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July 2012

Cutting Trade Costs to Kick-Start Growth

John Wilson's picture

The ongoing turmoil in Europe with the euro and sluggish global economic recovery has important implications for growth and trade in developing countries. A World Bank report released recently suggests that as a result of instability in advanced economies, developing country growth will slow to a relatively weak 5.3 percent in 2012. In a speech recently, WTO Secretary General Pascal Lamy described the rise in trade protection as alarming. Restrictive measures put in place since the global economic crisis in 2008 amounts to 3% of world merchandise trade, and almost 4% of G-20 trade. They have remained unabated over the past seven months.

Given economic slowdown in developing countries and an increase in restrictions on trade, what policy steps can the global community take to ensure trade remains a source of jobs and growth? 

Do Commitment Accounts Help?

Xavier Gine's picture

Ask farmers from low-income countries why they don’t purchase critical inputs, such as improved seeds and fertilizer, and they will most likely tell you that they “lack the funds” to do so. While this may be a catch-all excuse, the answer is all the more surprising given the high marginal returns that these investments usually entail.

One solution to this liquidity problem is to encourage formal savings. Low-income households do save informally in more expensive and risky ways (holding cash at home, purchasing livestock, etc.) but they find it hard to save at a financial institution. There are many reasons for this behavior. Absent the more recent technology-based solutions, such as mobile banking or banking correspondents, transaction costs can be high given the sometimes substantial distances to branches and the costly and unreliable transport. In addition, individuals may lack knowledge about the benefits of formal savings and may not be familiar with account-opening procedures. Banks don’t typically make much money with savings products targeted to low-income products unless they are loaded with hidden fees and commissions, in which case potential customers may be better off not saving at all. (One of these days I’ll blog about an audit study we are doing in Mexico to understand the quality of information and financial products offered to low-income households.)

Health information systems in developing countries: Star Wars or reality?

Patricio V. Marquez's picture

(Doctor at the GP office working with prescriptions. Kirov, Russia. Credit: Dmitry Kirillov/World Bank)

In the late 1990s, an international consultant told me that a proposed electronic health information system in the Dominican Republic was “like Star Wars and will not work in this country.”

 

Our objective was to improve service delivery by virtually connecting health providers to share medical records with one another as patients moved from health centers to hospitals. We learned that this was much more than an overnight task, requiring a sustained medium-term effort by the government to get the system fully up and running.

 

In recent years, I’ve seen similar efforts realized in the Russian Federation, Georgia, Azerbaijan and Botswana. In two Russian regions, Chuvash Republic and Voronezh Oblast, for example, electronic records are helping coordinate the flow of clinical and financial information across the health systems as facilities, departments within hospitals, and health insurance agencies have been “virtually” connected through broadband networks. The electronic records are supporting clinical decision-making, facilitating performance measurement and pay-for-performance initiatives, and ultimately the continuity of care as patients move across the health system. Inter- and intra-regional medical consultations and distance learning activities are also being supported by telemedicine networks that connect specialized hospitals with general facilities.

Training opportunity for people interested in doing RCTs on savings programs

David McKenzie's picture

The Yale Savings and Payments Research Fund (YASPR), under the Global Financial Inclusion Initiative at Innovations for Poverty Action (IPA), is planning a training event for PhD (and PhD-track) researchers who are interested in conducting randomized control trials (RCTs) on micro-savings and payments. 

Wow! Thank You

Inger Andersen's picture
Arne Hoel l Tunisia 2012
Response to our invitation to talented young Arabic speakers to join our team here in the Middle East and North Africa region of the World Bank has been tremendous. Thank you! We are excited to see such an enthusiasm for working on development matters in MENA. We are processing all the enquiries and because there are so many, it's quite a task.

A TAP on the Arab world’s shoulder

Mona Ziade's picture

Remember this acronym TAP. It is short for transparency, accountability and participation and is here to stay for a long, long time. It is a simple euphemism for a very complicated roadmap for Arab transition to “dignity, freedom and social justice.” But is TAP really a remedy for the chaos gripping the Middle East? Even if it is not, it certainly was the resounding buzz word at a World Bank regional seminar “Transitions and Governance Reforms in MENA,” convened in Rabat, Morocco, recently.

A river with many sources

Will Stebbins's picture

World Bank | Arne HoelRegardless of their original circumstances, successful economic and political transitions have a single, unifying characteristic. They may be motivated by crisis, but their successful implementation requires a broad consensus on the need for change, a shared vision of its goals and a common agreement on how to reach them.  The need for this critical consensus emerged over the course of a seminar on the role of governance reform in the current transitions in the Middle East and North Africa (MENA) region. Hosted by the World Bank in the Moroccan capital, Rabat, the Transitions and Governance Reforms in MENA seminar brought together a diverse range of government, civil society and media representatives to discuss the region’s challenges with former world leaders and members of the international development community who had undergone similar transitions.


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