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February 2014

How Should INGOs Prepare for the Coming Disruption? Reading the Aid/Development Horizon Scans (so that you don’t have to)

Duncan Green's picture

Gosh, INGOs do find themselves fascinating. Into my inbox plop regular exercises in deep navel-gazing –both excessively self-regarding and probably necessary. They follow a pretty standard formula:

  • Everything is changing. Mobile phones! Rise of China!
  • Everything is speeding up. Instant feedback! Fickle consumers! Shrinking product cycles!
  • You, in contrast are excruciatingly slow, bureaucratic and out of touch. I spit on you and your logframes.
  • Transform or die!

Financial Inclusion of Informal Firms — Status and Determinants

Subika Farazi's picture

Informal economies are a significant part of developing countries across the world and according to some estimates can represent around 60 percent of countries’ official GDP (Schneider, et al. 2010). IFC estimates suggest that some 80 percent of micro, small, and medium enterprises in emerging markets and developing countries are informal today. Access to finance is by far the biggest obstacle these firms face (Figure 1). This obstacle is more acute for firms that would like to register, and it becomes critical as firms grow in size (Figure 2). Considering that about two-thirds of full-time jobs in developing economies are provided by such firms, it is essential to better understand issues around access to finance for informal firms. A paper that I recently wrote on the subject (Farazi 2014) as part of the work on the 2014 Global Financial Development Report is an attempt in this direction.

Weekly Wire: The Global Forum

Roxanne Bauer's picture
These are some of the views and reports relevant to our readers that caught our attention this week.
 

The Mobile-Finance Revolution
Foreign Affairs
The roughly 2.5 billion people in the world who live on less than $2 a day are not destined to remain in a state of chronic poverty. Every few years, somewhere between ten and 30 percent of the world’s poorest households manage to escape poverty, typically by finding steady employment or through entrepreneurial activities such as growing a business or improving agricultural harvests. During that same period, however, roughly an equal number of households slip below the poverty line. Health-related emergencies are the most common cause, but there are many more: crop failures, livestock deaths, farming-equipment breakdowns, even wedding expenses.  In many such situations, the most important buffers against crippling setbacks are financial tools such as personal savings, insurance, credit, or cash transfers from family and friends. Yet these are rarely available because most of the world’s poor lack access to even the most basic banking services.


Mozilla plans '$25 smartphone' for emerging markets
BBC Technology
Mozilla has shown off a prototype for a $25 (£15) smartphone that is aimed at the developing world. The company, which is famed mostly for its Firefox browser, has partnered with Chinese low-cost chip maker Spreadtrum. While not as powerful as more expensive models, the device will run apps and make use of mobile internet. It would appeal to the sorts of people who currently buy cheap "feature" phones, analysts said. Feature phones are highly popular in the developing world as a halfway point between "dumb" phones - just voice calls and other basic functions - and fully-fledged smartphones.

Is the World Turning a Corner on High Food Prices?

Donna Barne's picture

 © Curt Carnemark / World Bank
If you Google the latest headlines, you will see plenty about the high price of food. Globally, however, average prices for major food commodities actually are 11% lower than a year ago, according to the latest edition of the World Bank’s quarterly Food Price Watch. Does this mean the world is out of the danger zone on high food prices? Economist José Cuesta sheds light on the issue.

Food prices have been falling globally since August 2012. Have we turned the corner on the food crisis?

It’s true we’ve seen prices declining in a sustained way, but we’re still only 18% away from that historic peak in 2012. The reasons prices increased in the first place – such as growing demand for food and weather concerns – are still issues, and probably will be in the future.I don’t think that we have turned any corner. Prices seem to be less volatile, and that’s good news. But that doesn’t mean the level of prices hasn’t continued to be high; they are still high.

Food Waste: Doing the Math

José Cuesta's picture
Many consider statistics cold and faceless. I have always thought the opposite. There are multiple numbers in the development world that are striking and moving: the millions of people living on less than $1.25 a day; the number of children dying of preventable diseases or being unable to attend school regularly; or how many families have no access to safe water or electricity in today’s super-sophisticated technological world, just to mention a few.
 
But I have never found more compelling numbers than those related to food. In a world where 842 million people go to bed hungry every night, we actually produce sufficient food to provide, on average, 2,700 kilocalories every day, for everyone. In this same world:
 
  • Between one-fourth and one-third of the nearly 4 billion metric tons of food produced annually for human consumption is lost or wasted.
     
  • Asia and Africa account for  about 67% of all food lost and wasted, globally.
     
  • North America and Oceania lose and waste almost half of what they produce: 42%! More than half of food loss and waste in developed countries happens during consumption — usually as a result of a deliberate decision to throw food away.
     
  • Developing countries lose an average of 120 to 220 kg of food per person per year, which means that even regions ridden by undernutrition, such as South Asia and Sub-Saharan Africa, lose as many as 400 to 500 kilocalories per person, every day. 
If you want to know how many kilocalories someone living in your region loses or wastes, on average, check the following figure:

Food Lost and Wasted by Region, 2009
Food Lost and Wasted by Region
Source: Brian Lipinski, Craig Hanson, Richard Waite, et al., “Reducing Food Loss and Waste,” World Resources Institute Working Paper, June 2013.

Pushing the Envelope

Laura Ralston's picture

Giving Cash Unconditionally in Fragile States

2012 Spring Mtgs - Close the Gap There have been many recent press articles, a couple of potentially seminal journal papers, and some great blogs from leading economists at the World Bank on the topic of Unconditional Cash Transfers (UCTs). It remains a widely debated subject, and one with perhaps a couple of myths associated with it. For example, what is cash from UCTs used for? Do the transfers lead to permanent increases in income? Does it matter how the transfers are labelled or promoted? I am particularly interested in whether UCTs could be a useful instrument in countries with low institutional capacity, such as fragile and conflict-affected states (FCS).

Why UCTs in FCS? UCTs present a new approach to reducing poverty, stimulating growth and improving social welfare, that may be the most efficient and feasible mechanism in FCS. A recent evaluation of the World Bank’s work on FCS recognized, “where government responsiveness to citizens has been relatively weak, finding the right modality for reaching people with services is vital to avoiding further fragility and conflict”. Plus there is always the risk of desperately needed finances being “spirited away” when channeled through central governments. UCTs may present a mechanism for stimulating the provision of quality services, which are often lacking, while directly reducing poverty at the same time. As Shanta Devarajan’s blog puts it, “But when they (the poor) are given cash with which to “buy” these services, poor people can demand quality—and the provider must meet it or he won’t get paid.” We should explore more about this approach to tackling poverty: where and when it has worked, what made it work, and whether we can predict whether it will work in different contexts.
 

How User-Generated Crisis Maps Save Lives in Disasters

Jing Guo's picture

YouTube, Wikipedia, Facebook, LinkedIn, Instagram, Twitter, blogs… This list could easily go on and on for paragraphs. Today, we are so immersed in social media that we can hardly go a day without reading or watching user-generated online content. Videos like “Charlie Bit My Finger” make us laugh. Free lessons on Khan Academy, which were originally started by a hedge fund analyst at home, help us learn.

But user-generated online content is not all about entertainment and free classes. Crisis maps on crowd-sourcing platforms like OpenStreetMap and Ushahidi have demonstrated a less expected yet significant capacity of user-led content creation online:  it saves lives in disasters.


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