Inclusive Growth and Development

Inclusive Growth and Development

• 1.
  Inclusive Growth and Development
• 2.
  Growth, Development +Macro Issues in ____________ Key Recent Macro Data Latest annual GDP Growth (%) GDP or GNI per capita (US $, PPP) Inflation rate (%) Unemployment rate (% of labour force) Fiscal balance (% of GDP) Govt debt (% of GDP) Yield on 10-Year Govt Bonds (Per Cent) Investment spending (% of GDP) Gross national savings (% of GDP) Key Background Information Currency unit Currency system Policy interest rate (%) Member of a Regional Trade Agreement? Current account balance (% of GDP) Main corporate tax rate (Per Cent) Competitiveness rank Corruption Perception Ranking Ease of Doing Business Ranking (World Bank) External Debt (% of GDP) Aspects of Development Latest HDI ranking Malnutrition data % of population living in extreme poverty Life Expectancy at birth (years) Gini coefficient and/or Palma Ratio Inward FDI (% of GDP) Remittances (% of GDP) Aid (% of GDP)
• 3.
  What is inclusivedevelopment? • Inclusive development considers whether development progress is sufficiently widespread for the majority of a population to benefit • The World Bank has a particular focus on the economic capabilities, freedoms and resilience of the bottom 40 per cent of the World’s population and the relatively poor in individual countries. • Per capita incomes can rise but simultaneously there can also be an increase in the scale of relative poverty • The inter-generational nature of development progress also needs to be considered – i.e. creating an environment fit for future generations. • One of the defining debates in development economics is the extent to which state intervention enables inclusive growth or whether a dynamic private sector offers greater potential for lifting development progress.
• 4.
  Individuals take partin society through three interrelated domains: markets (e.g. labor, land, housing, credit), services (e.g. electricity, health, education, water) and spaces (e.g. political, cultural, physical, social). To improve the terms on which people take part in society means to enhance their ability, opportunity and dignity. World Bank report on Inclusive Growth in Africa, January 2018
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  Poverty headcount ratio at$1.90 a day (% of population) 35% 1990 10% 2013 Number of poor at $1.90 a day (2011 PPP) 1.86 billion 1990 769 million 2013
• 7.
  Inclusive development –some key indicators • Median household incomes rather than mean incomes • Income & consumption inequality (using the Gini coefficient / Palma ratio) • Percentage of the population at risk of extreme poverty • Gender Parity in Labour Force Participation • Productive and secure employment v vulnerable work • Financial exclusion - access to financial services, vulnerability to high interest lending • Access to affordable and reliable electricity • Access to basic and digital infrastructure (addressing the digital divide) • Scale of social protection (broad notion of welfare assistance / safety nets) • Risk of exclusion based on gender, race, caste, ethnicity, religion, age, occupational status, location, and disability status • Exposure to and ability to adapt to the effects of climate change
• 8.
  International Poverty Lines InOctober 2015, the World Bank updated the international poverty line to $1.90 a day But from 2018 onwards it has added two new international poverty lines • A lower middle-income International Poverty Line is set at $3.20/day • An upper middle-income International Poverty Line, set at $5.50/day
• 9.
  Income inequality (2015data) HDI rank Country Quintile ratio Palma ratio Gini coefficient 119 South Africa 27.9 7.1 63.4 125 Namibia 20.3 5.8 61.0 163 Haiti 32.5 6.5 60.8 108 Botswana 22.9 5.8 60.5 188 Central African Republic 18.3 4.5 56.2 139 Zambia 16.0 4.3 55.6 160 Lesotho 20.5 4.3 54.2 95 Colombia 17.3 3.9 53.5 110 Paraguay 14.7 3.5 51.7 79 Brazil 15.5 3.5 51.5
• 10.
  Distribution of income90/10 decile ratio Income share held by the lowest 10% Income share held by the highest 10% Venezuela 0.5 34.1 South Africa 0.9 51.3 Brazil 1.1 40.5 Chile 1.7 38.0 United States 1.7 30.2 Malaysia 1.8 34.6 Spain 1.8 26.0 Mexico 1.9 39.7 China 2.0 31.4 Ghana 2.0 31.6 Greece 2.0 26.1
• 11.
  Oman: Male unemployment 14% Femaleunemployment: 37% Saudi Arabia: Male unemployment 3% Female unemployment: 21% Globally, 104 economies have laws keep women out of certain jobs
• 12.
  Countries with lowestfemale labour market participation rate (per cent) in 2015 HDI rankCountry Female labour force participation rate (%) 149 Syrian Arab Republic 12.2 86 Jordan 14.2 121 Iraq 15.1 69 Iran (Islamic Republic of) 16.2 83 Algeria 16.8 114 Palestine, State of 17.8 169 Afghanistan 19.1 38 Saudi Arabia 20.1 111 Egypt 22.8 104 Samoa 23.1
• 15.
  School life expectancyis a measure of how many years of education a child of school-entering age would receive during his or her lifetime if the school enrollment rates stay the same as of today. Average in many lower- income countries is pulled down by the many children who never go to school.
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  HDI rank Country Populationwith at least some secondary education (per cent) 186 Chad 1.7 181 Mozambique 2.8 187 Niger 3.6 132 Bhutan 5.8 185 Burkina Faso 6.0 184 Burundi 7.1 175 Mali 7.3 169 Afghanistan 8.8 154 Papua New Guinea 8.8 151 Tanzania (United Republic of) 10.1 162 Senegal 10.2 159 Rwanda 10.5 174 Ethiopia 10.8 Female population with some secondary education
• 17.
  62 percent ofthe world’s adult population has a bank account; up from 51 percent in 2011. Three years ago, 2.5 billion adults were unbanked. Today, 2 billion adults remain without an account. Mobile money accounts can drive financial inclusion. While just 1 percent of adults globally use a mobile money account and nothing else, in Sub-Saharan Africa, 12 percent of adults (64 million adults) have mobile money accounts. 45 per cent use mobile money accounts exclusively.
• 18.
  Strategies to driveinclusive development • Developmental state: • Provision of / access to / improved quality of core public goods and merit goods • Housing, early years education, interventions to tackle malnutrition, road infrastructure, ID systems • Labour market protections including employment rights, minimum wages, union recognition • Raising sufficient tax revenues to provide welfare + building progressivity into tax system • Laws to protect property rights – especially in urban areas – getting mega cities right is key! • Potential from private sector innovation: • Impact of foreign direct investment – how inclusive? • Expansion of AI/ machine learning / drones to improve productivity • Micro-finance (credit, insurance, savings), expansion of social enterprises (Yunus et al) • Private sector as a catalyst for inclusive innovation e.g. Fintech, renewable energies • Role of overseas aid and social capital • Social capital - people sometimes use social ties to create insurance networks. • Project aid (e.g. DFID and M-Pesa in Kenya and other countries) • Randomized controlled trials with basic income (Kenya is a good current example)
• 19.
  Evaluating pro-poor (inclusive)development policies • Fundamental debate over the efficiency and efficacy of the state over the market in delivering key services • Growing debate over direction of trade & investment policy i.e. commitment to globalisation or move towards a more closed system including protectionism, capital controls, managed currencies • Ever-present risk of government and regulatory failures • But risks too from non-intervention – deeper partial and complete market failures that can undermine competitiveness, growth and development • How much inequality is a) inevitable and b) tolerable in society • IMF (2018) “Much has been written about the relationship between inequality and economic development, but theory remains inconclusive."