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WTO’s Trade Facilitation Agreement and Doing Business reforms: Are they related and how?

Inés Zabalbeita Múgica's picture

Small differences in the time and cost to trade can determine whether or not a country participates in global value chains. In this respect, the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA), which came into force on February 22, 2017, is a landmark achievement given its comprehensive coverage of the issues around cutting red tape and promoting efficiency and transparency, as well as the fact that it is the first multilateral agreement since the establishment of the WTO in 1995.  Coincidentally, the Trading Across Borders (TAB) indicator of Doing Business measures the efficiency of national regulations in trade facilitation and keeps track of relevant reforms, allowing us to analyze how the provisions of the TFA are related to the reform efforts of governments around the world.

Sri Lanka at 70: Looking back and forward

Idah Z. Pswarayi-Riddihough's picture
A view from the Independence day parade.At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation.
A view from the 2018 Independence Day parade. At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation. Credit: World Bank

Like many Sri Lankans across the country, I joined Sri Lanka’s 70th Independence Day festivities earlier this month. This was undoubtedly a joyful moment, and proof of the country’s dynamism and stability. At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation.
The country’s social indicators, a measure of the well-being of individuals and communities, rank among the highest in South Asia and compare favorably with those in middle-income countries. In the last half-century, better healthcare for mothers and their children has reduced maternal and infant mortality to very low levels.
Sri Lanka’s achievements in education have also been impressive. Close to 95 percent of children now complete primary school with an equal proportion of girls and boys enrolled in primary education and a slightly higher number of girls than boys in secondary education.
The World Bank has been supporting Sri Lanka’s development for more than six decades. In 1954, our first project, Aberdeen-Laxapana Power Project, which financed the construction of a dam, a power station, and transmissions lines, was instrumental in helping the young nation meet its growing energy demands, boost its trade and develop light industries in Colombo, and provide much-needed power to tea factories and rubber plantations. In post-colonial Sri Lanka, this extensive electrical transmission and distribution project aimed to serve new and existing markets and improve a still fragile national economy.
Fast forward a few decades and Sri Lanka in 2018 is a far more prosperous and sophisticated country than it was in 1954 and, in many ways, has been a development success story. Yet, the island nation still faces some critical challenges as it strives to transition to another stage of its development and become a competitive upper middle-income country.
Notably, the current overreliance on the public-sector as the main engine for growth and investment, from infrastructure to healthcare, is reaching its limits.  With one of the world’s lowest tax to gross domestic product (GDP) ratios -- 12% in 2016, down from 24% in 1978 —Sri Lanka’s public sector is now facing serious budget constraints and the country needs to look for additional sources of finance to boost and sustain its growth.
As outlined in its Vision 2025, the current government has kickstarted an ambitious reform agenda to help the country move from a public investment to a more private investment growth model to enhance competitiveness and lift all Sri Lankans’ standards of living.
Now is the time to steer this vision into action. This is urgent as Sri Lanka is one of the world’s most protectionist countries and one of the hardest to start and run a business. As it happens, private foreign investment is much lower than in comparable economies and trade as a proportion of GDP has decreased from 88% in 2000 to 50% in 2016. Reversing this downward trend is critical for Sri Lanka to meet its development aspirations and overcome the risk of falling into a permanent “middle-income trap.”

Low-carbon shipping: Will 2018 be the turning point?

Dominik Englert's picture
Photo: Peter Hessels/Flickr
As highlighted in a previous blog post, international maritime transport has not kept pace with other transport modes in the fight against climate change.

While inland transport was included in the 2015 Paris Agreement and international air transport followed suit in 2016, progress in the international shipping sector, which carries 80% of the world’s trade volume, has been more modest. Back in 2011, the International Maritime Organization (IMO) did adopt a set of operational and technical measures to increase the energy efficiency of vessels. Realistically though, it may take about 25-30 years to renew the world’s entire fleet and make all new vessels fully compliant with IMO’s technical requirements.

In any case, focusing only on technical and operational efficiency simply won’t be enough. The demand for maritime transport is growing so quickly that, even when taking all these energy efficiency regulations into account, CE Delft projects that emissions from international shipping could still increase by 20-120% by 2050, while IMO estimates range between 50-250% for different scenarios. This clearly calls for a bolder agenda that includes credible market-based solutions, too.

Mapping Afghanistan’s future, one road at a time

Walker Bradley's picture
Mapping Afghanistan’s future, one road at a time
OpenStreetMap is an open source geospatial data portal built and maintained by a community of mappers. Photo Credit: Taimani Films/ World Bank

In May 2017, the World Bank celebrated its 15 years of reengagement in Afghanistan. Since reengagement, we have helped the government deliver public services to its citizens and, in the process, accumulated a wealth of data on many sectors from health and education to infrastructure.

However, publicly available base data used across sectors – also called ‘foundation’ data-- is still lacking. As it happens, that information is important to design projects and inform policies.

Case in point: while we may have data on vaccines given or babies born, we don’t know much about the roads that lead to the clinic. Similarly, we may get data on school attendance and passing rates of students, but we don’t know how long it takes for students to reach their schools.

These examples highlight how foundation data can help better plan the expansion of healthcare facilities or enhance access to education. After all, each mapped kilometer of a road can help us understand how long Afghan children must walk to get to school or how long it takes sick Afghans to reach a hospital.

Without question, there is a clear need for better foundation data to inform decision making at all levels.

Eco-Industrial Parks 2.0: Building a common global framework

Sinem Demir's picture
Eco-Industrial Park in Republic of Korea. @KICOX
Eco-Industrial Park in Republic of Korea. @KICO

Eco-industrial parks (EIP) refers to putting in place serviced industrial infrastructure conducive to attracting new investments, especially in manufacturing, while at the same time promoting environmental sustainability.

Is acceleration the panacea for scaling growth entrepreneurs? Reflections from XL Africa

Natasha Kapil's picture

The World Bank Group’s infoDev program has been working in Africa for years, helping to strengthen the ecosystem for digital entrepreneurs and seeding digital incubators in Kenya, Senegal, and South Africa. Start-ups in these “mLabs” have developed or improved more than 500 digital products or services, and some 100 early stage firms raised over $15 million in investments and grant funding. But is this the answer to scaling growth entrepreneurs on the continent?

Why the global economy could be turning a significant corner, in six charts

Ayhan Kose's picture

2018 will likely mark a turning point for the global economy. For the first time since 2008, the negative global output gap – defined as the difference between the levels of actual output and output if operating at full capacity – is expected to close. As the output gap closes in advanced economies, central banks are likely to normalize monetary policy after a decade of exceptional easing. With this anticipated withdrawal of stimulus by advanced economies, emerging market and developing economy policymakers need to remain alert to the potential for adverse spillovers.

Output gaps are closing

In 2018, for the first time since 2008, the negative global output gap is expected to be closed.

Global output gap
Source: World Bank staff estimates.
Notes: Output gaps calculated using multivariate filter. Global, regional, and group output gaps are calculated using constant 2010 U.S. dollar GDP as weights. The sample includes 15 advanced economies (Australia, Canada, Denmark, Finland, France, Germany, Italy, Japan, New Zealand, Norway, Spain, Sweden, Switzerland, United Kingdom, and United States) and 23 EMDEs (Argentina, Bolivia, Brazil, Bulgaria, Chile, China, Colombia, Croatia, Hungary, India, Indonesia, Kazakhstan, Malaysia, Mexico, Peru, Poland, Romania, Russia, Serbia, South Africa, Thailand, Turkey, and Vietnam). 2018 GDP is forecast. Dashed lines are 95 percent confidence interval bounds computed from the Kalman smoother state variances. Global lower and upper bounds are obtained as GDP-weighted averages of individual country lower and upper bounds.

What triggered the oil price plunge of 2014-2016 and why it failed to deliver an economic impetus in eight charts

Marc Stocker's picture
Also available in: Español

Download the January 2018 Global Economic Prospects report.

The 2014-16 collapse in oil prices was driven by a growing supply glut, but failed to deliver the boost to global growth that many had expected. In the event, the benefits of substantially lower oil prices were muted by the low responsiveness of economic activity in key oil-importing emerging markets, the effects on U.S. activity of a sharp contraction in energy investment and an abrupt slowdown in key oil exporters. 

Biggest drop in oil prices in modern history

Between mid-2014 and early 2016, the global economy faced one of the largest oil price declines in modern history. The 70 percent price drop during that period was one of the three biggest declines since World War II, and the longest lasting since the supply-driven collapse of 1986.

Real oil prices
Source: World Bank.
Notes: Real oil prices are calculated as the nominal price deflated by the international manufacturers unit value index, in which 100=2010. World Bank crude oil average. Last observation is November 2017.

Colombia: the roads more traveled

Philippe Neves's picture

Also available in Español​

Photo: Dominic Chavez / International Finance Corporation

In the early 1990s, Colombia’s road infrastructure was a maze of poorly maintained roads and bad highways. Difficult geography—the Pacific coast jungle and the Andes branching out into three chains—made it harder to improve road conditions and connect isolated communities. Conflict, corruption, and short-term political priorities contributed to the problems plaguing Colombia’s road system. But just as influential were the problems with the nation’s existing concession contracts that had wrong incentives, created opportunities for renegotiating signed contracts, and assigned unproportioned demand risk to the Government of Colombia.

Transforming Transportation 2018: To Craft a Digital Future for All, We Need Transport for All

Jose Luis Irigoyen's picture

Exponential progress in how we collect, process and use data is fundamentally changing our societies and economies. But the new digital economy depends fundamentally on a very physical enabler. Amazon and Alibaba would not exist without efficient ways to deliver products worldwide, be it by road or ship or drone. The job you applied for through Skype may require travel to London or Dubai, where you’ll expect to get around easily.

In fact, as the backbone of globalization, digitization is increasing the need to move people and goods around the planet. Mounting pressure on transportation as economies grow is leading to unsustainable environmental and safety trends. Transport needs are increasingly being met at the cost of future generations.

Can the digital revolution, which depends so much on efficient global and local mobility, also help us rethink transportation itself? To be a part of the solution to issues such as climate change, poverty, health, public safety, and the empowerment of women, the answer must be yes. Transport must go beyond being an enabler of the digital economy to itself harnessing the power of technology.