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South Asia

A Fragile Country Tale: Restrictions, Trade Deficits and Aid Dependence

Massimiliano Calì's picture

 Masaru Goto, World BankPart of the World Bank’s new vision is to step up its efforts to help fragile and conflict-afflicted states break the vicious cycle of poverty. But this is no easy task.
 
The destruction of productive assets and the restrictions on the capacity to produce are among the most severe economic impacts of conflicts and fragility. These effects explain why countries in conflict or emerging out of conflict typically have very large trade deficits. The productive sector is often particularly weak by international standards, so exports are low and domestic consumption has to rely on imports. Indeed, five of the ten countries with the largest trade deficit in the world (Timor-Leste, Liberia, the Palestinian territories, Kosovo and Haiti) are considered fragile by the World Bank and other regional development banks (figure 1).
 

Using Video to Promote Successful Trade Facilitation in Laos

Miles McKenna's picture


The World Bank has been working with the government of Lao PDR to better integrate the country into the regional and global economy since 2006. As the only landlocked country in Southeast Asia, Lao PDR faces a number of barriers to trade. Since beginning to implement reforms in 2008, the country has seen marked improvements in a number of key areas -- culminating in Lao PDR's formal ascension to the WTO last year. The Trade Post spoke with Richard Record, a senior economist based in the Lao PDR country office, about the video. Here's what he had to say...  
 

Travel Channel Meets Discovery Channel: How Tourism Can Promote Export Performance and Diversification

Gonzalo Varela's picture

Folded pashminas on display in China. Source - Ashley Wang. We all enjoy a nice vacation. Today, tourism has become a major driver of economic growth around the world. But measuring its impact, either directly or indirectly, is an evolving exercise.  

Our new research unveils a strong association between tourism inflows from a particular country and increases in exports of traditional or “exotic” goods to that same country the following year. In other words, tourism not only helps local vendors sell goods to people on vacation, but also works as a springboard for promoting traditional products abroad once that vacation is little more than a memory.
 

Beggar Thy Neighbor’s Beggars? Using Trade Policy to Moderate Food-Price Spikes May Hurt the World’s Poor

Will Martin's picture

Wheat. Source - World Bank. www.flickr.com/photos/worldbank/3633424588/sizes/m/in/photostream/Many countries use trade policy to protect their own consumers from spikes in international food prices. It turns out that this well-intentioned practice can actually do more harm than good. During food price spikes -- such as those in mid-2008, early 2011 and mid-2012 – governments restricted the export of food staples or lowered barriers to importing them. They hoped to keep their domestic prices of rice, wheat, maize, and oilseed low, reasoning that this would help their poor and stop people from falling into poverty. But there is new evidence that, while the practice kept each country’s domestic prices down relative to the world prices at the time, it contributed to the higher international prices that were the source of concern. In a World Bank Policy Research Working Paper, “Food Price Spikes, Price Insulation, and Poverty,” we explore this phenomenon and find that it did not reduce global poverty in 2008. On the contrary, we estimate it may have increased poverty slightly (by 8 million people).