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February 2014

Prospects Daily: Ukrainian financial markets tumble again amid shattered truce, Singapore revises Q4 GDP from contraction to growth, China’s manufacturing PMI falls to a seven-month low

Global Macroeconomics Team's picture

Financial Markets…Global equities moved lower on Wednesday as downbeat economic data from China and Eurozone and escalating turmoil in Ukraine dampened market sentiment. The benchmark MSCI world stock index dropped 0.5% to a 6-day low, with the MSCI developing-country stock index sliding 1.1%. Meanwhile, U.S. equities opened higher in morning trade with the S&P 500 and the Dow gaining 0.3% and 0.4%, respectively.

In the Face of a Messy World, Non-State Actors Offer a Positive Outlook

Natalia Agapitova's picture

In a lecture hosted by the World Bank in Washington, DC on February 19, former U.S. Secretary of State Madeleine Albright highlighted that the rise of non-state actors is one of the few positive trends in provision of public goods and services. She argued that non-state actors, like those supported by the Development Marketplace’s grants and capacity building programs, have unique on-the-ground knowledge and resources.

Unfortunately, Albright noted, the policy infrastructure does not support active dialogue and engagement of the non-state actors in the policy-making and service delivery. “These changes are not supported by collaborative structures,” she continued, “Modern states like the U.S. and India are not equipped to collaborate with these non-state providers.”  In the face of growing distrust of governments, she argued, these non-state providers cannot be ignored as they offer hope to those in dire need.

The Dictator’s Dilemma

Sina Odugbemi's picture

In an influential article in Foreign Affairs entitled ‘The Political Power of Social Media’, published in January 2011, Clay Shirky described the dictator’s dilemma, also called the conservative dilemma, as follows:
 

The dilemma is created by new media that increase public access to speech or assembly; with the spread of such media, whether photocopiers or Web browsers, a state accustomed to having a monopoly of public speech finds itself called to account for anomalies between its view of events and the public’s. The two responses to the conservative dilemma are censorship and propaganda. But neither of these is as effective as the enforced silence of citizens. The state will censor critics or produce propaganda as it needs to, but both of those actions have higher costs than simply not having any critics to silence or reply to in the first place. But if a government were to shut down Internet access or ban cellphones, it would risk radicalizing otherwise pro-regime citizens or harming the economy.

Many dictatorial or authoritarian regimes are sitting right on the butt-hurting horns of that dilemma right now. What is driving it is, of course, the explosive growth in mobile technology worldwide, what Michael Saylor, in a book of that title, calls The Mobile Wave. Cell phones, smart phones and internet access are driving into more and more corners of the world. For a current run-down of the mind-boggling statistics please see this Pew Research Report: ‘Emerging Nations Embrace Internet, Mobile Technology’. And for current reporting on how the dictator’s dilemma is playing out in some contexts please see ‘How Emerging Markets’ Internet Policies Are Undermining Their Economic Recovery’ from Forbes.

"Smart City Gran Concepcion" activity launched in Chile

Victor Mulas's picture

The ICT Unit of the World Bank and the Ministry of Transport and Telecommunications (MTT) of Chile launched the “Smart City Gran Concepcion” activity the week of January 13, 2014. The activity, which is financed by the Spanish Fund for Latin America and the Caribbean, has five sequential components that are designed to achieve two goals:(A) to improve local and municipal service delivery by introducing open innovation and ICT tools; and (B) to lay the framework for the development of a local and sustainable innovation ecosystem in Gran Concepcion. The Gran Concepcion area is the second largest populated area in Chile with almost a 1 MM inhabitants and it was chosen by MTT to pilot a model of Smart City for Chile.

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.
 

Emerging Nations Embrace Internet, Mobile Technology
Pew Research Global Attitudes Project
In a remarkably short period of time, internet and mobile technology have become a part of everyday life for some in the emerging and developing world. Cell phones, in particular, are almost omnipresent in many nations. The internet has also made tremendous inroads, although most people in the 24 nations surveyed are still offline. Meanwhile, smartphones are still relatively rare, although significant minorities own these devices in countries such as Lebanon, Chile, Jordan and China. People around the world are using their cell phones for a variety of purposes, especially for texting and taking pictures, while smaller numbers also use their phones to get political, consumer and health information. Mobile technology is also changing economic life in parts of Africa, where many are using cell phones to make or receive payments. READ MORE
 
How Emerging Markets' Internet Policies Are Undermining Their Economic Recovery
Forbes
NSA surveillance activities are projected to cost the American economy billions of dollars annually. Washington is not alone, however, in pursuing costly policies in the technology and Internet realm. Several emerging economies – including Brazil, Turkey, and Indonesia – are likewise undermining their already fragile markets by embracing Internet censorship, data localization requirements, and other misguided policies – ironically often in response to intrusive U.S. surveillance practices. These countries should reverse course and support the free and open Internet before permanent economic damage is done. READ MORE

Area C: An Untapped Resource that Could Turnaround the Palestinian Economy

Orhan Niksic's picture
 Arne Hoel

The Palestinian economy is stalling. Growth dropped sharply in 2013, unemployment is on the rise, and tax revenues for the Palestinian authority are falling significantly short of what is needed to finance even recurrent expenditures. That’s the bad news that many are well aware of. There is however a potential source of good news that currently lies dormant, but if tapped could both stimulate growth and transform the Palestinian economy.

Introducing 'Ask Guido'

Berk Ozler's picture
This week we're introducing our new series that we decided to call 'Ask Guido.' Guido Imbens has kindly agreed to answer technical questions every so often and we are thrilled. For this first installment, Guido starts by answering a question about standard errors and the appropriate level of clustering in matching.
 

One question that often comes up in empirical work concerns the appropriate way to calculate standard errors, and in particular the correct level of clustering. Here is a specific version of the question that someone posed, slightly paraphrased:

Billion Dollar Map to Help Africa Turn Mining into Prosperity

S. Vijay Iyer's picture
2013 Africa Progress Report: Equity in Extractives
 

Twenty countries in sub-Saharan Africa are classified as “resource-rich” by the International Monetary Fund. Most of these resources are minerals such as iron ore, gold and bauxite, as well as oil and gas. But of these, 14 are ranked higher for GDP per person than they are for their score on the UN human-development index. So what constrains such resource wealth from yielding greater development gains?  

The Six A’s of Quality Education

Harry A. Patrinos's picture


Over the past several decades, developing countries have made remarkable progress in achieving quantitative education targets. Since the turn of the millennium, almost 50 million children around the world have gained access to basic education – and most are reaching completion. But as recent PISA data shows, this is not typically the case for qualitative improvements in education. A persistent learning gap remains for an estimated 250 million children who are unable to read and do math, even after spending three or more years in the classroom.

Dialogue with Central Asian countries

Laura Tuck's picture

Bishkek, Kyrgyz Republic – Laura Tuck, the vice president for the World Bank’s Europe and Central Asia unit, talks about her trip to Kazakhstan, the Kyrgyz Republic, Tajikistan and Uzbekistan and important issues related to the economic growth of the region that she discussed in these Central Asian countries.


 


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