Macroeconomists for the Poor
Editor’s note: Growing up in Peru, Marco Hernandez watched his country struggle under the weight of economic and political difficulties in the '80s and '90s. His childhood inspired him to pursue a career in economics, a path that led him to the World Bank. He shares his story as part of the What Inspires campaign. Follow #whatinspires and share your story on Twitter or Facebook.
Peru was in the middle of a political and economic crisis when I was a child. Terrorism had escalated, there were a lot of bombings, and we were surrounded by violence. In the late '80s, inflation rates skyrocketed to more than 1000%. There were long lines for everything, from food to fuel.
I discussed our most recent Russia growth outlook at a roundtable at the Higher School of Economics Conference on Apr. 2 with a number of Russian and international experts. This conference is one of the most important and prestigious economic conferences in Russia, and traditionally, the World Bank co-sponsors it as part of its outreach to other stakeholders.
The room was packed...
Tim Richards, Mine Manager of the Amulsar Gold Mine explains the mine
lay-out to Chris Sheldon, Sector Manager of Mining at the World Bank.
Until recently, Armenia was not only landlocked, but also policy locked: a restrictive aviation policy limited options and increased prices for passengers and cargo coming in to or leaving Armenia’s Zvartnots airport outside of Yerevan, the capital. The government had granted exclusive rights to a private, Armenian-owned airline, Armavia, for ten years starting in 2003, and therefore restricted competition from foreign airlines. So, even a regular holiday sometimes started with a long road trip to Georgia’s capital Tbilisi to connect with cheaper flights there.
The World Bank Group is searching internally and globally for 18 experienced and driven professionals to help achieve two ambitious goals: reducing the number of people living on less than $1.25 a day to 3% by 2030 and promoting shared prosperity by fostering the income growth of the bottom 40%. These leaders will be crucial to our plan to improve the way we work, so we can deploy the best skills and expertise to our clients everywhere, to help tackle the most difficult development challenges around the world.
Last month, the Bank Group’s member countries endorsed our new strategy which for the first time leverages the combined strength of the WBG institutions and their unique ability to partner with the public and private sectors to deliver development solutions backed by finance, world class knowledge and convening services.
Instrumental to the success of our strategy is the establishment of Global Practices and Cross-Cutting Solution Areas, which will bring all technical staff together, making it possible for us to expand our knowledge and better connect global and local expertise for transformational impact. Our ultimate goal is to deploy the best skills and expertise to our clients at the right time, and become the leading partner for complex development solutions.
We are accepting applications for the Global Practice senior directors who will lead these pools of specialists in the following areas: Agriculture; Education; Energy and Extractives; Environment and Natural Resources; Finance and Markets; Governance; Health, Nutrition, and Population; Macroeconomics and Fiscal Management; Poverty; Social Protection and Labor; Trade and Competitiveness; Transport and Information Technology; Urban, Rural, and Social Development; and Water.
- Public private partnership
- fiscal management
- Rural Development
- disaster risk management
- health nutrition and population
- Natural Resources Management
- global practices
- Urban Development
- Social Development
- Public Sector and Governance
- Labor and Social Protection
- Information and Communication Technologies
- Financial Sector
- Agriculture and Rural Development
- Macroeconomists for the Poor
Since our most recent Russia Economic Report (RER) just four months ago, the World Bank revised its 2013 growth outlook for Russia – down from 3.3 percent to 2.3 percent. This downward revision in May represents a decline in our projections by 1.0 percentage point compared with March, and 1.3 percentage points compared with October 2012.
Spare a thought for the economist.
While in the past, people might have resorted to reading tea leaves to figure out what their future has in store for them, these days, at least on economic matters, people turn to the next available economist. But while economists are great at analyzing the past, predicting the future is still a complicated task.
In order to come up with projections, economists look at data. Now, it turns out that economists are often making long-term assessments based on the latest news. Take a look at these growth projections for ten years ahead for Russia, based on polls of economists conducted by Consensus Economics, along with actual growth in the year of the projections (Figure 1). Clearly, while long-term projections are less volatile, the two are correlated – the better the present the better the future, and vice versa. In particular, long-term projections have noticeably nudged down since the crisis.
Figure 1: Actual Growth and 10-Years Ahead Growth
Projections for Russia (percent), 2004 to 2012
To do this, we rely heavily on macroeconomic data from the national statistical office, the Ministry of Finance, the Central Bank and other sources. While this sounds straightforward enough (given it’s what economists around the world do when they compile their latest economic assessments) – it’s a rather indirect way to assess the issue.
Is Russia’s economy just about to shift a gear downwards?
In the decade before the global financial crisis, Russia’s growth averaged 7 percent, thanks to rising oil prices, rapid credit expansion and policy reform. Then, after the economy took a nosedive in 2009, Russia rebounded to growth above 4 percent even though the global economy was sluggish and the euro area soon went back into a recession.
But now, as we begin the final three months of 2012, Russia’s economy is settling onto a lower growth trajectory. In our new Russian Economic Report, we project that Russia will grow only 3.5 percent this year. Excluding the crisis years of 1998 and 2009, this would be the lowest rate in a decade and a half.