Syndicate content

February 2016

1992: On the magnitude of Mongolia’s challenges and the speed of reforms

Jim Anderson's picture
Continuing with our reflections on the 25 year partnership between Mongolia and the World Bank, today we look at 1992.  The political and economic changes envisioned by early reformers became lasting institutions with the adoption of a new Constitution and elections to the new State Great Khural later that year.  The reforms were well underway, but the economic difficulties deepened with GDP falling a further 9.3% during the year.  Mongolia faced the challenge of reforming its institutions and dealing with a very sharp economic decline at the same time.  The World Bank, for its part, sought to help keep things running and to contribute ideas on the way forward.

Can poverty be defined by shelter?

Sangmoo Kim's picture
 
Slums in Dhaka
Small shacks with bamboo frames & corrugated tin roofs - where 40 percent of the city’s population live.
Sangmoo Kim/World Bank

In Dhaka, the capital city of Bangladesh, you cannot miss the slum neighborhoods. More than 5,000 slum communities, accounting for 40 percent of the population, are spread across the city, often located right next to luxury penthouses, hotels, and high-rise office buildings. Most slum dwellers are limited to low-quality housing in precarious areas, often prone to flooding. The limited access to adequate shelter is an important factor that – according to the Economist Intelligence Unit’s 2015 livability rankings – makes Dhaka one of the least livable cities in the world. These communities are among the most neglected in the city in terms of urban policy, planning, and development, although the people who live in the slums make up the lion’s share of the work force, which drives the city’s economy, contributing significantly to the garment and leather industries, construction, waste management, and many other informal sectors.
                                                                         
Living in slums puts enormous social, economic, and financial burdens on households, and it can lead to intergenerational poverty. Many argue that slum dwellers are caught in a poverty trap—that living in slums makes it harder for households to escape poverty. Several slum-related factors contribute to the perpetuation of poverty, including poor health outcomes; an inability to access finance or leverage property assets; and lack of access to basic services. The existence of slums is a symptom of a shortage of affordable housing, the provision of which can be viewed as a valuable goal in its own right and as a critical ingredient in addressing the broader challenges of poverty.

Education is the topic for the new World Development Report

Kaushik Basu's picture
Education is central to improving human welfare and to achieving the goals of eliminating extreme poverty and boosting shared prosperity.  Schooling was recognized as vital to achieving the MDGs, and it remains front and center in the SDGs.  Yet there has never been a World Development Report (WDR) on education.  

What will it take for Romania to fully reap the dividends of digital transformation?

Marc Lixi's picture
Last week I was in Bucharest and attended the launch of the World Development Report (WDR) 2016: Digital Dividends. The event was co-hosted by the National School of Political and Administrative Studies (SNSPA) and the World Bank.

It was the first country-focused launch in an EU member state and brought together academics, business executives, regulators, journalists, former and current policy-makers to discuss the digital agenda and its implications for Romania’s EU2020 targets, growth and development.

But this launch is not the only reason why Romania stands out.

The country actually represents a paradoxical case study in terms of digital transformation.    

Romania boasts nine of the world’s top fifteen cities with the fastest broadband internet, yet over 40% of the population is at risk of poverty or social exclusion – the highest rate in the EU.

Amid growing risks, will leaders protect the poor?

Sri Mulyani Indrawati's picture
© Ashraf Saad Allah AL-Saeed / World Bank


There is enough trouble out there to keep any policymaker up at night. Recent volatility has roiled Chinese and global stock markets, commodity prices have slumped, and security concerns are rising. All of this raises serious questions over the health of the global economy. This year could shape up to be risky, full of challenges and concerns for the fight against poverty.  
 
We ended 2015 with good news: For the first time in history, the number of extremely poor people dropped below 10% of the world’s population. The new Sustainable Development Goals and the Paris climate deal bring momentum to our effort to lift the remaining 700 million extremely poor people out of poverty while generating climate-smart economic growth.

Making development work for peace

Saroj Kumar Jha's picture

Welcome to Development for Peace, a blog we are launching today with great ambition, to create a space to listen, learn, think, and ignite a discussion that will help us tackle the challenge of fragility, conflict and violence.

You might ask why the World Bank Group is working in this area. In fact, it’s at the core of our mission to reduce poverty. When the Bank was founded in 1944 towards the end of World War II, it was in recognition that unless there was a massive effort to help rebuild countries impoverished by war, the peace would not be sustainable. Development policies are a central part of peacebuilding and stability efforts.
 

Getting urbanization right for better jobs in India

Vaidehi Tandel's picture
India’s official urbanization rate is 31%, but by some measures it should be 55%. Changing the mode of governance of de facto urban areas could improve productivity of existing jobs in these areas. But local political pressures often prevent this reclassification. Therefore there need to be new governance forms that lie between the rural-urban classifications. These would allow the investments in infrastructure and amenities along with skill development that would be vital for augmenting employment productivity in these areas.
 

Competitive Cities: Changsha, China – coordination, competition, construction and cars

Z. Joe Kulenovic's picture

Cites are the heartbeat of the global economy. More than half the world’s population now resides in metropolitan areas, making a disproportionate contribution to their respective countries’ prosperity. The opportunities and challenges associated with urbanization are quite evident in the world’s most populous country, whose cities are among the largest and most dynamic on Earth. To better understand what a thriving metropolitan economy looks like in the Chinese context, our Competitive Cities team selected Changsha, the capital of Hunan Province, for inclusion among our six case studies of economically successful cities, as the representative of the East Asia Pacific Region.  
 
As recently as the turn of the millennium, Changsha’s economy was still dominated by low-value-added, non-tradable services (e.g. restaurants and hair salons) – an economic structure commonly seen today in many low- to lower-middle-income cities. Since then, Changsha has achieved consistently high, double-digit annual growth in output and employment, despite its landlocked location and few natural or inherited advantages, such as proximity to trade routes or mineral wealth. With per capita GDP surging from US $3,500 in 2000 to more than US $15,000 in 2012, Changsha has accomplished a feat so many other World Bank clients can only dream of: leapfrogging from lower-middle-income to high-income status in barely a decade, and an economy now comprised of much more sophisticated, capital-intensive industries. 

  

Photos via Google Maps

We took a closer look at the success factors behind this city’s dramatic growth story, and what lessons its experience may hold for cities elsewhere, especially in terms of (1) how to overcome coordination failures and bureaucrats working in silos and (2) how to ensure a level playing field for all firms in the city (that is to say, competition neutrality), even in industries with a strong SOE presence – something still not commonly seen in China these days.
 
Changsha’s (and Hunan’s) growth has clearly benefitted from a highly conducive national macroeconomic and policy framework, including a plan entitled The Rise of Central China, aimed at spurring development in areas beyond the country’s booming coastal regions. This and other initiatives provided for the removal of investment restrictions, more favorable tax treatment, and enhanced infrastructure and connectivity to coastal commercial gateways. China’s massive stimulus plan in 2009 (in response to the global financial crisis and recession) jump-started construction activity in the country, providing further impetus to one of Changsha’s principal industries, construction machinery and equipment manufacturing. And national government interventions in earlier decades – especially the establishment of dedicated research institutes – provided a critical contribution to Changsha’s accumulation of expertise in such disciplines as machinery or metallurgy.
 
Notwithstanding these national initiatives, responsibility for local economic development in China is highly decentralized, with municipal government leaders directly tasked with achieving GDP growth and tax revenue targets. Municipal governments also have rights over almost all land in cities, which can be leased or used as collateral to fund local infrastructure. In Changsha, municipal authorities used these prerogatives to improve their city’s economic competitiveness.

Tame macroeconomic volatility to boost growth and reduce hardship in the Caribbean

Francisco G. Carneiro's picture
Volatility in financial markets gets wide attention in the public eye. Less noticed is what we in the development world call macroeconomic volatility—faster-than-desired swings in the broad forces which shape an economy. Think investment, government spending, interest rates, foreign trade and the like.

There are three key questions to analyze: how do these forces interact, what is their effect on overall growth, and what policies are best to follow? All this is of more than academic interest: macroeconomic volatility can bring substantial hardships to millions of people

Pages