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Financial Sector

Is there something wrong with us economists?

Maurizio Bussolo's picture

We economists did not see the 2008 global financial crisis coming.

Nor did we anticipate, predict or, at least, warn people about the current wave of anti-trade, anti-immigration, and populism!?

To be fair, some economists were sounding alarms in the lead-up to the financial crisis. And even with the current backlash, although we may have missed the chance to predict it, many had warned that we were understating the impacts of global trade and that distributional tensions - the result of an unequal impact of globalization, technological change, and aging on certain groups - were mounting.

It seems very important – especially when considering the ongoing fierce rhetoric with which some policy proposals and decisions are described – to remain cool-headed, carefully analyze data, stay engaged and support reforms that are backed by solid evidence.

To reinvigorate Europe, we need more integration… of services

Doerte Doemeland's picture
Also available in: Русский | Română

To reinvigorate growth in Europe, European Central Bank President Mario Draghi called for more common projects in the European Union (EU). And he emphasized that these efforts need to meet a set of minimum bars: they should “…focus on those actions that deliver tangible and immediately recognisable results… [they] should complement the actions of governments; they should be clearly linked to people’s immediate concerns; they should unequivocally concern matters of European or global significance.”

We couldn’t agree more.

ციფრული რევოლუციის, უნარებისა და კომუნიკაციების მომავლის შესახებ

Tako Kobakhidze's picture
Also available in: English


ინფორმაციისა და კომუნიკაციების სფეროში კაცობრიობის ისტორიაში ჯერ არნახული უდიდესი რევოლუცია ხდება. მართალია, ამ ფრაზის ავტორი მე არ ვარ, მაგრამ სრულიად ვეთანხმები მას. სწორედ ამ წინადადებამ მიბიძგა წამეკითხა დოკუმენტის „მსოფლიოს განვითარების ანგარიში -2016: ციფრული დივიდენდები“ სრული მიმოხილვა.
ყოველთვის მაინტერესებდა, რას ნიშნავს სინამდვილეში ციფრული რევოლუცია. ვის, თუ არა ნახსენები ანგარიშის თანაავტორს შეეძლო ამ კითხვაზე პასუხის გაცემა! დიახ, გასულ კვირას შესაძლებლობა მომეცა, ინტერვიუ ჩამეწერა თბილისში მყოფ უვე დაიხმანთან. ის საქართველოს  8 აპრილს ეწვია „როუდშოუს“ ფარგლებში მსოფლიო ბანკის ჯგუფის მიერ განხორციელებული სამუშაოს წარსადგენად მთავრობის, ბიზნესის, აკადემიური წრეების, სტუდენტების და სხვა დაინტერესებული აუდიტორიის წინაშე ბიზნეს ფორუმზე: ინოვაცია და ციფრული ეკონომიკა.

A fresh look at the global financial crisis and poverty trends in the EU

Doerte Doemeland's picture
Also available in: Русский

When development practitioners such as ourselves think of poverty, the EU is not what comes to mind first. While it is true that average incomes are higher in Europe than in most regions of the world, it is also true that the 2008 global financial crisis had a huge impact on the welfare of the most vulnerable in many countries in the region.

Charging up the Fourth Estate: Communicating about audit

Tako Kobakhidze's picture
I’m back in Kazbegi and writing a blog again - what a nice coincidence! Georgian mountains possess a certain magic: they can help you forget about the office routine, bring out your social side, and enable you to more freely express yourself. Clearly, it was a very smart decision by the State Audit Office of Georgia (SAOG) to choose a location near Mkinvartsveri Mountain for its two-day workshop for media representatives.

With a view to helping journalists – the so-called Fourth Estate – broaden their knowledge in the field of audit, the head of the SAOG together with his colleagues hosted 20 media professionals from leading Georgian outlets, including TV, print and digital – all vital channels of external communication, and essential for ensuring transparency and accountability.


Moldova: adio 2015 și salut 2016!

Alex Kremer's picture
Also available in: English | Русский
Kids from Moldova

Aș vrea să vă explic de ce Banca Mondială este optimistă în privința Moldovei.
Primul motiv pentru optimism. Situată la granițele celei mai mari piețe din lume – Uniunea Europeană – și având costuri ale forței de muncă care constituie o mică părticică din media UE, Moldova ar putea fi un magnet de investiții pentru consumatorul european. Zonele economice libere din Moldova demonstrează cât de atractivă poate fi țara pentru investitorii străini, atunci când afacerile sunt protejate de corupție și reglementări excesive. Astfel, în ziua în care cetățenii Moldovei vor obține o economie curată, ei vor constata o creștere explozivă în domenii precum industria ușoară, care va fi însoțită de o cerere sporită pentru forța de muncă și salarii mai mari. Iar creșterea economică mai rapidă va genera un volum sporit de finanțare pentru educație, sănătate și pensii mai decente.
Al doilea motiv pentru optimism. Moldova a depășit cel mai devastator șoc economic cauzat de recesiunea economică din Rusia, precum și seceta din 2015. După un declin de 2 la sută în 2015, previziunea noastră este că creșterea PIB va fi relansată ușor în 2016, până la 0,5 la sută, și va accelera până la 4 la sută în 2017.
Cu siguranță nu e cazul să ne facem iluzii. Nu există alte cuvinte care ar descrie mai potrivit recesiunea, seceta și frauda masivă în sectorul bancar, povara căreia o vor resimți generații de moldoveni. Frauda bancară se face parțial responsabilă de deprecierea leului, ratele înalte la dobânzi și creșterea prețurilor. Colaboratorii Băncii Mondiale trebuie să fie ghidați de considerațiuni economice și nu de emoții, dar nu-mi pot stăpâni sentimentul de indignare atunci când realizez că Ion sau Ioana vor trebui să plătească pentru lipsa de acțiune a autorităților în cazul fraudelor comise în cele trei bănci.
Dar prosperitatea Moldovei nu este un obiectiv distant. Astfel, pentru a-l atinge, e important să fie realizate următoarele acțiuni în 2016...

Moldova: farewell 2015 and hello 2016

Alex Kremer's picture
Also available in: Русский | Română
Kids from Moldova

Let me explain why the World Bank is optimistic for Moldova.
Reason for optimism number 1. On the edge of the largest market in the world - the European Union - and with labour costs a tiny fraction of the EU average, Moldova could be a magnet for investment for the European consumer. Moldova's Free Economic Zones show how attractive the country can be to foreign investors when businesses are protected from corruption and hassles. The day that Moldovans get a clean economy, therefore, they will see explosive growth in such areas as light manufacturing, for example, and with that will come higher demand for labour and better wages. And faster economic growth will mean more money to pay for decent education, health care and pensions.
Reason for optimism number 2. Moldova has already weathered the worst of the economic shock caused by Russia's economic downturn and the 2015 drought. After a 2 percent decline in 2015, we predict that GDP growth will resume slowly in 2016 to 0.5 percent and accelerate to 4 percent in 2017.
Yes, of course one should not be delusional. 2015 was a tough year for the economy. There is no other word to describe a recession, a drought and a massive bank fraud for which generations of Moldovans will bear the burden. The bank fraud takes part of the blame for the fall of the leu, high interest rates and rising prices. World Bank employees are supposed to be guided by economics, not by emotions, but I cannot help feeling outrage that the ordinary Ion or Ioana will have to pay for the authorities' tolerance of fraud in the three banks.
But prosperity is within Moldova's reach. So, for 2016 let’s do the following...

How to bring discussion about financial issues into the classroom

Ivor Beazley's picture
Also available in: Русский
The 2008 financial crisis was a “wake up” call to many teachers in the United States and Canada. As families lost their homes and parents lost jobs, they began to appreciate the importance of kids leaving school with some knowledge of the world of finance – especially about how personal decisions are made about finance and how financial decisions taken by government directly affect their lives and future prospects. 

A study group from Moscow and five regions of Russia recently visited Canada and the US to learn more about initiatives in those two countries and to bring discussion about financial issues into the classroom – with the idea of turning today’s students into active and responsible citizens of the future, able to make well-informed personal financial decisions and to engage in discussions about public finances on behalf of themselves and their communities.

How can Russia grow out of recession?

Birgit Hansl's picture
Also available in: Русский

Russia’s economic woes continue: the recession deepened in the first half of 2015, severely impacting households, while the economy continued to adjust to the 2014 terms-of-trade shock, which saw oil prices being halved within a few months. In addition, investment demand has contracted for a third consecutive year.

Economic policy uncertainty, arising from an unpredictable geopolitical situation and the ongoing sanctions, caused private investment to decline rapidly as capital costs rose and consumer demand evaporated.

The record drop in consumer demand was driven by a sharp contraction in real wages, which fell by an average of 8.5% in the first six months of 2015 - illustrating the severity of the recession. The erosion of real incomes significantly increased the poverty rate and exacerbated the vulnerability of households in the lower 40% of the income distribution.

So, if oil prices remain low, how can Russia grow out of its recession?

Managing EU Funds – What We Can Learn from Slovenia

Maya V. Gusarova's picture
Effective management of European Union (EU) funds is not only high on the agenda of the new EU member states but also of the Western Balkan countries that are progressing in the EU integration process. As such, these countries face several important challenges and questions today.

On becoming an EU member, how much will the budget calendar and its preparation need to change? How best to plan and execute projects which are pre-financed? How to record unspent EU funds in the next fiscal year? To what extent should the Ministry of Finance be involved in the process before the signing of financial agreements with the EU? These and other questions arise in relation to the impact on a country’s fiscal position, co-financing obligations, pre-financings and bridging resources, and payment of errors.