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December 2013

Hedging Food Price Risks in a World of Uncertainty

Julie Barbet-Gros's picture

 www.istockphoto.comThe sudden 2008 global food price crisis—which pushed 105 million people into poverty and sparked riots around the world—showed that designing risk management strategies at the national level may prove to be a sound investment. In fact, this is one of the key messages of the 2014 World Development Report on risks and opportunities. With excessive volatility in food prices expected to persist in coming years, net food-importing countries in the developing world need to develop appropriate solutions to address the food price risks and unexpected fiscal impacts ok they may face.

Are hedging instruments appropriate to address these risks?

Hedging food price risks essentially refers to the purchase of insurance against sharp food price fluctuations, transferring the risk to financial institutions or traders. The government of Malawi is a notable example of an importing country which successfully used hedging instruments to mitigate food security risks, resulting in significant import cost savings. In September 2005, Malawi purchased physical call options* for maize, which offered both price protection and the actual delivery of 60,000 metric tons of maize. These instruments thus allowed Malawi not only to effectively manage price risks, but also to deal with physical availability risks, which are critical in many food-importing countries.

The Death of an Elder

Anne-Katrin Arnold's picture

An Elder has died. With Nelson Mandela’s death, “the world has lost a visionary leader, a courageous voice for justice, and a clear moral compass … an inspiration to us all,” said Kofi Annan in a message last week.

Nelson Mandela was the founder of a network of world leaders, called the Elders. The Elders are former holders of public office, former heads of state, activists, visionaries. They are independent, and their mission is to build peace. Mandela, as founder, was an Honorary Elder in this organization, but he was also an Elder to all of us. The global public’s strong emotional reaction to Mandela’s death indicates how deeply rooted the role of an Elder is even in today’s society, which seems to have gone a long way since the days of tribal culture, in which elders were formally acknowledged as leaders and advisors.

Cities’ Elusive Quest for a Post-Industrial Future

Stefano Negri's picture

What do rusting industrial cities have in common with outmoded BlackBerries? In this era of constant technological progress, talent mobility and global competition, it's striking how many similarities can be drawn between cities and companies, and the need for both to continuously adjust their industrial strategies to avoid oblivion or bankruptcy.

Cities can lose their vigor and vitality just as surely as a once-hot product can lose its cutting-edge cool. RIM, the maker of the the once-ubiquitous BackBerry,
has been leapfrogged by companies with more nimble technologies; Kodak, once synonymous with photography, went bankrupt when it failed to make the transition
from film to digital. The roll call of withering cities – once proud, yet now reduced to rusting remnants – shows how cities, like companies, can lose their historic raison d’etre if they fail to hone their competitive edge.

Heavy industries like steelmaking and automobile assembly once powered some of the world’s mightiest economic urban areas: Traditional manufacturing industries shaped their identity, giving their citizens income and pride. But globalization, competition, shifting trade patterns and changing consumer trends are continuously reshaping the competitive landscape, with dramatic impact on cities and people. Over the past century, industrialized regions like the Ruhr Valley of Germany, the Midlands of Great Britain and the north of France – along with the older shipbuilding cities around the Baltic and North Seas, and the mono-industrial cities of the former Soviet Union – have struggled to make the transition to different industries or toward a post-industrial identity. Their elusive quest for a post-industrial future has had a dramatic impact on their citizens.

The same issue has become daunting in recent decades for aging manufacturing regions in the United States, which have suffered the prolonged erosion of their industrial-era vibrancy. That kind of wrenching change is bound to soon confront other cities in the developing world, as they struggle to adapt their urban cores, civic infrastructure and industrial strategies to an era that puts a higher premium on nimble cognitive skills and advanced technologies than on bricks-and-mortar factories, blast furnaces and big-muscle brawn.

For fast-growing cities in the global South, many of which are urgently seeking solutions amid their sudden urban growth, there could be many lessons in the experience of older cities in the developed world in making such a transition.

A series of recent conferences among urban policymakers and practitioners – backed by a wide range of rigorous academic research and practical client-focused experience in building competitiveness – provide insights that city leaders and the World Bank Group’s practitioners can leverage as they craft programs for transformative urban strategies. 

Weekly Wire: The Global Forum

Kalliope Kokolis's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

Twitter Angling For More International Users
Tech President

“Twitter is following Facebook and Google's lead in creating an avenue for feature or "dumb" phone users to access their service, even without an Internet connection. They have partnered with the Singapore-based company U2opia Mobile, Reuters reports. Chief executive and co-founder of U2opia Mobile, Sumesh Menon, told Reuters that they will launch the Twitter service next year. U2opia Mobile already helps more than 11 million people access Facebook and Google Talk through their Fonetwish service without using data.”   READ MORE

Open government data emerging, trust in government declining
Internet Policy Review

“The use of open government data has declined since last year, a new study by the Initiative D21 and the Institute for Public Information Management (ipima) reported at a press conference in Berlin today. According to the fourth edition of the eGovernment Monitor, the number of users of eGovernment services in Sweden in 2013 was 53 percent, compared to 70 percent in 2012. On average, the decline was as high as 8 percent in those countries that were monitored. Numerous data breach scandals and the revelations about pervasive surveillance were obvious reasons for the heightened caution, the researchers wrote in their summary.”   READ MORE

Should Government Give Money to Tanzania’s Poor?

Jacques Morisset's picture

Men tilling a rice paddie on an irrigation project When confronted with financial distress or some other difficulty, over 80 percent of Tanzanian families say they count on relatives and friends for the support needed to get through it. This is to be expected in African culture which is shaped by a strong sense of affinity with family and tribal ties. 

However, in a poll conducted by the World Bank and Twaweza by phone in November, almost half of Tanzanian households also expressed that they expect to receive some help from their Government (see details in the fourth Tanzania Economic Update). In a world characterized by rapid urbanization and structural changes, government assistance is increasingly viewed as critical. In cities, especially, traditional ties and safety nets are generally losing their force. With economic progress, income disparities tend to widen. For example, the proportion of people living in extreme poverty (i.e. with barely enough resources to afford a 2,000 calorie diet) is only one percent in Dar es Salaam but over 15 percent in most rural areas.

More about MOOCs and developing countries

Michael Trucano's picture
an award-winning mooc(ow), as Joyce might say
an award-winning mooc(ow), as Joyce might say

The New York Times famously labeled 2012 the 'year of the MOOC', acknowledging the attention and excitement generated by a few high profile 'massive open online courses' which enrolled tens of thousands of students from all of the world to participate in offerings from a few elite universities in the United States.

What might 2014 bring for MOOCs, especially as might relate to situations and circumstances in so-called ‘developing countries’?


It may be hard for some in North America to believe, given the near saturation coverage in some English language web sites that focus on higher education and in certain thematically-linked corners of the English-language blogosphere, but the 'MOOC' phenomenon is only just now starting to register with many educational policymakers in middle and low income countries around the world. While many MOOCs have (from the start, and increasingly) attracted students from all over the world, at the policy level, 'MOOCs' have not – at least in my experience during the course of my work at the World Bank on education and technology issues -- been a topic much discussed by our counterparts in ministries of higher education and universities. Yes, one does see the occasional bullet point in a PowerPoint presentation towards the end of an institutional planning meeting, but my impression is that this can often be as much a reflection of the speaker’s desire to project a familiarity with emerging buzzwords as it is a reflection of any sustained strategic or practical consideration of the potential relevance (or threat) of MOOCs to traditional practices in higher education outside of ‘rich’ countries.

More than a few commenters in North America have invoked the Technology Hype Cycle (a concept developed and popularized by Gartner to represent the maturity, adoption and social application of certain technologies, and their application) when proclaiming that MOOCs have now past a 'peak of inflated expectations' to enter a period known as the 'trough of disillusionment' as a result of things like the recent change of course or ‘pivot’ of Udacity, one of the leading MOOC platform providers.

riding the hype curve ...While this assessment of the state of maturity/adoption may or may not be true from a North American perspective, and even if we concede that technology hype cycles are being compressed (it took Second Life and other ‘virtual worlds’, another recent notable educational technology phenomenon, three times as long to move from a period of great hype in educational circles to one of ‘disillusion’), such commenters may often neglect to consider that many hype cycles can exist simultaneously for the same technology or technology-enabled approach or service, depending on where you might find yourself in the world.

While perhaps unsure of the extent to which MOOCs represent a 'threat' to existing educational practices, a new avenue for higher education, or perhaps something else entirely, I agree with people who say that the reports of the death of the MOOC are highly exaggerated. Roy Amara, the longtime president of the Institute for the Future, famously remarked that "We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run." I would not be surprised if this holds for many of the trends that we, as a matter of convenience, and correctly or not, group together under the general heading of ‘MOOCs’ today.


In my personal experience working at the World Bank on projects at the intersection of technology and education sectors, and when in discussions in many similar sorts of international organizations, ‘MOOCs’ are, generally speaking, still not a hot topic of consideration for educational policymakers in most middle and low income countries. That said, they are starting to gain increasing mindshare in some places. At the very least, they are generating some real confusion (and where there is confusion, there is potentially opportunity as well, for better and for worse).

As a result, many folks in the international donor community are now beginning to ask themselves questions like:

• How can, or should, we be talking about MOOCs when speaking with our counterparts in government around the world?
• What are the real, practical opportunities to consider in the short and medium term?
• Where, and how, might education ministries and universities wish to engage with related issues -- and what role (if any) should organizations like the World Bank play in this process of engagement?


Channeling Caribbean diaspora dollars back home

Qahir Dhanani's picture

“We have the money, but it’s just not that easy to find the deals back home.” These words, from a Barbadian entrepreneur in Silicon Valley tell the story of a successful tech entrepreneur whose family left the Caribbean almost a generation ago. They moved to the USA and over the years he was able to build a successful business based in Northern California.

Why Stories Matter

Ravi Kumar's picture
Children in the classroom. Kenya.

When Jane Otai said there are flying toilets in slums of Nairobi, most of her audience, like me, was trying to figure out what she meant.

A few others laughed softly. Because there are no toilets, she said, “people just do it [in bags] and throw it on the rooftops.” And it is really difficult for women and girls, she added.