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CGD in the News

October 19, 2018

Maldives President-elect Ibu Solih may cancel Chinese projects (International Business Times)

By Ramandeep Bajwa 

From the article: 

According to the Center for Global Development, a Washington DC-based think-tank tracking BRI, the Maldives is one of the most at-risk countries where BRI projects are being implemented because of debt. 

What would come as a relief for India, Maldives President-elect Ibu Solih may put on hold Chinese-funded Belt and Road Initiative (BRI) projects in the country, reports Economic Times. India has been expressing concern about Beijing's increasing influence in the Indian Ocean region for some time now.

There are speculations that Solih may even cancel some BRI projects, which were the brainchild of outgoing pro-China president Abdullah Yameen, who, according to his critics, allegedly received $1.5 million as election funds from China.

However, the main challenge confronting Solih when he formally takes over as president will be the repayment of loans extended by China for developing different projects in the country.

Maldives is staring at liabilities of $1.4 billion, which is nearly a third of the GDP, mainly due to Yameen's policies.

Read the full article here.

 

October 19, 2018

Are We Serious About Reducing Poverty? Then We Need To Welcome Immigrants (Forbes)

By Art Carden

From the article:

According to a March 2018 Center for Global Development working paper by the economist Lant Pritchett, the least you can do for the world's poor--leaving them alone and letting them move to rich countries to work--will help them a lot more than the best you can do for the world's poor in the form of programs and interventions and development aid. In spite of all of our great intentions and noble endeavors, the world's poor would be far better served if we simply left them alone to move to and work in rich countries.

At EconLog, Bryan Caplan argues that Pritchett's paper "should be required reading for every Effective Altruist." I agree, and I would carry it a step further: anyone who thinks himself or herself serious about addressing and alleviating global poverty should read Pritchett's paper and wrestle with its arguments. After years of searching high and low for ways wealthy donors, governments, and NGOs from rich countries can make poor people wealthier and healthier, we've found...not a whole lot. Some things (like giving cash) work at least a little bit, but not much has been particularly transformative.

But then there is immigration, which the economist Michael Clemens of the Center for Global Development has called "The Biggest Idea in Development That No One Really Tried." In a 2011 article in the Journal of Economic Perspectives, Clemens argues that the gains from easing up on immigration restrictions are trillion-dollar bills on the sidewalk waiting to be picked up.

Read the full article here.

 

October 19, 2018

President-elect Ibu Solih may look at halting BRI projects in Maldives (Economic Times)

By Dipanjan Roy Chaudhury 

From the article: 

NEW DELHI: Maldives President-elect Ibu Solih is exploring options of putting on hold Chinesefunded Belt & Road Initiative (BRI) projects that have caused India major concerns about Beijing’s increasing influence in the Indian Ocean neighbourhood. 

... 

Former Maldives President Mohamed Nasheed — Solih’s biggest backer — has declared reviewing all the agreements that his country had signed with China under Yameen’s five-year rule between 2013 and 2018, hours after his Maldivian Democratic Party won the Presidential polls on Sep 24. Maldives, a small economy heavily reliant on tourism, is one of the most at-risk countries of any involved with the BRI because of debt, according to the Center for Global Development, a Washington DC-based think-tank tracking the initiative. 

Read the full article here.

 

October 18, 2018

Analysis | Asian Victors May Find Anti-China Campaign Vows Hard to Keep (Macau Daily Times)

By Macau Daily Times 

From the article: 

Three Muslim-majority Asian countries have elected leaders who campaigned on a promise to temper China’s growing influence, but analysts say reducing the foothold of the world’s second-largest economy won’t be easy because of the billions of dollars in development projects that are already under way.

The surprising elections in recent months of nonagenarian Mahathir Mohamad in Malaysia, cricketer Imran Khan in Pakistan and longtime opposition lawmaker Ibrahim Mohamed Solih in the Maldives buck a regional trend toward authoritarianism, and could present an obstacle for Chinese President Xi Jinping’s hallmark “Belt and Road Initiative” to build ports, highways and other trade-related infrastructure.

Countries including India, the U.S. and Japan are concerned that China’s massive initiative is part of an effort to build a China-centric world order in which all roads lead to Beijing and their own influence is eroded. 

... 

The Center for Global Development, a Washington think tank, estimates China’s loans to Maldives total at least USD1.3 billion, a quarter of the island nation’s gross domestic product. The country is considered by the World Bank and the IMF to be at high risk of debt distress because of its vulnerability to outside shocks. 

Read the full article here.

 

October 18, 2018

More affordable electricity would transform Africa. Here's how to get there (CNN)

By Donald Kaberuka & Todd Moss 

From the article: 

It's no surprise that economies around the world need electricity for economic growth and job creation — not just for keeping the lights on. But Liberia, a West African nation of 4 million people, has installed electricity of just 126 megawatts. That's less for the whole country than the average capacity of just one of the more than 8,000 power plants in the United States. If this isn't bad enough, Liberians pay more than three times the average rate for electricity than Americans. This lack of affordable energy dooms the country to poverty and unemployment.

Liberia is not alone. Ghana's aluminum industry, which had been the linchpin in the country's industrial strategy since the 1960s, has been running at a fraction of its capacity for more than a decade because of electricity shortages. The lost output from the plant (which turns alumina into aluminum) has killed tens of thousands of manufacturing jobs. Every sizable business in Nigeria, Africa's largest market, is forced to rely on dirty and expensive diesel generators. In fact, systemic power problems are chronic across Africa: Nearly every economy on the continent is constrained by energy gaps and high costs.

This shocking situation demands that we ask: What will it take for Africans to enjoy energy in the same way as others around the world? And, more importantly, when we help the continent build its future energy systems, are we planning for poverty — or for economic transformation?

Read the full article here

 

October 17, 2018

Why did India really reject the human capital index? (Devex)

By Amruta Byatnal

From the article:

MUMBAI, India — When World Bank President Jim Yong Kim announced the human capital index at the bank’s spring meetings this April, he anticipated the rankings to be “wildly controversial.” Delivering on his prophecy, India — which ranked 115th out of 157 when the index was launched last week — rejected the results.

The HCI aims to determine national levels of human capital by using survival and stunting rates as a measure of health, and quality-adjusted learning as a measure of education, to indicate the potential productivity of children born in a given country. India scored 0.44, lower than the average of 0.56, suggesting a child born in the country today will only be 44 percent as productive as she could be if she had complete health and education. The country brief points out that India’s score “is lower than the average for its region and income group.”

In challenging the methodology of the HCI, India also challenged its premise. It claimed such slow-moving indicators would do little to motivate efforts toward an improved ranking, and that the indicators used do “not reflect the key initiatives that are being taken for developing human capital in the country.”

It claimed the data used for measuring education quality is not accurate, challenging the veracity of the Programme for International Student Assessment and Trends in International Mathematics and Science Study scores used in the HCI. That was in part because the PISA scores date back to the last time the assessment was done in India in 2009. 

Still, a forthcoming paper from the Center for Global Development, a Washington, D.C.-based think tank, used a synthetic test made up of different international assessments on 4,000 children in the Indian state of Bihar. The results weren’t very different from the 2009 PISA test.

Anit Mukherjee, a policy fellow focusing on education at CGD who co-authored the paper, sees this as an opportunity for the government to shift its focus from inputs to learning outcomes. “Can learning be the center of India's education policy going forward? There are good examples in different states within the country, and there’s a lot to learn from them,” he said.

Read the full article here.

 

October 17, 2018

Imran Khan inherits an economy on the edge (Nikkei Asian Review)

By Henny Sender 

From the article: 

ISLAMABAD -- The uncertainty of an election in Pakistan tends to give the markets a prolonged case of the jitters. As the country prepared to vote in 2013, the rupee fell sharply, leading Pakistan to turn to the People's Bank of China for help. After China transferred almost $600 million into the depleted coffers of the Pakistani central bank, the sell-off abated.

Fast forward five years to the eve of the national elections this summer, which ushered former cricket star  Imran Khan into office. China stepped in once again, extending its currency swap agreement with Pakistan and raising its line of credit, and another pre-election sell-off of the rupee was halted.

"The swap was our secret weapon" in 2013, recalls the then-head of the State Bank of Pakistan, Yaseen Anwar. "I brought in so much money to shore up the defense of the rupee."

The pre-election interventions were reminders of China's status as Pakistan's top trading partner and "all-weather friend." But once the voting was finished, the dire realities of the Pakistani economy remained. 

...

Pakistan is "by far the largest country at high risk" of all 68 countries that are recipients of Chinese Belt and Road capital to have issues with sustainability of that debt, according to the Washington-based Center for Global Development. That could result in potential balance of payments issues and pressure on the rupee. 

Read the full article here.

October 17, 2018

Global aid, local focus: the mission to end poverty by 2030 (France24)

By Khatya Chhor 

From the article: 

As the UN marks the International Day for the Eradication of Poverty on Wednesday, aid experts say donors must work closely with local governments, which in turn must do more to foster the economic growth that could lift millions out of poverty. 

In the last 25 years more than 1 billion people have emerged from extreme poverty and the global poverty rate is now lower than at any other time in history, according to the World Bank.

The UN’s Millennium Development Goals of 2000 agreed to halve the number of people living in extreme poverty and hunger by 2015, a goal that was met ahead of schedule. The poverty rate fell from nearly 36 percent in 1990 to 10 percent in 2015 (the latest World Bank figures available) – or an average of 1 percent a year. The bank forecasts that extreme poverty rates will have declined further, to 8.6 percent, by the end of 2018. 

... 

Helping states succeed

Experts in development have long considered the merits of “top-down” versus “bottom-up” approaches. And with the number of people living in fragile or failing states rising sharply, the question of whether aid is more effective when provided directly to governments or to NGOs providing relief and community services on the ground seems as pertinent as ever.

“When it comes to who to give the aid to, the answer is 'that depends',” said Charles Kenny, a senior fellow at the Washington-based Center for Global Development think tank. “In most cases, working with governments to help them do more or do better at delivering the infrastructure and services they are already providing to citizens is the most sustainable and effective way to help.”

“But sometimes, especially when the aim is to help keep governments themselves to account, it is better to work through NGOs.” 

Read the full article here.

 

October 17, 2018

Bridge schools enable every child to fulfill potential regardless of background new DFID report reveals (The News - Liberia)

By Prince Parker

From the article:

The UK Department for International Development (DFID) has published a report in Nigeria which shows full equity of learning in Bridge International Academies classrooms, regardless of a child’s socioeconomic background.

It is a strong endorsement of DFID’s commitment to innovative private sector’s role in improving service and opportunity for these families.

Even though the report was based on Bridge schools in Lagos, Nigeria, the findings clearly have relevance in a Liberian context where the social enterprise supports Government schools as part of the Liberian Education Advancement programme.

The DFID findings build on the preponderance of evidence demonstrating that the methods used and support provided by Bridge to teachers and students lead to higher learning than the alternative.

This has been seen in Liberia when an independent report released last year by the Centre for Global Development and Innovations Poverty Action revealed that Bridge students learnt twice as fast as their peers in neighbouring schools. Students at Bridge run public schools learned significantly more than students at traditional public schools, nearly twice as much in reading and more than twice as much in maths. This is the equivalent of an additional year of schooling.

Read the full article here.

 

October 16, 2018

Can the World Trade Organization Be Saved? (World Politics Review)

By Kimberly Ann Elliott

From the article:

The World Trade Organization’s woes began long before Donald Trump was inaugurated as America’s president, and many countries are to blame. The latest round of global trade negotiations has been stalled for a decade and there is still no clear way out of the impasse. India insists on resolving long-standing problems, such as trade-distorting agricultural subsidies, before the WTO can begin to negotiate any new issues. China has no interest in taking a leading role on many pressing issues, such as regulations on state-owned enterprises, which might impinge on its industrial policies. Both Presidents Barack Obama and Donald Trump undermined the operation of the WTO’s dispute-settlement system by disrupting the appointment of members to the body overseeing appeals. And the European Union has been among the most prolific of those negotiating regional trade agreements outside the WTO.

The threat to the WTO’s continued viability ratcheted up notably, however, after Trump took office in January 2017. He has taken unilateral trade actions in violation of WTO rules and has reportedly told aides on multiple occasions that he wanted to withdraw entirely from the organization. The increased threat has, in turn, triggered renewed efforts to reform and strengthen the WTO. Officials from Australia, Brazil, Canada, Chile, the EU, Japan, Kenya, South Korea, Mexico, New Zealand, Norway, Singapore and Switzerland met in Geneva in September and discussed WTO reform proposals from the EU and Canada. Trade ministers representing those countries plan to continue the discussions in Ottawa later this week.

Despite Trump’s rhetoric, U.S. Trade Representative Robert Lighthizer met with his counterparts from the EU and Japan in late September to identify areas for cooperation. Indeed, it was on the same day that Trump told other leaders gathered at the United Nations that his administration had rejected “the ideology of globalism” in favor of “the doctrine of patriotism.” In a joint statement, however, Lighthizer, EU Trade Minister Cecilia Malmstrom and Japanese Minister of Economy, Trade and Industry Hiroshige Seko issued a joint statement pledging cooperation in areas of mutual interest, including China’s allegedly unfair trade practices—though this was not named—along with digital trade, e-commerce and WTO reform.

Read the full article here.

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