Some of the headings included in this issue of the Development Economics Prospects Group (DECPG) weekly global economic newsletter are as follows: United States job growth accelerated in October; European Commission revised Eurozone growth forecasts for 2015 to 2016; Brazil’s manufacturing Purchasing Managers’ Index (PMI)fell in October;Industrial Production (IP) contracted further; Indonesia’s Gross Domestic Product (GDP) increased modestly in third quarter; Angola made debut international bond issue; heavy dependence on commodities for export earnings and fiscal revenues has created vulnerabilities for commodity exporting Low-Income Countries (LICs) to commodity price movements; sharp commodity price declines have disrupted new foreign investments and in some cases production in extractive-based industries; Country specific factors will likely become more important, including changes in domestic mineral policy regimes.
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Ratings for the Sustainable Silk Production Partnership in Rural Lao People’s Democratic Republic (PDR) Project for Lao PDR were as follows: outcomes were unsatisfactory, risk to development outcome was high, Bank performance was moderately unsatisfactory, and Grantee performance was moderately unsatisfactory.
... See More + Some lessons learned included: the focus on raw silk production may have been too restrictive, even from a rural income generating point of view. The productivity of cocoon and yarn production is currently low in Lao PDR and the sector cannot compete on price rather than trying to compete on price against large producers such as China, Vietnam, and Thailand. A better approach for the future development of the sector appears to be aiming for high value products and niche markets relying on high quality and unique characteristics and appeal of traditional design and origin. The project design needs to have hard evidence to demonstrate these aspects that the project is viable on top of all consultations with firms during the design process. For a pilot project it is even more important that the detailed result framework, the baseline survey, and a focused monitoring and evaluation (M and E) system be in place from the very beginning to allow for clear guidance and close M and E of implementation and impact. Public institutions should not make investment decisions and minimize their role in enterprise development projects.
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Implementation Completion and Results Report ICR3386 OCT 30, 2015
Some of the headings included in this issue of the Development Economics Prospects Group (DECPG) global daily economic news are as follows: financial markets; high income economies; and developing economies in East Asia,Pacific,South Asia and Sub-Saharan Africa
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The trade facilitation facility (TFF) was launched to help low-income countries improve their competitiveness by reducing the costs of engaging in international trade, thus supporting their efforts to reduce poverty and achieve the millennium development goals.
... See More + This report summarizes the outcomes of the TFF between its establishment in 2009 and its end in 2015. The report highlights and reviews the accomplishments and lessons learned of TFF; it also discusses and reflects the perspective of task team leaders and relevant World Bank Group officials on the Bank Group’s continuing work in the trade facilitation sphere. The report presents results of TFF-funded activities and programs managed by staff from a large cross section of Bank Group sectors, including transport, agriculture, governance (customs), international trade, and private sector development. The report is organized as follows: chapter one give introduction. Chapter two provides an overview of the TFF portfolio. Chapter three looks at TFF as enabler of deepening regional integration, highlighting some of the facility’s accomplishments from a geographic and thematic perspective, particularly the extent to which TFF complemented Bank infrastructure operations and nurtured progress on trade facilitation instruments that countries and regional economic communities (RECs) have adopted but failed to implement. Chapter four, expanding thematic insights, addresses conceptual themes in trade facilitation. Chapter five, conclusions and contributions, sums up the areas in which TFF has contributed to moving the regional and multilateral trade facilitation agenda.
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As a small economy, Uruguay’s growth and poverty reduction prospects are closely related to its performance in international markets. This report analyzes export dynamics in Uruguay over the period 2000-2013, benchmarking them against relevant comparator countries.
... See More + It looks at export outcomes through four different dimensions of export performance: (1) the evolution, composition, and growth orientation of the country’s export basket; (2) the degree of diversification across products and markets; (3) the level of sophistication and quality; and (4) the survival rate of export relationships. The report offers a number of hypotheses for an in-depth competitiveness diagnostic of Uruguay’s external sector, as well as policy recommendations to increase integration and to gain from it. In addition to the real depreciation of the peso that followed the crisis, the international prices of Uruguay’s main export products soared. This stimulated investment in technological improvements in the production of these natural-resource-intensive products. Section one analyzes the macroeconomic environment in which exporters operate in Uruguay during the period of analysis. Section two looks at level, growth, composition, and market share performance of Uruguay’s exports, as well as the country’s main trading destinations. Section three focuses on the diversification of products and markets, considering several measures of concentration, including the share of top five products and markets in exports, and the Hirschman-Herfindahl index for Uruguay’s export portfolio. Sections four and five address quality and sophistication and survival, respectively.
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Working Paper 101540 OCT 01, 2015
Portugal Perez,Luis Alberto; Reyes,Jose Daniel; Varela,Gonzalo J.Disclosed
This economy profile for Doing Business 2016 presents the 11 Doing Business indicators for Albania. To allow for useful comparison, the profile also provides data for other selected economies (comparator economies) for each indicator.
... See More + Doing Business 2016 is the 13th edition in a series of annual reports measuring the regulations that enhance business activity and those that constrain it. Economies are ranked on their ease of doing business; for 2015 Albania ranks 97. A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies from Afghanistan to Zimbabwe and over time. Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labor market regulation. The data in this report are current as of June 1, 2015 (except for the paying taxes indicators, which cover the period from January to December 2014).
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As a small economy, Uruguay’s growth and poverty reduction prospects are closely related to its performance in international markets. This report analyzes export dynamics in Uruguay over the period 2000-2013, benchmarking them against relevant comparator countries.
... See More + It looks at export outcomes through four different dimensions of export performance: (1) the evolution, composition, and growth orientation of the country’s export basket; (2) the degree of diversification across products and markets; (3) the level of sophistication and quality; and (4) the survival rate of export relationships. The report offers a number of hypotheses for an in-depth competitiveness diagnostic of Uruguay’s external sector, as well as policy recommendations to increase integration and to gain from it. In addition to the real depreciation of the peso that followed the crisis, the international prices of Uruguay’s main export products soared. This stimulated investment in technological improvements in the production of these natural-resource-intensive products. Section one analyzes the macroeconomic environment in which exporters operate in Uruguay during the period of analysis. Section two looks at level, growth, composition, and market share performance of Uruguay’s exports, as well as the country’s main trading destinations. Section three focuses on the diversification of products and markets, considering several measures of concentration, including the share of top five products and markets in exports, and the Hirschman-Herfindahl index for Uruguay’s export portfolio. Sections four and five address quality and sophistication and survival, respectively.
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Working Paper 101540 OCT 01, 2015
Portugal Perez,Luis Alberto; Reyes,Jose Daniel; Varela,Gonzalo J.Disclosed
This diagnostic trade integration study (DTIS) analyzes the internal and external constraints to further integration with the world economy, keeping in view the end goals of job creation and poverty reduction, as well as enhancement of citizens’ welfare.
... See More + The DTIS seeks to identify policies as well as gaps in physical and institutional infrastructure that need to be overcome to consolidate Bangladesh’s strengths in existing markets as well as help diversify export products and export markets. Bangladesh aims to accelerate growth to become a middle-income country by 2021, continue its high pace of poverty reduction, and share prosperity more widely among its citizens. It seeks to increase the growth rate of its economy to about 7.3 percent per year over the sixth plan period, fiscal year 2011 to fiscal year 2015, and reduce the poverty headcount by about 10 percentage points. This DTIS has identified a four-pillar strategy that can contribute to accelerate development of the export sector, a priority for jobs and growth: breaking into new markets; breaking into new products; improving worker and consumer welfare; and building a supportive environment. Implementing the four-pillar agenda will help improve the overall competitiveness of the economy and provide sources of strength other than low wages.
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The objective of this Great Lakes Trade Facilitation Project for Africa is to facilitate cross-border trade by increasing the capacity for commerce and reducing the costs faced by traders, especially small-scale and women traders, at targeted locations in the borderlands.
... See More + There are four components to the project, the first component being improving core trade infrastructure and facilities in the border areas. The project will finance improvements to core trade infrastructure and facilities at specific land border crossing points, and an airport in Rwanda that is of regional importance. In addition, support will also be provided to ministries responsible for trade and commerce to finance the planning and construction of cross-border markets in the border areas. The second component is the implementation of policy and procedural reforms and capacity building to facilitate cross-border trade in goods and services. A clear lesson from previous trade facilitation projects is that improvements in infrastructure need to be accompanied by policy and procedural reforms and capacity building. The third component is the performance based management in cross-border administration. It will primarily focus on raising mutual awareness on their respective rights and obligations as stated in the ‘charter for cross-border traders in goods and services’, as well as on strengthening basic elements such as a professional attitude to border operations, customer care for officials, duty calculation for traders, mutual respect and understanding of constraints, etc. More generally it will progressively build mutual trust. On the other hand, change management activities planned under sub-component 3.1 will build on those exercises and develop different tools and incentives to increase professionalization for border officials only. Finally, the fourth component is the implementation support, communication, monitoring and evaluation.
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The expansion of international trade has been essential to development and reducing poverty but the relationship between economic growth, poverty reduction and trade is not a simple one.
... See More + This publication looks into this relationship and examines the challenges poor people face in benefiting from trade opportunities. Written jointly by the World Bank Group and the World Trade Organization, the publication examines trade and poverty across four dimensions: rural poverty; the informal economy; the impact of fragility and conflict; and gender. The publication looks at how trade could make a greater contribution to ending poverty through increasing efforts to lower trade costs, improve the enabling environment, implement trade policy in conjunction with other areas of policy, better manage risks faced by the poor, and improve data used for policy-making. This report has three key messages: 1) A sustained effort to deepen economic integration and further lower trade costs is essential for ending poverty. Strong growth in developing countries will be needed to achieve the end of poverty, and trade is a critical enabler of growth, opening up opportunities for new and better work for the poor. Although great progress has been made in reducing trade costs and integrating low-income countries into the global economy, more needs to be done. 2) Lowering tariffs and non-tariff barriers between countries are essential elements of this agenda, but this must form part facing the extreme poor, and for many, their disconnection from markets, if they are to benefit from trade. This includes challenges facing women, the rural poor, those in the informal economy, and those in fragile and conflict-affected states. Thus, in order to have the greatest impact toward ending poverty, trade policy must be made and implemented in conjunction with other areas of policy. This entails deeper cooperation across sectoral lines, government agencies, and a wider range of stakeholders. 3) The World Trade Organization and World Bank Group have made substantial contributions to trade and poverty reduction. However, a great deal more remains to be done to end poverty, and both institutions and other partners need to continually review their activities to support poverty reduction to ensure they remain relevant in an ever-changing world.
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The expansion of international trade has been essential to development and reducing poverty but the relationship between economic growth, poverty reduction and trade is not a simple one.
... See More + This publication looks into this relationship and examines the challenges poor people face in benefiting from trade opportunities. Written jointly by the World Bank Group and the World Trade Organization, the publication examines trade and poverty across four dimensions: rural poverty; the informal economy; the impact of fragility and conflict; and gender. The publication looks at how trade could make a greater contribution to ending poverty through increasing efforts to lower trade costs, improve the enabling environment, implement trade policy in conjunction with other areas of policy, better manage risks faced by the poor, and improve data used for policy-making. This report has three key messages: 1) A sustained effort to deepen economic integration and further lower trade costs is essential for ending poverty. Strong growth in developing countries will be needed to achieve the end of poverty, and trade is a critical enabler of growth, opening up opportunities for new and better work for the poor. Although great progress has been made in reducing trade costs and integrating low-income countries into the global economy, more needs to be done. 2) Lowering tariffs and non-tariff barriers between countries are essential elements of this agenda, but this must form part facing the extreme poor, and for many, their disconnection from markets, if they are to benefit from trade. This includes challenges facing women, the rural poor, those in the informal economy, and those in fragile and conflict-affected states. Thus, in order to have the greatest impact toward ending poverty, trade policy must be made and implemented in conjunction with other areas of policy. This entails deeper cooperation across sectoral lines, government agencies, and a wider range of stakeholders. 3) The World Trade Organization and World Bank Group have made substantial contributions to trade and poverty reduction. However, a great deal more remains to be done to end poverty, and both institutions and other partners need to continually review their activities to support poverty reduction to ensure they remain relevant in an ever-changing world.
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In 2014, Kenya’s Ministry of Industrialization requested technical assistance from the World Bank to conduct competitiveness assessments and develop competitiveness strategies for four key industries: textiles and apparel, food processing, furniture, and leather and leather products.
... See More + In the context of Kenya’s long-term vision to become an industrialized middle-income country by 2030, its leather and leather products sector offers an important opportunity for industrialization and diversification of exports. The development of the sector involves improving the raw material base (especially the quality of hides and skins), boosting the tanning subsector, producing leather goods, and marketing. Key strategic questions about the leather industry include: what is the status of development of the industry, what are the most critical competitiveness challenges and opportunities, what are the most are promising leather products that Kenya should focus on moving forward, and how can support be increased to value addition and exports by upgrading production processes, technology, marketing, and branding of leather products. The basic research methodology followed a standard approach of gathering existing reports and data, and interviewing a wide range of local and international experts. To increase the competitiveness of the leather industry and accomplish the product market objectives, strategies, and actions are recommended in this report and grouped according to a framework, which consists of three key strategies: promote the dynamic restructuring of the leather industry; increase access to markets and induce greater demand for Kenyan leather and leather products; and build quality and standards.
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Working Paper 99485 JUN 01, 2015
Hansen, Eric Rolf; Moon, Young; Mogollon,Maria PaulinaDisclosed
The main message of this report is that if Kazakhstan wants to take advantage of global integration and diversification opportunities, the government needs to improve its trade policy framework, its management, and its regulations.
... See More + It is also finalizing accession to the World Trade Organization (WTO) while its trade strategy includes a number of free trade agreements to be negotiated. It is an active member of the Central Asia Region Economic Cooperation (CAREC). This report is composed of three policy notes that discuss how to improve the trade policy framework, management, and regulations: note one is on the trade policy framework and recommends joining the WTO on a tariff schedule that is more liberal than Russia’s; note two postulates that to benefit more fully from the WTO membership and future regional or bilateral agreements, the institutional framework for trade policy management will need a clearer strategic vision, better coordination within the government and with private sector, and enhanced human capacity; and note three suggests that for the private sector to benefit from global integration and diversification, the government should ease the burden of regulations that affect trade (non-tariff measures (NTMs)).
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Ratings for the Second Export Development Project (EDP2) for Ukraine were as follows: outcomes were satisfactory, risk to development outcome was substantial, Bank performance was satisfactory, and Borrower performance was satisfactory.
... See More + Some lessons learned included: enterprise finance is delivered most effectively through a sound financial institution with a proven implementation track-record. Flexibility is key to effective design and implementation. At the design stage, it is important to elaborate outcome indicators for participating banks and beneficiary enterprises that will enable assessment of the project development objective (PDO). The implementation support missions often identified opportunities to improve the project, including through discussions with the project implementation unit (PIU), participating banks, and beneficiary enterprises. Lines of credit should take advantage of opportunities for leveraging the impact of Bank financing, and this was evident in the impact of the Ukraine financial sector development policy loan program initiated during the last year of EDP2 implementation.
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Implementation Completion and Results Report ICR3501 JUN 01, 2015
Trade facilitation connects economies and provides opportunities for business growth. However, the national agencies involved in trade often have different objectives, lack coordination with peer agencies in other countries because of different national priorities, high workloads, and absence of platforms to consult with each other.
... See More + Such a divergence of interests is a challenge when the goal is to address, and seek consensus on, trade issues on the regional level, while undertaking capacity building and reform activities at the country level, all with the objective to benefit the private sector. The International Finance Corporation (IFC) Western Balkans trade logistics project faced this challenge. In addition, the project was constrained by limited financial resources, so marrying effectiveness and efficiency was key to achieving results. This smart lesson summarizes lessons learned from the project implementation.
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Stronger regional integration has been a policy priority in Africa for several decades. Closer trade links with neighboring countries promise to stabilize food markets, enhance profitable exchanges in light manufactures, reduce consumer prices, and help develop regional production networks.
... See More + However, the implementation of existing integration initiatives has often been lackluster, so that the economic development and poverty reduction potential from expanded intraregional trade has remained untapped. Markets remain fragmented by a range of barriers to trade and competition along the value chain of traded goods and services. Countries in Africa have committed to a process of deeper integration, but have made little progress in implementing commitments and removing barriers. This report looks at the monitoring of regional integration in Africa and argues that more effective monitoring processes for existing integration arrangements could help to raise the profile of the prevailing implementation deficits and provide policy makers and civil society with the necessary information to push for corrective action. Currently, most integration monitoring systems are scorecard-based compliance assessments. These processes are useful in determining which member countries have transposed their regional-level reform commitments into national law, but say little about changes in trade practices on the ground. Where outcome indicators are used, these generally are of an aggregate nature, such as measuring changes in the volume of intraregional trade, or focus on tariff liberalization, the original centerpiece of most regional trade agreements.
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In Zimbabwe trade has been a driver of economic growth, rising incomes, and progressive empowerment of Zimbabweans through rising standards of living and the promise of better jobs.
... See More + Since 1980, through good years and bad years, increases in exports have been positively associated with increases in national income. Zimbabwe's location and resource base, together with a low-cost but relatively well educated labor force, have endowed it with a naturally high trade ratio built on a diversified base that facilitates using trade as an engine of growth. While trade volumes have rebounded smartly from the deep recession of 2007-2008, these do not offset other worrisome longer-term trends: 1) export growth during the last decade has been lackluster and failed to drive high growth; 2) agricultural exports, other than tobacco, have lost their once dominant role in the region, and are no longer a source of diversification; 3) manufacturing has withered in a continuing secular decline; and 4) Zimbabwe's export basket has become less diversified and more dependent on a narrow range of mineral and, to a lesser extent, agricultural products. In short, exports have become less diversified, less-technologically sophisticated, and less labor-intensive, and ever more dependent on a few large mining activities to provide foreign exchange and employment. This report traces the roots of this poor performance to several policy issues: poor predictability of macroeconomic policy and economic governance has created an unfavorable climate for private investment and trade; a tariff structure that dampens export profitability; industrial policies (indigenization policy in particular) that undermine investor confidence and inhibits private investment; and finally, competition-limiting policies toward services that limit connectivity of Zimbabweans and raise trade costs. The good news arising from the study is that the remedies for these policy shortcomings lie in Zimbabwean hands. If the government were to adopt reforms that reconfigure economy-wide incentives and trade and industrial policies, it could promote sustained growth, economic diversification and empowerment of poor people.
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The Second Fiscally Sustainable and Inclusive Growth Development Policy Credit (FSIG-II) Project for Pakistan will aim to achieve two broad objectives: fostering private and financial sector development to bolster economic growth, and mobilizing revenue while expanding fiscal space to priority social needs.
... See More + The operation contributes to the government's strategy for accelerating economic growth, ensuring fiscal consolidation, increasing investment, and enhancing the openness of the economy to domestic and external competition. A programmatic approach is proposed to customize actions and preserve reform momentum. Moreover, lessons from other similar operations in Pakistan favor a carefully sequenced and continuous reform approach. The pillars around which this FSIG series is organized are essential prerequisites and enablers for sustained poverty reduction and shared prosperity. As the growth elasticity of Pakistan's poverty rate is among the highest in the world, by the expected impact on growth acceleration, the operation is also expected to contribute to poverty reduction and shared prosperity. And similarly, protecting the safety net and enhancing business-friendly conditions will contribute to inclusive growth and governance.
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Improving levels of trade facilitation is one of the remaining challenges to enhancing connectivity and trade growth in South Asia, but border and internal security concerns are often perceived as a barrier to implementing key reforms.
... See More + Security is a legitimate issue for South Asian nations. But there needs to be a balance to achieve the optimum level of security without restricting trade and damaging a nation’s ‘economic’ security. Even border management agencies employing a ‘100 percent’ intervention policy does not have the resources to examine every package. The challenge is to focus security resources to target transactions of highest risk, using sophisticated analysis of transaction data and maintaining visibility and integrity of supply chains. After the 9/11 attacks, several governments had to address the challenge of securing their national borders and protecting their international supply chains against terrorist threats. There is concern that poor border security risks the trafficking of weapons or drugs, entry of terrorists or their means of support, or other threats. Following the attacks, many jurisdictions emphasized more intervention and an increased regulatory burden on international trade. However, added emphasis on security need not become a barrier to international trade or render trade uncompetitive. Based on several case studies, this note synthesizes some principles that can be adopted to govern the balance between managing security risks and facilitating trade.
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