Trade Liberalization Can Help Empower Women

Gender equality is a source of comparative advantage when a country integrates into the world market, according to a new working paper by Quy-Toan Do, Andrei A. Levchenko and Claudio Raddatz. For example, industries relying more on female labor expand more in countries that empower women. Meanwhile, trade affects a society’s attitude toward gender: the gender gap is smaller in Bangladesh and other countries that export goods requiring female labor. Thus, the road to female empowerment in an increasingly integrated world market depends on a country’s productive structure, as well as its exposure to global markets. Compared with countries with a comparative advantage in female labor-intensive goods, countries with a comparative advantage in male-labor intensive goods require more effort to counterbalance the resultant economic forces, leading to a slower pace of women’s empowerment. Nonetheless, these same efforts will in turn change the comparative advantage of countries in a way that will further promote conditions that help empower women.

read more

Lower Fertility Rates Boost Economic Growth and Poverty Reduction in Low-Income Countries

A new working paper by Monica Das Gupta, John Bongaarts and John Cleland argues that there is now a broad consensus among researchers that lower fertility rates facilitate economic growth in low-income countries.

Low dependency ratios (resulting from lower fertility rates) create a window of opportunity for savings and increase productivity and investment — which, if properly managed by policy makers, can permanently transform living standards. The more rapid the fertility decline in a region, the wider the window of opportunity, though its duration will be shorter, because the population will age more rapidly.

The studies reviewed also indicate that rapid population growth can be a constraint on economic growth, especially in poor countries with policies that don’t encourage rapid rise in productivity. In addition, lower fertility is associated with better child health and schooling, reduced maternal mortality and morbidity, a higher rate of labor participation by women, and higher household earnings.

Studies reviewed by the authors also highlight the deep challenges to managing common environmental property resources, because of diverging interests among users. But the pressure on these resources can be mitigated by reducing the rate of population growth. Although family planning programs are only one policy lever to help reduce fertility, most studies find them effective. Such programs might help the Sub-Saharan African region in particular, where high fertility rates and institutional constraints on economic growth have combined to slow rises in living standards.

Extracted from WorldBank

read more

Alternative Energy Sources Face Technological and Economic Challenges

The transition to a low-carbon economy will likely be much more challenging than optimists have claimed, according to a new working paper by Ioannis Kessides and David C. Wade. Key requirements for sustainable energy-supply infrastructure include: abundance of the energy resource, a small carbon footprint and the ability to be scaled up to meet a large, absolute increase in the global demand for energy. Coal-fired generation meets the criteria of abundance of the energy source and scalability, but it carries a very large carbon footprint. 

Although renewable energy and nuclear power meet both the criteria of longevity and climate friendliness, their abilities vary in delivering energy at a scale needed to meet huge global energy demand. The low density of renewable resources to generate electricity, as well as the current intermittency of many renewables, means they have limited ability to achieve high rates of growth. A significant increase in global nuclear power deployment, meanwhile, could carry serious risks related to proliferation, safety and waste disposal. And, unlike renewable sources of energy, nuclear power is an unforgiving technology, because human lapses and errors can have catastrophic, irreversible ecological and social impacts. 

By World Bank

read more

Opportunities to Increase Rice Production in Africa

Donors and governments have been reluctant to invest in large-scale irrigation in sub-Saharan Africa because of high investment costs and declining rice prices. It doesn't help that the performance of some large-scale gravity irrigation projects led by governments in Asia has been declining. 

But the conditions for growing irrigated rice have improved in sub-Saharan Africa, according to a new working paper by Yuko Nakano, Ibrahim Bamba, Aliou Diagne, Keijiro Otsuka, and Kei Kajisa. The price of rice has risen, and reforms in African countries have changed the institutional and policy environment for growing rice in large irrigation schemes. 

There are attractive opportunities to raise the productivity of rice, which requires adequate irrigation, chemical fertilizers and labor. Currently, chemical fertilizer is expensive, especially in Uganda and Mozambique. In addition, farmers often have unreliable access to water, which is required for both fertilizers and irrigation. In large irrigation schemes in four Sahelian countries of West Africa's Sahel region, which offers easy access to water, rice farmers achieve attractive yields when they have governmental and non-governmental support for chemical fertilizer. 

In places where wage rates are high, mechanization can help. Improved access to credit can facilitate the purchase of fertilizer or the hiring of labor. The research draws on household survey data from a variety of large-scale irrigation schemes in Burkina Faso, Mali, Mozambique, Niger, Senegal, and Uganda.

By World Bank Organization

read more

How Natural Disasters Affect Public Finances

As the world faces more natural catastrophes, such as droughts, earthquakes and wild fires, a new working paper by Martin Melecky and Claudio Raddatz systematically gauges their impact on the global gross domestic product and government expenditures and revenues. 

Drawing on data covering annual government finances in high- and middle-income countries from 1975 to 2008, the authors find that natural disasters drive down output and increase deficits, especially in the poorest middle-income countries. Indeed, while on average government deficits go up only after climate-related disasters, all events push up deficits in these countries. 

A country's debt level at the onset of disaster doesn't appear to affect the fiscal impact of the disaster. Rather, it seems to indicate good access to credit. Countries with higher financial development suffer less from disasters, but their deficits expand further. 

By contrast, the availability of private insurance reduces the impact of natural disasters on GDP without causing an increase in government spending. Thus, insurance penetration seems to offer the best ex-post mitigation approach against real and fiscal consequences of disasters, although a complete evaluation should also consider the costs associated with different alternatives.

By World Bank Organization

read more

Development Partners Demand Prosecution For Theft Of Education Funds

Development partners to Kenya’s education sector are asking the Government of Kenya to act swiftly and hand over the names of all Ministry of Education staff implicated in the loss of funds to the Kenya Anti-Corruption Commission for further investigation, and subsequent prosecution in the courts.

World Bank, UK’s Department for International Development, UNICEF and the Canadian International Development Agency commended the Ministry of Finance for investigating allegations of fraud in the education sector, which were revealed in September 2009. They urged swift action not only in bringing the culprits to book, but also in rectifying serious problems with financial management at the Ministry of Education, to restore Kenyan taxpayers’ confidence in Kenya’s biggest spending ministry.

'Financial mismanagement in the Ministry of Education appears to have resulted in the significant loss of funds intended to support children’s education in Kenya. As a result, some children will grow up without an education or with a lower quality education than they might have received. This is simply unacceptable', said World Bank Kenya Country Director Johannes Zutt, on behalf of the four development partners.

Ministry of Finance shared draft reports with development partners earlier this month on initial findings of the extended forensic audit. The audit, undertaken by the finance ministry, sought to examine how education funds for the period 2005/06 to 2008/09 were used and managed.

The Ministry of Finance has indicated that documentary justification is not fully in order for expenditures totaling about Kshs 8.4 billion for the four-year period. The audit was not able to obtain satisfactory documentary evidence for spending amounting to about 1.7 percent of the total education expenditure, or 14 percent of the education development expenditure, for the period under review.

Last year in a audit done in July, the Ministry of Finance discovered that KSh 234m of education funding could not be properly accounted for, prompting the nearly concluded in-depth audit, which has unearthed a much bigger financial management problem at Ministry of Education.

"The findings of this report are shocking and completely unacceptable.  We will go after every penny of British taxpayers' money that has been stolen and those responsible for fraud must be prosecuted through the Kenyan courts,” UK Secretary of State for International Development, Andrew Mitchell, said in a statement read on his behalf by the Head of DFID’s Office in Kenya, Alistair Fernie. 

“The British Government will not tolerate corruption. I commend the Ministry of Finance for revealing the extent of the financial mismanagement in the Ministry of Education,” he added.

Development partners are also asking the Government of Kenya to fully reimburse them their share of the lost money. Although the education programme receives donor funding, it is primarily financed by the Kenyan taxpayer.

“It is important to Canada that our development funding be used for its agreed purposes, such as improving educational opportunities for the most vulnerable children. Accountability is a key pillar of our work, and we look to the Government of Kenya to put in place mechanisms to prevent a repeat of cases such as this,” stated the Canadian High Commissioner to Kenya, H.E. David Collins.

“The loss of funds in the education sector is very disappointing. It saddens us to see how the joint effort between the Ministry of Education and development partners to achieve equitable access to quality education for the children of Kenya has been jeopardized,” said Ms Olivia Yambi, UNICEF’s Kenya Country Representative. 

Development partners reiterated their commitment to continue helping Kenyan children get a quality education. Since the initial fraud was uncovered last year, they all stopped putting funds in the pooled Kenya Education Sector Support Program, managed by the Ministry of Education.

Donors are keen to see fundamental strengthening of financial and information management systems, and stricter management oversight of internal controls at the Ministry of Education.

The forensic audit’s recommendations include setting up new management control and accounting systems, the removal of all existing finance, accounting and procurement staff at all levels in the education ministry, and clarity that the Permanent Secretary accepts overall responsibility for spending under his control.

The Ministry of Education has accepted these recommendations and the donors stand ready to support these efforts through the Public Financial Management Reform Program once a detailed implementation plan has been developed.

read more

World Bank Funds $100 Million for Early Childhood Development in Latin America

World Bank today announced that it has funded more than US$100 million for Early Childhood Development (ECD) programs in Latin America and the Caribbean, approximately one third of the amount promised in February 2010 at the launch of the Early Childhood Initiative: An Investment for Life -- a joint venture of Shakira’s ALAS Foundation and the World Bank.

Today’s announcement was made at the XX annual Ibero-American Summit of Heads of State and Governments held in Mar del Plata. So far, US$103.5 million in new World Bank projects are supporting ECD programs in Argentina, Brazil, Haiti, Mexico and Peru, with several more programs planned in the years to come. 

“Early Childhood Development creates equal opportunities for all children,” said Pamela Cox, World Bank Vice President for Latin America and the Caribbean.

"Investments in Early Childhood Development are among the most cost-effective investments a country can make in its people,” she added.

ALAS and Shakira have played a pivotal role in advocating for ECD investing. In early 2010 ALAS Foundation and the World Bank launched the Early Childhood Initiative to make Early Childhood Development a priority throughout the region. The initiative aims to mobilize all sectors of society towards the implementation of comprehensive, well-articulated, and efficient ECD policies and programs to equalize opportunities of low income children early in life and ensure all children achieve their potential. The World Bank has committed US$ 300 million to fund the initiative over the next two years, including loans, technical assistance and grants to support such programs in the region. These funds are part of the Bank's portfolio in the participating countries.

The Bank has already been funding ECD programs to improve the well being of children in Latin America and the Caribbean, but inequality persists between, and even within, countries. Many children in the region are malnourished, suffer from iron, vitamin, and other deficiencies; are stunted or face other developmental challenges.

All of these conditions are exacerbated by poverty and inequality that begin at birth.

The scientific evidence, according to World Bank research on cognitive development in the region suggests that overall results achieved by young children are low and determined by their socioeconomic status, due in large part to the mother’s education and income level.

All countries in the region continue to face challenges in ensuring that children receive adequate development opportunities to reach their highest potential. Most programs supporting ECD are independent efforts that vary in scale, services offered, and mode of delivery.

In addition, coverage and quality of ECD services across the region remains limited. Few programs have defined standards and adequate resources that cover a significant group of potential beneficiary populations, especially among younger children.

*Projects approved so far by the World Bank include:

Argentina: Fifteen million dollars (US$15 million) from the San Juan Social Inclusion Project support improvements in the quality and efficiency of service provision in education in the first two years of schooling, through two specific programs: Todos Pueden Aprender (Everyone Can Learn) and Programa de Día Completo (All-Day Program). These programs are expected to help improve results during the last years of primary school and in secondary school, strengthening the human capital foundation of San Juan's society and economy.  The project purports to guarantee equal opportunity in education, particularly for vulnerable students.

Brazil: Thirty-Four million dollars (US$34 million) from the Rio Municipal Project helps local authorities reduce the annual dropout rate in schools and supports increases in IDEB and IDE results. The program also aims to raise child and preschool education enrollment by at least 3,000 licenses per year in low income communities.

Haiti: Two and a half million dollars (US$2.5 million) from the Education For All Project aims to improve access to and equity of primary education. While the ultimate goal is to ensure universal access to free basic education in Haiti, following the earthquake and in the near future, the government seeks to help as many children as possible return to school. In this context, the project takes into account the important role that both the public and private sectors can play in the immediate response and in setting foundations for a stronger education sector in Haiti.

Mexico: Fifty million dollars (US$50 million) from funds provided under The Compensatory Education Project aim to ensure that 225,000 children aged 0-4 receive preschool education while their parents and/or caregivers receive training to improve their caring abilities.
It will also guarantee that roughly 48,000 parent committees obtain direct financial support and that 2,000 underperforming schools receive intensive pedagogical support. The initiative also seeks to improve learning results.

Peru: Two million dollars (US$2 million) has been provided through a grant to support The Participatory Nutrition Program, designed and managed by the World Bank, to be executed by the Fund for the Americas (FONDAM) in close coordination with the Government of Peru. The initiative aims to improve the nutritional status and development of children under 3 years, through a participatory intervention that seeks to improve local management skills, promoting changes in behavior and developing a greater awareness of the subject among the heads of households, communities and local actors in the poorest communities of the Peruvian sierra.

“More than 300,000 children under the age of five die every year in Latin America, more than nine million are severely undernourished, and 22 million are not enrolled in preschool,” said Cox.

“All children deserve equal opportunities. We can make a positive difference in their lives. For that to be true, investment in early childhood development needs to dramatically increase,” noted Cox.

The World Bank also announced that funding and technical assistance will be made in the near future to support programs in Bolivia, Colombia, Ecuador, Nicaragua, among others. These initiatives are implemented by the governments in the region in accordance to Bank standards.

Note to Editors:

ALAS is a Latin American nonprofit organization founded in December 6, 2006 by the most prominent Latin American artists and business leaders who saw in promoting ECD the opportunity and way to end with the intergenerational cycle of inequality in the region. ALAS, chaired by Colombian business leader Alejandro Santo Domingo, seeks to mobilize all sectors of society towards the implementation of ECD comprehensive public policies that allow a universal access to a proper nutrition, stimulation and attention to health for children between 0 and 6 years old.

The World Bank is an active member of ALAS’ Early Childhood Development Secretariat for Latin America —SEDITAL—, a platform of innovative knowledge and policies on ECD that serves countries in the exchange of information and experiences with international organizations to promote research and policies that will contribute to strategize and implement effective comprehensive ECD programs in the region.

The Secretariat brings to the partnership nine countries committed to ECD – Argentina, Colombia, Chile, Costa Rica, Honduras, Mexico, Panama, Paraguay and Uruguay – and ten solid partners from international organizations and NGOs.

read more

US$50 Million to Improve Health, Nutrition and Education in Peru

The World Bank Board of Directors approved a US$50 million loan to contribute to the Peruvian Government’s efforts to improve the quality and results of basic social services like health, nutrition and education.

“This loan allows us to give continuity to the country’s efforts to establish clear standards for children’s learning at the same time we improve their health and nutrition,” said Jose Antonio Chang, Peru’s Prime Minister and Education Minister. “This has helped parents and district governments in demanding quality services. This strategy has also established a base from which to advance toward the important results achieved in recent years regarding learning, health and nutrition.”

This is the third and last loan in a series of programmatic loans, implemented between 2007 and 2010, aimed at improving the results of social services. Some of the policies supported by this loan include:

·         Actions by the National Identity and Civil Registry (RENIEC) aimed at improving birth certificate registrations; 

·         Actions by the Finance Ministry aimed at improving the connection between budgets and results in social sectors, and the participation of poor communities in their monitoring; 

·         Actions by the Ministry of Education aimed at increasing parental participation in the education of their children; and

·         Actions by the Ministry of Health, the Integrated Health System, National Food and Nutrition Center (CENAN) and the Juntos program aimed at increasing health insurance coverage and nutritional monitoring. 

Finance Minister Ismael Benavides said that his portfolio is aiding efforts to make social spending more visible within the poorest populations. “In fact, this reform program seeks to share the responsibility for obtaining results across government levels and the population itself when demanding their right for health and quality education services,” added Benavides.

 For his part, Felipe Jaramillo, World Bank Director for Bolivia, Chile, Ecuador, Peru and Venezuela, said that “this program supports the Peruvian government’s successful efforts at defining goals and transforming the results obtained in social sectors, through reinforced accountability mechanisms. It is crucial that results be documented thoroughly, through the second-degree Educational Achievement Census Evaluation carried out by the Ministry of Education, MINEDU, the Nutritional State Information System (SIEN), and rigorous health-sector surveys such as the National Demographic and Family Health Survey (ENDES).”

Jaramillo stressed that reading ability and math skills had improved significantly between 2007 and 2010; institutional birth coverage keeps rising in rural areas; nutritional monitoring has intensified with support from CRECER; while the chronic malnutrition rate was lowered significantly in 2009 and 2010. 

“These social advances complement the country’s economic achievements and reduction of poverty levels, and represent a good omen for Peru’s future development,” said Jaramillo.

To date, the main achievements associated to this program include:

·         Increasing the percentage of second grade students whose reading abilities have reached passing grades. According to the Student Census Evaluation (ECE), that figure increased from 15.9% in 2007 to 23.1% in 2009. The goal is to achieve 35% by 2011.  

·         Increasing the percentage of second grade students reaching a passing grade in math skills, from 7.2% in 2007 to 13.5% in 2009. The goal is to achieve 30% by 2011. 

·         Increasing the coverage of institutional births (in adequate health services under specialist attention) in rural areas from 49.4% in 2007 to 55% in 2009. The goal is to reach a 70% coverage rate by 2011.

·         In 2009, the average number of growth and development controls for children under-12 months of age reached 4.2, compared to 3.3 in 2005. This exceeded the goal of 4.0, set at the beginning of the program 

·         Reducing chronic malnutrition in children less than five years of age with respect to levels shown at the baseline, from 28.5% in 2007 to 24.2% in 2009. It is estimated that the goal of 23% will be reached in 2011.

Financing for the US$50 million program approved today consists of a fixed-margin loan with a 12.5-year maturity period and an 11-year grace period. Total financing for the three loans related to this program during the 2007-2010 period reaches US$530 million.

read more