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.
The last 10 years have seen turbulent economic times. The global economic crises was rooted, in part, in standards for guiding private sector behavior and setting economic policy that failed to meet emerging challenges and risks. One of the lower profile, but important, consequences has been to reexamine the fiscal standards that have guided fiscal policy and management practices.
On October 6, 2014 the International Monetary Fund, at a joint event with the World Bank, launched its new Fiscal Transparency Code (FTC) and Evaluation following two years of intensive analysis and consultation. I congratulate the IMF on creating a set of standards that capture the quality of fiscal reports and data, are graduated to reflect different levels of country capacity, and more comprehensively covers fiscal risks.
For 2014, we project that Russia’s economy will grow at an estimated 0.3-0.5 percent. This is the lowest growth rate since the global financial crisis but higher than the high-risk case scenario which was expected since the geopolitical tension started and the sanctions of the EU and the US took hold. This means that Russia’s expected economic performance in 2014 will be similar to that of the Euro-zone, even though Russia is much more dependent on the European market than the EU is on Russia.
The recent acceleration in growth rates across much of sub-Saharan Africa may not be purely commodity-driven, but for many of the region’s economies macro-economic stability is still dependent on prudent management of natural resources. For this reason, a strategic shift is required to shield African economies from commodity boom-burst cycles.
For much of the last half century, the dominant political economy model of natural resource management in Africa was this: states received royalties from mostly private mining companies and then were supposed to invest in public goods such as roads, hospitals, and schools. Private mining companies, for their part, would pick up the slack whenever states failed. Most of the time this happened through corporate social responsibility (CSR) initiatives, as a way of buying the social license needed to operate in specific communities.
This model has proven to be a complete failure in nearly all resource-rich African states, for a number of reasons.
At a moment when good economic news is in short supply, this week’s observance of World Energy Day provides a chance to celebrate some positive news – positive, at least, from the viewpoint of the world's developed economies, which have lately been struggling to recover from prolonged stagnation.
The recent plunge in global energy prices was a major factor informing a World Energy Day forum on “The Green Side of Energy Security” – convened in Washington on Wednesday by the European Union Delegation to the United States. The plummeting cost of energy, thanks in part to vast increases in oil and natural-gas supplies, is now poised to give advanced economies a much-needed additional stimulus. That's helping dispel some of the gloom that pervaded the economic forecasts at the recent Annual Meetings of the World Bank Group and International Monetary Fund.
Moreover, the current global glut of oil and natural gas also highlights the success of a far-sighted innovation program that has helped strengthen productivity in the energy sector. The success of the 40-year-long U.S. program to create more effective methods of oil and natural-gas production has has transformed the global energy landscape. If those new production methods can be responsibly carried out, in compliance with strict environmental safeguards – and, granted, that’s a big “if” – then the economy will buy some extra time as it seeks to make the transition away from fossil fuels and toward cleaner, greener, more sustainable sources of energy.
The initiative's technological breakthrough epitomizes the creativity that public-private cooperation can unleash when governments and industries, working together, patiently invest to strengthen productivity in specifically targeted industries and sectors.
The worldwide price of crude oil has fallen about 25 percent – from more than $110 a barrel in midsummer to about $80 a barrel this week – thanks to a combination of reduced demand (due to sluggish economic activity in many industrialized countries) and vastly increased oil and natural-gas production. Despite the geopolitical tensions now afflicting several major oil-producing regions, large new supplies of oil and natural gas are projected to continue arriving on the market, maintaining downward pressure on energy prices.
Much of the increased supply has its origin in North America – where “the revolution in American shale gas and ‘tight oil’ is real,” according to energy-policy scholar and historian Daniel Yergin. Writing in the Financial Times this week, Yergin noted that “U.S. crude-oil output is up almost 80 percent since 2008, supplying an extra 3.9 million barrels a day. . . . Canadian oil sands have added another 1 million barrels a day to North American supply over the same period.”
The energy revolution is poised to deliver a powerful, positive economic impact: As industries and consumers pay less for oil and natural gas, they’ll receive the equivalent of a tax cut – with Yergin estimating its benefit at about $160 billion a year, just for the U.S. economy. Such a stimulus, if it helps buoy economic activity in Europe as well, will boost economies that have been mired in what threatens to become long-term “secular stagnation.”
For motorists who are now paying less at the gasoline pump – and for home-heating-oil and natural-gas consumers who are awaiting their first chilly-season heating bills – the oil-price plunge and natural-gas glut may seem like an economic deus ex machina.
Step by step, consider how this process delivered today's energy abundance.
- What inspired the arrival of these new energy supplies? New technologies and techniques – “hydraulic fracturing” and “horizontal drilling” – have helped coax once-inaccessible oil and natural-gas deposits out of underground rock formations.
- And how were those techniques developed? Through well-targeted innovation programs that were initially funded by government agencies.
- After government-funded R&D had proven the new technologies' promise, the new industrial methods were eagerly applied by innovators in the energy industry.
- Connect the dots: This revolution was brought to you by far-sighted, government-inspired investment initiatives that helped a strategically-chosen sector of the economy promote competitive industries and innovation.
- OK: Let's come right out and say it: This marks a triumph of industrial policy.
There: We actually said the fateful phrase: "industrial policy."
That always-somewhat-ambiguous term, "industrial policy," may have fallen out of political favor nowadays -- but there's no real reason to shrink from the idea, even though it's currently fashionable to use a euphemism like "innovation initiative" or "competitiveness strategy."
It's true, as skeptics suggest, that it's difficult to get industrial policy right. Public-private investment programs can be complex to design and sustain: In this case, it took about 40 years of experimentation and evolution to achieve the energy program's goals. Yet, when this initiative was launched in the energy-starved 1970s, various approaches to industrial policy were being vigorously pursued by many economies, large and small. (Yes, even the United States -- and even under conservative governments, as illustrated by the Ford Administration's pursuit of this program.) Put in its historical context, this example of 1970s-style industrial policy succeeded in delivering, at last, its long-promised payoff in productivity.
Piloted during the Ford Administration and ramped-up during the Carter Administration, this effort hailed from an era when repeated oil shocks were raising fears that the industrialized world would be threatened by oil-rich countries’ production cuts and price increases. Pragmatic R&D efforts on alternative oil-production methods were methodically pursued by the U.S. Department of Energy (DOE) and the U.S. Bureau of Mines, drawing on crucial technological insights from the taxpayer-supported network of national research laboratories.
Once that initial government-funded research had laid the foundation for new technologies and techniques, the private sector stepped in and played its indispensable part. A public-private partnership through the Gas Research Institute helped perfect the new techniques, while pro-innovation tax policies granted favorable federal tax treatment for investors’ R&D commitment to the energy sector. A champion of the new technologies, George P. Mitchell, evangelized for hydraulic fracturing and horizontal drilling, even when skeptics scoffed. Researchers at the Breakthrough Institute assert: “Where Mitchell proved invaluable was [in] engaging the work of government researchers and piecing together different federally-developed technologies to develop a commercial product.”
As we mark World Food Day, here’s a sobering thought: Too many people are hungry.
One in nine people suffer from chronic hunger, more than 1 billion people are undernourished, and 3.1 million children die every year due to hunger and malnutrition. This is a huge drain on development--when people are hungry and malnourished, they are less able to improve their livelihoods; adequately care for their families; live full and healthy lives and lift themselves out of poverty.
The problem is set to intensify in the future, as the population grows, climate change affects how we produce our food and the natural resources that help feed the world are stretched even further. We aren’t feeding the world as well as we should be in 2014. How can we do better in the future, when the world will need to feed and nourish 9 billion people in 2050?
It is said short absence quickens love, long absence kills it. This is not always true in reality. One case is remittance behavior of long-term migrants. The remittance literature argues that the amount of remittances sent by migrants to their countries of origin declines through time. Reunification of families or breakdown of family ties underpins such behavior. However, the empirical evidence is not all supportive. The passage of time does not significantly influence migrant remittance behavior. Remittances are maintained at high levels over long periods. This allays concern that economies dependent on remittances will face foreign exchange shortages and falling living standards as remittance levels fall because of reduced migration rates and decline in migrants' willingness to remit over time.
What is the Bangladesh experience? One way to judge is to look at the remittance behavior of Bangladesh diaspora abroad. There is no reliable data on the number and location of Bangladeshi diaspora members. A recent ILO report–Reinforcing Ties: Enhancing contributions from Bangladeshi diaspora members--estimates the number of Bangladeshi migrants living permanently in the United States and Europe at around 1.2 million.