Countries of the Middle East and North Africa (MENA) are a cauldron of wrenching social change. For years pundits have attributed the region's tense social fabric to relatively high population growth rates, a lack of economic diversity, autocratic governments, and, in many countries, on an over-reliance on oil.
Howard Pack, eminent business and public policy Professor at the Wharton School, came to the World Bank earlier this week to share his views on the question of why MENA countries never came close to the equivalent of an East Asian miracle and how they might get on a more successful economic path.
For the last two years, there has been a mystery about the evidence supporting the past favorable assessments of the scope for reducing poverty using microfinance instruments such as the famous Grameen Bank (GB). The chances for many poor people to benefit from access to this form of credit rest, in part, on solving that mystery.
To understand the mystery we need to go back to an influential paper by Mark Pitt and Shahidur Khandker (PK), published in the 1998 volume of the Journal of Political Economy. PK documented research supported by the World Bank—research that came to provide the most cited scholarly evidence yet to support the view that microcredit helps reduce poverty.
The first Senior Officials’ Meeting (SOM I) of Asia-Pacific Economics Cooperation (APEC) concluded earlier this month in Washington D.C. The APEC 2011 agenda now swings into full action. The member economies in the region are looking for ways to reaffirm APEC’s reputation for innovative economic integration initiatives – and the means by which to stave off new hiccups in the region’s economic recovery. In particular, the new APEC Supply Chain Connectivity Initiative (SCI) holds real promise as a dynamic successor to APEC’s successful Trade Facilitation Action Plans, which resulted in significant trade cost reductions across the region.
As a testament to the dynamism and ambition behind the trade-related policy goals of APEC – the United States, as APEC 2011 Chair, and the World Bank are working with APEC to build a platform to expand trade through research, data, and capacity building – with direct participation of private sector firms. Fedex is with us in this new venture. Is this March madness – yet another attempt to forge alliances where goals are shared but sustaining momentum proves tough? Or is it a spring awakening that data, research, and direct partnerships with firms to build in this area provides the real anchor for taking action to assist developing countries tackle trade costs at their source? I suggest it is the latter.
Microcredit has been in the spotlight lately. This innovative banking program, pioneered by Professor Muhammad Yunus, has created the option for millions of poor people, especially women, to become self-employed entrepreneurs. By empowering women, microcredit has created opportunities to lift countless families out of abject poverty. Clearly, this has been a net gain for society. Yet current criticism of microcredit points to its failure to alleviate poverty, high indebtedness of borrowers, high interest rates, coercive loan-collection tactics, lack of transparency in public fund management, and uncertainty of succession in leadership.
An 8.9 magnitude earth quake and extremely destructive Tsunami waves have left Japan reeling.Thousands of people are dead and many more still remain missing. As the effects of the disaster unfold, the international community is concerned about a) How Japan will come out of this crisis, and b) How this crisis will impact energy prices. Robert Peston shares his thoughts on reconstruction of Japan in an insightful post ‘How will Japan finance its reconstruction?’, and to know about energy prices, read the post ‘The Japanese Crisis and World Energy Prices’ by Catherine Rampell. However, the worst is not over as there are fears of radioactive leakage at the Fukushima nuclear plant. This has led to serious concerns on the safety of nuclear power plants around the world, especially in the US.
With the devastating Haiti earthquake just a year back and the recent Japan incident, the international community's focus is on natural disasters. Drawing data from the 2010 World Disasters Report, the post ‘A decade of disasters - get the key data’ gives a comprehensive analysis on the subject. The World Bank and UN's joint report, 'Natural Hazards, UnNatural Disasters' looks at disasters primarily through an economic lens.
I have no disagreement with Paul about the possibility of an expansionary effect of a temporary fiscal stimulus. But if the effect exists and the stimulus does not increase productivity as in his example, there will also be a contractionary effect after the exit of stimulus and the increase of tax to retire the public debts. At the end the issue of underutilization of capacity, which my paper attempts to address, will still be there.
Food price spikes happen when stocks are low and when unpredictable events occur. That was the main message of Professor Brian Wright at his Development Economics Lecture at the World Bank on March 11.
Wright, who is Professor & Chair Department of Agricultural & Resource Economics, has long followed the markets for storable commodities. He is also an expert in invention incentives, intellectual property rights, the economics of agricultural research and development, and the economics of conservation and innovation of genetic resources.
Today’s food and fuel concerns do not constitute the ‘perfect storm’, Wright said. However, he warned that if several important crop-producing countries have a bad season in the coming year, and if the demand for biofuels rises faster than the rate of production of major grains, we could be in real trouble.
What’s the best fix for this situation? Wright argues it’s keeping food supplies cheap and investing in the Consultative Group for International Agricultural Research (CGIAR), since it will be super-seeds, drought resilient crops, and innovations to boost yields that will turn things around. He also emphasized that, during a crisis, it’s essential to put minimum food needs above animal feed and fuel uses.
The current food crisis—increasing poverty linked to price volatility and high food prices—have put agricultural growth and food production issues back on the development agenda. Is productivity growth the only way to address the short-run challenge (the food crisis) and longer-term needs (meeting increased demand for food)?
Even though today agriculture is the main source of livelihood for 2.5 billion people, including 1.3 billion smallholders and landless workers, public investment in agriculture in developing countries, as well as the share of agricultural expenditure in total government spending, have been gradually declining since the 1980s. Bilateral and multilateral assistance to agriculture, after an increase in the 1970s, also fell starting in the mid-1980s. It is only in recent years that the World Bank and other aid agencies have increased their lending and boosted their investments. But will these investments be effective? This depends on whether they will have a sizeable impact on agricultural productivity.
Equality between men and women matters for development, which is why the 2012 World Development Report (WDR) will focus on this vital topic. Since the 100th anniversary of International Women’s Day is March 8, we thought it an auspicious day to launch the WDR 2012 website.
Gender was chosen as the focus for next year’s WDR in part because gender equality can lead to better development outcomes and because, as Amartya Sen asserted, development is a process of expanding freedoms equally for all individuals. This view assumes that gender equality is a core goal in and of itself and that people’s welfare shouldn’t be determined by their birthplace or whether or not they were born male or female.
The 2012 WDR will analyze the wide swath of literature on gender and development and it will highlight the impressive progress in gender indicators on many fronts. However, it will also reveal that in many domains—whether in the realms of power and decision making or maternal health – outcomes for women have improved very slowly or not at all.
After escalating for eight consecutive months, food prices have finally reached an all time high. Due to this unprecedented spike, FAO expects a tightening of the global cereal supply in coming months. According to a Forbes article, "the situation has prompted experts to warn of a global food crisis reminiscent of the spike in food costs that in 2008 caused various riots.”
To add to the concern are high oil prices, which the FAO thinks are a key factor driving the food price increase. However, IMF researchers believe that bad weather and rising demands for bio fuels are also to blame. They also stressed on the fact that it will take years for farmers to increase their production to meet rising demand for food, which “reflects structural changes in the global economy that will not be reversed.”