The remittances sent home every year by the African Diaspora should create a doorway to still greater opportunities, and the key to this door is financial access. While remittances do impact the living standards of beneficiaries directly, the banks that pay out the remittances month after month should offer recipient families a basic financial package including savings accounts, payment services and small loans for microenterprise. This should facilitate growth from current levels of remittances saved and invested. Leveraging of remittances through financial inclusion is certain to increase their development potential.
Bangladesh was born on December 16 1971, following a devastating war that cost the lives of 3,000,000 people. They were victorious in their fight for independence, yet the prospects of the Bangladeshi people living in the 70’s were disheartening, earning it the now rather infamous connotation of a basket case, as Henry Kissinger called it back in 1971. Emerging from the rubbles left by the war, the resilient Bangladeshis began the rebuilding of their newly established nation. Economic growth was slow to take off, and it rebounded to the pre-war level about twenty years later, in the 90’s. Yet, it was after the 90’s that the country began to attain palpable progress and only over the 2000-2010 decade that the country achieved great poverty reduction. The depth-of-poverty MDG target of 8 percent was attained five years ahead of schedule, and Bangladesh was set in the right path for achieving the first MDG goal of halving the poverty headcount to 28.5 percent by 2015.
With oil in Niger and Uganda, natural gas in Mozambique and Tanzania, iron ore in Guinea and Sierra Leone―African countries are increasingly finding rich new deposits of oil, gas, or minerals and just as quickly, attracting the courtship of international companies that are drawn to Africa’s new bonanza in extractives wealth.
Much of the G20’s agenda following the global financial crisis has been focused on crisis response—on short-term crisis management and recovery. In the aftermath of a major crisis, economic stabilization of course is the first order of business. And the G20 has done reasonably well in that respect. But economic stabilization alone will not restore strong and sustained growth, as global growth faces deeper structural challenges.
In advanced economies, some of the structural weaknesses have accumulated over time, such as the labor market rigidities in Europe, the deficiencies in tax and expenditure structures and associated fiscal problems in a broad range of advanced economies, including the US, and the challenges arising from ageing populations. The global financial crisis has added to these challenges by causing supply-side disruptions that lower potential growth, including the destruction of capital stock, financial sector dislocations, and increases in structural unemployment—as well as adding to the fiscal woes. Challenges also arise from a changing pattern of competitiveness and comparative advantage as emerging economies increasingly penetrate global production and trade. So future growth in advanced economies will require not just supporting a recovery of demand but also a reallocation of resources to new sources of growth—new products, new services, new jobs.
While global economic growth has been sluggish in recent years, Africa has been growing. We’ve seen a resurgence of traditional sectors such as agriculture and the extractive industries as well as promising new ones such as ICT. Not surprisingly, these booming sectors need highly skilled technicians, engineers, medical workers, agricultural scientists and researchers. Yet large numbers of African graduates remain unemployed as their skills are often not in line with industry requirements.
New developments and curiosities from a changing global media landscape: People, Spaces, Deliberation brings trends and events to your attention that illustrate that tomorrow's media environment will look very different from today's, and will have little resemblance to yesterday's.
This week's Media (R)evolutions: Mobile Growth Rates by Region
The Yangon Circular Railway is the local commuter rail network in Yangon, Myanmar. In this recording, World Bank Country Manager Kanthan Shankar boards the train on a three-hour ride around the city. "You see a panorama of life unfolding before you and you feel a part of the picture," he says, reflecting on the daily lives of the people in Yangon, "There's a huge opportunity for commerce and private sector growth. Yangon and Myanmar is lucky that it has basic infrastructure in place. It's a matter of rehabilitating these and aiming for a smoother ride to pave the way for commerce,"
Incomes in the poorest two quintiles on average increase at the same rate as overall average incomes, according to a new working paper by David Dollar (Brookings Institution), Tatjana Kleineberg and Aart Kraay. In a global dataset spanning 118 countries over the past four decades, changes in the share of income of the poorest quintiles are generally small and uncorrelated with changes in average income. The variation in changes in quintile shares is also small relative to the variation in growth in average incomes, implying that the latter accounts for most of the variation in income growth in the poorest quintiles. These findings hold across most regions and time periods, as well as conditional on a variety of country-level factors that may matter for growth and inequality changes. This evidence confirms the central importance of economic growth for poverty reduction and illustrates the difficulty of identifying specific macroeconomic policies that are significantly associated with the relative growth rates of those in the poorest quintiles. This reprise of Dollar and Kraay's earlier work also looks at the World Bank's new "shared prosperity" goal by considering the income growth rates of the poorest 40% of the population in each country in addition to looking at the poorest 20%.
The results suggest strangely mixed conclusions. In certain ways, poverty trends in Nigeria over the past decade were better than has been widely reported, where a story of increasing poverty has been the consensus. And yet poverty is stubbornly high, disappointingly so given growth rates.
Three facts stand out.
'Why is China Ahead of India? Implications for Europe and the US,' was the topic of a talk yesterday at the World Bank by Nobel winner Amartya Sen which was chaired by Kaushik Basu. In the span of just under two hours, Sen managed to pinpoint India's main Achilles Heel (primarily related to the low overall quality of education, poor health care and skewed energy and other subsidies), while weaving in references to Kido Takayoshi, Mao Zedong, David Hume, Mahatma Gandhi, Adam Smith, Jon Stuart Mill, Milton Friedman, Keynes, Marx and other thinkers and influencers.
Amartya's talk coincided with the publication of a New York Times op ed titled 'Why India Trails China' in which he stressed that one cannot wait to fix health and education only after reaching some modicum of overall prosperity. Indeed, proper health and education, which foster human capabilities, are an essential precondition to sustainable growth and the ability to compete successfully in an integrated world. India still needs to take these East Asian lessons fully on board.