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Living arrangements and conditions of older persons in Namibia
21 Feb 2017 10:58:11 GMT
In Africa, ageing is a phenomenon that is just beginning to reveal its shape; at present, it is a family concern. Although sub-Saharan Africa’s older population is not as large in size as in other regions of the world, it must still be considered as a potential cause for concern since Africa is ageing at a time when its resources are being depleted.
In Africa, ageing is a phenomenon that is just beginning to reveal its shape. Most governments, including the Namibian government, recognize the fact that the number of older persons is on the increase, however, discussing it is still a distant phenomenon and family matter.
This paper examines the living arrangements of older adults in Namibia, identifying the existing structure of living arrangements and the nature of family relationships of older people, as well as provides some basic descriptive information on the housing conditions in which older persons live and how they are associated with their socioeconomic and demographic factors. The analysis is based on 1991, 2001 and 2011 Namibia Population and Housing Censuses. The study concluded that living arrangements is constantly changing from extended family pattern to western nuclear family, mainly due to urbanisation and decreased
Housing conditions had notably improved in rural areas while in urban areas the conditions are affected by the mushrooming of informal settlements. There is need to encourage or conduct focused research on ageing to help coin policies based on evidence and make communities sensitive towards ageing.
The study further recommends Government to encourage old people to form organisations that would in turn focus on sensitising and help championing issues of ageing and aged persons.
Repositioning Chinese development finance in Latin America: opportunities for green finance
21 Feb 2017 02:46:19 GMT
China is one of the largest creditors of Latin American and the Caribbean and has loaned the region more than $125 billion since 2005. However, the composition of China’s financing in the region has been concentrated in commodity related sectors that are currently on the decline.
This policy brief notes the extent to which Chinese finance is concentrated in new green economy sectors, and finds that China is not taking full opportunity of the potential in this sector. Moreover, as the global commodity boom has declined, much of China’s investments in the region have been exposed to significant risk, including prominent environmental and social risks. Despite great strides whereby the Chinese government has established a series of guidelines on greening overseas investment over the last few years, China’s development banks and companies are lacking the policies and staffing to identify and fully mitigate such risks.
This policy brief reviews the green profile of Chinese development finance in LAC and analyses environment related risks and policies for Chinese overseas investment. It also outlines the opportunities of green finance in LAC and how blending instruments can mobilise green financial flows that are beneficial for both China and LAC.
The political economy of social protection policy uptake in Nigeria
21 Feb 2017 02:22:22 GMT
None of the recent efforts to study social protection in Nigeria have provided a detailed description of the political economy factors that enhance and prevent the uptake of social protection policies.
This study used qualitative and quantitative strategies within a political economy framework to explore the emergence and trajectory of these policies. Primary data were derived from field interviews and a survey of beneficiaries in six states selected from the six geopolitical zones in the country.
There is no overarching policy on social protection in Nigeria currently. There are pilot programmes led by the federal government and other programmes implemented in an ad hoc manner at state level. Political differences and competition between the state and federal governments have partly accounted for the slow pace in adoption of social assistance programmes. An uptake in social protection may occur only if the political leadership is convinced that it is sustainable and would enhance their political fortune.
Social assistance needs to be carried out within the context of a larger social policy framework, and knowledge about social assistance programmes needs to be diffused across all sectors. The federal government and international organisations have to promote a policy
network community and support meaningful evaluation of the existing programmes to make citizens and policy stakeholders appreciate social assistance as an effective instrument of poverty alleviation and social transformation.
Conditional cash transfers in Africa: limitations and potentials
21 Feb 2017 01:52:11 GMT
Conditional Cash Transfers (CCTs) are currently amongst the most popular social protection programmes for addressing
poverty, vulnerabilities, and risks of poor individuals, households and communities in developing Latin American, African, and Asian countries.
However, the increasing popularity and adoption of CCTs in Africa have remained highly understudied in comparison to CCTs in Latin America where they originated in the late 1990s and early 2000s. For this reason, this policy brief discusses some of the current limitations and potentials of CCTs as social protection programmes for reducing poverty and developing the human capital of poor individuals, households, and communities in African countries.
The brief begins with an overview of CCTs in general with special reference to Africa in particular. It then examines some of the limitations and potentials of CCTs on the continent.
Work, family and social protection: old age income security in Bangladesh, Nepal, the Philippines, Thailand and Vietnam
17 Feb 2017 12:45:16 GMT
How does growing older affect a person’s income security in Asia? This question is becoming increasingly urgent in the context of rapid population ageing in the region, yet relatively limited comparative analysis has tried to answer it. This report aims to fill the gap by providing a comparative investigation of the income security of older people in five Asian countries that have diverse contexts; namely, Bangladesh, Nepal, the Philippines, Thailand and Vietnam.
The report paints a picture of the multiple sources of income that contribute to income security in old age and how they interact. This has been done by mining existing survey data in each country to explore three key sources of income for older people: work, transfers from family and social protection. This marks a departure from most previous analysis of old age income security which has focused on age-disaggregated poverty data – which can only provide a relatively superficial picture of the issue. As well as providing new insights, this study highlights many weaknesses of existing data on ageing and points out opportunities for improvements in data collection and analysis.
Egypt’s new IMF deal comes with a huge price tag for human rights
17 Feb 2017 03:14:27 GMT
The government of Egypt has sealed a loan deal with the IMF following four years of negotiations. The impacts of the structural adjustment reforms associated with the loan raise strong human rights concerns, particularly for the status of economic and social rights in the country; aggravating employment conditions, the right to education, healthcare and to social protection.
The aim of the extended fund facility programme with Egypt is to restore stability and confidence in the economy. To do this, the programme supports the "government's home-grown comprehensive economic reform plan". This plan includes a range of monetary and fiscal reforms that first seek to reduce public spending, including by reforming the civil service and by reducing the public sector's role in the provision of subsidised social services. The second aim of these reforms is to increase state revenue, including by introducing a value-added tax (VAT) and by liberalising the exchange rate to shore up the country's foreign reserves and encourage foreign investment.
There are a number of alternative policy choices the Egyptian government can make with the support of the IMF to help address the country's economic crisis. These would avoid such huge social cost and meet international human rights obligations, offering a blueprint for a fair and equitable economic model, as has been affirmed by various UN bodies in recent years.
Actions to implement these recommendations could include public efforts to reform and revive the productive capacity of the state, so as to provide the foundation for a development model based on decent work and fair wages. A human rights approach to subsidy reform can also guide the government towards building a social protection model that would effectively contribute to the eradication of extreme poverty.
Population aging in India: facts, issues, and options
10 Feb 2017 10:58:43 GMT
India, one of the world’s two population superpowers, is undergoing unprecedented demographic changes. Increasing longevity and falling fertility have resulted in a dramatic increase in the population of adults aged 60 and up, in both absolute and relative terms. This change presents wide-ranging and complex health, social, and economic challenges, both current and future, to which this diverse and heterogeneous country must rapidly adapt.
This chapter first lays out the context, scope, and magnitude of India’s demographic changes. It then details the major challenges these shifts pose in the interconnected areas of health, especially the massive challenges of a growing burden of noncommunicable diseases; gender, particularly the needs and vulnerabilities of an increasingly female older adult population; and income security.
This chapter also presents an overview of India’s recent and ongoing initiatives to adapt to population aging and provide support to older adults and their families. It concludes with policy recommendations that may serve as a productive next step forward, keeping in mind the need for urgent and timely action on the part of government, private companies, researchers, and general population.
Parental background and child human capital development throughout childhood and adolescence: evidence from four low- and middle-income countries
09 Feb 2017 01:29:47 GMT
Although there are a vast number of empirical studies documenting a strong positive link between parental socio-economic status (SES) and child outcomes, we do not know whether these associations remain robust when other parental background dimensions are controlled.
This working paper investigates the association of child human capital indicators with a wide range of parental background dimensions across four low- and middle-income countries, and at different stages of childhood and adolescence, using data from the Young Lives cohort study in Ethiopia, India, Peru, and Vietnam.
The key finding is that parental income is strongly and positively associated with child nutritional status and cognitive achievement across all countries and at all stages of childhood and adolescence, even after controlling for other background dimensions, but the same does not hold for parental education. Child non-cognitive skills across all countries and at different ages, however, are mostly predicted by the mother’s personality traits reflected in her non-cognitive skills, social capital, and aspirations for the child’s education. Associations of parental background factors with child human capital measures do not change systematically with child age, except that mother’s aspirations for child education exhibits a positive association with child cognitive and non-cognitive skills that is increasing in child age across countries.
Overall, the results suggest that policies that seek to improve the material circumstances of the household and mother’s education and socioemotional competencies may be effective in promoting child cognitive and socioemotional development in low- and middle-income countries.
Russian BRICS Presidency: models of engagement with international institutions
07 Feb 2017 04:24:37 GMT
Six years after the first summit in 2009 in Yekaterinburg, the BRICS grouping of Brazil, Russia, India, China and South Africa has established its identity as an informal global governance forum. The members have consistently consolidated their cooperation, expanded and deepened their agenda, coordinated their efforts aimed at the recovery and growth of their economies, and developed their engagement with other international organizations. This work continued during the Russian presidency in 2015.
This article focuses on one dimension of BRICS performance: its engagement with international organizations. There are at least three reasons defining the relevance of this analysis:
- from its launch, the BRICS collectively pledged to build a multipolar, fair and democratic world order, which cannot be attained without cooperation with the key international organizations
- the objective of enhancing sustainability, legitimacy and effectiveness of the global governance architecture defines the need for the summit institution to rely on a flexible combination of models of engagement with other international institutions
- according to the concept note published by Russia on its BRICS presidency, one of its priorities was a transition to a qualitatively new level of engagement with international organizations.
The analytical framework for the study builds on the theory of rational choice institutionalism. The calculus approach fits the analysis of summit institutions bringing together states from a wide range of cultures, continents and economic development. Its distinctive features clearly apply to the analysis of the origin and performance of the BRICS. First, members act in a highly strategic manner to maximize the attainment of their priorities. Second, summitry presents an arrangement for strategic interaction among leaders to determine the political outcomes. Third, rational choice institutionalism offers the greatest analytical leverage to settings where consensus among actors accustomed to strategic action and of roughly equal standing is necessary to secure institutional changes – the features typical of summit institutions. Fourth, the institutions are created by the voluntary agreement of the respective countries’ leaders to perform specific functions and missions.
In order to maximize benefits from the new arrangement, the founders may choose to engage voluntarily with
existing institutions in a mode they regard as most efficient. The summit institution members’ choice of partners, modes and intensity of engagement is accepted to be strategic, intentional and voluntary, aiming to compensate for efficiency in their performance. The models of engagement are not mutually exclusive but coexist, with their choice dependent on the policy area and type of organization. The models of engagement with the other international organizations reflected in the leaders’ discourse indicate their place and role in the global governance architecture, imputed to them at their launch and subsequent evolution.
The study applies qualitative and quantitative methods. Drawing on the content analysis of the BRICS documents, the author tracks dynamics of BRICS engagement with multilateral organizations and main models of engagement, comparing them with the previous summits.
Fostering inclusive growth in Malaysia
07 Feb 2017 04:10:17 GMT
Malaysia has followed a comparatively equitable development path, largely eliminating absolute poverty and greatly reduced ethnic inequality. Income and wealth inequality have gradually declined since the mid-1970s. With the “people economy” at the centre of Malaysia’s ambition to become a high-income country by 2020, the focus is shifting to the challenges of relative poverty and achieving sustainable improvements in individual and societal well-being through inclusive growth. This shift would be aided by reforms in several policy areas where Malaysia may compare favourably within its region but less so relative to OECD countries. This includes reforms to increase access to quality education, provide comprehensive social protection, raise the labour force participation of women and older persons, maintain universal access to quality public healthcare, improve pension system sustainability and adequacy and
move towards a tax and transfer system that does more for inclusiveness.
Own ways of doing: national pride, power and China’s political calculus in Ethiopia
27 Jan 2017 04:09:04 GMT
China’s evolving position as a key economic actor in Africa, a diplomatic heavyweight in local conflict resolution and a new entrant into peacekeeping, security co-operation and capacity building, illustrates significant policy changes with potentially profound implications for the continent.
Mostly unencumbered by Western normative agendas and a concomitant need to reconcile these with its commercial interests, the Chinese government (along with Chinese enterprises) had pursued a mercantilist agenda that seemingly only required local elite compliance to succeed. However, as a result of China’s failure to sufficiently grapple with the intricacies of various political contexts, the early blush of success in places such as Sudan quickly devolved into situations of great complexity, potentially threatening the commercial viability of investments, the lives of Chinese citizens and the country’s international reputation.
Against this increasingly volatile backdrop, the pressure on China to devise an approach that mitigates these challenges without unnecessarily exposing the country to greater risks in the process, has become a formidable policy imperative. By embracing multilateralism while cautiously expanding its co-operation with and capacity building of African regional initiatives, Beijing hopes to have devised a winning strategy for securing future engagements across the continent and elsewhere. Yet the African terrain remains complex and unfamiliar, forcing China to pragmatically engage with specific contexts and learn by doing. This opens up a space for a broader conversation with other external partners of the continent (at both a national and a multilateral level) to explore avenues of engagement.
In this broader scheme of shifting dynamics, China’s quickly expanding links with Ethiopia offer a contextualised portrait of activities that extend beyond purely economic interests and outcomes. While neither resource rich nor an economic powerhouse at the scale of Nigeria or South Africa, Ethiopia is among the top Chinese foreign direct investment (FDI) and loan recipients in Africa. Given its strategic position within a vast geographical zone of conflicts and its increasingly active role in regional peacekeeping missions, Ethiopia plays an important part in the foreign policies of the EU, the US and, more recently, China.
By focusing on peace and security, human security and governance capacity building, this paper explores the nature of political culture and concepts of power in Ethiopia, while examining the ways in which China, as a foreign partner, navigates this complex political landscape (both domestically and regionally) as it seeks to expand both its foothold and bargaining power. The first part unpacks the complexity of domestic politics in Ethiopia, as this provides the basis for the country’s unfolding relationship with China and Chinese actors. The second part outlines the key areas of Chinese economic involvement while critically engaging with the idea of ‘infrastructure for diplomatic support’. The last part looks at China’s political influence, both at a domestic level through regular exchanges with the ruling party and, increasingly, at a regional level via engagements with the AU and other regional institutions.
Indian economy and demonetisation: way forward
20 Jan 2017 02:51:40 GMT
The delegalisation of the two highest value currency notes announced by Indian government on November 8th 2016 has created an impact on the economy at a scale which no other piece of policy has rivalled for a long time.
This brief tlooks at the rationale of the measure and scans it for lessons learnt. The analysis will also pay particular attention to the role of digital money and corresponding role of paper money.
There are also two more concerns which are touched upon in this study:
- globally the subject of cash as a physical currency versus its arrival as an electronic medium has become very relevant in the 21st century. One of the first large scale application of the principle was through the launch of Bitcoin. More such, are in the offing. Those create a vast and undefined region for economic analysis to venture into
- at a more basic level as economies of Asia and, particularly Africa find themselves rising up the growth path, they have been assailed by the impact of inequality and corruption that a growing economy without sufficient regulatory control are subjected to. The medium for such deviant practices are often based on manipulation of the cash economy.
Does the Indian demonetisation experiment have any lessons to offer in this context?
Financing Universal Access to Electricity
11 Jan 2017 05:21:27 GMT
The recent emphasis on the provision of modern energy services as an important ingredient for development has improved finance availability for the goal of Sustainable Energy for All (SE4ALL).
However, existing financial flows are still insufficient to meet the target of universal access of sustainable energy by 2030 and often ignore poor people, who cannot afford the service, or those renewable energy technologies that cannot offer high rates of return.
Drawing on a large dataset of official development assistance and private investment for electrification between 1990 and 2012, our research has looked at the factors that explain donor and private finance in the electricity sector of developing countries. What lessons can be taken and shared with policymakers to avoid past mistakes and target countries and technologies that have been neglected in previous efforts?
South Africa's trade and investment relationship with the United States post-AGOA
06 Jan 2017 04:12:54 GMT
The African Growth and Opportunity Act (AGOA) has been recognised as the cornerstone of America’s engagement with Sub-Saharan Africa for the past 14 years. It is therefore central to an understanding of the South Africa-US trade relationship. The recent extension of AGOA by a further 10 years presents many opportunities for improving that trade relationship and expanding economic ties. There are, however, areas for caution, as was seen in the debates around the extension of AGOA and the terms of the inclusion of South Africa as a beneficiary of AGOA.
This policy brief considers the three main options available to South Africa in a post-AGOA trade and investment relationship with the United States: to stay in AGOA, negotiate a Free Trade Agreement, or fall back on Most Favoured Nation terms and the Generalized System of Preferences.
Partnering with the New Development Bank: what improved services can it offer Middle-Income Countries?
06 Jan 2017 03:15:42 GMT
Multilateral development banks increasingly struggle to respond effectively to the needs of middle-income countries, influencing not only their potential development impact but also their own financial stability. This challenge has been driven by a changing external environment, including additional competition from other financiers, the changing needs of middle income countries and institutional constraints. Business processes that deter greater borrowing by countries, especially in the presence of other financiers with less strenuous requirements, also contribute to this situation. These include lengthy loan approval processes, limited use of in-country management systems and sensitivities around environmental and social safeguards. There is also a need for greater responsiveness and an emphasis on the importance of knowledge services. This paper highlights some of these challenges and offers some alternative solutions. The New Development Bank, as a new entrant to the development finance milieu, will do well to draw on the experiences of existing multilateral development banks to improve its offerings to countries.
Illicit financial flows estimating trade mispricing and trade-based money laundering for five African countries
06 Jan 2017 03:05:49 GMT
Illicit financial flows (IFFs) are garnered through the proceeds of illicit trade, trade mispricing, transfer pricing and other forms of organised profit-motivated crime. This paper focuses on the commercial tax evasion component of illicit financial flows (IFFs), clarifying concepts often used interchangeably, namely transfer pricing, abusive transfer pricing, trade mispricing (or trade mis-invoicing), trade-based money laundering (TBML), tax evasion and tax avoidance. It also shows how they link to IFFs. It estimates the extent of trade mispricing by enhancing the model currently used by Global Financial Integrity, and by developing a TBML model as a means of quantifying IFFs between two developing countries. There are data challenges with this methodology, as it is an estimation of illegal or hidden activities, using the International Monetary Funds Direction of Trade methodology.
The research points to declining trade mispricing in South Africa and Zambia for the period 2013-2015, and Nigeria for the period 2013-2014. Morocco and Egypt exhibit increasing trade mispricing from 2013 to 2014. The TBML model, which addresses the criticism regarding flows between two developing countries, points to increasing financial outflows for all five countries. These flows mean less revenue is available to the fiscus to invest in socio-economic infrastructure and pro-poor growth strategies, which would benefit women and the poor. Policy recommendations address commercial tax evasion as well as proposals to remedy the data anomalies.
Improving infrastructure finance for Low-Income Countries: recommendations for the ADF
06 Jan 2017 02:48:36 GMT
Low-income countries (LICs) in sub-Saharan Africa face a substantial infrastructure-financing gap. multi-lateral development banks (MLDBs) have traditionally played an important role in mobilising finance for infrastructure in LIcs, but their funding alone cannot match demand. the african development Bank’s (AfDB) concessional window, the african development fund (ADF), is a key infrastructure financier for african LICs, and comprises 37 regional member countries (RMCs), including emerging markets and fragile states. however, in recent years the ADF has faced funding and technical constraints.
This policy brief, based on a discussion paper, outlines the ADF’s role in providing infrastructure financing to LIcs and the challenges that countries face in accessing these funds. It also examines the changing context confronting LIcs as they weigh their infrastructure demands against the requirement to maintain sustainable debt levels. Lastly, the brief explores the challenges and opportunities of mobilising additional finance for LICs.
- in order to target growing international concerns around debt sustainability, the ADF should increase its efforts to work with countries in understanding and managing their debt levels
- the ADF should continue to streamline its approval and implementation processes, targeting national capacity bottlenecks as early as possible and ensuring the continuity of AfDB officials from the appraisal to monitoring stages
- the ADF should direct efforts towards increasing LIC awareness and understanding of its private finance mobilisation tools through greater promotion and dissemination of information, and should increase technical support and training for PPPs. It should place greater focus on measuring the developmental impacts of projects, especially where the private sector is involved
- project preparation requires more ADF funding, and the ADF’s PPF should explore cost recovery mechanisms to ensure sustainability. LIC governments should create better co-ordination and unified support around proposed projects to decrease risks
- LICs should be assisted in accessing the non-concessional ADB funds available to them
Recommendations of the Task Force on Climate-related Financial Disclosures
03 Jan 2017 10:11:21 GMT
One of the most significant, and perhaps most misunderstood, risks that organisations face today relates to climate change. While it is widely recognized that continued emission of greenhouse gases will cause further warming of the planet and this warming could lead to damaging economic and social consequences, the exact timing and severity of physical effects are difficult to estimate.
The large-scale and long-term nature of the problem makes it uniquely challenging, especially in the context of economic decision making. Accordingly, many organizations incorrectly perceive the implications of climate change to be long term and, therefore, not necessarily relevant to decisions made today.
The potential impacts of climate change on organizations, however, are not only physical and do not manifest only in the long term. To stem the disastrous effects of climate change within this century, nearly 200 countries agreed in December 2015 to reduce greenhouse gas emissions and accelerate the transition to a lower-carbon economy. The reduction in greenhouse gas emissions implies movement away from fossil fuel energy and related physical assets. This coupled with rapidly declining costs and increased deployment of clean and energy-efficient technologies could have significant, near-term financial implications for organizations dependent on extracting, producing, and using coal, oil, and natural gas. While such organizations may face significant climate- related risks, they are not alone. In fact, climate- related risks and the expected transition to a lower-carbon economy affect most economic sectors and industries. While changes associated with a transition to a lower-carbon economy present significant risks, they also create significant opportunities for a broad range of organizations focused on climate change mitigation and adaptation solutions.
Because this transition to a lower-carbon economy requires significant and, in some cases, disruptive changes across economic sectors and industries in the near term, financial policymakers are interested in the implications for the global financial system, especially in terms of avoiding severe financial shocks and sudden losses in asset values. Potential shocks and losses in value include the economic impact of precipitous changes in energy use and the revaluation of carbon-intensive assets—real and financial assets whose value depends on the extraction or use of fossil fuels. Given such concerns, and the potential impact on financial intermediaries and investors, the G20 Finance Ministers and Central Bank Governors asked the Financial Stability Board to review how the financial sector can take account of climate- related Recommendations of the Task Force on Climate-related Financial Disclosures iii
issues. As part of its review, the Financial Stability Board identified the need for better information to support informed investment, lending, and insurance underwriting decisions to improve understanding and analysis of climate-related risks and opportunities, and over time, to help promote a smooth rather than an abrupt transition to a lower-carbon economy.
Foreign investment promotion and domestic protection: a balancing act
16 Dec 2016 10:00:00 GMT
South Africa has experienced sluggish economic growth over the last four years. Real gross domestic product (GDP) growth has fallen steadily since 2011, and was down to 1.4% in 2015 and was predicted to drop by another 0.1% in 2016. This depressed economic performance is heavily influenced by the global economic recession and exacerbated by falling demand from China for raw materials such as coal and minerals, the destination of roughly 40% of South Africa’s total exports. Skyrocketing energy costs and shortages due to an aging electricity infrastructure as well as labour market rigidity and instability have also contributed to this low growth trend.
Given South Africa’s high levels of unemployment and inequality, the country can ill afford such low levels of growth. South Africa has a historically low savings rate and external financing needs of above 10% of total public expenditure; as such foreign direct investment (FDI) can be an important vehicle to help reverse this trend and bring future economic growth.
This paper analyses south africa’s relationship with sustainable inward foreign direct investment (FDi). it examines south africa’s balancing act of promoting FDi that brings inclusive economic development while remaining an attractive FDi destination for investors. it first gives a brief overview of south africa’s current FDi context, with particular focus on the dynamics of international mergers and acquisitions and how south africa’s competition and domestic policy frameworks affect these types of investments. Walmart’s acquisition of Massmart is employed to demonstrate the challenge of ensuring that FDi has positive spillover effects for south africans within the context of increasingly globalised production chains. Ultimately, the paper focuses on south africa’s future path towards more sustainable FDi, and the last section therefore analyses the government’s current efforts to create a domestic FDi regulatory framework. it then explores additional efforts to promote sustainable FDi such as the one-stop shop for investors and new public interest guidelines for competition, as well as prospects for a mechanism to support small, medium and micro-sized enterprise suppliers.
The BRICS initiatives towards a new financial architecture: an assessment with some proposals
25 Nov 2016 04:11:53 GMT
It is heartening, the author of this paper argues, to observe that developing countries, led by China and other BRICS members have been successful to organise alternative sources of credit flows . aiming for financial stability, growth and development. Setting a goal to avoid the IMF type of loan conditionalities and the dominance of US dollar in global finance, these new institutions provide a much needed turn in the global financial architecture, especially in the background of the on-going demands for austerity as are currently imposed on Greece by the troika of IMF, the ECB and the EU. It is rather ironic that the Western financial institutions as well as the EU are not in a mood to provide any option to Greece short of complying with the disciplinary measures as a pre-condition for Greece to continue with the Eurozone and its common currency, the Euro.
Limitations of the on-going global financial architecture at command of the IMF and its member nations in the OECD brings to the fore the need for new institutions which can provide alternative solutions. The launch of the financial institutions by the BRICS seem to chart out an alternative route which may turn out as superior in achieving a superior global financial order.
The BRICS financial institutions, along with the proposed clearing account will herald a new set of financial architecture which has the potential to be beneficial, not just for the BRICS but for global financial system at large. Since those settlements will not rely on dollar or other major currencies as unit of account, exchange rate fluctuations across such currencies will not impact the cross rates between the individual BRICS currencies as long as kept frozen with forward contracts renewed over time.
Arrangements to use the trade surpluses of individual BRICS members, by those in deficit would add to demand within the BRICS by creating new channels for intra-BRICS trade. The transfer of surpluses to meet deficits can even be treated as a loan , to be adjusted to similar other transactions of the NDB.
Moreover, trade surpluses earned by individual members (say China) will remain within the Brics as investment and will not be used as assets in US dollar , avoiding sources of vulnerability. Finally the Brics may devise ways and means to channelize the capital flows in a manner which strengthens the Brics institutions and generate real demand, say with infrastructures, rather than spurious activities of a speculative nature.
Population aging in India: facts, issues and options
24 Nov 2016 10:29:28 GMT
India, one of the world’s two population superpowers, is undergoing unprecedented demographic changes. Increasing longevity and falling fertility have resulted in a dramatic increase in the population of adults aged 60 and up, in both absolute and relative terms. This change presents wide-ranging and complex health, social, and economic challenges, both current and future, to which this diverse and heterogeneous country must rapidly adapt.
This paper first lays out the context, scope, and magnitude of India’s demographic changes. It then details the major challenges these shifts pose in the interconnected areas of health, especially the massive challenges of a growing burden of noncommunicable diseases; gender, particularly the needs and vulnerabilities of an increasingly female older adult population; and income security.
The paper also presents an overview of India’s recent and ongoing initiatives to adapt to population aging and provide support to older adults and their families. It concludes with policy recommendations that may serve as a productive next step forward, keeping in mind the need for urgent and timely action on the part of government, private companies, researchers, and general population.
The New Development Bank: towards greater efficiency
18 Nov 2016 01:53:20 GMT
Multilateral development banks (MDBs) increasingly struggle to respond effectively to the needs of middle-income countries (MICs). This has influenced not only their potential development impact but also their own financial stability. Part of the challenge has been internal business processes that deter greater borrowing by countries, especially in the presence of other financiers with less strenuous requirements. These processes include lengthy loan approval processes, limited use of in-country management systems and sensitivities around environmental and social safeguards. There is also a need for greater responsiveness and an emphasis on the importance of knowledge services.
This policy briefing (drawing on a more in-depth discussion paper) highlights some of these challenges and offers some alternative solutions. The New Development Bank (NDB), as a new entrant to the development finance milieu, will do well to draw on the experiences of existing MDBs to improve its offerings to countries.
- by simplifying and decentralising loan approval processes or creating simplified and standardised procedures for loans, MDBs can be more efficient, making their services more attractive to borrowing countries
- the NDB cannot divorce its operations from global discourse and pressures (from countries and non-state actors alike) related to environmental and social safeguards and should ensure adherence to international best practices
- there is a clear preference for the use of country systems from borrowing countries and thus the UCS approach should be prioritised. Where countries lack capacity, the NDB should provide the additional capacity-building support
- technical knowledge sharing should be a priority focus area of the NDB, as such services are greatly valued by borrowers, more so than ‘soft’ knowledge services such as reports or databanks
- to ensure greater inclusive development, the NDB needs to ensure gender considerations are included throughout the lifecycle of infrastructure financing and in institutional arrangements
Fiscal policies for diet and the prevention of noncommunicable diseases
11 Oct 2016 04:29:29 GMT
The Global Action Plan for the Prevention and Control of Noncommunicable Diseases 2013–2020, endorsed by the World Health Organization, provides a roadmap and a menu of policy options for Member States and other stakeholders to take coordinated and coherent action to reduce mortality from noncommunicable diseases (NCDs) and exposure to risk factors.
To address the increasing number of requests from Member States for guidance on how to design fiscal policies on diet, WHO convened a technical meeting of global experts in fiscal policies on 5–6 May 2015 in Geneva. The main objectives of the meeting were to review evidence and existing guidance, discuss country case studies and provide considerations with regards to the scope, design and implementation of effective fiscal policies on diet. The meeting consisted of presentations and discussions during plenary and in working groups on the evidence, country experiences and technical aspects of policy design and implementation.
It was concluded that there is reasonable and increasing evidence that appropriately designed taxes on sugar-sweetened beverages would result in proportional reductions in consumption, especially if aimed at raising the retail price by 20% or more. There is similar strong evidence that subsidies for fresh fruits and vegetables that reduce prices by 10–30% are effective in increasing fruit and vegetable consumption. Greater effects on the net energy intake and weight may be accomplished by combining subsidies on fruit and vegetables and taxation of target foods and beverages. Vulnerable populations, including low-income consumers, are most price-responsive and, in terms of health, benefit most from changes in the relative prices of foods and beverages.
Consistent with the evidence on tobacco taxes, specific excise taxes – as opposed to sales or other taxes – based on a percentage of retail price, are likely to be most effective. In countries with strong tax administration, taxes that are calculated based on nutrient content can have greater impact. A proper situation analysis, good political advocacy, appropriate objective setting and evaluation, should be part of the multidisciplinary development and implementation of such policies.
There are evidence gaps that could be addressed, with more countries developing and implementing such fiscal policies. Lack of standards or criteria for determining exactly what to tax is a challenge experienced by countries and the development of a nutrient profile model for designing and implementing fiscal policies was recommended. In addition, there was a call for a manual on developing and implementing fiscal policies for diet.
It is recommended that:
- the report of the meeting be disseminated for use by countries as information to assist in the development and implementation of fiscal policies as appropriate
- the current evidence gap – including the impact of SSB tax on improving weight and health outcomes, and ultimately the prevention of NCDs – be addressed through research and evaluation in countries
- a nutrient-profiling tool be developed for use by countries for the implementation of fiscal policies
- an implementation manual be developed to provide further guidance to countries on the development and implementation of fiscal policies for diet
The State of African Cities 2014: re-imagining sustainable urban transitions urban transitions
07 Oct 2016 03:42:44 GMT
The overarching challenge for Africa in the decades to come is massive population growth in a context of wide-spread poverty that, in combination, generate complex and inter-related threats to the human habitat. The main premise of this report is that successfully and effectively addressing the vulnerabilities and risks to which the African populations are increasingly being exposed may, perhaps, require a complete re-thinking of current urban development trajectories if sustainable transitions are to be achieved. This report is the third in The State of African Cities series.
It is not only Africa’s largest urban population concentrations that are becoming more prone to vulnerabilities and risks; these are actually increasing for all African settlements. This will add to the already significant social, economic and political hazards associated with Africa’s still pervasive urban poverty. The
combination of demographic pressures, rapid urbanization, environmental and climate change now appear to reinforce a host of negative urban externalities.
Ubiquitous urban poverty and urban slum proliferation, so characteristic of Africa’s large cities, is likely to become an even more widespread phenomenon under current urban development trajectories, especially given the continuing and significant shortfalls in urban institutional capacities. Since the bulk of the urban population increases are now being absorbed by Africa’s secondary and smaller cities, the sheer lack of urban governance capacities in these settlements is likely to cause slum proliferation processes that replicate those of Africa’s larger cities.
This report argues for a radical re-imagination of African approaches to urbanism, both to strengthen the positive impacts of Africa’s current multiple transitions and to improve urban living and working conditions. Africa’s population is still well below the 50 per cent urban threshold. This implies that a major reconceptualization of its approaches to urban development can still be undertaken. Given the rapidly changing global conditions, especially those associated with environmental and climate change, looming resources scarcity and the dire need to move towards greener and more sustainable development options, Africa has the opportunity to take a global lead in innovations towards greener, healthier and more sustainable urban societies
Scoping Report: current status of index-based insurance in Bangladesh
07 Oct 2016 01:19:41 GMT
With current and anticipated increases in magnitude of extreme weather events and a declining consistency in weather patterns, particularly challenging for agriculture, there has been a growing interest in weather index-based insurance (IBI) schemes in Bangladesh. A number of weather index-based insurance products have already been tested and applied across Asia and Africa, with varying degrees of success, as a mechanism to improve livelihood security by enabling vulnerable populations to transfer risk associated with climate change, extreme weather events and other hazards. In the process, these efforts have generated important new knowledge on how these schemes can be designed and implemented for optimal results.
However, the practice of index-based insurance is still limited in Bangladesh, and the experience and knowledge generated by the different stakeholders involved needs to be better communicated.
To identify and facilitate the diffusion of knowledge and best practices in this unique field, Worldfish will hold a two-day workshop for experts and practitioners who are working on this issue in Bangladesh. This event aims to map past and present index-based insurance schemes that have been undertaken in Bangladesh, and to facilitate knowledge sharing and capacity building among relevant organizations. Prior to this event, the International Centre for Climate Change and Development (ICCCAD) has conducted this scoping study to inform the design and objectives of the two-day workshop.
China’s African infrastructure projects: a tool in reshaping global norms
06 Oct 2016 11:33:41 GMT
The resilience of China’s investments in African infrastructure has been called into question in the light of its own economic slowdown. The substantial reduction in Chinese demand for African commodities has resulted in a significant drop in commodity prices, causing an adverse economic outlook in many commodity-dependent African economies and potentially decoupling the African growth story from China’s influence and economic engagement.
This policy insights paper argues that China’s infrastructure-based economic statecraft in Africa has shown and will continue to show resilience in the face of new economic realities in the China–Africa relationship, as these projects fit into China’s broader goals of reshaping global norms.
Costs of non-cooperation in South Asia: an illustration and way forward
06 Oct 2016 01:37:17 GMT
The South Asian economic integration has remained afflicted with a narrative that is more often than not a negative one. As a part of this, the arguments put forth include the assertion that the region lacks in trade complementarities due to similarities in production structures. Therefore, the region can only compete in
products and there is limited scope for intra-regional trade.
The effect of such an argument is enormous. It has apparently led to a tendency to neglect trade integration in South Asia let alone adopting a comprehensive approach towards it, whereby trade in goods, trade in services and investment are sought to be regionally integrated simultaneously. Pakistan’s consistent postponement of Most Favoured Nations (MFN) status to India and Sri Lanka’s ever evasive approach towards Comprehensive Economic Partnership Agreement (CEPA) are but two glaring examples. The examples of Pakistan and Sri Lanka are deliberate as they both are the only two non-LDCs (Least Developed Countries) apart from India in the region.
Realising income security in old age: A study into the feasibility of a universal old age pension in Malawi
04 Oct 2016 12:15:51 GMT
Many governments in developing countries are setting up non-contributory programs to assist older people, most of whom are not covered by formal pension schemes. Malawi is no stranger to the international advancement of social security and social protection. That said, further analysis on the implementation and the role of social pensions in tackling old-age poverty was needed to inform government policy and practice.
The aim of the study was to address the knowledge gap of social pension reforms in Malawi. The study examined what has been learned from the programs operating in different African countries, and highlights the key policy and budgetary issues that arise. The study has concluded that social pensions represent an important component of an institutional foundation for old-age social protection.
There are affordable options for Malawi to begin expanding a universal pension in the coming years. Various scenarios exist for universal pensions costing a fraction of GDP, which could be financed through wider efforts to increase revenue for social protection spending. Malawi could then seek to
increase the coverage and adequacy of a universal pension as more revenue can be secured, and as the economy grows.
The path chosen will depend on the political will of the government, but a potential option would be:
- make a start but introducing a relatively low cost scheme, such as benefit of MWK 3,720 to over 70s (a cost of 0.4 per cent of GDP). This would be in line with current levels of fiscal space, and would also allow for administrative systems to be developed gradually before rolling out to national level
- as soon as possible, expand the scheme to all older people aged 60 years and over. This would recognise the relatively short life expectancy in Malawi, and that many of the challenges of old age can kick in relatively early
- in the longer run, move towards a benefit level at the level of the national poverty line (approximately MWK 8,750 in 2016 prices), to ensure that no older person lives in poverty. This higher level of adequacy can be achieved both through growth of the economy, and also by devoting increased revenue to the scheme
Gone with the wind: demographic transitions and domestic saving
30 Sep 2016 09:26:57 GMT
Demographic factors are important determinants of a country’s saving behaviour. In Asia, for example, a favourable demographic transition over the last half century has supported high saving and investment rates.This study explores the relationship between demographic factors and saving rates using a panel dataset covering 110 countries between 1963 and 2012. In line with predictions from theory, this paper finds that lower dependency rates and greater longevity increase domestic saving rates. However, these effects are statistically robust only in Asia. In particular, Latin America, which is a region that has undergone a remarkably similar demographic transition, did not experience the same boost in saving rates as Asia. The paper highlights that the potential dividends arising from a favorable demographic transition are not automatically accrued. This is a sobering message at a time when the demographic tide is shifting in the world.
Deepening trade and investment relations post-AGOA: three options for South Africa
30 Sep 2016 02:39:29 GMT
As the US and Africa look to engage at the 2016 annual African Growth and Opportunity Act (AGOA) Forum under the theme of ‘Maximizing AGOA Now While Preparing for the Future beyond AGOA’, two pertinent issues come to the fore: leveraging AGOA until this programme of trade benefits expires in 2025, and considering the nature of trade relations post-AGOA.
The US is an increasingly important economic partner for South Africa: total trade has nearly doubled since the inception of AGOA in 2001, as has US foreign direct investment (FDI) into South Africa. Considering the changing global conditions over this period, such as the stalemate in World Trade Organization (WTO) negotiations, the slump in global commodity demand and prices, domestic economic stagnation and priorities of promoting export-led growth, South Africa needs to consider its future relations with the US.
This briefing highlights key measures South Africa can take to maximise the benefits extended under AGOA until its expiration. At the same time, three options are offered towards a more formalised trading arrangement with the US post-AGOA: a ‘simple’, ‘moderate’, and more comprehensive approach. These options are discussed in a prescriptive manner, highlighting the strengths and weaknesses of each approach, in the hopes of facilitating further research and discussion.
Private investment in clean energy, inclusive agribusiness and financial inclusion: evidence of impact
29 Sep 2016 12:41:17 GMT
This report, commissioned by DFID, seeks to identify what evidence exists that private investments made in clean energy, inclusive agribusiness and financial services lead to good development outcomes for the poor, especially women – with a particular focus on Asia. This paper is a rapid literature review, before deciding on whether or not to commission more detailed work. DFID is particularly interested in (a) specific suggestions that are made for how to strengthen the investments – for example, through complementary TA – so as to improve the likelihood of strong outcomes for the poor, especially women (b) gaps in the evidence base. The evidence of links between clean energy and good development outcomes for the poor was strong, although the review identified only very few rigorous impact studies. The literature highlighted the need for certain conditions to be met in order for those positive outcomes to be achieved. Financial sustainability was cited as a primary driver of development outcomes. Several studies indicated the importance of public sector intervention in clean energy investment alongside the private sector, to increase provision in poorer and rural areas and to ensure that proper standards are followed in the construction and operation of plants. For small-scale clean energy projects, the evidence indicated the importance of activities to promote their uptake, including financial services. Clean energy was seen to be of particular benefit to women but women are not properly represented in the design and implementation of small-scale clean energy projects. The evidence of links between inclusive agribusiness and good development outcomes for the poor was largely case study-based and anecdotal. The literature identifies many factors affecting the impact of inclusive agribusiness on the poor, including the assets available to the poor in value chains (including land and water) and the process of land acquisition. The literature identified elements of the design of successful inclusive agribusiness including the presence of producer organisations; innovative partnerships to help link producers to markets; pre-commercial investment to transfer assets and building capacity; and giving producers (especially women) a voice in governance and investment. Given the need for careful design, several sources emphasised the importance of ‘patient’ investment in this sector. The evidence for the impact of financial inclusion on the poor was considerably more robust than in the other two sectors, and many more rigorous impact evaluations were available. The evidence is strong for positive impacts for the poor through several different channels for private investment including savings products, improved banking technology and access to credit. In terms of barriers to successful financial inclusion, there is evidencethat farmers’ credit constraints are an important bottleneck in expanding agricultural output, and interventions that ease these constraints may be effective in reducing rural poverty and increasing agricultural production. The overall evidence on the impact of financial inclusion is mixed, as some studies show no effect on women while others associate it with positive impacts.&nbs[...]
The Funded Pension Scheme and economic growth in Nigeria
27 Sep 2016 04:57:12 GMT
In Nigeria however, life after retirement is dreaded by most workers. The fears of facing the future after retirement create an ambiance of disturbance among employees. Retirement is seen by workers as a transition that could lead to psychological, physiological and economic problems.
This study provided evidence on the effect of the operation of the funded pension scheme since its inception in 2004 on economic growth in Nigeria using error correction mechanism (ECM) and Ordinary Least Square (OLS) methodologies.
Findings revealed that the pension fund contributions from both private and public sectors in Nigeria increased greatly and constituted a huge investment fund in the capital and money markets. This increased liquidity in the economy and created employment opportunities as well as improvement in the investment climate.
The study concluded that with good risk and portfolio management by pension fund administrators and custodians, the contributory pension has the capacity to boost the Gross Domestic Product (GDP) in Nigeria and very convenient to retirees compared to the previous defined benefit scheme.
The study however recommended the removal of delay payment, administrative bottlenecks and corruption in the management of the pension fund in order to boost economic growth in Nigeria.
Bridging the risk modeling gap: expanding climate-related risk insurance through global risk assessment
27 Sep 2016 03:18:13 GMT
In 2015, more than 1,000 natural disasters inflicted some $100 billion worth of economic damages around the world. These natural disasters included severe storms, flooding, extreme temperatures, droughts, and wildfires—all of which are expected to increase in frequency for years to come as a result of climate change. The annual number of such extreme weather events has been increasing, with almost three times as many occurring worldwide from 2000 to 2009 as in the 1980s.
Of the total economic losses endured last year from natural disasters, insurance covered only 30 percent. The majority of uninsured losses occurred in developing countries across Africa, Asia, and South America.
In Asia, only 8 percent of losses from natural disasters were insured in 2015, and in Africa, only 1 percent of such losses were insured.
Without such risk management tools, governments and individuals are less able to prepare for, respond to, cope with, and recover from climate-change-fueled weather events and natural disasters. While insurance can take many forms, risk management in particular includes a lack of access to innovative insurance instruments - such as parametric risk insurance, which is specifically designed to pay out quickly in the aftermath of a natural disaster. This gives countries a rapid injection of capital that can be vital in the early window before overseas assistance is effectively ramped up and delivered.
To help address this shortfall, the private sector, national governments, and international financial institutions and organizations are working to build new partnerships aimed at enabling countries that are particularly vulnerable to climate change and related natural disasters to gain access to climate-related risk insurance.
These efforts were given a boost in 2015, when at its annual meeting, the G7 announced a goal of expanding access to climate-related risk insurance to 400 million additional people in the most vulnerable developing nations by 2020.
This would quintuple the current level of coverage throughout the developing world from 100 million people to half a billion people. In order to meet this goal of making innovative insurance and climate risk-management tools available to so many millions of new people, a critical gap in high-resolution data and cutting-edge modeling needs to be bridged.
Macroeconomic policy in times of slow growth and crisis
27 Sep 2016 02:36:34 GMT
South Africa faces a series of macroeconomic challenges in the coming months that will strain its ability to address its most pressing need – more jobs. The macroeconomic policy approach taken in the recent time period largely adheres to mainstream tenets, emphasising low inflation and fiscal restraint. Since the Great Recession of 2008, however, those tenets have come under scrutiny, even by organisations such as the IMF.
High global levels of unemployment persist seven years after the onset of the crisis, underscoring the relevance of an alternative macroeconomic framework for both developed and developing countries in which the jobs deficit is the utmost priority. Among policymakers and scholars, the urgent need to stimulate employment coupled with multiple additional macro-level challenges has resuscitated attention to the importance of identifying a wider array of macroeconomic tools beyond the standard ones used in the past 25 years.
This policy brief discusses the recent macroeconomic approaches employed by the South African government with an emphasis on examination of the monetary policies adopted by the South African Reserve Bank. Their impact on the goals of employment creation and growth will be discussed. This will be followed by a review of alternative strategies potentially available to the South African government to address these challenges.
The year that shook the rich: a review of natural disasters in 2011
22 Sep 2016 10:56:57 GMT
From the earthquake and tsunami in Japan to fourteen disasters causing over a billion dollars each in damage in the United States, 2011 was particularly damaging for developed countries. Reviewing 2011’s natural disasters, this report analyses the range of disasters and lessons to be learned from those that occurred in developed countries.Key lessons:2011 was the most expensive year in terms of disaster losses in history, mostly because of a spate of disasters affecting developed countries. Globally, the economic cost of disasters in 2011 was $380 billion, of which $210 billion were the result of the earthquake and tsunami in Japan. This was 72 percent higher than the losses in 2005, the second costliest year in history of disaster-related lossesdeveloped countries were particularly hard-hit by disasters in 2011 as evidenced by floods in Australia, earthquakes in New Zealand, an earthquake/tsunami in Japan and a series of disasters in the United States. While natural disasters result in higher economic losses in rich countries, fewer people tend to be affected and loss of life is less than in developing countriesthe post-tsunami Fukushima nuclear accident in Japan poses serious questions about preparedness for technological and industrial accidents caused by natural hazards as well as questions about the safety of nuclear technologyseveral positive trends in international humanitarian response were evident in the course of 2011, including promising developments in international disaster law, greater emphasis on disaster risk reduction and preparedness, and better communications during crises, including the use of social media in disaster responsethe first famine in twenty years was declared in Somalia in mid-2011, demonstrating the deadly interaction of conflict, political instability and drought that can result in a catastrophe with high human casualtiesthe interconnections between disasters (especially mega-disasters), media coverage and humanitarian funding means that humanitarian funding tends to be directed toward disasters that have higher media coverage rather than to those with disaster-affected populations in greater need of assistanceglobal population is ageing at an unprecedented scale and yet the special needs of older people in emergencies are often neglected. In disasters such as the earthquake/tsunami in Japan and Hurricane Katrina, older people made up a disproportionate percentage of casualties. Given the fact that developing countries are also experiencing an increase in the percentage of elderly people, it is likely that a lack of focus on older persons in all phases, from planning to emergency management to post-disaster reconstruction, can result in higher fatalities among older people, long-term chronic health issues, psychosocial trauma and isolation. Treating older people simply as “normal” disaster victims deniesthe specific vulnerabilities that many older people facemore work is needed to recognize the positive contributions which older people can make in reducing the risks from disasters, in disaster response and in recovery and reconstruction[...]
Emergence of LoCs as a modality in India’s development cooperation: evolving policy context and new challenges
20 Sep 2016 03:15:10 GMT
Development cooperation is an integral part of India’s foreign policy and India has been extending cooperation to its fellow developing countries even before its independence in 1947. In present times, India’s development cooperation is manifested through its 'development compact' comprising five components, namely, capacity building and skill transfer, technology and related partnerships, development finance (which includes concessional loans and lines of credit), grants, and trade and investment. Off late, Indian extension of Lines of Credit (LoCs) through EXIM Bank of India have also become a prominent modality of Development Cooperation. However, in many a cases it has been seen that the projects faced a number of challenges for effective delivery.
This discussion paper explores these challenges and other issues related to quality and timely delivery of the projects. It also explains evolution of the scheme IDEAS and discusses new guidelines by EXIM Bank.
Economic repercussions of the Look East Policy in Zimbabwe
20 Sep 2016 02:59:10 GMT
In 2003, Zimbabwe formally announced the Look East Policy (LEP) in the face of economic sanctions by the West. This, coupled with the Forum on China Africa Cooperation (FOCAC) of 2000, has strengthened trade and bilateral investments between Zimbabwe and China. China is increasingly involved in Zimbabwe's agriculture, mining, construction and tourism industries. There is also an influx of Chinese entrepreneurs in Zimbabwe's retail industry. The repercussions of the LEP have been mixed. In this policy brief, the authors critically engage with three sectors: agriculture, mining and the informal sector; in order to provide an overview of the effects that LEP has had on Zimbabwe focusing on the period 2010-2016. They also propound some recommendations for more positive outcomes in the future.
It is likely that Zimbabwe will continue its strong relationship with China. This is notwithstanding, the fact that it is China that stands to benefit more from interaction with Zimbabwe in terms of natural resource wealth extraction and trade, as compared to the little financial aid being poured into Zimbabwe by Beijing. The evolvement of Sino-Zimbabwe relations will however, remain a matter of strategic interests at play. In this regard, it is noteworthy to highlight that the Chinese government has of late been reluctant to commit to financial investment given the political climate in the country. The recent introduction of the Indigenisation policy in Zimbabwe has also negatively affected Chinese companies particularly in the mining industry.
Means testing vs. universal targeting: assumptions of efficiency and affordability
20 Sep 2016 02:37:21 GMT
Whether social protection benefits should be assigned to all (universal) or kept only for those who meet certain criteria (targeting) remains one of the most contentious questions in social policy research. The purpose of this brief is to revisit two social policy assumptions around basic concerns of efficiency, affordability and sustainability of universal social pensions. Contrary to what many international organisations and scholars have argued, this brief forwards that universal social pensions are economically viable and efficient strategies to produce welfare and alleviate older-age income deprivations. The world clearly has the resources to implement basic social pensions on a global scale; the question is if there is also the political will to do it.
- seventy-nine countries would be economically able to shift from targeted non-contributory pensions to basic universal non-contributory pensions with less than 1.2 per cent of the respective national GDPs
- sixteen countries have means-tested/regional-tested non-contributory pensions more expensive than a hypothetical basic universal pension
- an arbitrary threshold of “economic development” is not a limitation for implementing social pensions. At least 16 countries with a relatively low economic development have successfully implemented social pensions without targeting beneficiaries by means
- universal social pensions are politically and economically viable and are efficient strategies to alleviate income poverty
After Paris: fiscal, macroeconomic, and financial implications of climate change
13 Sep 2016 04:58:24 GMT
The December 2015 Paris Agreement lays the foundation for meaningful progress on addressing climate changeânow the focus must turn to the practical policy implementation issues. Against this background, this paper takes stock of the wide-ranging implications for fiscal, financial, and macroeconomic policies of coming to grips with climate change.Most immediate, and key, is the need to recognize and exploit the potential role of fiscal policies in implementing the mitigation pledges submitted by 186 countries in the context of the Paris Agreement. At the heart of the climate change problem is an externality: firms and households are not charged for the environmenta l consequences of their greenhouse gases from fossil fuels and other sources. This means that esta blishing a proper charge on emissions - that is, removing the implicit subsidy from the failure to charge for environmental costs - has a central role.Also critical are establishing a clear pathw ay to meeting complementary commitments on climate finance, effective adaptation, and ensuring financial markets play a full and constructive role. Fiscal policies are key to efficiently mobilizing both public and private sources of finance, while the need to adapt economies to clim ate change raises issues that have implications for the design of national tax and spending systems (for example, strengthening fiscal buffers and upgrading infrastructure in response to natural disaster risks). There is also a growing need to enhance the contribution of the financial sector to addressing climate challenges, by facilitating clean investments and pooling climate-related risks.For reducing carbon emissions ('mitigation'), carbon pricing (through taxes or trading systems designed to behave like taxes) should be front and centre. These are potentially the most effective mitigation instruments, are straight forward to administer (for example, building off fuel excises already commonplace in most countries), raise (especially timely) revenues for lowering debt or other taxes, and establish the price signals that are central for redirecting technological change towards low-emission investments. The challenges lie in gauging appropriate price paths and dealing with the adverse effects on vulnerable households and firms, and the consequent political sensitivities.Moving ahead unilaterally with carbon pricing is likely to be in many countries' own interests, because of the domestic (non-climate) benefits of doing so, most notably fewer deaths from exposure to local air pollution. As national pricing schemes emerge, a natural way to enhance these efforts and address concerns regarding lost competitiveness would be through international carbon price floor arrangements, analogous to those developed to counter some cases of international competition over mobile tax bases.For climate finance, carbon pricing in developing countries would establish price signals needed to attract private flows for mitigation. Substantial amounts could also be raised from [...]
Public-private partnerships for climate finance
13 Sep 2016 04:25:02 GMT
Implementing the Paris climate agreement and the transition to a low carbon economy require adequate finance. Public finance plays a key role - whereas private finance is essential in developing and implementing new and innovative solutions. The Nordic countries are committed to further develop financial instruments and structures that can scale up such investments.
This report discusses the role of the public-private partnerships (PPPs) in scaling-up climate finance and how such partnerships should be designed to best fulfil this task. PPPs provide frameworks to ensure public leadership and accountability in tackling climate change, while enabling the ownership of certain components of climate finance to be transferred to private hands. The report proposes eight recommendations for climate negotiations and effective climate finance, and looks at some good case studies of PPPs worldwide.
- PPPs should play a role in climate finance and support both mitigation and adaptation activities
for PPPs to play a role, public authorities should develop enabling frameworks to support climate finance PPPs
design of a PPP through a process of co-creation and early involvement of private financial institutions should be aimed for
mobility programs of staff between public and private financial institutions can be used to improve mutual understanding and communication
public financial institutions could support risk-taking initiatives to enlarge the scope of bankable projects
developed countries should support the emergence of PPPs in developing countries
robust stakeholder consultation processes should be established and implemented
systematic evaluation of implemented climate finance PPPs should be encouraged
Tracking climate co-finance: approach proposed by MDBs
13 Sep 2016 04:06:58 GMT
A consortium of Multilateral Development Banks (MDBs) has jointly reported their investments in climate change adaptation and mitigation projects (climate finance) on an annual basis since 2011, with the latest report published on June 2015. The objectives of this work are as follows:
- improved transparency and better understanding of MDB's own and external resources channelled through the MDBs for climate finance
- improved cooperation between International Financial Institutions (IFIs)
- more and better climate change adaptation and mitigation financing
The approach outlined in this briefing document seeks to expand the MDB climate finance tracking to also estimate financial resources invested alongside MDBs by exte rnal parties. A Technical Working Group (TWG) compo sed of MDB representatives, supported by an external consultant (International Financial Consulting Ltd), launched work towards a common practice in early 2015.
The purpose of this briefing document is to define a common tracking and reporting practice for MDBs that:
- defines a common approach on how to report on clima te co-financing flows that are invested alongside each MDBs' climate finance activities
- harmonize definitions and indicators that estimate climate co-financing alongside MDB-managed resources for climate projects
Namibia: towards a logistics hub for Southern Africa
09 Sep 2016 02:38:40 GMT
Foreign direct investment (FDI) is touted for its many benefits to developing countries. The skills and technology foreign investors bring with them can help to stem the huge skills and knowledge shortage that developing countries face until a well-trained labour force can be developed. FDI often boosts exports and earns much-needed foreign reserves while improving the competitiveness and efficiency of local producers. Until developing countries have the local capacity to do so, FDI can also facilitate the expansion of many of the fundamentals of growth, such as public infrastructure and information and communications technology.
Namibia’s new Investment Bill represents a new foreign direct investment (FDI) regime in line with a recent shift in the developing world away from liberal FDI regulation, which favours foreign investors and restricts the state’s right to regulate in the public interest. The bill creates provisions for reserving investment in certain sectors for namibian citizens and introducing performance requirements for foreign investors. Mandatory equity, joint ventures, and employment and skills development requirements can greatly increase the cost of FDI, particularly where local capacity and skills are in short supply. In sectors where the state does not have much bargaining power, these requirements can deter foreign investors. Incentive schemes can reduce this cost and increase Namibia’s attractiveness as an investment destination, but at the expense of forfeited state revenue. Whichever mix of regulation and incentives namibia chooses, the policy approach should be clearly articulated and legislated to minimise policy uncertainty. The bill provides an interesting platform for a discussion on FDI, its role in the namibian economy, and the impact FDI policy can have on development.
This paper uses FDI in Namibia’s logistics sector as a case study to investigate these issues. Logistics development is identified as a priority for inclusive economic growth in namibia, with a focus on the Port of Walvis Bay and its associated transport corridors. FDI has played an integral role in the construction and operation of the port and the transport corridors.
Policy briefing: SMEs and GVCs in the G20: implications for Africa and developing countries
09 Sep 2016 02:28:34 GMT
Increasing the participation of developing countries in global value chains (GVCs) is now an accepted G20 priority. However, there is disagreement over how multinational corporations (MNCs), which drive GVCs, can be persuaded to incorporate small and medium enterprises (SMEs) from developing countries into the GVCs they co-ordinate. The choices range from conscious industrial strategies oriented towards coercive measures designed to force MNCs to integrate SMEs into their value chains, to facilitative approaches designed to attract MNCs to invest and, over time, incorporate domestic suppliers into their value chains.
Nonetheless, there is consensus on the key constraints that inhibit the growth of SMEs in general, and their inclusion into GVCs in particular: transaction costs; access to network infrastructure; and the capacity of firms and supporting institutional arrangements. Accordingly, this brief offer a high-level framework of recommendations for G20 states’ consideration.
- transaction cost reductions: G20 states should support the ratification and implementation of the WTO TFA and capacity-building initiatives in African countries designed to help their SMEs access logistics supply chains and the host states to reduce regulatory compliance costs; and task the Financial Services Board with investigating ways to reduce trade finance costs for SMEs
- network infrastructure establishment: Building on the outcomes of the Brisbane summit, development partners should leverage Aid for Trade and broader external funding support for infrastructure development in Africa
- capacity to participate in GVCs: G20 states should build support mechanisms to assist African SMEs, particularly medium-sized companies with the capacity to export, to integrate into GVCs, such as helping them to build capacities to meet international standards. Support for SME representative institutions, to enable their participation in international economic governance forums, should also be prioritised
SMEs and GVCs in the G20 implications for Africa and developing countries
09 Sep 2016 02:15:15 GMT
Increasing the participation of developing countries in global value chains (GVCs) is now an accepted G20 priority that features prominently on the Chinese government’s agenda for the 2016 summit. However, there is disagreement over a simple question: how can multinational corporations (MNCs), which drive GVCs, be persuaded to incorporate small and medium enterprises (SMEs) from developing countries into the GVCs they co-ordinate?
The debate over this question is first explored in broad outline. It comes down to a decision by each country on whether it wishes to utilise GVCs in its growth strategy and, if so, what measures it wishes to adopt to promote the incorporation of its firms into MNCs’ GVCs. The choice ranges from conscious industrial strategies oriented towards coercive measures designed to force MNCs to integrate SMEs into their value chains, to facilitative approaches designed to attract MNCs to invest and, over time, incorporate domestic suppliers into their value chains where it makes business sense to do so.
Next the paper turns to the analyses and prescriptions being proffered by key international institutions in relation to the evolving G20 agenda on including SMEs in GVCs. What clearly emerges is consensus on a number of key constraints that inhibit the growth of SMEs in general and their inclusion into GVCs in particular. These can be summarised in three broad areas:
- transaction costs (import tariffs; border procedures; logistics; trade finance)
- network infrastructure (information and communications technology [ICT]; transport; energy); and
- capacity (of firms, to meet GVCs’ standards; and of supporting government institutions)
Agriculture and adaptation to climate change: the role of insurance in risk management: the case of Colombia
06 Sep 2016 03:49:46 GMT
Insurance can potentially play an important role in climate change adaptation for rural households in developing countries as part of the overall climate change adaptation strategy. However, agricultural insurance markets have many market failure s that inhibit their full development. In Colombia these market failures, namely information asymmetries and high transaction costs, are amplified by the country's difficult topography, poor infrastructure, and history of rural violence. Even though the government provides premium subsidies to increase coverage, it is still very low and important crops and small producers are not covered.This paper analyses in detail the market constraints on the development of the agricultural insurance market in Colombia and provides recommendations so that it can fulfill its potential as a risk management tool in the country.Policy recommendations:as inadequate agricultural insurance represents one of the most important market failures in Colombia, there is scope for public support in terms of information generation and dissemination. The development and maintenance of agricultural and weather databases as public goods can help insurers properly design and price agricultural insurance contracts, thus reducing adverse selection and possibly pricesit is necessary to update the agroclimatic risk maps for different crops and regions, and to generate such maps at a lower scale so that insurance companies have up-to-date effective information for pricing policies and assessing riskin terms of government subsidies, Colombian authorities should examine if current premiums are correctly priced or if subsidies are simply being transferred as profit margins for insurance companiesto generate a culture of insurance, the government and the private sector together have to undertake an expansive information and education campaign for producers and producer associations to explain what insurance is and how it can benefit themto protect the emerging insurance market from unraveling because of large losses due to extreme weather events in Colombia, climate change mitigation and adaptation measures should be undertaken to reduce insurance losses. Some examples are the protection of mangroves, reefs, and wetlands, as well as land use planning that buffers storm surges and protect s against flooding and landslide risksfor the government, it is necessary to design and implement an integral risk management strategy where support for private insurance and disaster aid are aligned and not at odds with each other, particularly for producers with ability to pay insuranceregarding the new challenges climate change poses not only for the agricultural sector but also the insurance sector, it is necessary to create bridges between the scientific community and their climate change models and the actuarial offices in insurance companies so that c[...]
Introducing the Tunisia Labor Market Panel Survey 2014
18 Aug 2016 01:51:11 GMT
The Egypt Labor Market Panel Surveys (ELMPSs) of 1998, 2006, and 2012 and Jordan Labor Market Panel Survey (JLMPS) of 2010 have become well-recognised data sources for labour market studies in the Middle East and North Africa (MENA). These two surveys have been used in numerous research endeavors including peer reviewed academic publications, dissertations, and international organization reports. As part of the same series of surveys, the Tunisia Labor Market Panel Survey (TLMPS) of 2014 is the first wave of what will eventuallybecome a longitudinal survey of the Tunisian labor market.
This paper introduces the TL MPS of 2014, the first round of a publicly-available nationally representative longitudinal household survey. The authors provide a description of the sample and questionnaires. The paper discusses a number of data collection issues, such as non-response, as well as what was done to address these issues. The construction of sample weights is detailed. A comparison of the TLMPS to other Tunisian datasets is conducted to illustrate the representativeness of the data in terms of ke y demographic and labor market measures. Key features of the Tunisian labor market and potential avenues for research using the TLMPS are discussed.
Climate-smart investment potential in Latin America: a trillion dollar opportunity
16 Aug 2016 11:32:41 GMT
As a result of the successful United Nations Framework Convention on Climate Change’s (UNFCCC) 21st Conference of the Parties (COP21) in Paris in December 2015, the international community has committed to limit the level of global warming at or below 2° Celsius. The historic agreement made in Paris will be implemented through country-led greenhouse gas (GHG) reduction commitments known as Nationally Determined Contributions (NDCs), which to date have been submitted by 189 countries covering 95 percent of global GHG emissions. For the private sector, NDCs1 offer a clearer signpost of the investment direction countries intend to follow as the global economy travels down a low-carbon, climate resilient highway.
There is both an urgent need and an enormous opportunity for the private sector to help turn NDCs and the climate policies and plans that underpin them into climate-smart infrastructure investments. This report offers IFC’s assessment of how the formulation and adoption of NDCs by Latin American and Caribbean (LAC) governments presents the private sector with huge investment prospects of untapped climate-smart opportunities in a part of the world that is endowed with a wealth of natural capital and already is regarded as one of the great frontiers for climate smart investment.
Should Tanzania establish a sovereign wealth fund?
12 Aug 2016 06:32:40 GMT
Many natural resource abundant countries have established sovereign wealth funds as part of their strategy of managing the resource wealth. This working paper by Ragnar Torvik looks into different arguments used as reasons to establish such funds, discuss how these funds are organized, and draw some policy lessons. The paper then develops a theory of how petroleum funds may affect the economic and political equilibrium of an economy, and how this depends on initial institutions. A challenge with petroleum funds is that they may produce economic and political incentives that undermines their potential benefits. In conclusion, the paper suggests that the best way to manage the petroleum wealth of Tanzania may not be to establish a sovereign wealth fund, but rather use revenues to invest domestically in sectors such as infrastructure, education and health. Such investments may produce a better economic, as well as institutional, development.
“If you have only dust in your hands, then friends are far; when they are full, they come closer”: an examination of the impacts of Zambia’s Katete universal pension
21 Jul 2016 12:10:27 GMT
For the past 10 years or so, Zambia has been experimenting with a universal old age pension in the district of Katete, in the east of the country. It has provided a regular pension to 4,500 older people aged over 60 years, 63% of whom were women. The recipients of the pension belong to the Chewa tribe. In 2010, the author undertook a study of the pension and, at the time, it provided people with a regular transfer of 120,0001 Kwacha (around US$23.50) per month. The pension was funded by the United Kingdom’s Department for International Development (DFID) and managed by the Ministry of Community Development and Social Welfare.
The Katete pension has had a transformative impact on the lives of older people, as well as on their wider communities. It has also helped address discrepancies between the ideal and reality with regard to how older people view themselves and how they are viewed by society. It enables older people to delay the inevitable decline into dependency on others and enables them to retain their humanity – as expressed in Chewa ideals – for as long as they can. By maintaining active mutual sharing and caring relations, they keep kinship and love alive. The pension has particularly positive benefits for those that have been marginalised in old age to re-incorporate themselves within intimate communities, which offer them care, respect and support, which they, because of their possession of cash, can reciprocate.Moving towards a much simpler universal pension, as in Katete, would make a lot of sense. The vast majority of older people in Zambia live in poverty and attempting to exclude the richest appears to add little – if any – value, in particular when they cannot be accurately identified. Furthermore, it would be preferable to provide the benefit as an individual entitlement so that households with more than one older person can receive multiple benefits. If not, households may be encouraged to split while particularly vulnerable households – with more than one older person (or person with a severe disability) – could receive a higher income, which they surely need.
Demographic changes and fiscal policy in MENA countries
21 Jul 2016 02:50:43 GMT
Middle East and North Africa (MENA) region countries have unique demographic characteristics. Within the MENA region, Arab countries have higher fertility and population growth rates and a significantly younger age structure than other ountries and regions. This can be a “demographic gift or a demographic curse” depending on whether the high population growth and fertility can be transformed into economic growth.
In this study, the author examines the links between demographic change and fiscal policy in MENA countries, focusing specifically on the economic impacts coming from the conflict between social security and education, which are two of the most government programs in any country. The paper is unique as it incorporates a political economy model of education given expected increases in social security spending in the background. Labor movements and growth results are expected to depend significantly on the return to education. A sensitivity analysis on the parameter that shows the return to education spending reveals that MENA countries would suffer significantly from a lower return to education.
This scenario highlights the importance of returns to education for the growth results in the MENA region. It is also important to note that the MENA region could potentially experience significant positive economic growth if it can maintain a high return to education and also attract more capital, despite a rising fiscal burden coming from the social security system.