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Myanmar has a mix of contributory and non-contributory programs providing some elements of social security but for a very small section of the population. The government is considering reformsto its pension and other social security schemes. Strengthening systems and ensuring fiscal sustainability should be a priority before implementing new provisions that may strain current delivery and financial management systems and to avoid crowding out other social spending. Should the proposed reforms be introduced, a very gradual transition is advisable. The reforms should aim to develop integrated, or at least harmonized, social security schemes for both public and private sector workers in the formal sector. It will also be critical to have a clear roadmap for long-term coverage expansion to a larger share of the population, particularly the poor and vulnerable.

The authors build on the findings from an earlier analysis, adding to the evidence base for the notion that credit rating agencies contribute to fiscal sustainability. To do so, the authors focus on election periods when political pressures for fiscal expansions are heightened. The literature on political budget cycles documents the tendency for budget deficits to increase in election years as governments attempt to appear economically competent by strategically providing additional publicly financed goods or services, or by cutting taxes. A rating downgrade, however, signals the opposite of competence as it implies an increase in the probability of sovereign default. Since credit ratings are widely observed - by financial markets as well as voters - they in effect serve as a disciplining device for fiscal policy not to submit to short-term spending pressures, thus keeping it responsible. The authors find that: (1) governments going into an election year immediately after a rating downgrade are 27 percentage points more likely to lose at the polls; and (2) governments going into an election year with a negative rating outlook (indicating a higher likelihood of a near-term downgrade) run smaller budget deficits compared to cases with positive or stable outlooks. Ratings act like fiscal rules disciplining governments when they are more vulnerable to political pressures on the budget - as opposed to fiscal policies supporting longer-term economic growth and development objectives.

Even nearly ten years of solid growth cannot guarantee long-term income convergence. The countries of the Latin America and Caribbean region (LAC), like other emerging economies, have benefited from a decade of remarkable growth and some income per capita convergence towards the United States and other industrialized countries. Yet, despite this recent progress, LAC still faces a significant per capita income gap with the developed world. The studies in this volume contribute to the ongoing debate on the reasons for this persistent income gap and the potential drivers of convergence, and propose some broad avenues for reform.

The European Union (EU) Regular Economic Report (RER), is a semiannual publication of the World Bank Group and covers economic developments, prospects, and economic policies in the European Union. The report uses four sub-groups that share broadly similar development patterns EU : Central Europe comprises Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Slovak Republic and Slovenia; Northern Europe comprises Denmark, Estonia, Finland, Latvia, Lithuania and Sweden; Southern Europe comprises Cyprus, Greece, Italy, Portugal and Spain; Western Europe comprises Austria, Belgium, France, Germany, Ireland, Luxembourg, the Netherlands and the United Kingdom. While the report covers the European Union, it provides additional information on European countries which had historically a stronger operational engagement with the World Bank Group, in particular, Bulgaria, Croatia, Poland and Romania. The focus note of this RER covers "Welfare States and the Protection of the Poor in the European Union".

In less than fifty years, Brazil evolved from a predominantly rural society and economy to a highly urbanized country in which 85 percent of its people now live in urban areas and more than 90 percent of the country's GDP is generated in the cities. This rapid urbanization process was characterized by a lack of planning and an enduring framework of inequality, resulting in high degrees of concentrated poverty in the urban areas. Much of this urbanization has taken place in metropolitan regions (MRs). MRs have grown more rapidly than the rest of the country, both in population and in GDP terms. In 2010, per capita GDP was higher in MRs than in the rest of the country and metropolitan economies accounted for 70 percent of GDP. At the same time, half of the Brazilian poor and 90 percent of the people living in subnormal conditions were found in metropolitan regions. The recent approval of a new framework for metropolitan governance inBrazil creates the opportunity for debate and evolution regarding several key issues. These include: a) placing metropolitan matters at the forefront of the development arena in Brazil; b) reviewing what has been learned about inter-municipal governance and service delivery; c) estimating resource mobilization needs for metropolitan development; d) coordinating metropolitan land use with transport and housing; e) including metropolitan concerns in any revision of fiscal federalism; and f) promoting environmental sustainability, social inclusion and resilience to disasters and climate change plans at the metropolitan scale. The World Bank can be a partner in addressing these issues. In responding to client demand, the Bank has been providing a range of support to Brazilian states and cities and especially their low- income populations in the areas of infrastructure, social services, slum upgrading, institutional development, river basin management, local economic development, environmental protection, water and sanitation, and transportation.

With most of the global population and capital goods concentrated in urban areas, cities are key to social development and economic prosperity. They are drivers of national economic growth and innovation, and act as cultural and creative centers. Many development partners and other organizations are active on the topic of resilience in cities, and there has been a recent upswing in the development and promotion of innovate programs, tools, and initiatives. Arup International and the Rockefeller Foundation have developed the city resilience framework, which provides a lens through which the complexity of cities and the numerous factors that contribute to a city's resilience can be understood. The framework is being used to facilitate agenda-setting sessions in cities selected to participate in the 100 resilient cities challenge. Within this global context, the city strength diagnostic was developed to help World Bank staff apply this new holistic approach to urban resilience to operations. It was designed to help facilitate a dialogue among stakeholders (for example, government, civil society, residents, and the private sector) about risks, resilience, and the performance of urban systems. The city strength diagnostic results in the identification of priority actions and investments that will enhance the city's resilience as well as increase the resilience building potential of planned or aspirational projects. It stresses a holistic and integrated approach that encourages cross-sectoral collaborations to more efficiently tackle existing issues and to unlock opportunities within the city.

From 2004 to 2012, Zambia experienced a combination of good economic policies and high rates of growth not seen since the early years after its independence. While growth was mainly driven by rising copper prices, other factors contributed to Zambia's ability to take advantage of this growth. The international debt relief programs in 2004-2005 almost eliminated public debt and provided the fiscal space for selective, high-priority investments and expanded social programs. The privatization of the copper mines brought new investment in rehabilitation and expansion of production. The period also saw a substantial expansion of primary education and progress in dealing with the most pervasive public health problems. These positive developments set the stage for Zambia to tackle its pervasive poverty. In practice, however, sustained growth over the period has led to little poverty reduction, especially in rural areas of the country. The Bank Group and other donors provided critical support at the beginning of the evaluation period, when Zambia's debt level became unsustainable. The Bank provided substantial support for capacity development and better functioning institutions. The Bank's efforts to strengthen public administration and improve governance met with some partial successes in enhanced audit and procurement capacity, and the achievement of Extractive Industries Transparency Initiative compliance. However, despite nearly a decade of implementation, the Integrated Financial Management Information Systems (IFMIS), is still only partially operational. Further, the Zambian government has not followed through on its positive discourse regarding decentralization of government authority.

The performance of the Malian economy is largely dependent on the performance of the agricultural sector. The overall good growth in the Malian economy over the last several years is attributed to the agricultural GDP growth. Since 1995, the economy grew at about 5 percent per year until 2010, but a global recession, the military coup and terrorist activity caused a noticeable slowdown in GDP to about 1.2 percent in 2011-2012. The economic growth has resumed at a slow pace since 2013 and is currently estimated around 4.5 percent for 2014-2015. Agricultural development in general and agricultural finance in particular is hampered by a lack of quality data on the sector. Although improving, reliable statistical information is still lacking in Mali. There are often inconsistencies in agricultural data presented in the various reports available in the country. Although data on the main food crops and cotton are readily available, quality information on the high potential value chains, like mango and meat and dairy value chains, is less frequently provided. The lack of quality agricultural statistics makes public planning and analysis difficult and deters private sector investment.

Seventy years after independence and more than a decade of political and institutional reforms, Indonesia has emerged as a stable democracy. Indonesia's achievements are now under stress, with a slowdown in its commodity driven economy, stagnant rates of poverty reduction, and rapidly rising inequality. The development policy review, completed in 2014, and the systematic country diagnostic (SCD), completed in 2015, explain the limited window of opportunity for Indonesia to reach high per capita income levels. This country partnership framework (CPF), covering the period FY2016-20, builds on the previous country partnership strategy (CPS) FY2013-15 and the long-term operational and policy-based support that has been a hallmark of World Bank Group's (WBG's) engagement with the Government of India (GoI) for the past decade. The CPF concentrates on areas of infrastructure necessary to better connect the economy, provide sustainable energy, help the country reap benefits from the rapid pace of urbanization, and improve equality of opportunity through better access of the poor and vulnerable to essential water and sanitation services. The CPF will seek to maximize synergies across the WBG and take advantage of all instruments in support of the CPF goals. The CPF will require a larger financing package than the previous CPS, although WBG's total contribution will still be a very small percentage of overall borrowing needs.

More frequent incidences of violence in Afghanistan, as well as delays in the elections process and cabinet formation, continued to fuel uncertainty and affected investor confidence in 2014 and the first half of 2015. Economic growth slowed to 1.3 percent in 2014, down from 3.7 percent a year earlier. Unlike in previous years, agriculture did not contribute much to growth in 2014. Production levels were high for a third year in a row but did not supersede the strong output in 2013. Growth was mainly driven by services and a slight expansion of industries where an increase in construction activities outweighed lower production in manufacturing. Private investment activities showed strong signs of slowdown in 2014, evidenced by a drop of nearly 50 percent in new firm registrations since 2012. The National Unity Government has embarked on an ambitious reform agenda to revitalize the economy, tackle corruption, and improve investment climate. However, it will take time for these reforms to have an impact, and it is yet unclear how much they will mitigate the high risks stemming from the fragile security environment. Growing trends in security and pension and wage spending over the medium term require immediate attention. Afghanistan faces significant financing shortages for both civilian and security spending. Therefore, securing continued high levels of donor financing over the coming years is of critical importance for fiscal stability in the country. The fragile security environment and financing constraints, compounded by weak governance capacity, pose serious challenges to service delivery in Afghanistan. Any setback in reform implementation would further slowdown the pace of human capital accumulation in Afghanistan and reduce future prospects of growth and poverty reduction.

Uruguay is a country of about 3.3 million people, which has consistently given high priority to achieving broadly-shared economic growth and a sustainable reduction in poverty. A strong and progressive social compact has been a defining feature of Uruguayan society and politics, with consistent emphasis placed on protecting vulnerable groups, assuring worker dignity and promoting equitable growth. This compact, combined with rapid economic growth since 2003, has contributed to the development of a sizeable middle class, at 60 percent, the largest in Latin America as a proportion of the population, as well as effective institutions, good governance and, in consequence, a high degree of public trust in Government. The resultant political stability has been a fundamental element of Uruguay's success in attaining its present standards of living. This Country Partnership Framework (CPF) is aligned with Uruguay's 2015-2020 political cycle and selectivity has been exercised in the identification of objectives. The design of the CPF program responds to the Government's priorities and is also closely coordinated with the programs of Uruguay's other development partners, including IADB and CAF. The program is anchored in the findings of the new Systematic Country Diagnostic (SCD) which was informed by extensive consultations with a wide range of stakeholders. The proposed CPF program is designed to support the Government in its pursuit of six objectives identified in the SCD, grouped into three focal areas, namely, building resilience, rebalancing the social compact, and integrating Uruguay into global markets. During consultations, the Government endorsed the selection of focal areas (CPF's pillars and objectives) and the technical teams closely coordinated with the Bank experts who designed a set of indicators, which are fully owned.

The objective of this paper is to understand the factors driving the location decisions of multinational corporations. The paper uses literature-review and expert-interview techniques to understand what cities can do to be best positioned to attract international capital.

This paper provides new empirical insights on the joint distribution of consumption, income, and wealth in three of the poorest countries in the world — Malawi, Tanzania, and Uganda — all located in Sub-Saharan Africa (SSA). The first finding is that while income inequality is similar to that of the United States (US), wealth inequality is barely one-third that of the US. Similarly, while the top of the income distribution (1 and 10 percent) earns a similar share of total income in SSA as in the US, the share of total wealth accumulated by the income-rich in SSA is one-fifth of its US counterpart. The main contributions of the paper are to document: (i) this dwarfed transmission from income to wealth, which suggests that SSA households face a larger inability to save and accumulate wealth compared with US households; and (ii) a lower transmission from income to consumption inequality, which suggests the presence of powerful institutions that favor consumption insurance to the detriment of saving. These features are more relevant for rural areas, which represent roughly four-fifths of the total population. The paper identifies the few successful pockets of the SSA population that are able to accumulate wealth by exploring sources of inequality such as age, education, migration, borrowing ability, and societal systems.

The Monitor provides an update of developments in Pacific economies and explores topical policy issues.

Despite clear aspirations by the Association of Southeast Asian Nations (ASEAN) to create an effective and transparent framework to facilitate movements among skilled professionals within the ASEAN by December 2015, progress has been slow and uneven. This report examines the challenges ASEAN member states face in achieving the goal of greater mobility for the highly skilled, including hurdles in recognizing professional qualifications, opening up access to certain jobs, and a limited willingness by professionals to move due to perceived cultural, language, and socioeconomic differences. The cost of these barriers is staggering and could reduce the region's competitiveness in the global market. This report launches a multiyear effort by the Asian Development Bank and the Migration Policy Institute to better understand the issues and develop strategies to gradually overcome the problems. It offers a range of policy recommendations that have been discussed among experts in a high-level expert meeting, taking into account best practices locally and across the region.