Syndicate content

Public Sector and Governance

A Tale of Two Competitive Cities: What Patterns Are Emerging So Far?

Z. Joe Kulenovic's picture

As noted in a blog post earlier this year, the World Bank Group is pursuing a Competitive Cities Knowledge Base (CCKB) project, looking at how metropolitan economies can create jobs and ensure prosperity for their residents. By carrying out case studies of economically successful cities in each of the world’s six broad regions, the Bank Group hopes to identify the “teachable moments” from which other cities can learn and replicate some of those lessons, adapting them to fit their own circumstances.

The first two case studies – Bucaramanga, in Colombia’s Santander Department, and Coimbatore, in India’s State of Tamil Nadu – were carried out between April and June 2014. Although they’re on opposite sides of the globe, these two mid-sized, secondary cities have revealed some remarkable similarities. This may be a good moment to share a few initial observations.
 
Bucaramanga and Coimbatore were selected for study because they outpaced their respective countries and other cities in their regions, in terms of employment and GDP growth, in the period from 2007 to 2012. Faced with the same macroeconomic and regulatory framework as other Indian and Colombian cities, the obvious question is: What did these two cities do differently that enabled them to grow faster?

Shaping the Debate on Promoting Jobs and Competitiveness in Small Island Developing States

Ivan Rossignol's picture

The United Nations has declared 2014 as the International Year of Small Island Developing States (SIDS), in recognition of the contributions this group of countries has made to the world, and to raise awareness of the development challenges they confront – including those related to climate change and the need to create high-quality jobs for their citizens.

The Third International Conference on SIDS in September in Apia, Samoa will be the highlight event.  The World Bank Group is helping shape the debate on both climate and jobs with a delegation led by Rachel Kyte, the Group Vice President and Special Envoy for Climate Change, and with senior-level participation in the conference’s Private Sector Forum.

Is the global jobs agenda relevant to small islands states?

Tackling the challenges related to the jobs agenda in large and middle-income countries could be seen as the most significant issue for the Bank Group’s new Trade and Competitiveness Global Practice, of which I’m a member. Yet the Minister of Finance of Seychelles recently challenged my thinking on this. 

At the June 13  joint World Bank Group-United Nations' High-Level Dialogue on Advancing Sustainable Development in SIDS (which precedes the September conference on SIDS), the presentation by Pierre Laporte, the Minister of Finance, Trade and Investment of Seychelles – who is also the chair of the Small States Forum – led to a lively discussion on various job-creation and growth models that the SIDS countries may want to pursue. 

The sentiment among SIDS leaders was that one-size-fits-all solutions will not do when it comes to jobs and growth.  Yes, they do want to continue to address the tough fiscal challenges they face, but they want to tackle them while creating job opportunities for their citizens. 

Decades of reforms have not helped SIDS grow at a rate similar to the rest of the world: On average, their pace of job creation is about half the global rate. The lack of opportunities felt by many generations resulted in a heavy “brain drain” that exceeds the level seen in other developing countries. 

It is becoming very clear that business as usual in SIDS will not do.  Creative solutions need to be found now.

Drifting Toward Plutocracy: Inexorable Concentration of Capital Undermines the Drive for 'Shared Prosperity'

Christopher Colford's picture

Like seismic waves rippling outward after a tectonic shift, reverberations are roiling the economic-policy landscape after the U.S. launch of the groundbreaking new analysis by Thomas Piketty, the scholar from the Paris School of Economics whose landmark tome – “Capital in the Twenty-First Century” – has newly jolted the economics profession.

Any Washingtonian or World Bank Group staffer who somehow missed the news of Piketty’s celebrated series of speeches and seminars last week – in Washington, New York and Boston – received an unmistakable signal this week about what an important intellectual breakthrough Piketty has achieved. President Jim Yong Kim on Tuesday cited Piketty while putting the issue of economic inequality at the top of his list of priorities during his review of the Spring Meetings of the Bank and the International Monetary Fund. Noting that he was already about halfway through reading Piketty’s “Capital,” President Kim sent a clear message that the skewed global distribution of wealth, as analyzed by Piketty and emphasized by many officials at the Bank and Fund's semiannual conference, should be top-of-mind for policy-watchers at the Bank and beyond – indeed, at every institution that hopes to promote shared prosperity.

Piketty’s scholarship is now receiving widespread acclaim as a landmark in economic analysis, and is being recognized both for its “exhaustive fact-based research” and its sweeping historical perspective. More of a patient dissection of hard data than a political roadmap, Piketty’s book has quickly become the subject of multiple praiseworthy reviews, notably in the New York Times and the Financial Times. One usually level-headed Bloomberg View analyst, recoiling from the “rapturous reception” accorded to the book, may have gone slightly overboard this week in asserting that Piketty's insights had been greeted by American liberals with “erotic intensity.”

Predictably, Piketty's book has also quickly become the target – “Piketty Revives [Karl] Marx,” blared a Wall Street Journal headline; “Marx Rises Again,” warned the New York Times’ lonely conservative scold – of the whack-a-mole ideological purists in laissez-faire Op-Ed columns, who forever seem tempted to equate modern-day liberalism with long-gone Leninism. Eager to publish denunciations of any idea, however modest, that might justify (heaven forfend) tax increases on stratospheric income-earners and the top-fraction-of-the-One Percent, the free-market fundamentalists on the Wall Street Journal’s editorial board – unabashed cheerleaders for plutocracy – have opened up one of their trademark barrages via their Op-Ed columns (“This book is less a work of economic analysis than a bizarre ideological screed”; “The professor ought to read ‘Animal Farm’ and ‘Darkness at Noon’ ”). The Journal's jihad clearly aims to demean or discredit anyone who might flirt with such Piketty-style notions as restoring greater progressivity to the tax code. (Egad: Progressive taxation? Next stop: Bolshevism.)

Toward Shared Prosperity, With an Urgent New Focus on Overcoming Inequality

Christopher Colford's picture

The challenge of promoting shared prosperity was one of the unifying themes throughout last week’s Spring Meetings at the World Bank Group and International Monetary Fund – the whirlwind of diplomacy and scholarship that sweeps through Washington every April and October. A remarkable new factor, however, energized this spring's event: In a vivid evolution of the policy debate, the seminars, forums and news-media coverage seemed focused, to a greater degree than ever, not just on the economic question of the creation of overall economic growth but on what has traditionally been seen as a social question: the distribution of wealth.

And in the wake of the Spring Meetings, Washington this week got a bracing reminder of how difficult it may be to build truly shared prosperity – not because our economic institutions lack the ability to achieve it, but because our political institutions may fail to summon the willpower to demand it.

A scholar whose work has taken the economics profession by storm, Thomas Piketty, captivated policy-watchers this week with the Washington launch of his landmark new work, “Capital in the Twenty-First Century.” Hailed as “the most important economics book of the year, and maybe of the decade” by Nobel Prize-winning economist Paul Krugman of the New York Times – and praised by Martin Wolf of the Financial Times as “an extraordinarily important” work “of vast historical scope, grounded in exhaustive fact-based research”– “Capital” offers vital new insights into how wealth and power are distributed in modern economies. “Piketty has transformed our economic discourse,” asserts Krugman. “We’ll never talk about wealth and inequality the same way we used to.”



Piketty’s account of “inexorably rising inequality,” according to New York Times columnist Eduardo Porter, challenges many of the economics profession’s “core beliefs about the organization of market economies” – including “the belief that inequality will eventually stabilize and subside on its own, a long-held tenet of free-market capitalism.” Instead, “the economic forces concentrating more and more wealth into the hands of the fortunate few are almost sure to prevail for a very long time.”

Have 'Special Economic Zones' Entered the 21st Century Yet? A Tale of Two Cities

Martin Norman's picture

At the World Free Zone Convention in Izmir, Turkey, which I attended in December, an important question was asked:  Have "Special Economic Zones" entered the 21st Century?  Evidence shows that, in many ways, they have – but in many instances we are still seeing across the globe the same isolated economic enclaves with few linkages to the local market and little economy-wide impact.

More than ever, special economic zones (SEZs) are on the defensive, despite the fact that the more than 3,500 SEZs worldwide have provided employment for more than 60 million people.

I believe that two zones, in particular, can shed light on the factors of success and failure in SEZs today:  Shenzhen, China, which is almost universally considered to be a success story, and the Calabar Free Trade Zone in Nigeria, which has failed to live up to its original projections. 
 

Sri Lanka - Resplendent Island, Raring to Deliver

Parth Shri Tewari's picture


Sri Lanka conjures up different images in the minds of different people: lush green tropical canopies, steaming cups of aromatic tea, and hardworking fishermen in their dinghy boats.

For me, the country also packs enormous promise for growth and development. There is not the slightest doubt that Sri Lanka will have to come clean and deal with the aftermath of its prolonged civil war. However, at a fundamental level, there is a sense of hunger in its people to rebuild their lives and their country. The new-found peace that engulfs the population is cherished by most, and is part of dinner conversations especially with foreigners like me.




Sri Lanka already holds a strong position in certain agricultural and industrial exports, like tea or uncut diamonds. Combine this with its strategic location – situated at the crossroads of major shipping routes connecting South Asia, East Asia and the Middle East – and you have a potent combination, a promise waiting to be fulfilled.

I recently spoke at an event organized by the country’s top business newspaper, the Daily Financial Times, in partnership with the well-regarded Colombo University MBA Alumni Association. The focus of the forum was the country’s emerging six-hub strategy – Maritime, Commercial, Knowledge, Aviation, Energy and Tourism: the cornerstone of its further economic development.

The euphoria leading up to the event was palpable. The ceremonial drums and lighting of the auspicious lamp to evoke good omen created the perfect ambience. I was nervous, not because of stage fright, but because I was about to present a contrarian viewpoint to private-sector and public-sector experts, while sharing the stage with the Minister of Economic Development and the Governor of the Sri Lanka’s Central Bank. Even though my arguments were well-thought-through and fact-based, it was going to be a delicate dance, as I was about to communicate some tough arguments against the implementation of the full-blown six-hub strategy.

Partager les expériences pour renforcer l'égalité hommes-femmes en Afrique subsaharienne

Paula Tavares's picture



Le 27 Février, un atelier régional de haut niveau a débuté à Lomé (Togo), avec la participation des ministres en charge de la promotion de la femme et des représentants de 11 pays d'Afrique de l'Ouest et Centrale. Le thème principal de l’atelier était le rapport du Groupe de la Banque mondiale, « Les Femmes, l’Entreprise et le Droit 2014 : Lever les obstacles au renforcement de l’égalité hommes-femmes ». Un dîner de bienvenue précédant l'ouverture officielle de l'événement a révélé le dynamisme des ministres participants - toutes des femmes -, de même que les réalités et enjeux communs à leurs nations. La plupart se réunissaient pour la première fois et cette occasion unique a permis le partage des expériences et des points de vue sur les lois, les normes culturelles et les rôles traditionnels au sein de la famille.

Les discours d'ouverture de l'atelier reflètent bien l'importance de l'égalité hommes-femmes pour la région. En accueillant l'événement, Monsieur Hervé Assah, Représentant Résident de la Banque mondiale au Togo, a noté que : « Sous-investir dans le capital humain que constituent les femmes est un véritable frein à la réduction de la pauvreté et limite considérablement les perspectives de développement sur le plan économique et social ». Ces préoccupations ont été reprises par la Ministre de l'Action Sociale, de la Promotion de la Femme et de l'Alphabétisation du Togo, Mme Dédé Ahoéfa Ekoué, qui a souligné l'importance de la participation des femmes dans la société et dans l'économie, à la fois au Togo et dans le monde. Le ton était donc donné pour cet événement de deux jours, qui visait à la fois à mettre en évidence les récentes réformes adoptées par les pays de la région et à promouvoir le partage d'expériences, les défis et les bonnes pratiques entre les participants pour promouvoir l'inclusion économique des femmes.

Sharing Experiences and Insights to Enhance Gender Equality in Sub-Saharan Africa

Paula Tavares's picture



On February 27, a high-level regional workshop kicked off in Lomé, Togo, with the participation of Ministers of gender affairs and officials from 11 economies from West and Central Africa focusing on the World Bank Group’s Women, Business and the Law 2014: Removing Restrictions to Enhance Gender Equality report. A welcome dinner prior to the official opening of the event revealed the dynamic nature of gender affairs Ministers – all women – and the common realities and issues facing their nations. Most were meeting for the first time in a unique experience that enabled sharing stories and views about laws, cultural norms and traditional roles within the family in prelude to the official discussions.
 
The opening remarks at the workshop reflected well the importance of gender equality for the region. In welcoming the event, Mr. Hervé Assah, the World Bank's Country Manager for Togo, noted that “underinvesting in the human capital of women is a real obstacle to reducing poverty and considerably limits the prospects for economic and social development.” Those concerns were echoed by the Minister of Social Action and Women and Literacy Promotion in Togo, Mrs. Dédé Ahoéfa Ekoué, who highlighted the importance of women’s participation in society and the economy, both in Togo and worldwide. The tone was thus set for this two-day event, which aimed at both highlighting recent reforms enacted by countries in the region and promoting the sharing of experiences, challenges and good practices among the participants in promoting women’s economic inclusion.

There is certainly much to highlight and share over these two days and beyond. Over the past two years, several Sub-Saharan African economies passed reforms promoting gender parity and encouraging women’s economic participation. For example, Togo reformed its Family Code in 2012, now allowing both spouses to choose the family domicile and object to each other’s careers if deemed not to be the family’s interests. Côte d’Ivoire equalized the same rights for women and men, and also eliminated provisions granting tax benefits only to men for being the head of household. Furthermore, Mali enacted a law allowing both spouses to pursue their business and professional activities and a succession law equalizing inheritance between husbands and wives. While the pace of reform has been accelerating in the region, it is not a recent phenomenon. In fact, Sub-Saharan Africa is the region that has reformed the most over the past 50 years: Restrictions on women’s property rights and their ability to make legal decisions were reduced by more than half from 1960 to 2010.

Settling with Justice

Jean Pesme's picture



Settlements in cases of foreign bribery cases are big news and growing.  More and more countries are allowing these procedures, and their law enforcement agencies are using them forcefully in their efforts to combat foreign bribery. The FCPA, which came into law in the US over thirty five years ago, has paved the way for many other countries to adopt similar legislations, in line with far reaching international agreements such as the OECD Anti-Bribery Convention. These are very welcome developments, which should continue unabated.

The 2003 UN Convention Against Corruption – to which almost 170 countries have become party to - has created an environment for a radical and universal change in the international landscape of anti-bribery legislation. Actual enforcement is making a difference, as illustrated by the rapid growth in settlements by companies and individuals who have contravened the law and have to face the consequences - without going to a full trial. The figures are telling: over the past decade a total of US$ 6.9 billion has been imposed in monetary sanctions through settlements - which is clearly good news in the fight against corruption.

But in the midst of this positive development, there are a number of troubling concerns (from the perspective of the countries affected by corruption).  Research by the  UNODC/World Bank Stolen Asset Recovery Initiative in our new report ‘Left Out of the Bargain’ has revealed that those countries whose officials have been bribed are most often unaware of the settlements, and receive very little of the moneys involved. Of the US$ 6.9 billion, nearly US$ 5.8 billion came about when the countries where the settlement took place – mostly major financial centers - were different from those of the allegedly bribed foreign public official.

StAR’s analysis of 395 cases reveals that only about US$197 million, or 3%, was returned to the countries whose officials allegedly received bribes.
 

Western Balkans: Through Science, Innovation and Collaboration, a Program for Shared Prosperity

Paulo Correa's picture


 

You’d probably be skeptical if I told you that the Western Balkans – a region that has long suffered from social and ethnic fragmentation – now has a strong opportunity to boost shared prosperity by promoting research, innovation and entrepreneurship. Your views might not even change if I showed you that such idea is validated by preliminary studies linking research and innovation to the performance of firms and countries in the region.

You might be surprised – yet your initial assumption might be unchanged – if I told you about the kind of companies that are starting to build a different economic landscape in the region: firms like UXPassion, Pet Minuta, Strawberry Energy or Teleskin, which are all technology-based startups created by young researchers who became entrepreneurs. Click on this link (http://www.worldbank.org/en/news/video/2013/10/22/western-balkans-research-and-development-for-innovation), or on the video embedded below, to meet them and other innovators from the Western Balkans.

Indeed, the transition to a market economy and the breakup of the former Yugoslavia starting in 1991 had a severe impact on the research and innovation sector in the Western Balkans. Research capacity narrowed significantly, and R&D’s links to the productive sector of the economy disappeared. The new industrial structure has naturally a lower propensity to invest in research while the current business environment promises low returns to the enterprise investments in innovation. Efforts to revamp the region's research and innovation sector were most of the time short-lived.

As a result, the performance of the research and innovation sector in the Western Balkans is gloomy. The region’s current investment in R&D are roughly the same amount as the investment by just the second-largest university in the United States. (In 2012, for example, only 38 patents from the region were registered with the U.S. Patent and Trade Office – compared to the average of 27 patents registered by each American university.) At the same time, very little of those investments are efficiently transformed into wealth. For example, for each invention that received a patent, the region spent, on average, three times more in R&D resources than does the United States.

Building on a continuing series of efforts to reform their national innovation systems, in the hope of changing their gloomy prospects, the Western Balkan countries in 2009 committed to develop a joint regional research and innovation strategy. That strategy, developed between 2011 and 2013, was formally endorsed last month by the ministers responsible for science and education from Albania, Bosnia-Herzegovina, Croatia, Kosovo, the Former Yugoslav Republic of Macedonia, Montenegro, and Serbia. The preparation of the strategy, which benefited from technical assistance by the World Bank and from the financial support of the European Commission, involved representatives from the region’s leading universities, research institutes, private sector firms and government agencies. Discussions of the draft proposal were pursued in all seven countries as part of a large outreach exercise.

Pages