Despite tremendous progress in poverty reduction over the last two decades, poverty still persists. Along with South Asia, Africa is a region where large numbers of people continue to live in extreme poverty. It is also a region where there is clearly room for higher foreign trade levels (see Chart). Given that trade can generate growth – and thus poverty reduction – focus on trade-related reforms (e.g. lower tariffs, better logistics, and trade facilitation) deserves to be a high priority of the region.
Монгол хувилбар байгаа
Mongolia’s mining revenues are set to soar in the coming years, but here people talk about the need to save for the future.
Surely building infrastructure, educating young Mongolians, improving healthcare and creating jobs is important? Surely by achieving these development goals Mongolia is providing for the next generation? These are great questions. Mongolia must do these things. But they in turn depend on efforts to prevent boom and bust and provide financial assets for future generations. Saving some of the revenues in good times is part of effective natural resource management.
Brazil’s success in reducing poverty and income inequality has been widely reported in recent years.
Is Russia’s economy just about to shift a gear downwards?
In the decade before the global financial crisis, Russia’s growth averaged 7 percent, thanks to rising oil prices, rapid credit expansion and policy reform. Then, after the economy took a nosedive in 2009, Russia rebounded to growth above 4 percent even though the global economy was sluggish and the euro area soon went back into a recession.
But now, as we begin the final three months of 2012, Russia’s economy is settling onto a lower growth trajectory. In our new Russian Economic Report, we project that Russia will grow only 3.5 percent this year. Excluding the crisis years of 1998 and 2009, this would be the lowest rate in a decade and a half.
Gross Domestic Product, better known as GDP, is the market value of all final goods and services produced within a country in a given period. That's why GDP per capita is widely used as a summary indicator of living standards in a country. No wonder we keep our eyes closely on its evolution and compare its levels among countries.
Starting in the early 1990s many emerging economies have embraced financial sector reforms and liberalization. As a consequence, they have become more financial globalized, triggering an important debate about the pros and cons of this process and its relation to financial crises. Notwithstanding all the attention, there are different dimensions of globalization, which are many times not clearly defined and which might add noise to the discussion.
In a recent World Bank policy research working paper and VoxEU column, we argue that there are at least two interconnected, albeit essentially distinct facets of financial globalization. The first one is financial diversification, that is, the cross-country holdings of foreign assets and liabilities. The second one is financial offshoring, that is, the use of foreign jurisdictions to conduct financial transactions. While the former focuses on who holds the assets, the latter deals with where the assets are transacted.
Sub-Saharan Africa (SSA) is home to the world’s poorest countries. The region’s geographical disadvantages are often viewed as an important deterrent to its economic development. A country’s geography directly affects economic development through its effect on disease burden, agricultural productivity or the availability of natural resources. However, the new economic geography (NEG) literature, initiated by Krugman (1991), highlights another mechanism through which geography affects prosperity.
Gross Domestic Product (GDP) estimates are some of the most heavily requested and used data published on data.worldbank.org. And as many users notice, the estimates are sometimes revised, occasionally resulting in large changes from previously published values. Why do revisions happen, what information do we publish about those revisions, and where do you find it?
A clear pattern of 'two speed recovery' emerged from the global economic crisis: although the East Asian economies saw a drop of nearly 4 percentage points in their GDP growth to 8.5 percent in 2008 and a further decline to 7.5 percent in 2009, they rebounded quickly to 9.7 percent in 2010. At the same time, however, growth in high income countries fell by 6.6 percentage points during 2008-09, from 2.7 percent in 2007 to -3.9 in 2009. Moreover, these economies are not yet out of the woods given the sovereign debt crises in the Euro Area. This is one of the many fascinating patterns revealed in the newly updated online version of the World Development Indicators.
What is more striking is that low income countries (LICs) have been resilient during the crises, more so than in the past. The annual GDP growth rate for low income countries declined less than 1 percentage point in 2008, standing at 4.7 percent in 2009 and quickly recovered to 5.9 percent in 2010. In particular, Ethiopia, Mozambique, Tanzania, and Zambia have shown robust growth of 6 to 11 percent throughout this period. Similar conclusions were presented in Didier, Hevia and Schmukler April 2011.
Renowned British economic historian Niall Ferguson in his new and dazzling history of Western ideas, Civilization: The West and the Rest, argues as his central thesis that the West developed six killer “apps”—referring to the popular software applications for smartphones and tablets—that caused the West to dominate the global stage for the last 500 years. These key institutions and complexes of ideas, such as “competition,” “property rights,” “the Work Ethic,” were what led the West to preside (relatively unchallenged) over global politics, economics, and culture, despite the fact that the civilizations of the Orient were much more advanced than Western Europe in the 1400s, which was plagued by disease and war. Over time, however, the West has become, as Ferguson puts it, a “template” for the Rest (i.e. non-Western countries), which have been copying (or downloading) the apps and are now on the verge of overtaking the West in terms of economic strength and size, led by China.
Available in: монгол хэл
There is good news coming out of Mongolia, the land of the eternal blue skies. The economy racked up a second quarter of high growth: the third quarter came in at 20.8 percent, topping the equally amazing second quarter of 17.3 percent (year-on-year GDP growth), as discussed in the World Bank's latest Mongolia Quarterly Update. And while this growth spurt originated in the mining sector, with Oyu Tolgoi—a mega copper and gold mine—getting ready to start producing in 2012 and a whole battery of other, smaller mines producing at full capacity, the high growth is quite broad-based. Even manufacturing is doing well.
(Available in Chinese)
This is the first blog post I write after revisiting China’s recent economic developments, the outlook, and policy implications as part of writing our latest China Quarterly Update. After this general overview I will in a few days write one on some interesting medium term trends on relative prices and the relative importance of external trade in China’s economy (they are also discussed in the Quarterly).
The term “normalization” has been used a lot lately in relation to the composition of growth and macroeconomic policy stance, also in China. But it is hard to avoid it. During 2010, China’s composition of growth started to “normalize”—as in look like it typically does—after the spectacular developments in 2009, when a massive government-led domestic demand surge offset a huge contraction in exports. Later in 2010, the macroeconomic policy stance also started to “normalize”. I guess many of us use the word “normalization” to describe or prescribe a macro policy stance that would be in line with the “normalized” economic outlook, as opposed to a particularly tight stance.
(Also available in Chinese)
As an economist monitoring the macroeconomic developments of the Chinese economy, dealing with data is one of my main jobs. I am so happy that now I have a new tool to handle data and make economic analysis. It is the World Bank Open Data platform launched recently. Based on my user experience till now, I found two features of it are specially worth highlighting:
The rapidly rising economic weight of developing countries – now in its third decade, rather than a product of the crisis, is notable for several interrelated developments:
• Developing economies as a whole have been growing faster than advanced economies since the 1970s, on both aggregate and per capita terms. (Read more about growth poles - .pdf)
• The margin between these growth rates has risen of late, although growth paths have become more synchronized. Decoupled in trend terms, more coupled in cyclical terms? (There is an abundant discussion of “decoupling”: see one example here and one here)