Syndicate content

Private Sector Development

South Asia Advances on Visual Tool Comparing Development over Time

Joe Qian's picture

The World Bank released its Data Visualizer tool last week, which compares 209 countries through the lens of 49 development indicators utilizing data ranging from 1960 to 2007. Using three dimensional bubbles whose sizes are proportional to populations and are color coded to the different regions (purple represents South Asia), they move horizontally or vertically based on their achievements on a number of indicators that range from GDP per capita to the percentage of children that are inoculated against measles.

Users will find similarities with the groundbreaking Gapminder World tool that Swedish Health Professor Hans Rosling first presented to the TED Conference in 2006. He concluded that the world is converging and that old notions of contrasting developed country (generally small families and long lives) with developing country (large families and short lives) to be grossly out of date.

Don’t Throw the Baby with the Bathwater!

Zahid Hussain's picture

Paul Krugman’s September 6 article in the New York Times (How Did Economists Get It So Wrong?) is a humbling warning to the economics profession against the pitfalls of intellectual complacence. It challenges the profession to re-examine the validity of its existing knowledge particularly in relation to globalization and the workings of local and global financial markets.

Granted that economists have to face up to the unpalatable fact that our theoretical apparatus falls far short both as descriptions of how economies function and as prescriptions of how they can be made to function better. The crisis has exposed the limits of economic knowledge. According to Krugman: “The vision that emerge as the profession rethinks its foundations may not be all that clear; it certainly won’t be neat; but one can hope that it will have the virtue of being at least partly right.”

In this process of reappraising existing economic knowledge, there is a real risk of going overboard and wrong the right knowledge. Using the global economic crisis as an excuse, there are emerging tendencies to reject tested economic wisdoms in areas such as the role of foreign capital and trade policy in economic development.

One school of thought that is attempting to rise from the ashes is known as (old) Structural Economics.

Full Speed Ahead: Internet Traffic Growth Unaffected by Financial Crisis

Joe Qian's picture

Reading about the financial crisis and the effects that have rippled around the world, it’s always heartening to find something positive in the midst of piles of red ink and pessimistic expectations.

Although the majority of industries and economies around the world have suffered due to the downturn, Internet traffic growth accelerated at an increasing rate in 2009 compared to 2008 with no discernible slowdown due to the crisis. According to data released by Telegeography, every single region around the globe registered growth in internet traffic, or flow of data. South Asia has registered over a 100% increase, higher than the 79% posted worldwide, although it must be noted that South Asia had a lower baseline capacity.

Doing Business Report 2010: South Asia

Joe Qian's picture

The World Bank released its annual Doing Business report (pdf) last week which tracks regulatory reforms for conducting business and ranks countries based on their ease of doing business.

Countries are evaluated and ranked by indicators such as starting a business, employing workers, getting credit, paying taxes, etc.

In South Asia, seven out of eight (75%) of the countries instituted reforms that were conducive to business, higher than any previous year of the study.

Pakistan was the highest ranked country in the region at number 85 while Afghanistan and Bangladesh were the most dynamic reformers with three reforms each. Afghanistan’s rank in the study also increased the most in the region, climbing eight spots.

Ingenious Engineers for India

Andreas Blom's picture

With its massive talent-base, a unique ability to attract its best and brightest students to the engineering discipline, and the presence of some of the world’s leading companies, India has an enormous potential to modernize its economy through engineering education and technology.

However, I think the potential is not fully exploited. The majority of new engineers in India are superb at rote memorization useful to pass paper exams. Many students, however, are less skilled at solving real-life problems with creativity. Also they lack communication and team skills in order to succeed in a demanding international setting.

Have Innovation and Entrepreneurship Found Solutions for Affordable Housing?

Joe Qian's picture

The recently elected government has recently announced an ambitious goal of eliminating slums in India in its most recent five year plan. Will this be a possibility? If you ask the construction companies, the answer is yes. A number of entrepreneurs and enterprises have embarked on new initiatives to provide affordable housing called such as Tata and its construction of Shubh Griha north of Mumbai.

With the increased rate of economic growth over the last few years, housing developers have tended to focus on the higher end luxury developments causing property prices to soar; I was astounded that luxury apartment homes in Mumbai cost the same as they do in New York and London. As demand for these properties have fallen due to the global financial crisis and increased interest rates, the focus on lower cost housing has increased due to a larger market coupled with acute shortages of housing in urban India.

The Resilience of Bangladesh's Economy May Again be Tested This Year

Zahid Hussain's picture

The Bangladesh economy entered FY10 in a position of strength, notwithstanding some pretty tough global circumstances. Good recovery in agriculture, a sustained growth in exports and remittances, and a steady growth in services helped achieve an estimated overall growth of 5.9 percent in FY09, compared with 6.2 percent in FY08. A decline in international commodity prices driven by the global recession and an improvement in domestic food supplies brought inflation down from 10 percent in FY08 to an estimated 7 percent in FY09. Rice prices have remained stable too at nearly 40 percent below the peak reached in April, 2008. The economy has shown reasonable stability in terms of most other macroeconomic indicators. The external current account has been in a large surplus; the exchange rate has been stable; foreign exchange reserves have reached record high levels of nearly $7.5 billion; fiscal balances have been contained; and private credit growth has remained decent.

This is all good news but it doesn’t mean Bangladesh goes totally unscathed by those tough global circumstances.

Will the Nano Fulfill the Promise of Mobility in Developing Countries?

Joe Qian's picture

Much in the same way the Ford Model T revolutionized transportation in the United States and the Volkswagen Beetle did in Germany, the Tata Nano (small in Gujarati) seeks to do the same for India and the rest of the developing world, with millions still seeking to realize dreams of four wheel mobility. Will the Nano become a resounding success and revolutionize the concept and accessibility of the car, or will it cause increased problems and growing pains in its mission to provide transportation to the broader public?

With a price starting at $2,200 dollars including taxes and fees, the Nano significantly undercuts the current cheapest car in India by almost half and may open the door to aspiring drivers around the world as the most affordable automobile in history (when accounting for inflation). The market potential is seemingly unlimited as only 0.7% of Indians owned automobiles in 2007.

However, economic development has already caused an explosion in the number of motor vehicles perpetuating increased fatalities due to accidents, standstill traffic, and smog filled cityscapes.

Its founder, Ratan Tata says that his inspiration is derived from poignantly watching the way entire families are transported on motorcycles complete with a rider, passenger, along with two children hanging onto the back. He noted the terrible toll in road deaths involving two-wheelers and called for a safer four-wheeled vehicle that will transport families in a dignified manner.

Remittances in Bangladesh: Determinants and 2010 Outlook

Zahid Hussain's picture

Co-authored with FARRIA NAEEM

Remittances have emerged as a key driver of economic growth and poverty reduction in Bangladesh, increasing at an average annual rate of 19 percent in the last 30 years (1979-2008).

Revenues from remittances now exceed various types of foreign exchange inflows, particularly official development assistance and net earnings from exports. The bulk of the remittances are sent by Bangladeshi migrant workers rather than members of the Bangladeshi Diaspora. Currently, 64 percent of annual remittance inflows originate from Middle Eastern nations.

Robust remittance inflows in recent years (annual average growth of 27 percent in FY06-FY08) have been instrumental in maintaining the current account surplus despite widening a trade deficit. This in turn has enabled Bangladesh to maintain a growing level of foreign exchange reserves.

The Important Role of Ready Made Garments to Bangladesh’s Export Earnings

Abul Basher's picture

Bangladesh’s export earnings are mostly determined by the export of readymade garments (RMG) to North American and European countries with 75% of total export earning coming from this sector. Quite understandably, the economic crisis in those countries unnerves us.

Fortunately, the clothing sector has remained more or less unscathed by the global crisis even as the trepidation among the entrepreneurs, policy makers and economists is still very high. During the last fiscal year (2007-08), the overall growth of the export of RMG was 16.16% which increased to 23.48% between July 08 and January 09 of the current fiscal year.

Readymade garments are the largest export industry and determine the dynamics of total export earnings for Bangladesh RMG is still growing at a satisfactory rate. There is no strong indication of any negative impacts of the global economic crisis on RMG as of today, but the future continues to be unpredictable.

Pages