Development aid falls during global recession

The Organisation for Economic Co-operation and Development released a news report outlining several trends and statistics in developmental aid flows from OECD countries to developing nations. Aid flows have been steadily increasing since 1997 until it dipped by 2.7% in 2011 compared to the previous year in real terms. OECD Development Assistance Committee (DAC) Chairman Brian Atwood stated that the decrease in aid, which resulted from the economic crisis, reflected the “growing awareness that global challenges… cannot be resolved without development progress.”

The largest donor in 2011 was the United States, followed by Germany, the United Kingdom, France, and Japan. Sweden, Norway, and Luxembourg topped the ranking in net official development assistance as a percentage of GNI; they, along with Denmark and the Netherlands, were the only states to “exceed the United Nations’ ODA target of 0.7% of GNI.  The United States sits at fifth from last at 0.2%, a 0.01% decrease from 2010. However, U.S. bilateral ODA to Africa rose 17.4% and ODA to Least Developed Countries increased 6.9%.

The OECD’s predictions for the years 2012 to 2015 give a conservative outlook, suggesting relatively few changes in current aid trends. The report explains that it may take “several years from the onset of a recession for the full impact to be felt on aid flows,” partly because some aid flows through international organizations and thus is not immediately received. In the upcoming years of tight budgets, DAC countries may focus more on the Recommendation on Good Pledging Practice, which seeks to improve aid “accountability and transparency.”

 

Posted by: Pokyee Yu

Sources: The Organisation for Economic Co-operation and Development

Photo Credit: The Organisation for Economic Co-operation and Development

President Obama Names Nominee to Lead World Bank

On Friday, March 23, the White House officially nominated Dr. Jim Yong Kim to lead the World Bank.  Currently the president of Dartmouth College – the first Asian American to hold that position at any Ivy League university – Dr. Kim is well-known and highly respected among aid experts for his work in global health and development.  Most notably, he was the former director of the World  Health Organization’s Department of HIV/AIDS where he launched the “3 by 5” initiative, largely regarded as one of the most successful modern global health initiatives.

While at Dartmouth, Dr. Kim launched the Dartmouth Center for Healthcare Delivery Science, which brings together an international network of researchers and practitioners to develop new models of high-quality, low-cost healthcare.  In addition, he instituted the National College Health Improvement Project.  He also co-founded a non-profit called Partners in Health, which provides healthcare to the poor.  An anthropologist and physician by training, Dr. Kim emigrated the United States when he was just five years old.  He went on to Brown University, graduating magna cum laude and earned a medical degree from Harvard Medical School and a Ph.D. in anthropology from Harvard University as well.

Now the frontrunner for the position, Dr. Kim had not been among the names recently tossed about in the policy discourse, nor is he among the most well-known either.  The list of heavy hitters included Susan Rice, U.S. ambassador to the U.N., Senator John Kerry, former Treasury Secretary and Obama economic advisor Lawrence Summers, PepsiCo chief Indra Nooyi, and even Secretary of State Hillary Clinton.  In addition, development expert and Columbia professor Jeffrey Sachs nominated himself for the post.  Developing countries have rallied around two candidates thus far: the Nigerian finance minister and the former Colombian finance minister.

Developing countries, particularly China, continue to press for greater representation in and control over the organization that directly serves them, however it was unlikely that President Obama would have yielded to these demands, especially in an election year.  Although it is wise to encourage the increasing international role of developing nations, the nontraditional support for a non-American could have been a symbol of declining American influence that many Americans are quick to counter.  In this context, the nomination of Dr. Kim is not surprising.  Even though he is an American citizen, his immigrant – specifically Asian – background is significant and perhaps an attempt at appeasement.  Dr. Kim has minimal experience in economics, banking, or policy, so his unconventional background may indeed benefit the organization as it tackles the challenges of 21^st-century development.

Posted by: Brian Gowen

Sources: The White House, The New York Times, U.S. News and World Report

Photo Credit:  Los Angeles Times (Andrew Harrer / European Pressphoto Agency)

Event Summary – Bullets to Books: The Role of Education in Development

The following is a news digest from an event hosted by Wilson Center on the Hill and the Program on America and the Global Economy.

Education can play an integral role in development and economic growth internationally.  Many studies have shown that an increase in education can result in higher productivity and earnings, as well as decreased crime and infant mortality.  At a Wilson Center on the Hill event on Friday, June 17 titled “Bullets to Books:  The Role of Education in Development and What the U.S. Can Do,” panelists discussed the relationship between education, development and economic growth. The panelists also touched on current USAID education initiatives.  Kent Hughes, Director of the Program on America and the Global Economy at the Wilson Center, moderated and opened the conference with a brief introduction of the panelists.

After introductions from Hughes, Harry Patrinos, Lead Education Economist for the Education Human Development Network at the World Bank, began by discussing the economic benefits of education.  He noted that education is key to achieving the Millennium Development Goals and that currently over two trillion dollars are spent each year on education around the world.  He also discussed Learning for All, the World Bank’s new education strategy, and its three messages:  investing early, investing smartly, and investing for all.  This will also launch their program on benchmarking education systems.  Patrinos analyzed the economic benefits of education from both the microeconomic and macroeconomic perspectives.  He noted that at the individual level, “a year of schooling increases earnings on the order of ten percent a year, on average, and perhaps as high as twenty percent in the poorest countries in the world.”

You are Invited – Bullets to Books: The Role of Education in Development and What the U.S. Can Do

Invitation to a Wilson Center on the Hill and Program on America and the Global Economy Event:

Bullets to Books:

The Role of Education in Development and What the U.S. Can Do

Friday, June 17, 2011 

12:00-1:15 p.m.

B-369 Rayburn House Office Building

Education is often viewed as the foundation for human development and can be tied to a country’s economic growth.   Panelists will discuss the importance of education from early childhood to higher education.  They will also examine the impact of education  on a nation’s economy and current education and  initiatives being put forth by USAID.

PATRICK COLLINS, Acting Office Director,  Office of Education, Bureau for Economic Growth, Agriculture and Trade, USAID

BARBARA KAMARA, Consultant, Early Childhood Development Program, Open Society Institute

HARRY PATRINOS, Lead Education Economist, Education Human Development Network, World Bank

Moderated by: KENT HUGHES, Director, Program on America and the Global Economy, Woodrow Wilson Center

Please RSVP acceptances only to onthehill@wilsoncenter.org or 202-691-4357.
_____________________________________________________________________   __   ________________________________   ____   _____   ________________                  ______                                                  __________

Wilson Center on the Hill is a nonpartisan forum that focuses on current issues related to international trade and security, sustainable development, and globalization. It sponsors 15 to 20 seminar programs each year on Capitol Hill that feature leading independent analysts and experts from the 22 programs of the Woodrow Wilson International Center for Scholars. Funded by a grant from the William and Flora Hewlett Foundation, Wilson Center on the Hill also sponsors congressional study trips, allowing Members of the U.S. Congress and senior congressional staff to examine these issues first-hand.

Posted by: PAGE Staff

Can Trade Drive Development?

On March 15^th Wilson Center on the Hill and the Program on America and the Global Economy (PAGE) hosted a discussion on the impact of trade and international markets on developing countries. With almost a third of the world’s population living on less than $2 per day, the need to reduce poverty is critical. The panel focused on the prospects for economic growth through the expansion of trade, and the related policy challenges facing United States lawmakers.  Kent Hughes, PAGE director, moderated the discussion.

Ambassador Peter Allgeier, President of C&M International and a veteran of the Office of the U.S. Trade Representative, opened the event by stressing the unique aspects of modern trade and placing the current policy challenges within that updated framework. Unlike in the 20^th century, most products today are involved in a complex supply chain where goods travel to several different countries before they come to market.  The modern diversified modes of production make it easier for emerging nations to “plug in to small parts of a bigger supply chain,” and increase manufacturing capability more efficiently.

Developing countries must “play by the rules,” Allgeier pointed out, by maintaining low tariffs and working to create a favorable investment climate.  Many expanding markets lack the physical and institutional capacity to support large-scale trade, which can preclude international investment; proper sanitation, rule-of-law, and a stable trade policy are all important factors in economic development, and are lacking in many small markets.

You are Invited: Can Trade Drive Development?

Invitation to a Wilson Center on the Hill Event

CAN TRADE DRIVE DEVELOPMENT?

March 15, 2011, 12:00-1:15pm

B-340 Rayburn House Office Building

With almost a third of the world’s population living on less than $2 per day, the need to reduce poverty is critical. Panelists will examine the linkages between trade and economic growth and its potential to reduce poverty. They will also discuss U.S. trade policy and its potential impact to promote economic development.

AMBASSADOR PETER ALLGEIER
President, C&M International; Former Ambassador, World Trade Organization

WILLIAM KRIST
Senior Scholar, Woodrow Wilson International Center for Scholars; Former Assistant U.S. Trade Representative

Moderated by: KENT HUGHES
Director, Program on America and the Global Economy, Woodrow Wilson International Center for Scholars

Please RSVP acceptances only to onthehill@wilsoncenter.org or 202-691-4357

Posted by: PAGE Staff

PAGE Meets with a Delegation from the National Defense University

On Monday, January 31 Woodrow Wilson Center and the Program on America and the Global Economy (PAGE) hosted students and faculty from the National Defense University (NDU) for a discussion on the history of the Russian energy economy and its prospects for the coming years.  Attending from NDU were members of the army, navy, air force, reserve branches, and foreign countries including Macedonia, Japan, Mongolia, and Norway.  PAGE director Kent Hughes led a discussion focused on Russia and its role in the world energy market.  Hughes highlighted past fluctuations in Russia’s energy production, and addressed some of the challenges facing the country moving forward.

Once the “breadbasket of Europe,” the former Soviet Union boasted a large agricultural sector, but only a small energy industry leading up to World War II.  While the region’s energy riches helped drive the industrialization of the mid 20th century, Hughes noted that their economy remained “quite inefficient,” and bequeathed the lack of a “vibrant manufacturing industry” to  post-Soviet Russia.  The energy industry enabled growth, but also exposed the Russian economy to shifts in global energy prices.  The Soviet Union’s vulnerability to global prices was made clear when Saudi Arabian oil producers caused a price drop in the late 1980s.  The sharp drop in prices contributed to an economic malaise and helped push Gorbachev’s reforms that, in turn, helped lead to the collapse of the Soviet Union.

Book Launch: The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World

Economists Otaviano Canuto and Marcelo Giugale pointed to a major shift in the world’s balance of economic power in their new book “The Day after Tomorrow: A Handbook on the Future of Economic Policy in the Developing World.” While developed countries face high unemployment, heavy public debt, and stagnant economies, developing countries have maintained the positive growth premium that emerged prior to the financial crisis. Moreover, the economists said they expect major emerging economies—while facing their own challenges—may become the new locomotives of the global economy.

In the aftermath of the economic crisis, Canuto and Giugale asked 40 of their World Bank colleagues to lay out their visions on how key economic policy issues will be dealt in the developing world within the next three to five years. The book resulted from this exercise revealed a reasoned optimism, based on sensible macroeconomic policies that have made developing countries resilient to the recession that engulfed advanced economies after the 2008 collapse of financial markets. Also, developing countries are integrating with each other and catching up technologically with advanced economies. Many are rich in natural resources that will remain in high demand.

Watch Live: The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World

The live webcast has now concluded.  Please check back for an archived video of the event.

The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World

Authors: Octavio Canuto, Vice President and Head, Poverty Reduction and Economic Management Network, The World Bank;  Marcelo Giugale, Director, Poverty Reduction and Economic Management for Latin America and the Caribbean, The World Bank

Discussants: Ajay Shankar, FICCI Scholar, Asia Program, Woodrow Wilson Center; Kent Hughes, Director, Program on America and the Global Economy, Woodrow Wilson Center

Moderator: Paulo Sotero, Director, Brazil Institute, Woodrow Wilson Center

The post-recession has been marked by a major shift in the world’s balance of economic power. While developed countries face high unemployment, heavy public debt, and stagnant economies, developing countries have managed to maintain the positive growth premium that emerged prior to the financial crisis. More and more, developing countries are integrating with each other and catching up technologically with advanced economies. Many have natural resources that will remain in high demand. With the United States and European Union still dealing with the consequences of the global meltdown and struggling to find the path back to vigorous and sustained growth, it is expected that major emerging economies, while facing their own social, economic and governance challenges, will be the main drivers of global growth in the years ahead.

Good economic management has shown that prosperity is possible in developing countries and does not need to be the privilege of the advanced economies as it has been in the past, according to World Bank economists Otaviano Canuto and Marcelo Giugale. In their new book to be presented on Dec. 16, Canuto and Giugale explain why the “rise of the rest” is not likely to be a temporary blip and argue that developing countries may become the locomotives of the global economy.

Posted by: PAGE Staff

You are Invited: The Day after Tomorrow: A Handbook on the Future of Economic Policy in the Developing World

The Brazil Institute and the Program on America and the Global Economy at the Woodrow Wilson International Center for Scholars

Invite you to a book launch:

The Day after Tomorrow: A Handbook on the Future of Economic Policy in the Developing World

Thursday, December 16, 2010 – 10 a.m. to 12:00 p.m.

Woodrow Wilson International Center for Scholars

5^th Floor Conference Room

RSVP (Acceptances only): renata.johnson@wilsoncenter.org

Authors: Otaviano Canuto, Vice President and Head, Poverty Reduction and Economic Management Network, The World Bank; Marcelo Giugale, Director, Poverty Reduction and Economic Management for Latin America and the Caribbean, The World Bank

Discussants: Ajay Shankar, FICCI Scholar, Asia Program, Woodrow Wilson Center; Kent Hughes, Director, Program on America and the Global Economy, Woodrow Wilson Center Moderator: Paulo Sotero, Director of the Brazil Institute, Woodrow Wilson Center

The post-recession has been marked by a major shift in the world’s balance of economic power. While developed countries face high unemployment, heavy public debt, and stagnant economies, developing countries have managed to maintain the positive growth premium that emerged prior to the financial crisis. More and more, developing countries are integrating with each other and catching up technologically with advanced economies. Many have natural resources that will remain in high demand. With the United States and European Union still dealing with the consequences of the global meltdown and struggling to find the path back to vigorous and sustained growth, it is expected that major emerging economies, while facing their own social, economic and governance challenges, will be the main drivers of global growth in the years ahead. Good economic management has shown that prosperity is possible in developing countries and need not be the privilege of the advanced economies as it has been in the past, according to World Bank economists Otaviano Canuto and Marcelo Giugale. In their new book to be presented on Dec. 16, Canuto and Giugale explain why the “rise of the rest” is not likely to be a temporary blip and argue that developing countries may become the locomotives of the global economy.

For more information on the Brazil Institute, visit www.wilsoncenter.org\brazil

Woodrow Wilson Center – 1300 Pennsylvania Avenue, N.W. – Washington, DC 20004

Posted by: PAGE Staff