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Global Economy

Helping Bhutan’s Parliamentarians Better Understand Economics

Yoichiro Ishihara's picture
Bhutanese Council Members and World Bank Staff
Bhutan's newly elected council members with World Bank staff. 

Members of parliament are valuable partners for the World Bank. They enact laws, shape and review development policies, and hold governments accountable for World Bank-financed programs. This applies for the landlocked Himalayan kingdom of  Bhutan. The role of its parliament has been increasing since the country’s successful transition from monarchy to constitutional monarchy in 2008. Through its engagement with these elected representatives, the World Bank effectively integrates citizen voice in its programs to achieve lasting and inclusive development results.
 
A joint workshop between the World Bank and National Council of Bhutan, the upper house, was a great opportunity for the World Bank to engage with the 25 newly elected National Council members.

Six ways Sri Lanka can attract more foreign investments

Tatiana Nenova's picture
In 2017, Foreign Direct Investment (FDI) into Sri Lanka grew to over $1,710 billion. But Sri Lanka still has ways to go to attract more FDI.
In 2017, Foreign Direct Investment (FDI) into Sri Lanka grew to over $1,710 billion. But Sri Lanka still has ways to go to attract more FDI. Credit: Shutterstock 


To facilitate Foreign Direct Investment (FDI), Sri Lanka launched last week an innovative online one-stop shop to help investors obtain all official approvals. To mark the occasion, this blog series explores different aspects of FDI in Sri Lanka. Part 1 put forth 5 Reasons Why Sri Lanka Needs FDI. Part 3 will relate how the World Bank is helping to improve Sri Lanka’s enabling environment for FDI.

Sri Lanka and foreign investments read a bit like a hit and miss story.

But it was not always the case.

Before 1983, companies like Motorola and Harris Corporation had plans to establish plants in Sri Lanka’s export processing zones. Others including Marubeni, Sony, Sanyo, Bank of Tokyo and Chase Manhattan Bank, had investments in Sri Lanka in the pipeline in the early 1980s.

All this changed when the war convulsed the country and derailed its growth. Companies left and took their foreign direct investments (FDI) with them.

Nearly a decade after the civil conflict ended in 2009, Sri Lanka is now in a very different place.

In 2017, Foreign Direct Investment (FDI) into Sri Lanka grew to over $1,710 billion including foreign loans received by companies registered with the BOI, more than doubling from the $801 million achieved the previous year.

But Sri Lanka still has ways to go to attract more FDI.
 
As a percentage of GDP, FDI currently stands at a mere 2 percent and lags behind Malaysia at 3 – 4 percent and Vietnam at 5 – 6 percent.

Five reasons why Sri Lanka needs to attract foreign direct investments

Tatiana Nenova's picture
Sri Lanka’s government has recognized the need to foster private-sector and beef up exports to attain the overarching objective of becoming an upper-middle-income economy.
Sri Lanka’s government has recognized the need to foster private-sector and beef up exports to attain the overarching objective of becoming an upper-middle-income economy.

To facilitate Foreign Direct Investment (FDI), Sri Lanka is launching this week an innovative online one-stop shop to help investors obtain all official approvals. To mark the occasion, this blog series explores different aspects of FDI in Sri Lanka. Part 2 will explore how the country can attract more FDI. Part 3 will relate how the World Bank is helping to create an enabling environment for FDI in Sri Lanka.

You may have heard that Sri Lanka is intent on drumming up more foreign direct investments up to $5 billion by 2020. At the same time, the government aims to improve the lives of Sri Lanka’s citizens by generating one million new and better jobs.
 
This isn’t a pipe dream. Thanks to its many advantages like a rich natural resource base, its strategic geographic position, highly literate workforce and fascinating culture, the island nation is ripe for investment in sectors such as tourism, logistics, information technology-enabled services, and high-value-added food processing and apparel.
 
What is foreign direct investment and why does Sri Lanka need it?
 
Very simply, foreign direct investment (or FDI) is an investment made by a company or an individual in a foreign country. Such investments can take the form of establishing a business in Sri Lanka, building a new facility, reinvesting profits earned from Sri Lanka operations or intra-company loans to subsidiaries in Sri Lanka.
 
The hope is that these investment inflows will bring good jobs and higher wages for Sri Lankan workers, increase productivity, and make the economy more competitive.  
 
Sri Lanka’s government has recognized the need to foster private-sector and beef up exports to attain the overarching objective of becoming an upper-middle-income economy.
 
Attracting more FDI can help achieve that goal and fulfill the promise of better jobs.
 
Here are five reasons why:

How one province in Pakistan is looking to digital jobs for its youth

Anna O'Donnell's picture
Hamza Khan, a Trainee Website Developer
Hamza Khan is a trainee website developer that has benefitted from KP'sYouth Employment Program

Pakistan’s Khyber Pakhtunkhwa province, or KP, has not always been recognized as a digital economy. Sharing a border with Afghanistan, the province experienced a period of instability and militancy over several decades that saw outmigration and the decline of private industries. Since then, the province has shown rapid economic growth, advancements in security, improvements in basic health and education, and a renewed sense of optimism.

Today, around half of the province’s population of 30.5 million is under the age of 30, necessitating rapid growth and job creation. In 2014, the Government of Khyber Pakhtunkhwa partnered with the World Bank to develop a strategy for job creation centered on leveraging the digital economy to address youth unemployment.
 

Digital KP
Digital KP”, that outlines a program on digital development that promotes youth inclusion and job creation.

Fast forward to 2018, and the province of Khyber Pakhtunkhwa has launched a comprehensive digital strategy, called “Digital KP”, that outlines a program on digital development, with a core objective to promote youth inclusion in the digital economy. Within this broader digital strategy is a strong focus on promoting job creation for youth.

Addressing youth employment through the digital economy has three key building blocks:

জলবায়ু পরিবর্তনের সাথে কি সুন্দরবন এলাকায় মাছের প্রাপ্যতা কমবে?

Susmita Dasgupta's picture

  
মাতৃমৃত্যু বা শিশু মৃত্যু কমানোর মতো বাংলাদেশের স্বাস্থ্য খাতে বহু অর্জন থাকা সত্ত্বেও  দেশের অসংখ্য মানুষ অপুষ্টির শিকার। দেশের প্রায় ৩৩-৩৬ শতাংশ শিশু এবং ১৯ শতাংশ মহিলা অপুষ্টিতে ভুগছে।  অপুষ্টির হার স্বভাবতই দরিদ্র এবং নিম্নবিত্ত  পরিবারগুলোতে বেশি ।  ওয়ার্ল্ড ফিশ এবং বিভিন্ন গবেষণা সংস্থা জানিয়েছে অপুষ্টির সমাধান  রয়েছে বাঙালির চিরন্তন ঐতিহ্য "মাছে  ভাতে"। নানা ধরণের ছোট মাছ শরীরে ফ্যাটি এসিড, ভিটামিন ডি, এ, বি, ক্যালসিয়াম, ফসফরাস, আয়োডিন, জিঙ্ক, আয়রন এর ঘাটতি মেটায়। তাই অপুষ্টি এড়াতে নিম্নবিত্ত পরিবারের খাবারের তালিকায় নানা  রকমের টাটকা মাছ - বিশেষত ছোট মাছের পরিমান বাড়াতে হবে। 

পরিবেশ উষ্ণায়নের সাথে সাথে কিন্তু মাছের যোগান পাল্টাবে । 
পরিবেশ উষ্ণায়নের সাথে সাথে পৃথিবীতে সমুদ্রের উচ্চতা বাড়ছে - জানিয়েছে জলবায়ু পরিবর্তন বিষয়ে বিশেষজ্ঞ আন্তর্জাতিক প্যানেল (আই,পি, সি, সি). গত কয়েক দশক ধরেই প্রতি বছর অগ্রহায়ণ থেকে শুরু করে জ্যৈষ্ঠ মাস পর্যন্ত দক্ষিণ পশ্চিম উপকূলবর্তী  এলাকায়  নদী  নালায় নোনা পানির সমস্যা দেখা যাচ্ছে।  বিশ্বব্যাংক এবং ইনস্টিটিউট অফ ওয়াটার মডেলিং বাংলাদেশে তাদের গবেষণা প্রতিবেদনে (River Salinity and Climate Change: Evidence from Coastal Bangladesh) জানিয়েছে সমুদ্রের উচ্চতা বৃদ্ধির কারণে ইছামতি, বলেশ্বর, শিবসা, পশুর, আধারমানিক সহ বিভিন্ন নদী এবং সংলগ্ন খাল বিলে  নোনা  পানির সমস্যা শুকনো মৌসুমে আরো বাড়বে| ফলে, দক্ষিণ  পশ্চিম উপকূলবর্তী   অনেক উপজেলায় মিঠা  পানির মাছের প্রাকৃতিক আবাস কমে যাবে।  স্বভাবতই এর ফলে  মিঠা পানির মাছের যোগান কমবে।

India's growth story

Poonam Gupta's picture

The World Bank is releasing its biannual flagship publication, the India Development Update. It takes stock of the Indian economy and assesses what it will take India to move to a higher growth trajectory.

The Update describes the state of the Indian economy, shares its perspective on the Indian growth experience and trajectory over the past two and a half decades, and analyses the near-term outlook for growth, the global economic outlook and its impact on the Indian economy.



The Update, to be formally launched on March 14, features a historic analysis of India’s economic performance in order to assess what it will take India to return to growth rates of 8 percent and higher on a sustained basis.

Sri Lanka at 70: Looking back and forward

Idah Z. Pswarayi-Riddihough's picture
A view from the Independence day parade.At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation.
A view from the 2018 Independence Day parade. At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation. Credit: World Bank

Like many Sri Lankans across the country, I joined Sri Lanka’s 70th Independence Day festivities earlier this month. This was undoubtedly a joyful moment, and proof of the country’s dynamism and stability. At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation.
 
The country’s social indicators, a measure of the well-being of individuals and communities, rank among the highest in South Asia and compare favorably with those in middle-income countries. In the last half-century, better healthcare for mothers and their children has reduced maternal and infant mortality to very low levels.
 
Sri Lanka’s achievements in education have also been impressive. Close to 95 percent of children now complete primary school with an equal proportion of girls and boys enrolled in primary education and a slightly higher number of girls than boys in secondary education.
 
The World Bank has been supporting Sri Lanka’s development for more than six decades. In 1954, our first project, Aberdeen-Laxapana Power Project, which financed the construction of a dam, a power station, and transmissions lines, was instrumental in helping the young nation meet its growing energy demands, boost its trade and develop light industries in Colombo, and provide much-needed power to tea factories and rubber plantations. In post-colonial Sri Lanka, this extensive electrical transmission and distribution project aimed to serve new and existing markets and improve a still fragile national economy.
 
Fast forward a few decades and Sri Lanka in 2018 is a far more prosperous and sophisticated country than it was in 1954 and, in many ways, has been a development success story. Yet, the island nation still faces some critical challenges as it strives to transition to another stage of its development and become a competitive upper middle-income country.
 
Notably, the current overreliance on the public-sector as the main engine for growth and investment, from infrastructure to healthcare, is reaching its limits.  With one of the world’s lowest tax to gross domestic product (GDP) ratios -- 12% in 2016, down from 24% in 1978 —Sri Lanka’s public sector is now facing serious budget constraints and the country needs to look for additional sources of finance to boost and sustain its growth.
 
As outlined in its Vision 2025, the current government has kickstarted an ambitious reform agenda to help the country move from a public investment to a more private investment growth model to enhance competitiveness and lift all Sri Lankans’ standards of living.
 
Now is the time to steer this vision into action. This is urgent as Sri Lanka is one of the world’s most protectionist countries and one of the hardest to start and run a business. As it happens, private foreign investment is much lower than in comparable economies and trade as a proportion of GDP has decreased from 88% in 2000 to 50% in 2016. Reversing this downward trend is critical for Sri Lanka to meet its development aspirations and overcome the risk of falling into a permanent “middle-income trap.”

Bangladesh is thinking big by thinking blue

Pawan Patil's picture

Maintaining and restoring ocean ecosystems – or ‘ocean health’ – is synonymous with growing ‘ocean wealth,’ according to a soon-to-be published report by the World Bank and European Union. With rapid population growth, limited land and fewer terrestrial resources to house, feed and provide citizens with their energy needs, coastal nations across South Asia are looking seaward. In doing so, countries are clueing in on the fact that sustainably managing and developing ocean spaces is critical to a nation’s economic advancement.

Thinking Blue - thinking how best to sustainably tap ocean spaces as new sources of sustainable growth and transition to a blue economy - is new, although South Asian nations have used the sea for food and trade for centuries. Five years ago, few had an inkling of the emerging importance of the term 'blue economy.'

By late 2017, at the Second International Blue Economy Dialogue hosted by the Government of Bangladesh in Dhaka, interest in what the blue economy is and why it matters is at an all-time high and rising. Perhaps this not surprising. 

The Legacy of Saman Kelegama

Sanjay Kathuria's picture
Saman Kelegama, a Sri Lankan economist and the Executive Director of the Institute of Policy Studies (IPS Sri Lanka) died prematurely in June 2017. He was a champion of deeper South Asian cooperation.
Saman Kelegama, a Sri Lankan economist and the Executive Director of the Institute of Policy Studies (IPS Sri Lanka) died prematurely in June 2017. He was a champion of deeper South Asian cooperation. Credit:  Institute of Policy Studies

I first met Saman in the early 1990s in Delhi.  Over the years, our paths diverged.  When I re-engaged on South Asia, I ran into Saman again. We re-connected instantly, despite the long intervening period.  This was easy to do with Saman—soft-spoken, affable, a gentleman to the core.  He bore his considerable knowledge lightly.  

Despite his premature passing away in June 2017, he left a rich and varied legacy behind him. I will confine myself to discussing his insights on regional cooperation in South Asia, based on his public writings and my interactions with him.

Saman was a champion of deeper economic linkages within South Asia. He was also pragmatic. 

Along with a few other regional champions, Saman, as the head of the Institute of Policy Studies in Colombo, helped to kick-start the “South Asian Economic Summit”, or SAES, in Colombo in 2008, to provide a high-profile forum for dialogue on topical issues, especially South Asian regional integration. It is remarkable that the SAES has endured, without any gap. The fact that the policy and academic fraternity meet with unfailing regularity, despite on-and-off political tensions in the region, is testimony to its value.

Saman repeatedly stressed that Sri Lanka has been able to reap benefits from the India-Sri Lanka FTA (ISFTA), contrary to the general belief. His arguments were powerful: the import-export ratio for Sri Lanka improved from 10.3 in 2000 (the start of the ISFTA) to 6.6 in 2015; about 70 percent of Sri Lanka’s exports to India get duty-free access under the FTA, but less than 10 percent of Sri Lanka’s imports from India come under the FTA (since India provided “special and differential treatment” to Sri Lanka).

Measuring South Asia’s economy from outer space

Martin Rama's picture
New technologies offer an opportunity to strengthen economic measurement. Evening luminosity observed from satellites has been shown to be a good proxy for economic activity.
New technologies offer an opportunity to strengthen economic measurement. Evening luminosity observed from satellites has been shown to be a good proxy for economic activity.
Economic growth is a key concern for economists, political leaders, and the broader population.

But how confident are we that the available data on economic activity paints an accurate picture of a country’s performance?

Measuring Gross Domestic Product (GDP), the most standard measure of economic activity, is especially challenging in developing countries, where the informal sector is large and institutional constraints can be severe.

In addition, many countries only provide GDP measures annually and at the national level. Not surprisingly, GDP growth estimates are often met with skepticism.
 
New technologies offer an opportunity to strengthen economic measurement. Evening luminosity observed from satellites has been shown to be a good proxy for economic activity.

As shown in Figure 1, there is a strong correlation between nightlight intensity and GDP levels in South Asia: the higher the nightlight intensity on the horizontal axis, the stronger the economic activity on the vertical axis.
Figure 1 Nightlight intensity increases with economic activity
Figure 1 Nightlight intensity increases with economic activity

However, measuring nightlight is challenging and comes with a few caveats. Clouds, moonlight, and radiance from the sun can affect measurement accuracy, which then requires filtering and standardizing.

On the other hand, nighlight data has a lot advantages like being available in high-frequency and with a very high spatial resolution. In the latest edition of South Asia Economic Focus, we use variations in nightlight intensity to analyze economic trends and illustrate how this data can help predict GDP over time and across space.

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