This is the central message of a report World Bank staff prepared as an input to the G20 Los Cabos summit held from June 18-19. The summit comes at a precarious time for the world economy. The Euro Area is facing a relapse into recession, with potentially large losses of output with global repercussions if current risks to stability and growth are not addressed forcefully. Recovery in other advanced economies is weak and faltering. Growth is also slowing in emerging economies that have been the drivers of global growth in recent years. Against this background, the Bank report, entitled Restoring and Sustaining Growth, conveys the following main messages:
The latest Global Monitoring Report analyzes the impact of recent food price spikes on the Millennium Development Goals (MDGs), paying particular attention to the negative consequences that temporary food price shocks may have on nutrition.
Nutritional outcomes are directly linked to the MDG on hunger (MDG 1.c) and indirectly to most of the remaining development targets, through its effects on cognitive skills of young children and consequently on human capital accumulation. Unfortunately, progress in fighting undernourishment is considerably lagging across nearly all developing regions (figure 1).
The latest World Bank estimates suggest that the percentage of the developing world’s population living below $1.25 a day declined from 52% in 1981 to 22% in 2008. While this indicates that there is still a long way to go in poverty reduction, the progress is encouraging. Moreover, we now also appear to be in a much better position to make such statements. The numbers above, by my colleagues at the Department Research Group, are based on over 850 household surveys for nearly 130 developing countries, representing 90% of the population of the developing world. By contrast, they used only 22 surveys for 22 countries when the first such estimates were reported in the 1990 World Development Report.
Systemic financial crises require swift and comprehensive solutions by the government. In 2008 it quickly became clear that characterizing the U.S. securitization crisis as one of liquidity was inaccurate, and hoping that it would be cured by auctioning off increasingly poorly collateralized central bank loans to distressed firms was futile. That led to -TARP- a plan to repurchase troubled assets from banks, which quickly evolved into a bank recapitalization plan when it became clear pricing toxic assets was nearly impossible.
More recently, Spanish banking system has seen its situation worsen, partly because of Madrid’s failure to force an earlier cleanup of bad debts stemming from a real estate bust. Austerity measures to remedy the region’s debt crisis have since led to greater deterioration of Spanish bank balance sheets, as more and more Spanish businesses folded and homeowners went into foreclosure. Over the weekend Spain became the largest euro-zone nation to seek an international bailout, and the 17-nation currency area agreed to lend Madrid up to $125 billion for its bank rescue fund. At this point there is little disagreement that there needs to be a broad-based approach to resolve the Spanish bank insolvency problem, but not as much discussion over the form it should take.
While the world’s population doubled in the last fifty years, global food production trebled – especially in the staple grains that form the mainstay of the poor man’s diet. Yet, over a billion people in the world still go hungry - why?
As the World Bank’s Global Monitoring Report of 2012 shows, it is not that the world as a whole lacks rice, wheat or maize, but produce from food abundant areas does not always make it to food deficit ones – i.e. it is not so much the availability of food that matters as access to it.
Movement of food within a country or across its borders remains hampered by dismal infrastructure and inefficient regulations, and shackled to the dictates of political economy. Yet, trading food can feed the poor at lower costs and help countries weather shocks to local production.
June 1 was Justin’s last day as World Bank Chief Economist and I wanted to share comments from several leading development thinkers and economists (including past Chief Economists) who knew him and appreciated the determination he brought to the position. Justin’s views were not in the mainstream at the World Bank, but through intellectual persistence, structural economics has re-emerged as a topic meriting debate and discussion among top development experts.
Enjoy the video and feel free to share your views about Justin’s legacy
The potentially deleterious effects of gender disparities on growth and poverty reduction have been receiving progressively more policy attention (reflected, for instance, in the inclusion of the promotion of gender parity amongst the Millennium Development Goals and the 2012 World Development Report). Inequities in labor market opportunities are of particular concern since labor earnings are the most important source of income for the poor in the vast majority of developing countries.
Although the vast majority of the poor live in rural areas and rural non-farm enterprises account for about 35-50% of rural income and roughly a third of rural employment in developing countries, relatively little is known about gender inequities in rural non-agricultural labor market outcomes due to data-limitations. This is unfortunate given the proliferation and diversification of rural non-farm activities and their potential to alleviate poverty, especially in countries where the importance of agriculture as an employer is likely to diminish.
When launching ‘Let’s Talk Development,’ we thought we would create a platform for encouraging open debate and exchanging serious ideas about economic development and poverty reduction. Looking back at almost two years of open exchanges and vigorous discussion on all sorts of issues, I think we have far surpassed our initial expectations. ‘Let’s Talk Development’ now has a wide and loyal readership and is among the most popular of the World Bank’s blogs.
- Development economics
High food prices, especially when they have increased suddenly and unexpectedly, have been found to hurt many poor people around the world. The Global Monitoring Report 2012: Food Prices, Nutrition, and the Millennium Development Goals (GMR) finds that the food price shock that peaked in early 2011 pushed nearly 50 million people into poverty. On one level, this is not surprising—the poorest people, after all, spend nearly all of their income on food. But on further reflection, this result is not so obvious— three quarters of the world’s poor are rural and the majority of them depend on farming for their livelihoods. The problem is that—unlike farmers in rich countries—many poor farmers in developing countries don’t produce enough food to meet their families’ needs. These net buyers of food are hurt by higher food prices even though they are farmers.
How does Serbia fare on gender equality in the labor market? Did it manage to sustain some of the achievements of the former socialist regime, such as equal access to education opportunities, equal treatment of men and women in the labor law and high employment rates of men and women? The analysis of the recent labor force and enterprise surveys shows that although men and women have similar education levels and enjoy equal treatment in the labor legislation, there are major gender disparities in access to economic opportunities: