Since the global financial crisis, credit to the private nonfinancial sector in emerging markets and developing economies (EMDEs) has surged. Within this overall surge, however, there has been considerable divergence between commodity-exporting and -importing economies. In commodity-importing EMDEs, credit-to-GDP ratios are high by historical standards but are now stable or declining. In commodity-exporting EMDEs, in contrast, credit growth has been near a pace associated with past credit booms, but private sector credit levels are still moderate, and, with a few exceptions, still well below thresholds identified as warning signs.
I was recently at the Novafrica conference in Lisbon, where one of the keynote talks was given by Stefan Dercon. He based it around a newly released short book he has written with Daniel Clarke, called Dull Disasters (open access version). The title is meant to indicate both the aim to make dealing with disasters a dull event rather than media circus, as well as to discuss ways to ‘dull’ or reduce the impact of disasters.
Stefan started his talk by noting that disaster relief may well be the part of the whole international development and humanitarian system that is the least efficient and has had the least research on it. The book starts by noting the predictability of responses “every time a natural disaster hits any part of the world, the newspaper headlines ten days later can be written in advance: ‘why isn’t the response more coordinated?’. He gives the examples of the responses to the earthquakes in Nepal and Haiti, to Hurricane Katrina, and to Ebola as examples. But he then notes the crux of the problem “…The truth is everybody argues for coordination but nobody likes to be coordinated”.
Blog #10: Three job deficits in unfolding India story
India is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Over the next few weeks, this blog series will highlight recent research from the World Bank and its partners on what has driven poverty reduction, what still stands in the way of progress, and the road to a more prosperous India.
We hope this will spark a conversation around #WhatWillItTake to #EndPoverty in India. Read all the blogs in this series, we look forward to your comments.
Rising labor earnings have driven India’s recent decline in poverty. But the quantity and quality of jobs created raise concerns about the sustainability of poverty reduction, and the prospects for enlarging the middle class. The period after 2005 can be best described as one of a growing jobs deficit. Three deficits actually: i) a deficit in the overall number of jobs, ii) a deficit in the number of good jobs, and iii) a deficit in the number of suitable jobs for women.
During the initial stages of recovery efforts, supporting local-level recovery initiatives can serve as a springboard for large-scale reconstruction programs, which remains our biggest comparative advantage. Therefore, there is a need to expand these assessments to include other elements of recovery, which would inform preparation of multi-sectoral local level recovery interventions in the short-term, and major reconstruction programs in the medium- to long-term.
It is almost impossible to think of a welfare system without state resources and intervention. But one man, Abdul Sattar Edhi, is single-handedly responsible for creating an unparalleled mini-welfare state system within the state of Pakistan.
In the early 1950s, a young Edhi started begging on the streets of Karachi to buy a battered old van to be used as an ambulance. In 2016, the non-profit Edhi Foundation had over 1800 ambulances stationed across Pakistan – all via public donation. Most Pakistanis will call an Edhi ambulance, rather than a private or state run service in case of an emergency. Edhi’s air ambulances were the first responders when an earthquake struck northern Pakistan in 2008. The reach of Edhi services during emergencies also extends to other parts of South Asia such as Nepal after the recent earthquake.
Over the years, Edhi expanded his work across many areas. His foundation runs homes for women, rehabilitation centers, workshops for skills based learning, dispensaries, soup kitchens, orphanages, welfare centers, missing persons services, refugees assistance, animal center, morgues and burial services including graveyards, child adoption services, and homes for mentally challenged across the country. Thousands of Pakistani children have Edhi and his wife Bilquis Edhi as parents on their official documentation. Edhi services are accessible and open to all but devoid of religious and governmental support in any monetary form.
In Pakistan, more people will trust the Edhi Foundation with their money than the state with their taxes. Donations come in different forms and from many economic strata of the Pakistani society. Many individuals who enter the job market will donate from few rupees to thousands from their first salaries as an initiation to economic and civic life – this pattern continues for many. It is not unusual for children to donate money to Edhi services out of their pocket monies or eidi (money given to children on Eid by their parents and relatives). Edhi single handedly inspired a culture of kindness, giving, volunteering, and civic mindedness in society often marred by economic or political plights.
Judging by the number of views of the recent Facebook livestream event on intra-regional trade and investment in South Asia, there is significant interest in this topic. And there should be, given that there remain many important and untapped opportunities to use the power of trade and investment to enhance economic opportunities, including for lesser-skilled people and women in the region.
According to respondents of the Facebook poll conducted during the above event in May 2016, the most important policy to enhance intra-regional trade would be to invest in connectivity and border crossings. Policy makers seem to realize this as well. Over the last two years, new efforts to deepen South Asian cooperation in trade have focused almost exclusively on trade facilitation issues. Let me elaborate.
These are some of the views and reports relevant to our readers that caught our attention this week.
Africa is moving toward a massive and important free trade agreement
African heads of state and government officials are meeting this week in Kigali, Rwanda, for the 27th African Union Summit. On their agenda will be taking the next steps to establish a free-trade area that would include all 54 African countries — which could be up and running by the end of 2017. This is news to much of the global community. Here are seven things you need to know about Africa’s Continental Free Trade Area (CFTA):
Mobile Phone Data Reveals Literacy Rates in Developing Countries
MIT Technology Review
One of the millennium development goals of the United Nations is to eradicate extreme poverty by 2030. That’s a complex task, since poverty has many contributing factors. But one of the more significant is the 750 million people around the world who are unable to read and write, two-thirds of which are women. There are plenty of organizations that can help, provided they know where to place their resources. So identifying areas where literacy rates are low is an important challenge. The usual method is to carry out household surveys. But this is time-consuming and expensive work, and difficult to repeat on a regular basis. And in any case, data from the developing world is often out of date before it can be used effectively. So a faster, cheaper way of mapping literacy rates would be hugely welcome.
Education and training play an important role in ensuring that youth develop the skills they need to live independent and prosperous lives. The research is clear: youth are more affected by unemployment than any other age group. Around the globe we have seen the political, economic and social consequences of young people not having jobs. Governments and international development organizations have turned to education and training initiatives as one tool to enable youth to find jobs or launch their own businesses.
It has been almost ten years since Richard Thaler and Cass Sunstein wrote Nudge, but the revolution in behavioral policymaking is still unfolding.
Around the world, behavioral economists and policymakers strive to show that a richer model of human behavior can improve both individual and social welfare in virtually all domains of society.