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Growth Without Apology

Shanta Devarajan's picture

 Chhor Sokunthea / World BankFrom time to time, countries experience rapid economic growth without a significant decline in poverty. India’s GDP growth rate accelerated in the 1990s and 2000s, but poverty continued to fall at the same pace as before, about one percentage point a year. Despite 6-7 percent GDP growth, Tanzania and Zambia saw only a mild decline in the poverty rate. In the first decade of the 21st century, Egypt’s GDP grew at 5-7 percent a year, but the proportion of people living on $5 a day—and therefore vulnerable to falling into poverty—stagnated at 85 percent.

In light of this evidence, the World Bank has set as its goals the elimination of extreme poverty and promotion of shared prosperity. While the focus on poverty and distribution as targets is appropriate, the public actions required to achieve these goals are not very different from those required to achieve rapid economic growth. This is not trickle-down economics.  Nor does it negate the need for redistributive transfers. Rather, it is due to the fact that economic growth is typically constrained by policies and institutions that have been captured by the non-poor (sometimes called the rich), who have greater political power. Public actions that relax these constraints, therefore, will both accelerate growth and transfer rents from the rich to the poor.

Some examples illustrate the point.

Setting the Example for Cooperative Management of Transboundary Water Resources in West Africa

Kabine Komara's picture

Stretching for more than 1,800 kilometers across Guinea, Mali, Senegal and Mauritania, the Senegal River is the third longest river in Africa. In a region such as the Sahel, which is plagued by drought, poverty, and underdevelopment, access to a water resource such as the Senegal River is critical to local populations who rely on it for energy production, land irrigation, and potable water.
 

June 27, 2014: This Week in #SouthAsiaDev

Mary Ongwen's picture
We've rounded up 20 tweets, posts, links, and +1's on South Asia-related development news, innovation and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal

Carbon Bubbles & Stranded Assets

Vladimir Stenek's picture
Also available in: العربية | Español | 中文

 Shutterstock

Packing an extraordinary amount of energy in little space, fossil fuels helped propel human development to levels undreamed of before the Industrial Revolution, from synthesizing fertilizers to powering space flight. But alongside energy, they produce health-damaging air pollutants and greenhouse gases.

Today, greenhouse gas emissions are higher than at any time in at least 800,000 years and rising, causing climate changes that threaten to reverse decades of development gains. Disruption of livelihoods, loss of food security, loss of marine and coastal ecosystems, breakdown of infrastructure, threats to global security: these are just a few of the risks identified in recent scientific reports.

In the absence of technology to permanently remove greenhouse gases and restore atmospheric concentration to safe levels, there is only one realistic solution: limiting additional emissions. It is estimated that to avoid the most damaging effects of climate change, over the next few decades we can at most emit a quantity equal to about 20 percent of total proven fossil fuel reserves.

Given fossil fuels’ omnipresence in our economies and lives, leaving them in the ground will have important implications, starting with the value of the very assets.

Maafushi Island Shows the Way for Inclusive Wealth Creation through Tourism

Sandya Salgado's picture



The success story of Maafushi, an island in the Kaafu Atoll in the Maldives, dates back to 2009 when the government liberalized its policy on local tourism. A visionary entrepreneur, Ahmed Naseer, lost no time in starting a four roomed guest house in 2010, to kick start the concept of local tourism in his home island Maafushi. And the rest is history!

Maafushi’s expansion from one guest house in 2010 to thirty guest houses to date is a remarkable success story which I was privileged to witness firsthand last week. 

An island with 2000 locals had welcomed 600 tourists last year. They were coming in search of an affordable, simple holiday, just for the sun and sea experience, living amongst the islanders while experiencing theiruniqueculture and lifestyle. Maafushi’s model of attracting local tourists has provided an alternative to the high end tourism that Maldives is known world over for. 

Morocco: Turning a Commitment to Clean Energy into Reality

Fanny Missfeldt-Ringius's picture
In 2009, Morocco adopted a visionary energy sector development plan that committed to increasing the country’s share of renewable energy to 42 percent of national capacity by 2020.  The country emphasized that implementing a climate change mitigation policy through introduction of clean energy technologies would contribute to the country’s economic development. At the same time, keenly concerned about its energy security and dependence on imported energy, Morocco also sees this approach also as means to changing the reality of being the Middle East’s largest energy importer.

May 16, 2014: This Week in #SouthAsiaDev

Mary Ongwen's picture
We've rounded up 18 tweets, posts, links, and +1's on South Asia-related development news, innovation and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh, India, Nepal, Pakistan, and Sri Lanka.

2014 India Development Marketplace Finalist Story: Selco - Providing those in slums access to productive lives; one solar battery at a time.

Cristina Navarrete Moreno's picture

One year ago, Kumar began renting out 40 Selco solar-powered batteries to the people living in his slum community in the heart of Bangalore. Prior to this, 400 families were left to rely on cheap, easily breakable lights, dangerous and flammable kerosene lamps, or simple darkness. Without affordable energy, the inhabitants of Kumar’s slum lose hours of otherwise productive time that would allow them to build a pathway out of the slum, and into a secure life. Within months, demand for Selco’s rechargeable batteries sky-rocketed and Kumar increased his inventory to 86. Now, he is requesting yet another 50.

The politics of rural electrification in Sri Lanka

Thilani L. Navaratne's picture

The 10th South Asian Economics Students Meet (SAESM) was held in Lahore, Pakistan, bringing together 82 top economics undergraduate students from the region. The theme was the Political Economy of South Asia, with a winning paper selected for each of the six sub-themes. In this post, Thilani Navaratne presents her winning paper on the political economy of energy and natural resource use. Posts from the other winning authors have also been featured on this blog, and can be found at the end of this post.

In the past, Sri Lankan policy makers and politicians paid considerable attention to creating surplus energy capacity at the national level in order to support rapid development while at the same time, embarked on rural development as a prime political initiative where the rural electrification infrastructure formed a crucial component of the policy framework.

I conducted an analysis of the dynamics and the characteristics of the political economy of access to energy in rural electrification in Sri Lanka. The study focuses on how national policies shaped rural energy access and what influence rural politics and demand at the grassroots level have had on the energy infrastructure.

In addition to that the study explores the budgetary policies that had a direct bearing on national energy policies, and more specifically in creating rural energy infrastructure itself.  While the provision of energy is the main component of rural energy access, the affordability of energy at rural level remains a key factor in the ultimate, tangible outcomes of energy usage. Clearly, rural economic development and enhancement of living standards are intrinsically linked with the degree of access to energy at affordable prices.

My paper finds that rural access to energy has come about both as a direct outcome of specific policies as well as a result of broader policies of rural development. Specific policies include the National Energy Policy which addresses the basic energy needs of the nation and sets out strategies to be followed to fulfil such needs. Much broader, macro level policies relating to Rural Development and energy accessibility are captured in the  “Mahinda Chinthana”- The long term plan for the future of the nation, presented by the governing regime and in the Ministerial Policies.


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