Tag Archives: development

Improve Devlopment Lending to Build Resilience

Andrew Revkin writes in the New York Times about a recent world bank report that finds that the world bank is not lending in ways that invest in natural capital or resilience (The report is online at worldbank.org/oed). However, there is increasing awareness that that is a big problem.  Revkin writes that the report states that:

it was vital for the bank and its partners to intensify their focus on measurable environmental protection, given rising vulnerability to environmental risks and the increasing flow of financing for projects related to climate change.

“They need to begin to see the inextricable link between sustaining environment and reducing poverty,” Vinod Thomas, the director-general of the evaluation group, said in an interview. “It is clear now from the Amazon to India that if environmental sustainability is not raised as a priority then all bets are off.”

… Cheryl Gray, the director of the review group for the World Bank, said the lack of consistent internal tracking of the environmental facets of projects was an indicator of how much work needs to be done.

The World Bank Group approved its first set of common environmental standards in 2001, for the first time making environmental stewardship part of its core mission of reducing poverty.

But the new evaluation found a persistent lack of environmental focus in each step along the lending chain — from the priorities that shape development projects to the environmental standards and monitoring required in the field.

Revkin also asked the report’s authors about World Bank’s lack of investment to reduce or mitigate disaster damage. On Dot Earth Revkin quotes

Vinod Thomas, the director-general of the World Bank Group’s independent evaluation group, said a recent report on the Bank’s work on disasters found the same problem. “The bank has done well on the reconstruction side,” he told me. “But even where disasters recur, the preventive side gets neglected, for political reasons. Reconstruction gets photos.”

Things appear to be improving, though, Mr. Thomas said, partly because analysts for the bank and its lending partners are running the numbers on the economic benefits of resilience. “The rate of return on prevention can be 4 to 12 times the investment,” he said.

Often, he noted, there is no inconsistency between environmental conservation and resilience to disasters. He cited the example of maintaining coastal mangrove forests as a buffer against flooding. Communities bounded by mangroves persist while those exposed to the waves vanish. There’s no need to crunch numbers to figure that out.

Absolute poverty in China: Higher, but going down faster than previously estimated

From the Economist:

In December 2007 the World Bank unveiled the results of the biggest exercise in window shopping in history. Scouts in 146 countries scoured stalls, supermarkets and mail-order catalogues, recording the price of more than 1,000 items, from 500-gram packets of durum spaghetti to low-heeled ladies’ shoes.

This vast enterprise enabled the bank to compare the purchasing power of many countries in 2005. It uncovered some statistical surprises. Prices in China, for example, were much higher than earlier estimates had indicated, which meant the Chinese income in 2005 of 18.4 trillion yuan ($2.2 trillion at then-market exchange rates) could buy less than previously thought. At a stroke, the Chinese economy shrank, in real terms, by 40%.

Since then, many scholars have wondered what this economic demotion means for the bank’s global poverty counts. It famously draws the poverty line at “a dollar a day”, or more precisely $1.08 at 1993 purchasing-power parity (PPP). In other words, a person is poor if they consume less than an American spending $1.08 per day in 1993. By this yardstick 969m people suffered from absolute poverty in 2004, a drop of over 270m since 1990. The world owed this progress largely to China, where poverty fell by almost 250m from 1990 to 2004.

…[using a new poverty line of $1.25/day (2005 US$) Shaohua Chen and Martin Ravallion ] find that 204m Chinese people were poor in 2005, about 130m more than previously thought.

That is the bad news. The brighter news is that China’s progress against poverty is no less impressive than previously advertised. By Mr Ravallion’s and Ms Chen’s new standard, the number of poor in China fell by almost 407m from 1990 to 2004, compared with the previous estimate of almost 250m.

Mobile phones and global communication

The spread of mobile phones across the developing world has been extremely rapid in the past few years (e.g. 4X increase between 2001-2005 in Africa).

Teledensity

The BBC reports on the annual Information Economy report from the UN conference on trade and development:

It was now well-established, said the report, that greater use of technology in businesses, schools and at home could raise standards of living and help people prosper.

In many developing nations the mobile phone had become the standard bearer for these changes, it said.

“In Africa, where the increase in terms of the number of mobile phone subscribers and penetration has been greatest, this technology can improve the economic life of the population as a whole,” it said.

In rural communities in Uganda, and the small vendors in South Africa, Senegal and Kenya mobile phones were helping traders get better prices, ensure less went to waste and sell goods faster.

The take up of mobiles was allowing developing nations to “leapfrog” some generations of technology such as fixed line telephones and reap more immediate rewards, said the report.

Greater use of computers in small businesses in countries such as Thailand made staff boost productive, it said. A study of Thai manufacturing firms showed that a 10% increase in computer literate staff produced a 3.5% productivity gain.

The developing world was also catching up in terms of net availability. In 2002, said UNCTAD, net availability was ten times higher in developing nations. In 2006, net availability was only six times higher.