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More efficient ways to transfer remittances are emerging. Are migrants and their families ready to benefit from them?

Massimo Cirasino's picture

The price of sending international remittances has reached a new record low in the first quarter of 2014. The global average cost of sending money across borders was recorded at 8.36 percent. This figure is used as a reference point for measuring progress toward achieving the so-called “5x5” objective – a goal endorsed by the G8 and G20 countries – to reduce the cost of sending remittances by five percentage points, to 5 percent, by the end of 2014.

Most indexes of international remittance costs – published by the World Bank in the new, ninth issue of the Remittance Prices Worldwide report, which was released on March 31 – indicate good progress in the market for remittances.

The global average cost is significantly lower when weighted by the volume of money that flows in each of the report’s country-to-country pairs. The weighted average cost is now down to 5.91 percent, following a further decline in the last quarter. For the first time, the weighted average has fallen below 6 percent.

Nearly one-third of the remittance-sending countries included in Remittance Prices Worldwide have now achieved a reduction of at least 3 percentage points. Those countries include such major sources of remittances as Australia, Canada, Germany, Italy and Japan. This is also the case for 39 out of 89 of the remittance-receiving countries.

Tax, Electricity and the State

Richard Mallett's picture

Some Observations from Nepal

Power lines in Kathmandu I've been in Nepal since January helping out with the implementation of a household survey. Throughout February and March, we asked people in two districts – Jhapa, in the south-east of the country on the Indian border, and Tibetan-bordering Sindhupalchok to the north – about their livelihoods, the various taxes they pay, and their relationships with state governance. As part of this research, we've also been carrying out a number of more in-depth qualitative interviews.
 
When asked about the kinds of taxes that most affect their livelihoods on a day-to-day basis, one of the things that struck me about people's responses was the frequency with which electricity bills were mentioned. At first, I couldn't quite understand why this was coming up so much: that's not a tax, I thought, it's simply a payment made in exchange for a service. In my mind, I began to discount these responses, passing them off as information that missed the points we were trying to get at.
 
My assumptions were misplaced.

What will happen to the Middle East and North Africa region if the Ukraine crisis escalates?

Lili Mottaghi's picture

 Arne Hoel

Following Russia’s annexation of Crimea after the popular voting in early March, the European Union and recently the U.S. and Canada have imposed their first round of sanctions—an asset freeze and travel ban on some officials in Russia and Crimea. This week NATO's foreign ministers, warning that Russian troops could invade the eastern part of Ukraine swiftly, ordered an end to civilian and military cooperation with Russia. Should the crisis escalate, potential fallout on Middle East and North Africa (MENA) countries is likely. The effects would be transmitted directly through trade and indirectly through commodity prices.

New Working Paper by Aart Kraay and David McKenzie: Do poverty traps exist?

LTD Editors's picture

This paper reviews the empirical evidence on the existence of poverty traps, understood as self-reinforcing mechanisms through which poor individuals or countries remain poor. Poverty traps, understood as self-reinforcing mechanisms through which poor individuals or countries remain poor, have captured the interest of many development policy makers, because poverty traps provide a theoretically coherent explanation for persistent poverty. They also suggest that temporary policy interventions may have long-term effects on poverty. However, a review of the reduced-form empirical evidence suggests that truly stagnant incomes of the sort predicted by standard models of poverty traps are in fact quite rare. Read the entire paper here.

Is Dhaka Ready? Towards Urban Resilience in Bangladesh

Marc Forni's picture

Bangladesh, the most vulnerable country in the world to the impact of natural disasters is also a leader in emergency preparedness and disaster response, particularly for cyclones, tidal surges and floods.  This was achieved through 25 years of effort, which was catalyzed through two devastating cyclones, one in 1970 and 1991 that caused the deaths of approximately 500,000 and 300,000 people respectively.  Part of what makes Bangladesh so strong at cyclone preparedness and response is the fact that major cyclones seem to hit Bangladesh every 3-4 years.  Recurrence of this frequency is quite unique.
 
On the other hand, major seismic events that lead to major losses occur infrequently.  Cities like Dhaka and Kathmandu, which are susceptible to major earthquakes, haven’t experienced a major shake in more than a generation.  Unfortunately, a lack of frequency often leads to complacency amongst governments and citizens.  Even more problematic is the very rapid accumulation of assets and population in urban environments in South Asia, including Dhaka.  
 
Walking through the streets of Dhaka paints a picture of a city with significant structural vulnerabilities – where poor construction standards, lack of enforcement, and poor maintenance turn many buildings into potential hazards. When a building in Savar collapsed in April 2013 – killing over 1,100 people and injuring thousands more – it was a wakeup call for Bangladesh. The collapse was not triggered by an earthquake, it was the result of catastrophic structural failures, but it was a glimpse into what could happen in the event of a major earthquake.

Prospects Weekly: The robust recovery in gross capital flows that began in the second half of 2013 resumed in March, Global business sentiment improved in March despite concerns around Ukraine, Import demand is strengthening across developing regions

After faltering in February, the robust recovery in gross capital flows that began in the second half of 2013 resumed in March. Global business sentiment improved in March despite concerns around Ukraine and slowing growth in China. Consistent with these trends, import demand is strengthening across developing regions, albeit with variations.

Racing to a Competitive Economy: China Pursues High GDP, Low-Carbon Growth

Xueman Wang's picture
Also available in: 中文

 Yang Aijun/World Bank

December 2009 does not seem so long ago. The UN climate conference in Copenhagen had just come to a disappointing end, and I headed home feeling depressed.  I returned to China for holiday and was surprised to see the widespread awareness of climate change and the collective sense of urgency for action. The concept of "low carbon" was discussed in all major and local newspapers. To my amazement, I even found an advertisement for a "low carbon" wedding. I finished my holiday and went back to Washington with optimism and hope: Despite the failings of Copenhagen, China, the biggest emitter in the world and the largest developing country, was going through a real transformational change. China clearly saw action on climate change as serving its own interest and as an opportunity to pursue a green growth model that decouples economic development from carbon emissions and resource dependence.

In the past five years, the world has witnessed the emergence of China as a leader for tackling climate change.  A few weeks ago, colleagues at the World Bank Group heard an evidenced-based presentation by Vice Chairman Xie Zhenhua from the National Development Reform Commission (NDRC) of China, who showed what China had done in the past, is doing now, and plans to do in the future. He shared his candid assessment of the challenges, mistakes, and lessons learned from China's experience.

China’s progress is impressive. Between 2005 and 2013, average economic growth has been above 8 percent while the country’s emissions intensity has decreased by 28.5 percent compared with 2005 levels. This equates to emissions reductions of 23 million tons of CO2. These reductions were achieved through massive closures of inefficient coal fire plants, aggressive energy efficiency programs, expanding the renewable energy program, and large investments in clean technology.

While these numbers are impressive, sustaining them will be harder. Over the last 10 years, China has targeted its "low-hanging fruit" for mitigation options. The challenge today is how China will sustain annual GDP growth of more than 7 percent while continuing to reduce its economy’s emissions intensity.

Take It On: What You Can Do to Help End Extreme Poverty

Christine Montgomery's picture

One voice can make a difference. Many can change the world.

From civil rights in America to the global fight against AIDS, history has shown that when people come together in pursuit of a goal, they can overcome seemingly insurmountable odds.

We’re urging everyone to come together to help end extreme poverty by 2030.

The World Bank Group, along with other like-minded organizations and individuals, is part of a global movement to change the lives of millions of people who survive on less than $1.25 a day.

Help us do it. Take on a challenge that can help end extreme poverty – whether gender equality, education for all, or fighting climate change. There are many ways you can help.

Be part of the generation that makes poverty history.

Here are some more ways to get involved:

Sign the Global Poverty Project petition calling on countries
to support efforts to end extreme poverty by 2030

When the petition reaches 1 million signatures, it will be sent to the
heads of governments in countries around the world for action.

 

Sign the Zero Poverty 2030 Petition

Redefining the Roles of NGOs

Suvojit Chattopadhyay's picture

NGOs must strive for scale if they want to fulfil their roles as enablers and incubators in striving for development

As small but key players in the social development space, non-governmental organizations (NGOs) often worry about scaling up. If you have worked in this space, you’d surely agree that models of development interventions promoted by NGOs often remain small islands of success (if at all they do succeed). NGOs themselves are aware of the limited traction they achieve with policymakers due to their inability to influence or demonstrate change at a larger scale. Also, often organizations that are effective at a certain scale falter as they attempt to grow bigger in size. In this column, I restrict myself to service-delivery organizations—those that work in the areas of livelihoods, basic services, etc.—and not those that are involved in activism or rights-based social mobilization.
 
One view is that the very nature of a development NGO sometimes limits its ability to grow. The objective of an NGO should be to demonstrate: (1) proof of concept of their model; and (2) that implementing this through a government agency is indeed feasible. The latter is especially important, given that key stakeholders in the sector have by now realized and acknowledged that the state/government is at the forefront of the development battle. Scale is crucial in a country like India—it is expected of organizations that they will demonstrate consistent results over a long period of time, and at the same time, reach out to large numbers of people.

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