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December 2013

Tapering Talk: The Impact of Expectations of Reduced Federal Reserve Security Purchases on Emerging Markets

Poonam Gupta's picture

In May 2013, officials of the Federal Reserve System first began to talk of the possibility of the U.S. central bank tapering its securities purchases (of it gradually reducing them from the prevailing $85 billion monthly rate to something lower, presumably as a prelude to phasing them out entirely).  A milestone to which many observers point is May 22, 2013 when Chairman Bernanke raised the possibility of tapering in his testimony to the Congress.  This “tapering talk” had a sharp negative impact on economic and financial conditions in emerging markets.

Three aspects of that impact are noteworthy.  First, not only was the impact sharp but, in the view of many commentators, it was surprisingly large. The most alarmed (some would say alarmist) commentators raised the possibility that some emerging countries might be heading towards a full blown crisis like those in Mexico in 1994 and Asia in 1998.  Second, the impact was not felt uniformly; different countries were affected rather differently.  And, third, there were complaints from policy makers in the developing world about the Fed’s turn to tapering that were seemingly hard to square with earlier criticisms of quantitative easing by the U.S. central bank as a form of “currency war.”

Comoros’ Next Chapter – Revitalizing Growth in a Post-Conflict Environment

Stephanie Liu's picture

What does it take revitalize private sector growth in a post-conflict country?

In the Union of the Comoros, an archipelago nation off the coast of East Africa, decades of institutional instability are giving way to the re-establishment of political calm, and, in the process, setting the stage for a better business environment.

But challenges abound. Entrepreneurs and investors alike still face numerous administrative barriers to starting a business, getting credit, or even accessing investment guarantees.

The World Bank Group and a community of international partners have been working with the Comorian government and the private sector since 2010 to find ways to minimize such barriers. Since that time, a series of regulatory reforms have been introduced. Steady improvements to the investment climate were seen in this year's Doing Business report. Reforms have reduced the number of days and procedures needed to start a business among other indicators. And by recently joining the Multilateral Investment Guarantee Agency (MIGA), the Comoros has boosted its investment potential by providing political risk insurance to foreign investors.

In this video, below and online, see how these reforms and institutional collaboration are signaling the start of a new chapter for this post-conflict country.

Comoros' Next Chapter


Quote of the Week: Roger Cohen

Sina Odugbemi's picture

“The modern world’s tech-giddy control and facilitation makes us stupid.  Awareness atrophies.  Dumb gets dumber.  Lists are everywhere – the five things you need to know about so-and-so; the eight essential qualities of such-and-such; the 11 delights of somewhere or other.  We demand shortcuts, as if there are shortcuts to genuine experiences.  These lists are meaningless.”

- Roger Cohen, A Columnist of The New York Times.

Efforts to Protect Tropical Forests Take Big Step Forward – and Money Awaits

Ken Andrasko's picture

This year, the annual Doing Business Report – by far the most anticipated and cited World Bank publication – celebrates its 15th year. Starting in 2003, the fledgling report, which covers about 130 countries, has grown into its teens garnering admiration and criticism in equal measure. Some absolutely love it, while others argue that its flaws outweigh its strong points.

Regardless, nobody can deny that the Doing Business report has been a major catalyst for reforms across the world – 3,200 reforms of business regulation have been counted to date, spurred by the Report and carried out in line with the methodology of its indicators.

Incentivizing consumers against tax evasion: Guest post by Joana Naritomi

The World Bank’s Governance Global Practice (GGP) is integrating its approach to address technical and political constraints to effective public procurement in Cameroon.
In efforts to boost efficiency and integrity in public spending, the Government of Cameroon created the Ministry of Public Procurement (MINMAP), the first of its kind in the world, to take responsibility for providing oversight to public contract procurement and management. It is also in charge of executing high value contracts on behalf of all sector ministries and designing public procurement policies and capacity development strategies in partnership with the pre-existing public procurement regulatory body (ARMP).

Food for Thought

Homi Kharas's picture

Close the Gap - School Feeding Programs As we enter the holiday season, it is worth reflecting on one of the most pernicious slow-moving crises of our time: the continued presence of hunger in a world of plenty. Ending hunger by 2030 and protecting the right of everyone to have access to sufficient, safe, affordable and nutritious food is one of the targets proposed for the post-2015 agenda by the High-Level Panel on the Post-2015 Development Agenda, and many others are also promoting the same message. Pope Francis is the latest entrant into this debate with his announcement of a global campaign of prayer and action to end to hunger and malnutrition, “One Human Family, Food For All”. The campaign includes encouragement for local, national or global level action against food waste and the promotion of food access and security worldwide. The Pope prompts us all to ask ourselves, what will it take to end hunger?

The Delhi Rape Case, One Year Later

Maria Correia's picture

We all have regular bills to pay for the ubiquitous services we consume – whether they be for utilities (water, heating, electricity etc.), credit cards, memberships, or car payments.  But, not everyone pays.  

So why don’t people pay?  Why are some countries better at this than others?  And what can be done to improve systems for debt collection?

Anniversary of New Delhi attack reminds us that tackling violence is urgent

Jeni Klugman's picture
Photoman29 l Shutterstock
تشكل الإناث حوالي نصف المشردين في العالم الذين تتجاوز أعدادهم 60 مليون شخص – بواقع 19 مليون لاجئ و 41 مليونا من المشردين داخليا. وهذه الأرقام هي الأعلى التي يتم تسجيلها حتى الآن ولا تزال تواصل ارتفاعها. 

The Way We Move Will Define our Future

Marc Juhel's picture

En la pasada década la presencia latinoamericana en la agenda global era anécdotica, periférica y accidental.

Eramos el continente olvidado. La atención del mundo y la de los países ricos se centraba en otras regiones, en los conflictos bélicos, en la amenaza del terrorismo. Mientras tanto, en América Latina se vivía un intenso proceso de búsqueda de equilibrios entre la voluntad de encontrar vías para vencer la desigualdad social y la necesidad de hacerlo sobre la base de una sólida política económica y fiscal.

Quedaba cada vez más claro que en la región podían convivir diferentes modelos y que la idea de los consensos continentales monolíticos no respondía a las circunstancias concretas de cada uno de los países.

La diversidad respondía a la realidad de una región que presenta características políticas, económicas y culturales disímiles en los diferentes países. En todo caso, y al entrar en la década del 2010, lo cierto es que América Latina, con la diferencias ya señaladas, se colocó más cerca de lo que la ciudadanía esperaba: una política económica previsible, responsable, que abriera al mismo tiempo la oportunidad a una mayor equidad desde el punto de vista social.

Friday roundup: Inequality, Stiglitz, Chetty, frugal innovation, polio, and nudges

LTD Editors's picture
Climate-smart crops can help feed the world. Dasan Bobo / World Bank

So, food systems are finally on the climate change map and embedded in the language of the Paris Climate Agreement.

This is a long way from the previous involvement of agriculture as a contentious area that was subject to fractious debate and fatally entwined with the discussion around climate-change related loss and damage. A vast majority of national plans to address climate change or Intended Nationally Determined Contributions (INDCs) presented at the COP in Paris contained language and commitments on agriculture – for both adaptation and mitigation measures.

What’s behind this change in sentiment and action?