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Financial Sector

Adapting to Climate Change: Disaster Risk Mitigation

Joaquim Levy's picture
A family whose home floods every year, creating hazardous living conditions in Colombia. © Scott Wallace/World Bank
A family in Colombia whose home floods every year, creating hazardous living conditions. © Scott Wallace/World Bank


Climate shocks have profound implications for the development prospects of the World Bank’s client countries. For many emerging market and developing economies (EMDEs), the adverse impact is already a reality, with natural disasters becoming more frequent and severe. Unfortunately, many countries still lack the capacity to cushion these blows, and this can spur political fragility, food insecurity, water scarcity, and, in extreme cases, conflict and migration. Even in milder manifestations, these impacts can derail development and set back gains from years of investment

Reforms Sri Lanka needs to boost its economy

Idah Z. Pswarayi-Riddihough's picture
 Joe Qian/World Bank
The Colombo Stock Exchange. Credit: Joe Qian/World Bank

Many Sri Lankans understand the potential benefits of lowering trade costs and making their country more competitive in the global economy. The majority, however, fear increased competition, the unfair advantage of the private sector from abroad and limited skills and innovation to compete.

Yet, Sri Lanka’s aspirations cannot be realized in the current status quo.  

While changes in trade policies and regulations will undeniably improve the lives of most citizens, I’m mindful that some are likely to lose. However, many potential gainers of the reforms who are currently opposed to them are unaware of their benefits.

Implementing smart reforms means that government funds will be used more effectively for the people, improve access to better healthcare, education, basic infrastructure and provide Sri Lankans with opportunities to get more and better jobs. Let me focus on a few reforms that I believe are critical for the country.  First, Sri Lanka needs to seek growth opportunities and foreign investment beyond its borders.    

First, Sri Lanka needs to seek growth opportunities and foreign investment beyond its borders.

Experience shows that no country in the world today has been able to create opportunities for its population entirely within its own geographic boundaries. To succeed in this open environment, Sri Lanka will need to improve its skills base, better understand supply and demand chains as well as produce higher quality goods and services

Experience shows that no country in the world today has been able to create opportunities for its population entirely within its own geographic boundaries. To succeed in this open environment, Sri Lanka will need to improve its skills base, better understand supply and demand chains as well as produce higher quality goods and services.

Machine Learning Helps Power Down Electricity Theft in Jamaica

Anna Lerner's picture
  • In Jamaica, about a quarter of electricity produced is stolen or “lost” through non-paying customers and/or accounting errors. Manual detection has failed to make a difference in reducing this theft.
  • ESMAP’s technical assistance team implemented a machine learning model to help Jamaican utility JPS identify and decrease incidents of theft.
  • The machine learning model is based on an open source code, and is available for free to any utility.
About a quarter of the electricity produced by Jamaica’s energy utility, Jamaica Public Service (JPS) is stolen. When traditional, labor-intensive methods failed to produce lasting results, Jamaica tried a different approach: machine learning.
 
Globally, billions of dollars are lost every year due to electricity theft, wherein electricity is distributed to customers but is never paid for. In 2014 alone, Jamaica’s total power transmission and distribution system reported 27% of losses (due to technical and non-technical reasons), close to double the regional average. While the utility company absorbs a portion of the cost, it also passes some of that cost onto consumers. Both actors therefore have an incentive to want to change this.
 
To combat this, JPS would spend more than $10 million (USD) on anti-theft measures every year, only to see theft numbers temporarily dip before climbing back up again. The problem was, these measures relied primarily on human-intensive, manual detection, and customers stealing electricity used more and more sophisticated ways to go around regularly metered use. JPS employees would use their institutional knowledge of serial offenders and would spend hours poring over metering data to uncover irregular patterns in electricity usage to identify shady accounts. But it wasn’t enough to effectively quash incidents of theft.

Smart investments? The costs of choice and excessive switching in pension funds

Alvaro Enrique Pedraza Morales's picture

Pension funds are rightly viewed as an important source of long-term capital in many countries. Following the global financial crisis of 2008, the theme of long-term investment and the role of institutional investors as providers of domestic capital for economic development has been high on policy makers’ agendas. Despite generally positive findings linking pension system development and economic growth, there are also plenty of disappointments. In too many countries, pension fund investments remain highly concentrated in bank deposits and traditional government bonds. This lack of diversification can be explained by many factors, for instance, unsupportive macro conditions, shortage of investment instruments, poor governance, limited investment knowledge, and regulations with restrictive asset class limits and excessive reliance on short-term performance monitoring.

Budget-strapped cities are creating financing—out of thin air

Luis Triveno's picture

Photo: Jonathan O'Reilly / Shutterstock

The world is urbanizing fast200,000 people are moving to cities every day in search of homes, jobs, as well as education and healthcare services for their families. Supporting this influx with proper infrastructure and services for water, sanitation, transport, and green spaces will require an estimated $1 trillion each year.
 
Given the difficulties of further increasing the tax burden or the level of public debt, it’s time for cities to think more creatively about alternative sources of funding.

Not willing to wait for their national governments to bless them with scarce infrastructure funds, innovative mayors have figured out how to squeeze a new source of urgently needed capital out of thin air, literally.

Let’s talk money: New campaign helps Cambodia’s new generation on financial management

Ratchada Anantavrasilpa's picture
The World Bank partnered with the Women’s Media Center “Let’s Talk Money” radio show to help build financial stability in Cambodia.
Risky financial behaviors among Cambodians of the post-millennial generation have become more widespread in the country, especially among the 18-35 age group. While they are important customers for the financial and banking sectors, their behaviors are often dominated by lavish spending and excessive borrowing. 
 

How Islamic finance is helping fuel Malaysia’s green growth

Victoria Kwakwa's picture
Photo: bigstock/ f9photos

Income growth is not the sole aim of economic development. An equally important, albeit harder to quantify objective is a sense of progress for the entire community, and a confidence that prosperity is sustainable and shared equitably across society for the long term.  

Fresh thinking on economic cooperation in South Asia

Nikita Singla's picture
 Aamir Khan/ Pakistan, Sreerupa Sengupta/ India, Sanjay Kathuria/ World Bank, Mahfuz Kabir & Surendar Singh/ Bangladesh) Photo By: Marcio De La Cruz/ World Bank
Young Economists sharing the stage with Sanjay Kathuria, Lead Economist and Coordinator, Regional Integration (Left to Right: Aamir Khan/ Pakistan, Sreerupa Sengupta/ India, Sanjay Kathuria/ World Bank, Mahfuz Kabir/Bangladesh & Surendar Singh/ India). Photo by: Marcio De La Cruz/ World Bank


That regional cooperation in South Asia is lower than optimal levels is well accepted. It is usually ascribed to – the asymmetry in size between India and the rest, conflicts and historical political tensions, a trust deficit, limited transport connectivity, and onerous logistics, among many other factors.

Deepening regional integration requires sufficient policy-relevant analytical work on the costs and benefits of both intra-regional trade and investment. An effective cross-border network of young professionals can contribute to fresh thinking on emerging economic cooperation issues in South Asia.

Against this background, the World Bank Group sponsored a competitive request for proposals.  Awardees from Bangladesh, India, and Pakistan, after being actively mentored by seasoned World Bank staff over a period of two years, convened in Washington DC to present their new and exciting research. Research areas included regional value chains, production sharing and the impact assessment of alternative preferential trade agreements in the region.

Young Economists offer fresh thoughts on economic cooperation in South Asia

Mahfuz Kabir, Acting Research Director, Bangladesh Institute of International and Strategic Studies and Surendar Singh, Policy Analyst, Consumer Unity Trust Society (CUTS International) presented their research: Of Streams and Tides, India-Bangladesh Value Chains in Textiles and Clothing (T&C). They focus on how to tackle three main trade barriers for T&C: a) high tariffs for selected, but important goods for the industries of both countries; b) inefficient customs procedures and c) divergent criteria for rules of origin classification.

Sreerupa Sengupta, Ph.D. Scholar at Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi discussed Trade Cooperation and Production Sharing in South Asia – An Indian Perspective. Reviewing the pattern of Indian exports and imports in the last twenty years, her research focuses on comparing the Global Value Chain (GVC) participation rate of India with East Asian and ASEAN economies. Barriers to higher participation include a) lack of openness in the FDI sector; b) lack of adequate port infrastructure, and long port dwell times; and c) lack of Mutual Recognition Agreements (MRAs).

Aamir Khan, Assistant Professor, Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad presented his work on Economy Wide Impact of Regional Integration in South Asia - Options for Pakistan. His research analyzes the reasons for Pakistan not being able to take full advantage of its Free Trade Agreement (FTA) with China, and finds that the granting of ASEAN-type concessions to Pakistan in its FTA with China would be more beneficial than the current FTA arrangement. The work also draws lessons for FTAs that are currently being negotiated by South Asian countries.

Changes must come to the way agriculture is funded in Brazil

Diego Arias's picture

A matching grant enabled the Brazilian cooperative Coopervoltapinho to build a rice silo. All photos by Romeu Scirea.

Imagine driving along a rural road and seeing many small farms, all growing flourishing crops. Would you know how the farmers obtained the funds to plant these crops, enhance their productivity, and deliver them to market?
 

International asset allocations and capital flows: the benchmark effect

Sergio Schmukler's picture

As financial intermediaries tracking benchmarks grow in importance around the world, the issue of which countries belong to relevant international benchmark indexes (such as the MSCI Emerging Markets) has generated significant attention in the financial world (Financial Times, 2015). The reason is that the inclusion/exclusion of countries from widely followed benchmarks has implications for the allocation of capital across countries.

As institutional investors become more passive, they follow benchmark indexes more closely. These benchmark indexes change over time, as index providers reclassify countries, implying that investment funds have to re-allocate their portfolio among the countries they target. The capital flows generated by these portfolio re-allocations are important because worldwide open-end funds that follow a few well-known stock and bond market indexes manage around 37 trillion U.S. dollars in assets (ICI, 2016).


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