Second quarter growth in China was broadly stable at 7.5 percent in line with expectations, with little indication thus far of a rebalancing away from investment towards consumption. Weak activity in the Euro Area and strengthening growth in the US have led to the widest level of the long-term yield spread in fifteen years. Steady stock-to-use ratios suggest a broadly stable outlook for most grain prices.
The following post is the first in a series exploring 'internet for development,' the theme of the World Bank's upcoming World Development Report 2016.
Why should we invest in internet access in developing countries when there are more important problems like providing clean toilets? That was one of the questions posed to Vint Cerf following his recent presentation on Emerging Internet Trends that will Shape the Global Economy here at the World Bank. Vint is one of the “Fathers of the Internet”. In the 1970s he was part of a small team that developed the protocols and standards that guide the open, global communication system that we all rely on every day. Today he is Google’s Chief Internet Evangelist and a preeminent thinker about the current state and future of the internet.
Vint’s presentation was the second seminar organized by the World Development Report 2016 (WDR): Internet for Development. This World Development Report (WDR) will look at the impact of the internet – in a broad sense – on businesses, people and governments. And it will evaluate policies in the information and communication technology (ICT) sector and in complementary sectors that will help countries receive the highest social and economic returns from those investments. In his wide-ranging talk and in a meeting with the WDR team, Vint touched on all of those issues. Here are a few of his thoughts.
"A good working definition of a bubble is that the price of an asset has become detached from the fundamentals, which means that the only way to make money in a bubble is to find a bigger fool to take the thing off your hands."
- Tim Harford, economics leader writer for the Financial Times. He is the author of four books and also writes the long-running weekly FT column, “Undercover Economist."
Three quarters of a century since the opening of the first McDonald’s, the fast food chain operates around 34,000 outfits in around 120 countries and territories across all continents. In Sub-Saharan Africa (SSA), however, – a region of 48 countries and almost a billion people - only South Africa and Mauritius have been able to attract this global food chain.
This peculiarity cannot be explained only by the fact that the region is poor. The company has found a market in about 30 countries with GDP per capita of less than US$ 3,000 (in constant 2005 US$) at the time of their first McDonald’s opening. Hamburgers, Cheeseburgers, and Big Macs are also on offer in a dozen of low-income countries as well. When the first McDonald’s opened in Shenzhen in 1990, China’s GDP per capita was less than US$ 500 per person. Of course, Shenzhen’s per capita income was several times higher, but the company has also found a market in Moldova since 1998 when the GDP per capita of the 3 million person country was less than US$ 600 per capita. There are many cities in SSA today that have higher income, population concentration, and tourists than what Chisinau had in 1998; yet they do not have a McDonald’s. As a matter of fact, 22 SSA countries today have higher income per capita than what Moldova or Pakistan had when the first McDonald’s opened there, and 15 of them have higher income per capita even than what Indonesia or Egypt had at their McDonald’s openings (see chart).
Little research currently exists on a vulnerability line that distinguishes the poor population from the population that is not poor but that still faces significant risk of falling back into poverty. A new World Bank policy research working paper by Hai-Anh H. Dang and Peter F. Lanjouw attempts to fill this gap by proposing vulnerability lines that can be straightforwardly estimated with panel or cross-sectional household survey data, in rich- and poor-country settings. These vulnerability lines offer a means to broaden traditional poverty analysis and can also assist with the identification of the middle class or resilient population groups. Empirical illustrations are provided using panel data from the United States (Panel Study of Income Dynamics) and Vietnam (Vietnam Household Living Standards Survey) for the period 2004-2008 and cross-sectional data from India (National Sample Survey) for the period 2004-2009. The estimation results indicate that in Vietnam and India during this time period, the population living in poverty and the middle class have been falling and expanding, respectively, while the opposite has been occurring in the United States.
- Measuring empowerment on the from poverty to power blog: “breaking down the fuzzword ‘empowerment’, into the ‘four powers’ (power within; power with; power to and power over) model”…” you just can’t rock up in a village and ask do you feel empowered?’ and expect to get a useful result”
At the secondary level, the performance of students from the Middle East and North Africa in international tests such as TIMS is significantly below the developing country average.
At the tertiary level, universities are chronically underfunded and not training students for jobs that the market is demanding - reminiscent of the Woody Allen line, "The food in this restaurant is terrible and the portions are too small."