probably be skeptical if I told you that the Western Balkans – a region that has long suffered from social and ethnic fragmentation – now has a strong opportunity to boost shared prosperity by promoting research, innovation and entrepreneurship. Your views might not even change if I showed you that such idea is validated by preliminary studies linking research and innovation to the performance of firms and countries in the region.

You might be surprised – yet your initial assumption might be unchanged – if I told you about the kind of companies that are starting to build a different economic landscape in the region: firms like UXPassion, Pet Minuta, Strawberry Energy or Teleskin, which are all technology-based startups created by young researchers who became entrepreneurs. Click on this link (http://www.worldbank.org/en/news/video/2013/10/22/western-balkans-research-and-development-for-innovation), or on the video embedded below, to meet them and other innovators from the Western Balkans.

Indeed, the transition to a market economy and the breakup of the former Yugoslavia starting in 1991 had a severe impact on the research and innovation sector in the Western Balkans. Research capacity narrowed significantly, and R&D’s links to the productive sector of the economy disappeared. The new industrial structure has naturally a lower propensity to invest in research while the current business environment promises low returns to the enterprise investments in innovation. Efforts to revamp the region's research and innovation sector were most of the time short-lived.

As a result, the performance of the research and innovation sector in the Western Balkans is gloomy. The region’s current investment in R&D are roughly the same amount as the investment by just the second-largest university in the United States. (In 2012, for example, only 38 patents from the region were registered with the U.S. Patent and Trade Office – compared to the average of 27 patents registered by each American university.) At the same time, very little of those investments are efficiently transformed into wealth. For example, for each invention that received a patent, the region spent, on average, three times more in R&D resources than does the United States.

Building on a continuing series of efforts to reform their national innovation systems, in the hope of changing their gloomy prospects, the Western Balkan countries in 2009 committed to develop a joint regional research and innovation strategy. That strategy, developed between 2011 and 2013, was formally endorsed last month by the ministers responsible for science and education from Albania, Bosnia-Herzegovina, Croatia, Kosovo, the Former Yugoslav Republic of Macedonia, Montenegro, and Serbia. The preparation of the strategy, which benefited from technical assistance by the World Bank and from the financial support of the European Commission, involved representatives from the region’s leading universities, research institutes, private sector firms and government agencies. Discussions of the draft proposal were pursued in all seven countries as part of a large outreach exercise.

The Beauty of Numbers

Wolfgang Fengler's picture

One of my first assignments in the World Bank, some 13 years ago, was in a small and complicated country, better known for coups and mercenaries than for statistical capacity. Before I set off to the Comoro Islands, my then manager (now an established World Bank Vice-president) gave me the following priceless advice: “When you get there, make sure to get a lot of data. It may be difficult to get and sometimes even flawed, but data has one great advantage: It cuts through a lot of crap.”  

Accounting chartsNumbers are indeed beautiful. They can help bring clarity to our lives and save us time as well as resources. But raw data can be messy and you also need a good system for deciding which numbers to use and how to interpret them. Last week’s launch of the 2014 Doing Business rankings reminded me of the advice my then boss had given me. Doing Business started from the premise that companies are the backbone of any economy but that investors often lacked knowledge of the conditions in “frontier economies”. With the benefit of an annual assessment of the business environment in each country, investors could make more informed decisions. As for policy makers, they could more easily attract investors, provided they made a genuine effort in cutting red tape and supporting businesses.

Innovation and Insurance: Protection Against the Costs of Natural Disaster

Olivier Mahul's picture



Natural disasters – such as tsunamis, earthquakes, cyclones and floods – are costly to society, in terms of both human destruction and financial losses. Governments ultimately bear the full cost of the havoc wreaked by natural disasters, which can create an enormous strain on limited government budgets, especially in developing countries. This is even before we begin to contemplate the development impact and how the poorest of the poor are disproportionately affected.

Just last week, the world saw the widespread damage that the St. Jude storm inflicted across Europe, and we witnessed its effect on hundreds of thousands of people. Most advanced economies, however, have sufficient capacity to be able to absorb the financial losses inlicted by natural disasters. Higher-income countries enjoy (relatively) efficient public revenue systems and developed domestic insurance markets.



By contrast, developing countries do not have the same degree of access to financial and insurance markets. They face limited revenue streams, limited fiscal flexibility, and limited access to quick liquidity in the wake of an event. This is particularly so for Small Island Developing States (SIDS), such as the Pacific island nations.

Let Them Eat Cash

Shanta Devarajan's picture

The Economist this week has an excellent article on giving cash transfers, conditionally or unconditionally, to poor people to alleviate their poverty.  Calling it “possibly the single best piece of journalism on cash transfers that I’ve seen so far,” Chris Blattman—one of the scholars whose research has provided grist for this mill—laments that such writing “tends to make the Pulitzer committee fall asleep in bed.”  Maybe so, but the idea is potentially transformative.

Cash Transfers

That cash conditional on sending your children to school or taking them for a medical checkup improves health and education outcomes has been established for some time now.  More recently, some studies show that unconditional cash transfers could have the same effect.  Chris’s work demonstrates that giving cash to idle young people leads to higher business earnings than if the money were used to run vocational training courses for these people.


In parallel, Todd Moss at the Center for Global Development and my colleague Marcelo Giugale and I (along with several others) have been exploring the idea of transferring oil revenues to citizens as cash transfers, as a way of reducing the resource curse that afflicts many resource-rich countries, especially in Africa.  Gabon for instance, with a per-capital income of $10,000 has the second-lowest child immunization rate in Africa.  Marcelo and I show that, with just 10 percent of resource revenues’ being transferred directly to citizens (in equal amounts), poverty can largely be eliminated in the smaller resource-rich African countries.

Relaunching Africa Can and Sharing Africa’s Growth

Francisco Ferreira's picture

Dear Africa Can readers, we’ve heard from many of you since our former Africa Chief Economist Shanta Devarajan left the region for a new Bank position that you want Africa Can to continue highlighting the economic challenges and amazing successes that face the continent. We agree.

Today, we are re-launching Africa Can as a forum for discussing ideas about economic policy reform in Africa as a useful, if not essential, tool in the quest to end poverty in the region.

You’ll continue to hear from many of the same bloggers who you’ve followed over the past five years, and you’ll hear from many new voices – economists working in African countries and abroad engaging in the evidence-based debate that will help shape reform. On occasion, you’ll hear from me, the new Deputy Chief Economist for the World Bank in Africa.

We invite you to continue to share your ideas and challenge ours in pursuit of development that really works to improve the lives of all people throughout Africa.

Here is my first post. I look forward to your comments.

In 1990, poverty incidence (with respect to a poverty line of $1.25) was almost exactly the same in sub-Saharan Africa and in East Asia: about 57%. Twenty years on, East Asia has shed 44 percentage points (to 13%) whereas Africa has only lost 8 points (to 49%). And this is not only about China: poverty has also fallen much faster in South Asia than in Africa.

These differences in performance are partly explained by differences in growth rates during the 1990s, when emerging Asia was already on the move, and Africa was still in the doldrums. But even in the 2000s, when Africa’s GDP growth picked up to 4.6% or thereabouts, and a number of countries in the region were amongst the fastest-growing nations in the world, still poverty fell more slowly in Africa than in other regions. Why is that?

How can regional integration improve access to finance in South Asia?

Sarmad Shaikh's picture

South Asia is the least integrated region in the world. Intra-regional trade in South Asia is less than 2% of GDP compared to over 20% in East Asia. Labor mobility and regional travel is minimal, with few exceptions. Even remote communication is low – only 7% of international telephone calls in South Asia are to countries within the region, compared to 71% for East Asia. The case for closer integration has remained strong for a while now, and it is refreshing to see that some movement, albeit watchful, in addressing some of the region's deep rooted political economy issues, particularly between India and Pakistan.

The discussions around closer integration have centered on energy, trade, connectivity and stability. All of these offer strong potential to enhance growth in the region. However, financial sector integration overall, and access to finance in particular, hardly ever make it to the agenda of regional integration forums and deliberations. This is unfortunate, because the region has a long way to go in providing adequate access to financial services and insurance products, especially to the vulnerable segments of the population. Given that South Asia is home to more than half a billion of the world’s poor, this becomes a poverty reduction goal as much as a financial inclusion goal.

Managing Disaster Risk in South Asia

Marc Forni's picture

Losses due to disasters to human and physical capital are on the rise across the world.  Over the past 30 years, total losses have tripled, amounting to $3.5 trillion. While the majority of these losses were experienced in OECD countries, the trend is increasingly moving towards losses in rapidly growing states. 
 
In a sense, increasing risk and losses caused by disaster are the byproduct of a positive trend - strong development gains and economic growth. This is because disaster loss is a function of the amount of human and physical assets exposed to seismic or hydrometeorological hazards, and the level of vulnerability of the assets. The richer a country gets, the more assets it builds or acquires, and therefore the more losses it potentially faces.
 
Rapid development across South Asia signals the need to commit greater efforts to increase resilience to disaster and climate risk. It also requires governments to develop a strategy to both protect against events today and to develop strategies to address the losses of the future.  This is a challenge somewhat unique to South Asia. The losses of today, predominantly rural flooding that impacts wide swaths of vulnerable populations, will begin to diminish in relative importance to the losses of the future.

Non-Tariff Measures Raise Food Prices and Hinder Regional Integration in Central America

Jose Daniel Reyes's picture

A cow browses in Nicaragua. Source - www.flickr.com/photos/ajohndoeproject/3657141084/sizes/m/in/photostream/It is July 2012 and cattle farmers in Nicaragua are worried because Guatemala has enacted a series of laws that restrict beef trade. These so-called “non-tariff measures,” or NTMs, require that beef crossing the Guatemalan border meet stricter safety and labeling standards. The Guatemalan government argues that these measures protect the country’s consumers from health hazards. But the Nicaraguan farmers say they hurt business and unfairly shelter Guatemalan producers from competition. 

This is just one example of the debates that arise in the food industry in Central America and elsewhere. While it is laudable and good policy for a government to use legitimate, non-trade related legislation to protect its citizens from certain risks, governments can also use these measures to protect domestic industry. Regardless of their intention, in an increasingly globalized, competitive world, non-tariff measures increase the cost of doing business, impact prices, affect the competitiveness of the private sector, and impact the overall welfare of the economy.

Djibouti Keeps an Eye on Quality in Efforts to Expand Access to Education

Noah Yarrow's picture

Djibouti Keeps an Eye on Quality in Efforts to Expand Access to Education

Djibouti does not make the headlines as often as its larger neighbors Somalia, Eritrea, and Ethiopia –or Yemen, just across the Gulf of Aden.  As children go back to school this month, the small, French speaking country deserves our attention as it works to overcome serious education challenges with a committed group of partners including the World Bank.

Of Runways and Playgrounds

Nora Weisskopf's picture
Touchdown on the runway at Funafuti Airport in Tuvalu. The ATR-42 that brought us here from Nadi in Fiji slowly rolls toward the apron and as we step off the plane we are greeted by what seems to be a Welcome Committee for the plane’s arrival. With only two flights a week, the excitement of airplanes landing and departing has clearly not worn off yet – from grandmothers to playing children, young men on

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