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Winds of Change: The Case for New Digital Currency

0 sec ago

Blog: Chart of the Week: Bye Bye Baby—How Crises Affect Fertility Rates

1 hour 39 min ago

Casting Light on Central Bank Digital Currencies

3 hours 26 min ago
Staff Discussion Notes No. 18/08

How the Middle East and Central Asian Countries Can Reduce Debt and Preserve Growth

10 hours 6 min ago

Ghana Implements the IMF's Enhanced General Data Dissemination System

12 hours 39 min ago

IMF Staff ends Mission to Cameroon on the 3rd Review under the Extended Credit Facility (ECF)

13 hours 24 min ago

Italy: Staff Concluding Statement of the 2018 Article IV Consultation

13 hours 26 min ago

IMF Management Completes First Review of Staff-Monitored Program with Equatorial Guinea

1 day 8 hours ago

IMF Staff Concludes Visit to Zambia

1 day 12 hours ago

IMF Staff Concludes Visit to Romania

1 day 14 hours ago

Republic of Equatorial Guinea : First Review under the Staff-Monitored Program-Press Release; and Staff Report

1 day 23 hours ago
Country Report No. 18/310

China’s Rebalancing: Recent Progress, Prospects and Policies

1 day 23 hours ago
Working Paper No. 18/243

The Kingdom of the Netherlands—Curaçao and Sint Maarten: Staff Concluding Statement of the 2018 Article IV Mission

4 days 7 hours ago

IMF Staff Concludes Visit to Guatemala

4 days 7 hours ago

IMF Executive Board Concludes 2018 Article IV Consultation with Chile

4 days 13 hours ago

IMF Staff Concludes Visit to Namibia

4 days 13 hours ago

Dag Detter: Unlocking Public Wealth

4 days 23 hours ago

Equilibrium Yield Curve, the Phillips Curve, and Monetary Policy

4 days 23 hours ago
Working Paper No. 18/242

Chile : Selected Issues Paper

4 days 23 hours ago
Country Report No. 18/312

Chile : 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Chile

4 days 23 hours ago
Country Report No. 18/311

Mexico's Economic Outlook in Five Charts

5 days 6 hours ago

ASEAN and the IMF: Staying on Track with the Sustainable Development Goals

5 days 8 hours ago

Europe's Economic Outlook in Six Charts

5 days 10 hours ago
Europe’s economy continued to expand in the first half of 2018, although at a slower-than-expected pace, specifically in advanced Europe. Driven by domestic demand, economic activity continued to expand in the first half of 2018, the IMF said in its latest health check of Europe’s economy. But the outlook is less favorable, with several forces likely to hamper economic growth.

Europe's Economic Outlook in Six Charts

5 days 10 hours ago
Europe’s economy continued to expand in the first half of 2018, although at a slower-than-expected pace, specifically in advanced Europe. Driven by domestic demand, economic activity continued to expand in the first half of 2018, the IMF said in its latest health check of Europe’s economy. But the outlook is less favorable, with several forces likely to hamper economic growth.

IMF Executive Board Concludes 2018 Article IV Consultation with Mexico

5 days 12 hours ago

Mexico : 2018 Article IV Consultation-Press Release; Staff Report; and Staff Statement

5 days 12 hours ago
Country Report No. 18/307

ASEAN Progress Towards Sustainable Development Goals and The Role of the IMF

5 days 13 hours ago

Blog: When History Rhymes

5 days 15 hours ago

Regional Economic Outlook: Domestic Expansion Running into External Turbulence

5 days 16 hours ago

Mexico : Selected Issues

5 days 23 hours ago
Country Report No. 18/308

Georgia : Technical Assistance Report-Public Investment Management Assessment

5 days 23 hours ago
Country Report No. 18/306

Cambodia : Technical Assistance Report-Tax Administration Modernization Priorities 2019–23

6 days 23 hours ago
Country Report No. 18/305

Jamaica : Fourth Review Under the Stand-By Arrangement, Request for Modification of Performance Criteria, and Monetary Policy Consultation Clause-Press Release; Staff Report; and Statement by the Executive Director for Jamaica

6 days 23 hours ago
Country Report No. 18/304

IMF Staff Completes 2018 Article IV Mission to Republic of Palau

1 week 8 hours ago

Regional Economic Outlook: Middle East and Central Asia November 2018

1 week 8 hours ago

IMF Staff Completes Discussions for the Fifth Review under the Extended Credit Facility (ECF) to Central African Republic and the 2018 Article IV Mission

1 week 11 hours ago

Finland: Staff Concluding Statement of the 2018 Article IV Mission

1 week 16 hours ago

IMF Executive Board Completes Fourth Review under the Stand-By Arrangement for Jamaica

1 week 1 day ago

IMF Reaches Staff-Level Agreement with Mali on Tenth Review under ECF Arrangement

1 week 1 day ago

Three Bridges to a Prosperous Future

1 week 1 day ago

Tax Revenue Mobilization Episodes in Emerging Markets and Low-Income Countries: Lessons from a New Dataset

1 week 4 days ago
Working Paper No. 18/234

Balancing Financial Stability and Housing Affordability: The Case of Canada

1 week 4 days ago
Working Paper No. 18/237

Mongolia : Fifth Review Under the Extended Fund Facility Arrangement and Request for Modification and Waiver of Applicability of Performance Criteria-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Mongolia

1 week 4 days ago
Country Report No. 18/303

The Expansionary Lower Bound: Contractionary Monetary Easing and the Trilemma

1 week 4 days ago
Working Paper No. 18/236

Monetary and Macroprudential Policy Coordination Among Multiple Equilibria

1 week 4 days ago
Working Paper No. 18/235

Transcript of IMF Press Briefing

1 week 5 days ago

IMF Staff Completes 2018 Article IV and First ECF Review Mission to Burkina Faso

1 week 5 days ago

Reflections on International Spillovers and Cooperation

1 week 5 days ago

Blog: Realizing the Potential of the G20 Compact with Africa

1 week 5 days ago

An Algorithmic Crystal Ball: Forecasts-based on Machine Learning

1 week 5 days ago
Working Paper No. 18/230

The Limits of Meritocracy

1 week 5 days ago
Working Paper No. 18/231

Measuring Competitiveness in a World of Global Value Chain

1 week 5 days ago
Working Paper No. 18/229

Indonesia : Technical Assistance Report-Report on Sectoral Financial Accounts and Balance Sheets Technical Assistance Mission

1 week 5 days ago
Country Report No. 18/302

Macro-Fiscal Implications of Climate Change: The Case of Djibouti

1 week 5 days ago
Working Paper No. 18/233

The Labor Market Integration of Migrants in Europe: New Evidence from Micro Data

1 week 5 days ago
Working Paper No. 18/232

IMF Staff Completes 2018 Article IV Consultation Discussions and Review Mission to Senegal

1 week 6 days ago

IMF Executive Board Completes Fifth Review under the Extended Arrangement for Mongolia and Approves US$ 36.22 Million Disbursement

1 week 6 days ago

IMF Team Reaches Staff-Level Agreement on the Fourth Review for Egypt’s Extended Fund Facility

1 week 6 days ago

IMF Staff Team Completes Review Mission to Togo

1 week 6 days ago

IMF Staff Concludes Visit to Nicaragua

1 week 6 days ago

Blog: Chart of the Week: Financial Reform Report Card

1 week 6 days ago

Somalia : Technical Assistance Report-Internal Audit and Accounting Training for the Central Bank of Somalia

1 week 6 days ago
Country Report No. 18/293

The Morning After--The Impact on Collateral Supply After a Major Default

1 week 6 days ago
Working Paper No. 18/228

OECD News - Corruption

2018 OECD Consultation on Fighting Foreign Bribery

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This Working Group on Bribery consultation with the private sector and civil society will focus on topics suggested by the stakeholders themselves and launch the OECD study, 'Foreign Bribery Enforcement: What Happens to the Public Officials on the Receiving End?'.

2018 OECD Consultation on Fighting Foreign Bribery

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This Working Group on Bribery consultation with the private sector and civil society will focus on topics suggested by the stakeholders themselves and launch the OECD study, 'Foreign Bribery Enforcement: What Happens to the Public Officials on the Receiving End?'.

OECD and World Bank call for whole-of-government approach to combating tax evasion and corruption

3 weeks 1 day ago
Countries must step up work to ensure that tax authorities and anti-corruption authorities can effectively co-operate in the fight against tax evasion, bribery, and other forms of corruption, according to a joint OECD/World Bank report.

Mexico must increase foreign bribery enforcement: full implementation of anti-corruption reforms could help

3 weeks 4 days ago
Mexico needs to give more priority to foreign bribery enforcement, having yet to prosecute a case involving the bribery of foreign public officials 19 years after ratifying the OECD Anti-Bribery Convention.

OECD News - Economy

OECD, BSR and Danone launch 3-year initiative to strengthen inclusive growth through public-private collaboration

1 day 16 hours ago
Business and government should work more closely together to reduce inequality and foster inclusive growth. To help achieve this, at the Paris Peace Forum, Gabriela Ramos, OECD Chief of Staff, G7/G20 Sherpa and leader of the OECD’s Inclusive Growth Initiative, and Emmanuel Faber, Chairman & CEO of Danone, launched the Business for Inclusive Growth (B4IG) Platform.

Composite Leading Indicators (CLI), OECD, November 2018

1 day 19 hours ago
CLIs continue to signal easing growth momentum in the OECD area

Growth and economic well-being: second quarter 2018, OECD

5 days 19 hours ago
OECD household income growth slows to 0.3%, lagging behind GDP growth in second quarter of 2018

Consumer Prices, OECD - Updated: 6 November 2018

1 week 19 hours ago
OECD annual inflation stable at 2.9% in September 2018

Consumer Prices, OECD - Updated: 6 November 2018

1 week 19 hours ago
OECD annual inflation stable at 2.9% in September 2018

OECD News - Finance

Launch of the OECD Pensions Outlook 2018

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3 December 2018 - Every two years, the OECD Pensions Outlook provides an analysis of the main policy issues affecting pensions in OECD countries and assesses trends in retirement income systems. It discusses policy initiatives for strengthening pension systems, funded private pension systems in particular.

Conference on the Role of Financial Education and Consumer Protection in Supporting Financial Inclusion in Southeast Asia

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26-27 November 2018, Vientiane, Lao People's Democratic Republic. The conference will provide a forum to discuss best practices on developing financial education and consumer protection in supporting financial inclusion in Lao P.D.R and other Southeast Asian countries.

2018 OECD Workshop on Data Collection for Sustainable Infrastructure – Infrastructure Data Initiative

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15 November 2018, Paris - This Workshop will bring together academics, public stakeholders and industry experts to discuss using blockchain technology to unlock data for AI and financial sustainability and quality benchmarks

2018 Annual Meeting of the OECD CVM Centre on Financial Education and Literacy in Latin America and the Caribbean

1 day 18 hours ago
12-13 November 2018, São Paulo, Brazil - A series of events addressing the most recent trends, opportunities and challenges in financial education will be co-hosted by the OECD and CVM Brazil.

OECD Committee on Financial Markets Elects New Chair

2 weeks 4 days ago
26/10/2018 - The OECD Committee on Financial Markets has confirmed the appointment of Aerdt Houben, Director of the Financial Markets Division at De Nederlandsche Bank, as its Chair.

2018 OECD/IOPS Global Forum on Private Pensions

2 weeks 5 days ago
25-26 October 2018, Beijing, China - The 2018 Global Forum was entitled “Designing pension systems to cope with the ageing challenge” and was jointly organised by the OECD, the International Organisation of Pension Supervisors (IOPS) and the China Banking and Insurance Regulatory Commission (CBIRC), China.

Pension Markets in Focus

3 weeks 4 days ago
OECD report on trends in the financial performance of private pension plans. Covering 87 countries, it assesses the amount of assets in funded and private pension plans, describes the way these assets are invested in financial markets, and looks at how investments have performed, both in the past year and over the past decade.

The World Bank - Blog

Paris Peace Forum - Preventing conflict in 2018, 100 years after the Armistice

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Paris Peace Forum. © Ibrahim Ajaja/World Bank

[[tweetable]]This week marks 100 years since the end of World War I. One hundred years since an armistice encouraged battling sides to lay down their arms and usher in peace.[[/tweetable]] Many of us – the lucky ones – still enjoy peace. We go to work, to school, to the playground, to shops and restaurants all with a sense of safety and security. But that is not the case for many people around the world. Wars still rage in Syria, Yemen and Iraq, and violent conflict mars communities in every region of the globe.
 
Also this week, world leaders are in France – site of the 1918 Armistice signing – for the Paris Peace Forum. They are marking the occasion, but also working to address the international tensions that cause unrest in our day and age, and the initiatives aimed at preventing them: cooperation to fight climate change, resource scarcity, globalization and technological disruptions; institutions to channel power rivalries and administer global public goods; justice to assuage grievances and frustration, regulation to address inequalities and abuses of power; and peacebuilding and security.
 
I participated in the Forum yesterday with other colleagues from the World Bank and highlighted the plight of one group for whom conflict and fragility make worse an already tenuous situation: the world’s poor.

[[tweetable]]By 2030, as many as 50 percent of the world’s poor people could live in countries affected by fragility, conflict, and violence and the number of refugees and internally displaced persons is at the highest since World War II.[[/tweetable]] In an increasingly inter-connected world, where events that originate in one part of the globe can spread rapidly to others, these challenges threaten global efforts to reduce poverty and boost shared prosperity. 
 
To address the challenges – in poor countries and increasingly in affected middle-income countries – those of us working on development, humanitarian and security solutions to fragility, conflict and violence are developing new approaches, including pivoting to prevention; deploying new tools, including through new financing instruments; and leveraging new partnerships to deliver more effectively in countries and communities. What does this look like?
 
We know from our flagship report with the UN, Pathways for Peace, that for every $1 invested in prevention, about $16 are saved down the road. Therefore, by focusing on prevention we can direct more of our resources to sustainable development outcomes, rather than continuously responding to emergencies. Today, we are operationalizing the findings from Pathways for Peace and investing more in addressing global risks – conflicts, natural disasters, famines and more – before they turn into full-blown crises.

We are using new tools to do this. One example is the Risk Mitigation Regime (RMR), which offers $1 billion in financing from the World Bank’s International Development Association (IDA) for programs that specifically target the factors that risk fueling conflict.
 
In Niger, for example, we are leveraging RMR financing to strengthen economic opportunities for youth and women in conflict-affected regions. Working closely with the government, we are improving rural transport infrastructure and sustaining road access for farming communities to markets. Through this project we aim to support the government in addressing regional imbalances and grievances around service delivery, promoting the peaceful management of resources, and improving the livelihoods of marginalized groups – all factors that can mean the difference between war and peace. In addition to Niger, we are leveraging RMR financing in Guinea, Nepal and Tajikistan.

Underpinning this new approach to conflict prevention and the tools we are using to make it work is the firm conviction that partnerships are essential and must be the new normal if we are to prevent conflict, build resilience, and sustain peace in an increasingly complex world. We are therefore reducing fragmentation and working closely with peacebuilding, humanitarian and security actors in countries like the Democratic Republic of Congo (DRC) to deepen partnerships with organizations that are closest to the ground and can carry out conflict-sensitive programming.

In DRC, we are preparing to scale-up our engagement in conflict-affected North Kivu by building partnerships with the UN, and notably the MONUSCO peacekeeping mission, to help provide the logistics and security necessary for us to carry-out development support in the most challenging settings.

And work is ongoing in many other countries. Two World Bank-financed initiatives are being recognized during the Paris Forum: The Londo ('Stand-Up') Project in Central African Republic is providing temporary employment to vulnerable people throughout the country. And a report published in 2017, Securing Development: Public Finance and the Security Sector, developed by the World Bank in partnership with UNDPKO, proposes a framework for improved public expenditure management and policy to allow finance agencies and security and military officials to work together better on budget planning, public financial management, financial accountability, and oversight of defense, police, and criminal justice systems.

[[tweetable]]One hundred years after the end of World War I, despite much progress, the world still suffers from conflict.[[/tweetable]] We have a collective responsibility to promote peace and prosperity by committing to support our fellow citizens – increasingly the world’s poor – still caught in the web of fragility. At the World Bank, we are developing new initiatives, tools and partnerships to address the challenge. [[tweetable]]The Paris Peace Forum is a reminder, not just of the immense need, but that there is a global coalition of countries, organizations, businesses and citizens also working together in new ways to promote lasting peace.[[/tweetable]] 

Empirical Evidence Shows Migrants in South Africa Create Jobs

6 hours 51 min ago
Photo: Steven doRemedios


The Triple Threat, as it is referred to in South African policy circles, remains a key policy priority for the government; namely, inequality, poverty and unemployment. The latter – unemployment – was 27.2% in the second quarter of 2018 and at such high rates, it is a critical development issue in contemporary South Africa.

Access to the South African labor market by international migrants, asylum-seekers and refugees is a contentious issue in the presence of high levels of internal migration, where local migrants are also seeking better livelihoods. Notably, social cohesion in South Africa, as is the case in other countries, is influenced by the widespread belief that migrants have a negative impact on the economy. The implications of migration on local jobs, is therefore, highly contested. However, robust economic analysis may provide the necessary impetus for policy-makers to develop interventions that create positive jobs outcomes for migrants and locals alike.

A newly published World Bank study, Mixed Migration, Forced Displacement and Job Outcomes in South Africa, seeks to better understand the implications migration has for labor market outcomes in South Africa and finds that one immigrant worker generates approximately two jobs for South Africans.

Post-Apartheid Immigration and Trends

South Africa has long been a major immigration hub in the region hosting migrants, refugees and asylum-seekers from vari­ous African countries as well as people from outside of the con­tinent (see figure below). After 1990, international immigration in South Africa increased rapidly and underwent a major transforma­tion, shifting from collective mining labor agreements to largely informal and individual immigration. In the 1990s, South Africa hosted refugees, although fewer than many other African countries. There were two major inflows of immigrants to South Africa: the Mozambican refugees from 1984 and Zimbabweans in 2000s. Mozambican refugees were officially granted that status after an agreement between the UN Refugee Agency (UNHCR) and the South African government from 1993. Notwithstanding this protection, many Mozambicans were deported from the country as ‘illegal immigrants’ and only a few were able to stay and legalize their status. Despite, the emergence of South Africa as a major immigration hub, immigrants’ share in the population has not significantly increased over 1996-2011, rising from 3.3% to nearly 4.0% over the period.

The study’s contribution to immigration and jobs literature in South Africa

The study adds to a small body of literature that covers the impact of immigration on labor market outcomes in South Africa. Previous papers have generally found no impact on total income but negative effects on local employment. Compared to earlier research, this study makes several contributions including, use of industry-province level data; use of the instrumental variable (IV) approach to address endogeneity issues; the analysis includes all immigrants – not only men, as has been the case in some previous studies. The latter is especially significant given the substantial share (24%) of female employment among immigrants.

Further, the study estimates focus on the relationship between all locals and immigrants, and not on specific groups based on education and experience within each category that might capture partial effects. Finally, the study uses wage data from the Post-Apartheid Labor Market Series (PALMS) harmonized survey, instead of relying on total income from the Census that includes both labor and non-labor earnings as in other studies.

Understanding the results

The study estimates the impact of immigration on labor market outcomes such as employ­ment and wages in South Africa between 1996 and 2011 and posits several explanations for its results. One of the explanations is the rate of self-employment among immigrants, which accounted for 25%  of total jobs for immigrants, compared to 16%  for locals.

These statistics reveal that immigrants are more likely to appear in entrepreneurial roles than locals. The study notes that because immigrants tend to have lower levels of risk-aversion, they are more likely to start new businesses or engage robustly in the informal economy. This engagement in entrepreneurial activities is likely to pro­mote economic growth by enhancing, for instance, the supply of small retail establishments. If those businesses are success­ful, they also will provide multiplier effects which may spread beyond the immediate family. Other important explanations for these results can be found in the study.

An opportunity for policy dialogue and further research

As one of the most urbanized countries in Africa, self-employment in major towns and cities is an important way in which access to livelihoods is secured by migrants and locals alike. These findings on the role of self-employment (among other reasons) in explaining the positive impact immigrants have is noteworthy for policy-makers and development actors in South Africa.

Crucially, the study highlights that these results provide an important foundation upon which further large-scale research could be developed. Such research could potentially complicate and enable a richer understanding for how migrants, refugees and asylum-seekers engage with the South African economy and the economic relationships they share with locals. The study concludes by suggesting that research, may for instance, consider how circular migration, informality, undoc­umented movements and gendered dimensions have implica­tions for economic relationships.

Debunking myths about migrants, refugees, and jobs in South Africa

9 hours 42 min ago
#s7video_div.s7videoviewer{ width:100%; height:auto; }   var s7videoviewer = new s7viewers.VideoViewer({ "containerId" : "s7video_div", "params" : { "serverurl" : "https://worldbank-h.assetsadobe.com/is/image", "contenturl" : "https://www.worldbank.org//", "config" : "/etc/dam/presets/viewer/WB-Standard-Player", "config2": "/etc/dam/presets/analytics", "videoserverurl": "https://gateway-na.assetsadobe.com/DMGateway/public/worldbank", "posterimage": "/content/dam/videos/ecrgp/2018/nov/VLOG%20on%20South%20Africa%20Migration.mp4", "asset" : "/content/dam/videos/ecrgp/2018/nov/VLOG on South Africa Migration.mp4" } }).init(); As one of the most urbanized African countries and the largest economy in Southern Africa, South Africa is a popular and important destination for migrants and refugees from all over Africa, and increasingly, from parts of Asia.

South Africa has over 4 million migrants, including over 300,000 refugees and asylum-seekers. The latest South African census data estimates that migrants account for over 4% of the country’s population. [[tweetable]]Contrary to what some may think, immigrant workers have had a positive impact on local employment and wages in South Africa[[/tweetable]], according to a new World Bank study.

The study, titled Mixed Migration, Forced Displacement and Job Outcomes in South Africa, finds that [[tweetable]]one immigrant worker generated approximately two jobs for local residents in South Africa between 1996 and 2011. [[/tweetable]]
About this series
More blog posts

As you will learn from the video, evidence shows that immigrants and locals are not perfect substitutes in South Africa. As such, immigrants and locals are likely to specialize in performing different and sometimes complementary tasks, which can lead to overall productivity gains and positive impacts on local employment and wages. Further, 25% of immigrants are self-employed, possibly reflecting the demand for the diverse set of entrepreneurial skills they bring, which can result in large multiplier effects.

[[tweetable]]These findings help debunk existing myths on migration and local jobs in South Africa.[[/tweetable]] They also help redirect policy conversations and considerations to enhancing development opportuni­ties for local residents, migrants, refugees, and the wider economy – while being cognizant of perceptions and lived experiences of the local host communities.  

Watch the video to learn more. Click here to download the full study.

READ MORE

The urban dimensions of mixed migration and forced displacement in South Africa

11 hours 16 min ago
Braamfontein Railway Yards, Johannesburg © demerzel21


Across the world, the movement of people is an increasingly urban phenomenon. As such, researchers are beginning to recognize that the developmental consequences of migration are often felt most acutely at the municipal or provincial level. A newly published study Mixed Migration, Forced Displacement and Job Outcomes in South Africa, adds to the growing body of research on movement to cities by highlighting the important urban dimensions of these movements into and within South Africa.


The study examines the intermingled movement of refugees, asylum-seekers, as well as those who fall outside established protection categories, such as vulnerable economic migrants, to South Africa. In the global governance of migration, a basic distinction is made between those who choose to move (economic migrants) and those who are forced to (asylum-seekers/refugees). In practice however, this distinction is not always clear. The study uses the term ‘mixed migration’ to highlight how in Southern Africa and elsewhere, asylum-seekers and migrants sometimes travel together and are motivated by multiple, complex, reasons.

As the largest economy in Southern Africa, South Africa is a destination for migrants and refugees from all over Africa, and even parts of Asia. South Africa is also one of the most heavily urbanized countries in Africa. Drawn by the economic dynamism of cities like Johannesburg and Cape Town, internal migrants, economic migrants, refugees and asylum-seekers alike, overwhelmingly move to these urban and peri-urban spaces in search of protection, livelihoods as well as access to services, such as housing, education and healthcare. These places, whether they are townships or parts of central Johannesburg, are marked by high levels of inequality, poverty and joblessness. Residents - nationals and non-nationals alike - lead precarious lives and face serious socio-economic hardships.

A history of restrictions on movement
South Africa’s contemporary urban context and mobility challenges are closely tied to its history of spatial and racialized exclusion. Through the establishment of various laws, the Apartheid state heavily controlled the movements of the black majority. Townships in South Africa were designed to act as labor reservoirs for cities and for industries in or around cities. Limited transport infrastructure was created and was only intended to carry workers to their places of employment or other centers of economic activity, and back. This has had direct implications for 1) settlement patterns in South African townships – which are often far from, and inadequately connected to, economic centers; 2) the provision of public services, especially the availability and quality of housing – issues that continue to be key drivers of periodic local community protests; and 3) conceptions about human mobility, particularly who has the right to lay claim to certain urban spaces and associated entitlements (such as municipal services) - a conception that is notably consequential for social cohesion.

Mobility and vulnerability in contemporary South Africa
In South Africa today, these legacies of spatialized inequality continue to influence how and where people move (especially into and around urban spaces such as Johannesburg), where they settle, and how migration is governed. Cities like Johannesburg are faced with high rates of unemployment, poor service delivery, poverty, overcrowding, high crime rates, and drug and alcohol abuse. It is in these contexts that migrants seek out their livelihoods, struggle to access services such as housing, medical care and education for themselves and their families and interact with state authorities. These circumstances, however, are not exclusively faced by international migrants. In some instances, South African migrants from other provinces also face similar challenges. In this sense, development actors often find it impossible to differentiate between the vulnerabilities that internal migrants, refugees and locals face in urban areas.

Major Policy implications
Prioritising the role of local authorities in the governance of migration: In South Africa, migration has generally been understood as falling within the domain of national policymakers. However, as South Africa continues to face increasing population mobility and rising urbanization of refugee/internal migrant populations, effectively assisting migrants and refugees will require (1) a re-examination of the role that provincial and municipal authorities could play in the governance of migration, and (2) creation of pragmatic incentives for these sub-national actors to work with migrants (including internal ones) and refugees. In particular, area-based programs that address the most pressing development challenges such as access to health, education and livelihoods, should be prioritized. Further, sustained efforts to build trust between communities and local authorities should underlie such programming.  

Improving access to services for both hosts and migrants/refugees: In addition to policies and practices on refugee protection, the livelihoods of refugees and asylum-seekers are significantly shaped by other policy sectors such as housing, health-care, education. It is also these policy areas that most intersect with the lives of poor host communities. Development actors, such as the South African government, should therefore focus on the ways in which migration and displacement intersect with access to urban services and livelihoods for communities. Improvements in the quality of social services, in a context where international and internal migrants, refugees and asylum-seekers live among one another and face similar service challenges, will not only benefit external migrants but also internal migrants and host communities. 

Could private job services help address the unemployment challenge in Bosnia and Herzegovina?

11 hours 37 min ago
Bosnia and Herzegovina: private and public employment services Despite recent stability in economic growth in Bosnia and Herzegovina, with 3.2% growth projected for 2018, the country continues to experience an elevated level of unemployment, especially among young people.

The country’s unemployment rate is 18.4% overall, and 38.8% among youth aged 15 to 24 years. Furthermore, unemployment among young women, at 45.5%, is far more severe than among young men, at 35.4%.

To help address these alarming statistics, the governments in Bosnia and Herzegovina are investing substantial resources in promoting employment opportunities. The Federal Employment Institute in the Federation of Bosnia and Herzegovina (FBH) and the employment bureaus in Republika Srpska (RS) offer a wide arrange of direct services to employers and jobseekers, and spent a total of which 28 million BAM ($16.6 million) in FBH and 8.7 million BAM ($5.2 million) in RS in 2018.

These services comprise mostly job intermediation, such as counseling or job matching, and financial incentives to employers when they hire registered unemployed people. In FBH, financial incentives have supported about 18,000 jobseekers and at least 4,000 employers per year. But given the magnitude and persistence of the unemployment problem, there must be other, more effective approaches that could be deployed to complement ongoing practices.

One such approach is outsourcing selected employment services to private job brokers.

Many high-income countries such as the UK, USA, Denmark, Sweden, Germany, and Australia now rely on private employment agencies to provide services to jobseekers. This policy option has not yet been used in Bosnia and Herzegovina—or indeed in any other Western Balkan country.

Private provision of employment services was introduced in the UK in late 1970s and throughout the 1980s as a response to overburdened public employment services that couldn’t reduce long-term unemployment by offering traditional employment services.

Public employment services (PES) can outsource specific labor market policies to private agencies. PES can contract out technical training (from vocational training schools), technical training in combination with on-the-job training (requesting the partnership of education institutions and employers), or simply job intermediation. Such services are usually provided to specific groups such as youth, long-term unemployed, or women, for example. Hence, private service providers are required to offer solutions that are tailored to the needs of a specific group, as well as the needs of employers.

There are several reasons why outsourcing certain services to private employer service agencies could help tackle the unemployment challenge in Bosnia and Herzegovina.

First of all, public provision of services is seriously constrained. Employment bureaus in both entities are overwhelmed – the ratio of jobseekers to counselors is 1,200 to one, while for private job broker firms varies between 80 and 120 cases. The country should therefore shrink the public sector and reallocate staff to positions where they could be more productive and effective.

Secondly, Bosnia and Herzegovina has an incipient market of job intermediation. There are at least four active firms that provide job intermediation, and which serve the high-end of the labor market – for example, foreign firms seeking to establish new production plants, large firms which outsource (some of) their HR services, and specialized hiring of high-skilled workers.

However, these firms are not yet serving the low-end of the labor market: low-skilled and long-term unemployed who struggle to enter or come back into labor market. The main reason is that it is not considered profitable and firms have not been offered the right incentives to take on this challenge.

Thirdly, public employment services need to cover a wider range of issues and provide support more quickly. Out-migration of youth is of increasing concern, as well as the increasing number of refugees. As technology advances and automation continues to spread worldwide, many workers in Bosnia and Herzegovina will need to retrain. In this context, PES that can quickly react to changing needs and partner with private providers can be critical to success.

The World Bank Group and the Swedish International Development Cooperation Agency (SIDA) have partnered together with the objective of promoting cooperation between public and private employment agencies – the goal is to maximize the impact of existing resources to create more effective and sustainable solutions to the challenge of unemployment.

Over the coming months, the Bank and SIDA will work closely with public and private employment providers to provide employment services to youth aged 18 to 30. Young men and women who have completed secondary education will be invited to receive counseling and job matching services by private employment services providers. Through this pilot activity, the organizations will learn if contracting out is an effective policy option in Bosnia and Herzegovina. Stay tuned to find out more, as we share the progress of this pilot activity.

An update on Bhutan’s economy

13 hours 35 min ago
Accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development. Credit: World Bank

[[tweetable]]Bhutan is one of the smallest, but fastest-growing economies in the world.[[/tweetable]]
 
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 [[tweetable]]Bhutan maintained robust growth and macroeconomic stability in the first half of 2018.  [[/tweetable]]

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).

However, since the Bhutanese ngultrum is fully pegged to the Indian rupee, the depreciation is mainly due to the depreciation of the Indian rupee.
 
And since India accounts for more than 80 percent of the country’s international trade, the price developments of these countries are parallel.
 
Therefore, the real effective exchange rate has been stable. External debt remained high but had not increased significantly.  The 2018 World Bank-IMF Joint Debt Sustainability Analysis concluded that the risk of debt distress was moderate.  
 
On the downside, [[tweetable]]the Bhutanese economy faces a few risks such as further delays in hydropower construction, scarce donor financing, policy uncertainty, and adverse weather events.[[/tweetable]]
 
To manage these risks, accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development.
 
This is the main message of the recently launched Bhutan Development Update November 2018
 
The first tasks of the new government are to revise the FY2018/19 budget (an interim budget is currently in place) and endorse the 12th Five-Year Plan (FYP).
 
Our baseline scenario – in other words, without the materialization of the downside risks – is that the economy would grow 6 percent a year over the medium term, almost the same as the annual average growth rate in the past five years.
 
The ongoing hydropower projects and the services sector, especially tourism, are likely to support growth.
 
With the completion of one of the major hydropower projects in late 2018, exports are expected to increase in the next fiscal year, while imports are expected to ease decline due to lower capital goods imports for hydropower projects, as well as overall lower public investment, thus contributing to narrowing the current account deficit.

In addition, external debt as a share of to GDP is also expected to decline, due to elevated repayments and faster GDP growth.
 
However, as the hydropower projects contribute little to job creation, the direct impact of growth on poverty reduction is expected to be modest.
 
Due to low-productivity growth in agricultural activities (which still accounts for nearly 60 percent of employment) and the limited private sector development, the transition out of farming into more productive jobs will likely happen at a slow pace.

 

Helping poor women grow their businesses with mobile savings, training, and something more?

13 hours 53 min ago

Growing a business is not easy, and for women firm owners the challenges can be acute, especially when they are poor and run subsistence level firms. In developing countries, 22 percent of women discontinue their established businesses due to a lack of funds, and women are more likely than men to report exiting their businesses over finance problems, according to the Global Entrepreneurship Monitor. Meanwhile, personal savings are a crucial source of entrepreneurial financing, and nearly 95 percent of entrepreneurs globally state that they used their own funds to start or scale up their businesses. Women, however, face unique constraints in accumulating savings to invest in growing their firms.
 

Photo credit: Marijo Silva and the “She Counts” global platform.

Women entrepreneurs are highly underserved by traditional financial institutions. They are often deterred from accessing traditional saving accounts by high transaction costs and implicit or explicit biases against female customers. In turn, they are sidelined to informal, less secure saving channels, such as cash savings, which they may divert to other uses because they face higher family and social pressures than men to share their cash. If women do accrue some savings despite these obstacles, another challenge to firm profitability and growth can be gaining the necessary business skills and financial literacy to scale their businesses.

Two recent randomized control trials (RCTs), one in Tanzania, the other in Indonesia, tested the impact of two interventions—separately and together—to address these constraints: a mobile savings promotion program to increase women’s access to and use of mobile savings accounts, and a business training program to improve financial literacy and good business practices.

In Tanzania, the savings intervention focused on easing demand-side constraints in women’s access to mobile savings products. It involved a training session for women microentrepreneurs on M-Pawa, a mobile savings account linked to M-Pesa that also gives customers access to microloans. Participants in the training created mobile savings accounts, set savings goals, and set up weekly SMS reminders to save. The business training intervention, designed by TechnoServe, offered 12 weeks of weekly group sessions that taught women standard good business practices, how to mobilize finance, the importance of personal effectiveness and perseverance, and the benefits of gender equality in society. An interactive mobile phone learning platform complemented the training.

In Indonesia, the savings intervention took a different approach, targeting supply-side constraints preventing women’s access to mobile savings accounts. It provided local bank agents with either ‘high’ or ‘low’ financial incentives for signing up new customers and trained all agents on the mobile savings product and the importance of targeting female customers. The business training intervention, designed and implemented by Mercy Corps Indonesia, provided female entrepreneurs with an average 3-hour session on financial literacy and mobile savings, complemented by three group mentoring sessions to reinforce the training.

The studies found that in both Tanzania and Indonesia the promotion of mobile savings worked (women increased uptake of mobile savings significantly) and, when combined with business training, had significant impacts on intermediate business and individual outcomes. In Tanzania, women who participated in the mobile savings intervention saved double using M-Pawa, were 14 percentage points more likely to receive a mobile loan, were 4 percentage points more likely to grow their business activities by operating a second business, and reported an increase in their household decision-making power, compared to the control group. Meanwhile, women who received mobile savings promotion and business training saved almost four times more on M-Pawa and were 16 percentage points more likely to obtain a loan compared to the control group.  In addition, they increased their good business practices by six percentage points, worked two hours more a week, and increased their capital investments by 23 percent, compared to the women in the mobile savings intervention alone. These effects were observed 15 months after the training ended. Notably, the Tanzania results showed that women’s total savings balances did not actually increase, but rather, firm owners appeared to have shifted savings and loans from other sources (such as cash savings) to the more secure mobile platform.

In Indonesia, women served by high-incentive agents promoting mobile savings increased their total savings by seven percent, whereas women receiving business training increased their total savings by 11 percent, compared to the control group of women served by an agent promoting mobile savings under low incentives—although neither of these increases was statistically significant. Women in both interventions independently also increased their household assets significantly --by 24 percent for women in the high incentive agent group and 20 percent for women in the business training group.  Women served by better paid bank agents and receiving training and mentoring increased their total savings significantly by 24 percent, increased their mobile savings balance by a statistically significant four percentage points, and reported being significantly more empowered in household decision-making. For a majority of the women these effects were observed a month or less after the last mentoring session, and, in this short-term interval neither intervention (independently or combined) influenced women’s business outcomes. The question remains of whether women’s increased savings will be invested in their businesses in the long run.

Together, these studies illustrate how easing supply-side constraints, by directly promoting mobile savings and by having more highly motivated, better paid agents do this promotion, contribute to boosting women’s mobile savings, and how easing demand-side constraints through business and financial literacy training can further amplify these effects on savings. The evidence also suggests that savings and mobile savings increase women’s household decision-making power. Yet, these intermediate effects are still not enough to increase women’s firm profitability and business performance in the short run. Is it only a question of time, and further accumulation of capital from savings (and loans) will trigger this business growth?  Alternatively, are there additional constraints in the business environment where these women-owned firms operate that only more capital-intensive interventions will help overcome?  Follow-up surveys in Tanzania and Indonesia should provide additional insights on these questions.

For more information on these studies, see the project website, as well as the following papers: Short-Term Impacts of Improved Access to Mobile Savings, with and without Business Training: Experimental Evidence from Tanzania, Unequal Ventures: Results from a Baseline Study of Gender and Entrepreneurship in East Java, Indonesia, and Unequal Ventures Update: Empowering Women Entrepreneurs in East Java, Indonesia.

International Debt Statistics 2019: External debt stocks at end-2017 stood at over $7 trillion

14 hours 25 min ago
The 2019 edition of International Debt Statistics (IDS) has just been published.
International Debt Statistics 2019 presents statistics and analysis on the external debt and financial flows (debt and equity) for the world's economies for 2015. This publication provides more than 200 time series indicators from 1970 to 2017 for most reporting countries. To access the report and related products you can:  
This year's edition is released just 10 months after the 2017 reference period, making comprehensive debt statistics available faster than ever before. It presents comprehensive stock and flow data for individual countries and for regional and analytical groupings. 

In addition to the data published in multiple formats online, IDS includes a concise analysis of the global debt landscape, which will be expanded on in a series of Debt Bulletin over the next year.

These data are produced as part of the World Bank's own work to monitor the creditworthiness of its clients and are widely used by others for analytical and operational purposes. Recurrent debt crises, including the global financial crisis of 2008, highlight the importance of measuring and monitoring external debt stocks and flows, and managing them sustainably. Here are few highlights from the analysis presented in IDS 2019:

Net financial inflows (borrowing and equity) to low- and middle-income countries rose 61 percent in 2017 to the highest level in three years, driven by a rebound in net debt inflows.

Net financial flows climbed to $1.1 trillion in 2017, a level last seen in 2013. The rebound in aggregate net financial flows was driven by net borrowing which rose to $607 billion in 2017 from $181 billion in 2016, surpassing net equity inflows for the first time since 2013.  A sharp rise in both long-term and short-term debt inflows contributed to the increase. Foreign direct equity investment (FDI) inflows, long considered the most stable and resilient component of otherwise volatile financial flows, contracted for the second consecutive year, falling a further 3 percent in 2017.  In contrast, portfolio equity inflows rose to $57 billion, an increase of 29 percent over 2016.

if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["EbqTS"]={},window.datawrapper["EbqTS"].embedDeltas={"100":612,"200":531,"300":477,"400":450,"500":450,"700":423,"800":423,"900":423,"1000":423},window.datawrapper["EbqTS"].iframe=document.getElementById("datawrapper-chart-EbqTS"),window.datawrapper["EbqTS"].iframe.style.height=window.datawrapper["EbqTS"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["EbqTS"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("EbqTS"==b)window.datawrapper["EbqTS"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); The total external debt of low- and middle-income countries rose 10 percent in 2017 to $7.1 trillion, a faster pace of debt accumulation than the 4 percent increase in 2016.  
Regional level trends in external debt in 2017 accumulation varied. Countries in sub-Saharan Africa accumulated external debt at a faster pace than low- and middle-income countries in other regions in 2017: the combined external debt stock rose 15.5 percent from the previous year to $535 billion.  Much of this increase was driven by a sharp rise in borrowing by two of the region's largest economies, Nigeria and South Africa, where the external debt stock rose 29 percent and 21 percent respectively.

South Asian economies expanded external debt stocks by 13.3 percent on average, led by Bangladesh (23 percent) and Pakistan (17 percent).  The Middle East and North Africa region saw external debt stocks rise 11.7 percent as a 23 percent rise in the external debt stock of Egypt in 2017 was offset by a 5 percent increase in Lebanon.  Countries in the East Asia and Pacific region other than China increased external debt stocks by an average of 9.3 percent. External debt stocks rose 2.5 percent in Europe and Central Asia and in Latin America and the Caribbean in 2017.

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Public sector entities in the world's poorest countries borrowed externally on a large scale in 2017 despite rising concerns about debt sustainability. New loan commitments to the public sector in IDA only countries totaled $43 billion. While official creditors continue to account for the largest share (around 75 percent) of long-term external debt stocks, borrowing from private creditors is the fastest growing component.  External obligations to private creditors rose to $83 billion at end 2017, equivalent to 26 percent of long-term external debt. Multilateral creditors continued to be the largest creditor group, however their share of long-term external debt declined to 43 percent at end 2017, from 53 percent in 2008. Of the 59 IDA-only countries, 12 accounted for 65 percent of external debt stock at end 2017.  Bangladesh was the largest IDA-only borrower with an external debt stock of $47.2 billion at end 2017, followed by Ethiopia ($26 billion), Ghana ($22 billion) and Sudan, $21.7 billion.  

if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["RrC3k"]={},window.datawrapper["RrC3k"].embedDeltas={"100":469,"200":391,"300":391,"400":374,"500":374,"700":374,"800":374,"900":374,"1000":374},window.datawrapper["RrC3k"].iframe=document.getElementById("datawrapper-chart-RrC3k"),window.datawrapper["RrC3k"].iframe.style.height=window.datawrapper["RrC3k"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["RrC3k"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("RrC3k"==b)window.datawrapper["RrC3k"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); You can look forward to more IDS 2019 content here on the Data Blog over the coming months, and on @worldbankdata on Twitter. If you have any questions related to IDS or our other data products, please visit our Data Helpdesk.

 

Can Wealth Taxation Work in Developing Countries? Guest post by Juliana Londoño-Vélez

14 hours 59 min ago

This is the first in this year's series of posts by PhD students on the job market.

Developed countries have recently begun considering wealth taxes to raise revenue and curb rising inequality. Should developing countries follow suit? On the one hand, developing countries are often afflicted by acute income and wealth inequality (Alvaredo et al., 2018), and could thus benefit from a more progressive tax system. On the other hand, the question remains whether governments can enforce wealth taxes on an elite that have a vast arsenal of tools to avoid and evade taxes altogether.

My job market paper explores individual responses to personal wealth taxes and enforcement policies in Colombia. Colombia provides a unique opportunity to study these issues thanks to its extensive administrative tax microdata on the assets and debts of wealthy individuals, its numerous tax policy changes since 2002, and its recent enforcement efforts to improve compliance among the rich.

Our data covers all income and wealth tax filers between 1993 and 2016. Critically, Colombian income taxpayers annually report their (taxable and non-taxable) wealth regardless of whether they owe wealth taxes. For example, end-of-year wealth in bank deposits, portfolio securities, real estate, vehicles, inventories, and debts are reported to the taxman. We match our tax records with the microdata from the “Panama Papers,” that is, the information leaked from Mossack Fonseca, one of the world’s five largest wholesalers of offshore secrecy at the time of the leak. This enables us to observe offshore sheltering in Colombia’s most relevant tax havens.

We first study responses to wealth taxes, exploiting quasi-experimental variation introduced by tax reforms and discontinuities in the wealth tax schedule. For instance, in 2010, a reform broadened the wealth tax base by lowering the exemption threshold from 3 billion pesos (US $1,562,490) to 1 billion pesos (US $520,830), thus levying individuals previously exempted from paying this tax. In addition, the schedule assigned each bracket of net worth an average tax rate, creating jumps in tax liability at bracket cutoffs. A taxpayer reporting 999.999 million pesos in wealth in 2010 was exempted from the wealth tax, while a taxpayer reporting an additional peso owed 1% of all taxable net wealth, i.e., a tax bill of US $5,208. If individuals did not respond to the wealth tax, reported wealth would be distributed smoothly around this threshold. If, instead, individuals avoided the jump in tax liability, there would be bunching in reported wealth below it; the degree of bunching indicating the responsiveness of reported wealth to the tax (see Saez, 2010; Kleven & Waseem, 2013).

We find large and immediate responses to wealth taxation as well as tax changes. This provides clear evidence that individuals respond to the incentives created by tax policies (see Figure 1). In our main analysis, the marginal “buncher” would have reported 21% more wealth in the absence of the wealth tax. Our estimated elasticity suggests that a 1% increase in (one minus) the wealth tax rate raises reported wealth by 2%. These responses generate revenue losses of up to one-fifth of the mechanical projected revenue.
 
Figure 1: Distribution of Reported Wealth
in 2009 (Before Reform) and 2010 (After Reform)

 
Unlike earnings responses to income taxes, which potentially conflate real and sheltering responses, bunching in the distribution of reported wealth predominantly reflects sheltering. It is difficult for individuals to immediately bunch below the notch points using real responses (e.g., investment) because wealth partly depends on asset prices, which are uncertain and fluctuate throughout the year (Jakobsen et al., 2018). Furthermore, in Colombia there has been limited systematic crosschecking of items reported in the wealth tax return using third-party reported information. This enabled individuals to avoid taxes, as we show, by underreporting the value of assets not subject to third-party reporting and fabricating debt.
 
In addition, wealthy individuals often have access to sophisticated tax sheltering strategies and may reduce their tax burden by offshoring assets to tax havens. Illustrating this point, the Panama Papers reveal offshore entities are used predominantly by very wealthy Colombians: the wealthiest 0.01% of the distribution is 24 times as likely to appear named in the leak than the wealthiest 5%. Further, assets reported to the tax authority significantly drop immediately after an individual incorporates an offshore entity, which is consistent with wealth obfuscation for the purpose of minimizing the tax burden. Not surprisingly, these offshore entities have been used more aggressively since the reintroduction of wealth taxation in Colombia.
 
Can better enforcement recover tax on hidden wealth and crack down on offshore evasion? To answer this question, we evaluate Colombia’s voluntary disclosure scheme, which took place between 2015 and 2017. Similar disclosure schemes have been introduced in many countries, including the United States, to encourage reporting foreign assets and recover tax on offshore investments. Colombia’s scheme awarded tax incentives for disclosing unreported (foreign and domestic) assets and nonexistent debts. Disclosers waived past income and wealth tax liabilities but paid a penalty worth 10–13% of their disclosed wealth, while evaders who did not come forward faced higher fines if caught cheating.
 
Colombia’s program encouraged disclosures worth more than 1.7% of GDP and raised 0.2% of GDP in penalty revenues. People who disclosed under the scheme are among the wealthiest individuals in the country: in all, two-fifths of individuals in the wealthiest 0.01% admitted to prior noncompliance and disclosed hidden wealth. Most hidden wealth had been concealed abroad, reflecting the pervasiveness of offshore tax evasion at the top. The scheme raised tax liability for the wealthiest taxpayers: comparing disclosers and non-disclosers across time, disclosers reported more wealth as well as more capital income from asset ownership three years after their first admission of noncompliance. As a result, they also paid 39% more income taxes relative to non-disclosers, further enhancing tax progressivity in the longer term.
 
Crucially, two events increased the perceived risk of detection and punishment for failing to disclose hidden wealth. First, halfway through the scheme, the Panama Papers news story broke and the names of Mossack Fonseca’s clients were thrust into the public spotlight. The Colombian tax authority reacted by scrutinizing Mossack Fonseca and its clients, contacting taxpayers named in the leak and requesting documentation of their offshore activities and transactions. Three weeks later, the governments of Colombia and Panama announced a tax information exchange agreement between the two countries. We exploit the exogenous timing of the leak and compare outcomes between wealth tax filers named (treated) and not named (control) in the leak before and after it occurred. We find that the Panama Papers leak induced a more than 800% increase in disclosures under the scheme (Figure 2) and an even larger rise in disclosures of foreign assets in particular. Consequently, taxes paid by these individuals more than doubled.
 
Figure 2: The Panama Papers Leak Raised Disclosures of Hidden Wealth

 
Second, in December 2016, Colombia criminalized tax evasion for the first time. Tax evaders could face up to nine years in prison. We find that most participants disclosed hidden wealth six months later, at least in part due to this harsher punishment of tax evasion.
 
Overall, we interpret our findings as evidence that greater enforcement improves wealth tax collection. Wider coverage of third-party reporting, if coupled with systematic cross-validation of reported information and increased scrutiny of high net worth taxpayers, can strengthen enforcement capacity in developing countries. Furthermore, policies to promote financial transparency and encourage foreign asset reporting are key to curb offshore sheltering at the top. Voluntary disclosure schemes help collect new information about offshore assets and income and generate more revenues from wealthy taxpayers. For such programs to be effective in improving compliance in the shorter and longer term, stricter enforcement needs tough noncompliance sanctions and a credible threat of detection, for example, by exploiting the automatic exchange of tax information and whistleblower data. With better enforcement, wealth taxes can complement progressive income taxes to reinforce progressivity and address inequality in contexts where elites are difficult to tax.
 
Juliana Londoño-Vélez is a PhD Candidate in Economics at the University of California, Berkeley.

Poor sanitation is stunting children in Pakistan

1 day 1 hour ago
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


[[tweetable]]More than one in every three children born in Pakistan today is stunted.[[/tweetable]]

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

[[tweetable]]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[[/tweetable]] 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 [[tweetable]]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[[/tweetable]].

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.
 

7-month-old Lata with her mother leaves after a check-up from UNICEF in Village Meghwar Pro Chelhar, Tharparker District, Sindh Province, Pakistan. Credit: UNICEF
Why has progress on all these fronts made virtually no dent in rates of diarrhea and stunting?

In the report, we argue that to reconcile these apparently anomalous facts, we need to refocus attention on why arguments for ending OD were made in the first place.

The intended benefit of ending OD was to ensure the safe removal of fecal waste away from human settlements and waterways, in order to contain the bacterial contamination of water, soil, and food.

The role of E. coli bacteria in diarrhea prevalence has been known for a long time.

Now research has also shown the far more damaging impact of environmental enteropathy (EE), a process by which [[tweetable]]fecal pathogens like E. coli can permanently damage the intestinal villi of young children making it difficult for them to absorb nutrients even during periods when there are no signs of diarrhea. [[/tweetable]]

EE leads to both stunting and a compromised immune system, with lifelong health challenges.

So, what does the available evidence on E. coli contamination in Pakistan tell us?

While there is no systematic testing of water or soil, the Pakistan Council for Research in Water Resources (PCRWR) has been conducting water quality tests in some locations.

These tests almost invariably reveal high levels of E. coli. contamination.

Water tests done as part of a long-term study in rural Punjab and Sindh that is being conducted by me and my co-authors at the World Bank, show that more than one-third of the water samples drawn directly from hand and motorized pumps, as well as from piped water supply systems, in rural Punjab were contaminated with E. coli bacteria.

These numbers are consistent with PCRWR (2011) for Punjab. What is more alarming is that the rate of bacterial contamination rises to 50 percent, when water storage devices within the home are tested. In Sindh, things were much worse.

Close to 60 percent of groundwater was contaminated at the source, with contamination rates rising to 75 percent when water storage devices were tested.

Why is groundwater in the most densely populated areas of rural Pakistan so contaminated?

The answer lies in the way expansion in access to “improved” toilets and water supply has been achieved.

[[tweetable]] There has been almost no public investment in water or sanitation systems in rural Pakistan.[[/tweetable]]

Instead, households have largely self-provided for both, and have done so in the absence of even a basic set of regulatory guidelines.
  Faryal, nutrition assistant measures Arslan mid-upper arm circumference at UNICEF supported nutrition center in Basic Health Unit (BHU) Mahabbat Abad, Mardan District, Khyber-Pakhtunkhwa province, Pakistan. Credit: UNICEF
The result has been devastating, especially in the poorest districts.

[[tweetable]]In rural Sindh, for example, most toilets are of the leaching pit or open drain variety and are built in close proximity to water pumps.[[/tweetable]]

This sets the stage for the substrate contamination of groundwater, especially where the aquifer is shallow.

Open drain toilets further concentrate untreated fecal waste around human settlements and much of the waste flowing in open drains eventually enters surface water systems spreading the contamination.

Fecal waste is also dumped in open trash heaps around villages, spreading more contamination to surface soil. It doesn’t end here.

Untreated wastewater is routinely mixed with ground and surface water for crop irrigation.

This creates further downstream effects, contaminating the food grown and distributed for consumption in the major urban centers of the country, where it is consumed by the rich and the poor alike.

Together this chain of contamination multiplies the channels through which the oral transmission of fecal bacteria can occur—food, flies, fingers, fields, and fluids.

The incidence of diarrhea in Sindh’s largest cities provides clear evidence of this.

[[tweetable]]Even the richest households in cities like Karachi and Hyderabad report diarrhea rates among young children of close to 30 percent.[[/tweetable]]

In fact, as we show in the report, living in proximity to an area with poor quality sanitation provides roughly the same exposure to fecal pathogens as being poor.  

Interestingly, the evidence also shows that areas with the highest levels of diarrhea and stunting engage in roughly similar or better health behaviors than areas with lower levels.

If anything, [[tweetable]]stunting, diarrhea and other types of morbidity could well have increased in Pakistan, were it not for the decline in poverty and improvements in diet and primary health care. [[/tweetable]] 

This is not to suggest that these factors do not need attention. They do! The problem is one of squarely confronting what is first order.

Dietary, curative and behavioral improvements can serve as a temporary bulwark at best, unless the total fecal burden in the environment is reduced, the treatment of water is prioritized and the use of untreated wastewater for crop irrigation is controlled.
 

Thinking and working differently to improve water security and safely managed sanitation in Africa

1 day 6 hours ago
How can we think and work differently to improve the outcomes of investments in water supply, sanitation, and hygiene – and particularly for people living in poverty?
 
This was the big question we shared with governments, regional institutions, international partners, the private sector, the scientific community, civil society, and the media at the recent 7th Africa Water Week in Libreville, Gabon. AWW is convened by the African Ministers Council on Water (AMCOW) in conjunction with the African Union Commission and organized with other development partners. The event brings together stakeholders to collectively debate and seek solutions to Africa’s most challenging water and sanitation issues.


 
At Africa Water Week, I had the opportunity to present the World Bank’s Water Supply, Sanitation, and Hygiene Poverty Diagnostic Initiative (WASH PD) at the Country Focus Day during the High Level Ministerial Dialogue on “Linkage between WASH and Poverty”. This initiative is just one example of how the World Bank and our clients are thinking and working differently based on evidence gathered from across the world. Funded by the Global Water Security & Sanitation Partnership (GWSP), the initiative spans 18 countries ranging from fragile and conflict-affected states to middle-income countries, and set out to answer some key questions: 
  • Who are the people living in poverty and where do they live?
  • What is their level of access to water supply and sanitation? 
  • What is the impact of inadequate water supply and sanitation on child health and childhood stunting?
  • Why do water and sanitation services often fail the poor? 
There were three key lessons from the research, which we discussed at AWW, that seemed to really resonate with those in attendance:
 
First, better coordination is needed for investments in human capital across the water, health, and nutrition sectors to tackle challenges such as childhood stunting. Four factors that underpin childhood stunting are food insecurity; inadequate care and feeding practices; inadequate access to health care; and inadequate water, sanitation, and hygiene. Our analysis showed that unsurprisingly a child who has access to one of these factors, on average, is taller than a child without any access.  However, we also observed synergies when a child has access to a combination of these factors including WASH at the same time. In other words, in combination these factors add up to more (in child height) than the simple sum its parts.
 
Second, investments need to be both scaled-up and better targeted if people living in poverty are to be reached with improved water and sanitation services. Our estimates indicate that a four-fold increase in spending is required to reach the Sustainable Development Goals (SDGs) for water supply and sanitation.  
 
In addition to increasing investments, it is important to assess how and where financial resources are spent. The picture we see across countries, especially in Africa, is that while access to improved water in urban areas is about 93 percent, in rural parts of the same countries it drops to 42 percent. That’s a drop of more than half. These statistics are difficult to ignore, particularly in the Africa region, given that in some countries more than 8 in 10 people often lives in rural areas.
 
Third, we need to ‘mind the gap.’ We need to find ways to better bridge the gap between policy and implementation, which is often the reason why services fail poor people. Service delivery and institutional reform challenges are a mix of technical and governance challenges. We need to recognize that the individual and organizational behaviors that maintain a low quality of service delivery are embedded in a complex web of incentives that cannot be solved through technical solutions alone.


 
Importantly, we discussed how the WASH PD findings are highly relevant to Africa and already shaping decision-making. In Nigeria, our findings resulted in the country’s President declaring a state of emergency in the water sector, the development of a revitalization plan, and a request to the Bank to support two projects for water supply and sanitation for US$ 700 million. In Tanzania, we’re beginning to better coordinate our investments between the water and nutrition sectors -- because for the first time, we’re able see the overlap between inadequate water and sanitation and childhood stunting due to our innovative mapping techniques.
 
The main conclusion from AWW was the importance of thinking and working differently.  
 
We have the evidence that proves collaboration across sectors, across borders, and across mindsets can often be transformational for poor communities. Yes, we need more funding and financing resources in the sector. But just as important, we need to spend more effectively and more efficiently to target the resources where we can have the highest impact – to work where it matters most.
 
It is our hope that taking these approaches will enable progress toward achieving the SDGs related to water security and sanitation by 2030 – while delivering on the 2025 Africa Water Vision on that journey. Together, we can have a significant impact on millions of lives.
 

Romania: good policies and institutions can limit the impact of natural disasters

1 day 10 hours ago


The World Bank’s recently completed Systematic Country Diagnostic highlights Romania’s vulnerability to natural disasters. Over the years, floods, droughts and earthquakes have cost the country thousands of casualties and billions of euros in damages to physical infrastructure. They have hurt the economy’s productive capacity and disproportionately affected the poor.

A vulnerable country

Countries around the world are already seeing evidence of the damaging impact of climate change, which is making past growth patterns unsustainable and reversing progress made on poverty reduction and shared prosperity.

Romania is no exception. Climate and natural disasters risks, including increasing incidences of severe inland flooding and more intense and frequent droughts, are becoming a “new normal” – the kind that comes with a high price tag.

Since 1990, 77 severe disaster events were recorded across the country, resulting in more than $3.5 billion in direct damages (in current dollar terms), or 3.5 percent of average GDP over the same period - a significant drag on the economy.

The story does not end here. Romania’s climate is predicted to change considerably over the next 50-100 years, and the estimates of the overall impact of climate-related hazards indicate that expected annual damage to infrastructure alone would double by 2020 and could be six times higher by 2080.

Other, non-climate induced, natural disasters are having a significant impact as well. Over the last 100 years, 13 earthquakes resulted in 2,630 fatalities and affected more than 400,000 people.

With more than 75 percent of the population (65 percent of which is urban) vulnerable to earthquakes, and 45 percent of all national response support in areas with high earthquake hazards, a future earthquake could have catastrophic consequences for the national economy.

Good policies can make a difference

Building resilience to climate change and natural disasters is a long journey that calls for good policies, effective coordination at different levels of government and across sectors, and mobilization of significant financial resources.

To limit the consequences of natural disasters, countries around the world adopt policies to reduce private asset losses. These range from targeted investments in infrastructure to effective early warning systems that can improve weather forecasts and timely inssuance of warnings.

For example, studies show that the timely issuance of warnings before the Elbe and Danube floods in 2002, allowed 31 percent of the population in flooded areas to follow preventive measures, such as moving vehicles outside the flood zone or protecting important documents and valuables, thus significantly reducing the impact of floods.

With better prevention, the consequences of the 2010 floods in Romania - which caused Euro 1.1 billion in damages and affected over 12,000 people, including 26 fatalities - would have been less dire. In fact, a study conducted by the World Bank and the Global Facility for Disaster Risk Reduction and Recovery (GFDRR) estimates that implementation of preventive measures in Romania could reduce asset losses by up to 13 percent and well-being losses by 16 percent.

Many countries have also implemented policies focused on increasing resilience in the aftermath of a disaster. These have included measures to facilitate access to finance or to promote insurance mechanisms that significantly accelerate post-disaster reconstruction.

One such example are risk-pooling schemes that leverage the private sector to transfer excess risk. The value of access to a global pool of risk capital was demonstrated in the aftermath of the 2010 earthquake in Chile, when an estimated 95 percent of the $8 billion in insured losses was passed on from the domestic market to international reinsurers.

It is estimated that implementation of such policies to boost resilience in Romania would result in overall reduction of asset losses by 2.8 percent and well-being losses by 14 percent.

Resilience starts with good governance

Whether it is about retrofitting buildings to make them resistant to earthquakes, climate-proofing and modernizing agriculture, improving water resources management or tackling flood risks, Romania’s readiness to overcome the consequences natural disasters is constrained by the weakness of its institutions.

Although Romanian authorities recognize that better policies and institutions can have an important role in reducing the economic costs of climate and natural disaster risks, there’s an unfinished reform agenda.

Implementation of the EU Flood Management Directive has helped Romania identify and map potential flood risk areas. Other initiatives also include the development of national and regional risk management plans.

However, lack of investment in seismic risk reduction in the building sector remains a salient issue. To minimize potential damage in the event of an earthquake there is a need to scale up the government’s financing for retrofitting both the residential and public-sector building stock, and to increase residents’ awareness of the urgency of addressing seismic risks.

Climate and disaster risks are only going to increase in the future and much remains to be done in Romania to limit the consequences.

Only better policies and a more effective institutional coordination will help reduce risks, protect the lives and wellbeing of Romanians, and minimize damage to natural, physical, and economic assets.

In Africa, more not fewer people will work in agriculture

1 day 11 hours ago
Is the neglect of agriculture in job creation strategies and public investments premature? Photo:  Peter Kapuscinski / World Bank

Many people in Sub-Saharan Africa still work in agriculture; on average, over half of the labor force, and even more in poorer countries and localities. Yet the share of the labor force in agriculture is declining (as is normal in development), leading African leaders and economists to focus on job creation outside agriculture.

Planning for jobs of the future matters.  The 200 million young people (those ages 15-24 years old) either looking for jobs or constructing livelihoods now, will increase to 275 million each year by 2030, and 325 million by 2050. Is the neglect of agriculture in job creation strategies and public investments premature?

Declining shares, Rising numbers

In the early phases of the structural transformation, where most African countries currently are, agriculture absorbs labor. This has been true and documented historically: Taiwan in the mid-20th century; China from 1978-1990; in India until 2005; Vietnam until 2014.  Agriculture in Africa is also absorbing labor now (Figure below).  The agricultural labor shares decline; yet the absolute numbers of people employed in agriculture still increase. This remains an underappreciated stylized fact of structural transformation.

Source: WDI Indicators 2018 Following historical experience, the absolute numbers in Africa are expected to rise for another several decades before they come down. In each of these historic instances, the “absolute increase and relative decline” of the labor force in agriculture coincided with rapid growth in agricultural productivity and concurrent expansion of services and labor-intensive manufacturing.
That Africa’s agricultural labor force continues to rise in numbers while the share declines is therefore not anomalous.  Quite the opposite—an absolute net flow of labor out of agriculture would be extraordinary given the size of the agricultural labor force relative to the receiving sectors of services, construction, manufacturing and mining.  Even as these sectors grow and absorb labor, they are not yet large enough to support a net reduction in number of people employed in agriculture. 

The period of absolute increase and relative decline in Africa’s agricultural labor force is likely to be prolonged given Africa’s slow demographic transition and the associated slow per capita income growth.  Out of the slightly larger than 3 percentage points annual increase in Sub-Saharan Africa’s demand for food (in volume), about 2.6 points still come from population growth; the remainder from urbanization and income growth.

As incomes rise, the share of income going to food further declines, the demand for non-food goods and services increases more rapidly, and farm exits accelerate. This productively frees up labor for nonagricultural production, at least if agricultural labor productivity also increases.

What to do?

Recognition of “absolute growth with relative decline” of the agricultural labor force in the coming decades in Sub-Saharan Africa requires adjusting strategies on job creation. A climate resilient labor-absorbing agricultural transformation will have to be part of Africa’s foreseeable future. Productivity growth, including labor productivity, is essential to success.

Good management requires foresight and a willingness on the part of national and international leaders to invest not only in the education and health of rural young people, but also in the sector that will in many cases be their major employer.  Resources will need to flow into agricultural science and rural infrastructure on a scale greater than is happening today.  Without such investment and with climate change intensifying, the countries and regions that will house millions of rural young people in 2030 and 2050 will face unmitigated downside risk.  Their agricultural competitiveness will further erode as wealthier and more diversified economies adapt faster and encroach on local and regional food markets. 

Such a gloomy future is neither desirable nor necessary.  While the agriculture sector’s share of the labor force declines, the number of farmers and farm workers will continue to grow for some time. Their welfare will also increase if the public sector makes the investments needed to raise agricultural labor productivity.
 
Follow the World Bank Jobs Group on Twitter @wbg_jobs.
 

Corporate tax avoidance in an era of changing firms

1 day 12 hours ago

It is widely accepted that corporate tax avoidance is commonplace, but experts disagree over the precise amount of tax that corporations successfully avoid. One estimate for 2012 suggests that 50 percent of all foreign income of multinationals is reported in jurisdictions with an effective tax rate below 5 percent; another suggests it’s more like 40 percent. The OECD estimates that governments worldwide are missing out on anything between four and ten percent of global corporate income tax revenue every year, or US$100–$240 billion. While the accounting varies, one fact is clear:  there is an unacceptable level of corporate tax avoidance, no matter how you do the math. 

The 2019 World Development Report on the Changing Nature of Work highlights the challenges of corporate tax avoidance in Chapter 2 on the “Changing Nature of Firms”. Many asked why; what’s the link? For starters, tax avoidance is easier and more common in the new world of work, even if it isn’t new. The digital economy expands firm boundaries. Physical presence is no longer a prerequisite to doing business: digital platforms generate income from the capital of others; companies provide online services from abroad or profit from intangible assets such as software and intellectual property; and identifying where value is created is not always straightforward, particularly when it comes to user data. Under these circumstances, it has become easier for companies to locate assets (and subsequently profits) in tax havens—countries with preferential corporate tax frameworks.
 
Second, and related, the notion that billion- and trillion-dollar companies syphon off large portions of their profits to reduce their tax burden is a moral problem for many citizens, and particularly those who work. While effective corporate tax has gone down in many countries, over the same period, a portion of the fiscal burden has been transferred to workers through increases in personal income tax. For example, since 2008, countries have cut headline corporate taxes by 5 percent, while increasing personal taxes by 6 percent. Minimizing one’s tax burden is understandable, but the latitude to do so is decided by governments. Public acceptance of the situation is waning.
 
Third, tax avoidance contributes to tighter government budgets. The less fiscal space governments have in which to maneuver, the more limited they are in their response to labor market disruptions driven by technology. Lower skill workers are losing out in the face of automation, because their skills do not complement new technologies. Job tenure is decreasing and work in the digital gig economy often has no social protections. These trends are more pronounced in advanced economies, where technology is more widespread. However, this situation is not dissimilar to that of the 2 billion people who work in the informal sector, predominantly in low- and middle-income countries. Worldwide, governments need bigger budgets to invest in expanded social protection and better education that enables people to compete in the global economy. Aggressive—albeit legal—tax planning is the last thing governments need in this environment.
 
Ensuring governments capture a meaningful portion of corporate gains needs to become a development priority, particularly as large digital companies move into emerging markets. Low income countries on average collect the least amount of tax as a proportion of GDP. They also, however, have the greatest financial burden when it comes to financing the human capital and social protection investments needed to adjust to the changing nature of work.
 
The international community has taken great strides in recent years to reduce opportunities for tax avoidance. The OECD Base Erosion and Profit Shifting (BEPS) initiative, launched in 2013 and involving more than 115 countries, negotiated the most comprehensive package of measures to reduce profit shifting to-date. Certain measures, if fully adopted by governments, would better align profit and taxes with the location where value is created, and the package includes guidelines on transfer pricing. However, the initiative has put off solutions for the digital economy until 2020.
 
Multilateral, or at least regional, solutions to corporate tax avoidance are the best option to deal with digital business, if consensus on the details is possible. But while we wait, people are getting impatient and governments are getting desperate. The United States’ 2017 tax reform included a minimum tax on intangible assets and the United Kingdom announced late last month that it will target “established tech giants” through a tax on digital services revenues if the BEPS initiative fails to deliver in 2020. Several countries, including India, Italy, and Spain have plans to do the same. Many more countries may follow suit before BEPS can produce a solution.
 
This shouldn’t come as a surprise. The political economy surrounding global corporate tax reform presents major challenges. In the meantime, however, unilaterally imposed digital taxes represent a potentially significant revenue stream for governments. What’s more, in targeting only the largest of digital firms, just like UK, politicians risk very little—for most countries, those firms are foreign. The political economy of unilateral digital tax seems far easier for governments to deal with.

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

1 day 13 hours ago
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.

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

Supportive government policies, business model innovations and more public and private financing all have an important role. But there’s another oft-overlooked factor: whether or not we have enough skilled workers and entrepreneurs. Are countries in Sub-Saharan Africa and South Asia building the robust and diverse workforce they will need as distributed renewable energy enterprises grow and expand?

Right now, the answer is a resounding ‘no.’

Despite growing demand for home solar systems and other off-grid renewable energy solutions in Africa and Asia, there is a growing shortage of job-ready talent to finance, develop, install, operate and manage these systems. And the biggest skill gap is in Sub-Saharan Africa. More than 600 million people in the region are still living without electricity, yet there are only 76,000 jobs in the renewable energy sector on the whole continent, according to the latest data from IRENA. Compare that to India, which has half as many people without electricity and 10 times more people working in the solar PV sector alone.

Among those feeling the skill pinch in Africa is BBOXX, an off-grid solar provider with operations in East Africa and West Africa. “In-market competency shortages are among our main business challenges at the moment,” said Kweku Yankson, Group Head of Human Resources at BBOXX. “As we expand into new markets, a key potential constraint to our success is the quality of the talent we find in these markets.”

Last week, a broad-based coalition launched a new campaign, Powering Jobs, to close this skills gap. Unveiled at the International Off-Grid Renewable Energy Conference (IOREC) in Singapore, the campaign aims to create the global workforce that will be needed as distributed renewable energy takes stronger hold in Africa and Asia. The coalition is made up of companies, government and multilateral institutions, researchers, NGOs and trade associations.

[[tweetable]]Using distributed renewables to achieve universal energy access goals is a massive economic opportunity.[[/tweetable]] It will create millions of good jobs in underserved rural areas that need economic activity the most, and enable millions more by powering small enterprises and agricultural businesses. It’s an especially big opportunity for women and youth, who suffer the most from energy poverty.

While data on the industry’s full potential impact is limited, the positive signs are hard to miss. In India, research has found that rooftop solar systems create seven times as many jobs per megawatt as utility-scale solar projects. Nigeria’s Rural Electrification Agency has created 5,000 skilled and unskilled jobs in just the past year.

IRENA estimates that the off-grid value chain could create at least 4.5 million jobs by 2030. But those estimates may be conservative. The International Labor Organization estimates that India alone could add three million new jobs if the renewable energy sector continues with its current growth trajectory.

A key priority of the Powering Jobs campaign is to conduct the first comprehensive survey on energy access jobs and their broad economic impacts. The first findings will be launched in 2019 — a year when the sustainable development community focuses on jobs and the future of work. A second key priority is to identify workforce initiatives that are working and channel more targeted support into replicating them around the world. One encouraging indicator is India’s Skill Council for Green Jobs, which expects to certify 50,000 newly trained solar PV installers by 2022.

Leveraging finance for the Nigerian off-grid solar market

4 days 9 hours ago
When I asked a table of Nigerian bankers whether corporate debt to finance solar off-grid and mini grid companies would find favor in local capital markets, they literally laughed at the idea. No, they said very clearly, there’s no mandate for green here, certainly not among the funds they represented, and off-grid solar was new and untested anyway.

Such reluctance of many local financial institutions (FIs) to invest has been a major impediment to the Nigerian solar off-grid market which lags compared to other African countries such as Kenya. Nigerian solar companies discuss finance model

Consider:

We recently visited Nigeria to analyze barriers to finance in the off-grid solar market. We’ve developed a taxonomy of finance models in the mini grid and off-grid solar sector to apply to Nigeria and partnered with the recently approved $350 million World Bank Nigerian Electrification Project (NEP). The NEP will leverage private sector investments in solar mini grids and standalone solar systems to provide electricity to 2.5 million people and 70,000 MSMEs, as well as publicly-funded reliable electricity to seven universities and two teaching hospitals.

In meeting with dozens of investors and solar companies in Nigeria, our team discovered a market in transition and poised for growth. On the investor-side, several FIs were planning to enter the market at scale while others were taking a wait-and-see approach. Overall, awareness and interest of local banks was definitely on the rise.

On the company side, almost all firms were bullish on the sector. Some firms, such as Lumos, have established operations with a visible brand and plans to scale. Others were start-ups with more innovative approaches, such as One Watt Solar which plans to apply blockchain technology to their offerings.

What role for the World Bank Group?
While solar mini grids and off-grid solar have potential to address Nigeria’s energy access deficit, market failures impede growth, and those most in need of access – the rural poor – will likely never be served on commercial terms. The World Bank estimates that in many rural areas, only 5-10% of the population can afford electricity offered at market prices.

However, by employing Maximizing Finance for Development (MFD) principles, the World Bank Group could help the sector grow in a timely way that ensures development impact through private sector leadership and leveraged commercial finance.

Among activities being considered through coordinated IFC and World Bank efforts are:
  • Technical assistance to companies to build capacity for smaller local firms, the Nigeria Climate Innovation Center (NCIC) – part of the World Bank’s global network of CICs – was launched in August to provide technical assistance to companies and market development services.
  • Targeted concessional financing. the Nigerian Rural Electrification Agency – supported by the World Bank NEP – will issue tenders for companies to provide solar mini grid and off-grid solar services and IFC can advise on the tender – including looking at structures from Scaling Solar – to maximize private participation.
  • FI Capacity Building. Training, knowledge and capacity building for local banks will allow them to understand and enter the growing solar market.
  • Quality Assurance Standards drawing from the World Bank Group’s Lighting Global program, quality standards for the Nigerian market will comfort both customers and investors on these relatively new products.
  • Insurance Product to enable international debt. IFC is developing a credit insurance product to mitigate FX risk through securitization of receivables to bring foreign capital to the market.
  • Design of Local Capital Fund for Solar Market. An open and transparent process to design a specialized fund could provide the vehicle for local capital investments in the sector.
  • On-lending/risk-sharing Facilities to FIs with subsidized Solar Financing Carve-Outs. DFIs including IFC could provide on-lending/risk sharing facilities to banks for investment in the sector.
While the mix of World Bank Group finance and services provided is still being coordinated, there is an enticing model of combined interventions using MFD principles to drive private sector innovation and investment to address the development challenge of energy access.

What countries can learn from Moldova’s successful tobacco taxation efforts

4 days 11 hours ago



Smoking begins at a young age in Moldova, with people starting to smoke at the average age of 17 years old. It’s a bigger concern among men here, as 30 percent of men in Moldova smoke, according to 2016 data, compared to 3.3 percent of women.

Tobacco use is a leading cause of the growing burden of noncommunicable diseases (NCDs) globally, harming and killing prematurely, so it’s no surprise that life expectancy for men in Moldova, at 68 years old, is eight years less than for women. Since the greatest relative years of life lost for men occur during their working years, this also impacts Moldova’s human capital development. The World Bank Group’s Human Capital Index value for Moldova, which measures the current and potential productivity of a country’s people, has increased since 2012 but it’s still lower than the average for the region, reflecting the country’s higher rates of premature mortality among men due to NCDs.

Besides the negative public health and human capital impacts, the rising burden of tobacco-related diseases also imposes a heavy cost on public health expenditures and household budgets, as on the economy. In Moldova, the total economic cost of smoking-attributable diseases, including health care costs and work absenteeism, is estimated at 3.8 percent of its GDP.

One of the most effective and least expensive tools in the fight against tobacco are taxes. In many countries, raising tobacco taxes can offer a “win–win”: positive health outcomes and increasing fiscal revenue for priority programs and investments. However, in many cases, countries’ tax rates are quite low, undermining their public health and revenue potential.

Moldova’s positive experience with taxing tobacco in recent years provides some lessons, and possibly encouragement, for other countries considering this measure. The government has been increasing tobacco taxes every year since 2016, with the goal of achieving the European Union (EU) tobacco tax directive minimum rate of 90 EUR/1,000 cigarettes by early next decade, per its Associate Agreement with the EU. This has translated into public health gains for the country, with a reduction in the volume of cigarettes sales taxed (used as a proxy for consumption) by about 10 percent, to 5.55 billion pieces in 2017 compared to 6.19 billion pieces in 2016.

While reducing tobacco use, and the related risk of developing tobacco-attributable diseases, Moldova has also been able to collect additional tax revenue, partly because of still high levels of tobacco use in the country and the low cost of cigarette production relative to the average retail price. Cigarette excise tax revenue in the country increased from MDL 1.73 billion (US$ 87 million) in 2016 to MDL 2.04 billion (US$ 110.6 million) in 2017, or about 1.16 percent of Moldova’s GDP. The tobacco tax increases adopted by Moldova’s Parliament for 2018-2020 are projected to further increase excise tax revenue, hitting 3.31 billion MDL (US$194 million) or 1.45 percent of GDP in 2020.

Evidence from Moldova also shows that tobacco taxation disproportionately benefits the poor. Research by the World Bank, using data from household budget surveys, shows that the poor tend to be more responsive to price increases, reducing their tobacco use more than the rich (the change in the quantity purchased relative to its price change for the lowest income group in Moldova was estimated at −0.53, compared to −0.13 for the highest income group). In turn, lower cigarette use among the poorest income groups can reduce the risk of developing tobacco-attributable diseases, the risk of impoverishment due to high out-of-pocket medical expenses to treat these diseases and would boost household incomes due to a decrease in ill health and absenteeism from work.

While Moldova has seen many benefits from taxing tobacco, a key lesson from their recent experience is the need for countries to simplify tax structures by merging multiple tobacco tax “tiers” and unifying the tax rate across all types of cigarettes. This can help to preempt smokers’ switching to cheaper cigarette brands after a tax-rate hike on the brands they previously smoked. While Moldova saw a reduction in cigarettes consumed from 2016 to 2017, there was a noticeable shift during this time in people’s consumption to non-filter cigarettes, which are taxed at lower rates than filter cigarettes and cost less.  Additionally, tobacco tax rates should be adjusted over time to at least keep up with the pace of inflation and, preferably, at a faster rate so that affordability is reduced over time. 

Moving forward, if Moldova adopts a uniform tax structure for both filter and non-filter cigarettes and increases tobacco tax rates by about 25 percent per year over 2021-2025, the country could benefit even further from reduced health risks due to lower cigarette consumption and collect additional tax revenue that helps its population as a whole.  Momentum for future tobacco tax policy increases in Moldova can also be boosted, and cross-border threats like cigarette smuggling minimized, by coordinating with neighboring countries (particularly Belarus and Ukraine) and strengthening tax administration and customs control over the tobacco distribution chain, including the use of “track and trace” technologies. 


Related:
WBG Brief: Moldova Economic Update, November 1, 2018
Special Topic: Moldova Why is Tobacco Taxation Important?
World Bank Group Global Tobacco Control Program website

 

Advancing together toward water security and safely managed sanitation in Africa

4 days 12 hours ago
From drought in the Horn of Africa to floods in Sierra Leone to water shortages in Cape Town and Bouake, so many people in Africa live every day with the damage done by too much or too little water. Growing demands driven by demographic changes and urbanization; reduced water availability and quality, exacerbated by climate change; the potential for conflict over water resources - all these issues mean Africa is on the frontlines of the water crisis.
 
Thankfully, Africa can also be on the frontlines of the solutions. These times call for bold action;  and last week at the 7th Africa Water Week (AWW-7), I was fortunate to engage with many innovative ideas and constructive debates commensurate with this need for boldness. Steven Schonberger, World Bank Water Global Practice Director, gives remarks at the 7th Africa Water Week.

The theme of this year’s conference was Toward Achieving Water Security and Safely Managed Sanitation for Africa, convened by the African Ministers Council on Water (AMCOW), the African Union Commission, and other development partners. The conference was a busy buzz with over 1000 participants from governments, regional institutions, international partners, the private sector, the scientific community, civil society, and the media. [[tweetable]]There is an old African proverb “if you want to go quickly, go alone; if you want to go far, go together” and I felt that #AWW7 exemplifies this spirit of collaboration.[[/tweetable]]
 
AWW-7 aimed to discuss and collectively seek solutions to Africa’s water resources and sanitation challenges. It is held biennially to build momentum on achieving the Sustainable Development Goals (SDGs) related to water security and sanitation by 2030, the 2025 Africa Water Vision, as well as to crystalize the way forward for actualizing Africa’s Agenda 2063, a strategic framework for the socio-economic transformation of the continent, adopted in 2013.
 
We at the World Bank believe that AWW-7 provides an opportunity for all to advance the aspirations of the people of Africa for healthier and wealthier lives, and together, ensure that the critical role of water is both recognized and addressed through our joint efforts. According to UN Water, water security enables populations to safeguard sustainable access to adequate quantities of acceptable quality water for sustaining livelihoods, human wellbeing, and socio-economic development – in addition to ensuring protection against water-borne pollution and water-related disasters, and for preserving ecosystems in a climate of peace and political stability.
 
I would like to highlight a number of themes that emerged from AWW-7.
 
First, it is clear that we need to improve water security and safely managed sanitation to progress towards achieving the SDGs in the continent. In line with this ambition, the World Bank last year published the report “Uncharted Waters.” This analyzed the linkages between drought, food insecurity, stunting, educational outcomes, and poverty for women in Africa. The most striking result was how the negative impacts of water crises are transmitted between generations, contributing to long-term poverty traps.
 
Second, the importance of identifying the technical, financing and governance challenges in achieving the SDGs. It was with these challenges in mind that the World Bank developed the Water, Sanitation and Hygiene Poverty Diagnostic (WASH PD) initiative, which countries can use to assess their relationship of access to water supply and sanitation to poverty and health indicators. So far, we have conducted WASH PD research in 18 countries worldwide, including the Democratic Republic of Congo, Ethiopia, Mozambique, Niger, Nigeria, Tanzania, and Tunisia. We anticipate supporting many more countries with further WASH PD research in the coming years.
 
And these diagnostics have led to real results, including increased financing to the WASH sector in many countries. For example, in Nigeria, based on the results of the WASH Poverty Diagnostic, the Government has requested financing of US$700 million from the World Bank for addressing water supply and sanitation service needs. And in Tanzania, innovative spatial mapping in the Wash PD demonstrated the linkages between poor water and sanitation and stunting, ensuring a strong share of funding to these needs under a new Early Years Initiative tied to the Human Capital Project. 
 
Third, [[tweetable]]how water is managed will play a major role in determining the expected economic impact of global warming. [[/tweetable]]I shared the findings from the World Bank’s “High and Dry” report, which looked at this issue. Its analysis showed that in Africa, continuing current policies was estimated to reduce GDP by 6% per year by 2050.  However, taking policy actions now to improve water allocation amongst sectors and improve the efficiency of water use would help contribute to higher GDP growth rates in Africa.
 
Finally, everyone was enthused about the opportunities for technology to serve Africa’s needs. Africa really can become a hotbed for innovative solutions. A 2016 World Bank survey identified over 170 technology innovation centers across Africa, such as Kenya’s iHub; and a new generation of start-ups - such as eWaterPay and Waterpreneurs - which link water start-ups to potential investors. We are supporting the development of this innovation ecosystem through the IFC’s Water Innovation Platform for Africa, which links technology innovators to water utilities. Disruptive technologies are changing the world as we know it, the social process of innovation continues apace and Africa is well-placed to leapfrog to new ways of operating when it comes to technology and innovation.


 
[[tweetable]]We are at an historic moment when recognition of the role of water in achieving the world’s priorities in terms of human well-being and the Earth’s sustainability is as high as it has ever been.[[/tweetable]] But it is up to all of us to seize the moment to the benefit of the people of Africa by refocusing our efforts on meeting the universal water supply and sanitation goals of the SDGs, and ensuring that the continent’s critical water basins and groundwater are managed collaboratively amongst countries to ensure climate resilience. 
 
During the opening plenary, at which I served as a panelist alongside ministers and other institutional representatives, I emphasized that these ambitious agendas require us to look beyond traditional approaches, and to harness the power of private financing and technology innovation in the service of the continent’s water agenda. The World Bank stands ready to work with the nations of Africa and its partners to make this happen – and we look forward to hearing all about the progress made at the next Africa Water Week.
 

Student assessment: Supporting the development of human capital

4 days 14 hours ago



At the Annual Meetings of the World Bank Group and International Monetary Fund in Bali, Indonesia, the World Bank highlighted the importance of human capital for economic development.
 
Central to the World Bank’s motivation for the Human Capital Project is evidence that investments in education and health produce better-educated and healthier individuals, as well as faster economic growth and a range of benefits to society more broadly. As part of this effort to accelerate more and better investments in people, the new Human Capital Index provides information on productivity-related human capital outcomes, seeking to answer how much human capital a child born today will acquire by the end of secondary school, given the risks to poor health and education that prevail in the country where she or he was born.

The Index seeks to measure the productivity of a future worker using information about the current state of health and education outcomes. While most internationally-comparable data on education has focused almost exclusively on years of schooling, the innovation of Human Capital Index is in combining this type of information with a measure of countries’ education quality, producing quality-adjusted years of schooling. Specifically, the quality of education reflects new work at the World Bank to harmonize student assessment scores, including from major international and regional student assessment programs such as PISA, TIMSS and PIRLS, LLECE, SACMEQ, and others.

The inclusion of student assessment data in the Index underscores the importance of measuring student learning outcomes to craft more effective human capital development policy. Large-scale, system-level student assessments are designed to provide policy-relevant information on the performance of the education system and any related or contributing factors. These assessments seek to answer questions such as: How well are students learning at various levels in the education system? Are there any strengths and weaknesses in students’ knowledge and skills? Do certain subgroups in the population perform more poorly than others? What factors are associated with student achievement? And how do the achievements of students change over time, given changes in the education system?
 
International large-scale assessments are particularly useful for providing comparative estimates of achievement levels in different education systems. There has been a steady increase in the number of countries participating in international large-scale assessments over the last five decades, in part due to their many advantages, including the ability to benchmark student achievement using common standards and cost-sharing arrangements among participating countries. However, many countries still do not participate in these assessments, and there is an urgent need to educate policymakers, teachers, parents, civil society and the media about the value of collecting internationally-comparable achievement data for diagnostics and monitoring of education systems and education reforms. There is also a need to build the capacity of local assessment specialists to produce valid and reliable assessment data, and to analyze, interpret, and disseminate this data in the most effective manner.
 
Over the last ten years, the READ Trust Fund program has been leading the effort to help countries strengthen their assessment systems, enabling them to implement international large-scale assessments and other types of assessments more efficiently and effectively. The program partnered with the Organization for Economic Co-operation and Development (OECD) to support the launch of the Program for International Student Assessment (PISA) for Development (PISA-D) initiative. The READ team helped participating countries by hosting technical workshops, analyzing capacity needs, developing capacity-building plans, and producing two high-level reports. Through this partnership, countries such as Cambodia, Ecuador, Guatemala, Paraguay, Senegal, and Zambia were selected to participate in the PISA-D initiative. At the country level, the program has directly supported the development of student assessment systems in 12 countries and has provided targeted support for implementation of activities to carry out international large-scale assessments, such as Trends in International Mathematics and Science Study (TIMSS) in Armenia, PISA in Vietnam, and PISA-D in Zambia.
 
The Human Capital Project raises awareness of and increase demand for interventions to build human capital in developing countries. As the World Bank and the global community continue to focus efforts on supporting the development of human capital around the world, valid and reliable information on what children know will be key to understanding whether learning is taking place in classrooms. This will help to identify children’s learning needs and design policies to address those needs, ensuring that current and future generations of children acquire the knowledge and skills necessary to be competitive in the economy of the future. The READ Trust Fund has been contributing to these efforts by equipping countries with strong student assessment systems to ensure effective investment in the learning of their children.

Weekly links November 9: a doppelganger U.K., conditional distributions of journal decision times, invisible infrastructure, and more...

4 days 14 hours ago
  • The Wall Street Journal discusses the synthetic control method as a way to understand Brexit (gated): “There are small differences in the various studies, but they all use Prof. Abadie’s method as the basis for constructing a “doppelganger” U.K. from other similar advanced economies, such as the U.S., Canada, France and the Netherlands. They reach similar conclusions, suggesting the British economy at the start of 2018 was around 2% smaller than it would have been had the 2016 referendum gone the other way”
  • Market-level experimentation: In the Harvard Business Review, How Uber used synthetic control methods combined with experiments to decide whether to launch Express Pool.

Weekly links November 9: a doppelganger U.K., conditional distributions of journal decision times, invisible infrastructure, and more...

4 days 14 hours ago
  • The Wall Street Journal discusses the synthetic control method as a way to understand Brexit (gated): “There are small differences in the various studies, but they all use Prof. Abadie’s method as the basis for constructing a “doppelganger” U.K. from other similar advanced economies, such as the U.S., Canada, France and the Netherlands. They reach similar conclusions, suggesting the British economy at the start of 2018 was around 2% smaller than it would have been had the 2016 referendum gone the other way”
  • Market-level experimentation: In the Harvard Business Review, How Uber used synthetic control methods combined with experiments to decide whether to launch Express Pool.

For better returns on development investments, we need a better market

4 days 18 hours ago

Financing for development is not a cost, it is an investment. An investment in sustainable cities, quality education, access to healthcare, decent jobs, efficient and responsible agriculture, and ending extreme poverty. In 2015, we recognized that the size of the investment needed to achieve the UN’s Sustainable Development Goals is greater than aid alone can provide. The Addis Ababa Action Agenda called on both public and private actors to use aid, taxation, investment, remittances, philanthropy and innovative financing. This amounts to trillions of dollars in financing of all kinds, which needs to be targeted more strategically to where they are most needed.

We’re at risk of defaulting on this promise. Foreign direct investment in developing countries is falling, public revenue levels in many countries are not increasing fast enough, and we lack a strategy for measuring and co-ordinating all finance flows. We know that failure to meet the financing gap and achieve the SDGs will result in ongoing, global impacts – increased natural disasters, epidemics, and large-scale forced migrations respect no borders.

We can get back on track if we shift our approach to financing for sustainable development. Rather than a static web of providers and receivers relying on generosity and solidarity, financing for sustainable development should be seen as a dynamic market, with providers competing to invest in meeting global needs. Promoting healthy competition will help to drive innovation, better tailor financing to the needs of developing countries, and promote higher social and economic returns.

The forthcoming OECD Global Outlook on Financing for Sustainable Development takes a fresh look at FSD as a market, linking supply (global savings) with demand, through a range of intermediaries – inluding governments, companies, or households. This approach reveals plenty of opportunities, but also challenges and inefficiencies. This market is still immature. To take just one example: while substantial amounts of cross-border financing ($1.7 trillion) and tax revenues ($4.3 trillion) accrued to developing countries in 2016, little is known about the development impact of the vast bulk of this financing, and what partners can do to maximise it.

In order to produce optimal financing mixes for developing countries, the financing for sustainable development market needs a triple shift: more transparency; new policy standards, and greater coherence and co-ordination. A properly functioning market calls for more empowered “customers” of sustainable development finance, and reduced asymmetries of information between beneficiaries, intermediaries and suppliers, so that each dollar spent is maximised and impactful.

This market approach does not imply a shrinking of the role of official development assistance (ODA): if anything, ODA becomes even more relevant to ensure that no country and no one is left behind. OECD countries’ ODA is driven by a unique mandate and moral imperative, to support development in countries most in need – including least developed countries, small island developing states, and fragile states. ODA remains the principal external investor in long-term resilience and stability.

The Global Outlook presents a path forward for OECD countries to provide better support in advancing the Sustainable Development Goals, with ODA and beyond to other market actors. ODA must work in unison with private sector investors, the tax revenue system, migrants, philanthropists and others outside of traditional development circles, to support development goals. OECD countries also have a powerful capacity to use policy to achieve both inclusive growth at home, and support development gains in countries most in need. This is not a zero-sum game: some of the same policy tools used to achieve inclusive growth in OECD-countries can be harnessed to increase SDG financing.

A better FSD market will not only mobilise new finance flows – some of which are catalysed by ODA – it also demands better orchestration of all resources. We need to improve the quality of public and private investment while we grow the market. Private sector actors, for example, are called on not just to help underwrite the SDGs but “to engage as partners in the development process, to invest in areas critical to sustainable development, and to shift to more sustainable consumption and production patterns” (United Nations, 2015). Our goal must go beyond turning billions into trillions. The larger objective for all actors to play their part in turning all finance into more impactful investments for the billions of people that still live in extreme poverty today.

Collective action will be critical to achieve these important goals. Working with others, including the United Nations and the World Bank Group, the OECD has an important role to play in building strong, inclusive economies, setting common standards, expanding trade and investment, and contributing to development in OECD and non-OECD countries alike. As an organisation and a policy community, we have long documented the costs of artificial divisions. In a divided world, we all lose, and those most in need are left behind.

In 2015, we witnessed the potential of multilateralism as global leaders stepped forward to agree to the 2030 Agenda. It is critical that the international community redouble this optimism, drive, and collective commitment. We stand at a crossroads and the time to act is now.

To learn more about this topic, see the Global Outlook on Financing for Sustainable Development 2019, which will be launched at the Paris Peace Forum on November 12, 2018.
 

Tackling gender inequality through investments in health equity

4 days 23 hours ago
© Dominic Chavez/Global Financing Facility

[[tweetable]]Still today, in almost all societies around the world, women are less well-off than men.[[/tweetable]] Women are still paid less than men; they are less represented in business, politics and decision-making. Their life chances remain overwhelmingly less promising than those of men. 
 
This inequality hurts us all. [[tweetable]]The world would be 20% better off if women were paid the same as men.[[/tweetable]] Delaying early marriage in the developing world by just a few years would add more than $500 billion to annual global economic output by 2030. 
 
But this is more than a problem of lost income. For women and girls in poor countries, it cuts life short before it can flourish.  
 
[[tweetable]]Today, 830 women will die from complications related to pregnancy or childbirth.[[/tweetable]] This month, 450,000 children under the age of five will die. This year, 151 million children will have their education and employment opportunities limited due to stunting. If current trends continue, 150 million more girls will be married by 2030.
 
Clearly, we need to accelerate progress so that no woman or child is left behind.

[[tweetable]]We need to allow women to time and space pregnancies as they choose, support safe deliveries, breastfeeding, and other basic services that are critical for health and nutrition.[[/tweetable]] Good health leads to better educational attainment, and full participation in the labor force.

Bold new thinking is required to transform the lives of women, children and adolescents. It begins by making their lives our first priority in development. It means alignment between international donors and national governments to ramp up funding, and a global commitment to life-saving and health-enhancing services for every woman, child and adolescent. 

[[tweetable]]The good news is there is a funding facility dedicated to improving health and life chances for women and children in the poorest countries.[[/tweetable]] In 27 countries, it is already strengthening the delivery of quality services across pregnancy, birth, early years and adolescence by incentivizing governments prioritize spending on health and nutrition. This week, Heads of State and Ministers from across the world met in Oslo to decide on the future of the Global Financing Facility (GFF), with the aim to scale things up and tackle head-on the terrible effects of gender inequality on health. 

In response, ten new investors—Burkina Faso, Côte d'Ivoire, Denmark, the European Commission, Germany, Japan, Laerdal Global Health, the Netherlands, Qatar and an anonymous donor—announced in Oslo that they were contributing more than US$1 billion to the GFF, which the World Bank will link to an additional US$7.5 billion in IDA/IBRD resources for women, children and adolescents’ health and nutrition.

The early results of the GFF are promising, and a recent study in The BMJ Global Health showed that just $US2.6 billion of GFF financing could catalyze up to US$75 billion of additional money by 2030—70% of which will come from increases in countries’ own domestic resources. It also showed that as many as 35 million lives could be saved by 2030 if global health investments contributing to maternal and child mortality continue to grow at current rates. 

We point to three reasons for the early success of the GFF. First, it puts countries in the driver’s seat and rallies financial and implementation support towards their priorities, based on what they know will work on the ground. Second, it helps governments harness financing from multiple sources towards a single set of goals. This includes governments’ own resources, so they have skin in the game. 

Finally, the GFF has a strong focus on results so health ministers can make the case for a greater share of the overall domestic budget. The government of Cameroon is a case in point. Since working with the GFF, it has committed to dramatically increase its national budget allocation for primary and secondary healthcare, from 8% in 2017 to 20% by 2020.  This 150% expansion in government financing for health will help to accelerate access to safe and quality services for mothers and children. 
 
And in the northeast of Nigeria, where there has been long-lasting conflict, GFF support has helped to re-establish maternal, newborn and child health and nutrition services. By linking funding to health results, local governments are making rapid progress—including increasing births attended by (midwives) health professionals from an estimated 5% coverage to 40%. 
 
At the GFF Replenishment I spoke up to end health inequality for women, children and adolescents. I stood with the Bill & Melinda Gates Foundation, the governments of Norway and Burkina Faso, country health ministers and hundreds of other partners. The US$1 billion we raised, and the new partners we welcomed, this week are major steps. I encourage other partners to join us in our quest to realize the full potential of every woman, child and adolescent. 
 
[[tweetable]]Together we can invest in the empowerment of women and children in poor countries and strengthen countries’ capacity to finance the health of their people sufficiently and sustainably.[[/tweetable]] 
 
Together, we can make unprecedented progress towards a fairer and more prosperous world. 
 

Related: World leaders pledge US$1 billion to transform health and nutrition of world’s poorest women, children and adolescents 

The biggest feminist fund (that you’ve probably never heard of) raises $1 billion to boost health of women and children worldwide
 

The politics of safety nets: Don’t shy away

5 days 5 hours ago
If you have ever brought up politics in a technical meeting on safety nets, or on social policy in general, you might have observed one or all of the following reactions: sighs, eye rolls, forced laughs, desperate looks to the door. A few awkward minutes may ensue, filled with polished remarks only accessible to experts in double-entendre. Then you might have had follow-up backroom discussions in hushed tones. Then maybe heard a few loud rants on how politics will never change and the world would be better off if it was left to technical experts.

Yet, as Chapter 3 of the new book, “Realizing the Full Potential of Social Safety Nets”  argues, openly discussing the politics of safety nets is critical (program sustainability depends on it), it is OK (you are not selling your soul), and a lot can be done to leverage politics.

Why is it critical? Because a beautifully designed social program will never see the light of the day if it doesn’t have political traction in the country. Or will get shut down at the first opportunity. And that doesn’t do any good to the populations that need it.

Why is it OK to discuss the politics of social policy? Here, the chapter tries to clear a confusion between two very different forms of politicization: electoral accountability and clientelism. On the one hand, a functioning competitive democracy depends on the aspiration of politicians to reap electoral benefit by enacting programs that enhance the welfare of their constituencies. A government tries to expand safety net coverage to increase its chances in the next election? There is nothing wrong with that.
On the other hand, ethical issues arise when politicization entails clientelism or favoritism, as they may represent a breach in equal access of citizens to public benefits, or an attempt to distort the electoral process. Those temptations surely exist and need to be combatted, but they will be better contained if an open conversation can take place on the healthy side of electoral accountability.

Finally, what can be done? First, public opinion and politics do change. Commonly-held beliefs and preferences shift as shocks hit, economic conditions evolve, evidence becomes available. Think of how post-disaster humanitarian assistance often opened pathways to sustained social assistance in countries that never displayed high preferences for redistribution. Or how consumption support is increasingly acknowledged as an investment in productive capacity of recipients, instead of merely being thought of as a hand-out.

Second, program parameters can be adjusted to shift the politics of social programs. Targeting, co-responsibilities, exit strategies, accompanying measures can all be tailored to the preferences of policymakers or elected representatives. The job of program designers is then to ensure a proper balance between technical requirements, necessary for impact, and political tweaks, needed for sustainability.

Third, politics and social policy are a two-way street. Safety nets are shown to empower the poor, raise their expectations and appreciation for state-provided programs, and increase their political participation. Relations between local and national politicians change when social programs extend their outreach. And programs can strengthen those political feedback loops from constituents or local actors, through adequate delivery and social accountability mechanisms.

Read this chapter – and the next time politics comes up in a technical meeting, relax… and have the conversation.

This blog post is based on “Recognizing and Leveraging Politics to Expand and Sustain Social Safety Nets,” Chapter 3 of the 2018 regional study “Realizing the Full Potential of Social Safety Nets in Africa.” Blogs based on previous chapters include:

Chapter 1 Blog: Social safety nets in Africa: Everywhere and growing, but going where?
Chapter 2 Blog: Safety nets boost consumption levels of the poorest across Africa  

How can shared and on-demand mobility complement public transit?

5 days 11 hours ago
Photo: Diego Torres Sivlestre/Flickr São Paulo is home to 20.7 million residents, making it the biggest city in the Southern Hemisphere. Commuting in this bustling Brazilian city is a serious affair: the region sees a whopping 44 million trips every day, with public transit, motorized and non-motorized modes each accounting for about 1/3 of the total. The average public transit commute clocks in at 67 minutes. However, commuting times can be much longer for those in the periphery, where lower-income households tend to live. This penalizes the mobility of the poor. For instance, wealthier residents take almost twice as many trips as poorer residents.
 
While public transit has a relatively high reach across the metropolitan region, it falls short of the growing demand, and historical underinvestment has led to growing motorization. Congestion in Sao Paulo is among the worst in Latin America. In 2013, the productivity losses and pollution associated with congestion costed the metropolitan area close to 8% of its GDP, or over 1% of Brazil’s total GDP.
 
In the last decades, the World Bank Group has been working closely with São Paulo to boost public transport infrastructure and policies, which has helped the city expand mass transit coverage and develop a more comprehensive approach to urban transport.
 
The latest wave of disruptive technologies that is reshaping the transport sector –including shared mobility platforms, electric vehicles, and automation— are now providing exciting new ways to build on these gains. If properly integrated into broader public transport policies, these innovations have the potential to reduce the use of single-occupancy vehicles, decrease pollution and carbon emissions, improve traffic flow, and save energy.
 
Among all these new technologies, let’s take a closer look at shared mobility and on-demand mobility solutions like ride-hailing apps or bikeshare systems, which have been growing rapidly around the world. While there has been much talk about ride-hailing and its impact on congestion, we have seen a lot less research about how these emerging mobility options could affect commuting habits and transform public transport. By providing reliable rides at a relatively affordable price, could shared and on-demand mobility help cover the last mile between public transport stations and commuters’ final destination? Could they effectively complement mass transit to make a car-free lifestyle more viable, and progressively reduce demand for privately-owned vehicles?
 
Early evidence suggests that many users already rely on a combination of public transport and ride-hailing to complete their journey. In Sao Paulo, the Brazilian-born e-hailing app 99 estimates that 13% of all its trips start or finish at a metro station. In Rio de Janeiro, this figure is as high as 24%.
 
How can we tap into the synergies between ride-hailing and public transit in order to tackle congestion and improve the commuting experience in mega-cities like Sao Paulo? To answer this, the World Bank is partnering with 99 and researchers from Fundação Getulio Vargas to assess how the e-hailing company may contribute to feeding São Paulo’s public transit system, particularly its metro lines. The study will address a wide range of questions:
  • At what price would people be motivated to renounce a car-only trip and decide to combine a car and metro ride instead?
  • How may income levels, gender, and age affect these commuters’ choices?
  • What other factors could influence their decisions (e.g. personal security)?
The study will provide unique insights into the potential of e-hailing for first and last-mile connectivity across one of Latin America’s largest cities. If ride-hailing is deemed to be a promising option for feeding public transit, policies could be adapted to allow for payment integration between public and e-hailing modes, set differentiated public-transport fares for e-hailing transfers, among other incentives. In the long-run, such measures could prove efficient to reduce emissions, improve connectivity of areas underserved by traditional public modes, and to help overcome gender barriers in urban transport. Stay tuned for the results!
 

Who’s afraid of big bad firms?

5 days 13 hours ago

Superstar firms have been in the minds of world’s leading bankers and economists lately. Policymakers are concerned that America’s leading firms such as the FAANG stocks — Facebook, Apple, Amazon, Netflix and Google — are having adverse results on the rest of us and making economic policy less predictable. Why is this? Many of the companies have improved the lives of people across the world with highly desirable and useful products. These superstar firms have also done very well for many of their stakeholders and investors. The numbers are staggering. These five tech companies together account for roughly half of the gains achieved by the Standard & Poor’s 500 stock index in 2018. And in recent weeks, Apple became the world's first trillion-dollar corporation, with Amazon not far behind. While the superstar firms have made life easier for many consumers, it's hard for economists not to wonder whether the effects of their stratospheric success are entirely benign.

The standard concerns come in two flavors. First, we worry that by realizing very high returns on investment, these superstar firms are pulling away from the rest of the economy. The concern is that the gap could signal the evolution of a two-tiered economy, with most people working for second-tier firms that offer little in the way of employment growth prospects. Indeed, the rise of these firms has been linked to a decline in the labor share of national income. Second, economists also fear that mega-firms such as these tech titans are realizing their high profits in a very old-fashioned way — by restricting competition, which enables them to charge high prices without investing much.

Several studies published in recent years suggest that these concerns are warranted. A Council of Economic Advisors report from 2016 features a scary graph that shows returns on investment of the top 10 percent of public firms pulling away from the rest. Likewise, recent work by Jan De Loecker and Jan Eeckhout shows that the pricing power of the average firm in the United States — defined as how much the companies sell their products for compared to the cost of making them – is rising over time.

However, our research reveals that there may be an important omission in these analyses. The previous research relies on firms’ financial statements data, prepared according to the usual accounting conventions, which do not explicitly measure intangible capital — defined as a firm’s brands, R&D discoveries, intellectual property and organizational capital. This omission is non-trivial since our knowledge-driven economy has become increasingly dependent on intangible capital.

Once we apply this correction, the news is mostly good. When examining both return on investment and pricing power, we find no evidence that the superstar firms are worlds apart from the rest of the economy. So, the inequality among firms is, in fact, not growing. We also don’t find that the superstar firms are cutting output more than other firms in the economy at a given level of markups.

In recent decades, consumers have benefited precisely because Amazon and similar firms have kept their prices down as they prioritized growth over profits. However, it is not clear that workers, especially those in routine manual and low cognitive jobs, have benefitted as their industries have been disrupted by many of the innovators. But, it is likely that the superstars are disrupting the market for labor not because they are superstars, but because technology is changing. The decrease in the value of routine manual and low cognitive jobs in the U.S. market for labor that would have taken place whether the disruption is being spearheaded by one superstar firm or by a host of smaller firms. Whether there was one car company or many, the horse’s dominance was doomed. 

So, are the concerns about the market domination of these mega firms overstated? Not quite. Something else may be going on that could pose problems down the line. That’s because this handful of superstar firms may be playing a longer term strategic game. To quote Amazon’s Jeff Bezos in his 1997 letter to shareholders: “We believe that a fundamental measure of our success will be the shareholder value we create over the long term. We have invested and will continue to invest aggressively … to establish an enduring franchise.”

But now some superfirms have metamorphosed into behemoths, and there is a danger that they might use their spare cash to preempt future competition. Historically, companies have flexed their monopolistic power by driving competitors out of business. But a potentially more nefarious and difficult-to-spot strategy is to buy firms using nascent technologies that have the potential to emerge as competitors and consign them to Davy Jones’ Locker.

Recent research studies this same practice in the pharmaceutical industry. A recent paper by Cunningham, Ederer and Ma finds evidence that roughly 7 percent of all pharma mergers and acquisitions over the past two decades were “killer acquisitions” — strategic deals by big pharma companies to eliminate competition from smaller companies.

Current antitrust laws, with their focus on short-run consumer welfare, are not equipped to recognize the long-run growth strategy of the leading firms. Regulators must be on the lookout for new types of monopolistic behavior. We need policies that leave markets open enough so that “creative destruction” of market power is allowed to work. However, devising and implementing new regulations may be challenging and perhaps costly for the economy because policymakers will have to rely on judgments about the future potential of technologies that only insiders are skilled enough to attempt. But perhaps technology, with all its unpredictability, will be our friend. After all, the superfirms of yore that we were all afraid of would take over their industries, firms like GM, IBM, GE, Microsoft, Walmart and others, don’t seem such a big threat now. Perhaps we just need to slow down and take a long run view.

For further reading:

Ayyagari, Meghana, Asli Demirguc-Kunt and Vojislav Maksimovic, “Who are America’s Star Firms?” World Bank Policy Research Working Paper WPS8534.

Protecting Bhutan’s cultural heritage

6 days 9 hours ago
Cultural heritage is an extremely important aspect of Bhutan and is one of the four pillars of Gross National Happiness, the guiding philosophy of Bhutan’s development


[[tweetable]]Culture defines the sovereignty and identity of Bhutan and its people.[[/tweetable]]

And the intricate beauty and uniqueness of its traditional architecture are known around the world.

As such, [[tweetable]]cultural heritage preservation is one of the four pillars of Gross National Happiness, the guiding philosophy of Bhutan’s development,[[/tweetable]] and is embedded in all its national development policies.

In this context, the Royal Government of Bhutan has made it a priority to sustain both tangible and intangible aspects of its culture with dedicated offices under the Department of Culture of Ministry of Home and Cultural Affairs (MOHCA), which work closely with local governments.

This work is critical as Bhutan’s monuments are vulnerable.

The 2009 and 2011 earthquakes damaged hundreds of historic monasteries and fortresses known as dzongs, including the Lhuntse and Trashigang Dzongs (2009) and the Paro Tadzong (2011).

Also, fires triggered some of the worst disasters in Bhutan’s cultural history.

The famous Paro Taktshang, nicknamed the Tiger’s Nest and the Wangduephodrang Dzong were burnt down in 2008 and 2012 respectively.

One of the distinctive characteristics of the Dzongs of Bhutan is their strategic location.

Historic monasteries sit on hilltops or at the confluence of rivers, to allow residents to watch the valley and guard themselves against threats.
The dzongs sit on hilltops or at the confluence of rivers, to allow residents to watch the valley and guard themselves against threats.

But the salient features of dzongs also increases their vulnerability.

For example, during the Wangduephodrang Dzong fire, its location at the hilltop prevented bystanders from quickly accessing the scene and putting out the flames that slowly burned down the majestic structure.

That said, [[tweetable]]preserving its cultural assets remains a challenge for Bhutan as the country struggles to reconcile the needs to improve the livelihoods of residents while conserving the authenticity of the traditional buildings where they live[[/tweetable]].
  Improving the Resilience of Bhutan’s Cultural Heritage Sites  
To overcome this challenge, and building on the outcomes from the Technical Deep Dive on Resilient Cultural Heritage in Tokyo, the Division for Conservation of Heritage Sites (DCHS) and its partners gathered at a workshop last April to develop further guidelines to monitor and prepare for risks,  disaster response, and post-disaster recovery for cultural heritage sites.

The event also highlighted the importance of Bhutan’s cultural heritage for its economy.

Central to DCHS’ vision is to involve religious congregations or monks, who act as custodians of the heritage sites, in major renovation projects as well as in discussions on policies and programs.

The DCHS is also closely engaging with international agencies to bring in best practices and technical knowledge, seek support for direct investments and capacity development.

Partners include UNESCO, the International Council on Monuments and Sites (ICOMOS), the International Centre for the Study of the Preservation and Restoration of Cultural Property (ICCROM) and private civil society organizations.

The DCHS with its partners is working at all levels, ranging from inventory and documentation of important heritage sites to hands-on renovation works, research works to improve the understanding of the behavior of traditional buildings, and continued capacity building of artisans and its officials to enhance the resilience of these structures.

All these initiatives aim to preserve the unique cultural legacy that’s part of Bhutan’s national fabric.

 Read more: From Japan to Bhutan: Improving the resilience of cultural heritage sites

The Kingdom of Bhutan’s efforts to preserve and protect its cultural heritage are supported by the World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR), and through the Japan-World Bank Program for Mainstreaming Disaster Risk Management (DRM).
 

“Step by Step”: Enhancing the tourism potential of southern Albania

6 days 9 hours ago
Saranda stairs. Source: Piotrus  
One of my favorite memories from the past summer was discovering Saranda, located in the southern part of the ‘Albanian Riviera.’ I was fascinated by the city’s beautiful location - right on the Ionian Sea coast, with its deep blue waters and with the island of Corfu (Greece) visible on the horizon. I was far from being the only visitor as Saranda is full of people during the summer. In fact, while the usual population is around 35,000, in July and August, this figure can swell with an influx of tourists. During 2016, Saranda registered over 700,000 visitors.
 
Saranda is not alone in this regard. Over the past years in Albania, tourism has significantly increased, especially in places like Ksamil, Saranda, and Durres. From August 2017 to August 2018, according to the national statistical office, Albania hosted 8.2 million visitors - a 16.8% increase compared to the previous year. And most of these tourists came for the sun and beaches in the summer. These figures are expected to continue to grow in the coming years. On World Tourism Day, the Ministry of Tourism and Environment even indicated that Albania aims to attract 10 million tourists by 2025!
 
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In the meantime, how can popular Albanian destinations such as Saranda improve their local infrastructure and public spaces to more effectively absorb this large increase of visitors?

Saranda, with its breath-taking natural features and cultural assets, is a good place to start this discussion. The city faces inner city mobility challenges and a lack of public spaces. Today, one can hardly walk on the promenade given how overcrowded it gets (I had to be careful not to step on other people’s toes all the time!). The sea promenade, which is currently the main public space in the city, is simply not able to accommodate the increasing number of tourists visiting the town each year. Also, the staircases which connect the upper parts of the city with the sea promenade have not been safe anymore and were in dire need of renovation.
 
To address the lack of public spaces and improve mobility within the city, the Government of Albania has launched a project, supported by the World Bank, that includes the renovation of Saranda’s staircases and the rehabilitation of the sea promenade.

These two investments are just the beginning of a series of urban upgrading activities in the city. Besides the scenic coastal city of Saranda, Permet - an eco-tourism destination - and Gjirokaster and Berat - two spectacular UNESCO World Heritage sites - are also being supported by the project. In  addition to urban upgrades and infrastructure improvements – including the restoration of cultural heritage sites, the project also focuses on improving tourist sites in the South of Albania and on supporting the tourism sector, for example by developing new tourism products and connecting them to potential markets.
 
Surveys among residents, visitors and local businesses also highlighted a clear need to increase the amount of public spaces - including parks, green areas, and playgrounds - in selected municipalities. The quality of municipal infrastructure was rated differently across municipalities, showing that each city needs a tailored approach towards urban upgrading.
 
Surveys among tourists also showed insightful results. Visitors currently spend around five days/nights in Saranda. The rehabilitation of public spaces can contribute to attracting more visitors and encourage them to stay longer in a given place.
  View over the city of Saranda from above. Source: Jarosław Lichoń
These transformative, urban upgrades have a doubly-positive effect: they make cities like Saranda more livable for permanent residents while simultaneously making them even more attractive destinations for seasonal visitors. Improvements in mobility and safety will enable tourists and residents alike to stroll around the city on newly renovated stairs and enjoy a walk along the promenade while looking at the sea.
 
Looking ahead, the rehabilitation of public spaces will also reinforce the country’s tourism potential and contribute to economic development and job-creating at the local level. I can’t wait to get back to Saranda to see the new developments with my own eyes and to move freely around the city on the new stairs.

Increasing performance transparency! Generating citizen participation! Improving local government! It's SUPERMUN

6 days 11 hours ago

Running a local government is not sexy. It’s making sure that roads are maintained, there is water to drink, health clinics are stocked and staffed, and schools are equipped to teach. Often, it means doing these things with limited resources, infrastructure, and manpower. With few exceptions, there is little fanfare and glamour. It’s a bit like being a soccer referee: you’re doing a good job when no one notices you’re there.

And yet, the business of local government is extremely consequential for everyday life. We’re greatly affected by our immediate surroundings: this is where we live, work, and play. Life becomes more difficult, unpleasant, and unsafe when sewage backs up into our homes or flows into our streets, when we cannot access reliable healthcare, and when we cannot leave our house at night for fear of mugging or worse. Decentralization reform across the globe suggests that such local challenges are increasingly seen as things that can best be resolved, well, locally. The World Bank has been making this point for several years, including in WDRs in 2004 (which discusses decentralization in China and India) and 2017 (which highlights the potential for flexibility and proactivity at a local level). Even Oxfam, not always our biggest fan, agrees.
 
But how can citizens know how local governments are doing, especially in relation to what might be possible? Oftentimes, local governments make the case for themselves through reporting on their achievements, like in this 30-month progress report from Washington, DC. But local governments are responsible for so much: education, healthcare, roads, policing, housing, environmental protection, water, sanitation, welfare…what should we be paying most attention to? And what if we’re interested not in the performance of a specific local government, but in all local governments in a country, including those that do not have the resources to publish glossy brochures? What if the same performance metrics don’t make sense for everyone, or the same data isn’t available?
 
There are at least two important challenges in measuring municipal performance consistently for a country as a whole. First, it’s difficult to create indicators that accurately capture relevant dimensions of local government performance across an entire country. Second, governments at various levels may lack the capacity (or the incentive) to produce relevant data and analyses. It turns out that there are, in fact, very few countries with comprehensive local government data and performance measurement systems. These include the UK, Philippines, Vietnam, and a handful of others. South Africa, in contrast, mandates that municipalities assess their own performance annually. However, a report from the auditor general found that "[f]or those municipalities that produced performance reports (62% of the total), the reports had flaws and were not reliable for their councils or public consumption."
 
Creating a municipal performance monitoring system in Burkina Faso 
We faced these challenges when, in 2013, we started working with the Government of Burkina Faso as part of the World Bank-financed Local Government Support Program, or PACT, which supports the country’s ongoing decentralization process. Our partners were committed to improving citizen engagement and the accountability of local governments, yet there was no consensus on how to define and measure local government performance in a way that would be both meaningful and applicable across Burkina Faso’s diverse landscape. So, a first step in improving local government accountability was agreeing explicitly for what they were being held accountable.
 
We then started to define, together with stakeholders at national, regional, and local levels, a limited set of indicators on (a) basic service delivery and (b) municipal administrative capacity, based on national norms and intended to capture areas which were most consequential for the life of the average municipal resident. The indicators were to be: 

  1. In areas with at least partial responsibility effectively transferred to local governments and where action by them could reasonably be expected to change things;
  2. Substantively significant for quality of life in the municipality;
  3. Measurable in quantitative and objective terms, and based on existing information or data that could be collected at low cost;
  4. Comparable across municipalities and over time;
  5. Consistently relevant across the country’s socially and ecologically diverse regions; and
  6. Easy to understand.
The result was SUPERMUN, for Suivi de la performance municipal, Burkina Faso’s annual municipal performance monitoring survey.


Data was first collected for 2013 for six of the country’s thirteen regions and, as of 2017, SUPERMUN covers the entire country. The survey is currently run by PACT and the National Agency for the Promotion of ICT, and the latter is creating a portal for open access to the performance data for journalists, activists, researchers, NGOs, the private sector, and other parts of government as part of the Burkina Open Data Initiative, the first of its kind in Francophone Sub-Saharan Africa.

Making the data openly accessible is an important step in enhancing transparency and accountability, and the ability to compare SUPERMUN data across municipalities can serve to ignite the competitive spirits of local administrations, and assist public, private, and non-profit actors at all levels to better plan resource distribution and policy planning. This is part of a growing trend: in the last six years, the Bank has provided $50 million in technical assistance and funding for open data activities in over 50 countries.



  Posting of a scorecard SUPERMUN now produces consistent annual municipal performance data for all of Burkina Faso. But data is only as good its use, so now we’re looking at various low-cost applications of this data to understand whether and how these can improve local government accountability (remember, this was the goal at the outset). Through a series of randomized controlled trials, we are testing:
  1. if simply providing performance information to municipalities through an easy-to-digest scorecard, benchmarked against national norms, is sufficient to improve performance; 
  2. if community-based organization can be motivated, by financial rewards linked to improvements in the same scorecard, to lobby their local government for improved performance; 
  3. if municipal performance information affects voter turnout and support for incumbents in local elections.
Did these things work? Watch this space or check out www.reglab-burkina.org. We would also love to hear your thoughts on similar experiences elsewhere or on other applications which could build on the SUPERMUN platform.

Keeping the public and private in PPPs

6 days 11 hours ago


Tomas Castelazo | Wikimedia Commons

The Colombian magazine Dinero, one of the most respected economic publications in Latin America, recently published a story about a World Bank study that placed Colombia as the second most competitive country in the world—behind a tie between Great Britain and Australia—to finance infrastructure projects under the public-private partnership model (known as PPPs). This score (83 points out of 100) was also shared by Paraguay and the Philippines.

At first glance, this is a virtuous recognition—at least on paper. However, in daily practice in the Latin American region, like most emerging economies, the administrative complexity of government bodies still presents enormous challenges that demand immediate attention if PPPs are to reach their full potential. Getting this right would truly integrate the PPP model into the economic and social development engine required to compete in a globalized economy.

While many governments in emerging economies, such as Honduras or Kenya, have taken strong steps to improve the process of bidding and managing PPPs, these processes still tend to be long and often slow. These delays often result in the expiration of environmental licenses and building permits that have already been secured,  bringing the project to complete paralysis.

I was pleased to see that, in a recent study by the World Bank’s International Development Association (also known as IDA), private participation in renewable energy infrastructure projects accounted for 70% of all energy projects in 2017 in emerging economies, a significant increase compared to 38% in 2013.

As entrepreneurs in the energy industry, this encourages us to use PPP mechanisms whose structures have already been enhanced, like in Colombia or the Philippines. Just as renewable energy projects are a global necessity of the 21st century, solid platforms that facilitate their development are also de rigueur. 

Many deficiencies in the management of PPPs are due to governments’ lack of real understanding of the partnership model. By this, I mean that governments repeatedly tweak the balance to impose their processes on the private sector— [[tweetable]]diluting the alliance’s true meaning. In honoring a bureaucratic tradition of mechanisms and protocols, the advantages, discipline, and expertise that the private sector brings to the PPP table are dimmed.[[/tweetable]]

This is where we need to really re-balance the necessities of the two partners in PPPs. The speed and flexibility provided by the private sector is an added value that injects confidence in the investment and development of infrastructure projects.

At the same time, these elements should be complemented with the long-term security the public sector offers. In Colombia, for example, this equilibrium has been put into action by laws that reflect the core basis of PPPs, such as the PPP Law of 2012 and the establishment of the National Infrastructure Agency, a public entity manages PPP projects in the transportation sector.

As president of an energy infrastructure development company, I see how the global demand for renewable sources is increasing tremendously. This has not only aroused the interest of new actors, but amplified international competition to access these sources. The speed of technological advances asks us, more than ever, to be innovative and seek alternatives to new challenges. Many models from the past simply no longer meet the demands of our globalized world. This is an ideal scenario to double-down on PPPs to introduce efficiency and innovation in some obsolete or inefficient public services.
 
We know this model very well at ININCORP since all our projects are designed to offer solutions that align public needs with feasible and viable capacities contributed by the private sector.
 
Having a PPP framework that has been applauded by the World Bank, as in the cases of Colombia, Paraguay, or the Philippines, should encourage an acceleration in the development of PPP projects in these countries. Regrettably, their systems also provide obstacles that may lead to a decrease in the completion of such initiatives.
 
Governments are right to ensure good projects that are sustainable, affordable, and deliver excellent service to their people. But we must guard against consequences that are likely unintended but slow down the objectives for which these alliances were forged.
 
Disclaimer: The content of this blog does not necessarily reflect the views of the World Bank Group, its Board of Executive Directors, staff or the governments it represents. The World Bank Group does not guarantee the accuracy of the data, findings, or analysis in this post.
 
Click here for the Spanish version of this blog

 
Related Posts

Muskets, PPPs, and standardization
 

PPP Cancellations: If you do not change direction, you may end up where you are heading (Lao Tzu)
 

Beating the odds? How PPPs fare in fragile countries.

 
 

The rise of local mapping communities

6 days 13 hours ago
Members of the mapping community in Kinshasa, DR Congo plan the collection of field data for the Kisenso neighborhood. (Courtesy of OpenDRI)

There is a unique space where you can encounter everyone from developers of self-driving cars in Silicon Valley to city planners in Niamey to humanitarian workers in Kathmandu Valley: the global OpenStreetMap (OSM) community. It comprises a geographically and experientially diverse network of people who contribute to OSM, a free and editable map of the world that is often called the “Wikipedia of maps.”  

What is perhaps most special about this community is its level playing field. Anyone passionate about collaborative mapping can have a voice from anywhere in the world. In the past few years, there has been a meteoric rise of locally organized mapping communities in developing countries working to improve the map in service of sustainable development activities.

The next opportunity to see the OSM community in action will be the November 14th mapathon hosted by the Global Facility for Disaster Reduction and Recovery (GFDRR)’s Open Data for Resilience Initiative (OpenDRI). Mapathons bring together volunteers to improve the maps of some of the world’s most vulnerable areas, not only easing the way for emergency responders when disaster strikes, but also helping cities and communities plan and build more resiliently for the future.

GFDRR’s engagement with local OSM communities

[[tweetable]]The 2010 Haiti earthquake served as a wake-up call about the need for access to better quality information for reducing vulnerability to natural hazards and climate change impacts.[[/tweetable]] In the years since, OpenDRI has turned to the OSM platform as an important way to bring people together to create open data, learn new skills, and support the human networks that eventually become key actors for resilience. We can gather people in a room around something exciting, like a mapathon, and start a conversation about sharing information for the benefit of everyone.

Changes in the mapped areas in OpenStreetMap for Kampala, Uganda, from 2016 to 2018. (Courtesy of OpenDRI and OSM) [[tweetable]]Any data, technology, or tool is only as valuable as the way and the extent to which people use it[[/tweetable]], and that’s why building sustainable mapping communities is so critical for this work. Even as we engage governments to promote the use of open data and open source tools, OpenDRI also strives to nurture local communities of OSM users and developers from universities, NGOs, and innovation hubs. To that end, OpenDRI supports local OSM communities and conferences like “State of the Map” whenever possible, particularly by funding scholarships for attendees who would not otherwise get to attend, learn, and share knowledge.

Participatory mapping in Asia and Africa

OpenDRI started its work with OSM by supporting the growth of local mapping communities in  Indonesia, the Philippines, Nepal, Bangladesh, and Sri Lanka, including through the Open Cities Project. Many of these communities were quick on their feet to respond to the devastating 2015 earthquakes in Nepal. More than 6,000 volunteers helped add data to the OSM platform, mapping up to 80 percent of affected zones, an effort which continues to provide invaluable information to emergency response and preparedness efforts.In the years since, OSM communities across Asia have come together to exchange knowledge and build connections at a series of open source mapping conferences. The fourth “State of the Map Asia” conference will take place in Bangalore, India, this month.

In Africa, the stakes for OSM are even higher, because it is often the only digital map available for many locations. Recent years have brought a rise of participatory mapping communities across Africa, which now total more than 30 active local OSM groups. Africa’s first-ever “State of the Map” conference was held in Kampala, Uganda in 2017.

Building on that momentum, OpenDRI recently launched the Open Cities Africa project, currently supporting the development of teams in 11 cities across Africa. These teams are taking the lead in collecting data remotely and on-the-ground through participatory mapping, thus building mapping capacity in their local OSM communities. They are also collaborating with World Bank teams to use the new OSM data to help address a range of development challenges, from urban flooding in Kinshasa to coastal risk management in Senegal. Drawing on our experiences in Asia, we are incorporating novel approaches in our engagement in Africa, including online learning, gender integration, disruptive technologies, and design research. More than 150 people participated in the SotM Africa conference in 2017. (Courtesy of SotM Africa)
What’s next for local OSM communities?
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Local OSM communities are hopeful that the future will see a larger and more diverse population of mappers worldwide – this will be key to improving the “Wikipedia of maps” even further. As technology giants join the global OSM community, we are now exploring how new machine learning mapping techniques might complement and amplify the work of local OSM communities.

Over the past seven years, the OpenDRI team has been hard at work to create local communities around open-source mapping as part of our drive to promote open data for resilience, and that effort will continue.

To discover the OSM community for yourself and learn more about the benefits of using geospatial data for addressing the world’s most critical development challenges, join us on Wednesday, November 14 for the OpenDRI mapathon at the World Bank.  
 

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How can we measure success of jobs projects?

6 days 13 hours ago
Many development projects are tackling jobs challenges, but the lack of resources available on jobs measurement has often discouraged project teams from including jobs in their project objectives or results frameworks. (Photo: Sarah Farhat)

Let’s face it: assessing the results of a development project can be as complex as designing and implementing it. This is particularly true for projects that aim to create more and better jobs for all population groups and often work across sectors: how do we measure the number of newly created jobs through a private sector development project? Or the increase in earnings for young women and men who participated in a skills training, benefited from a coaching, or received stipends to help them move from low to higher quality jobs? Wouldn’t it be great to have a common terminology and definitions, and a set of ready-to-use tools to standardize the measurement of jobs outcomes?

A Toolkit by project teams, for project teams With this idea in mind, the World Bank Jobs Group has developed a Toolkit on Monitoring and Evaluation (M&E) of Jobs Operations to encourage a more systematic assessment of jobs outcomes in development projects. The toolkit puts the assessment of jobs results at the core of each step in the project cycle, from design and preparation, to implementation and completion: it helps project teams to choose relevant jobs indicators and collect data to inform these indicators without resource-intensive survey efforts. The toolkit draws from the extensive experience of project teams working on jobs projects across sectors, and builds on existing frameworks, guidelines and survey instruments developed by the World Bank and other development partners.
A one-stop-shop with multiple tools The Jobs M&E Toolkit is a one-stop-shop for jobs measurement at project level and includes several tools, and it is available in both an interactive and a PDF version. Some of the highlights include:
  • A flexible ‘menu’ of indicators: The toolkit introduces a set of 20 jobs indicators to measure results along the dimensions of job creation, job quality, and access to jobs. Results are measured at the level of the beneficiary types most commonly targeted by jobs-related interventions – individuals, such as job-seekers or self-employed, and firms of any size, operating either in the formal or informal sector. Project teams can select from this ‘menu’ of indicators according to the design of their intervention and expected results related to jobs. Guidance notes help teams make their decision and include actual project examples.
     
  • …with easy-to-use standard definitions: For each of these indicators, the toolkit introduces a standard definition, which is based on internationally recognized sources (ILO, DCED, OECD and other international organizations). This is one of the major benefits of the toolkit, as standardized indicator definitions allow to aggregate and compare data across projects, within or across countries, making sure we don’t compare apples with oranges.
     
  • …supported by short data collection forms that fit country context and capacities:  Two simple-to-use data collection forms, targeting individual and firm beneficiaries respectively, allow for reporting on jobs outcomes. Each form provides a set of questions linked to the jobs indicators and follows the standard definitions. Both forms are available in digital (online) and paper (offline) formats: The preferred data collection methodology depends on the number and geographic location of project beneficiaries, the availability of a reliable internet connection, access to digital devices, and the availability of data already produced by the implementing entities as part of their activities.
Many development projects are tackling jobs challenges, but the lack of resources available on jobs measurement has often discouraged project teams from including jobs in their project objectives or results frameworks. By making measurable indicators available, the Jobs M&E Toolkit supports project teams in assessing jobs outcomes in a more systematic way: being able to better quantify the number of newly created jobs, the increase in earnings of youth participating in jobs projects, or other jobs-related outcomes, this toolkit hopefully makes the lives of project teams and management units a bit easier and can, ultimately, improve accountability for results attributable to jobs interventions.
 
Follow the World Bank Jobs Group on Twitter @wbg_jobs.
 

More than money: Counting poverty in multiple forms

6 days 14 hours ago

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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).

Recognizing the incompleteness of the so called monetary measure of well-being, this year’s Poverty and Shared Prosperity Report proposes a multidimensional poverty measure. It adds deprivations in education (child school enrollment and adult school attainment) and access to basic infrastructure (drinking water, sanitation and electricity) to the consumption measure to construct a more complete picture of poverty. With this broader definition of poverty, many more people come into view as poor.

The figure shows the proportion of people in monetary and multidimensional poverty in the world and in each region circa 2013. The global poverty rate is 50 percent higher (18 percent versus 12 percent) when poverty in its multiple forms is considered. South Asia has made progress in reducing monetary poverty, but when deprivations in education and basic infrastructure dimensions are taken into account, the share of the population in poverty more than doubles. The poverty rate in Africa is the most worrying, with almost two out of three people in multidimensional poverty.

8 lessons on how to influence policy with evidence – from Oxfam’s experience

6 days 15 hours ago

How to use evidence to influence policy? Oxfam Great Britain has some experience in this area, and in a new paper by some of their team – “Using Evidence to Influence Policy: Oxfam’s Experience” – they lay out the lessons they’ve learned over the years. Here are 8 lessons we gleaned from their experience. 

1. “One of the least effective ways to use research for influence is to write a paper and then ask ‘right, who do I send it to?’” Making sure that your published paper gets into the right hands is worthwhile, but it’s far more effective to design research with policy impact in mind. With impact evaluations, that often involves co-producing research questions with government or non-profit partners. But it can also involve asking questions that you know are relevant to current policy debates (and answering them before the debates have concluded). As economist Rachel Glennerster recently wrote, “Answer a really important hotly contested question well.”  


2. “Evidence is more likely to influence policymakers when presented to them during ‘windows of opportunity’, when they are motivated to pay attention to and solve a problem.” Dave recently published a working paper on school uniforms in Kenya, and in conversation with a local media expert, he learned that school uniforms are currently a real issue, so he co-authored an op-ed on the topic. But in most cases, the timing of your research paper may not coincide with an important policy issue. If we want policy impact, we have to track policy debates and insert the evidence when the topic is needed. This may involve recycling material later or using midline results when policy debates arise before we arrive at the end of the evaluation.  

3. “Policymakers in the middle of a political change or crisis, and who are seeking advice, are also far likelier to pick up the phone to researchers they already know than to make new contacts or start reading unsolicited reports.” Cultivating relationships with policymakers takes time, but it can yield significantly opportunities for policy impact – you’re the expert they call when they need evidence. It has an added benefit, as described by economist Amy Ando recently: “Many academics are trained to think about unidirectional public engagement. They do research and then tell people about it. Hopefully that has a positive impact, but telling takes time away from researching.  But great research is informed by engaging with people outside of our academic circles. We learn from people and policy makers (and people in other disciplines) what big new/unsolved problems are out there, and how institutions (formal and informal) really work.” (See #1 above.)  

4. “The type of research required to get something on the public agenda is different from research designed to influence specific pieces of legislation.” During the Ebola crisis in West Africa a few years ago, our office prepared some of the first numbers of the likely economic impact of the crisis outside of the affected countries. Headline numbers like that can be useful for pushing an issue into public debate. But the results of well-crafted impact evaluations can be more useful for improving the design of social programs.  

5. “The way in which evidence is coproduced, framed, timed and presented can be as important as its substance.” In most of our impact evaluations, we spend months or even years getting the design right, gathering the right data, making sure the analysis is responsible. But the substance of the research is just the beginning of policy impact. Oxfam has an extensive, impressive apparatus for this. It starts with a power analysis – and not the kind that economists and statisticians are used to thinking about. This looks at the power dynamics that are part of any hope for policy change: Who supports the change, who might block it, and who are the people who influence these actors?  

6. “Identify the actors with the power to change policy, and the actors able to influence policymakers.” Government ministers, their advisors, the broader public, and many actors in between have a role to play in influencing policy. Identify the actors most relevant to the policy change you want to see and seek to influence them. Remember that focusing on just one champion for your results in government isn’t ideal. Cabinet shuffles can happen frequently, and the minister of transport could easily end up in health (and vice versa). Mid- to high level civil servants are also prone to moving around a lot. Other key actors include companies, the voters, and “hidden and informal influencers.”  

7. “Most of Oxfam’s global campaigns start with a major piece of foundational research and campaign report which lays out basic analysis and policy recommendations which may then be followed by shorter briefings and/or media releases framed and timed to coincide with changing events and windows of opportunity.” Take your research, identify the policies you’d like to see it influence, then choose the tools (see here) based on the opportunities. You increase your odds of choosing the right message, medium, and messenger if you understand how the people you are trying to influence process information.   

8. Use a wide array of tools to communicate effectively. First, humanize complex issues. Second, if you have them, use a few “killer facts.” Third, use visualizations to increase accessibility.   Fourth, perfect your 30 second elevator pitch. And finally, “the messenger can be as important as the message.” It doesn’t always have to be the researcher who goes out and communicates results; key allies may be better placed to deliver the word.  The paper has lots of additional concrete examples. Check it out, then go forth and co-produce research questions with decisionmakers, “stay agile, engage with policymakers readily and continuously, respond quickly to events, test and learn from your strategies.” Easy, right?

Malaysia budget 2019 – A balancing act for the new government

6 days 20 hours ago
Malaysia’s latest budget points to many encouraging directions. How the government balances its priorities is key to ensuring low-income populations get to share in the benefits of development. (Photo: Samuel Goh/World Bank)

The unveiling of Malaysia’s much-anticipated 2019 budget last Friday by the Minister of Finance, Lim Guan Eng comes at a challenging time for the country. On the external side, Malaysia’s exports are facing growing headwinds – as opposed to the fair winds of recent years – due to heightened trade tensions and slower global growth. On the domestic front, a new emphasis on addressing the stock of government debt and contingent liabilities is likely to narrow fiscal space and prevent public investment from driving economic activity as it did before. In this situation, Malaysia will depend more on private consumption and investment to support economic growth in the next few years.

This year’s budget required a careful balancing act between safeguarding growth, sustaining private sector confidence, promoting fiscal responsibility, managing debt sustainability and protecting the vulnerable. In recent years, lower-income households in Malaysia were disproportionately affected by the rising cost of living, propelling the new government to think of ways to improve the effectiveness of the country’s social protection system.
 
Analyzing Malaysia’s new budget, one sees many encouraging directions. First, efforts to strengthen good governance, fiscal responsibility and transparency are positive steps forward. Second, better targeting of cash transfers through the new Bantuan Sara Hidup Rakyat (BSH) program to account for household size, and of fuel subsidies are also steps in the right direction. Third, the new budget’s focus on promoting education, skills and entrepreneurship is a highly welcome development. This latter priority is critical for Malaysia to compete and thrive in the new digital economy. As indicated by the global Human Capital Index recently launched by the World Bank, Malaysia’s human capital outcomes could be better for its development ambitions, particularly in relation to the quality of education in math and science. 
 
Another positive aspect of the new budget focuses on taxation. The decision to include ‘imported services’ within the scope of the Sales and Services Tax (SST), particular those related to the digital economy, is a timely initiative and is well-aligned with growing international practice. More can be done over the coming years to further expand the scope of the SST. The move to make the taxation system more progressive by broadening the coverage of individuals and businesses paying income taxes, and by increasing the real property gains tax and stamp duties on premium properties is also a constructive measure embedded in the budget.
 
In the area of debt sustainability, however, prudent management of fiscal commitments over the short and medium-terms will be required. Part of these fiscal management responsibilities include the development of an effective mechanism for targeting fuel subsidies. Malaysia will also need to bolster efforts to diversify fiscal revenues. An appreciable narrowing of consumption-based taxation in 2018-2019 and a greater dependence on less-stable oil revenues could constrain fiscal adjustment measures in the future, particularly with unexpected declines in oil prices. It could also encourage the adoption of pro-cyclical fiscal policies. 
 
During his budget speech, Minister Lim Guan Eng declared that the “it is not the business of government to be in business”. This policy direction, if pursued, will boost investor confidence and promote pro-competition economic reforms. While Malaysia’s ‘government linked-companies’ (GLCs) form an important part of the economy, some of their activities given their market dominance have distorted economic activity and prevented competition -- with consumers ending up paying the price. If the heavy lifting of economic growth and job creation in the coming years is going to be shouldered by the private sector, then the public sector getting out of the way is an important first step. The recent and significant improvement in Malaysia’s global Doing Business ranking from 24th to 15th symbolizes this country’s ambition to further enable private-led development. It also reveals Malaysia’s economic potential to compete at the global frontier and become an Asian Tiger.

A version of this blog appeared in The Star

Malaysia budget 2019 – Balancing priorities

6 days 20 hours ago
Malaysia’s latest budget points to many encouraging directions. How the government balances its priorities is key to ensuring low-income populations get to share in the benefits of development. (Photo: Samuel Goh/World Bank)

The unveiling of Malaysia’s much-anticipated 2019 budget last Friday by the Minister of Finance Lim Guan Eng comes at a challenging time for the country. On the external side, Malaysia’s exports are facing growing head winds – as opposed to the fair winds of recent years - due to rising trade tensions and slower global growth. On the domestic front, a new emphasis on addressing the stock of Government debt and contingent liabilities is likely to narrow fiscal space and prevent public investment from driving economic activity as it did before. In this situation, Malaysia will depend more on private consumption and private investment to support economic growth in the next few years.

This year’s budget required a careful balancing act between safeguarding growth, building private sector confidence, promoting fiscal responsibility, managing debt sustainability and protecting the vulnerable. In recent years, lower-income households in Malaysia were disproportionately affected by the rising cost of living propelling the new Government to think of ways to improve the effectiveness of the country’s social protection system.
 
Analyzing Malaysia’s new budget, one sees many encouraging directions. First, efforts to strengthen good governance, fiscal responsibility, and transparency particularly in public procurement are positive steps forward. Second, better targeting of cash transfers through the new Bantuan Sara Hidup Rakyat (BSH) program to account for household size and of fuel subsidies are also steps in the right direction. Third, the new budget’s focus on promoting education, skills and entrepreneurship is a highly welcome development. This latter priority is critical for Malaysia to compete and thrive in the new digital economy. As indicated by the global Human Capital Index recently launched by the World Bank, Malaysia’s human capital outcomes could be better relative to its development ambition, particularly in relation to the quality of education in math and science. 
 
Another positive aspect of the new budget relates to taxation. The decision to include ‘imported services’ within the scope of the sales and services tax (SST), particular those related to the digital economy, is a timely initiative and is well-aligned with growing international practice.  More can be done over the coming years to further expand the scope of the SST. The move to make the taxation system more progressive by broadening the coverage of individuals and businesses paying income tax and by increasing the real property gains tax and stamp duties on premium properties is also a constructive measure embedded in the 2019 budget.
 
In the area of debt sustainability, however, prudent management of fiscal commitments over the short and medium-terms will be required. Part of these fiscal management responsibilities include the development of an effective mechanism for targeting fuel subsidies. Malaysia will also need to bolster efforts to diversify fiscal revenues. An appreciable narrowing of consumption-based taxation in 2018-2019 and a greater dependence on less-stable oil revenues could constrain fiscal adjustment measures in the future, particularly with unexpected declines in oil prices. It could also encourage the adoption of pro-cyclical fiscal policies. 
 
During his budget speech, Minister Lim Guan Eng declared that the ‘it is not the business of Government to be in business”. This policy direction, if pursued, will boost investor confidence and promote pro-competition economic reforms. While Malaysia’s ‘Government linked-companies’ (GLCs) form an important part of the economy, some of their activities given their market dominance have distorted economic activity and prevented competition -- with consumers ending up paying the price. If the heavy lifting of economic growth and job creation in the coming years is going to be shouldered by the private sector, then the public sector getting out of the way is an important first step. The recent and significant improvement in Malaysia’s global Doing Business ranking from 24th to 15th symbolizes this country’s ambition to further enable private-led development.  It also reveals Malaysia’s economic potential to compete at the global frontier and become an Asian Tiger.

A version of this blog appeared in The Star

Social cohesion: Why does it matter in forced displacement situations?

1 week 13 hours ago



When refugees arrive, everything changes for the hosting community. Suddenly, there are large numbers of people who need to use your hospital, your school, and collect water from the same source. You know that they have suffered a traumatic experience, but you may start blaming the newcomers for the pressures that they bring to your community, causing tensions and raising the possibility of potential conflict.


In a new study entitled “Social Cohesion and Forced Displacement,” we review what we know about how to address this challenge. In this interview [link to audio file], I explain why it’s important to make sure that these situations are managed well, both for the refugees and for the hosts. 

What is social cohesion? There are many definitions, but for our purposes, it refers to the way people trust and interact with each other, under a common sense of purpose. It doesn’t mean that everyone thinks or acts in the same way. It doesn’t mean doing away with conflict, as this is part of human life. Rather, conflict needs to be managed constructively so that no one is left out.

Governments hosting large numbers of refugees are concerned about how best to promote social cohesion. What we do in the new study is to collate existing experiences on how people have tried to tackle social cohesion so that we can provide better answers.  

To take this forward, anyone working in these contexts needs to understand the history, social relationships, and perceptions of change among others. When you invest in this knowledge, it will help to better define what needs to be done.

Listen to the full interview to find out more. 

This work is part of the program “Building the Evidence on Protracted Forced Displacement: A Multi-Stakeholder Partnership." funded by UK aid from the United Kingdom's Department for International Development (DFID).

Making higher education accessible to Afghan women

1 week 14 hours ago
Students attending class at Kabul Medical University. Photo Credit: Rumi Consultancy/ World Bank

As a women’s rights activist who has dedicated the past six years of her life to empowering women, ensuring that women can access education is crucial to me.
 
This is what motivates me in my work with the Higher Education Development Program (HEDP) at the Ministry of Higher Education (MoHE), the principal body responsible for providing and regulating higher education in Afghanistan.  
 
When I joined the MoHE as a Gender Specialist in 2016, I mainly focused on making sure female students did not face the same challenges I personally encountered as a student at Kabul University.

[[tweetable]]Some of the issues my friends and I remember was traveling long distances to the university, the lack of facilities for female students on campus[[/tweetable]], and the few opportunities to go abroad for postgraduate studies. Factors which, together, led to low female enrollment rates.

Today, with support from the Afghanistan Reconstruction Trust Fund (ARTF), many of the challenges I witnessed have been resolved with the initiation of the second National Higher Education Strategic Plan, 2015–2019, under the HEDP.

Female students now enjoy a safe commute from home to the Kabul Medical University by minibuses with support from the Higher Education Development Program. Photo Credit: Rumi Consultancy/ World Bank

Providing resources to help women succeed

[[tweetable]]As a result of HEDP initiatives, female students enjoy safe transportation in the form of 25 minibuses[[/tweetable]], which get them to and from the university.

So far, about 1,000 female students have benefited from such services, especially in cities and provinces, such as Herat, Jawzjan, Kabul, Kunar, and Kunduz, where the need for safe, reliable transportation is much higher because of the lack of public transport or safety concerns.

Humaira Saadat, a fifth-year medical student at Kabul Medical University, says that safe transportation has been crucial to her success and that of her classmates.

She believes that “the most important point is that females feel very safe knowing that they are being transported by an institution they can trust, an institution that will not tolerate harassment of women or discriminate based on gender or financial status”.

Humaira says that free and safe transportation has improved her attendance in class and at training sessions in the hospitals.

“Previously, I had to use different public vehicles and find different stations to get to my lessons and the hospitals,” she says. “If I was late, I would be marked absent, which would hurt my academic standing. But now, [[tweetable]]I don’t have this problem because I can take the bus provided by HEDP[[/tweetable]].”

Providing more university residential facilities for women has also been a priority for HEDP, with plans to build a standard dormitory in five universities, two of which, in Bamyan and Kunar, are expected to be completed next year.

This means that more than 1,000 female students will enjoy safe university housing.

Additionally, [[tweetable]]the program has helped renovate 20 public universities, built female lavatories, and upgraded water and sanitation facilities[[/tweetable]], the lack of which had been a significant issue for female students on campus.

Soqhra Zahidi, 22, a fourth-year stomatology student at Kabul Medical University, emphasizes the importance of having university residential facilities and safe transportation for women.

A native of Balkh province, Soqhra says the availability of safe and appropriate housing and transportation is an important issue that all female students from the provinces are concerned about when applying to university.

She points out: “Those who are from the provinces have to have a safe place to live and transport is also important because in a new city, you do not know which transportation is safe. [[tweetable]]The HEPD transportation is important for girls and the other facilities created help us feel secure and comfortable at university[[/tweetable]].”

These services and facilities may not seem like much. But as a woman who has seen and personally experienced these issues, I can say that these improvements are crucial to making female students feel they have a place in university.

Source: HEDP Giving women opportunities to grow

[[tweetable]]Because of the inequalities that exist in our world, not everyone, unfortunately, can exercise their right to education.[[/tweetable]]

These inequalities disproportionately affect girls and women everywhere, but here in Afghanistan, the HEDP team and I are determined to break the cycle. 

[[tweetable]]In 2018, HEDP started providing 100 scholarships for disadvantaged female students[[/tweetable]] (disabled and very poor) to help them study for a bachelor’s degree at public universities. The program is expected to expand significantly in the coming years.

Further, at least one-third of the MoHE scholarships that aim to improve the qualifications of academics at public universities by funding master’s degree courses are awarded to female academics to pursue their higher education abroad.

[[tweetable]]With the financial support of HEDP, 65 female academics are completing a master’s degree abroad, while another 41 will start their studies in 2018[[/tweetable]].

Although I am proud of the progress HEDP initiatives have achieved, in my opinion, the greatest achievement of my work is the unlikely partners we have brought on board to support our mission.

One of those partners is Paktia University, which, with fewer than 100 female students, had one of the lowest female enrollment rates in the country.

[[tweetable]]That changed in 2018 when the university adopted an existing quota system to set aside 435 places for female students[[/tweetable]].

Similarly, [[tweetable]]HEDP has encouraged other universities across the country to reserve places for female students in 10 priority faculties[[/tweetable]], leading to an increase in female students in these faculties. This initiative is encouraging more girls to take the Kankor exam, Afghanistan’s national university entrance exam.

[[tweetable]]To see these universities, like Paktia University, take the lead in improving women’s access to higher education makes me feel that we are indeed making a difference[[/tweetable]].

Egypt’s Sanitation Program for Results (PforR): achieving results on the ground

1 week 23 hours ago
Co-authors:
  • Osama Hamad, Lead Water Supply & Sanitation Specialist, World Bank Water Global Practice
  • Heba Yaken Aref Ahmed, Operations Analyst, World Bank Water Global Practice
  • Sara Mohamed Mahmoud Aly Soliman, Consultant,  World Bank Water Global Practice

 
In a rural area about 60 miles north of Cairo lies the town of Toukh El Aqlam, situated on Egypt’s busy Cairo-Alexandria agricultural road. The region has long-suffered from a lack of sanitation services, creating a serious impact on the health and social development of its inhabitants. On October 16th, 2018, the World Bank’s Program for Results (PforR) team and representatives from Egypt’s Ministry of Housing visited Toukh El Aqlam, where 30,000 citizens now benefit from 5,000 new sanitation connections in rural Dakahliya governorate.



The Dakahliya Water and Sanitation Company (WSC) is one of three WSCs participating in the World Bank-supported Sustainable Rural Sanitation Services Program (SRSSP), along with Beheira and Sharkiya. Approved by the Bank in July 2015, the Program is already delivering results on the ground in its efforts to achieve sustainable access to sanitation services, reduce water pollution in the Nile Delta, and improve water sector governance.

The WSC serving Toukh El Aqlam has made significant progress on KPIs supported by the Program. The number of reported sewerage flooding events over each 100 km of the network in a year was 426.9, well below the benchmark of 450. The operating ratio is currently 90%, above and beyond the targeted 79%. Through a decentralized approach to service delivery, the program is empowering the WSCs in different activities that were previously managed by central agencies, such as the design and construction of sanitation infrastructure.

Financial incentives embedded in the program have proven to be one of the key reasons this approach is succeeding. Performance-based capital grants provide a fiscal transfer mechanism from the national government to the WSCs, with strong incentives for performance improvements and the timely execution of the investment program.
 
The community is extremely satisfied with the amount of professionalism the Program has to offer,” said Dr. Enas Abd El Shafei Atteya, the Local Administration Officer of Simbelaween.  “The Program emphasizes the importance of the health and safety of those living in the community while improving the sanitation systems of the village."

Citizen engagement has also improved significantly.  A Grievance Redressal Mechanism has been set up under the Program to give community members the chance to address their complaints, as well as get a hold of information in a more transparent manner. With the increase in community involvement, land acquisition issues are more easily resolved.

Unlike previous programs, the PforR includes a clear bottom-up approach, instead of a traditional top-down method, allowing subnational WSCs to gradually gain more autonomy and decision-making power. And by first testing the approach on just a few WSCs, successful experiences can be replicated and applied to the whole sector.

Building on the success of the initial phase of the Program, the Bank recently approved additional financing, co-financed by the Asian Infrastructure Investment Bank. This will allow the Program to scale up from US$550 million to a US$1.15 billion. While this is still far from the US$14 billion needed to achieve sustainable access to sanitation in rural areas across Egypt, the new approach is attracting other development partners and building the foundations for a complete transformation of the Water and Sanitation Sector in Egypt and the turnaround of service providers to achieve the Sustainable Development Goals.

To build human capital, we need more and better-targeted investments in health – The GFF provides an innovative path

1 week 1 day ago
  © Dominic Chavez/Global Financing Facility

[[tweetable]]​When countries invest in people—particularly young people—they're investing in the future and giving the next generation an opportunity to achieve their dreams.[[/tweetable]] 

 But every year, in countries across the world, too many dreams are cut short: more than 5 million mothers and children die from preventable causes. [[tweetable]]Globally, nearly a quarter of children under 5 are malnourished and 260 million are not in school.[[/tweetable]]

In this age of rapidly advancing technology, where there is a growing demand for complex cognitive skills and problem-solving, this crisis should be a wake-up call. 

[[tweetable]]With half of the world’s population still lacking access to basic health services, we urgently need more and better financing for health, especially in developing countries where health and nutrition needs are greatest.[[/tweetable]]  

This is why we launched the Global Financing Facility (GFF) in support of Every Woman, Every Child in 2015 with the United Nations, Canada, Norway, and other partners. 

The GFF works with countries to transform how they invest in the health of their people. It works in three ways:

1) It helps governments build one vision and one plan to meet the health and nutrition needs of the country’s women, children and adolescents—of those who have been left furthest behind. The plan involves a range of partners, including civil society, health experts, multilateral and bilateral partners, private sector, and many others. It focuses on high-impact areas such as family planning, nutrition, maternal and newborn health. .

2) The GFF then works with countries to mobilize and coordinate financing behind the plan—bringing together increased domestic resources, bilateral financing, World Bank financing and the private sector—while increasing the efficiency and impact of investments. It focuses on filling the gaps to ensure women and children can access the basic health services they need to survive and thrive. The approach has a focus on results, ensuring the money invested provides a strong return on investment, which we measure in lives saved and improved.

3) The GFF also explores innovative ways to leverage and increase financing over the long term so countries can build and sustain primary health systems. These innovative financing mechanisms include loan buy-downs and funding packages when the money is invested in health and nutrition. To date, $482 million of GFF Trust Fund financing has been linked to $3.4 billion in World Bank financing, which is beginning to deliver health and nutrition outcomes. The GFF also collaborates with the private sector to deliver better results rapidly,, especially in fragile settings. 

For example, in the northeast of Nigeria, where there has been long-lasting conflict and basic health services are lacking, the GFF partnership is helping to re-establish maternal, newborn and child health and nutrition services. By linking financing to results, local governments are making rapid progress, including increasing births attended by midwives from an estimated 5 percent coverage to 40 percent. 

Like Nigeria, Cameroon is working with the GFF to increase its investment in health and nutrition. Cameroon is increasing its health budget allocation to the primary and secondary levels from a baseline of 8 percent in 2017 to 20 percent by 2020, which is leading to great progress. Family planning visits are surging, and many more women are going to their antenatal appointments.

And in Indonesia, the World Bank is supporting the government’s impressive effort to drastically reduce stunting, using a grass-roots approach employing community workers to deliver health, nutrition, water and sanitation, and early childhood education services to mothers and children. As part of the health plan, the GFF also provided a grant to look at the quality implementation and results of this program, including identifying the highest-priority investments, improving coordination, looking at scaling up the use of disruptive technology, and supporting financing reforms to improve efficiency and transparency.

At the World Bank, we recently launched the Human Capital Index, which is changing the conversation about human capital and accelerating more and better investments in people. We see platforms like the GFF as critical tools to help countries invest more, and more effectively, in their people.

On November 6, the World Bank will co-host the replenishment of the GFF in Oslo alongside the Governments of Norway and Burkina Faso and the Bill & Melinda Gates Foundation. The GFF’s replenishment event is a critical milestone that will enable the GFF to expand from 27 countries to as many as 50 countries with the greatest health and nutrition needs. This has the potential to contribute to saving as many as 35 million lives by 2030. 

[[tweetable]]With millions of children growing up without adequate nutrition and health care, and mothers still dying from pregnancy and birth-related complications, there is no time to lose.[[/tweetable]] 

This post was originally published on LinkedIn

Social business, youth and technology to accelerate climate action to 1.5°C

1 week 1 day ago


Recently the Intergovernmental Panel on Climate Change (IPCC) set out clear scientific evidence of what a world impacted by climate change will look like in their Global Warming of 1.5°C report, and the facts are striking: climate impacts in a 2°C warmer world are far greater than with 1.5°C warming. By 2050, in a 2°C world, several hundred million more people would be exposed to climate-related risks and susceptible to poverty.

Moreover, this is not some distant threat: a changing climate is already here. According to NOAA, 2017 was the second hottest year globally since 1880 when modern record-keeping began, reflecting a broader trend with 18 of the 19 warmest years occurring since 2000. Nonetheless, the IPCC emphasizes that limiting warming to 1.5C is still possible by implementing unprecedented transitions in all aspects of society.

Acting on climate is not just about building a better future, but about addressing changes already affecting individuals, communities and economies around the world. As part of the wider solutions that can drive climate action, there are three elements that could play a transformative role: the empathy of social business, energy from the youth, and the innovation offered by technology. All three were in full force during this year’s UN General Assembly (UNGA) and Climate Week events in New York in September, where the World Bank’s Connect4Climate played a key communications role.

Explaining how empathy is fundamental to the social business approach, was Nobel Peace Prize winner Mohammad Yunus. At the UNGA Social Business, Youth and Technology high-level event (#SocialBusiness4SDG), he observed: “We started building another type of business out of necessity, designed to solve problems rather than make money… Social business is defined as a non-dividend company designed to solve human problems. Instead of only wearing dollar glasses we are giving you bi-focal glasses, where you can see the dollars and at the same time you see people in your eyes.”

By putting planet and people on equal footing with profit, existing businesses can transition to become social businesses, and social business startups can grow and scale to deploy climate solutions. Such were the entrepreneurial solutions presented as part of the UN Solutions Summit, to which Connect4Climate is a partner, in the SDG Media Zone at UNGA. The social business presentations were dynamic, committed and focused on transformational change, covering ideas from the Powerstove clean cooking solution, to Recode’s use of technology for education, to the Beacon of Hope solar light toolkit, all helping “get us to that low-carbon, resilient future,” as I mentioned in the UN Solutions Summit highlights video.

The importance of youth leadership was also evident during UNGA. A flagship UN Youth Strategy was launched with Secretary General Antonio Guterres, World Bank Group’s president Jim Yong Kim, the UN Youth Envoy Jayathma Wickramanayak, along with the K-pop band BTS and others. Connect4Climate highlighted the vital role of youth leadership in the SDG Media Zone by facilitating the Climate Action and Youth live discussion with Hugh Weldon, Young Champion of the Earth, and Emma Frances Camp, Young Leader for the SDGs. “The power of storytelling and new technologies can inspire global action. We are here to support the youth climate movement”, emphasized Giulia Braga, Connect4Climate’s Program Manager.

Yunus also highlighted the important role of today’s youth during the UNGA Social Business, Youth and Technology event: “You are the most powerful generation in the human history with all technology available, and the most vulnerable if you do not behave right.” This was followed by Connect4Climate presenting the Youth Unstoppable call-to-action video that showcased young voices who don’t want to waste time, who want to be ambitious, and above all, want to act on climate: “We are the next leaders and we are unstoppable.”

The transformative potential of technology also featured strongly. Technological solutions were featured during the UN Solutions Summit, where for example SeAB Flexibuster presented a shipping container-shaped waste management system recycling waste into energy, fertilizer, and water, or the aQysta Barsha Pump that could irrigate up to 2 hectares of land without electricity or batteries. In parallel to UNGA, at the One Planet Summit, the World Bank Group announced a $1 billion commitment for battery storage to scale up renewable energy globally. Investing in climate-smart technology will be key in the transition to a low-carbon resilient future. “Batteries are critical to decarbonizing the world’s power systems,” emphasized World Bank Group President Jim Yong Kim. “We call on our partners to join us and match the investments we’re making today.”

Imagining a carbon neutral and resilient future, in line with our climate and development ambitions, is possible. The IPCC highlights that limiting warming to 1.5°C means reducing carbon pollution by about 45 percent from 2010 levels by 2030 and reaching to net zero by 2050. This requires further accelerating renewables for energy and scaling up existing and new low-carbon and carbon-negative technologies for industrial processes, buildings and transport and sustainably managing landscapes. Yunus advised: “Imagination is the path. Let your imagination go as wide as you can, to design a world of your own creation.”

 

We need to build a civilization built on empathy, on caring and peace. We need to save our #environment and achieve our #climate taget of below 2C in 30 yrs. - @Yunus_Centre Muhammad Yunus #SocialBusiness4SDG #SocialBusiness #ClimateAction #SDG #EnvironmentalProtection pic.twitter.com/ywjGi5uXNn

— Connect4Climate (@Connect4Climate) September 25, 2018

 

.twitter-tweet{ margin-left:auto; margin-right:auto; } But imagining that world and, critically, turning that vision into reality will require all the creativity of social business, the energy of unstoppable youth, the transformative potential of technology, and much more. As today’s youth emphasize in Connect4Climate’s video: “Imagine a better world. There is no time to waste. It’s time for ambition. It’s time to set up. It’s time for action…Let’s imagine a better world and actually put forward policies and actual labor to make it happen.”

How Pakistan can diversify, digitally

1 week 1 day ago

A year ago, Farzana had no idea that an online business would so drastically change her life. She was drowning in debt with no way of repaying, worrying about her family’s financial future. Reaching for a lifeline, she joined GharPar, a women-founded, women-led social enterprise that connects beauticians with clients seeking at-home salon services through an Uber-like digital platform.

In just one year, her situation has completely changed. “Before joining GharPar, our family conditions were extremely dire, we never knew where our next meal would come from,” she says. “After being on the platform as a beautician for one year my whole life has changed. I now make around PKR 60,000 (about $450) per month. Through my savings, I have been able to buy a motorcycle for my family and currently, I am saving money for my son’s education.”

Farzana is not alone in her success. Since launching in 2016, GharPar has attracted over 100 beauticians to its platform—and, as part of the company’s social mission, nearly all come from marginalized and minority backgrounds.

Taking home 70 percent of the price of every GharPar request, beauticians’ incomes have soared. So while the average monthly salary of a beautician in a brick-and-mortar salon is estimated to be PKR 11,000 (US$82), according to the Pakistan Bureau of Statistics, a GharPar beautician makes PKR 60,000 per month on average. Top earners can double that. This jump in income has allowed these women to climb out of poverty, becoming household breadwinners and strong female role models in their families and communities.

Pakistan’s emerging tech sectors
GharPar is just one of many startups that are taking advantage of Pakistan’s rising comparative advantage in technology. And a ‘tech boom’ could help to reenergize and diversify the country’s economy.
Pakistan’s primary exports—textiles, leather, and rice—have stagnated over the last decade. Rising oil prices, relatively high minimum wages in key sectors and a lack of innovation have eroded the country’s competitiveness in the global value chains that move these products around the world.

Yet, ICT services exports have been rising steadily since 2007. Many multinational IT firms, including Cisco, S&P Global, and Mentor Graphics – have already opened offices across the country, relying on Pakistani talent to deliver IT services to global markets. The industry is targeting $10 billion in exports by 2025, which would be 400% growth from 2017.   

Export growth of goods vs ICT services (US$ billions)

As technology continues to reshape global industries, supporting diversification towards IT and IT-enabled services is one way the Government of Pakistan can reinvigorate growth today while also helping build the global brand of Pakistan’s tech sector for the future. That means focusing reforms and incentive policies in three main areas of activity: (1) software-as-service exports, (2) virtual freelancing (e-lancing), and (3) e-commerce.

Software-as-service exports
Pakistan’s software-as-service exporters have been able to leverage Pakistan’s increasingly large pool of young software engineers and computer science graduates to offer services to global clientele at a competitive quality-to-price ratio. Industry associations report Pakistan now has more than 300,000 English-speaking IT and IT-enabled service professionals. With nearly one quarter (23.3 percent) of its population between the age of 10-19, there is potential to develop a pipeline of skilled young workers and entrepreneurs to help this sector grow. 

Virtual Freelancing
Many of those who have not found jobs with Pakistan’s larger tech companies have become e-lancers in the global ‘gig economy’. Today, an estimated 150,000 Pakistanis offer their services on online e-lancing platforms, according to the Punjab Information Technology Board. This has helped make Pakistan the 3rd most popular country for virtually outsourcing tasks, according to the Oxford Internet Institute’s Online Labor Index, trailing only India and Bangladesh and ahead of the United States and the Philippines.  

E-Commerce
As the world’s 6th most populous country, Pakistan is also an attractive market for global e-commerce and a petri dish for young Pakistani tech entrepreneurs. Many of these entrepreneurs are trying to find marketable solutions to local problems—like GharPar—focusing on social impact and helping to drive social change.

Given all of this momentum and potential, how can the Government of Pakistan best support its rising tech sector? At the World Bank Group, we see a few ways to start:

  • Strengthen the regulatory framework around e-commerce. This will help to safeguard data and to build trust between buyers and sellers. The government is already working on this—in particular, on consumer protection rights and on privacy/data protections. These are critical building blocks that will help to protect domestic consumers and to alleviate the concerns of potential foreign direct investors.
     
  • Reduce the costs of regulatory compliance for start-ups and small businesses through consistent, streamlined, and transparent administrative procedures. Addressing the country’s complex tax system is already on the new government’s agenda, and this is a start. Granting small start-ups a temporary waiver on paying the Employee’s Old-Age Benefit could be another option. To help new businesses grow and to encourage them to formalize, the government needs to make it easier for them to interface with regulators.
     
  • Strengthen oversight and regulatory mechanisms to foster cross-border electronic transactions. The State Bank of Pakistan is currently working on amending foreign exchange policies—a major constraint on the tech sector. Establishing dispute resolution mechanisms for e-commerce and formulating licensing requirements for establishing and operating e-commerce businesses will help.
     
  • Focus on skills development – but not just technical skills and not only at the tertiary level. For Pakistan to continue to build its brand as a country known for excellence in digital technology and skills, the workforce of the future will need to be creative, agile, and resilient—skills that should be fostered at all stages of the education system. And fostered for all parties. Pakistan will need more women workers and entrepreneurs. The government should continue to level the playing field for women in education and in the workforce, to ensure sustainable, inclusive growth.
​​

Financing stabilization: Achieving a common vision for security and development

1 week 1 day ago
UN troops patrol the airport grounds in Goma, Democratic Republic of the Congo. They are followed closely by children who were able to sneak into the airport without much trouble. © Vincent Tremeau/ World Bank


Deciphering the nexus between security and development has become one of today’s most pressing global challenges. Just look at recent news: In the past few weeks, more than 5,000 people have been marching from Central America to the United States to flee criminal violence and poverty. In Afghanistan, 4 million people have voted in parliamentary elections amid growing violent attacks that have taken almost 30 lives, including that of a powerful a police chief. In Nigeria, insecurity is a major development challenge due to the militant group Boko Haram, as well as because of the growing intercommunal violence between herders and pastoralists.

Read the full blog on Paris Peace Forum's Medium

Making room for Africa's urban billion

1 week 1 day ago

By 2050, more than a billion people will be living in African cities and towns. As more and more of the continent’s population – 60 percent of whom live in the countryside – move to urban areas, pressures on land can only intensify. How should we make room for this massive urban expansion? How will city structures have to change to accommodate Africa’s urban billion? And could well-directed policy help spring African cities out of the low-development trap? These questions were at the core of discussions at the World Bank’s 5th  Urbanisation and Poverty Reduction research conference on September 6th 2018.

Cities on the brink
 
Rapid urbanisation is pushing countless African cities to their limits – many are simply running out of space. As infrastructure struggles to keep apace of a mushrooming populace, policymakers will have to rethink their approach to the use and distribution of land. Lagos is but one of the latest cities undergoing an ambitious redesign of its urban environment. In 2017, the city launched the Eko-Atlantic regeneration project. With aims to reclaim a land mass the size of Manhattan off the coast, the new planned city hopes to house more than 200,000 new residents and 150,000 workers, reflecting the government’s vaulting ambitions to manage relentless urban growth.
 
Such radical changes are part and parcel of a wider ongoing phenomenon in African cities – the lack of controlled densification and the prevalence of urban sprawl. It’s now expected that even with density levels remaining the same, by 2050, urban land cover in Africa will be four times higher than it was in 2000. Should density levels decline, Africa’s total urban area could increase by more than a factor of 12, placing tremendous strains on the continent’s economic, social, political, and environmental health.  
 
When the city loses its walls, the city ceases to be
 
Economists tend to advocate compact living and the containment of urban sprawl, but why does density and the spatial organisation of cities really matter? The answer is that how cities shape and sprawl closely affects how we live. How we access jobs and economic markets, how we communicate and interact with one another, how much time we spend commuting, and how much we pollute. When cities are well planned and compactly organised, it’s much easier to seize the positive agglomeration aspects of urbanisation whilst also lowering the costs of providing essential infrastructure and services.
 
When we think about the spatial development of Western countries, the efficient cities are those characterised by high-density developments, that are close to the city center, and anchored by strong transportation networks and formal property markets. These are the foundations for highly attractive and productive spaces where people can live, work, and think together.
 
On the other hand, many African cities are spatially dispersed, with neighborhoods that are undermined by a combination of weak infrastructure and dysfunctional and markets, leaving vast populations isolated from social and economic life. Recent evidence suggests that the average African city is 20% more fragmented than cities in Asia, 29% more expensive, and with 37% less exposure to people and jobs. These challenges are often a symptom of wider land policy failures, both past and present, which lock cities into informality and a low-development trap.
 
Two features of Africa’s urbanisation challenge: Low-density and leapfrog development
 
At the conference, Jan Brueckner presented on Backyarding, a semi-formal means of densification that has proliferated through much of South Africa in response to planning regulations set up during the apartheid era (paper). Across major cities, millions of homeowners – mostly those living in government subsidized properties – are choosing to rent out portions of their yards to occupants living there in self-constructed or formally built dwellings.
 
Since past government housing was done at extremely low-density, residents have seized the opportunity for infill development on their surplus lot space, generating new housing outside standard planning regulations. According to Statistics South Africa, the number of households living in either formal or informal dwellings in backyards has increased from 1.135 million in 2011 (7.3% of the country total), to 1.835 million in 2016 (12.5% of the total).
 
A key question is whether town and planning regulations will eventually recognise these market driven means of densification. In Los Angeles, for instance, government officials are encouraging residents to use Backyarding as a tool to house the homeless in so-called “granny flats”. As part of the program, homeowners could be awarded $75,000 to build a granny flat on their land, or $50,000 for renovations of existing units.  One major advantage of course, is that by sharing external services, such as water and sanitation facilities, access to services is significantly better than in alternative options like slums. 
 
In another session, Vernon Henderson showed the distorting effects that colonial hangovers have had on the structure of African cities (paper). Studying the differences between cities under Anglophone rule versus Francophone, he showed that Anglophone cities have more leapfrog development at the city margin as well as less intense land use and more irregular layouts in the colonial portions of the city.

The figure below compares the road layout of colonial sections of Accra versus Bamako both in the 1960s and today. Both cities have very similar layouts today as they did nearly 70 years ago, but Bamako appears to have denser, grid-like structures with sections of the city well-connected to arterial roads, while Accra has a much lower degree of rectangularity and much fewer lineal connecting roads. Note that for the same map scale, we see much more of the city in Bamako than in sprawling Accra. Henderson shows that this is a feature of Anglophone cities, which tend to sprawl compared to Francophone ones largely because under British rule, colonial and native sections were left to develop without an overall plan and coordination. Whereas, integrated city planning and land allocation mechanisms were a key feature of French colonial rule.



New plans for African cities
 
Land use regulations, building standards, and zoning are all tools with tremendous power to bring people into cities or keep them out instead. Too often in African cities, developers and everyday citizens are side-lined to the outskirts where looser restrictions coupled with ambiguities over jurisdictional responsibilities, make development much easier and affordable.
 
One question is whether African cities can and should aspire to a western model of spatial development, or whether they should work towards incremental changes, developing existing strengths and moving towards some means of semi-formal development that encourages greater density. Land policy and spatial planning have a critical role to play in this process, ultimately determining how cities will densify and expand as they grow.
 
In the city centers, land policy needs to be adaptable and consistently readjusted to provide guiding principles on urban renewal and regeneration that promote suitable means of densification. At the outskirts, where we see concerning trends of urban sprawl and encroachment into peri-urban and rural lands, local communities should also have a strong role to play to ensure expansion is sustainable and land is clearly defined and demarcated to support the growth of the local community.

Marginal changes for the many or focusing on the few? Trade-offs in firm support policies and jobs

1 week 1 day ago

Should governments aiming to improve job opportunities devote additional resources towards trying to provide programs that attempt to generate marginal changes in many micro and small firms, or try to target the support towards making larger impacts on a smaller number of high-growth and larger firms? For example, should a government spend an additional $5 million on grants and training programs that support 25,000 micro firms at $200 each, use it to give 100 grants of $50,000 each to 100 high-growth potential firms, or use it as a single $5 million tax incentive to encourage one large multinational to set up a manufacturing plant in the country? I’ve been asked my thoughts on this question quite a few times, so thought I’d share them here.
 
The answer involves many different trade-offs and considerations, and I attempt to summarize some of the key ones in this post. The bottom line is that there are trade-offs (at least in the short-run) between poverty alleviation and productivity growth, and that different policies will have impacts on different types of job creation. A key lesson for policymakers is to be clear about what the job problem is that they are trying to solve, and not try to use the same policy instrument to achieve multiple competing priorities.

One standard reaction I have heard is for people to refer to research on whether small vs large firms, or young firms create more jobs (e.g. Ayyagari et al, 2014). However, while useful as a descriptive of where jobs are being created and destroyed, such studies tell us very little about policy effects. What matters are the policy deltas – the additional jobs created if additional funds are devoted to helping a particular type of firm compared to business as usual. For this, explicit consideration of counterfactuals is needed.
 
The case for (and against) policies targeted at many micro and small firms
Micro, small, and medium firms are important sources of employment for the poor. Successful finance, grant, and training programs directed towards such firms typically improve self-employment prospects for the owners of these firms, helping them to start such enterprises, have these enterprises survive longer, and help their owners earn higher incomes. However, they have little discernable effect on paid employment of others (Grimm and Paffhausen, 2015). But these programs can have lasting impacts on the incomes of relatively poor people. For example, in de Mel et al. (2012) my co-authors and I show that one-time grants of $100 to $200 given to Sri Lankan male business owners resulted in 10-percentage-point-higher enterprise survival rates, and $8-to-$12-per-month-higher profits five years later, resulting in substantial returns to capital. Likewise, two recent evaluations I have done of business training programs in Kenya and Togo find limited employment effects, but significant increases in the incomes of firm owners that more than result in high return on investments (McKenzie and Puerto, 2017; Campos et al, 2017).
 
In absolute terms, these changes for each firm served by these programs are small. But an increase in income of $8 to $12 per month in Sri Lankan firms that were earning $47 per month, or an increase of $2.60 per week in Kenya for women who were earning $13 per week equates to an important improvement in the returns to the labor of the poor. Moreover, in the Kenyan study, we are able to show that this increase in income does not come from reducing the income of other businesses operating in the same markets, but that it comes from growing the market as a whole.
 
A final point in favor of policies targeted at such firms is that emerging evidence suggests that this is the group of firms that policymakers may be best able to predict success amongst, at least in terms of distinguishing between firms with growth prospects and subsistence firms (e.g. Hussam et al, 2017). Moreover, several of the evaluations show both high returns for the average firm, and impacts across a large fraction of the distribution.
 
The case against such policies is that such policies may be much better at poverty alleviation than at generating long-term productivity growth and structural change in the economy. Very few of these microenterprises ever grow to the point of hiring workers, and especially to hiring more than ten workers (see background note on targeting). Moreover, as economies grow, the share of the labor force in self-employment shrinks dramatically (Gollin, 2008), and so efforts to help the microenterprise sector are largely focused on firms that we expect to eventually disappear, and on individuals who we eventually expect to become wage workers, as the economy grows.  A final point to note is that it can be costly to administer a program to thousands of firms, and so a larger share of my hypothetical $5 million in spending might end up getting spent on program administration costs than in programs helping larger firms.
 
The case for (and against) policies targeted at high-growth firms
High-growth firms account for a disproportionate share of employment growth, and so successful policies which are targeted towards such firms can generate new jobs in the economy. For example, in McKenzie (2017), I show that individuals who win a $50,000 grant in a business plan competition in Nigeria are more than 20 percentage points more likely to have grown their firm to 10 or more workers three years later than comparable non-winners, with a cost per job created that is substantially cheaper than is the case for vocational training, wage subsidy, management training, and small grant interventions. Likewise, Fafchamps and Quinn (2017) find short-term positive and cost-effective impacts on job creation of a business plan competition in three other African countries.
 
The types of jobs created by these high-growth firms appear to be somewhat different than those in micro-enterprise employment. In my work on the Nigerian business plan competition, I find that the workers hired by the business plan competition winners tend to be more educated than the average Nigerian youth, and such jobs may do less for poverty alleviation than directly helping the self-employed. However, these jobs may be ones in which workers are more likely to learn new skills, and which may contribute more to productivity growth in the country.
 
Two disadvantages of such policies are the difficulty in targeting such programs, and the cost. In work with Dario Sansone, I note that it has proven very difficult to predict in advance which firms will grow rapidly. The best that may be able to be done is to screen out the bottom tail of firms, and use a mechanism which self-selects a pool of firms with more growth potential. Secondly, the cost of these programs may make it expensive to reach very many firms. The YouWin! business plan competition spent $60 million on grants to 1,200 firms in order to generate just over 7,000 jobs. While cost-effective compared to many alternative job policies, this still highlights the high cost of generating jobs through direct support to high-growth firms.
 
A further trade-off can arise between government efforts to support innovation and the development of high-technology industries, versus a desire to support job creation. Programs that improve the productivity and innovativeness of digital start-ups, biotechnology, etc. may create the types of high-paying, high-skilled jobs that are scarce in many developing countries. But these sectors also tend to not be very employment-intensive, and support to other sectors may be more effective in generating large numbers of job for poorer and less-skilled individuals. In some cases, supporting productivity improvements in these mid-sized firms may actually reduce employment in the long-term, as seen in my long-term follow-up of a management improvement intervention in India.
 
The case for (and against) supporting very large firms
A final alternative is to focus very narrowly on trying to attract more large firms to set up operations in the country, and policy actions to help the largest firms grow. Some of the policies to do this are more general business environment and infrastructure policies that may help firms of many different sizes. The broader trade-off question arises when considering direct efforts to attract and help the largest firms. These may include tax incentives, free trade zones, research and development incentives, supplier development programs, and other such policies. The argument in favor of such efforts is that these large firms may generate many jobs at once, and help improve the productivity and industrial capacity of a country.
 
However, there are several reasons to be cautious about the ability of such policies to generate employment. The evidence base on many of these interventions is sparser and less well-identified than on interventions for microenterprises and high-growth firms. One partial exception is work on export processing zones. Cirera and Lakshman (2017) conduct a systematic review of 59 studies and conclude there is no robust evidence that these zones create additional employment. A second concern is one of political capture and fairness, with incentives ending up largely benefiting well-connected and already wealthy business owners in many developing countries. Rodrik (2004) lays out a set of principles that an appropriate industrial policy should follow, but, to my knowledge, there is no rigorous evidence as to the extent to which attempting to follow such policies has resulted in employment growth.
 
Final points

  1. Generating additional employment is hard to do, and hard to measure. Many impact evaluations are only short-term, and are unable to measure whether new jobs are created, or whether firms supported take away business from other firms, and whether the workers employed simply move away from other employment activities. Context matters here – countries with high unemployment rates and/or large numbers of youth entering the labor market every year may be more focused on the number of jobs created and less on displacement, while those with high employment rates may instead be trying to create more jobs of higher wages and quality.
  2. Governments are often guilty of trying to use the same policy instrument to try to serve multiple policy aims that might conflict with one another. For example, the appropriate policy instrument to spur high-growth entrepreneurship is unlikely to also be the right instrument for including under-served groups such as underrepresented regions, female entrepreneurs, or the poor. Policies to encourage innovation and the development of a high-tech sector may be more effective if they are not also trying to select firms on employment potential. Governments should therefore be very clear what job problem they are trying to solve before deciding which policy instrument will be most successful for doing so.
  3. While the choice of where to spend time and money at the margin will involve a trade-off between supporting microenterprises, SMEs, and large firms, most countries will want a mix of policies that offer different policy instruments designed to support all of these types of firms. Indeed, we see this is still the case in most developed countries, where governments both spend money on small-business programs, as well as providing tax incentives and other programs for large firms.
  4. A final point is that I am sympathetic to Lant Pritchett’s point that such money might be even better spent on something with only a tiny probability of having an influence, and with it being difficult to ascribe causality, but where the upside potential is huge.

Why Disruptive Technologies Matter for Affordable Housing: The Case of Indonesia

1 week 2 days ago



Big Data. Blockchain. Drones. E-Wallets. Artificial Intelligence.
These are words that one would expect to hear at the latest conference in Silicon Valley, not during a discussion of Indonesia’s affordable housing challenges. Yet they were buzzing through the captive crowd in Jakarta at the Disruptive Technologies Workshop for Affordable Housing on September 17, 2018. The event, hosted by Indonesia’s Ministry of Public Works and Housing with support from the World Bank’s National Affordable Housing Program (NAHP), was attended by 150 participants from local public agencies, developers, lenders, and community organizations. The workshop’s goal was to explore one big question: How might Indonesia harness the power of disruptive technologies to transform its housing ecosystem?   

Indonesia cities are growing faster than those of its Asian neighbors at a rate of 4.1% a year. However, the benefits of urbanization – economic growth and poverty reduction – won’t be fully realized until the country can increase access to basic services and invest in affordable housing for its residents. An estimated 820,000 to 1 million housing units are needed on a yearly basis to meet the growing demand between now and 2030.

Indonesia’s current housing situation dovetails with the rapid development of its technology sector. There is strong start-up culture that has birthed local giants like Go-Jek, which started as a simple ride-hailing app for motorcycle taxis and expanded to over a dozen services, including food delivery, massage booking, and mobile payments. Go-Jek is currently valued at close to $5 billion. Through its ascent, it has revolutionized aspects of life in Indonesia’s cities and contributed to a booming gig economy.

Workshop participants were keen to discover: were there other budding technologies out there, like Go-Jek, which could change the way Indonesia approached housing? Here are a few of the promising pitches that were presented to the group.

iBuild
Citizen-centric mobile application that facilitates home self-construction processes

Who it’s for Households; construction workers; contractors; lenders; developers; policymakers Why it’s needed Most housing is self-built, as it’s often the only financially affordable option. Access to credit is limited, and the construction sector is largely unorganized and informal. Government subsidies given towards self-build projects are difficult to track and highly vulnerable to fraud. How it works Using the mobile platform, users find contractors and get quotes for projects, purchase materials, track the progress of construction projects, rank quality of services and make mobile payments to vendors.  E-wallets help ensure that government subsidies are being used for intended purpose. Why it’s promising
  • Empowers citizens to take control of the home construction process
  • Improves transparency, organization, and competition in a huge informal construction sector
  • Aggregates data on previously informal transactions to boost inform policy-making
 
City Planning Lab Affordable Housing Suitability Tool
Geospatial planning tool that identifies optimal locations for affordable housing developments Who it’s for Spatial planning agencies, central and local government, and developers Why it’s needed Government-subsidized housing projects are often poorly located on multiple factors. They tend to be far from the central business district, geographically risky, and lack access to basic services and employment centers. How it works Using the online tool, which combines geospatial and satellite data, users can generate a heat map that displays optimal locations, based on a detailed list of critical factors such as access to Why it’s promising
  • Boosts local government capacity to identify more optimal, and thus more successful, locations for affordable housing
  • Facilitates collaborative and informed decision making
 
IBM Blockchain 
Secure, transparent, and efficient digital ledger that streamlines land titling processes Who it’s for Low-income and informal populations; NGO’s; Land Planning Agencies; lenders Why it’s needed Nearly 20% of urban slum dwellers don’t have formal tenure on their homes, which means they can’t access formal financing for home improvement. The process for obtaining this tenure in Indonesia is inefficient and costly. How it works Networks of community workers survey and map land/ property ownership in a “fit for purpose” manner, and use blockchain – a public, secure, decentralized digital ledger – to streamline the mapping process and accelerate land titling. Why it’s promising
  • Streamlines the process and reduces the transaction costs of obtaining formal tenure  
  • Provides a uniquely secure, transparent, and tamper-proof method of documentation


Property PriceTag  
Use of Big Data and new technologies to track housing supply and demand for informed decision-making Who it’s for Public agencies; developers; lenders; other key stakeholders   Why it’s needed Data on the housing market is currently scattered across public and private agencies, and difficult to analyze in real time and on a large scale.   How it works Big Data is consolidated across various sources, including public and private data, and data gathered through innovative methods (i.e. trained Artificial Intelligence bots that can count the number of individual homes on satellite images). Why it’s promising
  • Equips policymakers and companies to make more timely and informed decisions with regard to the housing market 
  • Technologies to be incorporated into the development of NAHP’s Housing Real Estate Information System, a real-time housing database used for decision-making by both the public and private sector
 
The technologies described above are just the tip of the iceberg of what was discussed at the workshop.  No longer a luxury of advanced economies, these disruptive innovations hold vast potential to empower informed decision-making, formalize the informal, and radically reinvent housing value chains to transform the affordable housing sector and improve the lives of millions. Of course, as with any technological advancement, there are serious issues to consider and plan for such as consumers’ privacy rights protection and cybersecurity in an age of interconnectedness. It’s a tricky task for any government to navigate, but one well worth the waterfall of benefits.
 

Lessons from China: Vocational education for economic transformation in Africa

1 week 4 days ago
“African participants visit modern container port in Ningbo, China. Photo credit World Bank”

This September I traveled to Beijing and Ningbo, China, to participate in the second Africa China World Bank Education Partnership Forum on Technical and Vocational Education and Training (TVET). The Forum--co-hosted by the China Institute for Education Finance Research, Peking University, Ningbo Polytechnic and the World Bank Group-- served as a platform for discussion and knowledge exchange to encourage stronger partnership efforts between African TVET institutions and some of China’s best ranking TVET centers and industries.

The initiative, launched in 2017, offers a space for collaboration and partnership between leading universities, vocational education institutions, and private sector in both East Asia and Africa. This year’s Forum included TVET ministers and directors from across the region, including Chad, Ivory Coast, Ethiopia, Kenya, Tanzania, Ghana, Niger, and Nigeria. The goal was to address the challenges for TVET in the African continent, particularly in the Sub-Saharan region, such as low access, quality and relevance, and inadequate policy and financial support, as well as opportunities, including the ongoing economic transformation and regional integration initiatives which boost the demand for skilled labor. The week-long event offered government officials, TVET experts and development professionals the opportunity to learn first-hand from China’s TVET model and practices and hear more of the country’s national model geared toward demand-driven training. 
 
China’s TVET Model and Experience
 
The Chinese TVET model can be seen across three stages of education. First, TVET is introduced at the secondary education level to help initiate and train operations-oriented skilled workers. Second, TVET is later advanced at the tertiary education level to offer more developed skills and competencies for demanding areas such as manufacturing, management, services and construction. Third, education institutions and companies offer in-service training to further sharpen skilled workers’ already-acquired technical knowledge and capabilities, to meet current labor market demands. What is truly unique to the Chinese TVET model is that it promotes vertical and horizontal mobility and progression between different qualification levels, and between TVET and general and higher education.
 
The government’s vision is to develop a world-class vocational education system by 2020, and it provides concentrated financial and technical assistance for key vocational colleges to serve as models for TVET reform and innovations. The policy encourages strong industry-education integration to ensure TVET is demand-driven and relevant. Quality assurance mechanisms are in place to ensure the quality of training programs, and funding for vocational education is guaranteed for all – particularly for students coming from low-income families to promote equity. TVET institutions are increasingly using technology in the delivery of training to produce an ICT-competent workforce.
 
After having learned more about the Chinese model of governance on TVET, participants from Africa and international institutions acknowledged the strategic importance of designing and investing in TVET education as a means to achieve economic transformation. Participants also learned how essential it is to change perceptions around TVET by creating clear paths to increase qualifications leading to better jobs. 
 
Some of these lessons will be incorporated by participants from selected TVET centers in Africa as part of the World Bank’s East Africa Skills for Transformation and Regional Integration Project (EASTRIP), developed under the platform of the Pan-African Partnership for skills in Applied Sciences, Engineering and Technology (PASET). EASTRIP aims to increase the access and improve the quality of TVET Institutes and to support regional integration in East Africa. The project will support 16 TVET centers in Kenya, Ethiopia and Tanzania to strengthen their capacity to produce high quality skills for the regional sector markets in railway, highway, port management, energy, light manufacturing, and ICT, in addition to helping create national environments conducive for TVET and enhancing regional collaboration.
 
Smart and timely investments in human capital present a transformational opportunity for African nations. This initiative is part of the World Bank Group’s efforts, through PASET, to accelerate the creation of highly skilled technical personnel in Africa and foster strong local scientific and technical capacity to propel the economic transformation of the region.

Weekly links November 2: harnessing shame, measuring markets, African safety nets and apprenticeships, rugby, and more...

1 week 4 days ago
  • “The average number of new social safety net programs launched each year in African countries since 2010 exceeded 10” – Kathleen Beegle on the Africa Can End Poverty blog discusses the rise of social safety nets in Africa.
  • The Declare Design team remind you to stratify your cluster-randomized experiments by cluster size.
  • With the job market coming up, a paper on the characteristics of “job market stars” – one factoid is that in development more than half the stars are female, compared to only 20% of all stars...another is that “not a single star student for six years running has taken a permanent job in industry”.
  • On VoxDev, Gordon Hanson and Amit Khandelwal discuss using night-light intensity to measure markets- with a comparison to what daytime satellite imagery reveals, and a note that combining the two provides the best results – “daytime imagery is particularly well-suited for defining the extent of market areas, and that nightlight imagery is useful for capturing the intensity of activity within these market boundaries”

Safety nets boost consumption levels of the poorest across Africa

1 week 5 days ago

Social safety nets are among the most frequently evaluated social policy interventions in Africa. The surge of information has left practitioners and policymakers alike a little puzzled. What can we say about the average impacts of social safety nets across the continent? Our Chapter 2 in the report on Realizing the Full Potential of Social Safety Nets in Africa tackles these questions by aggregating findings across numerous studies to provide a more systematic assessment. The full methodological details (that would have overwhelmed the chapter for a World Bank report!) are detailed in the companion Policy Research Working Paper.

We identified 55 impact evaluations to study, spanning 27 programs in 14 African countries. (These 55 studies were culled from a longer list of 250 evaluations identified on the basis of study quality and comparable outcomes.) Table 1 summarizes the findings of the analysis. The results are strongest on equity - that is ensuring the poorest households can afford their basic needs. These findings are certainly not entirely new: they complement (and are consistent with) existing literature. For example, the recently published global meta-analysis on food security and assets, as well as another systematic review for Africa and the world.   

We find that for every dollar transferred, consumption increases by 74 cents on average (see figure 1). Food expenditures specifically increase by 36 cents per dollar transferred. Programs that do particularly well are those that target very poor households, such as the Zambia Child Grant Programme and the Malawi Social Cash Transfer Programme  – because the poorest live under the most stringent household budgets, where the extra dollar is likely to have its greatest impact on consumption. Predictability and timing of payments are also important. Again in Zambia, 98% of households received payments on time, and this – combined with short walks to payment sites and low transaction costs –contributed to the program’s impact on consumption, even though transfer sizes were modest.

 
On resilience, the cash from these programs helps households to build assets, often facilitated by complementary interventions. The strongest results were seen through increases in livestock ownership by 34% (from baseline levels) and durable ownership by 10%. And, overall, social safety nets seem to increase the share of households with savings.

On opportunities, programs can boost human capital and productive inclusion. While on average across all programs, social safety nets did not significantly increase school attendance or enrollment, those that focus on children as the key beneficiaries (such as child grant programs) saw improvements. Likewise, healthcare expenditures were not found to significantly increase on average. Programs targeting these human capital outcomes should think carefully about messaging to beneficiaries as well as whether the availability and quality of public services are sufficient.

Beyond these measures of program impact through the meta-analysis, this work points to some important lessons on program design and implementation. 

For equity, outcomes can be achieved at a modest transfer level. Programs with strong impacts have clear target groups and targeting protocols. And, there is some evidence that small, frequent transfers best support improved consumption levels. 
For resilience, it is important to build social safety net programs and delivery capacity during ‘good times’: don’t wait for the emergency! Somewhat larger, less frequent transfers best support savings and investments. Coordinating social safety nets with complementary programs helps boost livelihood resilience.  

And for opportunity, consider supply side constraints in the health and education sector. Strong beneficiary outreach and communication can help deliver desired outcomes.
  
Finally, as social safety nets evolve, so too should impact evaluations. We note three missing areas on the evidence of social safety nets: crisis/fragility contexts, urban settings, and programs at a more mature stage (past the growing pains of the early years). 

Table 1: Synopsis of Results




This blog post is based on “Social Safety Nets Promote Poverty Reduction, Increase Resilience, and Expand Opportunities,” Chapter 2 of the 2018 regional study “Realizing the Full Potential of Social Safety Nets in Africa.” You can read the blog based on the first chapter, Reaching the poor and vulnerable in Africa through social safety nets, here.

Safety nets boost consumption levels of the poorest across Africa

1 week 5 days ago

Social safety nets are among the most frequently evaluated social policy interventions in Africa. The surge of information has left practitioners and policymakers alike a little puzzled. What can we say about the average impacts of social safety nets across the continent? Our Chapter 2 in the report on Realizing the Full Potential of Social Safety Nets in Africa tackles these questions by aggregating findings across numerous studies to provide a more systematic assessment. The full methodological details (that would have overwhelmed the chapter for a World Bank report!) are detailed in the companion Policy Research Working Paper.

We identified 55 impact evaluations to study, spanning 27 programs in 14 African countries. (These 55 studies were culled from a longer list of 250 evaluations identified on the basis of study quality and comparable outcomes.) Table 1 summarizes the findings of the analysis. The results are strongest on equity - that is ensuring the poorest households can afford their basic needs. These findings are certainly not entirely new: they complement (and are consistent with) existing literature. For example, the recently published global meta-analysis on food security and assets, as well as another systematic review for Africa and the world.   

We find that for every dollar transferred, consumption increases by 74 cents on average (see figure 1). Food expenditures specifically increase by 36 cents per dollar transferred. Programs that do particularly well are those that target very poor households, such as the Zambia Child Grant Programme and the Malawi Social Cash Transfer Programme  – because the poorest live under the most stringent household budgets, where the extra dollar is likely to have its greatest impact on consumption. Predictability and timing of payments are also important. Again in Zambia, 98% of households received payments on time, and this – combined with short walks to payment sites and low transaction costs –contributed to the program’s impact on consumption, even though transfer sizes were modest.

 
On resilience, the cash from these programs helps households to build assets, often facilitated by complementary interventions. The strongest results were seen through increases in livestock ownership by 34% (from baseline levels) and durable ownership by 10%. And, overall, social safety nets seem to increase the share of households with savings.

On opportunities, programs can boost human capital and productive inclusion. While on average across all programs, social safety nets did not significantly increase school attendance or enrollment, those that focus on children as the key beneficiaries (such as child grant programs) saw improvements. Likewise, healthcare expenditures were not found to significantly increase on average. Programs targeting these human capital outcomes should think carefully about messaging to beneficiaries as well as whether the availability and quality of public services are sufficient.

Beyond these measures of program impact through the meta-analysis, this work points to some important lessons on program design and implementation. 

For equity, outcomes can be achieved at a modest transfer level. Programs with strong impacts have clear target groups and targeting protocols. And, there is some evidence that small, frequent transfers best support improved consumption levels. 
For resilience, it is important to build social safety net programs and delivery capacity during ‘good times’: don’t wait for the emergency! Somewhat larger, less frequent transfers best support savings and investments. Coordinating social safety nets with complementary programs helps boost livelihood resilience.  

And for opportunity, consider supply side constraints in the health and education sector. Strong beneficiary outreach and communication can help deliver desired outcomes.
  
Finally, as social safety nets evolve, so too should impact evaluations. We note three missing areas on the evidence of social safety nets: crisis/fragility contexts, urban settings, and programs at a more mature stage (past the growing pains of the early years). 

Table 1: Synopsis of Results




This blog post is based on “Social Safety Nets Promote Poverty Reduction, Increase Resilience, and Expand Opportunities,” Chapter 2 of the 2018 regional study “Realizing the Full Potential of Social Safety Nets in Africa.” You can read the blog based on the first chapter, Reaching the poor and vulnerable in Africa through social safety nets, here.

Releasing the 2017 Global Findex microdata

1 week 5 days ago

It’s financial inclusion week—a series of events exploring "the most pressing actions needed to advance financial inclusion globally"—making this a perfect time to launch the 2017 Global Findex microdata.

In April, we released country-level indicators on account ownership, digital savings, savings, credit, and financial resilience. Now comes the microdata – individual-level survey responses from roughly 150,000 adults living in more than 140 economies globally.

The good thing about the microdata is it lets you slice up the Global Findex variables in countless different ways. It's also easy to mix in data from other sources and explore the factors driving financial inclusion.

Here's one small example. Let's say you work on women's financial inclusion, and you want to probe West Africa's surge in account ownership. Looking at the main Global Findex data, you can easily find the share of women with an account.

But maybe you only want to focus on the poorest 20 percent of women, or women who are out of the workforce. Using the microdata, you can define the demographic categories and produce the numbers. Don't get too carried away, though—you should only trust numbers for which you have at least 100 observations.



The microdata's granular detail also makes it easier to unpack financial inclusion trends. Overall, the Global Findex shows a sharp rise in digital payments from 2014-2017. Microdata hints at where that progress came from.

In Ghana, for example, digital payments nearly doubled. Three years ago, a quarter of adults used such payments; today, half do. A look at the data suggests mobile money accounts were a factor in this increase. While the share of adults with only a financial institution account was mostly flat, the share with both types of account nearly quadrupled, to 24 percent. During the same period, there was a doubling of the number of adults using only mobile money.  

But mobile money exists mostly in Sub-Saharan Africa and a few other emerging economies, including Bangladesh and Paraguay. So what else is behind the global digital payments increase?

Consider Thailand, where the share of adults using digital payments hit 62 percent, up from 33 percent in 2014. Part of the explanation might be that use of debit cards doubled during the same period, as did the share of adults using an account to receive wage payments. Meanwhile, receipt of digital government transfers nearly tripled.

The microdata clearly cannot capture every type of transaction or definitively explain financial inclusion trends in every country. But we hope it will help researchers better understand what's going on in the financial inclusion world—and open opportunities for further progress.

Global Findex 2017 microdata available for download

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We're thrilled to release the 2017 Global Findex microdata, featuring individual survey responses from roughly 150,000 adults globally. Get it here, along with documentation including a variable list, questionnaire, and information on sampling procedures and data weighting.
 
Downloading the data is easy. At the microdata library, you'll see a screen that looks like this:
 

 

Click on the green arrow next to the global dataset, or the individual country you want. Next, you'll see a screen like the below. Click on the "get microdata" tab.
 


 
You have to register with the World Bank's microdata library to complete the download, but registration is quick and easy and you'll have the data in no time.
 
The microdata delivers roughly 100 variables measuring how adults use bank accounts, mobile money, digital payments, savings, and credit, based on nationally-representative surveys conducted in more than 140 economies. Collected by Gallup, Inc. in calendar year 2017, the latest Global Findex follows earlier rounds from 2014 and 2017. 
 
In April, we published country-level data on key financial inclusion indicators. (For a quick overview of our main findings, watch our video.) But there are endless ways to splice the data – and we covered only a few of them.
 
The individual-level microdata lets you design pretty much any variable you want, including by gender, age, income, education, and workforce participation.  
 
Suppose you're a policymaker working on retirement, and you want to know how many elderly adults in your country receive public pension payments. Using the microdata, you can define "elderly" however you want (55 years or older? 65 years or older?) and find out. While you're at it, you might also want to know how they receive such payments – whether through a bank account, a mobile phone, or some other method. Again, the microdata has what you need. Don't get too carried away, though – you should only report numbers for which you have at least 100 observations.
 
We hope policymakers and researchers will dig into the microdata and use it to come up with new insights into the world's financial inclusion challenges and opportunities. Visit the Global Findex homepage if you want to read our report or look at the country-level indicators. Share your findings with us on Twitter @GlobalFindex, and don't hesitate to get in touch if you have any questions. 
 

What’s new in social protection – November edition

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Can cash transfers increase voting in elections? An upcoming article by Conover et al estimates that participation of Colombia’s Familias en Accion conditional cash transfer (CCT) program increases the probability that women cast a ballot by 2.8% (and women are more likely to vote for the incumbent candidate who supported the CCT).

A systematic review by Bastagli et al discusses the impact of cash transfers on 35 indicators: in general, cash contributed to progress in the intended objectives, but with variations in size and strength of underlying evidence base. Handa et al dispel a range of negative ‘myths’ on cash transfers, such as creating dependency or labor market distortions. Among the findings, they show that programs generate between 27-152% returns in local economies across Africa. An article by Profti et al notes that people may switch from wage to self-employment (own farm labor) as they are provided transfers of different levels. A Vox brief by Baird et al reflects on the limitations of classic economic models to assess the labor effects of cash transfers.
 
Moving to nutrition, Sanchez et al examine the nutritional and cognitive impact of the Peruvian Juntos CCT program among children below 4 years of age. This reduced stunting by 8.9 percentage points and cognitive functions (i.e., vocabulary ability as measured by Peabody test scores) by 0.2 standard deviations. A working paper by Devereux and Nzabamwita reviews experiences with social protection in six African countries and find enhancements in food security, but little or no improvement in nutrition due to under-coverage and low transfer amounts. A presentation by De Groot and Yablonski finds similar overall results in Ghana, while a paper by Lumbasi on Ethiopia found that women bear the main responsibility for observing ‘soft’ conditionalities of cash transfer programming, thus reinforcing existing gender-based norms and caring practices (see also Peachey’s reflection on gender and cash transfers).
 
Some mixed evidence on the Public Distribution System (PDS) in India: Kaul estimates that an Rs10 increase in PDS subsidy bolsters food consumption by 126 kcal/day (for all food groups, not only cereals); yet, the impact is almost 50% lower in corrupt states. Another study by Das in West Bengal shows that PDS targeting is relatively pro-poor, with awareness campaigns by community-based and self-help groups increasing program participation.
 
A new brief shows that in high income countries, 1 child out of 7 lives in (relative) poverty: cash transfers help (1% increase in spending leads to 1% reduction in poverty rate), but not for jobless and single-parent families. Among them, the poverty gap is too deep, and the size of cash is not adequate to lift them up. A presentation by Kajula investigates the impact of cash transfers on violence against children and youth in Tanzania. Emerging findings seem to indicate that CCTs and “cash plus” graduation components have increased formal help-seeking against violence, but not reduced its level. Speaking of children, check out three handy one-pagers on child-sensitive social assistance in Zimbabwe, Palestine and Sudan.
 
Not one, but three papers on humanitarian assistance and social protection. A discussion paper by Alawi Al-Ahmadi and De Silva provides a great detailed account on what it takes to operationalize social protection in fragile, war-torn Yemen. A working paper by Ulrichs and Sabates-Wheeler has a nice discussion on the rationale for connecting humanitarian and social protection spheres (see p.10-11), while another paper by Roelen et al provides an overview of the use of cash transfers as part of long and short-run objectives.
 
A couple of new pieces on targeting. A working paper by Sebastian et al develops a proxy means test for Sri Lanka and finds that it could improve the targeting performance of Samurdhi in terms of undercoverage, leakage, eligibility, and poverty impact. Valli has a new paper on targeting in the Ethiopia (see brief here): although based on slightly old data (i.e., 2004-2009), findings suggest an overall improvement in targeting, especially for public works.
 
UNDESA unveils its thinking on social protection in a comprehensive report. While providing insights on themes like migration, urbanization and disability, it also underscores that universality and targeting can be complementary concepts: “… complementary special or differentiated measures may be necessary—even if only temporarily—to help [disadvantaged] groups to overcome the challenges they face and achieve universal coverage” (p.114). Since I mentioned disability, Schojedt has compiled a useful annotated bibliography on social protection and disability including 137 titles on the subject presented with handy links and summaries.
 
Finally, Lustig’s monumental, 902-page edited handbook on the Commitment to Equity project is now available (the individual chapters and 81 working papers were already posted online). A pioneering project on the impact of tax-transfers systems in developing countries, CEQ has helped to bring the effects of financing and taxation more firmly into social protection debates – the latter often heavily focused on the benefit side of the equation.
 
==
This blog is based on weekly newsletter available here

宜居始于社区——新加坡故事(下篇)

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上一篇博客中,我介绍了5D框架,并结合新加坡的公共住房社区,例如组屋小镇,讨论了前两个D——密度和多样性。在本文中,我将分享我的观察体会,探讨组屋社区如何反映其他三个D——目的地(Destination)、距离(Distance)和设计(Design)。
 
为了提高目的地通达性,新加坡推行畅行乘车(Walk2Ride)计划,改善社区步道,鼓励居民使用公共交通。这项政府政策确保在地铁站400米(或1/4英里)范围内都建有公共廊道通往公车站点、公共设施和组屋。
 
让人们能“舒适”地“步行”搭乘公共交通只是新加坡为社区做的诸多努力之一,现在新加坡有顶棚的廊道总长度已经达到了200公里
 
为了缩短到达换乘点时间,政府鼓励居民骑行,以解决公共交通的第一英里和最后一英里的连通性问题。作为骑行基础设施的一部分,许多地铁和公交站点都设有多层自行车停放架,使新加坡更加适于骑行。实际上,从2016年7月开始,所有新建学校、商业、零售和企业园区(达到一定规模的)必须制定步行骑行规划,确保公共空间设计充分照顾到步行与骑行需求。
  社区自行车停放架。(摄影:王雪漫/世界银行)

让我们探索一下打造这座城市的最后一个“D”城市设计的方方面面。我认为社区是新加坡建设花园里的城市愿景的重要组成部分。虽然新加坡面积不大,但政府付出了巨大的努力为居民打造自然环境。

政府对社区的“软”“硬”景观都有具体规定。这些规定细致到包括树木密度建议、社区绿色走廊到公园连接通道和国家公园的连通性,以做到公共空间的连续性和互联互通。绿色空间不仅为户外活动提供了宜人环境,而且根据新加坡城市建设局的研究,增加绿化面积可使气温降低高达3.1摄氏度。

左:宏茂桥组屋区鸟瞰。右:宏茂桥组屋区的一个楼顶花园。(摄影:王雪漫/世界银行) Toh太太的大儿子住在榜鹅,这是一个相对较新的组屋社区,有12万6千3百位居民。他非常喜欢带蹒跚学步的孩子沿榜鹅水道玩耍,这个人工水道穿越整个小镇,长达4.2公里。水道沿线的公园和区域安排有适合不同年龄人群的文化遗产项目和嬉水活动。Toh太太和先生来看孙子时,一家人就步行到水道,享受户外活动。
  榜鹅组屋区。(摄影:王雪漫/世界银行) 漫步在组屋区,精心设计的公共空间尤其令人印象深刻。原则上,组屋区每个单元要有0.75平方米用于社会和社区设施。很显然,这些设施的设计有利于促进居民间的交流和互动。
 
Toh太太喜欢公共区域的底层设施,邻居们可以聚在这里打牌看电视。沿步道新修的扶手让老年人行走更安全。她家旁边是儿童乐园和运动场地(如篮球或羽毛球),荫凉处设有座椅,她可以坐在那里看着孙子嬉戏。 一个设施齐全的典型组屋区。 总之,新加坡经历了翻天覆地的变化,从20世纪60年代落后的热带“垃圾堆”转变为今日花园里的城市,并且跻身全球最可持续城市之列。新加坡城市可持续性的关键就在于其充满活力、负担得起且包容和睦的社区。这些社区是新加坡成功故事的重要篇章,可供世界各国各城市借鉴。

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Doing better business to fight poverty

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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: [[tweetable]]business-friendly regulations can be instrumental in lowering poverty at the national level.[[/tweetable]]

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

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

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.

Here’s something to think about: [[tweetable]]A 10 percent improvement in the overall Doing Business indicator results in a 2-percentage point reduction in the poverty headcount [[/tweetable]]according to a study published this year.

Researchers analyzing data for 189 economies from 2004 to 2016 found a statistically significant association between the general measure of business-friendly regulations (the overall Doing Business score) and the measures for getting credit and enforcing contracts with the poverty headcount.

Doing Business 2017 revealed that economies with a low Ease of Doing Business score (the measurement used by the index) also had a higher Gini-coefficient (which measures income inequality, the gap between the rich and the poor).  

Here are 5 ways in which business-friendly regulations can contribute to reducing poverty:

  1. Encourages economic growth led by the private sector. Private sector-led growth is the most sustainable way of generating good jobs to reduce poverty. Growth in both public and private sector spending has been linked to reducing poverty at a faster rate.
     
  2. Helps to formalize the informal economy; 2/3rd of the Sri Lankan economy is informal. This creates problems - illegal business activities, below minimum wage-pay, poor working conditions, a lack of social security for employees to name a few. When businesses enter the formal economy (eg: by registering with the Registrar of Companies or opening a tax file), they have to abide by standards - whether it’s to do with the products or services they sell, or how they treat their employees.
     
  3. More registered businesses = more tax revenue to be spent on education, health, and social protection. These are key sectors that directly impact the lives of the poor.
     
  4. Strengthens property rights. Property owners with registered titles are more likely to invest. The same applies to individuals. Research tells us that while the poor have access to land, this right is often not legally recognized- this constrains the use of property as collateral and as a source of income.
     
  5. If private sector growth is inclusive it will increase women’s participation in the economy and improve their decision-making power. Evidence suggests that women make more astute decisions about their families’ health and education outcomes- once again, key to overcoming poverty.
What’s happening in Sri Lanka?

[[tweetable]]In Sri Lanka, the regulatory environment for investment is slowly improving.[[/tweetable]]

The new Doing Business ranking places the country at 100 out of 190 economies, compared with 111 last year. [[tweetable]]This year Sri Lanka made it easier for businesses to register property, obtain permits, enforce contracts and pay taxes.[[/tweetable]]

Ongoing reform efforts are gathering momentum as well, with their impact yet to be realized and measured by Doing Business. This progress includes:
  • The Companies Act no longer requiring businesses to run a notice of incorporation- taking a full 3 days out of the equation when it comes to starting a business.
  • The Registrar of Companies (ROC) introducing a portal called E-ROC to make it possible for applicants to register their business online.
  • The Government of Sri Lanka appointing an Office of the Official Receiver for the first time since the law made it possible in 1982 (the receiver was never appointed). This institution will oversee Sri Lanka’s insolvency framework.
So, what do you think? Have you benefited from these reforms yet? How can these regulators improve their service delivery to help you grow your business?

We’d like to hear about your experience doing business in Sri Lanka, and whether you really think a better business environment can help the effort to end poverty and promote shared prosperity. Let us know in the comments below!  
#DoingBiz  

Afghanistan eases doing business

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Doing Business Better in Afghanistan


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

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.

[[tweetable]]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[[/tweetable]], 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, [[tweetable]]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[[/tweetable]].

There is a great deal of work to do in this regard, but the good news is that [[tweetable]]Afghanistan is serious about improving its investment climate[[/tweetable]]. [[tweetable]]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[[/tweetable]]:

  • Ease of starting a business: Previously, obtaining a business license would cost entrepreneurs 32,000 afghanis (about $420). In 2017, GDP per capita in Afghanistan was $585. This means that for many, the fee to register a business could equate to an entire year’s salary. Following the modernization of administrative procedures under the One Stop Shop for business licensing across 21 provinces, entrepreneurs need only pay 100 afghanis for a three-year license.
     
  • Electronic tax declarations: Large taxpayers can now submit their tax declarations online through the Large Taxpayers Office and have their taxes calculated automatically. This significantly decreases the time, burden, and unpredictability involved with paying taxes for companies.​​
     
  • New Limited Liability Company Law: This new law, signed on March 8, 2018, strengthens Afghanistan’s corporate governance and protection of minority investors.
     
  • New Insolvency Law: This law streamlines insolvency proceedings, promotes reorganization for distressed companies, and ensures that secured creditors are repaid first during business liquidation.
     
  • Access to credit: The insolvency law also makes it easier for businesses to get access to credit as it establishes that secured creditors are repaid first during business liquidation, and hence have priority over other claims.
Afghanistan Rural Enterprise Development Project, Ghaizan District, Western Herat Province. Photo Credit: Rumi Consultancy/ World Bank
Greater prosperity and self-reliance are both pillars of the country’s 2016 National Peace and Development Framework. [[tweetable]]Afghanistan’s Doing Business reforms are helping to put the country on the path towards achieving these goals[[/tweetable]] – so that all Afghans can enjoy economic opportunities.

The challenges remain significant. Just over half (55 percent) of all working-age Afghans participate in the labor force—that is, are currently employed or looking for a job—and just one-third of those holding a job are salaried workers. The formal labor market struggles to absorb the 400,000 Afghans that join the workforce each year.

Insecurity and population movement are straining service delivery and increasing competition for scarce economic opportunities in host communities. The private sector continues to face bottlenecks, for example, processing times and uncertainty about regulatory requirements remain a challenge for many Afghans looking to start businesses.

With funding support from the United States Agency for International Development (USAID), the World Bank Group has been supporting the government of Afghanistan’s efforts to improve the business environment and address private sector challenges through the ongoing Business Enabling Environment (BEE) advisory services project. [[tweetable]]Going forward, the work will focus on helping the government realize the benefits of the reforms it has already made[[/tweetable]].

Ensuring that its improved legal and regulatory frameworks are fully implemented – and continuing to pursue ambitious and well-targeted policy reforms to unlock potential investments and help the private sector will be essential for Afghanistan to realize the full potential of its recent changes.
 
[[tweetable]]With a robust private sector driving innovation, serving the needs of consumers and businesses, and creating jobs for youth, Afghanistan will be one step closer to providing a peaceful and prosperous future for its people[[/tweetable]].
 

Toward a deep transformation of the banking industry in Africa

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Newly assigned to Dakar, Senegal, I must, of course, take steps to have water, electricity, internet and a bank account.  For the latter, I chose a large bank for its reputation and its wide network of branches and ATMs.  What follows is not fiction but a reality that I thought had disappeared years ago.  Here is the story.

Arriving at the bank office, I am quickly welcomed by an agent who gives me forms to fill.  I sit in a corner of the agency and start filling the documents: last name, first name, address, phone number, passport number, annual salary, etc.  Very quickly, I realize that all the forms, 8 in total, except a few, ask more or less the same basic information.
 
After the amazement of such an administrative burden, I stop on a document that presents an offer to subscribe to life insurance.  Surprised, I ask the agent for further information. He explains that this insurance, in fact mandatory, will allow the bank to guarantee itself in case of my death, and there is a negative balance in my account. I propose that, instead of this insurance, my account be simply blocked in case of an insufficient balance, so that the bank is never exposed to such huge risk. I'm retorted that   the insurance will allow the bank to charge any fee after my death, even in case of insufficient balance.  Unstoppable.  Astonishment follows a slight annoyance.

I realize then that, besides the life insurance policy that claims an annual premium in the amount of $ 50, none of the documents the agent gave me indicate the fees and commissions to which I might be subject. I therefore ask what would cost me, on an annual basis, ownership of a current account with a checkbook and a visa card.  We reach very quickly the sum of 500 dollars a year, an amount that I consider totally disproportionate to my needs that would be limited, in practice, to a dozen withdrawals and checks per month.  The annoyance then gives way to a form of misunderstanding mingled with spite.  I decide, in the end, not to open a bank account in Dakar and continue to manage with my US bank account.

An extreme case will you say? Perhaps. But that tends to say it all on the relatively low financial inclusion rate in Africa.  Beyond the anecdote, this little story is a good demonstration that a banking model invented and tested for decades in the West hardly finds its place in this part of the world and that new forms of banking must be found.

The good news is that solutions seem to emerge from the banking world, thanks in particular to the concomitance of three factors:

  • Competition from mobile operators.  With their sprawling network of resellers, these operators have grown considerably in the space of a few years, allowing in some countries to exceed the 100% mobile ownership rate. To the initial telephony functions were quickly added the so-called transaction accounts, providing their users with the ability to store, withdraw, transfer money and pay bills electronically, securely and in real time.  But if these new features were primarily intended to eliminate secondary network of recharge cards, they are also found to be the first serious stab in the traditional business of banks.  It seems that still few mobile operators have started moving up the value chain by offering more typical banking financial services such as remunerated savings or credit.  But many operators are thinking about it, and it could come pretty quickly.  The competition might then be particularly tough for banks.
     
  • Regulatory innovation.  Little by little, the central banks are making a revolution.  Traditionally averse to change, however, they are now allowing foundational innovation to emerge.  Modern banking agents regulation (based on the successful agents of mobile operators’ model) or more risk-based KYC/CDD regulations are good examples.  A welcome upgrade the competitive game when one knows all the benefits that the customers could draw from a direct confrontation between banking and mobile operators, two industries with huge appetites and deep pockets.
     
  • Technological innovation. The almost universal use of mobile phones has offered opportunities well understood by bankers. However, in practice, these same banks face particularly heavy ICT constraints, which can be explained by the entrenchment of several decades of internal developments (forming the famous Core Banking System) that makes it almost impossible for banks to design and market products and services in phase with consumers’ new expectations.  Faced with these challenges, second generation Core Banking Systems are about to emerge and with them the promise to finally see the deployment of new banks that would place digital at the heart of their mode of operation and allow a complete democratization of basic banking services (and probably also non-bank).

This conjunction is happening in Africa, in some countries like Angola. The rebirth of Banco Postal is a perfect illustration of the fact that the bank can reinvent itself and set out again to conquer the market.  Through its new offer (Xikilamoney), Banco Postal has by far the most comprehensive range of financial services (including digital financial services and traditional banking services). Thanks to its network of about 200 access points (including branches and kiosks), Banco Postal onboarded already 200,000 customers in just 18 months. In Angola, the three ingredients are present: strong competition from telecom operators, more open banking regulations on the issues of branchless banking and the adoption of a new generation CBS.

Other countries could quickly follow suit, such as Senegal (and other WAEMU countries), where agent banking regulation could change soon.

These country-led developments also align with the World Bank Group’s approach to financial inclusion, particularly its Universal Financial Access (UFA) initiative which goal is that by 2020, adults globally will be able to have access to a transaction account to store money, send and receive payments as the basic building block to manage their financial lives.

Five strategic priorities for intermediate cities in Bolivia

1 week 6 days ago


When you think of Bolivia, which is the first city that comes to mind? La Paz? Santa Cruz or maybe Cochabamba? But what about Trinidad or Tarija? Or perhaps Cobija or Riberalta? These are relatively smaller cities when compared to cities like La Paz or Santa Cruz, but they are growing the fastest in terms of population. Why is that? And how can these smaller, intermediate cities manage growth so that they are sustainable and prepared for the future? 


Intermediate cities in Bolivia are classified as those with a population between 50,000 and 500,000 inhabitants and economies typically specialized in tertiary services or industry.
 
Bolivia is at a critical stage in its urbanization process. Compared to other countries in Latin America, the urbanization process started relatively late in Bolivia. Today nearly two-thirds of Bolivians live in urban areas and the United Nations estimates that by 2025 nearly 75% will be urban. This situation offers a unique opportunity to act and harness the benefits of urbanization.

The World Bank has conducted an extensive analysis of intermediate cities in Bolivia and identified five strategic priorities for these fast-growing cities:
 

  • Building compact cities

In most cities in Bolivia, the population increase results in a massive extension of the urban surface area as self-built, low-density houses start to cluster on the fringes of the city.

The development and maintenance of a widespread network of services, however, is expensive and traveling long distances to get to work results in high costs and loss of productive time. Transportation costs disproportionally affect the poor, who are typically located in disconnected areas of the city.

Furthermore, these homes located at the fringes of the cities are often in locations prone to natural hazards like landslides or flooding.

By using territorial planning tools, cities can steer their growth to density instead of expansion of urban fabric in such a way that its inhabitants are not deliberately exposed to these risks, costs of services are more manageable, and travel distances are shorter.

  • Data is important

To manage cities effectively it is critical to understand what specific challenges exist in key sectors such as health, services, education, infrastructure, and housing. To evaluate the urban fabric by measurable indicators helps to get to the bottom of these challenges and set the baseline to measure the impact of future projects.
  
Relevant data as for example on mobility, poverty or access to basic services can often be collected in a simple extension of regular population Census. However, it is important that the methodology is consistent throughout the country and that it aligns with international recommendations like the ones that have been developed at Habitat III.

Further, it is essential to include all settlements, the formal and informal into the data collection to get a complete evaluation. Establishing a cadaster system registering all lots and inhabitants simplifies data collection and analysis and at the same time is an opportunity for further revenue generation.
 


  • Strengthening resilience toward natural hazards
The concept of disaster resilience evolves around three aspects: Evaluation of current and future risks, coherent territorial planning, and structural improvements.

In addition, it is crucial to develop institutional mechanisms which take immediate effect in case a disaster occurs, such that competencies are clear and there is no time wasted to provide help to the affected population.
  • Investing in human capital
Intermediate cities in Bolivia receive a significantly higher per capita contribution in transfers from the national government than larger cities. Consequently, it is not primarily funding what the municipalities are lacking, but the capacity to manage funds and implement projects with a clear territorial development vision. To make efficient use of both the land and funds as well as to harness further revenue potential it is critical to have qualified staff working in city governments. This means training in urban and territorial planning, data collection and municipal management. But cities cannot do this alone.

To sustain institutional capacity investments in the long term, continuous technical assistance is needed from the regional and national levels. For instance, municipal administrations of intermediate cities could join forces with national and regional authorities to organize workshops and training programs for their staff to disseminate knowledge of best practices.
  • Harnessing local economies
Each secondary city has its own characteristics regarding geography, prevalence of economic activities and role in the national network of cities. It is important to evaluate these factors and tailor territorial development strategies specifically to these conditions.

Economic development initiatives should build on analysis of local economies and consider related value chain clusters as possible new fields of economic activities.

Strategies to harness local economies range from creating partnerships between the city’s most established or emerging firms to take on trainees to matching skills taught in schools with the needs of local companies or support to build new economies around existing ones.

All the mentioned strategies, but especially the first three, overlap and are interlinked. Addressing one of them lowers the bar for achieving the others. Which means there is no wrong place to start and Bolivia’s intermediate cities can tackle the challenges of rapid urban growth step by step to provide the new urban residents with increased quality of life.
 
 

Subtle but significant changes to private infrastructure investment in first half of 2018

1 week 6 days ago



Like winter and summer solstices of investment cycles, every six months we take stock of how much private participation in infrastructure has come to financial close across emerging markets.  From Mozambique to Moldova, Chile to China—in power, water, transport, and the backbone of telecom services—the World Bank Group tracks every new public-private partnership (PPP), privatization, auction, concession, lease, and management contract through our PPI Database.

At first glance, we’re usually surprised at how little private participation in infrastructure (PPI) changes.  Then, peeling back the onion, we see subtle patterns of private investment emerge and adjust to economic, financial, and political winds.|

The first half of 2018 tells its own story about how developing countries are crowding in private finance and operational efficiency across infrastructure sectors, a process referred to as Maximizing Finance for Development at the World Bank Group.  While we saw a modest 7 percent increase in total volumes of PPI (from US$40.9b in the first half of 2017 to US$43.5b), shifts in the underlying countries of concentration, sectoral movements, and financial structures provide insight into what kinds of investments are working for both governments and private investors and operators.  The data are summarized here, but highlights include:
  • A regional shift, from Latin America & the Caribbean and the Middle East & North Africa to Asia:  Investment volumes continue to shift toward Asia.  China, India, and Vietnam all surface in the top five countries, by total volume of PPI.  Behind this shift, the volume of public infrastructure investment in East Asia grossly outstrips other regions and swamps the region’s own PPI volumes.
     
  • Renewable energy dominating private power investments, but power systems still rely on thermal baseload:  The share of private renewable projects out of total private power generation projects increased to more than 90 percent.  However, this disguises the fact that by installed capacity or by investment dollars, renewables total only 60 percent of private generation.  And this does not include the public investment in thermal generation that continues in many developing (and wealthy) countries. The promise of battery storage that allows intermittent power supply from renewables to be stored and dispatched in tandem with consumer demand hasn’t yet been fully achieved. Big baseload power remains thermal where hydro and nuclear options are not practicable. This may explain why private power investment volumes dropped by nearly 50 percent in H1 of 2018.
     
  • More leveraging: Project debt-to-equity ratios climbed (averaging 78 percent of total financing) as commercial lenders found comfort in multilateral development bank (MDB) and bilateral support while equity investors minimize exposure.
     
  • MDB and bilateral development finance institution (DFI) participation in private infrastructure also increasing:  While MDB’s share of total financing dropped, the share of projects that have some MDB or DFI participation continued to increase—representing about 40 percent of projects across emerging markets. The role of guarantees, insurance products, other credit enhancements, blended finance, commercial finance, first-loss facilities such as MCPP, viability gap funds, and other forms of support are increasingly recognized as critical inputs to structured finance arrangements.

The World Bank Group is doubling down on addressing barriers to investment and risk management so that this upward trend continues. This is the Maximizing Finance for Development story in action:

  • Policy and Capacity Transformation:  With policy operations designed to support reforming governments from Ethiopia to Uzbekistan, infrastructure sectoral transformation will get a major boost from World Bank teams. This means fiscal support and technical assistance for legal, institutional, and capital market reforms along with market structure, regulation, and pricing reforms at the sectoral level. Global programs such as the Public-Private Infrastructure Advisory Facility continue to provide just-in-time support for governments to address regulatory, policy, pricing, and sector constraints to private investment.  On the capacity-building side, our PPP Certification Program has become the standard for officials, advisors, and regulators working in the PPP space.
     
  • Sector/country strategies:  Ten IFC-World Bank-MIGA teams across sectors and regions are working as part of an MFD “Accelerator” program to build joint investment programs and address the exact challenges of investment in energy, transport, water, telecommunications—and even agriculture and education. These efforts join a growing series of diagnostics that include a blueprint for investment, sector by sector.
     
  • Pipeline development:  Through the Global Infrastructure Facility (GIF), the IFC and World Bank —along with partner MDBs such as EBRD and IaDB—are preparing 46 commercial investment programs for the market with a potential investment value of about US$40billion.  These projects are already starting to reach commercial close. The GIF is committed to a market-changing scope of 200 projects over the next five years.  
     
  • Commitments and incentives: With baselines established and targets agreed for private capital mobilized, the next months will draw out the ability of World Bank Group teams to find private sector solutions and maximize private finance where practicable and affordable.
Why is the World Bank Group working so hard in this public-private space? Consumers and governments alike know that their basic needs transcend what traditional public and aid financing models can accomplish. Ensuring more people and businesses get access to sustainable, affordable, high-quality infrastructure services is at the heart of the development challenge.

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The Goods, the Bad, and the Ugly: Data and the food system

1 week 6 days ago
Photo Credit: Goodluz/Shutterstock.com

The business of agriculture and food is driven by data, making it the treasure trove of today’s agri-food system. Whether it’s today’s soil moisture, tomorrow’s weather forecast, or the price of rice in Riyadh, every bit of data can improve the efficiency with which the world’s 570 million farmers put food into the mouths of its soon-to-be eight billion consumers. Digital technologies are facilitating the flow of data through the food system, shrinking information asymmetries and fashioning new markets along the way. How can we ensure these new markets are appropriately contested, and the treasure does not end up in the hands of a couple of gunslingers? Is there a public sector’s role in generating and disseminating data that on the one hand encourages innovation and competition and on the other reduces opportunities for market capture? One place to look may be at the crossroads of internet and public goods.

We all remember from econ class that public goods can’t be efficiently allocated by markets because they are non-rival and non-excludable. There are precious few examples of true public goods – national defense, clean air, and lighthouses come to mind. That is, at least until Coase’s in “The Lighthouse in Economics” argued that lighthouses are excludable because it was possible to temporarily turn-off the lighthouse when a ship sailed by that didn’t pay their port fees.

Is data also a public good? In the era of Internet, this may very well be the case. This is because internet is a place where consumption of information by one does not preclude consumption by another; and exclusion from a given source of information is virtually impossible when the marginal cost of access to the internet falls to zero (think of the free wifi in your local library).

This idea is not new at all. In fact, the World Bank’s Open Data Initiative pioneered the concept by emphasizing early on that the benefits of Open Data include transparency, public service improvement, innovation and economic value, and economic efficiency. The potential is staggering with a McKinsey study estimating that open data can help unlock three to five trillion dollars in economic value, and this does not even include the agri-food system!

For agriculture, one example of a game changer that really stands out is LANDSAT data. The data include three decades of reliable data on land use change, creating endless possibilities for scientists and entrepreneurs. Since the day these data were made available for free in 2008, demand has grown exponentially. A report by the USGS in 2013 surveyed 11,275 LANDSAT users on the uses and value of LANDSAT Satellite imagery and found 43 percent of respondents started using LANDSAT after the imagery was made available at no cost on the web in 2008. Seventy-seven percent of the respondents stated they were dependent on Landsat imagery to do their job. And the economic benefit of Landsat data for 2011 was estimated to be $2.19 billion.

Another example of the value of open data can be found in Uruguay, where the state provides public access to soil information. Soil types are classified according to their productivity and measured by the index called CONEAT. An online open access map provides plot level information on soil type, productivity, and land use. The index correlates well with the price of the land, ultimately making the market more competitive through access to better information.

Are the soils and land use maps sitting in the basement of the Ministry of Agriculture one part of the buried treasure that we’ve been searching for? They just might be if they are scanned and made available for free on the world wide web, because they drive down the cost of businesses entering new markets. The key is defining the role of the public sector in making sure that this takes place in a way that increases efficiency, equity and sustainability.

We hope to crowd-in some of the world’s best minds to participate in a global conversation on food and technology through the “What’s Cooking? Rethinking farm and food policy in the digital age” blog series. We invite people with diverse backgrounds and perspectives to join us and comment below.

How can Local Capital and Foreign Brands Join Forces to Create Millions of Jobs? The Case of Non-Equity Modes of Investment

1 week 6 days ago
  • Hon Hai, the holding company of Foxconn – a Taiwanese multinational corporation known for manufacturing many Apple products in China - is among the top 50 companies to receive the largest number of US patents in 2016, thus driving innovation in East Asia.
     
  • InterContinental Hotel Group (IHG)’s management contracts with locally-owned hotels aim to raise the quality and service of hotels around the world. It does this by bringing global hotel management and operation standards to host countries, transferring technology to local construction companies around how to design and build global standard hotels, and providing skills and training in hospitality through the IHG Academy. During 2016, 2,145 IHG Academy programs in 75 countries benefitted nearly 12,000 participants.  
What do these two examples have in common? Both Hon Hai and IHG are companies that use contract-based models of doing business overseas, involving little or no equity investment from the parent company. And both seem to generate significant development benefits for host countries. For developing countries, investments in a form other than “equity”, often referred to as non-equity modes of investment (NEMS), provide a huge, but often overlooked opportunity to connect with multinational corporations (MNCs) and integrate into global value chains. 

As businesses become more international, multinational companies have been looking for new ways to gain efficiencies of production or to access  foreign markets. Commercial contractual arrangements between a foreign multinational company and a local enterprise are becoming a common way multinational companies invest across borders. In this case, the foreign company’s “investment” consists of making available its brand name, intellectual property, know-how, technology, skills and/or business processes. The local enterprise provides financing, local production capabilities, physical assets, or other locational advantages. The level of direct involvement of the foreign company in daily economic activity varies.  Examples include:
  • A locally-owned hotel in Nepal using Hyatt’s brand and business model through a franchise arrangement, where Hyatt also manages operations through a management contract;
  • Intel outsourcing development of specific software or IT services to Wipro India;
  • Lenovo contracting out production of specific components of laptops to Flextronics in Singapore through a contract manufacturing arrangement.
Non-equity  modes of investment are often a gateway to future investments.  MNCs  enter a host country using non-equity modes, but may over time decide to invest directly through equity ownership, creating foreign subsidiaries or joint ventures. Particularly in higher risk environments – such as countries afflicted by conflict, fragility and high levels of political risk- foreign companies may prefer to explore an investment opportunity through a contractual arrangement as opposed to capital investment. Decisions by MNCs to choose non-equity modes thus depend on availability of capital, degree of ownership and control required, risk appetite and availability of local suppliers.
 
Job creation, value addition, technology transfer, exposure to higher standards, sales generation from NEMs can be significant, depending on the type and sector of the NEM. The Indian Information Technology – Business Process Outsourcing sector had revenues of $143 billion in 2016, exports reaching $108 billion and growing at 10.3%. UNCTAD estimates that 18-21 million workers are directly employed in firms operating under NEMs arrangements across various sectors. Most of the jobs created are in contract management, outsourcing and franchising activities. Around 80% of these jobs created are in developing or transition economies.


 
NEMs tend to be an important vehicle for technology transfer and for exposure to new and higher standards. In licensing for example, the licensee gains access to technology related intellectual property and financially compensates the licensor for it while in franchising, franchisors transfer a business model to  local partners, typically entailing extensive training to setup operations, and technology transfer.
 
The findings of a survey of international franchisors conducted by the World Bank Group and the International Franchise Association presents further insights. It shows that 100% of respondents provided training to their new franchisees, including both industry-specific professional skills and more general management capabilities while 63% transferred technology in the form of equipment or software that were new to the local market. The survey also examined the main constraints for expansion and high potential markets for international franchisors.



Despite these benefits to  host countries, NEMs also present inherent risks. MNCs may find it relatively easier to promptly relocate production or manufacturing base to a more cost-effective location when they find one, resulting in loss of jobs and business opportunities to local suppliers. Host country NEM partners may remain at the low end of the value-added scale for several years. But these potential downsides are not unique to NEMs; they are often associated with the traditional equity-based FDI as well.

On balance, NEMs can bring about significant development benefits to host economies and boost opportunities for their private sector. In addition to  commercial viability , research and investor surveys show that policy and regulatory frameworks (such as registration/approval processes, repatriation rules, contract enforcement) of countries also impact MNC decisions. Developing countries should consider systematically exploring the value proposition of non-equity modes of investment,  steps towards facilitating their growth, alongside ensuring upgrading, diversification and their sustained contribution to development. 

With ActiVaR, Ecuador launches its first immersive training program

1 week 6 days ago


A few years ago, it would have been unlikely for a young Latin American student from a disadvantaged background to be able to access high-quality technical training using state-of-the-art technology and laboratories.
 
Implementing training programs in technical and vocational education, especially in vulnerable areas, has traditionally been a difficult and expensive task. Rapid technological progress often requires that training centers continually make investments to adapt their content, teaching materials, technology, and laboratories.
 
Partly due to the high cost of equipment and laboratories, technical programs in the region have traditionally prepared students to respond to the needs of the service sector (e.g., accounting, tourism, computer science). Less emphasis has been placed on manufacturing, agroindustry, and technology. Moreover, most approaches to technical training in Latin America offer only limited "practical" or “on-the-job” training and focus instead on in-class teaching.
 
But that is changing. Today's technology is helping to overcome those barriers. New models of immersive teaching that use augmented reality (AR) and virtual reality (VR) technologies, have shown that it is possible to develop the technical and practical skills of students without making large capital investments.
 
Immersive training is an innovative approach being used as a teaching methodology, which can provide a similar to  real-life environment and simulate state-of-the art technology and equipment, without the need to make large capital investments. Immersive training is essentially a simulation that uses computer graphics to form actual situations.
 
The Potential of Immersive Training
 
Although more experimental research is needed, the consensus in the literature is that immersive training, if well designed, can positively support learning and help develop practical skills. An experimental study conducted recently in China found that students exposed to immersive learning showed, on average, better results in learning assessments. These results were up to 30% higher than among students exposed to traditional training. Other studies indicate that immersive training can effectively build practical skills for surgeons, welders, machine operators, security officers, and pilots. Moreover, several studies have found that immersive training enhances the motivation of teachers and students, which leads to better learning.
 
Within this context, the Government of Ecuador recently introduced the ActiVaR program through its Secretariat of Higher Education, Science, Technology, and Innovation (Senescyt), and within the World Bank financed, “Transformation of Tertiary Technical Institutes Proyect”. ActiVaR is an immersive training program that will use VR technology to develop the practical skills of between 500 and 700 students enrolled in public technical and technological training centers. Students will be able to benefit from this immersive training starting in May, 2020.

The ActiVaR program was launched in Quito on October 23, 2018 by the Secretary General of the Presidency of the Republic, the Secretary of the Senescyt, and the President of the Chamber of Industries and Production. A number of rectors, teachers, and students from the national network of public technical and technological training centers participated in the launch.

Training centers participating in the program will benefit from technical assistance to design, implement, and evaluate an immersive training curriculum in a technical field using VR technology. The program will equip training centers with a VR laboratory and will train teachers to properly use the technology.
 
The ActiVaR program will be implemented in close collaboration with the University of Technology and Education of Korea (KOREATECH), an institution pioneering the worldwide use and development of immersive training programs. This pilot program will be financed by the Korea-World Bank Partnership Facility, with technical assistance from the World Bank.
 
The ActiVaR pilot program will be amongst the first of its kind in Latin America. The results of the program will serve to inform policy makers about the benefits, scalability, and potential of using immersive technology in the region. ActiVaR: activating the future of technical and technological training in Ecuador.
 
  Evento Realidad Virtual: innovando la formación técnica y tecnológica

Commitment to reforms improves business climate in South Asia

1 week 6 days ago
  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 [[tweetable]]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.[[/tweetable]]
 
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.
 
[[tweetable]]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.[[/tweetable]]
 
And Afghanistan is not the only South Asian country this year that took a prominent place among top 10 improvers globally.
 
[[tweetable]]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[[/tweetable]]. 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. 

The indicators which show maximum improvements in India this year – dealing with construction permits and trading across borders – reflect the results of reform efforts over the past four years and are a testament to the persistence and commitment demonstrated by the government, municipal corporations, and customs agency.

Better business regulations also inspire innovation and technological progress. During my meeting with Madhya Pradesh, I was impressed by the way in which this state government is harnessing the private sector to provide clean and relatively cheap solar power to its schools, hospitals and public buildings. This is a model of development that the Bank has supported and is now helping to spread to other states in India.

And the exciting news for South Asia coming from the Doing Business 2019 report does not end there. [[tweetable]]The countries of the region collectively carried out 19 business reforms during the past year, with an average of more than two reforms per economy. [[/tweetable]]Strong commitment to the reform agenda is also paying off in Sri Lanka and Pakistan, as indicated in their improved rankings.
 
Any economy cannot thrive without a healthy private sector. When local businesses flourish, they create jobs and generate income that can be spent and invested domestically. A government that cares about the economic well-being and advancement of the people it represents pays special attention to laws and regulations affecting local small and medium-sized enterprises.

[[tweetable]]In South Asia, even with the successes of the past years, the agenda of improving business environment remains far from finished[[/tweetable]]. [[tweetable]]With India being the top-ranked country in the region at 77th place, the countries have a long distance to go to catch up with the front-runners of the Doing Business index, such as New Zealand, Singapore, and Denmark[[/tweetable]].

In particular, the region can do better in areas such as enforcing contracts, paying taxes and registering property. In South Asia, registering a property takes 114 days compared to 47 days on average globally.
 
[[tweetable]]The World Bank stands by the governments in South Asia in their journeys to improve business regulations and create a conducive environment for inclusive and sustainable growth.[[/tweetable]]

In addition to supporting specific reforms through investments, we are carrying out analytical work to understand the bottlenecks and identify opportunities. Examples of such studies include the recent Investment Climate Survey in Pakistan and the upcoming Country Private Sector Diagnostic in Nepal.
 
I would like to emphasize again the strong need to persist with challenging reforms that can provide more opportunities for businesses to open and grow, allowing people to lift themselves out of poverty and spread prosperity more widely.

We’re looking forward to working with governments in the region to achieve more gains in the coming years.

Too often, Dhaka remains inaccessible for people with disabilities

1 week 6 days ago
Tajkia Mariam Jahan, a wheelchair user from Dhaka, Bangladesh was confined to her home for seven years due to the road environment. The city roads are unwelcoming not only for people in a wheelchair like her but also for persons with all types of disabilities. Credit: World Bank 

An ever-growing urban population with overflowing and at times chaotic vehicular traffic can make life difficult even for the most well-abled pedestrian.

The challenges become higher for a person with a disability.

How can I go out of my home?’ asks Tajkia Mariam Jahan, a wheelchair user from Dhaka, who was confined to her home for seven years due to the road environment.

The city roads are unwelcoming not only for people in a wheelchair like her but also for persons with all types of disabilities.

Hawa Aktar, a woman with hearing impairment, needs clear, visible signs and signals on road crossings and from vehicles. And Bashir Uddin Molla, a student with visual impairment, needs sounds and guidance when she is walking.

None of these facilities are available to people with disabilities living in Dhaka.

Dhaka Remains Inaccessible to People with Disabilities


[[tweetable]] It is estimated that more than one million people with disabilities live in Dhaka[[/tweetable]] if considering 15% of the world population are living with disabilities as reported by the World Health Organization.

Unfortunately, many of them – like Tajkia – are excluded from economic opportunities due to lack of physical access. When asked why, their answers point to three issues: 1) how road infrastructure and public transport vehicles are designed; 2) how they are maintained and used, and; 3) how drivers and public transport operators behave. 

[[tweetable]]For roads and public transport vehicles, accessibility for people with disabilities doesn’t seem to be considered well in Dhaka.[[/tweetable]]

 Most sidewalks do not have wheelchair-accessible ramps. Intersections, pedestrian bridges, road crossings, and bus stops are not accessible, either.

Even when roads are designed well, without proper maintenance, these became unfriendly to people with a disability.

The sidewalk surface is often uneven with broken tiles and several potholes. Trash, construction materials and street hawkers occupy the precious space, which makes sidewalks even further inaccessible.

While people with disabilities have no other choice than to take a private mode of transport such as taxis, rickshaws, auto-rickshaws, or CNG as they are known here, drivers of these services sometimes claim up to triple the normal fare because of the additional assistance provided for getting on and off the vehicles.

The government has taken steps to address these issues. Bangladesh signed and ratified the Convention on the Rights of Persons with Disabilities (CRPD) in 2007.

Following that, the Persons with Disabilities’ Rights and Protection Act (2013) was enacted, and the National Action Plan is being developed as per the Act.

But the real challenge is the coordinated implementation of the legal framework.

While the Ministry of Social Welfare is the focal agency for disability matters, there are other agencies involved: Roads and Highways Department, Local Government Engineering Division, Bangladesh Road Transport Authority, Bangladesh Road Transport Corporation, City Corporations, and more.

The World Bank, with financial support from the Quality Infrastructure Investment Trust Fund by the Government of Japan, is providing technical assistance to the government to help improve accessibility for all people, especially those with limited mobility.

This program is implemented as part of the Clean Air and Sustainable Environment (CASE) project, through which Dhaka South and North City Corporations have upgraded 70 km of sidewalks and 39 intersections.

Under this program, a draft of 'Better Accessibility Vision' for the two city corporations has been prepared to guide the policymakers and practitioners for future implementation and to ensure better accessibility for all.

The World Bank has also made a commitment to accelerate disability-inclusive development in key areas including transport, at the Global Disability Summit, held on July 24, 2018 in London.

All the World Bank-financed urban mobility and rail projects that support public transport services will be disability-inclusive by 2025.

Because there is so much to do, [[tweetable]]it is imperative to raise awareness and broaden the coalition for better accessibility for all in Dhaka.[[/tweetable]]

We hope the message conveyed through the video will help many of us take the first step.

Too often, Dhaka remains inaccessible for people with disabilities

1 week 6 days ago
Tajkia Mariam Jahan, a wheelchair user from Dhaka, Bangladesh was confined to her home for seven years due to the road environment. The city roads are unwelcoming not only for people in a wheelchair like her but also for persons with all types of disabilities. Credit: World Bank 

An ever-growing urban population with overflowing and at times chaotic vehicular traffic can make life difficult even for the most well-abled pedestrian.

The challenges become higher for a person with a disability.

How can I go out of my home?’ asks Tajkia Mariam Jahan, a wheelchair user from Dhaka, who was confined to her home for seven years due to the road environment.

The city roads are unwelcoming not only for people in a wheelchair like her but also for persons with all types of disabilities.

Hawa Aktar, a woman with hearing impairment, needs clear, visible signs and signals on road crossings and from vehicles. And Bashir Uddin Molla, a student with visual impairment, needs sounds and guidance when she is walking.

None of these facilities are available to people with disabilities living in Dhaka.

Dhaka Remains Inaccessible to People with Disabilities


[[tweetable]] It is estimated that more than one million people with disabilities live in Dhaka[[/tweetable]] if considering 15% of the world population are living with disabilities as reported by the World Health Organization.

Unfortunately, many of them – like Tajkia – are excluded from economic opportunities due to lack of physical access. When asked why, their answers point to three issues: 1) how road infrastructure and public transport vehicles are designed; 2) how they are maintained and used, and; 3) how drivers and public transport operators behave. 

[[tweetable]]For roads and public transport vehicles, accessibility for people with disabilities doesn’t seem to be considered well in Dhaka.[[/tweetable]]

 Most sidewalks do not have wheelchair-accessible ramps. Intersections, pedestrian bridges, road crossings, and bus stops are not accessible, either.

Even when roads are designed well, without proper maintenance, these became unfriendly to people with a disability.

The sidewalk surface is often uneven with broken tiles and several potholes. Trash, construction materials and street hawkers occupy the precious space, which makes sidewalks even further inaccessible.

While people with disabilities have no other choice than to take a private mode of transport such as taxis, rickshaws, auto-rickshaws, or CNG as they are known here, drivers of these services sometimes claim up to triple the normal fare because of the additional assistance provided for getting on and off the vehicles.

The government has taken steps to address these issues. Bangladesh signed and ratified the Convention on the Rights of Persons with Disabilities (CRPD) in 2007.

Following that, the Persons with Disabilities’ Rights and Protection Act (2013) was enacted, and the National Action Plan is being developed as per the Act.

But the real challenge is the coordinated implementation of the legal framework.

While the Ministry of Social Welfare is the focal agency for disability matters, there are other agencies involved: Roads and Highways Department, Local Government Engineering Division, Bangladesh Road Transport Authority, Bangladesh Road Transport Corporation, City Corporations, and more.

The World Bank, with financial support from the Quality Infrastructure Investment Trust Fund by the Government of Japan, is providing technical assistance to the government to help improve accessibility for all people, especially those with limited mobility.

This program is implemented as part of the Clean Air and Sustainable Environment (CASE) project, through which Dhaka South and North City Corporations have upgraded 70 km of sidewalks and 39 intersections.

Under this program, a draft of 'Better Accessibility Vision' for the two city corporations has been prepared to guide the policymakers and practitioners for future implementation and to ensure better accessibility for all.

The World Bank has also made a commitment to accelerate disability-inclusive development in key areas including transport, at the Global Disability Summit, held on July 24, 2018 in London.

All the World Bank-financed urban mobility and rail projects that support public transport services will be disability-inclusive by 2025.

Because there is so much to do, [[tweetable]]it is imperative to raise awareness and broaden the coalition for better accessibility for all in Dhaka.[[/tweetable]]

We hope the message conveyed through the video will help many of us take the first step.

Founded in 2000, the Parliamentary Network is an independent, non-governmental organization that provides a platform for Parliamentarians from over 140 countries to advocate for increased accountability and transparency in development cooperation. Jeremy Lefroy is the current Chair of the Parliamentary Network.

 

The Network – via its international secretariat, regional chapters and country chapters – reaches over 1000 Parliamentarians in Africa, Asia, Europe and the Americas. It strives to increase transparency and accountability in the development cooperation process by fostering the oversight role of parliaments and civil society. The Network has a specific focus on multilateral aid and a sub-focus on the work and modus operandi of the World Bank Group and the International Monetary Fund (IMF), the world’s largest multilateral funders.

 

It provides a platform for MPs and civil society to hold to account their own governments, as well as International Financial Institutions (IFIs), for development outcomes.

Membership is free of charge and open to elected parliamentarians who currently hold a mandate. As a member, you will receive The Parliamentary Network on the World Bank and International Monetary Fund’s policy materials, including the quarterly Network Review publication and the Parliamentarians and Development series.

You will also be eligible to attend the Annual Conference and participate in discussions with senior World Bank and IMF leadership. You can also be invited to take part in the Parliamentarians in the Field country visit programme.
In addition, the The Parliamentary Network on the World Bank and International Monetary Fund often invites partner organizations to join its activities.
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