Developing world faces domestic challenges, as global economy stabilizes
Source: World Bank
The world economy appears to be getting back on its feet as risks from advanced economies ease.
Growth in the developing world will remain solid, albeit slower than the frenetic growth rates seen during the pre-crisis boom period, as developing countries grapple with home-grown challenges brought on by capacity constraints in many middle income countries, says the World Bank’s latest Global Economic Prospects, issued today.
Global GDP is expected to expand about 2.2 percent in this year and strengthen to 3.0 percent and 3.3 percent in 2014 and 2015.
Developing-country GDP is now projected to be around 5.1 percent in 2013, strengthening to 5.6 percent and 5.7 percent in 2014 and 2015, respectively, with growth in Brazil, Russia, India and South Africa projected to remain weak. Looking at broader region-wide trends, the East Asia & Pacific region is expected to grow by 7.3 percent this year; Europe & Central Asia by 2.8 percent; Latin America & the Caribbean by 3.3 percent; Middle East & North Africa by 2.5 percent; South Asia by 5.2 percent; and Sub-Saharan Africa by 4.9 percent.
For high-income countries, fiscal consolidation, high unemployment and still weak consumer and business confidence will keep growth this year to a modest 1.2 percent, firming to 2.0 percent in 2014 and 2.3 percent by 2015. Economic contraction in the Euro Area is estimated to be 0.6 percent for 2013, compared with the previous projection of 0.1 percent. Euro Area growth is expected to be a modest 0.9 percent in 2014 and 1.5 percent in 2015.
Source: World Bank
A new World Bank-CMI-EIB and ISESCO report titled “Transforming Arab Economies: Traveling the Knowledge and Innovation Road” shows how an economy based on innovation and knowledge can help promote greater economic growth and spur competitiveness. The report, launched today in Rabat at an event organized with the Islamic Educational, Scientific and Cultural Organization (ISESCO), underlines that greater investment in a knowledge-economy model will be needed to meet the job creation challenge common to the region.
The new report suggests that the extent of change will depend in good part on how well the knowledge economy takes hold throughout the region. Creating jobs entails more investment in knowledge-related sectors and new emphasis on how to develop competitive, productive, and sustainable economies.
The Global Monitoring Report 2013: Rural-Urban Dynamics and the Millennium Development Goals examines rural-urban disparities in the achievement of the Millennium Development Goals (MDGs) and how urbanization, if managed well, can contribute to the attainment of these goals. The report provides information about the differences in progress toward the MDGs across geographical areas and recognizes that urban populations are better off than their rural brethren. However, unfettered urbanization can cause migrants and the urban poor to end up in slums where attainment of the MDGs lags. GMR 2013 calls for an integrated strategy to better manage the planning-connecting-financing formula of urbanization. Notwithstanding the importance of urbanization in poverty reduction and MDG attainment, rural areas remain a huge challenge—one that underscores the importance of policies that can improve rural livelihoods. The rural-urban spectrum ranges from small towns to large cities. The general experience is that poverty is lowest in the largest cities and considerably higher in smaller towns. The MDGs reflect the basic needs of all citizens, and governments should aim to meet them fully in both urban and rural areas. However, resources are scarce, so priorities must be set and trade-offs made. The report argues that the sequencing of actions be tailored to local conditions when it comes to the degree of urbanization and rural-urban differences in MDG outcomes. The world has met four global MDG targets. New estimates confirm the 2012 reports that MDG 1.a—reducing the $1.25-a-day poverty rate (2005 purchasing power parity)—was reached in 2010, falling below half of its 1990 value. The world also met part of MDG 7.c—to halve the proportion of people without safe access to drinking water—in 2010. MDG 7.d—to improve significantly the lives of at least 100 million slum dwellers by 2020—was also achieved. Finally, the first part of MDG 3.a—to eliminate gender disparity in primary education— was accomplished in 2010. Global progress on the full MDG 3.a (to eliminate gender disparity in primary and secondary education) is close to being on track. Global Monitoring Report 2013 was prepared jointly by the World Bank and the International Monetary Fund, with consultations and collaborations with regional development banks and other multilateral partners.
Climate Change Report Warns of Dramatically Warmer World This Century
Source: World Bank
- New World Bank-commissioned report warns the world is on track to a “4°C world” marked by extreme heat-waves and life-threatening sea level rise.
- Adverse effects of global warming are “tilted against many of the world’s poorest regions” and likely to undermine development efforts and goals.
- Bank eyes increased support for adaptation, mitigation, inclusive green growth and climate-smart development.
Source: World Bank
This report analyzes the growth and evolution of applications for mobile phones, focusing on their use in agriculture, health and financial services, as well as their impact on employment and government. It also explores the consequences for development of the emerging “app economy”, summarizing current thinking and seeking to inform the debate on the use of mobile phones for development. It’s no longer about the phone itself, but about how it is used, and the content and applications that mobile phones open.
Source: World Bank
Four years after the onset of the global financial crisis, the worst appears to be over.
However, the global economy remains fragile, as high-income countries continue to suffer from volatility and slow growth, says the World Bank’s latest Global Economic Prospects, issued today.
Despite slow growth in high-income countries, prospects for the developing world remain solid (albeit between 1 and 2 percentage points slower than in the pre-crisis period). In order to regain those earlier faster growth rates, developing countries will need to focus on productivity-enhancing domestic policies, to assure robust growth in the long term.
The World Bank estimates global GDP grew 2.3 percent in 2012. Growth is expected to remain broadly unchanged at 2.4 percent growth in 2013, before gradually strengthening to 3.1 percent in 2014 and 3.3 percent in 2015.
Developing countries recorded among their slowest economic growth rates of the past decade in 2012, with GDP estimated to have grown 5.1 percent. Growth for developing countries is projected to expand by 5.5 percent in 2013, strengthening to 5.7 percent and 5.8 percent in 2014 and 2015, respectively.
Growth in high-income countries remains weak, with their GDP expanding only 1.3 percent in 2012 and expected to remain slow at an identical 1.3 percent in 2013. Growth should gradually firm to 2 percent in 2014 and 2.3 percent by 2015. In the Euro Area, growth is now projected to only return to positive territory in 2014, with GDP expected to contract by 0.1 percent in 2013, before edging up to 0.9 percent in 2014 and 1.4 percent in 2015.
Global trade of goods and services, which grew only 3.5 percent in 2012, is expected to accelerate, expanding by 6 percent in 2013 and 7 percent by 2015.
Source: World Bank
This new flagship report – eTransform Africa – produced by the World Bank and the African Development Bank, with the support of the African Union, identifies best practice in the use of ICTs in key sectors of the African economy.
Under the theme "Transformation-Ready", the growing contribution of ICTs to Agriculture, Climate Change Adaptation, Education, Financial Services, Government Services and Health is explored. In addition, the report highlights the role of ICTs in enhancing African regional trade and integration as well as the need to build a competitive ICT industry to boost innovation, job creation and the export potential of African companies.
World Bank’s Country Strategy for India (2013-16)
Source: World Bank
The World Bank is holding a series of consultations to seek inputs on its proposed Country Program Strategy (CPS) for India for 2013-2016. The CPS is the Bank’s roadmap for engagement in the country over the next four years. Oriented toward results, the CPS aims to support India’s development agenda of faster, sustainable and more inclusive growth as outlined in the government’s upcoming 12th Five Year Plan.
The CPS identifies key areas where the World Bank’s assistance can have the greatest impact on poverty reduction. This, in turn, determines the level and composition of the World Bank Group’s financial, advisory, and technical support to the country over a four-year period.
The CPS is developed in consultation with country authorities, civil society organizations, development partners, the media, the private sector, and other stakeholders. Consultations provide a platform for the World Bank Group to tap into the experience and knowledge of a broad range of stakeholders, and listen to their ideas about how the Bank can work with them to help the country meet its development challenges. Discussions not only cover the country’s long-standing development agenda but also the new challenges thrown up by unprecedented economic growth, and the recent slowdown.
WB Urges Developing Countries to Strengthen Domestic Fundamentals, to Weather Global Economic Turmoil
Developing countries should prepare for a long period of volatility in the global economy by re-emphasizing medium-term development strategies, while preparing for tougher times, says the World Bank in the newly-released Global Economic Prospects (GEP), June 2012.
A resurgence of tensions in high-income Europe has eroded the gains made during the first four months of this year, which saw a rebound in economic activity in both developing and advanced countries and an easing of risk aversion among investors. Since May 1st, increased market jitters have spread. Developing and high-income country stock markets have lost some 7 percent, giving up two-thirds of the gains generated over the preceding four months. Most industrial commodity prices are down, with crude and copper prices down by 19 and 14 percent, respectively, while developing country currencies have lost value against the US dollar, as international capital fled to safe-haven assets, such as German and U.S. government bonds.
So far, conditions in most developing countries have not deteriorated as much as in the fourth quarter of 2011. Outside of Europe and Central Asia and the Middle-East and North Africa, developing country credit default swap (CDS) rates, a key indicator of market sentiment, remain well below their maximums from the fall of 2011.
Cities contribute an estimated 70 percent of the world’s energy-related greenhouse gases (GHG). Their locations, often in low-elevation coastal zones, and large populations make them particularly vulnerable to the impacts of climate change. But cities often take steps, even ahead of national governments, to reduce GHG emissions. So it is with China’s cities, which are well placed to chart a low-carbon growth path to help reach China’s national targets for reducing the energy and carbon intensity of its economy. China’s cities will need to act on multiple fronts, in some cases scaling up elements of existing good practice, in others changing established ways of doing business. Actions affecting land-use and spatial development are among the most critical to achieving low-carbon growth as carbon emissions are closely connected to urban form. Spatial development also has very strong ‘lock-in’ effects: once cities grow and define their urban form, it is almost impossible to retrofit them because the built environment is largely irreversible and very costly to modify. Furthermore, cities need energy-efficient buildings and industries. They need a transport system that offers alternatives to automobiles. They need to shift to efficient management of water, wastewater, and solid waste. And they need to incorporate responses to climate change in their planning, investment decisions, and emergency-preparedness plans.
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This paper reviews and synthesizes theoretical and empirical research on the role of finance in developing countries. First, the paper presents the stylized facts about firms in developing nations as well as the legal, financial and broader institutional framework in which these firms operate. Next, the paper focuses on the financing choices available to small and medium firms in developing countries and highlights areas needing additional research.
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Accounting for water quality in monitoring access to safe drinking-water as part of the Millennium Development Goals: lessons from five countries
ObjectiveTo determine how data on water source quality affect assessments of progress towards the 2015 Millennium Development Goal (MDG) target on access to safe drinking-water.MethodsData from five countries on whether drinking-water sources complied with World Health Organization water quality guidelines on contamination with thermotolerant coliform bacteria, arsenic, fluoride and nitrates in 2004 and 2005 were obtained from the Rapid Assessment of Drinking-Water Quality project. These data were used to adjust estimates of the proportion of the population with access to safe drinking-water at the MDG baseline in 1990 and in 2008 made by the Joint Monitoring Programme for Water Supply and Sanitation, which classified all improved sources as safe.FindingsTaking account of data on water source quality resulted in substantially lower estimates of the percentage of the population with access to safe drinking-water in 2008 in four of the five study countries: the absolute reduction was 11% in Ethiopia, 16% in Nicaragua, 15% in Nigeria and 7% in Tajikistan. There was only a slight reduction in Jordan. Microbial contamination was more common than chemical contamination.ConclusionThe criterion used by the MDG indicator to determine whether a water source is safe can lead to substantial overestimates of the population with access to safe drinking-water and, consequently, also overestimates the progress made towards the 2015 MDG target. Monitoring drinking-water supplies by recording both access to water sources and their safety would be a substantial improvement.
Key Findings+ The African market remains highly fragmented; preventing enormous opportunities for cross-border trade from being exploited and in turn generating new jobs.+ Effective regional integration is more than simply removing tariffs—it is about addressing the barriers that undermine the daily operations of ordinary producers and traders of both goods and services.+ The incidence of barriers to regional trade fall most heavily, and disproportionately, on the poor and on women, and is preventing them from earning a living in activities where they have a comparative advantage—catering for smaller, local markets across the border.+ Action is required at both the supra-national and national levels. Regional communities can provide the framework for reform but responsibility for implementation lies with each member country.+ The donor community can help countries understand the political economy resistance that lies behind the fact that despite public pledges for integration, actual barriers to trade remain in place.