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From the article:
The trade war with the United States coupled with the “Belt and Road Initiative” has the potential to add further pressure to China’s sluggish economy and debt pile, according to researchers, as the benefits of manufacturing in the mainland decrease.
China’s manufacturing industry has already been hit by the US trade tariffs, in particular, the smaller exporters who are the most vulnerable to slowing demand and slimmer margins in the face of competition from low-cost alternatives including Vietnam and India.
Many of China’s competitors in Southeast Asia have already joined the belt and road plan to grow global trade, meaning the manufacturing situation in the mainland is likely to get worse, the researchers said, as investment in the initiative may speed up the exit of low to mid-end production from China to the likes of Vietnam and India despite the benefits of better infrastructure and supply chain.
Washington has heavily criticised the belt and road plan, warning of the danger of debt traps and threats to national security that the project has brought. But even with the risk of rising tensions with the US and to its own economy in the short term, China is unlikely to give up the plan, researchers said.
“The Trump administration’s stance toward the initiative has been consistently critical, and I don’t expect that to change no matter what happens with the trade negotiations,” said Scott Morris, senior fellow at the Centre for Global Development and director of the US Development Policy Initiative.
“However, to the degree tariffs are contributing to a slowdown in China, they could indirectly slow the pace of investment under belt and road.”
From the article:
In a mountain village where every week people leave for the United States, the school broadcasts its message in its name: el Centro Quédate — the Stay Here Center.
It’s a low-slung white building in which teenagers gain skills that ostensibly will help them find jobs here, instead of the United States. They learn to cut hair and to fix computers. They sharpen their English so they can work in call centers or as tour guides.
They get lectures on the dangers of migrating. A poster shows stick figures drowning in rivers, falling off trains and being held at gunpoint.
What the students don’t know is that they’re subjects in a quiet experiment to deter migration.
The Stay Here Center is funded by the U.S. Agency for International Development and the Guatemalan government in an attempt to stem the flow of migrants from Guatemala, now the biggest source of people attempting to migrate to the United States. About one in 100 Guatemalans has reached the U.S. border in the last year alone.
The United States spends hundreds of millions of dollars each year on programs such as the Stay Here Center, aimed at improving the lives of would-be migrants in their own communities so they don’t leave home in the first place. It’s the softer side of migration enforcement: rehabilitation programs for prisoners in El Salvador, business training for young Hondurans, funding for the corn and bean farmers of Guatemala.
The idea of teaching vocational skills to keep would-be migrants from leaving is hardly unique to the Stay Here Center. Across the world, developed countries invest in programs aimed at addressing the root causes of migration. Spain opens a cashew processing plant in Mali. Italy funds vocational training centers in Ethiopia. Belgium tries to improve farming practices in Senegal.
Michael Clemens, a fellow at the Center for Global Development, says the approach “gets it backward.”
“Migration is a fundamental part of a country’s development process.”
In much of the developing world, money sent home by family and friends abroad provides a crucial economic foundation. In Guatemala, these remittances account for more than 11 percent of GDP.
Migration can also ease tight labor markets when demographic booms create surges of young people competing for limited numbers of jobs.
“The fact is that migration provides a remarkably good return on investment,” Clemens said.
The face of Guatemala’s migrant surge is youthful. Roughly 136,000 Guatemalans were apprehended at the U.S. border or turned themselves in from October through March, according to Customs and Border Patrol. That included 94,000 people arriving in families and 16,800 unaccompanied minors.
The Stay Here Center serves young people mostly ages 12 to 19. Unlike many public schools in Guatemala, it’s free. As a result, the center is the only school that some of its poorest students attend.
No one tracking results
Quintana estimates that 1 in 10 of her former students have migrated.
It’s difficult to know whether this represents failure, or success. The Center for Global Development estimates that roughly 8 percent of all 17-year-olds in Guatemala, El Salvador and Honduras migrated to the United States between 2011 and 2016.
The Stay Here Center in Santa Maria Visitacion is a tiny part of the U.S. government’s development package in Central America. It has received just over $20,000 per year in U.S. funds over the last two years, distributed by the International Organization for Migration.
USAID says it does not keep track of the center’s results — the federal agency relies on the International Organization for Migration for oversight. IOM says it has not tracked the school’s impact on local migration trends.
From the article:
U.S. President Donald Trump's consideration of sending immigrants to so-called sanctuary cities represented by Democrats is more than possible retaliation against his political opponents. It also evokes an event nearly 40 years ago that to this day shapes the partisan debates in the United States and other countries about the impact of immigration.
That debate focuses on whether a large influx of low-skilled immigrants hurts native workers. That answer is complicated and depends upon how studies are framed, according to economists and research conducted around the world. Some economists say low-skilled immigrants from poor countries can hurt low-skilled native workers, while others say such an influx can bolster a local economy.
The Mariel boatlift in 1980 is highly instructive about the impact low-skilled immigrants have on native workers, being the focus of numerous studies. The boatlift was a mass migration of Cubans into the U.S. that began on April 20 of that year and lasted through October, and was allowed by then-President Fidel Castro after a severe downturn in Cuba's economy.
In all, an estimated 125,000 people traveled from Cuba to the U.S. and after reports emerged that some of the migrants had been released from Cuban jails, a heated public debate began in America about the merits of allowing large immigrant populations. A sizable portion of those Cubans, called "Marielitos," permanently settled in the Miami area, says economist Michael Clemens, a senior fellow at the Center for Global Development, a nonprofit think tank based in Washington.
"Everyone assumed at the time the flood (of immigrants) would have to (adversely) influence the labor market," Clemens says. But that didn't happen, Clemens says, who points to research published in 1990 by economist David Card of the University of California-Berkeley as the lasting standard that examines immigration's impact on a local economy.
Card's study found no changes in wage or employment trends between Miami and other similar-sized U.S. cities in his study. Social scientists have since looked at several factors that may explain Card's findings, and a 2017 study by Harvard economist George Borjas challenged the 1990 research by asserting that low-skilled immigrants do damage the employment prospects for native workers.
But the Borjas study is flawed, Clemens says. In a separate 2017 study that Clemens co-authored with Jennifer Hunt, Clemens says Borjas' study ignored female and Hispanic workers and people who had high school diplomas Additionally, Borjas looked only at male workers aged 25-55, and placed an overly representative weight on African-American workers compared to the overall Miami labor market.
However, Borjas forcefully contested Clemens and Hunt by presenting data in 2017 that showed that even removing African-American workers from his analysis did not alter his findings. "In short, using the increase in the relative size of Miami's black workforce after 1980 to dismiss my Mariel evidence performs the job of obfuscating the debate further, but does little to clarify," Borjas wrote.
The flaw in the argument that an influx of workers will adversely affect native workers is in looking at people as if they are bananas, Clemens says. When the supply of bananas increases, the value of each individual banana falls. That isn't the case with humans, Clemens says, whose research shows that as more people arrive in a local economy, demand for goods and services such as housing and food also increases.
What should policymakers keep in mind when crafting laws to handle immigration? Clemens says it's simple: Countries need to have clear, consistent lawful channels for migration.
"When people have legal status, they make larger financial contributions to society," Clemens says. "It's more beneficial to the country of origin. It's also beneficial to the home country, where people can send remittances. Plus, you're taking money away from smugglers."
From the article:
At a time of rising populism and questions over the value of foreign aid, a new analysis suggests Britain’s contributions are largely well spent — especially the share channelled directly by its international development agency.
The Center for Global Development think-tank concludes that nearly four-fifths of the £28bn donated via the British government over eight years was spent well or satisfactorily. It was reviewing 65 individual assessments by the Independent Commission on Aid Impact, a UK watchdog.
While most of the money goes via the Department for International Development, other agencies were less well rated. In particular, spending via the Foreign and Commonwealth Office — which some ministers are keen to have take back direct control of Dfid — performed worst, with some disbursements possibly not even meeting the legal definition of aid.
There is no room for complacency. A previous analysis by CGD highlighted that some other countries — and multilateral institutions — perform better than the UK when considering factors such as efficiency, transparency and fostering institutions. New Zealand and Denmark ranked particularly well, although high quality was offset by a relatively low quantity of aid. The US, which gives generously, scores poorly, notably because much remains “tied” or linked to its own interests.
But as the World Bank heads into new leadership by a man highly critical of multilateralism, and with public opinion febrile, constructive criticism should not trump the benefits aid can bring.
From the article:
BRUSSELS — European Union states have given nine economists six months to suggest changes to the bloc’s development financing structure, as the European Investment Bank, European Commission, and European Bank for Reconstruction and Development vie to assert their role in meeting the 2030 Agenda for Sustainable Development.
The mandate for the “High-Level Group of Wise Persons,” agreed last week by European governments, is to set out “the challenges to and opportunities for rationalising” European development finance, particularly the respective roles of EIB and EBRD.
The group will look at what best delivers “development impact,” “the respective strengths and weaknesses of the mandates and instruments of all actors involved,” and “the strategies put forward by the EIB, the EBRD and the Commission to further develop their mandates with a view to enhancing private sector development and sovereign lending, including, as appropriate, in least‑developed and fragile countries.”
In September last year, the commission declared that it wanted to play a leading role in steering investments from European development actors, including national players such as the Agence Française de Développement. That clashed with the vision of EIB President Werner Hoyer, who has said there are “many inefficiencies” in the European development landscape and is pursuing plans for an EIB subsidiary focused on projects outside the EU. Meanwhile, EBRD is now considering a move into sub-Saharan Africa, to be decided at its annual meeting next year.
“Collectively, the EU invests more in developing countries than the rest of the world combined,” said Mikaela Gavas from the Center for Global Development think tank. “But the impact of its investment is mired in a system that is fragmented and uncoordinated and thus unable to meet its full potential of taking a leading role in sustainable development.”
Gavas said the wise persons’ group could propose a division of labor between EIB and EBRD, but the “problem is that the objectives, modes of operating and the expertise of the two banks are very different. There cannot simply be an arbitrary division between lending operations in the public and private sectors, or Europe and Africa.”
From the article:
Far from the din of Washington, Ivanka Trump toured businesses run by women in Ethiopia on Sunday while promoting a White House global economic program for women.
President Donald Trump’s daughter and senior adviser visited a coffee shop and textile company in Addis Ababa. It was her first stop in Africa on a four-day trip to Ethiopia and Ivory Coast on behalf of a White House project intended to boost 50 million women in developing countries by 2025.
Aiming to offer assistance and learn about the struggles of women in business, she took part in a traditional coffee ceremony, visited with weavers and announced new financial support for businesses
“Investing in women is smart development policy and it’s smart business,” Trump said, sitting in Dumerso Coffee, a dimly lighted space with a woven ceiling, tile floor and colorful paintings. Alongside were women who work in the industry. “It’s also in our security interest, because women, when we’re empowered, foster peace and stability,” she said.
Experts praised the government-wide approach, which will incorporate new and existing programs, though some stressed that it was early in the process. The investment comes as the president is proposing cuts to foreign aid, and as the administration is expanding a ban on U.S. aid to groups that promote or provide abortions.
“The part of the proposal which is around looking at laws — that is a good thing to focus on,” said Charles Kenny, a senior fellow at the Center for Global Development, referencing the initiative’s support for changing laws, regulations and customs that create barriers preventing women from fully participating in the workforce.
But he said the abortion-related ban could have a negative economic impact. “I think one of the most powerful tools for women’s economic empowerment is the ability to choose when and how many children they have,” Kenny said.
Daniel Runde of the Center for Strategic and International Studies said Ivanka Trump was strategically building on the work of past administrations. He called her an effective “goodwill ambassador” for the issues and a smart emissary to send to Africa.
Hillary Clinton, as U.S. secretary of state, “provided high-level attention to these issues,” said Runde, who previously worked for USAID and is an informal adviser to the administration on development policy. “Ivanka Trump is playing a similar role to the role that Secretary Clinton played.”
From the article:
U.S. Rep. Maxine Waters, chair of the House Financial Services Committee, voiced concerns about a World Bank effort to direct more private investment to low-income, fragile, and conflict-affected countries — and she threatened to withhold support for the bank’s capital increase package unless the institution shows greater transparency.
In a hearing with U.S. Treasury Secretary Steven Mnuchin on Tuesday, Waters began her opening remarks with a statement about the International Development Association — the arm of the bank that delivers grants to 75 low-income countries — and its “private sector window.” Her remarks came just as the World Bank Spring Meetings were getting underway, and on the day that David Malpass, a now-former U.S. Treasury official, took over as the institution's president.
“I’m concerned that IDA, through its new private sector window ... today is transferring $2.5 billion to the World Bank’s private sector arm, the International Finance Corporation, and is subsidizing private firms selected without competition on the basis of unsolicited proposals,” Waters said.
“The PSW is likely to prioritize financial returns over positive development impacts, which will be difficult to monitor. The PSW also stands in conflict with the World Bank’s own principles that call for subsidies to be justified, transparent, competitively based, focused on impact, and guarded against rent-seeking opportunities,” she said.
Waters concluded with a specific request — and a specific consequence if the bank chooses not to heed it.
Waters is not the first to raise questions and concerns about IDA’s private sector window.
After a review late last year noted that the PSW had only allocated $185 million of its resources, Charles Kenny, senior fellow at the Center for Global Development, observed that, “If anyone was still dreaming that there were a bunch of significant shovel-ready public-private infrastructure deals in low-income countries just waiting for slightly better financing terms, the PSW’s experience should get them woke.”
Kenny and others have also raised some of the transparency and open competition questions that Waters focused on in her remarks to Mnuchin. Resources from the IDA window subsidize private sector deals, but information about who actually receives those subsidies, and on what basis, and with what development impact are difficult to come by, Kenny wrote last year.
“The taxpayers who provide this finance, as well as the client countries of IDA which would otherwise have received it, have the right to know how it is being used,” he argued.
The World Bank did not immediately respond to a request for comment on this story.
From the article:
Despite critical commentary about his professional credentials and commitment to the multilateral system, David Malpass has been elected unopposed as the next president of the World Bank. Complaints about the outdated gentlemen’s agreement that led to this appointment will soon be overshadowed by Malpass’ initial signals on where he wants to lead this still globally important development institution.
During his campaign, Malpass said some of the right things but was silent on other priorities for the World Bank. To win the support of all his 189 members, Malpass must now unambiguously endorse the bank’s role in helping the world meet five challenges.
First, he must prioritize support for Africa’s development and integration into the world economy. The central development challenge for the next two decades is to help Africa deal with its demographic, environmental, and developmental challenges. The success or failure of this endeavor will determine the future of the 2.5 billion people who will inhabit the continent by 2050 — with major spillovers for every other region.
The World Bank is already the largest multilateral financier of Africa’s development, but it can play an even stronger role to facilitate a more coherent approach by Africa’s other large development partners — including the European Union and China.
Second, he must help middle-income countries make the right development choices. Emerging markets and middle-income countries will increasingly drive global growth. Their new infrastructure’s sustainability will define how livable our planet will be for the next century. Their economic success will provide expanded markets for global exports and jobs around the globe. And they are home to women, minorities, and other vulnerable groups who struggle with basic numeracy and literacy, lack human security, and live in fear of slipping back into absolute poverty. It would be a missed opportunity of historic proportions for the World Bank to watch these developments from the sidelines.
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