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Investigating the forces that drive local food prices

Stephanie Fangyu Liu's picture

What influences fluctuations in local food prices? Is it domestic drivers like weather and harvest cycles? Or external forces like world prices?
 
World Bank economist John Baffes and consultant Varun Kshirsagar explore these questions in their recent post on the Let’s Talk Development blog.  In a working paper that examines evidence from Tanzania’s maize market, they provide valuable insight on the issue of export bans and find that more open trade policies will have increasing relevance for Tanzania’s future.

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Traditional trade policy is alive and kicking

Nihal Pitigala's picture

With the growing importance of global value chains as a conduit for trade integration, much of the recent empirical analysis and other literature has focused on the impacts of non-tariff barriers, behind-the-border measures, and other transaction costs. Traditional barriers, tariffs in particular, have generally been dismissed as less disruptive to trade and, therefore, have fallen out of the policy debate. However, evidence is surfacing from developing countries that import taxes are on the rise, increasing protection, and their disruptive tendencies are often disguised. Along with the rising tendency to subsidize domestic industries, these additional taxes tend to further augment the inherent anti-export bias, which can be particularly detrimental to trade-led development strategies and policies in developing countries. 

A BIT far? Geography, Investment Agreements, and FDI

Gonzalo Varela's picture
Despite hard times at home, emerging market multinationals (EMMs) continue their impressive rise in the global marketplace. In 2014, outward foreign direct investment (FDI) by developing and emerging economies increased by 23 percent, reaching a record level of $468 billion or 35 percent of global FDI flows (UNCTAD, 2015). In little more than a decade, emerging market firms like India’s Tata Group, South Africa’s SABMiller, and China’s Haier, have established operations around the world, becoming global leaders in their respective products.

Thoughts on competition policy from Anabel Gonzalez, Senior Director of the WBG Trade and Competitiveness Global Practice

Julia Oliver's picture

Anabel Gonzalez, Senior Director of the the World Bank Group's Trade and Competitiveness Global Practice, has published a new blog post on competition policy, "From Tirole to the WBG Twin Goals: Scaling up competition policies to reduce poverty and boost shared prosperity." The piece addresses the links between competition policies, economic growth, and household welfare. It also explains how the Global Practice is scaling up support to governments on effective competition policies.

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Better trade logistics could jump-start Africa’s light manufacturing industry

Ankur Huria's picture

Zambia-Zimbabwe border crossing. Photo - World Bank.Labor-intensive, light manufacturing industries led the economic transformation of some of the most successful developing countries in the world, including China and Vietnam. In Sub-Saharan Africa, that was simply not the case.  The region’s share of the global light manufacturing market has declined to less than one percent since China’s emergence in the 1980s. Nevertheless, a review of recent trends in exports suggests that some East African countries –Ethiopia, Kenya, Tanzania, Uganda and Zambia – are making headway in light manufacturing industries.

According to the World Bank Group’s 2011 report, “Light Manufacturing in Africa,” the global trading environment “favors Sub-Saharan Africa if it can overcome key constraints in the most promising subsectors.” Those subsectors include the manufacture of food products and beverages; apparel and the dressing and dyeing of fur; wood and wood products; luggage and the tanning and dressing of leather; and fabricated metal products. Sub-Saharan Africa enjoys low labor costs and abundant resources, as well as preferential trade access to US and EU markets for light manufactures. Despite these advantages, the competitiveness of Africa’s light manufacturing industry continues to be undermined by the costs of importing and exporting intermediate inputs of both goods and services. 

Does trade facilitation facilitate trade? Lessons from Albania

Russell Hillberry's picture

Border between Albania and Montenegro. Photo - Aleksandr Zykov / Flickr Creative CommonsTrade facilitation is at the center of the global trade policy agenda. The Trade Facilitation Agreement (TFA) – signed by World Trade Organization (WTO) Members in December 2013 and discussed last week at the WTO’s Fifth Global Review of Aid for Trade – aims to simplify and harmonize trade procedures across countries.  Improving their ability to efficiently manage trade flows is a challenging task for many developing countries, but developed countries are eager to help. The WTO indicates that between 2006 and 2011, US $1.2 billion in official development aid was spent to support trade facilitation reforms.  Even more aid was committed as a result of the TFA.

As of yet we know little about the impacts of trade facilitation efforts. Djankov, Freund, and Pham (2006), Freund and Rocha (2010), Persson (2010) and Hornok and Koren (2014) provide cross-sectional evidence on the trade impacts of administrative costs and delays.  But trade facilitation reforms have seen few rigorous impact evaluations.  

Ensuring the poor benefit from global trade

Anabel Gonzalez's picture

A woman brings onions to market in Mali. Photo - Irina Mosel / ODI via Flickr Creative CommonsThis week the World Bank Group, the largest multilateral provider of aid for trade, is participating in the World Trade Organization’s 5th Aid for Trade Global Review. Every two years, the Global Review brings together participants in global trade from all over the world, including trade ministers, the heads of international development institutions, the private sector and civil society. We will be focused on the role of trade in helping achieve the Bank Group’s Twin Goals: ending poverty and boosting shared prosperity.

The role of trade in ending poverty is the subject of a new WTO-World Bank Group publication being launched on 30 June, the first day of the Review.  The report argues that to achieve the end of poverty by 2030, more needs to be done to connect the nearly one billion people who remain in extreme poverty to trade opportunities. On 30 June the report will be available online, along with further details about the agenda it sets out for maximizing the gains of trade for the poorest.

A critical part of this effort, and the theme of this year’s Aid for Trade meeting, is the importance of reducing the costs of trade. The Bank Group is publishing new analysis at the review, using a database we have developed with UNESCAP, which illustrates how the costs of getting goods to overseas markets are significantly higher for developing countries. For example, low income countries face costs that are on average three times higher than for advanced economies. Landlocked countries and small islands also face particularly high trade costs. The reasons vary, but include poor road networks, weak logistics, inadequate port facilities, antiquated customs procedures, corruption at border crossings, and outdated legal and regulatory structures. Lowering these trade costs makes firms in developing countries more competitive, allowing them to benefit more from trade opportunities. Implementing the Trade Facilitation Agreement will help, and will be an important focus for us at the Review, but the greatest impact will be achieved by comprehensive strategies to tackle these wide-ranging sources of trade costs.

Supporting the implementation of the WTO Trade Facilitation Agreement

Bill Gain's picture

Dar es Salaam Port, Tanzania. Photo - Rob Beechey / World BankIn December 2013, Members of the World Trade Organization (WTO) concluded negotiations on a Trade Facilitation Agreement (TFA) which promises to significantly improve trade facilitation practices across the world.  Yet, to date, only five WTO members — Hong Kong (China), Singapore, the United States, Mauritius, and Malaysia – have formally lodged their acceptance of the TFA. Two-thirds of the WTO’s 161 Members still need to do so before the Agreement can enter into force.  
 
The pressure is on for Member countries to ratify the Agreement and begin to reap the benefits of its implementation, which are expected to be quite substantial. A conservative calculation puts global trade cost savings resulting from the full implementation of the Trade Facilitation Agreement (TFA) at around $210 billion per year.

Connecting the dots: engaging the African diaspora in trade, investment, and skills transfer for Africa’s development

Also available in: Français

Nairobi is an African city that has benefited from diaspora investment. Photo - Clara Sanchiz/Flickr Creative Commons license.

With over 30 million Africans living outside of their home countries, the continent’s diaspora has the potential to be a major source of development financing. The financial power of the diaspora shows in the high remittance figures that Africa receives annually from its foreign-based communities. In 2010, estimates reached a record US$ 40 billion, or 2.6% of the continent’s GDP, not counting informal money transfers. Further, the diaspora saves an estimated US$ 53 billion annually.

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