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How Well did We Forecast 2014?

Shanta Devarajan's picture

A year ago, we polled Future Development bloggers for predictions on the coming year (2014).  Looking back, we find that many unforeseen (and possibly unforeseeable) events had major economic impact. 

We missed the developments in Ukraine and Russia, the spread of the Islamic State in Iraq, the outbreak of Ebola in West Africa, the collapse in oil prices and their attendant effects on economic growth.  At the same time, we picked the winner of the soccer World Cup, and got many of the technology trends right. Perhaps economists are better at predicting non-economic events.

Here’s the scorecard on the seven predictions made:
 

الوظائف أو الامتيازات

Marc Schiffbauer's picture
Also available in: English

إطلاق العنان لخلق فرص العمل في منطقة الشرق الأوسط وشمال أفريقيا

 
ثمة خيار أمام غالبية من هم في سن العمل في منطقة الشرق الأوسط وشمال أفريقيا: إما الانضمام إلى صفوف البطالة أو العمل في أنشطة ضعيفة الإنتاجية وتكفي بالكاد احتياجاتهم، وغالباً ما تكون في الاقتصاد غير الرسمي (الموازي). وبوجه خاص، فإن نسبة العاملين في القطاع الرسمي في المنطقة ممن هم في سن العمل لا تتجاوز 19 في المائة.
 
ويتمثل السبب الرئيسي لذلك في أن القطاع الخاص لا يهيئ فرص عمل كافية. وتبلغ نسبة فرص العمل في الشركات متناهية الصغر التي تعمل في منطقة الشرق الأوسط وشمال أفريقيا ما بين 42 إلى 72 في المائة من إجمالي الوظائف، غير أن هذه الشركات لا تنمو. ففي تونس، نجد أن احتمال نمو شركة ما متناهية الصغر بما يتجاوز 10 موظفين بعد 5 سنوات من تأسيسها تبلغ 3 في المائة.
 

Life in the Slow Lane - The Nairobi Grind

Apurva Sanghi's picture

I’ve lived in cities famed for their gridlock: 1990s Bangkok (gridlock was as bad as it could be); Los Angeles (gridlock + pollution); New Delhi (gridlock + pollution + honking galore); Nairobi’s gridlock is surely up there.

But is traffic “bad”? What sort of question is that you ask? Surely, the answer is 'yes', you say: time wasted stuck in traffic, the frustration, the needless idling of vehicles which creates both local (and global) pollution and so on. But let me suggest this: traffic congestion is also a sign of development. In fact, the more vibrant and dynamic the city as Nairobi surely is, the more traffic congestion you might expect...to paraphrase Gordon Gekko from the movie Wall Street, “Traffic is…good”!

Jobs or Privileges?

Marc Schiffbauer's picture
Also available in: العربية

Unleashing the Employment Potential of the Middle East and North Africa

The majority of working-age people in MENA face a choice: they can be unemployed; or they can work in low-productivity, subsistence activities often in the informal economy. In particular, only 19% of the working age people in MENA have formal jobs.

The main reason is that the private sector does not create enough jobs. Between 42% and 72% of all jobs are in micro firms in MENA, but these micro firms do not grow. In Tunisia, the probability that a micro firm grows beyond 10 employees five years later is 3%.

Why has private sector job creation been so weak?

Are Institutional Births Institutionalizing Deaths?

Jishnu Das's picture

On November 12th in the Indian state of Chhattisgarh, twelve women who had received tubal ligations died. The tragic incident highlights the unfortunate reality that for many people around the world, hospitals and clinics may not satisfy the most basic assumption that visiting them will make you better. Equally worrying is the Indian government’s singular focus on increasing ‘institutional deliveries’ and family planning that led it to celebrate a surgeon who had performed 100,000 sterilizations, now spending no more than 4 minutes on each “case”.
 

How to Break the Curse of Unemployment: Jobs First or Skills First?

Omar Arias's picture

Some Skills should Come Before Jobs, Others Develop with the Job
 
Students work on an engine at Sisli Vocational High School To be clear from the onset: I will not oversimplify the unemployment (or inactivity) problem in the Western Balkan countries as solely due to a lack of skills in the population. Low employment rates result from both insufficient creation of jobs by enterprises and too-high a fraction of the workforce that is ill-equipped to take on the jobs that a modern economy creates. Both issues are intertwined. Solutions, therefore, require efforts on several fronts to enable a more vibrant private sector –including improvements in the business environment, enterprise restructuring, integration in global markets and promoting entrepreneurship— as well as to prepare workers for new job opportunities.

Let’s Talk Convergence

Homi Kharas's picture

The city of Tianjin In a recent article called “Economic Convergence: The Headwinds Return”, The Economist magazine called the rapid convergence of income levels between developing countries and the United States an aberration. It presented data showing that the difference between income per capita growth in developing countries and in developed countries had peaked around 2008 and had since become steadily smaller. When China is excluded from the calculations, the difference becomes smaller still.

So should we dismiss convergence as a trend whose time is past? I would argue that this would be premature, and that convergence is still a feature of our time. The different conclusion is not because of different data--both of us use the IMF’s World Economic Outlook series for GDP per capita at purchasing power parity terms, and its forecasts until 2019—but a different approach to convergence.

It’s not the How; It’s the Why

Shanta Devarajan's picture
Also available in: Español | Français | العربية

Hardly a week goes by without my hearing the statement, “It’s not the What; it’s the How.”  On the reform of energy subsidies in the Middle East and North Africa, for instance, the discussion is focused not on whether subsidies should be reformed (everyone agrees they should be), but on how the reform should be carried out.  Similar points are made about business regulations, education, agriculture, or health. I confess to having written similar things myself.  And there is no shortage of such proposals on this blog
 
Reforms are needed because there is a policy or institutional arrangement in place that has become counterproductive.  But before suggesting how to reform it, we should ask why that policy exists at all, why it has persisted for so long, and why it hasn’t been reformed until now.  For these policies didn’t come about by accident.  Nor have they remained because somebody forgot to change them.  And they are unlikely to be reformed just because a policymaker happens to read a book, article or blog post entitled “How to reform…”

لا يتعلق الأمر بالكيفية، بل بالسبب

Shanta Devarajan's picture
Also available in: English | Español | Français

انقضى أسبوع تقريبا دون أن أسمع عبارة "لا يتعلق الأمر بالكيفية بل بالسبب."  ففي مجال إصلاح دعم الطاقة في الشرق الأوسط وشمال أفريقيا، على سبيل المثال، لا يتركز النقاش على ما إذا كان ينبغي إصلاح الدعم (يتفق الجميع على ضرورة ذلك) بل على كيفية إجراء الإصلاح.  وتثار نقاط مماثلة بشأن تنظيم ممارسة الأعمال أو التعليم أو الزراعة أو الصحة. واعترف بأني أنا نفسي كتبت أمورا مشابهة.  ولا يوجد نقص في مثل هذه المقترحات على هذه المدونة.
 
فالإصلاحات مطلوبة لأنه توجد سياسات أو ترتيبات مؤسسية قائمة باتت معوقة.  لكن قبل أن نقترح كيفية إصلاحها ينبغي أن نسأل لماذا وُجدت هذه السياسة من الأصل، ولماذا استمرت فترة طويلة، ولماذا لم يتم إصلاحها حتى اليوم.  فهذه السياسات لم تأت مصادفة.  ولم تستمر لأن شخصا ما نسي تغييرها.  ولن يتم إصلاحها على الأرجح لمجرد أن أحد صانعي السياسات قرأ كتابا أو مقالا أو مدونة بعنوان "كيف تصلح..."

Tariffs for Standards?

Hassan Zaman's picture

Bangladesh Duty- and quota-free access for exports to global markets is something developing country trade negotiators have demanded for years.  Few other “stroke-of-the-pen” measures could boost employment and reduce poverty in low income countries in such large numbers. For instance  if the US removed tariffs on Bangladeshi garments – which average around 13%, but for some items are as high as 33% – then exports to the US could rise by  $1.5 billion from the FY13 level of $5 billion, in turn generating employment for at least an additional half a million, primarily female, workers.[1]  Examples of other countries facing US tariffs include Cambodia (12.8% average tariff rate on its exports to the US), India (4.01%), Indonesia (5.73%), and Vietnam (7.41%). Progress in trade facilitation would likely have even greater pay-offs to growth and employment, but these require structural reforms and investments, while the decision to remove tariffs is a simpler, “stroke-of-the-pen” measure.

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