Let’s say we are both girls born on farms in remote villages at the foothills of mountains, but you were born at the foothills of the Himalayas and I, somewhere at the foothills of the Swiss Alps. You are the first of five children and I have only one younger sister. What do you suppose our lives growing up would be like?
I have access to a road that leads me to school every day and to hospitals when I need it. I have electricity so that I can do my homework in the evenings and my mother can cook using a clean stove. We have heat. I even have telecommunication services for when I want to talk to my uncle who lives in Nova Friburgo, Brazil. And my bathroom is indoors because it separates us from our waste.
Tax revenue growth in Bangladesh this year has been one of the lowest in recent years. There is now demand for a cut in corporate income tax rate with the forthcoming FY15 budget. Is this a good idea from a fiscal point of view?
Whether or not a tax-cut will increase or lower tax revenues depend on the tax rates and the tax system in place. If tax rates are in the prohibitive range, a tax cut will result in increased tax revenues. Arthur Laffer distinguished between the arithmetic effect and the economic effect of tax cuts. The arithmetic effect means that a lowering of the tax rate will result in lower tax revenues by the amount of the decrease in the rate. The economic effect identifies a positive impact of lower tax rates on work, output and employment which expand the tax base. If tax rates that are currently in the prohibitive range are lowered, the economic effect of a tax cut will outweigh the arithmetic effect and revenue collection will increase with tax cut.
When it comes to primary education, there are many reasons to be optimistic. Enrollment has jumped across the world, and more children are in school than ever before. In the last decade, the number of out-of-school children has fallen by half, from 102 million in 2000 to 57 million in 2011.
But is showing up to school enough?
According to UNESCO’s Education for All Global Monitoring Report, almost one quarter of the youth in the developing world cannot read a sentence. In countries with large youth populations, this can leave behind a crippling ‘legacy of illiteracy’. Despite almost universal primary enrollment in India – 97 percent – half of second grade students cannot read a full sentence, and almost a quarter cannot even recognize letters.
Reading is a foundational skill. Children who do not learn to read in the primary grades are less likely to benefit from further schooling. Poor readers struggle to develop writing skills and absorb content in other areas. More worryingly, learning gaps hit disadvantaged populations the hardest, limiting their economic opportunities. In Bangladesh, only one in three of the poorest quartile is literate, compared to almost nine out of ten in the richest.