The current budget (FY10) expects a significant increase in revenue collection, a perennial problem in the country. The target revenue was set at 610.00 billion taka ($8.8 billion) with 261.10 billion collected in the first half and the remaining 348.90 billion in the second. The realization of this target requires a year on-y growth of 16.15%, which, being a notable departure from the trend growth rates was received with sheer skepticism from the economic observers of the country. However, about 33.67% more revenue has to be collected in the second half of the fiscal year as compared to the first half which seems realistic in the light of the fiscal performances of the last 5 fiscal years.
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Have you ever tried explaining to non-economists what the consequences of resource misallocation can be for the economy?
What will happen if you invest enough in some sectors and too little in others? The answer is likely to be that you have enough production in sectors where you got your investments right and too little in the under-invested sectors. That may be correct in some cases, but it ignores the interdependence between the adequately invested and underinvested sectors. As a result, you may have too little production in the sectors where you have invested enough because you have too little production in the sectors you have neglected to invest.
This question was asked ---- out of surprise, confusion, and even a little bit of suspicion --- at the launch of JIYO! --- an artisan owned brand ---- at the New Delhi Office during April 1-3. The crowds of artists, art patrons, buyers, hotel chain owners, parliamentarians, diplomats, Bank staff, and other shoppers milled about the kiosks of artists from rural areas, and many contemplated this. The answer is quite simple: from a rural poverty reduction perspective. India is home to the largest population of rural poor in the world, larger even than all of sub-Saharan Africa.
Cultural industries are the second largest employer in rural India. Cultural industries are also a US$100 billion global market. It's clear what the Bank could and should do in this area. Linking rural artists to this massive global market creates opportunities for both growth and poverty reduction, and it comes with the bonus of preserving the India's rich cultural heritage.
When people think of rural development, they mostly think of agriculture, but there is so much more to "rural" than people assume. Many of the traditional, heritage art forms --- also known as cultural industries --- have been kept alive in rural areas. Too often relegated as "quaint", these artists have been relegated to the informal sector, a poverty trap that leads many to abandon their art. JIYO! --- a JSDF-funded project in India that is linked to several rural livelihoods investment projects --- has been turning the typical view of rural arts upside down.
When thinking about development, I always look for opportunities for cross learning between regions. Having lived in and traveled extensively in East Asia and having worked in the South Asia Region for over a year, I often compare and think about prospects between the two regions. One question in particular is whether South Asia should aim to emulate East Asia’s manufacturing and export driven development model. Japan began using this model starting in the 1950’s and most East Asian countries particularly, South Korea, Malaysia, Taiwan, and most recently China have used manufacturing as a catalyst for growth.
According to the World Development Indicators, manufacturing accounted for over 30% of GDP in East Asia and Pacific while it is around 15% in South Asia. Bangladesh’s ready-made garment (RMG’s) industry is one example of manufacturing success as it has proven to be exceptionally competitive in the global market. However, holistically, I found that South Asia has distinctive characteristics and quickly moving towards an East Asian export-led model may not be most effective.
- Sri Lanka
- Korea, Republic of
- South Asia
- East Asia and Pacific
- Urban Development
- Science and Technology Development
- Public Sector and Governance
- Private Sector Development
- Macroeconomics and Economic Growth
- Information and Communication Technologies
- Cross Learning
Imagine if, in 1799 – the year in which Napoleon seized power – a research institute had published its global forecasts for the next 20 years. Its researchers would have known about the tremendous changes that took place over the previous two decades: from the United States’ declaration of independence, through the French Revolution and the execution of Louis XVI, up to Napoleon’s victory over Austria in his Italy Campaign.
Even so, the chances of the researchers accurately predicting the events that came to pass over the subsequent 20 years, including their impact on the 19th century’s world order, would have been infinitesimal. No one could have anticipated that Napoleon would have plunged Europe into non-stop war for a decade until being overcome at Waterloo, or that, by the time of his defeat, he would already have swept away the foundations of traditional structures and initiated an unstoppable wave of reforms.
Because of its industrial might, this Europe would dominate the rest of the world during the 19th century. When European rivalries exploded into World War One, the face of the earth had already changed considerably compared to the previous century. And, having changed the world, Europe set the conditions for the demise of its own empire. Even before World War One, Teddy Roosevelt had heralded the start of the United States’ ascension to its current hegemony.
- The World Region
- South Asia
- Europe and Central Asia
- East Asia and Pacific
- Social Development
- Science and Technology Development
- Macroeconomics and Economic Growth
- Law and Regulation
- Financial Sector
- Culture and Development
- Communities and Human Settlements
- Teddy Roosevelt
- French Revolution
Current rehabilitation and development rhetoric calls for listening to the Afghans and giving them the lead. Sadly, actions too often defy these wise words. The challenge is to make way for genuine in depth Afghan involvement at a time when the problems inherent in a lackluster government beset with corruption are so complex, and, particularly, when the aid-dispensing agencies so often disregard coordination and cooperation.
Politics within the prevailing environment of conflict imposes a sense of great urgency, no doubt, but many basic development principles are being set aside when they are most needed. Plans that rest on massive projects designed by outsiders lavishing too much money and demanding instant implementation are bound to be ineffective. Quick fixes never have worked. Throwing around money indiscriminately just compounds problems and raises new dilemmas. Sustained development, as has been established for decades, requires patient on the ground interactions over time.
The presidential election in Sri Lanka this January resulted in an easy win for the incumbent Mahinda Rajapakse. The end of the long lasting civil conflict with Tamil separatists, strong remittances and an IMF agreement boosted investors’ confidence. Foreign exchange reserves recovered from about one month of imports in the first half of 2009 to six months of imports by January 2010.
Now that the war is over and the global economy recovering, the government needs to grasp the opportunity to do the right things and avoid hurting confidence in the country’s stability, which is key to the rise in foreign investment and tourism.
The bad news is that the withdrawal of GSP Plus by the European Union countries can hurt industrial exports. The EU decision is worrisome. Thanks to the increase in manufacture exports from 6 percent of total exports in 1975 to 60 percent in 2005, firms began to lead Sri Lanka‘s connectivity with the rest of the world.
After Iraq, South Asia is the second most violent place on earth. Conflict has increased in South Asia during the last decade. Where is conflict concentrated? What can be done about it?
Conflict is a very broad term, which is often defined differently in different contexts and data sets. We can, however, consider two broad classes of conflict. The first category includes conflict against the State. Examples of this include civil war or terrorism, which is an extreme manifestation of conflict, and it reflects a certain degree of organization of conflict. It is carried out by a relatively organized group of non-state actors, and directed against the State. Some researchers choose to focus on terrorism as a measure of conflict, because it has implications for the overall stability of the state itself, and therefore its ability to implement any developmental policy. The second category includes people-to-people conflict, rather than directed against the State. Examples of this include localized land conflicts, religious riots, homicides or other crimes. They too have adverse implications for development, but are probably less severe, compared to terrorism.
In the book, The Idea of Justice, Amartya Sen motivates the discussion on the importance of processes and responsibilities by relying on an example. In the Gita (part of the Mahabharata), on the eve of the crucial battle episode in the epic, Arjuna expresses his doubts about leading the fight which will result in so much killing. Lord Krishna, tells him that he, Arjuna, must perform his duty, that is, to fight. And to fight, irrespective of the consequences.
Krishna’s blessing of the demands of duty is meant to win the argument from a religious perspective. But most of us would share Arjuna’s concerns about the fact that, if the war were to occur, with him leading the charge on the side of justice and propriety, many people would get killed. He himself would be doing a lot of the killing, often of people for whom he had affection.
It was in 1714 that Bernard de Mandeville defended his view of the economic world in a long poem with pretensions to uncovering the moral basis of modern society – The Fable of the Bees: Private Vices, Public Benefits. According to him, industrialists, businessmen and politicians are like pimps, quacks, pickpockets and forgers: tireless professionals who, through their cunning, use the work of others for their own purposes. Mandeville claims that it matters little if every trade and place is tainted by trickery and every profession, by chicanery. What does matter is that everyone, whether saint or sinner, contributes to producing the comforts progress provides, by looking after their own interests.
But you and I believe that where people live off ill-gotten gains the community will suffer and, thus, we reject the poem’s cynical view of the world. Yet, the lesson of The Fable of the Bees (that civilization advances in the measure that individuals seek to satisfy their needs and desires) is still alive and kicking.