This brief on the General Capital Increase is one of a suite of policy briefs that provides basic background information and practical analysis of the financial and governance issues facing the international financial institutions.
After dramatically increasing their lending during the global financial crises, the international financial institutions are requesting an unusual General Capital Increase. Senior fellow Todd Moss and co-authors explain what this means—and why it’s important.
With the African Development Bank (AfDB) seeking approval from its shareholders for a three-fold increase in its capital base, CGD senior fellow and vice president Todd Moss has evaluated the bank’s progress against six recommendations offered by a CGD working group in 2006. How much progress has the AfDB made?
In this CGD Brief, Todd Moss and Vijaya Ramachandran analyze the survey results of 300-400 manufacturing firms in Kenya, Tanzania and Uganda. Their main finding? Foreign firms perform better than local firms in generating jobs, increasing the productivty of their workers, and in skills transfer.
Many poor countries, especially in Africa, will miss the MDGs by a large margin. But neither African inaction nor a lack of aid will necessarily be the reason. Instead, responsibility for near-certain ‘failure’ lies with the overly-ambitious goals themselves and unrealistic expectations placed on aid. While the MDGs may have galvanized activists and encouraged bigger aid budgets, over-reaching brings risks as well. Promising too much leads to disillusionment and can erode the constituency for long-term engagement with the developing world.
Zimbabwe has experienced a precipitous collapse in its economy over the past five years. The government blames its economic problems on external forces and drought. We assess these claims, but find that the economic crisis has cost the government far more in key budget resources than has the donor pullout. We show that low rainfall cannot account for the shock either. This leaves economic misrule as the only plausible cause of Zimbabwe’s economic regression, the decline in welfare, and unnecessary deaths of its children.
Although nearly all poor countries are classified by the World Bank as IDA-only, Nigeria stands out as a notable exception. Indeed, Africa’s most populous country is the poorest country in the world that is not classified as IDA-only. Under the World Bank’s own criteria, however, Nigeria has a strong case for reclassification. IDA-only status would have two potential benefits for Nigeria. First, it would expand Nigeria’s access to IDA resources and make the country eligible for grants. Second, it would strengthen Nigeria’s case for debt reduction. With a renewed economic reform effort getting under way and the emerging use of debt reduction as a tool for assisting economic and political transitions, the UK, the US, and other official creditors should support such a move as part of a broader strategy for encouraging progress in one of Africa’s most important countries.