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Oil Price volatility – its risk on economic growth and development

Jun Erik Rentschler's picture

The following post is a part of a series that discusses 'managing risk for development,' the theme of the World Bank’s upcoming World Development Report 2014.

Crude oil is arguably one of the single most important driving forces of the global economy, and changes in the price of oil have significant effects on economic growth and welfare around the world. Indeed, the level of oil dependency of industrialized economies became particularly clear in the 1970s and 1980s, when a series of political incidents in the Middle East disrupted the security of supply and had severe effects on the global price of oil. Since then, oil price shocks due to such exogenous events have continuously increased in size and frequency (cf. Figure 1). While oil demand tends to be slow moving, mainly driven by economic growth and to some extent climate policies, the prospects of future oil supply are highly uncertain – not least considering persistent political instability in exporting countries and the uncertainty regarding the discovery of new reserves. As a result of such uncertainties, oil prices could undergo further (increasingly) drastic fluctuations in the future.

Slums and Slum-dwellers: the untapped potential of collective capacity

The recently launched report by the High Level Panel on the post-2015 Development Agenda puts forward that the post-2015 agenda needs to be driven by five big, transformative shifts. The first one it highlights is that the new agenda should leave no one behind. It states that:

“We should ensure that no person – regardless of ethnicity, gender, geography, disability, race or other status – is denied universal human rights and basic economic opportunities. We should design goals that focus on reaching excluded groups.”

Clearly, the world will have to pay particular attention to slum-dwellers, who are left behind in many areas of development and in the current Millennium Development Goals (MDGs).

Friday Roundup: Direct Transfers to Africans, Rogoff on Gold, Malala at the UN, Economics of Tahrir, Japan's Mood & Jailed Immigrants

LTD Editors's picture

Shanta Devarajan and Marcelo Guigale have a CGD working paper on 'The Case for Direct Transfer of Resource Revenues in Africa.'

"Policymakers should be cautious in interpreting the plunge in gold prices as a vote of confidence in their performance," says Ken Rogoff on 'Golden Slumbers.' Read it here.

"Education is the only solution. Education First" - Malala Yousafzai. Read the full text of Malala Yousafzai's speech at the UN here.

Five fundamental transformations to end poverty

Homi Kharas's picture

On May 30, 2013, the High Level Panel of eminent persons on the Post-2015 Development Agenda, a group that had been asked for advice by the United Nations (UN) Secretary-General Ban Ki-moon, issued its report, ‘A New Global Partnership: Eradicate Poverty and Transform Economies through Sustainable Development’.  Even though this is not the first report on the topic of what the sequel to the Millennium Development Goals (MDGs) should be (and it will certainly not be the last either), it is perhaps the first comprehensive report that links voices from around the world with some of the political realities facing the General Assembly as it looks to find a consensus agreement on the post-2015 agenda.
 
The Secretary-General established the High-Level Panel (HLP) in July 2012, right after the Rio+20 conference. It consisted of 27 persons and was co-chaired by the President of Liberia, Ms. Ellen Johnson Sirleaf, the President of Indonesia, Dr. Susilo Bambang Yudhoyono, and the Prime Minister of the UK, Mr. David Cameron, MP.  The HLP was tasked to provide bold yet practical thinking for the post-2015 development agenda.  Its report highlights the need for a single agenda that brings together social, economic and environmental issues, and for a universal agenda that is relevant to, and actionable by, all countries.

China’s Farm to the World’s Fork: Why Standards Matter

John Wilson's picture

Mention China at your next dinner party, and chances are you will be met with references about future superpowers, exchange rates, and the joys of traveling through gleaming new airports. And while the conversation may touch on the dining scene along the Bund or outstanding new restaurants in Shanghai and Beijing, the impact of food standards on global consumers will almost certainly not be the center of discussion.

The fact is, however, that trade in agriculture is one of the most important ways the world connects with China. China’s exports of food products increased from US$ 9.7 billion to US$ 56.3 billion between 1992 and 2012. The United States alone imported US$ 6.5 billion worth of Chinese fish, seafood, juice, vegetables, fruit, and other food products in 2012—making China the third largest source of US food imports.

Brazil’s protests: The bursting of a complacency bubble

Francisco Ferreira's picture

Here was an exemplary developing country – nay, emerging market! In the 2000s, Brazil’s economic growth, albeit not stellar, was certainly steady. Inequality fell continuously and markedly throughout the decade and, as a result of those two things, poverty fell from 43% of the population in 2003 to around 25% by the end of decade (using a $4/day poverty line). By the World Bank’s definition – which is considerably more demanding than the government’s – the middle class grew in size by more than 50%, to over 60 million people in 2010. Infant mortality fell. Life expectancy rose. We were going to host the World Cup and the Olympics – the only country ever to do so back-to-back with the exception of the United States. The sun was shining... What could possibly go wrong?

Then, on June 13, a relatively small demonstration against a hike in bus fares in the city of São Paulo was violently repressed by police. The following two weeks saw a remarkable eruption of street protests across hundreds of Brazilian cities, with hundreds of thousands in the streets at certain times. In a soccer-loving country, Brazil’s successes at the Confederations Cup did nothing to mitigate popular anger. On the contrary, one of the protesters’ multiple banners was indignation at the scale of spending on (and corruption from) football stadia for next year’s World Cup, while schools, hospitals and public transport are allowed to languish.

Friday Roundup: Aamir Khan, Bill Gates, Lotteries in Lesotho, income classifications, Ravallion on aid after coups & Rodrik on growth

LTD Editors's picture

A short video shared via Twitter highlights Bill Gates' recent India trip. He covers the rotavirus, agricultural innovation, and a joint TV appearance with Bollywood star and development activist Aamir Khan.

World Bank researcher Damien de Walque's recent results from a Randomized Control Trial in Lesotho of a lottery scheme to reduce risky sexual behavior was presented at an AIDS conference in Malaysia and covered in Bloomberg.

The World Bank updated its classification of the world's economies based on estimates of gross national income (GNI). Among other things, Russia moves to high income status; also, Chile, Lithuania, and Uruguay become high-income for the first time. 

"Japan ahead of China in forging Africa Partnerships" is the title of a piece in The Global Times.

Through the smog, gently: Postcard from Malaysia

Kaushik Basu's picture

PREAMBLE

My travels in Malaysia begin at the distant eastern edge of the country, in Sabah's capital, Kota Kinabalu, the strange name a reminder of the distance I have traveled from home. Meeting local folks, regional politicians, and masters of local arts and crafts, it quickly becomes evident that this ancient island, Borneo, symbolizes all the mysteries and romance of human movement through history. The people who seem settled here forever arrived one day after traveling great distances, braving the wilds and the seas. They were then the modern people who had come to an ancient land. They would soon be absorbed and become the natives in the eyes of the next wave of arrival and modern-day visitors like us.

Frederico, Vivian, Kup (a senior officer of the Ministry of Finance) and I are received at the airport at Kota Kinabalu by a charming young woman, Intan. She is tall and has a head-scarf carefully draped around her head covering her hair. Intan explains she is part Arab, part Chinese, and part Bajau, an ancient tribal people. She smiles and adds that she considers herself Bajau.

Friday round up: Tapering trouble, debating inequality, the greedy rich, waves of protests, and a view from the UN

LTD Editors's picture

John Makin of AEI has a piece on troubling taper talk from central banks. Read it here.

In "What if we're looking at inequality the wrong way?', Tom Edsall of NYT's Opinionator blog writes about the views of Richard V. Burkhauser of Cornell as well as those of his co-authors.

Robert Skidelsky advocates for a universal basic income, received by all citizens on an unconditional basis in his post, "Playing by the rules," in Project Syndicate. Read more.

Health and the post-2015 development agenda: Stuck in the doldrums?

Adam Wagstaff's picture

I think it’s fair to say most of us don’t typically take UN reports with us on our summer vacation. But you might want make an exception in the case of the high-level panel (HLP) report on the post-2015 development agenda. It offers a nice opportunity to reflect how – over the last 15 years or so – we have seen some serious global shifts in values, expectations and motivations. 

The HLP feels the MDGs were worthwhile: “the MDGs set out an inspirational rallying cry for the whole world”. As my colleague Varun Gauri argues, goals inspire if they are underpinned by a moral case, and the panel pushes hard on issues of rights and responsibilities, social justice, and fairness: “new goals and targets need to be grounded in respect for universal human rights”; “these are issues of basic social justice. Many people living in poverty have not had a fair chance.” 

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