Sovereign credit ratings assigned by the major rating agencies (such as Fitch, Moody’s and Standard and Poor’s) play a major role in determining the government’s access to international capital markets. Although sovereign ratings relate to debt and creditworthiness of the central government, in effect they serve as a barometer of confidence and a ceiling for creditworthiness for the private sector as well. They influence the borrowing costs of private entities and in a wider sense overall investment flows. The sovereign rating is often a benchmark and sub-sovereign entities, such as companies and banks, rarely get a rating higher than the sovereign’s.
In post conflict countries, those who have made it out of the country are keenly aware that the livelihoods of those left behind vitally depend on remittance transfers. While concerns have been expressed about the possibility that remittances may stoke conflict, the majority view is that Diaspora support from abroad can contribute to democracy. It has been clearly established that private remittances are of central importance for restoring stability by enhancing human security in strife-torn societies. As in much of Sub-Saharan Africa, due to the predominantly informal nature of remittance delivery mechanisms, the magnitude of remittances to the economies of these regions has been under-estimated.
With Andria Thomas
Social networks such as Facebook and China’s RenRen reach increasingly large segments of the global population, with Facebook claiming over 1 billion active users and RenRen claiming 178 million. The popularity of social networking is not limited to developed countries, but extends to developing countries as well. In fact, in countries that receive the most international remittances, such as India (#1) and the Philippines (#3), Facebook is either the most frequently visited website or among the top three most visited. These social networks reach segments of the population who can often lag in financial inclusion: in the Philippines, more women than men access Facebook, for instance. The enormous—and deepening—reach of these social networks is clear. If money transfer organizations begin offering fund transfer services to populations traditionally excluded from financial services via social networks, they could generate significant international transaction volumes in an environment where mWallets— in most countries—have struggled.
“You cannot eat a sweet with the wrapping,” young men from South Africa told researchers as part of a recent World Bank study, explaining why they refuse to wear condoms despite a high and well-known risk of HIV. Men often don’t see condoms as manly, and women feel unable to insist.
What does this mean? A 2011 Gallup poll of 19 sub-Saharan African countries, home to more than two-thirds of the world's HIV-infected population, found most adults know how to prevent the spread of HIV. But while 72 percent agreed people should use latex condoms every time they have sex, only 40 percent said they ever had.
Access to reliable, accurate, and up-to-date data is crucial to the analysis work we do here at the World Bank. Making sure we have that data and making it as accessible as possible to others is equally as crucial. That's why we have developed a feature on the World Integrated Trade Solution (WITS) platform that aggregates and analyzes trade outcomes.
For those who don’t yet use it, WITS is an online database aggregator where you can access major international merchandise trade, tariffs, and non-tariff data compilations with a click of the mouse. It’s free software that anyone—World Bank Group staff, policymakers, practitioners, researchers, academics—can use when working on trade and competitiveness issues around the world.
Our team here in the International Trade Unit, in collaboration with the Development Economics Data Group, developed a multi-functional “tool” to aggregate several indicators used to assess the trade competitiveness of a country. We call it the Trade Outcomes Indicators Tool.
Last week I attended the Gaidar Forum in Moscow. Yegor Gaidar was an economist who became the architect of the Russian market economy as deputy prime minister of the Russian Federation in 1992. Like Leszek Balcerowitz in Poland and Vaclav Klaus in Czechoslovakia, Gaidar was a pioneer of the shock therapy: rapid liberalization of prices; opening up of borders to allow free international trade; and privatization of capital. Gaidar died in 2009 at an age of 53. In his memory the Gaidar Forum was organized for the first time in 2010. This was the fifth time the Russian Presidential Academy of National Economy and Public Administration organized this annual conference that brings together ministers, academics, and business people.
We had an interesting experiment last month with our very first Development Slam – modeled on the idea of a Poetry Slam – that was held with Aspen Institute’s New Voices Fellows and the World Bank Group’s storytellers.
The Slam allowed people to share their experiences in an interactive way with their peers and allowed the audience to participate as well via an open mic.
This blog post was first published on the Trade Post blog by Gael Raballand and Miles McKenna.
A big issue for the business community, informal trade has been equally as troublesome for the cash-strapped transitional government. According to recent World Bank research, the Tunisian government is losing a significant amount of public revenues-- duties, value-added tax and other taxes-- from informal trade along the Libyan and Algerian borders.
On January 14, 2011, Tunisia’s President Zine El Abbedine Ben Ali fled to Saudi Arabia in the wake of a popular uprising against his 24 year-long rule. Ben Ali was the first head of State to fall in the Arab Spring – the outpouring of discontent against long standing autocracies in the region. Following his forced departure, the interim Tunisian government charged the former President with money laundering and drugs trafficking, and sent out international requests to obtain his arrest and the freezing of assets he allegedly stole. In 2011, Ben Ali was sentenced in absentia to life imprisonment for inciting violence and murder and also convicted (along with his wife) of wide scale theft.