Three interlinked global crises—food, economic, climate—were high on the agenda of this year’s Bank-IMF Spring Meetings. At a conference organized by the Independent Evaluation Group and World Bank Institute, a panel of experts—Kristalina Georgieva, European Commissioner; Hans Herren, President, Millennium Institute; Trevor Manuel, Minister, National Planning Commission, South Africa; Ngozi Okonjo-Iweala, Managing Director, World Bank; Robert Watson, Chief Scientific Advisor, Government of UK— discussed not only the impact of each crisis, but crucially the links among them in seeking joint solutions.
The World Bank has a clear vision: A world free of poverty. When integrity prevails, projects deliver and the poor benefit. When they fail, development is set back and the poor suffer. That‘s why at the World Bank, we take the position that Rule of Law equals Development. In the Bank’s pursuit of results, openness and accountability, we assert integrity in our operations, without reservation. At the heart of our strategy is a commitment to remove the conditions that dent international security and make corruption flourish.
It is a fact that many of the countries which suffer the most from corruption are the countries which have the fewest resources to combat the problem. Poor countries may be faced with a dilemma of using resources to prosecute the corruption which degrades the quality and quantity of public goods that reach their citizens, or using resources to provide those basic goods, such as food aid and roads.
At the same time, larger bribes are not infrequently paid by outsiders, such as foreign corporations. Casual observation shows that funds must be coming from outside some of the poorest countries. In short, the bribe money is flowing from the developed world into the developing world.
I chaired a very lively seminar on Friday afternoon that focused on the question, “Can Africa Trade with Africa?” The answer was a resounding yes.
Today, there is strong consensus among African leaders that regional integration is indispensable to unlock economies of scale and sharpen competitiveness. And promoting intra-African trade has emerged as a top priority, in recognition that the African market of one billion consumers can be a powerful engine for growth and employment.
Yet despite the introduction of free trade areas, customs unions, and common markets within the Region, the level of intra-African trade remains among the lowest in the world -- only about 10% of African trade is within the continent, compared to about 40% in North America and about 60% in Western Europe.
Anyone who has ever been to the Central African Republic (CAR) knows that the country has huge infrastructure needs after years of internal turmoil and strife. But when you look up how much of the government’s investment budget actually was implemented and financed infrastructure development in 2009 for instance, you find a stunningly low execution rate of 5 percent.
Authors: Emily Sinnott & John Nash
For Latin American and the Caribbean (LAC), there has been a substantial shift from exporting commodities to advanced economies to trading instead with emerging economies. China, in particular, has become an important destination market, with its share of commodity exports having grown tenfold since 1990 (from 0.8 percent in 1990 to 10 percent of total commodity exports in 2008).
In our report on “Natural Resources in Latin America and the Caribbean: Beyond Booms and Busts?” we argue that one advantage of these changing trade patterns has been the important role that China’s demand for commodities played in the region’s economic rebound from the global crisis. While we are not alone in this view (see the CEPAL report on the drivers of the LAC recovery launched on September 2, 2010), there has been some anxiety in LAC that the region is going down the path of increased dependence on exports of raw materials with little value-added, while at the same time increasing its reliance on manufacturing imports from China.
Chief regional economist Augusto de la Torre explains why commodities, if wisely managed, can be a "blessing" for Latin America and the Caribbean.
With the global economic crisis in the rearview mirror, Latin American economies are on a fast track to full recovery and will post a solid 4 percent growth for 2010.
This is no small feat, says the Bank’s chief regional economist Augusto de la Torre, in his new report on the region’s economic prospects ‘From Collapse to Recovery’ (pdf). The region’s rebound, he explains, is one of the world’s strongest, second only to Asia’s, which is the main engine pushing global economies towards a full-fledged recovery.
The global economic crisis has reversed the impressive economic growth of recent years in emerging Europe and Central Asia, hitting families hard with higher unemployment and lost wages.
Growth has plummeted from a fast clip of 7.6 percent in 2007 to 4.7 percent in 2008, and is projected at negative 5.6 percent in 2009, the World Bank said at an Annual Meetings press briefing yesterday.
“What started as a financial crisis has become a social and human crisis. Just as banks were under stress, families are now the ones under severe stress as they see breadwinners lose their jobs and have trouble paying their bills.”
Global attention is mounting about this year's Annual Meetings of the Bank and the Fund in Turkey. From Egypt, where I am on MIGA business on my way to Turkey, the discussion is around whether the meetings will advance the G20 communiqué in terms of substance and specific implementation measures.
I spent two days earlier in the week with global private equity investors. Their anxiety mostly revolves around how financial sector regulation will evolve over the coming months. They feel the cold wind of oversight, and the discussion revolves around two competing plans for financial regulation, one emanating from Brussels and the other from Washington. But everyone accepts that an overhaul of financial sector regulation is the unfinished business from last year's financial crisis, even though views differ on the extent and content of the changes needed. My own concerns are whether the world's piecemeal international governance system will enable a coherent global regulatory structure to emerge from the wreckage of last year's financial meltdown.
In Istanbul I'm looking forward to taking the temperature of the financial world. I hope and expect the meetings to be more subdued than in past years, because we have some serious business to do; and many players who were around at the Singapore meetings are no longer with us (Lehman, Bear Stearns, Merrill, AIG...).
It's a new world.