Imagine a conversation. “So, your company is expanding its operations in country x, but I hear there is a lot of frustration among young people about unemployment. Are you worried about the possibility of political upheaval?” And the investor responds, “We’re not very worried about any instability. The current government has been in power for decades and we’re very well connected, so if there are any problems, we’ll be protected.” Without naming names, we can think about how this approach to risk management may have failed investors as of late, but such reversals of fortune predate the days of Twitter and Facebook – take the fall of the Suharto regime in Indonesia. At MIGA’s recent discussion titled “Best Laid Plans? How Ignoring Political Economy Affects Development Outcomes and Increases Risk", this attitude toward risk was aptly labeled “risk myopia.”
Important developments today:
1. European sovereign credit risk rises to eight-week high following Greek debt swap insurance payouts
2. Italy in recession
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This year marks two especially significant milestones in sustainable development: the 20th anniversary of the United Nations’ Earth Summit in Rio de Janeiro and the 25th anniversary of the Brundtland Report, Our Common Future.
How far have we come since the concept of sustainable development was elevated to the global policy agenda? To put it simply, not far enough....
In Calcutta a few days before Christmas, December 2011, Ashoka India brought together Fellows from the North and North East around a thematic workshop with Innovation Alchemy. The theme was ‘Scale’. The issue of increasing the IMPACT of the work that the Fellows are implementing through their diverse initiatives.
The two days of engagement was a quick immersion into the complex Development world of the North East. The region is perceptibly isolated from the rest of the country, politically, geographically, economically... A brief research of the core challenges in this part of the country points to porous borders, leading to migration, infiltration and huge demand on a weak economy. High degree of ecological instability and recurring natural disasters repeatedly impacting livelihoods, increasing displacement and further reducing opportunities. Adding to the complexity is a feeling that ‘the Central Government does not care about the North East‘.
Combine all this – human rights struggles, cross-border violations, weak economy, limited opportunity and lack of any strong progressive policy frameworks – and what you get is a situation ripe for human conflict.
We launched South Asia’s first regional report, ‘More and Better Jobs in South Asia’ in a series of events in Dhaka early last week.
Through events including a seminar with youth at the University of Dhaka, a formal report launch the next day, a TV interview with the South Asia Chief Economist, Kalpana Kochchar, and an op-ed in the leading English language newspaper, the report helped generate discussion on core economic challenges facing Bangladesh, as job creation are highly correlated with the challenges of faster growth.
Bangladesh, along with other South Asian countries, has seen steady job growth and a substantial decrease in poverty over the past three decades. The country has added nearly 1.2 million new jobs every year over the last ten years, and this has been accompanied by increasing real wages and declining poverty amongst all categories of workers. This performance will have to be improved in the future, owing to Bangladesh's early progress in its demographic transition. With substantial reductions in infant and child mortality following a significant decline in fertility rates, Bangladesh's working age population is growing more rapidly than its young and old dependents. In turn, this can be attributed to Bangladesh’s success in nurturing the desire for smaller families, through its reproductive health program as well as its emphasis on girls’ education.
Ideas often come from unexpected quarters. Last week, Ricardo Hausmann came to the World Bank to talk about his work on economic complexity. I missed the seminar, but afterwards read his Atlas of Economic Complexity: Mapping Paths to Prosperity. (I had actually already looked at the stunning – but rather confusing charts – of his coauthor Cesar Hidalgo after reading Tim Harford’s great new book Adapt: Why Success Always Starts with Failure.)
On the face of it, the Atlas of Economic Complexity doesn’t have a lot to do with the topic of this blog post – whether World Bank staff are under-specialized. But bear with me, and I hope I’ll convince you otherwise.
Despite the large and growing literatures on migration in economics, sociology, and other social sciences, there is surprisingly little work which actually evaluates the impact of particular migration policies (most of the literature concerns the determinants of migrating, and the consequences of doing so for the migrants, their families, and for native workers). I am therefore always interested to see new work in this area, particularly work which manages to obtain experimental variation in policy implementation.
The Japanese phrase “Shikata ga nai (仕方がない) -loosely translated as "it can't be helped" -captures the essence of the resilience and sense of duty towards one’s community that the Japanese people displayed in the aftermath of the Great East Japan Earthquake and Tsunami.