The World Bank - Working for a world free of poverty

Views menu

Making development work for all

About us

About us

East Asia & Pacific is facing some great development challenges today: urbanization, protection of the environment, the need to find renewable energy sources and many others. This site wants to create a conversation around those important issues. More »

October 2008

Financial crisis could provide Mongolia opportunity for reform

Image credit: rreichle at Flickr under a Creative Commons license.

Mongolia's steppes are especially beautiful in October. A light dusting of snow on the gentle rolling hills makes them look like a rumpled white blanket. A large share of Mongolia's population still lives a nomadic lifestyle, herding livestock from one grazing area to another and living in the traditional ger, Mongolia's version of the central Asian yurt.

In this beatific landscape, the financial crisis and collapse of global stock markets seem far away -- but Mongolia will be sharply affected. In recent years the government has introduced a host of programs that have made herders' lives less vulnerable and difficult: livestock insurance to protect herders from losses in the terrible freezes that occur every few winters; expansion of cell phone coverage throughout the countryside; and expansion of rural education. The global economic crisis, however, threatens the sustainability of these programs.

Teleport yourself into the discussion on Oct. 30

Whether it is connecting with someone in another continent without leaving home or jetting off in a flying car, someone familiar with Second Life knows that pretty much anything is possible in the online virtual world—from the serious to the ridiculous.

On Thursday, October 30, at 2 p.m. Washington time, Second Life users will be able to learn the results of the Doing Business 2009 report when it is launched on this island. Doing Business, a report published by the World Bank and the International Finance Corporation, ranks economies around the world based on how easy it is to do business, considering the level of laws and regulations in a region. The report aims to improve business environments, in part through dialogue and reform.

China ideas marketplace uses entrepreneurial spirit to tackle social issues

A woman explains a project to restore education in the part of Gansu, China, hit by last May's earthquake. Grassroots civil society organizations proposed innovative project ideas this week addressing development issues at the China Development Marketplace.

I am glad that I did not have to be a juror in our second China Development Marketplace, which concluded with its award ceremony today. Grassroots civil society organizations (CSOs) from all over China proposed projects addressing environmental and social issues in innovative ways.

We received more than 500 proposals, and choosing 50 winners (download list in Excel) to receive funding was a very difficult task. Our expert panel of academics, civil society activists, and financial contributors chose 115 finalists, who came to Beijing for a colorful exhibition. One of our jurors, who was judging proposals for the second time, noted that the quality of proposals was much better than the last China Development Marketplace in 2006, indicating how quickly civil society groups here are strengthening.

Fighting poverty takes more than one day a year

In some villages in Laos, a household of six people live on US$320 a year, living with whatever means their environment offers them.

I find it amazing the number of “world days” there are. Food day, health day, hand washing day, peace day, elderly person day—there is almost an event for every day of the year! And while people who are poor, have no food, or do not live in peace, do not need a reminder, the world as a whole does.

In Laos, I would venture to say most people do not need the reminder of last week’s Blog Action Day or United Nations anti-poverty day. According to Government figures, approximately 35 percent of the country’s population—roughly 2 million people—is poor (living with less than US$1.50 a day). And while the number has improved significantly in the last ten years (down from 45 percent of the population in 1992), it is still a big number.

In some of the villages that I have visited in Laos, a whole household of six people live on US$320 a year. They live with whatever means their environment offers them. This, in turn, makes them ever the more vulnerable to anything that may affect the ecosystem that surrounds them.

China’s growth surprises on the downside

Although exports have slowed down, they contributed to China's GDP growth in 2008. But in this gloomy global economy, some factories will close and workers will lose jobs as it slows down further.

China’s growth rate in the third quarter fell to 9.0%, the lowest rate since the SARS crisis in 2003. Everyone expected that the global slowdown and disruption from the Olympics would take some of the froth off China’s economy. But the median forecast among specialists who follow China was 9.7%, so it is fair to say that the drop was a big surprise.

The details of the third quarter report provided some good news. Exports are slowing gradually, but still contributed to the GDP growth in 2008. Retail sales growth hit its highest level in nine years and was at 18% in real terms in September. So far, Chinese consumption is holding up. And the easing of inflation to under 5% means that the government has scope to loosen monetary and fiscal policy. The government is planning to respond to the potential for further growth declines with accelerated spending on reconstruction of the earthquake-affected areas and with infrastructure projects more generally.

Financial turmoil could threaten poverty reduction gains

During the annual meetings of the World Bank and IMF, World Bank President Robert Zoellick made a plea to the leaders of the world’s richest countries not to forget developing nations, even as they hammer out ideas to steady their own economies. Watch his speech

I spent the last week in Washington, DC, at the annual meetings of the World Bank and the IMF. There were several things on my mind as I left Beijing ten days ago. I was looking forward to a seminar of Asian policy makers focusing on the food inflation crisis and its impact on the poor. And I was going to speak on a panel on climate change, how poor countries can adapt and what to do to mitigate greenhouse gas emissions.

The financial crisis, however, hijacked the meetings. The panel on food prices was canceled at the last minute and it was hard to get anyone to focus on long-term issues such as climate change. And attention was definitely drawn away from poor countries and poor people to focus on the wild ride in the U.S. and other advanced stock markets.

Is a coordinated approach to the financial crisis needed in Asia?

It has been a couple of weeks since my last blog entry and it is amazing how much the financial world has changed in that short time!  We seem to be entering new territory and the end of the global financial crisis seems to be nowhere in sight. I just returned from two countries in Asia–China and Vietnam, where the financial sector policymakers are clearly concerned about the possible effects of the crisis. However, there is no real sense of urgency or panic, which may be a good thing in this highly volatile environment.  In fact, it seemed the view was that the economies and financial sectors would ride this storm out without too much damage. This may ultimately prove true and it is what we are all aiming for, but should Asian financial policymakers take a preventative coordinated approach to the financial crisis to better ensure they can ride out this storm?  This is a particularly timely question in light of the Annual Meetings of the World Bank and International Monetary Fund being held this weekend.

Melting glaciers redistribute Asia's water

"The glacier at Karo-la pass covered the whole rock face when our Tibetan guide began leading tours in 1996."

I spent the October holiday in China traveling across the Tibetan plateau to Qomolangma (Mount Everest) base camp. One striking impression was how much water there is there. Most of the great rivers of Asia originate on the Qinghai-Tibet plateau: Ganges, Indus, Yangtze, Yellow, Mekong, Salween, Irrawady, and Yarhung Tsangpo (which becomes the Brahmaputra in India and Bangladesh). Half the world’s population gets its water from these rivers running off the plateau. The rivers are fed by the gradual melting of the huge glaciers that cover the Himalayan peaks, as well as the melting of the annual snowpack and seasonal rain. (The name of the Himalayan peak, Annapurna, in Nepal means “full of food,” reflecting the fact that the gradual melting of snowpack and glaciers each spring and summer waters the rice crop.)

The melting of the glaciers has accelerated dramatically in recent years. This is one of the most profound effects of global warming. The glaciers have shrunk 20% over the past 50 years, with much of that in the past decade. Our Tibetan guide took us to a number of different glaciers and showed us how they had receded since he starting taking tours around in 1996. At Karo-la pass we stood on hard, dry ground that had been covered by the glacier just 12 years ago. Climate scientists project that the glaciers will be 80% gone by 2035.

A dream has come true

The Integrated Biodiversity Assessment Tool is now on line and is set to change the way we do some of our business. It is known as ibat (in lower case to distinguish it from the Association of Independent Banking in Texas, the Institute of Bookbinding and Allied Trades, the Institute of Business and Technology and even Intrascapular Brown Adipose Tissue).

I'm lucky enough to be in Barcelona for the IUCN World Conservation Congress and on Monday I attended the ibat's standing-room-only launch. The significance of this biodiversity toolkit which helps businesses and development banks (and hopefully governments and those charged with writing environmental assessments) is indicated by the positive review it received in the latest issue of The Economist.

October 8 is International Day for Disaster Reduction

Growing up in Chapel Hill, North Carolina, every year in elementary, junior high and high school, we would participate in hurricane drills. An alarm would sound, and all the kids would file into the interior hallways, sit cross-legged on the floor, and cover our heads with our hands. Some of us, if there wasn't a hallway handy, would crawl under our desks until we were told it was safe to resurface. Thinking back on those drills, I knew they were important but never quite made the link as to why we had to do these exercises, since strong hurricanes never seemed to make their way that far inland while I was growing up. Of course then in 2004, Hurricane Ivan blew through my hometown and caused massive damage, and knocked out my parents' power and water supply for more than a week. I'm sure the local schools put their hurricane drills to good use during that storm.

“Billiards drives the horrid species out of my head”

Charles Darwin: eminent naturalist, geologist, biologist, author, and avid billiards player.

The summer is over, the vacation (mainly in SE France) is a pleasant memory, the awful backlog in my over-stuffed inbox is more or less under control if not dealt with, and life has returned to its mind-racing pace. The problems of conserving the species occupy the majority of my mind space.

Towards the end of my vacation my wife and I did something which had been on our mutual ‘to-do’ list for decades – visiting Down House. This was the home of Charles Darwin in the small and leafy village of Downe (yes, the spellings are different) 25 km south-east of London and has been maintained more or less as it was in Darwin’s days. It was a remarkable feeling being in his dining room where he entertained many of the great names of the day, and of course in his study where he thought so intensely about the dynamics of life, be it the role of earthworms, the pollination strategies of orchids, and the taxonomy of barnacles, and where he penned the dramatic text of The Origin of Species and pondered the impact it was going to have when published .

A stark reality for islanders: there are not enough jobs to go around

Kiribati is the easternmost country in the world, and was the first country to enter into the year 2000.

I had been warned to bring sunscreen to Kiribati. But I had not been warned that I would be captivated by her beauty. Kiribati (pronounced as kiri-bass) is made up of 33 coral atolls, littered across 3,500,000 sq km of ocean in the Pacific—4,890 times its land area. The atolls straddle the equator with the highest point of around two meters. Reports suggest that this country, just 29 years after independence, may be the first land territory to disappear due to climate change. It is reported that if nothing is done in the next 50 years the country will sink, bringing its population of 97,000 down with it. About 40,000 people live in South Tarawa, the urban area of Kiribati.

Rice is expensive: a blessing or a curse for Cambodia?

A rice seller in one of Cambodia's markets. The price of rice, a staple food for Cambodians, has doubled between July 2007 and July 2008.

Last week, I attended a very interesting seminar by the Cambodia Development Research Institute (CDRI). They presented the result of their recent study on the impact of high food prices (which the World Bank and several others financed). I found the results, presented by CDRI’s Chan Sophal, very interesting, showing the complexity of the question.

The simple reaction is that higher price of food is bad for the poor. CDRI is able to confirm some of this by tracking prices (the price of rice doubled between July 2007 and July 2008) and reminding us that food accounts for two thirds of consumption for a poor family. And there will be little substitution effect to other goods (even within food, most of the caloric intake comes from rice, also very difficult to replace–although CDRI shows that Cambodians in part shifted to lower quality rice to make up for the higher price).