The year 2016 was difficult for many countries. We estimate that global economic growth slowed from 2.7% in 2015 to 2.3% in 2016. High-income economies struggled with subdued growth and low inflation amidst increased uncertainty about policy direction in light of rising populism. Among emerging markets and developing economies, commodity exporters were most affected by the end of the commodity price boom, growing by only 0.3%—much in line with our estimate of 0.4% growth for South Africa, the lowest growth rate since the 2009 recession after the global financial crisis. By contrast, commodity importers carried the torch of global growth in 2016, expanding by 5.6%.
Resource rich nations face unique challenges when attempting to move from low to high value added activities.
Resource sectors (such as mining and oil) tend to be highly capital intensive and offer limited employment opportunities to accommodate workers exiting from other sectors with lower average productivity, such as agriculture and informal services.
Travelling across Africa these days you are likely to run into increasing numbers of mining, oil, and gas industry personnel engaged in exploration, drilling, and extraction across the continent. Although commodity prices are moderating, the discoveries being made in Africa offer the real prospect of significant revenue to many cash-poor, aid-dependent governments in the decade ahead. If you care about development, the question is whether these revenues will catalyze broad economic development and whether they will benefit the poor in Africa.
Co-authored with FARRIA NAEEM
There is widespread belief among Bangladeshi media, civil society and think tanks that collusion exists in the supply chain of many essential commodities, and many blamed this for the price hike in the first half of 2008. Keeping prices low is a high priority for the government. It is therefore important to measure the presence of market collusion through empirical evidence and design appropriate policy responses to mitigate its impact on prices in order for the government to continue to meet its election promise.
Bangladesh is a net importer of major food items. In the absence of market influences and duties, domestic and international prices are expected to be similar. The convergence may not be exact due to transportation and taxation costs but price should follow similar trends as movements of international commodity prices do not of domestic and international markets do not often vary.
We examine and compare the co-mol prices of four essential food items (coarse rice, flour (atta), salt and soybean oil) over time to look for signs of market influences.
The global economic downturn and the consequent pessimistic outlook for exports in developing countries like Bangladesh have reinvigorated voices for protectionism. Even pro-trade minds have vented their skepticism about trade liberalization, as if the punch of the ongoing crisis could be shielded with the help of an embargo on trade with the rest of the world!
Such thoughts, derived from the gloomy prospects of exports, ignore the potential benefits drawn through the imports and disregard the lessons learned from history- that economic isolation leads to further impoverishment.