The current policy debate on spurring growth is sometimes couched as a choice between fiscal stimulus and structural reform. In the context of the euro zone, this gives an incomplete picture. Two other issues are important: financial policies to avert a credit crunch; and collective actions to rebuild confidence. Adding these complicates the picture but helps point the way to a fuller policy response and clearer priorities to address the current mutually reinforcing combination of a growing sovereign debt-banking problem on the one hand and risks of a recession on the other.
Millions of Chinese have just celebrated the beginning of the year of the Dragon - a year which according to Chinese tradition is auspicious for ambitious undertakings. These may be required as the global economy faces severe headwinds. According to the January edition of Global Economic Prospects (GEP) report the world economy is expected to grow at 2.5 percent and 3.1 percent in 2012 and 2013, significantly below the 3.6 percent projected for both years in last July’s GEP. But even achieving these much weaker outturns is highly uncertain. The downturn in Europe and weaker growth in several large developing countries, such as Brazil and India, could potentially reinforce one another, resulting in an even weaker outcome. But without growth it will be more difficult to reduce the high debt of some advanced economies to sustainable levels and create much needed jobs world-wide.
The quality of development projects depends in part on how well grounded project preparation is in knowledge about what works and what does not. Development practitioners need to be well informed if their projects are to have impact.
The World Bank’s in-house research department—the Development Research Group (DECRG)—is the main unit aiming to supply relevant research findings to Bank operations, as well as to external clients. It is not a large department, accounting for about 1% of the Bank’s administrative budget. But it produces the majority of the Bank’s research, and has a high profile internationally. Indeed, it is often ranked ahead of almost all universities and think tanks in development economics, measured by the quantity of research outputs, downloads and citations to research findings. For example, the highly-regarded and much-watched ranking done by the IDEAS project currently puts DECRG ahead of all but one university.
Small but sometimes radical new steps toward greener energy and green growth are happening on our stressed planet, but we don’t hear enough about them, nor do we sufficiently explore and share policy lessons.
Examples include ‘smart grid’ R&D activities that deploy sensors to gather data on incoming electricity from wind, solar and other renewables with varying power outputs, better management of outages, factoring in the needs of electric vehicles, and installing more energy-efficient power meter usage in homes and offices. At the other end of the spectrum, Husk Power Systems, a company operating in Bihar, India has devised a novel single fuel gasifier for rural electrification based on discarded rice husks – one of India’s most common waste products. Thanks to the risk husks, 60 mini-power plants have now been installed. They power about 25,000 households in more than 250 villages in rural India.
For many African countries, one important way to create productive jobs is to grow the labor-intensive light manufacturing sector, which would accelerate economic progress and lift workers from low-productivity agriculture and informal sectors into higher productivity activities.
Sub-Saharan Africa’s low wage costs and abundant material base have the potential to allow light manufacturing to jump-start the region’s long-delayed structural transformation and over-reliance on low-productivity agriculture. Moreover, as globalization advances and China evolves away from a comparative advantage in labor-intensive manufactured products toward more advanced industrial production, African economies such as Ethiopia and Tanzania are uniquely positioned to take advantage of this opportunity.
The youth bulge is a common phenomenon in many developing countries, and in particular, in the least developed countries. It is often due to a stage of development where a country achieves success in reducing infant mortality but mothers still have a high fertility rate. The result is that a large share of the population is comprised of children and young adults, and today’s children are tomorrow’s young adults.
Figures 1 (a)-(b) provide some illustrative examples. Dividing the world into more and less developed groupings (by UN definitions) reveals a large difference in the age distribution of the population. The share of the population in the 15 to 29 age bracket is about 7 percentage points higher for the less developed world than the more developed regions. In Africa (both Sub-Saharan and North Africa), we see that about 40 percent of the population is under 15, and nearly 70 percent is under 30 (Figure 1(a)). In a decade, Africa’s share of the population between 15 and 29 years of age may reach 28 percent of its population. In some countries in “fragile situations” (by World Bank definitions), almost three-quarters of the population is under 30 (examples in Figure 1(b)), and a large share of 15-29 year olds will persist for decades to come (Figures 1(c) and (d)).
2011 was a highly successful year for World Bank blogs; four posts chalked up more than 10,000 views over the year; the year saw the launch of the highly successful Development Impact blog; and two of the Bank’s blogs (Development Impact and Africa Can End Poverty) have featured in Palgrave’s top-50 Economics blogs. The table below lists the top-100 World Bank blog posts of 2011 based on page views over the period November 1, 2010 – November 19, 2011. For those interested, click here to see how the Bank’s 26 English-language blogs compare to one another in terms of the number of posts they have in the top-50, top-100, and top-200. (Keep in mind, however, that Development Impact was running for only part of this period.)
Twitter, Facebook, SMS, and Crowdsourcing—2011 has certainly been the year in which the use of social media and technology has captured the world’s attention.
From Tahrir Square in Egypt to the Anna Hazare movement in India, citizens have demonstrated that they want voice and accountability. Innovations in social media, mobile phones and inter-active mapping are powerful tools to mobilize citizens and to provide people with a voice—thus broadening the political debate.
However, key questions remain unanswered: What role can these innovative tools play to encourage governments, donors and foundations to become more transparent, open and accountable? Can the use of social media and cell phones empower people and marginalized communities, and close the feedback loop, allowing citizens to directly report back on project results and participate in decision-making processes about the use of public funds? These are a few issues that emerge when analyzing the potential transformative power of technology on development.
Since 2005 Brazil, Russia, India and China (BRICs) have received almost half of all net capital inflows to developing countries. Out of $1,130 billion net capital flows to developing countries in 2010, almost 60 percent went to the BRICs.
In analyzing returns to schooling and in evaluating educational policies, ‘soft skills’ – personality traits like conscientiousness, openness and diligence -- often get under-valued or neglected. This is in part because so much value is placed on standardized test scores in education systems. It’s also because soft skills that are valued in the labor market, in school, and in many other domains are considered too hard to quantify.