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Are Second Pillar Pensions Robust in the Face of Economic Shocks?

Mamta Murthi's picture

A view from Central Europe and the Baltics

An elderly Roma woman Saving for old age is important in countries where longevity is increasing. Countries in Central Europe and the Baltics emerged from the economic transition of the 1990s recognizing that they needed to encourage their workforce to retire later and save more in order to be comfortable in old age. To this end, they modified their pay as you go pension systems which collects taxes from workers to pay retirees (the "first pillar") to create an additional or "second pillar" of individual pension accounts funded by taxes. As these second pillar pension accounts were the private property of individual workers, they were expected to encourage saving. Over time as these savings grew, it would be possible to reduce the pensions paid by the government from the first pillar without reducing the standard of living for pensioners who would be able to rely on complementary pensions from their private saving in the second pillar. Typically, a share of payroll tax receipts  was redirected to finance individual pension saving accounts. This resulted in revenue shortfalls in pay as you go you pension schemes, and most governments raised additional debt to meet their obligations which was in turn held by the companies who were managing the pension savings on behalf of employees. However, since the economies were growing rapidly, fiscal deficits were generally kept manageable, easing concerns about additional debt.

In a Rapidly Changing World, Governments Need to Make Education a Priority

Donna Barne's picture
UN Secretary-General Ban Ki-moon, left, and World Bank Group President Jim Yong Kim, right, pose with education campaigners Shazia Ramzan and Kainat Riaz, who were caught up in the Pakistan gun attack on Malala Yousafzai and are in Washington to lobby for greater educational access. Photo: Roxana Bravo/World Bank

The world needs to step up efforts to educate large numbers of young people to meet the challenges of the 21st century. That was a key message at the Learning for All Symposium, Investing in a Brighter Future, at the IMF-World Bank Spring Meetings.

The event, moderated by PBS News Anchor Judy Woodruff and webcast in three languages, linked what several participants described as an ongoing “learning crisis” with high unemployment among young people worldwide.

While a lot of progress has been made getting children into school, 57 million are still out of school. Studies have found that education gaps are impeding skills development, economic growth, and competitiveness around the world. In 2011 it was estimated that 73 million young people were unemployed globally. Youth employment rates are two to four times as high as those of adults in most countries.

If You Could Help End Extreme Poverty, Would You? We Can. Let's Take It On.

Ravi Kumar's picture



Talent is everywhere, but opportunities are not. That’s the conventional belief.

Today, after listening to some amazing young people speak about their lives at Thursday’s End Poverty event at the World Bank, I’m convinced that opportunities are omnipresent.

These youth have one thing in common: They all want to take on poverty and want everyone else to join them. For the first time in history, we can end extreme poverty, and we can do it by 2030. It’s the right thing to do.

Confucius, a Chinese philosopher who lived in the fifth century B.C., said that when we are faced with what’s right, “to leave it undone shows a lack of courage.” Today, four inspiring youth leaders were at the World Bank Group in Washington, D.C. to do what is right by helping to launch a global movement to end extreme poverty by 2030.

One of them, Chernor Bah, was born during a civil war in the slums of Freetown, the capital city of Sierra Leone. Access to basic needs such as food was a privilege for him. His mom’s resilience helped him get education, he passionately told an energetic, youthful crowd. When he grew up he took it upon himself to mobilize young people to help increase access to education. Today he serves as the chairman of the Youth Advocacy Group for the Global Education First Initiative. Its goal is “to accelerate progress towards the Education for All goals and the education-related Millennium Development Goals.”

Diesel: Emissions, Health, and Climate Impacts

Sameer Akbar's picture
Also available in: العربيةEspañol | Français

Trucks idling in traffic in Ghana. Jonathan Ernst/World Bank

Playing charades with my nine-year-old over the weekend, I was surprised when he gave black smoke as a clue for diesel. When I was his age, I probably would have given bus or truck as a clue.

The word diesel derives from the inventor Rudolph Diesel, who developed a heavy-duty engine in Germany in the late 1800s. Diesel fuel is any fuel used in diesel engines. The combustion of diesel fuel provides the power to move heavy-duty vehicles, such as buses and trucks. It also results in emissions of fine particles, often in the form of black smoke, along with a number of other chemical compounds.

In 2012, the World Health Organization (WHO) declared the emissions from diesel combustion to be carcinogenic. Last month, the WHO released data showing that more than 7 million deaths are caused by indoor and outdoor air pollution. The black smoke from diesel engines is a part of outdoor air pollution contributed by buses and trucks, as my son would tell me after we finished our game.

What he does not know as yet is that a study by a team of international scientists in 2013 noted that diesel smoke consists primarily of black carbon, which has a strong global warming impact on the climate; nearly 3,300 time more than that of carbon dioxide over a 20-year time period.

The one simple and clear message from the triangulation of current scientific evidence is that reducing diesel emissions provides health and climate benefits.

Apr 11, 2014: This Week in #SouthAsiaDev

Liana Pistell's picture
We've rounded up 39 tweets, posts, links, and +1's on South Asia-related development news, innovation, and social good that caught our eye this week. Countries included: Bangladesh, Bhutan, India, NepalPakistan, and Sri Lanka. For regular #SouthAsiaDev updates, follow us on Facebook and Twitter

Universal health coverage: Time for an ambitious call for equity in health

Winnie Byanyima's picture

People want dignity, people want rights

In the global survey World We Want 2015, health was the first priority of people living in poor countries. This was not surprising. Every year in Africa, nearly a quarter of a million children under five die because their parents cannot afford to pay for treatment. According to the World Health Organization, 150 million people face catastrophic health care costs every year, while 100 million are pushed into poverty because of direct payments. Increasingly, poor people are protesting the denial of their basic right to access health care when they need it.

The Interview: Cyprian Fisiy

Roxanne Bauer's picture

Exploring ideas, innovations and fresh approaches to our world is at the heart of the public sphere. People, Spaces, Deliberation brings you significant voices from academia and the practice of development through a series of interviews.

Providing public services must deliver reliable results because it's in the public interest. However, development practitioners may wonder whose interest is really at stake- the public's or the private sector's. "And there you find contestation of the public good and what you need to do differently," says Cyprian Fisiy, former Director of the Social Development Department in the World Bank's Sustainable Development Network.

Watch the full video for Cyprian's review of what it takes to be successful in development.

The Interview: Cyprian Fisiy

Prospects Daily: Greece returns to international capital markets, U.S. jobless claims down to nearly 7-year low, China’s exports contract for second consecutive month in March

Financial Markets
 
Greece sold €3 billion of 5-year bonds on Thursday, tapping the international bond market for the first time since March 2010, as the country took advantage of the bond market rally across euro-zone economies. The bond was priced at a yield of 4.95% with nearly 90% of the issue being sold to foreign investors. After surging to more than 30% following the debt restructuring in 2012, the yield on Greek 10-year bonds fell below 6% yesterday for the first time since February 2010
 

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