Over the last decade, Turkey has achieved relatively high economic growth at just over 5% per year. As was discussed in a recent blog post, this translated into broadly inclusive growth- not only did income grow for all segments of the population, but there were also improvements in a number of non-income indicators of well-being, including in health and education. Last week the OECD launched the latest results from its Program for International Student Assessment (PISA), a triennial international assessment that evaluates education systems worldwide by testing the skills and knowledge of 15-year-old students. This new data allows us to revisit the question of how Turkey has fared in terms of the performance of its education system in general and with regards to inclusiveness in particular. So what does the data tell us?
(In observance of the International Migrants Day on December 18)
You probably do not spend much time contemplating leaving your country of birth, your home, your family, your community and your job because rising sea levels are making your current place of residence too dangerous and difficult. But then, you probably do not live in Kiribati, a small state in the South Pacific with a population of just over 100,000, like Ioana Teitiota. He and his family have requested asylum in New Zealand claiming to be climate change refugees. Sea levels in Kiribati have been rising and are contaminating drinking water, destroying crops, flooding homes, and undermining livelihoods, but apparently, these imperatives are not (yet) enough.
Following the launch of the World Development Report (WDR) 2014, Risk and Opportunity: Managing Risk for Development, various team members have been traveling to different countries to present its findings. I recently joined other team members in a visit to Morocco, Egypt, Ethiopia, and South Africa, with a stop in the middle in London and Oxford.
One thing that struck me was how relevant the topic of risk management is for many countries. The importance of risk management seemed immediately apparent to many participants in our discussions. Indeed, many participants gave examples of risk management measures that have been practiced in their cultures for generations (such as storing grain in African villages), or linked messages in our Report to common sayings – for example, as Professor Awad from the American University in Cairo told us, our message on the importance of saving in good times for the bad times has a direct parallel in the old Arabic adage, “to keep a white coin for a black day”.
Economists are often considered to be an aesthetically challenged bunch. Yet, as any trade economist will tell you, there is a single visual aid that someone has decided symbolizes all things international trade. To trade economists, this image is inescapable – it seemingly graces every textbook cover, accompanies every policy brief, website, blog post, or article, article, article, or article. There is even award-winning scholarship about it.
The image, of course, is of stacked cargo shipping containers.
How has globalisation affected inequality in incomes around the world? How do the incomes of the richest Chinese compare with those of the poorest Americans, and how has the gap changed over the last 20 years? Where do the poorest and richest people in the world live?
I was surprised not to see more coverage of last week’s hard-hitting report from the Global Financial Integrity watchdog. Illicit Financial Flows from Developing Countries: 2002-2011 has a whole bunch of killer facts about the escalating haemorrhage of wealth from poor countries. Here are some highlights. My additions in square brackets/italics:
“We estimate that illicit financial outflows from the developing world totalled a staggering US$946.7 billion in 2011, with cumulative illicit financial outflows over the decade between 2002 and 2011 of US$5.9 trillion. [By way of comparison, total global aid in 2011 was $134bn (not mn as first printed -thanks to all of you who pointed this out) – 14% of illicit flows - and has fallen since, even as illicit flows keep booming. Want that as a soundbite? ‘For every dollar of aid, the South loses $7 in illicit outflows; developing countries are losing $2.6 bn a day/$108m per hour/$2m per minute/$30,000 per second’.]
This gives further evidence to the notion that illicit financial flows are the most devastating economic issue impacting the global South. Large as these numbers are, perhaps the most distressing take-away from the study is just how fast illicit financial flows are growing. Adjusted for inflation, illicit financial flows out of developing countries increased by an average of more than 10 percent per year over the decade. Left unabated, one can only expect these numbers to continue an upward trend.
World Bank Vice President for East Asia & Pacific Axel van Trotsenburg talks about his visit to Tacloban City after Typhoon Haiyan caused destruction to lives, livelihoods and property.
Microcredit has become a buzzword over the past couple of decades and many have hoped that small loans would help microenterprises grow and raise the incomes of their owners. Recently, a number of rigorous studies have measured the effect of credit on microenterprises. The results paint a nuanced picture; with most studies showing no strong impact on microenterprise growth (see Chapter 3 of the World Bank Group’s Global Financial Development Report 2014 for a summary of these findings).
Researches have uncovered several reasons why microcredit may not lead to the expected increase in firm growth. For example, to mitigate default risk, microloans often have joint liability. However, joint liability may discourage investment because group members have to pay more if a fellow borrower makes a risky investment that goes bad, but they do not enjoy a share of the profits if the investment yields returns. Also, looking beyond microcredit, recent studies suggest that providing other financial instruments, such as savings products and microinsurance, can spur microenterprise investment and growth.