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March 2016

2013: The challenge of public finance during a mining boom

Jim Anderson's picture
Continuing our series celebrating the 25 years that Mongolia has been a member of the World Bank, today we look at 2013.  Foreign direct investment (FDI) fell below 20% of GDP, down from the heights around 50% of GDP a few years earlier. Growth, however, was still in double-digit territory and inflation was in single digits.

With the boom well underway, a report examined how to meet the challenge of scaling up infrastructure.  In a blog summarizing the study, one co-author was blunt:  “Financed by the mining boom, government spending on new infrastructure in Mongolia has increased 35-fold in the past 10 years. But you would not know this from driving the pot holed streets of Ulaanbaatar or inhaling the smog filled air of the city, particularly in the ger areas. … [The study] examines why this increased spending is not resulting in equivalent benefits for the citizens of Mongolia in terms of better roads, efficient and clean heating, and improved water and sanitation services.” The study pointed to poor project planning and implementation, and suggested ways to improve.

So what can be done to contain volatility and spur growth in these countries?

Francisco G. Carneiro's picture
Understanding Macroeconomic Volatility: Part 5. Read parts 1-4 here

How does this affect the small island economies of the Caribbean?

Francisco G. Carneiro's picture
Understanding Macroeconomic Volatility: Part 4. Click to read the rest of the series

Yemen: so critically short of water in war that children are dying fetching it

Farouk Al-Kamali's picture
Oleg Znamenskiy l Shutterstock.com

Before the ongoing war, Yemen was already among those countries facing the most serious water shortages: experts warned that its groundwater would be depleted by 2017. The war has greatly exacerbated the situation as, along with instability, the absence of government, and spread of armed conflicts, the arbitrary pumping of groundwater has increased while government utilities like water supplies have collapsed.

New data on Climate Investment Funds and their results

Martin Craig Hall's picture
Readers of this blog site will know that open data is data that can be freely used, re-used and redistributed – it’s legally open and technically open.  Readers of this blog may not know that the $8.3 billion Climate Investment Funds (CIF), are providing scaled-up financing through the Multilateral Development Banks (MDBs) to initiate transformational change toward climate-resilient, low-carbon development in 72 countries worldwide.  And this month, for the first time, the CIF is publishing open data on the results of our Clean Technology Fund (CTF) and our Scaling up Renewable Energy Program (SREP).
 

Stalled productivity, stagnant economy: Chronic stress amid impaired growth

Christopher Colford's picture

Call it “secular stagnation,” or the disappointing “New Mediocre,” or the baffling “New Normal” – or even the back-from-the-brink “contained depression.” Whatever label you put on today’s chronic economic doldrums, it’s clear that a slow-growth stall is afflicting many nation’s economies – and, seven years into a lackluster recovery from the global financial crisis, some fragile economies seem to be lapsing into another slump.

As policymakers struggle to find a plausible prescription for jump-starting growth, a tug-of-war is under way between techno-utopians and techno-dystopians. It’s a struggle between optimists who foresee a world of abundance thanks to innovations like robot-driven industries, and pessimists who anticipate a cash-deprived world where displaced ex-workers have few or no means of earning an income.

To add a bracing dose of academic rigor to the tech-focused tug-of-war, along comes a data-focused realist who adds a welcome if sobering historical perspective to the debate. Robert J. Gordon, a macroeconomist and economic historian at Northwestern University, takes a longue durée perspective of technology’s impact on growth, wealth and incomes.

Gordon’s blunt-spoken viewpoint has caused a sensation since his newest book, “The Rise and Fall of American Growth,” was launched at this winter’s meetings of the American Economic Association. His analysis injects a new urgency into policymakers’ debates about how (or even whether) today’s growth rate can be strengthened.

When Gordon speaks at the World Bank on Thursday, March 31 – at 11 a.m. in J B1-080, as part of the Macrofiscal Seminar Series – economy-watchers can look forward to hearing some ideas that challenge the orthodoxies of recent macroeconomic thinking. His topic – “Secular Stagnation on the Supply Side: Slow Growth in U. S. Productivity and Potential Output” – seems likely to spark some new thinking among techno-utopians and techo-dystopians alike.

To watch Gordon’s speech live via Webex – at 11 a.m. on Thursday, March 31 – click here. To dial in to listen to the audio, dial (in the United States and Canada) 1-650-479-3207, using the passcode 735 669 472. For those telephoning from outside the United States and Canada, the appropriate numbers can be found on this page.

The things we do: Why thought suppression doesn’t work

Roxanne Bauer's picture

Don't Think sign, LondonA colleague of mine recently told me a story about a friend of hers with a very long beard who was asked one day, “How do you sleep with all that hair?”  The man, who had never given it much thought, shrugged at the question. However, he later confessed to my colleague that since the question was posed he was losing a lot of sleep.
 
This man has fallen into a common mental trap: once a thought occurs to you, it’s very difficult to suppress it, and trying to suppress it may make the thought stronger.
 
This mental trap has a long-running history in our social consciousness.  Leo Tolstoy once said he tried to play a game in which he would, “get into a corner and endeavor, but could not possibly manage, not to think of the white bear.”  This was later echoed by Fyodor Dostoyevsky who lamented that “Try to pose for yourself this task: not to think of a polar bear, and you will see that the cursed thing will come to mind every minute. So how is it to be done?  There is no way it can be done…"
 
These observations would later inspire social psychologist Daniel Wegner, PhD at Harvard University. Wegner is considered to be the founding father of thought suppression research, and was inspired to look into thought suppression after reading Dostoyevsky's quote more than 25 years ago.

World Water Day: Transforming lives through better water and jobs

Jennifer J. Sara's picture

The largest sphere represents
all of Earth's water. The next
smallest sphere represents the world's
liquid fresh water. The smallest
one represents fresh surface water
in all the lakes and rivers on the planet.
Source: US Geological Survey

Water covers 70% of Earth’s surface, but if you live in Sana’a, Sao Paolo, California, or the many other areas where drought or chronic water scarcity has affected daily life, you know that abundance can be relative.

This image from the US Geological Survey shows that only a tiny fraction of Earth’s water is the accessible freshwater we need to live, grow food, sustain the environment, and power our cities and jobs.

Growing cities and populations and a changing climate are placing unprecedented pressures on water. According to the World Economic Forum, water crises are among the top risks to global economic growth. For at least 650 million people, even the water they are able to find is unsafe.

But this also offers an opportunity to provide safer water and better manage our water resources for a more resilient future.

This year, #worldwaterday focuses on the connection between water and jobs, and these connections primarily fall under two categories: productivity and sustainability.


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