These are some of the views and reports relevant to our readers that caught our attention this week.
#Davosproblems: The financial crisis isn‘t over, and the inequality crisis is just beginning
The World Economic Forum’s annual meeting has kicked off in Davos, Switzerland under the banner of “The New Global Context.” Falling in the long shadow of the financial crisis, the WEF’s theme reflects as much hope as a creeping sense that economic turmoil is the new normal. Some seven years into the current crisis, the participants at Davos are acutely aware that the world economy still hasn’t recovered its past momentum.
The Power of Market Creation, How Innovation Can Spur Development
Most explanations of economic growth focus on conditions or incentives at the global or national level. They correlate prosperity with factors such as geography, demography, natural resources, political development, national culture, or official policy choices. Other explanations operate at the industry level, trying to explain why some sectors prosper more than others. At the end of the day, however, it is not societies, governments, or industries that create jobs but companies and their leaders. It is entrepreneurs and businesses that choose to spend or not, invest or not, hire or not.
How can economic growth benefit more people? What will it take to double the share of renewables in the global energy mix? Will the world have enough food for everyone by 2050? You can hear what experts have to say on these topics and others, ask questions, and weigh in at more than 20 webcast events from Oct. 7 to 11. That's when thousands of development leaders gather in Washington for the World Bank-International Monetary Fund Annual Meetings. Several events will be live-blogged or live-tweeted in multiple languages. You can also follow the conversation on Twitter with #wblive and other hashtags connected to events. We’ve compiled a sampling of events and hashtags below. Check out the full schedule or download the Annual Meetings app for Apple devices and Android smartphones.
For a very long time, the rich have known to some extent how the poor around the world live. What’s new in today's world is that the best-kept secret from the poor, namely, how the rich live, is now out. Through the village television, the Internet and hand-held instruments, which a rapidly increasing number of the poor possess, life-styles of the rich and the middle class are transmitted in full color to their homes every day.
Last year, when I traveled with President Evo Morales to a Bolivian village 14,000 feet above sea level, villagers snapped pictures on their smartphones of our arrival. In Uttar Pradesh, the state in India with the highest number of poor people, I found Indians watching Korean soap operas on their smartphones.
We live in an unequal world. But while the rich world may be blind to the suffering of the poor, the poor throughout the world are very much aware of how the rich live. And they have shown they are willing to take action.
Many people have the misconception that my field -- global development -- is just about do-gooders and charities helping the poor. To be sure, many charitable groups are doing generous, laudable work. But global development extends far beyond charity and has a greater impact on the global economy than most people think.
Strong economic growth in developing countries became an engine for the global economy after the 2008-09 financial crisis, accounting for roughly 50 percent of all global growth. In addition, fully half of the United States’ exports now go to emerging markets and developing economies.
Global economic development can be good for your bottom line. Our focus is on helping more than a billion poor people lift themselves out of extreme poverty and on boosting the incomes of the poorest 40 percent in developing countries. To do that, we need to find economic growth strategies that help all segments of society in emerging markets -- reaching even fragile states striving to put years of conflict behind them and to create good jobs for their people.
The question I ask my team all the time is, what’s our plan? Increasingly scarce public funding isn’t enough to get the job done. We need to attract private sector investment that creates jobs. Ninety percent of all jobs in the developing world are created by the private sector. If we have high aspirations for the poor and vulnerable, there is no argument: We need the private sector to flourish, even in the poorest countries.
Jim Yong Kim knows something about prejudice. When he was growing up Asian American in Iowa, kids would make “kung fu” gestures and hurl racial slurs at him. In an op-ed published in the Washington Post, the World Bank Group president writes that his experiences are “trifling indignities” compared to what gay and lesbian citizens of Uganda and Nigeria are now experiencing, in the wake of new laws making homosexuality a crime punishable by up to life in prison.
Institutionalized discrimination goes far beyond those countries, he notes; 81 other countries also criminalize homosexuality. It also goes beyond sexual orientation to encompass laws that discriminate against women and members of minority groups. And aside from being wrong, Kim writes, “Widespread discrimination is also bad for economies. There is clear evidence that when societies enact laws that prevent productive people from fully participating in the workforce, economies suffer.”
He points out the irony that AIDS activists, many of them gay, fought to ensure access to life-saving drugs for people with AIDS, most of them African. Kim concludes, “Eliminating discrimination is not only the right thing to do; it’s also critical to ensure that we have sustained, balanced, and inclusive economic growth in all societies.”
Read the full op-ed here.
While some of you might be familiar with the term, transport logistics refers to the services, knowledge and infrastructure that allow for the free movement of goods and people.
In today’s globalized economies, logistics is recognized as a key driver of competitiveness and economic development. And as policy making turns its attention to promoting sustainable growth paths, valuing scarce resources, and minimizing environmental impacts, sustainable logistics is indeed a key nexus point.
Efficient logistics systems are a precondition for regions, countries, cities and businesses to participate in the global economy, boost growth, and improve the living conditions of millions of people.
That’s why this topic is so important for the World Bank’s mission and our client countries in the transport sector. And that’s why this week in The Hague we organized, together with the government of The Netherlands and partners like Dinalog, the Dutch Institute for Advanced Logistics, our first Conference on Sustainable Logistics.
- food security
- urban freight
- trade facilitation
- economic development
- shared prosperity
- inclusive growth
- sustainable growth
- green growth
- sustainable transport
- green logistics
- sustainable logistics
- Public Sector and Governance
- Private Sector Development
Inclusive growth refers to both the pace and distribution of economic growth. For growth to be sustainable and effective in reducing poverty, it needs to be inclusive (Berg and Ostry 2011a, Kraay 2004). Traditionally, poverty (or inequality) and economic growth analyses have been conducted separately. Recent work indicates that there may not be a trade-off between equity and efficiency, as suggested by Okun (1975), and “that it would be a big mistake to separate analyses of growth and income distribution” (Berg and Ostry 2011b). Ianchovichina and Gable (2012) describe inclusive growth as raising the pace of growth and enlarging the size of the economy by providing a level playing field for investment and increasing productive employment opportunities.
- inclusive growth
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Rio+20 has an unexpected effect on participants.
While government representatives attend interminable sessions to reach a consensus on the final text for the Sustainable Development summit, legislators from 85 countries managed to reach an agreement in record time. They made a commitment to promote legislation in their respective countries on green and inclusive growth, in other words, growth that respects the environment and benefits everyone in society.