By Dr. Perks Master Ligoya, Ambassador and Permanent Representative of Malawi to the United Nations and Mr. Paul Akiwumi, Director, Division for Africa, Least Developed Countries and Special Programmes, UNCTAD
The COVID-19 crisis shook the very foundations of the international system, triggering an abrupt and severe global recession, which threatens to heighten economic contagion.While no country is spared, the coronavirus has hit the world’s poorest nations disproportionately.
Chile is considered a success case, and Chileans today are much better off than a decade ago. However, inequality is persistent and the knowledge base of the country is still limited. What the country also faces is a productivity challenge. Chile’s total factor productivity growth has decreased from 2.3% per year in the 1990s, to a yearly rate of 0.3% from 2000 to 2009, and then to -0.2% after 2010. These trends lasted through several government terms. So, what needs to be done to sustain the country on its path towards development? Continue reading “What can governments do to harness the potential of new technologies?”
One contention is that balanced development and policy action that lifts the financial, technological, institutional and human capital constraints to productivity will also enable higher productivity in informal firms and thereby formalisation. A growth-inducing productivity agenda is a necessity, but growth alone is not enough to reduce informality. Continue reading “Policy pathways for addressing informality”
The informal economy remains a problem when we discuss the prospects of economic development. It is perceived as a hindrance to economic progress because the informal sector does not pay taxes, does not include its employees in social insurance schemes and does little to offer labour law protections. Increasingly, various researchers (La Porta1, Shleifer2, 2014) and international organisations, like the OECD, converge in seeing the informal economy as an obstacle to economic development due to its imminent low productivity. Indeed, informal businesses are concentrated in low productivity sectors. They are, on average, smaller and hence less productive. They generate lower value added. They pay lower wages to their employees and do not train them. And the owners of informal businesses manage their firms less efficiently than their better educated formal sector counterparts.
The informal sector is hence both a symptom of economic backwardness and a drag on economic development. But, can this apparent vicious circle be broken, or is it an economic policy donquichottean task?
By Carl Dahlman, Head of the Thematic Division and Head of Global Development Research at the OECD Development Centre and Martin Wermelinger, Economist at the OECD Development Centre Strong growth over much of the past decade has substantially boosted developing countries’ share of the global economy and accelerated per capita income convergence with richer countries. We call this process “shifting wealth.” However, productivity is still lagging … Continue reading How to continue the shifting wealth momentum
By Mario Pezzini, former Director of the OECD Development Centre, and Angel Melguizo, former Head of the Latin America and Caribbean Unit at the OECD Development Centre.
Latin America and the Caribbean enjoyed a decade of strong growth between 2004 and 2013. Growth averaged 3.8% and in some years over 5%. They were helped along by growth in China and other emerging economies that raised demand and prices for exported commodities such as food, metals and fuels.