According to conventional wisdom, capital flows are fickle. They are fickle more or less independent of time and place. But different flows exhibit different degrees of volatility: FDI is least volatile, while bank-intermediated flows are most volatile. Other portfolio capital flows rank in between, and within this intermediate category debt flows are more volatile than equity-based flows.
We economists did not see the 2008 global financial crisis coming.
Nor did we anticipate, predict or, at least, warn people about the current wave of anti-trade, anti-immigration, and populism!?
To be fair, some economists were sounding alarms in the lead-up to the financial crisis. And even with the current backlash, although we may have missed the chance to predict it, many had warned that we were understating the impacts of global trade and that distributional tensions - the result of an unequal impact of globalization, technological change, and aging on certain groups - were mounting.
It seems very important – especially when considering the ongoing fierce rhetoric with which some policy proposals and decisions are described – to remain cool-headed, carefully analyze data, stay engaged and support reforms that are backed by solid evidence.
Technology is shaking up labor markets around the world. Increasingly intelligent machines are taking over routine jobs. Three-D printing is making many traditional, labor-intensive production processes obsolete. In total, almost half of all jobs may be at risk in the United States due to automation. Job losses are no longer just limited to blue collar occupations, but increasingly also affect high-paying white collar jobs such as in insurance, in the health sector or even in government bureaucracies. Is this the end of work as we know it? Not so fast, say some, who argue that technological progress and automation have not necessarily led to less demand for work on aggregate. An often cited example is the fact that the introduction of the automatic teller machine was accompanied by an expansion in retail banking jobs as banks opened more branches.
Let’s Work, a global partnership of over 30 organizations, is piloting tools that can help Development Finance Institutions (DFIs) measure the impact of private sector investments on jobs. The aim is for partners to not only measure jobs in the same consistent way, but also along the same nuanced dimensions: number of jobs gained, the quality of those jobs, and who gets those jobs (inclusiveness). One of the measurement methods being developed by the Partnership is the Jobs in Value Chains Survey tool.
Over the past decade and a half, Sub-Saharan Africa has experienced rapid economic growth at an average annual rate of 5.5%. But since 2008, the share of manufacturing in GDP across the continent has stagnated at around 10%. This calls into question as to whether African economies have undergone structural transformation – the reallocation of economic activity across broad sectors -- which is considered vital for sustained economic growth in the long-run.
Over the past several years, innovations in information and communication technologies have fundamentally changed the nature of work.
This has created new opportunities in digital employment for workers and employers in South Asia and beyond.
So what are the pathways to this new employment?
During a recent Facebook live chat on digital jobs, we explored three themes related to the digital jobs of the future. First, we discussed where the digital jobs of the future are. Second, we discussed how South Asia is uniquely positioned to benefit from the growth of these jobs. And finally, we discussed how to get started in the digital economy by finding relevant training and learning opportunities.
Here’s an overview of our discussion in five points:
Digital jobs fall into two categories: jobs within the IT or digital industries, and what are termed digital society jobs. Digital industry jobs include those such as computer programmer, mobile app developer, graphic designer and other jobs where information and communication technologies are the core tool to perform the job functions. However, technology is also changing what we call digital society jobs, where technology is maybe not core to the job functions, but makes more you more efficient and productive, and improves access to markets and networks.
2. What is driving the emergence of these new digital jobs?
The rapid rise in connectivity that is linking more and more people to the internet is changing employment. Today, many jobs can be performed through computers, with workers telecommuting from almost anywhere in the world. Many business processes are being broken down into task based work, and which can be farmed out to people with the skills to do them, anywhere the world. Some of these tasks need higher-level skills, and can pay well – especially compared with many developing countries’ wage levels. But there are also simpler tasks that many more people, even those with limited skills, can do. This mix creates the opportunity to include more people in the global digital economy, while also creating pathways towards better paying and higher quality work for those who perform well and pick up in-demand skills.
Who are Spain's neighbors? Is Canada closer to Spain than Portugal? What about Estonia or Greece? The answer? Depends on the data you are looking at!
Earlier this week I crunched data based on a selected list of indicators from the new Open Trade and Competitiveness platform from the World Bank (TCdata360) and found some interesting trends. In 2009 Spain was closer to economies like Estonia, Belgium, France and Canada while 6 years later in 2015, Spain's closest neighbors were Greece and Portugal. How and when did this shift happen?
Other trends I spotted using the same data? It seems the Sub-Saharan region ranks the lowest in Ease of Doing Business, that in 2007 Israel held the record for R&D expenditure as % of GDP, while in the same year Malta topped FDI net inflows as % GDP, and that the largest annual GDP growth in the last 20 years occurred in Equatorial Guinea in 1997.
Figure 1: Dots represent values for an economy at a given point in time for years 1996 to 2016 overlaying their box-plot distributions. Colors correspond to geographical regions.
In the ongoing debate about the benefits of trade, we must not lose sight of a vital fact. Trade and global integration have raised incomes across the world, while dramatically cutting poverty and global inequality.
Within some countries, trade has contributed to rising inequality, but that unfortunate result ultimately reflects the need for stronger safety nets and better social and labor programs, not trade protection.