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Financial Sector

An update on Bhutan’s economy

Yoichiro Ishihara's picture
Accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development
Accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development. Credit: World Bank

Bhutan is one of the smallest, but fastest-growing economies in the world.
 
Its annual average economic growth of 7.6 percent between 2007 and 2017 far exceeds the average global growth rate of 3.2 percent.
 
This high growth has contributed to reducing poverty: Extreme poverty was mostly eradicated and dwindled from 8 percent in 2007 to 1.5 percent in 2017, based on the international poverty line of $1.90 a day (at purchasing power parity).
 
Access to basic services such as health, education and asset ownership has also improved significantly.
 
The country has a total of 32 hospitals and 208 basic health units, with each district hospital including almost always three doctors.
 
The current national literacy rate is 71 percent and the youth literacy rate is 93 percent.
 
The recent statistics on lending, inflation, exchange rates and international reserves (Sources: RMA, NSB) confirm that Bhutan maintained robust growth and macroeconomic stability in the first half of 2018.  

Gross foreign reserves have been increasing since 2012 when the country experienced an Indian rupee shortage.
 
Reserves exceeded $1.1 billion, equivalent to 11 months of imports of goods and services, which makes the country more resilient to potential shocks.
 
The nominal exchange rate has been depreciating since early 2018 (with ngultrum reaching Nu. 73 against the US dollar in early November).

Helping poor women grow their businesses with mobile savings, training, and something more?

Mayra Buvinic's picture

Growing a business is not easy, and for women firm owners the challenges can be acute, especially when they are poor and run subsistence level firms. In developing countries, 22 percent of women discontinue their established businesses due to a lack of funds, and women are more likely than men to report exiting their businesses over finance problems, according to the Global Entrepreneurship Monitor. Meanwhile, personal savings are a crucial source of entrepreneurial financing, and nearly 95 percent of entrepreneurs globally state that they used their own funds to start or scale up their businesses. Women, however, face unique constraints in accumulating savings to invest in growing their firms.
 

Photo credit: Marijo Silva and the “She Counts” global platform.

Corporate tax avoidance in an era of changing firms

Davida Connon's picture

It is widely accepted that corporate tax avoidance is commonplace, but experts disagree over the precise amount of tax that corporations successfully avoid. One estimate for 2012 suggests that 50 percent of all foreign income of multinationals is reported in jurisdictions with an effective tax rate below 5 percent; another suggests it’s more like 40 percent. The OECD estimates that governments worldwide are missing out on anything between four and ten percent of global corporate income tax revenue every year, or US$100–$240 billion. While the accounting varies, one fact is clear:  there is an unacceptable level of corporate tax avoidance, no matter how you do the math. 

For better returns on development investments, we need a better market

Jorge Moreira da Silva's picture

Financing for development is not a cost, it is an investment. An investment in sustainable cities, quality education, access to healthcare, decent jobs, efficient and responsible agriculture, and ending extreme poverty. In 2015, we recognized that the size of the investment needed to achieve the UN’s Sustainable Development Goals is greater than aid alone can provide. The Addis Ababa Action Agenda called on both public and private actors to use aid, taxation, investment, remittances, philanthropy and innovative financing. This amounts to trillions of dollars in financing of all kinds, which needs to be targeted more strategically to where they are most needed.

Who’s afraid of big bad firms?

Asli Demirgüç-Kunt's picture

Superstar firms have been in the minds of world’s leading bankers and economists lately. Policymakers are concerned that America’s leading firms such as the FAANG stocks — Facebook, Apple, Amazon, Netflix and Google — are having adverse results on the rest of us and making economic policy less predictable. Why is this? Many of the companies have improved the lives of people across the world with highly desirable and useful products. These superstar firms have also done very well for many of their stakeholders and investors. The numbers are staggering. These five tech companies together account for roughly half of the gains achieved by the Standard & Poor’s 500 stock index in 2018. And in recent weeks, Apple became the world's first trillion-dollar corporation, with Amazon not far behind. While the superstar firms have made life easier for many consumers, it's hard for economists not to wonder whether the effects of their stratospheric success are entirely benign.

To build human capital, we need more and better-targeted investments in health – The GFF provides an innovative path

Jim Yong Kim's picture
 
© Dominic Chavez/Global Financing Facility
© Dominic Chavez/Global Financing Facility

​When countries invest in people—particularly young people—they're investing in the future and giving the next generation an opportunity to achieve their dreams. 

 But every year, in countries across the world, too many dreams are cut short: more than 5 million mothers and children die from preventable causes. Globally, nearly a quarter of children under 5 are malnourished and 260 million are not in school.

In this age of rapidly advancing technology, where there is a growing demand for complex cognitive skills and problem-solving, this crisis should be a wake-up call. 

With half of the world’s population still lacking access to basic health services, we urgently need more and better financing for health, especially in developing countries where health and nutrition needs are greatest.  

Releasing the 2017 Global Findex microdata

Leora Klapper's picture

It’s financial inclusion week—a series of events exploring "the most pressing actions needed to advance financial inclusion globally"—making this a perfect time to launch the 2017 Global Findex microdata.

In April, we released country-level indicators on account ownership, digital savings, savings, credit, and financial resilience. Now comes the microdata – individual-level survey responses from roughly 150,000 adults living in more than 140 economies globally.

Global Findex 2017 microdata available for download

Leora Klapper's picture
We're thrilled to release the 2017 Global Findex microdata, featuring individual survey responses from roughly 150,000 adults globally. Get it here, along with documentation including a variable list, questionnaire, and information on sampling procedures and data weighting.
 
Downloading the data is easy. At the microdata library, you'll see a screen that looks like this:
 

 

Doing better business to fight poverty

Duvindi Illankoon's picture
The new Doing Business ranking places Sri Lanka at 100 out of 190 economies, compared with 111 last year. This year Sri Lanka made it easier for businesses to register property, obtain permits, enforce contracts and pay taxes. Credit: World Bank

End Poverty Day fell on the 17th of October. Two weeks later, the new Doing Business rankings come out for this year.

If you’re wondering what the link is, here’s a quick summary: business-friendly regulations can be instrumental in lowering poverty at the national level.

This is one of those happy instances where economics, common sense and the data align.

A better regulatory environment encourages more businesses to register and expand, bringing more employers to the economy.

Then the market responds- not only do these employers create more jobs, but also going to offer better jobs to attract capable workers to their companies.

Ultimately, a reliable source of income is the catalyst to moving out of poverty.

Sounds too simple? Trust the numbers.

How can Local Capital and Foreign Brands Join Forces to Create Millions of Jobs? The Case of Non-Equity Modes of Investment

Priyanka Kher's picture

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