Syndicate content

Global Economy

Relative versus absolute poverty headcount ratios: the full breakdown

Juan Feng's picture

Most countries in the world measure their poverty using an absolute threshold, or in other words, a fixed standard of what households should be able to count on in order to meet their basic needs. A few countries, however, have chosen to measure their poverty using a relative threshold, that is, a cutoff point in relation to the overall distribution of income or consumption in a country.

Chart 1


The chart above shows the differences between relative and absolute poverty headcount ratios for countries that have measured both. You can select other countries from the drop down list, but for example, you can see that Romania switched from measuring poverty in absolute terms to measuring poverty in relative terms in 2006.  Absolute poverty headcount ratios steadily declined from 35.9% in 2000 to 13.8% in 2006. However, by relative measures, the national poverty headcount ratio in 2006 was 24.8%.  This does not mean that poverty bumped up in 2006. These two numbers are simply not comparable, but what exactly do they both mean?

New Voices in Investment: How Emerging Market Multinationals Decide Where, Why, and Why Not to Invest

Gonzalo Varela's picture

Emerging market multinationals (EMMs) have become increasingly salient players in global markets. In 2013, one out of every three dollars invested abroad originated from multinationals in emerging economies.

Up until now, we have had a limited understanding of the characteristics, motivations, and strategies of these firms. Why do EMMs decide to invest abroad? In which markets do they concentrate their investments and why? And how do their strategies and needs compare to those of traditional multinationals from developed countries?

In a book we will launch tomorrow at the World Bank, “New Voices in Investment,” we address these questions using a World Bank and UNIDO-funded survey of 713 firms from four emerging economies: Brazil, India, Korea, and South Africa.

G20 Growth Strategies

Zia Qureshi's picture

G20 Leaders concluded their summit over the weekend in Brisbane, Australia. G20 summits represent the culmination of a process of preparatory work and discussion that lasts a whole year. Concerns about weak prospects for global growth and job creation took center stage in the G20 agenda this year. Economic recovery in advanced economies has been slow and uneven and growth in the faster-growing emerging economies also has slowed. There is a growing recognition that restoring more robust global growth requires not only addressing the legacies of the global financial crisis but also implementing deeper, structural reforms to raise potential growth.

Against this background, all G20 countries were asked to prepare medium-term growth strategies to provide a systematic framework for addressing policies and priorities in the growth agenda. The strategies that have been prepared are comprehensive in scope, spanning macroeconomic policies and structural reforms to promote strong, sustainable, and balanced growth. They have a particular focus on four policy areas that the Australian G20 Presidency emphasized as key elements of the growth agenda, namely, investment and infrastructure, employment, competition and business environment, and trade. The emphasis in the strategies on investment and structural reforms is appropriate: while the proper calibration of macroeconomic policies is important to support aggregate demand in the short term, in the medium term it is the productivity-enhancing structural reforms and investments that will drive strong and sustainable growth. The strategies have benefited from an extensive process of discussion and peer review within the G20, supported by technical assessments prepared by international organizations. Final versions of these strategies were released yesterday together with the Leaders’ Communiqué and the Brisbane Action Plan (which provides an overview of these strategies).

Kenya’s re-based national accounts: myths, facts, and the consequences

Johan Mistiaen's picture

A month ago, the Kenya National Bureau of Statistics (KNBS) Kenya released a set of re-based and revised National Accounts Statistics (NAS), the culmination of an exercise that started in 2010.  Press coverage, reactions from investors and the public have been generally favorable, but some confusion still looms regarding some of the facts and consequences.  We wrote this blog post to debunk some of the myths.

NAS, including Gross Domestic Product (GDP), are typically measured by reference to the economic structure in a “base” year.  Statisticians sample businesses in different industries to collect data that measures how fast they are growing.  The weight they give to each sector depends on its importance to the economy in the base year.  As time passes and the structure of the economy changes, these figures become less and less accurate.

Re-basing is a process of using more recently collected data to replace an old base year with a new one to reflect the structural changes in the economy.  Re-basing also provides an opportunity to add new or more comprehensive data, incorporate new or better statistical methods, and apply advancements in classification and compilation standards. The current gold standard is the 2008 System of National Accounts (SNA).

The High Density of Brazilian Production Chains

Otaviano Canuto's picture

International trade has undergone a radical transformation in the past decades as production processes have fragmented along cross-border value chains. The Brazilian economy has remained on the fringes of this production revolution, maintaining a very high density of local supply chains. This article calls attention to the rising opportunity costs incurred by such option taken by the country.
 
Moving Tectonic Plates under the Global Economic Geography

In recent decades, international trade has gone through a revolution, with the wide extension of the organization of production in the form of cross-border value chains. This extension was a result of the reduction of tariff and non-tariff barriers, the incorporation of large swaths of workers in the global market economy in Asia and Central Europe, and technological innovations that allowed modularization and geographic distribution of production stages in a growing universe of activities. International trade has grown faster than world GDP and, within the former, the sales of intermediate products has risen faster than the sale of final goods.

Chinese Lessons: Singapore’s Epic Regression to the Mean

Danny Quah's picture

Across all recorded history, 99% of humanity has never invented a single thing. Yet, it is a truth universally acknowledged that long-run sustained progress in economic well-being arises from human creativity and innovativeness. In this regard, the average human and indeed the great majority of humanity over the last seven million years provide a completely misleading guide to what is possible.

Misapplied, the Law of Averages misinforms.
 

Tackling the Most Critical Regional Economic Challenges

Sanjay Kathuria's picture
south asia integration
For the first time in history, all South Asian leaders were invited to the newly elected Indian Prime Minister’s oath-taking ceremony, May 2014. President Mahinda Rajapaksa/Flickr.  

I’m on my way to the 7th South Asia Economic Summit (SAES) in New Delhi, India. The summit* brings together leading analysts, academics, policymakers, the private sector and civil society from across the region and beyond, who meet to suggest solutions to South Asia’s economic issues and learn from each other’s experiences. 

This year’s SAES takes place at a very opportune time. Regional cooperation momentum has been on an upswing. The theme of the summit, “Towards South Asian Economic Union” captures the renewed optimism of moving forward on the regional agenda and generating shared prosperity. Apart from that, the SAES is held between November 7 – 8, only two weeks before the 18th SAARC (South Asian Association for Regional Cooperation) Summit, where heads of state from Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri-Lanka will meet in Kathmandu, Nepal.

What Inspires You to Help End Extreme Poverty by 2030?

Korina Lopez's picture
 
There may be more beautiful times, but this one is ours.  – Jean-Paul Sartre
There may be more beautiful times, but this one is ours.  
​– Jean-Paul Sartre


When I got that quote by the French philosopher tattooed on my arm, I wasn’t thinking about world poverty.  I wasn’t thinking about the environment or peace or conflict or starvation or social justice. In fact, aside from puzzling over which recycling bin my coffee cup goes in, I didn’t think about much outside of my own world. Like so many others, I have plenty of my own problems to worry about, let alone ending world poverty. It’s easy to get caught up in our own lives. That daily crush of details — getting to work on time or paying the bills — can swallow up years. But if everyone only focused on what’s happening in their own world, then nothing would ever get better.


Pages