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CGD in the News

December 30, 2011

2012 Global Economic Prospects (CNN en Espanol)

Senior Fellow Liliana Rojas-Suarez was interviewed on CNN Español about the 2012 global economic prospects.

From the article:

As part of a special edition of CNN program, CNN Dinero, Senior Fellow Liliana Rojas-Suarez formed part of a panel discussing global economic prospects for 2012. She emphasized that events in Europe will determine growth prospects around the globe. Liliana is not optimistic about the resolution of the Eurozone crisis given the lack of a decisive and coordinated efforts to deal with two major problems: (a) mounting difficulties in the banking sector; and (b) the European Central Bank’s reluctance to behave as a lender of last resort. If this trend were to continue in 2012, a number of defaults will materialize and the Eurozone will not survive in its current form. A much needed large increase in IMF resources to contain the European crisis will also continue to face severe impediments in 2012 in view of the ongoing political mess in the US, whose vote is needed for a formal increase in the lender’s resources.

Watch it here.

December 27, 2011

Economic Growth Has Made the Developing World Less Dependent On Aid (The Guardian)

Senior fellow and Director for Europe Owen Barder on economic growth and the developing world's dependence on aid, in The Guardian.

From the article:

I celebrated New Year's Day 2011 in Ethiopia, where we lived for three years. Ethiopia is humming with the optimism and energy of a fast-growing country, creating more jobs, sending more children to school, expanding healthcare, and providing electricity, clean water, sanitation and roads.

Ethiopia's economy grew by 7.5% this year, and it is not the only country in Africa to boast a high growth rate. Africa has been the fastest growing continent of the past decade. The emergence of a new generation of leaders, the end of the continent's debt crisis, business-friendly policies, new technologies, the spread of peace, and strong demand for natural resources have helped Africa withstand the global downturn.

Steve Radelet, a former senior fellow at the Centre for Global Development, has documented the emergence of 17 African countries in which total income is growing by more than 5% a year – increasing average incomes by 50% in 13 years. That growth is attracting businesses and investors from Africa and abroad, and the continent's middle class is expanding. By 2015, about 100m African households will have incomes greater than £2,000 a year, roughly as many as India today.

And as they grow, developing countries are becoming less dependent on aid.

At the start of 2011, we did not expect a year in which so many people would be able to claim their rights and freedom. The Arab spring has moved many of us, but should not have surprised us. Better government has spread across Africa and the Middle East, defying outdated assumptions in the west. Thirteen African countries held national elections in 2011, four leading to a change of government; there will be 13 more in 2012. South Sudan gained its independence after a largely peaceful referendum.

When the year began, we did not know the rains in east Africa would fail. But in contrast to the 1980s, in today's Ethiopia drought no longer means famine. Unlike its neighbour Somalia, there has been no repeat of the TV images of starving people in Ethiopia. That's because, with the help of foreign donors, it has put in place early warning, food reserves and distribution systems, and a safety net that supports the poorest families in their own communities.

As developing countries have become more integrated into the world economy, and less dependent on aid, so their interests have changed. The most important international events for developing countries this year were the repeated failures of European leaders to put in place a credible plan to save the euro, the G20's decision to put the world trade talks out of their misery, and modest progress at the Durban talks on climate change. These will all have more impact on developing countries than gatherings of the "development set" at World Bank meetings, the UN general assembly or the Busan forum on aid effectiveness.

But while progress has been good, it is not yet fast enough. Hundreds of thousands of people in the Horn of Africa will have spent Christmas in refugee camps, and about a billion people will go to bed hungry on New Year's Eve.

In the years ahead, the Centre for Global Development in Europe will be working with policymakers, researchers and academics to find evidence-based, politically savvy ways for rich countries and powerful institutions to help developing countries lift themselves out of poverty. Our focus is on the world's efforts to promote shared growth, protect our environment, reinvent our financial system, clamp down on international corruption, encourage and share innovation, reduce inequality and entrench peace.

For affluent and developing countries alike, these are the aspirations for 2012.

Read it here.

December 20, 2011

Global Development Podcast: Looking Back at the Big Global Issues of 2011 (The Guardian)

Senior fellow Charles Kenny was interviewed as part of The Guardian's end of the year development podcast.

From the Article:

Famine, rising food prices, economic crisis, the Arab spring: it has been a tumultuous year. What has it meant for development? What impact has the economic crisis had on developing countries? What's the outlook for global health funding? This month's Global development podcast takes a look back at 2011 and asks what the big development stories might be in 2012.

Overseeing the debate is John Vidal, the Guardian's environment editor, who is joined in the studio by Jonathan Glennie, research fellow at the Overseas Development Institute and regular blogger for the Guardian's Global development site, and Dana Makram Ebeid, an Egyptian PhD student at the London School of Economics.

Joining the discussion from Washington DC is Charles Kenny, the economist and author of Getting Better, an optimistic look at global development. And down the line from New Delhi, economist Jayati Ghosh provides insights from India.

We also hear from the Guardian's health editor Sarah Boseley, who offers her thoughts on global health challenges, and from Jamal Osman, who reports from Somalia.

Listen to it here.

December 19, 2011

Naughty or Nice? (Foreign Policy)

Senior fellow Charles Kenny's Foreign Policy column on improvements to global goodwill also mentioned CGD research assistant Jonathan Karver.

From the Article:

Since it is the season of goodwill to all, holiday cheer, and all that, it's worth asking how much of these particular values are actually around nowadays. We could certainly do with more goodwill, of course -- particularly from brutal rulers in places such as Bahrain and Syria. And a bit more cheer on European bond markets might do the global economy a favor. But overall, levels of holiday spirit appear to be high worldwide -- and climbing.

A recent Council on Foreign Relations report gathered data on global opinion related to human rights that suggest widespread tolerance and good-feeling toward one's neighbors. For example, a 2008 WorldPublicOpinion.org survey of 24 countries found that, in every country, the great majority of respondents thought it was important to treat people of different religions equally. Even in the lowest-scoring country, Egypt, 74 percent agreed that religious equality was very or somewhat important. Of course, polling evidence is never that straightforward: The survey reported 67 percent of Egyptians also agreed there are some religions that people should not be allowed to practice, and recent clashes suggest tolerance of other faiths has some way to go in the country. But across the globe, the basic principle of religious tolerance appears to be widely acknowledged.

The same holds true when it comes to women's empowerment and racial equality. An average of 86 percent of respondents across 21 developed and developing countries in the WorldPublicOpinion.org poll suggested that it was important for women to have full equality of rights with men, and the same poll suggested equality of treatment for different races and ethnicities was important to an average of 91 percent of respondents across countries. India ranked lowest in both categories, but six out of ten people in the country still said equality of treatment for different races and for men and women was important.

At the Center for Global Development, my colleague Jonathan Karver and I are looking at how such attitudes have changed over time. Data from the World Values Survey, which covers countries with a combined population of nearly four billion people, suggests that between the second wave of the survey (conducted between 1988 and 1993) and the fourth wave (from 2004 to 2005), there are signs of growing global tolerance. The proportion of people worldwide who say they wouldn't want to have a neighbor of a different religion dropped from 67 percent to 48 percent -- and the proportion fell in 21 out of 23 countries surveyed. While the overall proportion of respondents who said they did not want people of a different race or immigrants as neighbors did rise slightly -- to 22 percent and 23 percent, respectively -- the majority of countries surveyed still saw a decline. And overall, the results suggest that, by 2005, the majority of the world was happy with neighbors of whatever race, creed, or nationality.

 

While acts of bigotry are still an everyday occurrence, the forces of intolerance are on the wrong side of history. Two-thirds of Americans think the United States should admit immigrants fleeing poverty, for example. Changing attitudes help to explain why the effects of discrimination against groups like India's Dalits -- "untouchables" -- appear to be on the wane. More Dalits are working in nontraditional jobs like tailoring and driving (their more traditional employment was in occupations like bonded agricultural labor, tanning, and dealing with night-soil), and many more Dalit girls are going to school.

 

What's more, the ultimate expression of ill-will -- trying to kill someone -- is also on the decline almost everywhere. The last decade has seen fewer war deaths than any in the last hundred years. Violent crime also appears to be increasingly rare worldwide. In 2002, about 332,000 homicides from around the globe were reported to the U.N. Office of Drugs and Crime. By 2008, that had dropped to 289,000. Between those years, the homicide rate fell in 68 reporting countries and increased in only 26. Compared to 1995, the homicide rate has fallen in three quarters of reporting countries. The U.N. data becomes patchier after 2008, but if the United States is anything to go by, it could be that the trend has continued more recently -- 2010 saw 13 percent fewer violent crimes in the United States than did 2006.

There doesn't seem to be a simple explanation for why the world is becoming more tolerant and pacific over time. But part of the answer may be that we're witnessing a cultural sea change when it comes to attitudes toward the acceptability of both discrimination in general and violence in particular. Perhaps there's a part played by television there -- with over 1.4 billion of them in homes worldwide, the medium brings people of different races, creeds, and countries into living rooms and suggests how our daily concerns are alike. So do your part: Watch that re-run of It's a Wonderful Life.

This greater global comity must certainly be one reason that the world is increasingly merry. The proportion of the planet reporting they were somewhat or very happy climbed from under three-quarters to over four-fifths between the two World Values Survey waves. Global contentment may have dipped as a result of the financial crisis -- but Princeton University economist Angus Deaton suggested that happiness polls have pretty much recovered to their pre-crisis levels in the United States. And countries like China and India, which account for much of the world's population, became ever more prosperous over the past few years. So it seems very likely that cheer remains the default state for the great majority of humanity.

It is less jolly that, even as people are becoming better behaved, our faith in them is dropping. According to the World Values Survey, the proportion of people across the planet that believe most people can be trusted has fallen from 43 percent to 34 percent between the early 1990s and the mid 2000s.

Regardless, fewer people worldwide are being naughty, and more are being nice. That's great news, because the last thing the global environment can afford this year is more coal in peoples' stockings.

Read it here.

December 16, 2011

Celebrating America's Long-Term Strength, Not Its Impending Death, on International Migrants Day (Huffington Post)

Senior fellow Michael Clemens' piece on International Migrants Day was featured in the Huffington Post.

From the Article

December 18th will be International Migrants Day. I'm delighted, because continued migration flows across the globe will add trillions of dollars to the beleaguered world economy.

You're not planning a big party on the 18th, you say? Neither are the various pressure groups working hard to slow or stop migration to the United States and Europe -- outfits like NumbersUSA, FAIR, the Center for Immigration Studies, the British National Party, or France's Front National.

This spring I sat in an auditorium in New York and watched two heroes of that international movement, Kris Kobach and Tom Tancredo, list their reasons why immigration has pushed the United States to the breaking point: Immigrants want to take space but there is no space left. Immigrants want to take jobs but there are no jobs left. Immigrants want to take welfare checks -- our "goodies", said Kobach with a smile -- but there is no money left. It would be nice if America could still be the land of opportunity, they say, as it was for their own ancestors. But America was strong then. It's weak now, so weak that more immigrants will push it right over the edge.

These immigration opponents are planning a funeral for America. But I won't attend; America is not dying. When I walked out of that auditorium and looked around, I didn't see the broken, limping, moribund country I had just been told about. This country, my country, has proven the pessimists wrong again and again. Its proud history deserves more optimism and faith than this.

Read it here.

December 14, 2011

I've Got My Eye on You (Slate)

Senior fellow Alan Gelb was mentioned in a Slate article on biometric identification.

From the Article

Call 2011 the year of the biometric ID. Once the territory of high-security enclaves and spy novels, identification by iris scan, fingerprint, and other unique physical features has now become de rigueur around the world—especially in India, whose program to ID every citizen has been the subject of almost giddy reports about the technology’s potential to democratize society. The New York Times described India’s biometric database as “building real citizenship” for the first time. Wired emphasized how biometrics can finally bring the disenfranchised into the formal economy. The New Yorker detailed the necessity of IDs for the poor in accessing formal savings opportunities.

But entirely underemphasized is another major upside of biometric IDs and the shift to electronic payments: solving the ghost-worker problem.

For decades, the developing world has tried to bust ghost workers: make-believe police, teachers, and bureaucrats furtively planted into payrolls by corrupt government staffers, particularly in remote areas. These fictional “workers” bear the names of infants, the deceased, or real adults who simply aren’t employees. This long-running scam drains millions of dollars each year from already strained public coffers in countries like India, Nigeria, Zimbabwe, and Afghanistan.

Waste, fraud, and abuse are often blamed on too much central government. But ghost-worker scams illustrate the opposite problem: Ghost scams flourish in areas characterized by decentralization—where cash payment systems for government salaries, pensioners, and welfare recipients are particularly hard to monitor.

The scale of the problem can be jaw-dropping. In Zimbabwe, a recent examination reportedly revealed 75,273 ghost workers out of 188,019 employees from various ministries. Eliminating these phantom employees would save taxpayers more than $200 million annually. The potential savings are immense in a country where up to 80 cents for every dollar of government revenue goes to salaries.

Using biometric IDs instead of traditional paper documents can eliminate duplicate enrollments and guarantee that the actual payee receives the money, usually by employing fingerprint verification at pay points. These high-tech IDs have been used in at least 15 developing nations over the last decade for payments or money transfers. In June, Alan Gelb and Caroline Decker of the Center for Global Development estimated that at least 450 million people in developing countries have had their biometric information recorded, with that figure set to triple over the next five years.

Read it here.

December 13, 2011

Change Afghanistan Can Believe In (Foreign Policy)

Senior fellow Charles Kenny's weekly column in Foreign Policy on Afghanistan.

From the Article

After 10 years of war and reconstruction, and as tens of thousands of international troops and aid workers in Afghanistan gear up to spend yet another holiday season a long way from the comforts of home, a lot of people are wondering: Was it worth it? Certainly Dec. 5's international conference in Bonn, Germany, on the future of Afghanistan was a subdued affair -- boycotted by Pakistan after NATO aircraft killed 24 troops on its border and rapidly overshadowed by a rare act of sectarian violence in Kabul (against Afghan Shiites) that killed 59 people. Expectations were considerably below the high hopes of the first Bonn conference 10 years ago on building a post-Taliban Afghanistan. Then, in 2001, the talk was of making the country a haven of peace and prosperity after 30 years of war. Last week, it was the hope of good-enough government over a stable-enough country.

Nonetheless, the answer to "was it worth it" is yes. For all the waste, corruption, and death, Afghanistan is a much better place to live than it was 10 years ago, and the international community can take a considerable part of the credit for that.

First, the country remains considerably more peaceful and united than it has been for most of the past 40 years. The 1990s saw battle deaths in Afghanistan average around 9,000 a year, according to World Bank data. From 2003 to 2008, though, despite an uptick of violence in the last few years, that average was down to below 3,000 deaths. Yes, negotiations with the Taliban have foundered since the September assassination of the government's chief negotiator, Burhanuddin Rabbani. Still, militant attacks were down by more than a quarter in the three months to September this year over the same period last year. Asia Foundation polling suggests people feel more secure, support for the government is up, and more than two-thirds of the country reports no sympathy for the Taliban.

The economy is also in better shape than it was 10 years ago. According to World Bank data, GDP per capita climbed from $569 to $879 between 2002 and 2008, a rate of growth that suggests average incomes might have doubled over the course of the decade since the fall of the Taliban. The World Bank suggests that as the troops leave and aid flows diminish, GDP growth rates may slow from around 9 percent to 5 or 6 percent. Nonetheless, rising average incomes suggest at least some Afghans are living life a little further away from absolute destitution. One positive sign: 71 percent of Afghan households have a mobile phone.

Read it here.

December 12, 2011

What can Canada do Right Now to Help Reduce Rural Poverty and Malnutrition? (ONE)

The center was mentioned in a ONE blog on IFAD funding.

From the Blog

Despite significant progress in global food security since the beginning of the 2009 L’Aquila Food Security Initiative, many developing countries are not on track to meeting Millennium Development Goal 1 – halving hunger and extreme poverty. However, next week donor countries have a once-in-3 years opportunity to accelerate progress toward this goal through replenishment of the International Fund for Agricultural Development (IFAD).

On December 15 -16, IFAD member countries will meet in Rome and make pledges to cover the next 3 years of IFAD operations and lending. ONE supports robust “replenishment” pledges to IFAD for three main reasons: (1) the Fund’s mandate to reduce rural poverty through women, small-scale agriculture and rural development, (2) it is one of the more effective institutions working towards food security, and (3) it is a model of efficiency in international development.

Its mandate. Holding dual status as a UN agency and an international financial institution, IFAD focuses on small-scale farmers exclusively, thus playing a unique role in the global food security architecture. To date, IFAD has empowered more than 370 million rural poor people to make better lives for themselves and leveraged US$19.7 billion in co-financing for its projects. In 2010 alone, IFAD reached 43 million rural poor people.

Its effectiveness. According to a recent report, IFAD has strong monitoring and evaluation, aligns its aid with national development strategies, and performs very strongly in financial accountability and transparency. Additionally, because IFAD projects coordinate multiple donors, IFAD 9 gives donors an avenue to maintain their commitments to strategic coordination and the improvement of multilateral institutions. All this means that IFAD is one of the most effective agencies out there working on agriculture.

Its efficiency. In the Center for Global Development’s 2011 QuODA database, IFAD ranked in the top four aid institutions globally on indicators related to “maximizing efficiency.” Additionally, IFAD has continuously improved its already efficient model of operations. Likewise, the ratio of its overhead expenses has improved recently, shrinking from 16% in 2008 to a projected 12% in 2012. In times of tight donor budgets, countries should prioritize efficiency when investing resources.

Read it here.

December 9, 2011

Leave China Out of a Trade Pact at Your Peril (Financial Times)

Senior fellow Arvind Subramanian's op-ed piece on trade agreements was featured in the Financial Times.

From the Article

When trade ministers meet in the World Trade Organisation in Geneva next week, they will arrive with a set of marching orders from their bosses.

In Cannes last month, the Group of 20 leaders recognised that the present approach to the Doha round could not succeed and that the world would have to confront broader challenges facing the multilateral trading system. One of the biggest challenges is how to deal with the rise of China. Ministers, in our view, need to prepare for a new “China round” of multilateral trade negotiations.

China is the world’s largest exporter and by 2020 the country’s trade will be nearly one-and-a-half times as much as that of the US. China is set to become an economically dominant power. That in itself should not be a cause for worry because China’s economic transformation has been, and will remain, so predicated on an open trading system that Beijing will have a stake in preserving it.

But some of the most contentious issues in trade over the past few years – such as the perceived “beggar-thy-neighbour” effects of undervalued exchange rates and the opaque purchasing and investment practices of government entities – have involved China. World leaders have an interest in ensuring that these issues are resolved without undermining the open trading system. The world has an interest in tethering China more firmly to the multilateral system.

Read it here.

December 9, 2011

Climate Change's Dead Letters (Businessweek)

Senior fellow Charles Kenny's piece on climate change was features in Businessweek.

From the Article

The 17th Conference of the Parties to the United Nations Framework Convention on Climate Change took place this month in Durban, South Africa. Two things to note: First, climate change shows no sign of abating; second, it’s the 17th meeting. This was also the Seventh Meeting of the Parties to the Kyoto Protocol, the only international agreement that legally binds some countries to agreed reductions in their greenhouse-gas emissions. The flaw in Kyoto is that it binds none of the world’s three largest polluters, which are responsible for nearly half of all emissions. The U.S. never signed the protocol, and India and China were exempted from emissions caps on the grounds that rich countries had done the majority of combusting, excreting, or otherwise expelling the gases causing the atmosphere such heartburn to date.

Remember UN climate meeting No. 15? That was in Copenhagen a couple of years ago, when President Barack Obama and fellow leaders stayed up half the night, seemingly hours away from a binding climate deal covering countries rich and poor. Today we seem not hours but years away from such a deal. The Kyoto Protocol expires next year—and the Durban meeting didn’t even seriously discuss a replacement. You might call this a glacial rate of progress, except we’re going backward (and glaciers are melting quite fast nowadays).

Disappointment at Durban will give environmentalists one more reason to gripe at the state of global leadership. They’ll have a point. The planet’s politicians have missed an opportunity to unite to confront the greatest global challenge of the new century. Yet at the same time, progress against global warming is being made at the individual country and regional level—which is good news, because for the foreseeable future that’s the only approach likely to work.

With the lack of progress on climate change in recent years, some environmentalists have been reduced to pinning their hopes on either the exhaustion of natural resources or the complete collapse of global capitalism to take care of the problem. But neither higher oil prices nor financial crises have significantly slowed the release of greenhouse gases. Because of new fossil fuel discoveries and new technologies that allow their extraction from deep seabeds or out of shale rock, global peak oil extraction won’t arrive until some time after Denver becomes a seaside resort. The global economic slowdown, meanwhile, has brought the silver filigree of temporarily holding down emissions in the developed world (2008 and 2009 actually saw declining greenhouse gas output in the U.S.). But a study released on Dec. 4 by the Global Carbon Project, an association of scientists, found that global emissions rose again in 2010 by 5.9 percent, the largest increase since 2003.

Read it here.

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