Three trade challenges for LDCs to converge and eradicate poverty

By Anabel González, Nonresident Senior fellow at the Peterson Institute for International Economics; Former Costa Rica Minister of Trade, World Bank Senior Director for Trade & Competitiveness, and World Trade Organization Director for Agriculture


This blog is part of a special series marking the 3 July 2019 launch in Geneva of the joint OECD/WTO publication Aid for Trade at a Glance 


AFT coverBangladesh is preparing to graduate from the category of least developed countries (LDCs). Robust multi-year economic growth of more than 6-7% has helped this South Asian nation make remarkable progress in reducing extreme poverty from 44.2% in 1991 to 13.9% in 2017. In parallel, life expectancy, literacy rates and per capita food production have increased significantly. Rapid growth enabled Bangladesh to reach the lower middle-income country status in 2015; it now aspires to become an upper middle-income country by its 50th anniversary in 2021. Trade has been at the heart of this success story (see Figure 1). Exports of textiles and garments are driving integration into the global economy, with new products becoming part of the country’s export basket. Will Bangladesh be able to continue to rely on trade for increased growth? Will conditions remain for other LDCs to follow?

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Look East instead of West for the future global middle class

By Kristofer Hamel, Chief Operating Officer, and Baldwin Tong, Research Analyst, World Data Lab

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South City Mall in Kolkata, India

Poverty is declining worldwide. Yet, reducing poverty is not equivalent to a rising middle class. A large share of the world’s population earns between USD 2 and USD 11 a day (in 2011 purchasing power parity). Only once people start earning more than USD 11 do they tend to have enough extra spending power to make purchases that go beyond basic needs and therefore enter the global middle class. First-time middle-class purchases include personal transportation (motorcycles), housing (first-time renting or low-end purchases), finance (first savings account or loan) and education (tertiary).

Over the next decade, middle-class spending power will shift from west to east due to the huge growth in the middle-class segments (USD 11-USD 110 per day) of India and China. The middle classes of these two countries will represent over 83% of their respective country’s spending power, meaning that businesses should consider their tastes and preferences. Combined, the world’s two most populous countries are expected to represent over 43.3% of the global middle class by 2030.
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Innovation Driving the City

By Ms. Theresa Mathawaphan and Ms. Yaowarat Kekina, National Innovation Agency (Public Organisation), Thailand


Check out the 28 March 2019 EMnet meeting on
“Global Challenges for Business in Emerging Markets”
with a special focus on Smart Cities in Asia


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Bangkok CyberTech District Development

Innovation and technology currently play an increasing role in developing the urban city by tackling multiple challenges. Many cities in the ASEAN region have set-up urban development strategies by creating an innovation ecosystem to elevate the area’s economy and investment, reaching a global level. This makes the “innovation city” concept more recognised and used as a new way of driving the development of cities.

Proof of this is the Innovation Cities Index 2018. This report evaluates the city innovation ecosystem capability of 500 cities worldwide, reflecting the vision that a city can grow and be sustainably driven when citizens and corporations are capable of generating innovation. This index measures three main aspects, namely cultural assets, human infrastructure and networked markets, and has a total of 162 indexes. Continue reading

Raising capital for intermediary cities

By Jeremy Gorelick, Senior Infrastructure Finance Advisor, USAID’s* WASH-FIN (Water, Sanitation and Hygiene – Finance) Programme, and Joel Moktar, Project Leader, Open Capital Advisors


This blog is part of an ongoing series exploring the intersection between intermediary cities in developing countries and sustainable development


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Intermediary cities are the fastest growing cities in the developing world. Often referred to as secondary or second-tier cities, intermediary cities typically have a population of between 50,000 and one million people. They play a fundamental role in connecting both rural and urban areas to basic facilities and services.[1] Driven by population growth and rural-urban migration, intermediary cities worldwide are projected to grow at almost twice the rate of megacities (those with more than 10 million inhabitants) between now and 2030.[2] Of these, the fastest growing cities are in Africa and Asia.[3]

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Normatively weak institutions can be functionally strong: A surprising lesson from China

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By Yuen Yuen Ang, Associate Professor of Political Science at the University of Michigan and the author of “How China Escaped the Poverty Trap


This blog is part of an ongoing series evaluating various facets
of
Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion


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Guangzhou, China. Photo : shutterstock.com

For the past decades, policymakers and development practitioners have clung to the idea that “good governance” is the solution to poverty. If only poor countries could eradicate corruption, enforce laws, hold leaders accountable and achieve a checklist of best practices, their economic and social problems would be resolved.

This thinking, however, runs into a chicken-and-egg problem: in the first place, it’s hard for poor countries to quickly and meaningfully establish good governance. Indeed, if it were easy to achieve good governance, poor countries would have done it long ago.

But if insisting on one-size-fits all good governance is not the solution, then what is the alternative? My research on China’s development reveals a surprising lesson: normatively weak institutions can be functionally strong. Seen through first-world lenses, the norms and structures found in low-income, pre-industrialised countries are often regarded as “weak” or “backward,” that is, as impediments to development. In fact, these institutions can be creatively adapted or repurposed to kick-start development.
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The institutional key to step-up disaster risk management in Thailand

By Andrea Colombo, Jr. Policy Analyst, and Chloé Stutzmann, Consultant, OECD Development Centre

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Thailand, Nonthaburi flood, 2011.
Photo: Suwan Wanawattanawong / Shutterstock.com

The increasing exposure of people to disaster worldwide was a key issue during last week’s World Water Forum in Brasilia. By 2050, almost 2 billion people in the world will be at risk of floods. At the same time, between 5 and 6 billion people might live in areas that will be water-scarce.

Thailand is no exception to this global trend. The 2011 floods affected 16 million people and claimed over 1 000 lives. The economic damage accounted for over USD 9 billion in the city of Bangkok alone (OECD, 2015). In 2016, drought was declared in 14 provinces, and water rationing was imposed as major dams dropped to their lowest levels since 1994. Such flooding and drought moreover negatively affect agricultural production, especially in Thailand’s rural provinces in the North, the Northeast and the South regions, where agriculture’s share in GDP exceeded 20% in 2015, compared to the 9% national average.
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Are women holding up Chinese and African skies?

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By Hannah Wanjie Ryder, CEO, Development Reimagined, and China Representative, China Africa Advisory


Learn more about this timely topic on the upcoming
OECD Global Forum on Development
Register today to attend


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In 1968, Chairman Mao might have proclaimed that women hold up half the sky, but it remains a sad fact that the majority of top African and Chinese politicians are still men. This is also the case for CEOs of state-owned and other large Chinese and African businesses. No woman has been president of any African country since Ellen Johnson Sirleaf stepped down last year, and in a recent study by the World Economic Forum (WEF), China was ranked 77th out of 144 countries in terms of female political representation, and 86th for economic participation and opportunity. Only eight sub-Saharan African countries featured overall in the top 50 of the same index. When I attended the Forum on China Africa Cooperation (FOCAC) in 2015, which has been running since 2000 and tends to be a very government-led affair, only two women were prominent – the head of the African Union Commission at the time Nkosazana Dlamini-Zuma, and Kenya’s then Foreign Minister Amina Mohamed.

But I am now noticing an interesting new phenomenon: Women from all over the world seem to be aiming to shape China-Africa relations.

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