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Which South Asia do you live in?

Prabha Chandran's picture

This blog is part of the series #OneSouthAsia exploring how South Asia can become a more integrated, thus more economically dynamic region. The blog series is a  lead up to the South Asia Economic Conclave, an event dedicated to deepen existing economic links through policy and investments in regional businesses.

Which South Asia do you live in? The one which offers world-class metros and malls, super-specialty hospitals, gourmet eateries and designer homes where servants make your meals, drive your car or clean your mess? 

Or do you live in the South Asia where sanitation, water and electricity are a luxury, where filth, ignorance and violence means death comes early and more frequently from illness, poverty and natural disasters? Statistically, the latter is more likely.

Having lived in Southeast Asia, where the emergence of the Tigers has transformed the lives of millions of poor through investment in human development, infrastructure and exports producing high growth rates, the visible poverty and chaotic streets of South Asia are troubling. So, too, is the contrast provided by India's dollar billionaires -- the third-largest rich man's club in the world.

4 key challenges for reforming state-owned enterprises: Lessons from Latin America

Fanny Weiner's picture
Man fixing railroad tracks. Mexico. Photo - Curt Carnemark / World Bank

Efficiency. Competitiveness. Innovation. Integrity.

Do these words come to mind when you think of State-Owned Enterprises (SOEs)?

From June 2-3, 2015 in Santiago, Chile, over 100 representatives of governments, SOEs, and academia from 13 countries came together to discuss how to advance these ideals, at the fourth Annual Meeting of the Latin American Network on Corporate Governance of State-Owned Enterprises, co-organized by the World Bank, the Organisation for Economic Co-operation and Development (OECD), and the Latin American Development Bank (CAF). 

SOEs are commercial enterprises owned by governments, in full or in part. Across Latin America, SOEs still represent a significant portion of GDPs, national expenditures, employment, and government revenues. Many SOEs provide essential public goods and services like water, electricity, and transportation.

Tourism ecosystems: A way to think about challenges and solutions to tourism development

Shaun Mann's picture

Ecosystem: A complex of living organisms, their physical environment, and all their interrelationships in a particular unit of space.
Tourism: A social, cultural and economic phenomenon that entails the movement of people to countries or places outside their usual environment for personal, business or professional purposes.

I was part of a tourism ecosystem, once, when I built and operated a small lodge on the banks of the Nile in Uganda. While I was living in a tent in the bush building the lodge, life was simple: My little ecosystem was the land around the lodge and the tribulations of fending off monkeys and snakes by day and leopards, hippos, elephants and mosquitoes at night. The sun and rain beat down hard, and tools and workers broke down regularly. The generator was a particular pain in the neck.

Apart from supplies coming in, I was not really connected to the outside world. Money ran out for awhile and I had to rush to Kampala and persuade the bank give me a bigger overdraft (at 26 percent interest – thieves!).
Once the lodge was finished, I had to join another ecosystem: the world of registering the company, getting licenses, drawing up employment contracts, getting a bank overdraft, getting a tax ID number – all the elements of the enabling environment for me to do business. Then I had to join another one: I needed bums on beds, and I had to link my wonderful product to local markets; I had to develop promotional materials and packages; I had to interact and contract with tour operators and local travel agents to supply me business; I needed market access. 

Nile Safari Camp: home for two years

Then, guess what? My business plan wasn’t panning out. I didn’t get the occupancies or the rates that I projected from the local market. I had to step into yet another ecosystem: the world of international long-haul travel. I needed more and better-paying customers. I had to understand how the big international tour operators sold their product, what they were looking for in new product and how they contracted. I had to join another ecosystem to make that happen. Turns out my little product wasn’t enough to attract international customers on its own, I had to team up with other lodges and offer a fuller package; we had to cluster our products. I had to diversify and innovate and find ways to add value to my accommodation offer – birdwatching, fishing, guided walks, weddings and honeymoons, meetings and workshops. . . . Well, there are whole ecosystems around each of those market segments. You need to understand them before you can do business with them.        

When China met Africa

Tehmina S. Khan's picture
China’s expanding presence in Sub-Saharan Africa has been a major catalyst for growth in the region. Contrary to widespread opinion, its engagement covers all aspects of development. Stronger domestic policies will help countries in the region increase the gains from this growing partnership.

What will it take to realize Pakistan’s potential?

Sri Mulyani Indrawati's picture
Sri Mulyani Indrawati meeting beneficiaries
Meeting with beneficiaries of the Benazir Income Support Programme in Lahore, Pakistan.

As Pakistan readies to celebrate its independence day, we can all feel satisfied about progress in restoring macroeconomic stability, but should also realise that the country can and should do much better. Pakistan has many assets, of which it can make better use — from its vast water and river endowment, to its coastline and cities, to its natural resources. And there are upsides: a growing middle class, a lively informal economy and a strong influx of remittances. Pakistan can also be proud of the first peaceful transfer of power between two civilian governments. But to reach its full potential, Pakistan needs to focus on two critical areas, both obvious and urgent. It needs to ensure that its people have the means to fully participate in and contribute to the economy. And it needs to integrate itself more, globally and regionally.

The first challenge is demographic. As a result of rapid population growth, 1.5 million youngsters reach the working age each year. The question is, will the private sector be able to provide the jobs they need and want? And will the youth have the skills to get good jobs? Pakistan must do far better in education. Primary school net enrollment is about 57 per cent, well below other South Asian countries. Enrollment drops by half in middle school, with much lower levels for girls and children from poor families. This is not a good foundation to build on.

It is not surprising then that Pakistan also struggles to give all its citizens the opportunity to participate in building better lives for themselves. Only 25 per cent of women participate in the labour force, compared to 50 and 80 per cent in most developing countries. Women and girls deserve better. Research shows that girls with little or no education are far more likely to be married as children, suffer domestic violence, and live in poverty. This harms not only them, but also their children, their communities and the economy. Greater gender equality can enhance productivity and improve development outcomes for the next generation. It is smart economics.

Pakistan has taken steps to empower women. The Benazir Income Support Program, supported by the World Bank, has provided millions of women with national ID cards and makes direct payments to them, strengthening their ability to take decisions and move out of poverty.

Cecil the lion: Is there a golden lining?

Hermione Nevill's picture

Cecil the Lion at Hwange National Park in Zimbabwe.

We all know about the story that broke the Internet: the story of Cecil the lion and the Minnesota dentist who killed him. What you may not know is that you can now buy a gold-plated iPhone case with Cecil etched on the back for about US$1,000.

The world has reacted in different ways to the news of this black-maned martyr. For various reasons, the media has gone into overdrive, the public has been outraged, and enterprising phone-case companies have gotten creative. So what does it mean for us in the field of tourism, conservation and development?

The global spotlight has been a good thing.  First of all, it has raised the temperature of the debate around conservation. People have flooded the dentist’s business page with negative online reviews (“murderer!”), called for his extradition to Zimbabwe, signed petitions, made donations, retweeted celebrities and forced three US airlines to ban wildlife trophy transport.

Publicity like this can have a lasting effect on consumer demand by stimulating more responsible behavior. For example, media exposs on sex tourism and child abuse in Thailand and Madagascar caused the tourism industry (more than 1,000 travel and hospitality companies) to adopt a global code of ethics. Public backlash against the negative impacts of orphanage tourism (volunteering) in Cambodia – following a 2012 investigation by Al Jazeera – meant that most large travel agents removed the product from their books, not only in Cambodia but globally. There is an opportunity here for all tourists, hunters and operators to reflect on and improve the way they behave and interact with wildlife.

More crucially, Cecil’s publicity has revealed the divisiveness of the issue. While everyone condemns the illegality of what happened, conservationists, columnists, academics and others cannot definitively agree on bigger questions. Does trophy hunting really contribute to conservation? Or should it be banned? Is photographic tourism a better alternative? Do we actually know?

For those of us concerned with such development goals as natural-resource management, job creation or local community empowerment, this lack of a global consensus poses a policy challenge. Indeed, the last few days have highlighted that indeed both consumptive (hunting) and non-consumptive (safari) tourism can demonstrate positive impacts.

So perhaps the question is not “Which is the better alternative” but “How can we better capture the value and benefits of each?” One way is to look at the policy framework and its role in regulating the supply side of the equation.

Traditional trade policy is alive and kicking

Nihal Pitigala's picture

With the growing importance of global value chains as a conduit for trade integration, much of the recent empirical analysis and other literature has focused on the impacts of non-tariff barriers, behind-the-border measures, and other transaction costs. Traditional barriers, tariffs in particular, have generally been dismissed as less disruptive to trade and, therefore, have fallen out of the policy debate. However, evidence is surfacing from developing countries that import taxes are on the rise, increasing protection, and their disruptive tendencies are often disguised. Along with the rising tendency to subsidize domestic industries, these additional taxes tend to further augment the inherent anti-export bias, which can be particularly detrimental to trade-led development strategies and policies in developing countries. 

How to make zones work better in Africa?

Cecile Fruman's picture

Sub-Saharan Arica has launched a new wave of “special economic zones” (SEZs), with more and more countries establishing or planning to establish SEZs or industrial parks. However, can Africa overcome the past stigma and make the zone programs truly successful?

This was one of the hot topics during the China-Africa “Investing in Africa Forum,” held in Addis Ababa, Ethiopia, from June 30 to July 1, organized by the World Bank Group with the government of Ethiopia, the government of China, the China Development Bank and UNIDO.
Why did the the African zones fail, in the past, to attract many investors? My answer was they were not truly “special” in terms of business environment and infrastructure provisions, and many constraints were not significantly improved inside the zones. This analysis was supported by another panelist, His Excellency Dr. Arkebe Oqubay, Senior Advisor to the Prime Minister of Ethiopia. According to Dr. Oqubay, past zones in Africa were “missing the ‘basics’ such as power, water and one-stop services, and were not aligned with national development strategy.”

That viewpoint was shared by almost all the other panelists, which included senior African and Chinese officials and international experts at the SEZ session, which was characterized with candid discussions and greatly benefited from the background paper prepared by Douglas Zeng of the World Bank Group’s Trade and Competitiveness Global Practice.

Commodities (mostly) continue to tumble

John Baffes's picture

We just published our Commodity Market Outlook for the third quarter of 2015, and report that most prices declined in the second quarter of 2015 due to ample supplies and weak demand, especially in industrial commodities (see figure below).

Energy prices rose 12 percent in the quarter, with the surge in oil offset by declines in natural gas (down 13 percent) and coal prices (down 4 percent). However, energy prices fell on average to 39 percent below 2014 levels. Natural gas prices are projected to decline across all three main markets—U.S., Europe, and Asia—and coal prices to fall 17 percent. Excluding energy, our report notes a 2 percent decline in prices for the quarter, and forecasts that non-energy prices will average 12 percent below 2014 levels this year. Iran’s new nuclear agreement with the US and other leading governments, if ratified, will ease sanctions, including restrictions on oil exports from the Islamic Republic of Iran. Downside risks to the forecast include higher-than-expected non-OPEC production (supported by falling production costs) and continuing gains in OPEC output. Possible (less likely) upside pressures may come from closure of high-cost operations—the number of operational oil rigs in the US is down 60 percent since its November high, for example—and geopolitical tensions. 

A BIT far? Geography, Investment Agreements, and FDI

Gonzalo Varela's picture
Despite hard times at home, emerging market multinationals (EMMs) continue their impressive rise in the global marketplace. In 2014, outward foreign direct investment (FDI) by developing and emerging economies increased by 23 percent, reaching a record level of $468 billion or 35 percent of global FDI flows (UNCTAD, 2015). In little more than a decade, emerging market firms like India’s Tata Group, South Africa’s SABMiller, and China’s Haier, have established operations around the world, becoming global leaders in their respective products.