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Poverty

An update on Bhutan’s economy

Yoichiro Ishihara's picture
Accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development
Accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development. Credit: World Bank

Bhutan is one of the smallest, but fastest-growing economies in the world.
 
Its annual average economic growth of 7.6 percent between 2007 and 2017 far exceeds the average global growth rate of 3.2 percent.
 
This high growth has contributed to reducing poverty: Extreme poverty was mostly eradicated and dwindled from 8 percent in 2007 to 1.5 percent in 2017, based on the international poverty line of $1.90 a day (at purchasing power parity).
 
Access to basic services such as health, education and asset ownership has also improved significantly.
 
The country has a total of 32 hospitals and 208 basic health units, with each district hospital including almost always three doctors.
 
The current national literacy rate is 71 percent and the youth literacy rate is 93 percent.
 
The recent statistics on lending, inflation, exchange rates and international reserves (Sources: RMA, NSB) confirm that Bhutan maintained robust growth and macroeconomic stability in the first half of 2018.  

Gross foreign reserves have been increasing since 2012 when the country experienced an Indian rupee shortage.
 
Reserves exceeded $1.1 billion, equivalent to 11 months of imports of goods and services, which makes the country more resilient to potential shocks.
 
The nominal exchange rate has been depreciating since early 2018 (with ngultrum reaching Nu. 73 against the US dollar in early November).

Poor sanitation is stunting children in Pakistan

Ghazala Mansuri's picture
A nutrition assistant measures 1 year old Gullalay’s mid-upper arm circumference (MUAC) at UNICEF supported nutrition center in Civil Dispensary Kaskoruna, Mardan District, Khyber-Pakhtunkhwa province, Pakistan.
With a stunting rate of 38 percent, Pakistan is still among the group of countries with the highest rates of stunting globally and the pace of decline remains slow and uneven. In Sindh, for example, things have worsened over time, with one in two children now stunted. Credit: UNICEF


More than one in every three children born in Pakistan today is stunted.

Child stunting, measured as low height for age, is associated with numerous health, cognition and productivity risks with potential intergenerational impacts.

With a stunting rate of 38 percent (Demographic & Health Survey 2018), Pakistan is still among the group of countries with the highest rates of stunting globally and the pace of decline remains slow and uneven.

In Sindh, for example, things have worsened over time, with one in two children now stunted!

The policy response to this enormous health crisis has been almost entirely centered on interventions at the household level—reducing open defecation (OD), improving household behaviors like child feeding and care practices and food intake.  

A recent World Bank report, which I co-authored, suggests that a major shift is this policy focus is required for significant progress on child stunting.

The report begins by showing that over the past 15 years Pakistan has made enormous progress in reducing extreme poverty, with the poverty rate falling from 64 percent to just under 25 percent in 2016.

This has improved dietary diversity, even among the poorest, and increased household investment in a range of assets, including toilets within the home.

This has, in turn, led to a major drop in OD, from 29 percent to just 13 percent. Curative care has also expanded, with the mainstreaming of basic health units and the lady health worker program.
 

Bridging the skills gap is key for energy access, new jobs

Rebekah Shirley's picture
Frontier Markets (night shot)/Power for All


Progress is being made in closing energy access gaps in Africa and Asia. A big reason is falling renewable energy costs, which have made home solar systems, mini-grids and other distributed renewable energy (DRE) solutions a viable option for providing first-ever electricity in remote, rural areas far removed from electric grids.

For the first time ever, the number of people gaining access to electricity in Sub-Saharan Africa is outstripping population growth. More than 700,000 home solar systems have been installed in Kenya alone and another 240,000 poor, rural households are expected to be connected soon under a new $150 million off-grid project backed by the World Bank. In South Asia, progress has been ever faster.

What will it take to accelerate these gains for the nearly 1 billion people worldwide still living without electricity?

More than money: Counting poverty in multiple forms

Dhiraj Sharma's picture

Consider two households that have the same level of consumption (or income) per person but they differ in the following ways. All the children in the first household go to school, while the children in the second household work to support the family. The first household obtains drinking water from a tap connected to the public distribution network, whereas the second household fetches water from a nearby stream. At night, the first home is illuminated with electricity, whereas the second home is dark. A lay person would easily recognize which of these two families is better off. Yet, traditional measures of household well-being would put the two households on par because conventionally, household well-being has been measured using consumption (or income).

Doing better business to fight poverty

Duvindi Illankoon's picture
The new Doing Business ranking places Sri Lanka at 100 out of 190 economies, compared with 111 last year. This year Sri Lanka made it easier for businesses to register property, obtain permits, enforce contracts and pay taxes. Credit: World Bank

End Poverty Day fell on the 17th of October. Two weeks later, the new Doing Business rankings come out for this year.

If you’re wondering what the link is, here’s a quick summary: business-friendly regulations can be instrumental in lowering poverty at the national level.

This is one of those happy instances where economics, common sense and the data align.

A better regulatory environment encourages more businesses to register and expand, bringing more employers to the economy.

Then the market responds- not only do these employers create more jobs, but also going to offer better jobs to attract capable workers to their companies.

Ultimately, a reliable source of income is the catalyst to moving out of poverty.

Sounds too simple? Trust the numbers.

Afghanistan eases doing business

Shubham Chaudhuri's picture
Doing Business Better in Afghanistan


Despite a volatile business environment, Afghanistan has made gains to improve the ease of doing business in the country.

These gains resulted in Afghanistan’s ranking in Doing Businessa World Bank report that measures business regulations across 190 economies—jumping from 183 in 2018 to 167 in the 2019 report, earning the country a coveted spot in this year’s global top improvers.

This is a first for Afghanistan and the upshot of the record five reforms was to improve the business environment for small and medium companies, increase shareholders’ rights and role in major corporate decisions, and strengthen access to credit.

With more than half of the Afghan population living below the national poverty line, Afghanistan needs to catalyze private investment and create jobs, helping entrepreneurs advance their business initiatives and helping established private businesses, small and large, to grow and create jobs.

There is a great deal of work to do in this regard, but the good news is that Afghanistan is serious about improving its investment climate. An overview of the key reforms Afghanistan has undertaken in the last year shows how the country is easing constraints faced by entrepreneurs and investors:

Commitment to reforms improves business climate in South Asia

Hartwig Schafer's picture
 
Rikweda, an Afghan fruit processing company in the Kabul Province is well on its way to restoring Afghanistan as a raisin exporting powerhouse—a status the country held until the 1970s when it claimed about 20 percent of the global market. Credit World Bank


Imagine a state-of-the-art processing plant that harnesses laser-sorting technology to produce a whopping 15,000 tons of raisins a year, linking up thousands of local farmers to international markets and providing job opportunities to women.
 
To find such a world-class facility, look no further than Rikweda, an Afghan fruit processing company in the Kabul Province that’s well on its way to restoring Afghanistan as a raisin exporting powerhouse—a status the country held until the 1970s when it claimed about 20 percent of the global market.
 
In Afghanistan’s volatile business environment, let alone its deteriorating security, Rikweda’s story is an inspiration for budding entrepreneurs and investors.
 
It also is an illustration of the government’s reform efforts to create more opportunities for Afghan businesses to open and grow, which were reflected in the country’s record advancement in the Doing Business 2019 index, launched today by the World Bank.
 
Despite the increasing conflicts and growing fragility, and thanks to a record five reforms that have moved Afghanistan up to the rank of 167th from 183rd last year, the country became a top improver for the first time in the report’s history.
 
And Afghanistan is not the only South Asian country this year that took a prominent place among top 10 improvers globally.
 
India – which holds the title for the second consecutive year – is a striking example of how persistence pays off, and the high-level ownership and championship of reforms are critical for success. Its ranking has improved by 23 places this year and puts India ahead of all other countries in South Asia. This year, India is ranked 77th, up from 100th last year. 

What’s the latest in development economics research? Microsummaries of 150+ papers from NEUDC 2018

David Evans's picture



Last weekend, the North East Universities Development Consortium held its annual conference, with more than 160 papers on a wide range of development topics and from a broad array of low- and middle-income countries. We’ve provided bite-sized, accessible (we hope!) summaries of every one of those papers that we could find on-line. Check out this collection of exciting new development economics research!

The papers are sorted by topic, but obviously many papers fit with multiple topics. There are agriculture papers in the behavioral section and trade papers in the conflict section. You should probably just read the whole post.

If you want to jump to a topic of interest, here they are: agriculture, behavioral, climate change, conflict, early child development, education, energy, finance, firms and taxes, food security, gender, health and nutrition, households, institutions and political economy, labor and migration, macroeconomics, poverty and inequality, risk management, social networks, trade, urban, and water, sanitation, and hygiene (WASH).

Does monetary poverty capture all aspects of poverty?

Daniel Mahler's picture
Also available in: Français | Español 

Poverty is a complex concept. A widespread view argues that important aspects of poverty cannot be measured in monetary terms – in fact, to successfully address poverty, we need to measure it in all its facets. The recent release of the 2018 edition of the Poverty and Shared Prosperity Report contains the World Bank’s first attempt at measuring multidimensional poverty at a global level. Global measures of multidimensional poverty have a rich history, a prominent example being the annual Global MPI produced by the United Nations Development Programme with the Oxford Poverty & Human Development Initiative.

Nearly 1 in 2 in the world lives under $5.50 a day

Dean Mitchell Jolliffe's picture

Today, less than 10 percent of the world population lives in extreme poverty. Based on information about basic needs collected from 15 low-income countries, the World Bank defines the extreme poor as those living on less than $1.90 a day. However, because more people in poverty live in middle-income, rather than low-income, countries today, higher poverty lines have been introduced. These lines are $3.20 and $5.50 a day, which are more typical of poverty thresholds for middle-income countries.


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