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This dissertation deals with the question how suppliers contribute to creating value in supply chains. The last decades have been characterized by increased specialization of business activities and, consequently, firms have outsourced between 50% and 80% of their business activities to suppliers. Accordingly, purchasing and supply management receives growing interest from both managers and academics. Traditionally, the focus of purchasing and supply management was on attaining superior cost reductions from suppliers. However, today companies increasingly acknowledge suppliers as a source of competitive advantage. Suppliers not only determine the firm's cost position, they are also crucial for matters such as innovation, reduction of their ecological footprint and improved customer value propositions. Suppliers thus have become important facilitators of value creation processes necessary to effectively compete in a global market. Despite the value potential of suppliers, the understanding of how suppliers contribute to the value creation processes of a firm is still poorly defined. The first challenge is to define the concept of value. In this dissertation we have explained that the value concept can be differentiated into three sub concepts i.e. customer value, societal value and shareholder value. Firms need to respond to ever changing customer demands. Also, firms need to compete for the acquisition of scarce (natural and social) resources, and are expected to operate in a sustainable and socially responsible manner. Next, shareholders and investors want to see satisfactory financial returns. Business practitioners thus face an intriguing challenge how to cope with the complexity and dynamics of satisfying different stakeholder requirements and expectations in parallel. Today, firms cannot cope with these challenges individually. They need to do this in close collaboration with the partners that make up their supply chains. In this dissertation, we investigate how firms create value together with their suppliers. For this purpose we use insights from the resource dependence theory, the resource-management view and the stakeholder theory. Inspired by stakeholder theory, we have identified three important stakeholder groups: customers, society and shareholders. Next, we have used the resource management theory, a recent offspring of the resource-based theory, to describe the mechanisms through which a firm creates value and satisfies these three stakeholder groups. Finally, with the resource dependence theory we have described the role of suppliers in the efforts to create value. Accordingly, the central research question in this dissertation is: What is the impact of suppliers on the ability of a focal firm to satisfy its customers, society and shareholders? We investigate this research question by means of three studies, each representing a different stakeholder perspective, theoretical focus and research objective. In the first study we examine how firms realize customer satisfaction through market orientation and innovativeness. The second study examines the effects of Corporate Social Responsibility (CSR) and innovativeness on a focal firm's CSR reputation and customer satisfaction. The third study addresses the shareholder perspective by looking at the interaction effects of market orientation, CSR orientation and supplier orientation in relation to current and expected financial firm performance. The research objective and research question calls for a unique research design that examines multiple parties operating in a supply chain. By means of a survey, data were collected from three members along a coherent supply chain: a supplier, a focal firm and a customer. In total 88 sets of these supply chains have been used for this research. The results contribute to the understanding of value creation in supply chains. Creating Customer Value through Market Orientation and Innovativeness The objective of the first study was to understand how suppliers enable a focal firm to realize customer satisfaction by means of market orientation and innovativeness. We have introduced the concept of a supplier's end-user orientation to describe the supplier's processes and activities directed at satisfying the customer of the focal firm (in this study referred to as the end-user) through continuous needs assessment. By doing so, the first study aimed to understand whether a supplier's end-user orientation and a supplier's innovativeness increase customer satisfaction, either directly or indirectly. The research question of the first study was: What is the impact of a supplier on the ability of a focal firm to achieve customer satisfaction through market orientation and innovativeness? Based upon our research results, the direct effects of market orientation on customer satisfaction seem rather limited. Within the focal firm, market orientation clearly is a driver of innovativeness. Our results show that the focal firm's market orientation and the supplier's end-user orientation do not relate to each other. Neither did we find a relationship between a supplier's end-user orientation and a supplier's innovativeness. However, a supplier's innovativeness positively contributes to the focal firm's innovativeness and the focal firm's innovativeness positively contributes to customer satisfaction. In conclusion, it seems that a market orientation is primarily an enabler of innovativeness at the level of the individual firm, rather than at the level of supply chain relationships. Next, supplier innovativeness acts as a driver of a focal firm's innovative response to its customers. The first study thereby stresses the strategic relevance of developing relationships with innovative suppliers, especially when the focal firm seeks opportunities to strengthen its innovative capabilities. Creating Societal Value: Corporate Social Responsibility and Innovativeness The second study of this dissertation examined the question how firms realize societal value through Corporate Social Responsibility (CSR) and innovativeness. Societal value is a difficult concept to grasp because it encompasses considerations of governments, consumers, action groups and local communities. For the purpose of this dissertation, we assess societal value by an evaluation of the focal firm's CSR reputation by the customer. The study was aimed at assessing whether, and to what extent, CSR drives innovation, both at the individual company level and at the supply chain level. The positive effects of CSR on the firm's innovation processes had been suggested by other researchers, but were not empirically investigated yet. We expected that the CSR orientation and innovativeness would affect both customer satisfaction and the firm's CSR reputation at the customer. The research question of the second study therefore was: What is the impact of a supplier on the ability of a focal firm to act socially responsible and foster its CSR reputation and customer satisfaction? The results suggest that CSR orientation and innovativeness are strongly related, within both the focal firm and the supplier firm. Adopting a CSR orientation raises the focal firm's CSR reputation which, similarly to the firm's innovativeness, accounts for increased customer satisfaction. Also in this study we found that a supplier's innovative capabilities foster the focal firm's innovative capabilities. However, we did not find a relationship between supplier's CSR orientation and the focal firm's CSR orientation. During our analysis, we found an unexpected negative relationship between a supplier's CSR orientation and a focal firm's innovativeness. Although this relationship warrants more research, it seems that managing for supplier CSR compliance only, does not allow for an exchange of information, knowledge and new ideas, as is often seen with rigid supplier codes of conduct. While the direct effect is negative, the indirect effect via a supplier's innovativeness turns out positive. The indirect relationship seems to allow for a richness of information and exchange of new ideas that benefit the focal firm. With respect to the research question underlying the second study, we may conclude that adopting a CSR orientation, both internally and externally, may work out positively on the firm's innovativeness. CSR orientation impacts the focal firm's CSR reputation in a direct way. Firm Performance: Managing for Multiple Stakeholders The third study of this dissertation combined insights from the first two studies to examine market orientation, CSR orientation and supplier orientation in relation to a firm's current and expected financial performance. The concept of a focal firm's supplier orientation was introduced to describe the focal firm's activities directed at developing and operating an excellent supply base. Based upon stakeholder theory, we examined the interaction effects of market orientation, CSR orientation, and supplier orientation on innovativeness and financial performance. The research question of the third study was: What is the impact of multiple orientations at a focal firm and its suppliers on the ability of a focal firm to achieve current and expected firm performance? The results of the third study showed that external orientations mediate – instead of interact – at the level of the individual firm. That is, they affect each other instead of influencing the impact on innovativeness or performance. We found (again) that the external orientations affect the individual firm, while innovativeness connects supply chain partners. The answer to the third research question is that two variables influence superior firm performance: a focal firm's supplier orientation impacts current performance, and a focal firm's innovativeness affects expected future performance. Supplier's innovativeness fosters focal firm's innovativeness and indirectly affects expected future performance. It thus seems that a firm's collaboration with suppliers will support the firm to achieve financial returns today, as well as achieving good financial results for the future. General Outcomes Based upon the outcomes of the three studies, we are able answer the overall research question of this dissertation: What is the impact of suppliers on the ability of a focal firm to satisfy its customers, society and shareholders? On the one hand, we found no evidence for a direct impact of suppliers on the value created for the different stakeholders targeted. On the other hand, we found positive evidence for a supplier's impact on the focal firm's ability to respond to different stakeholders. Three observations are essential for reflecting on the overall research question. Firstly, in each of the studies we found that supplier's innovativeness is a key driver of the focal firm's innovativeness. Through innovativeness, the focal firm is able to serve customers better and realize superior financial performance. The results thus seem to suggest that a supplier's innovativeness increases the focal firm's ability to deliver value to customers, society and shareholder. Because the effects of the supplier are input for the focal firm, the results assign a crucial role to the focal firm to enable, facilitate and leverage supplier's innovativeness. Secondly, we have found that the attitude of the focal firm towards its suppliers, i.e. the focal firm's supplier orientation, affects the firm's current financial performance. The role of suppliers and supply management thus seems important and is twofold. The firm's supply management practices allow a firm to realize superior firm performance today. At the same time these suppliers are a source for innovation that can anticipate future developments and assure future performance. Thirdly, our findings suggest where we should not search for added value in supply chain relationships. The results indicate no relationship between a focal firm's market orientation and a supplier's end-user orientation; neither do we see that CSR-oriented firms relate to CSR-oriented suppliers. In contrast to the concept of strategic fit suggested by other researchers, we found that market orientation, CSR orientation and supplier orientation seem more relevant for innovation within the firm rather than in buyer-supplier relationships. We may conclude that a combination of external orientations and supplier's innovativeness allow a firm to realize value for customers, society and shareholders. Contribution to academic research The dissertation theoretically contributes to academic research in several ways. The first theoretical contribution stems from the use of three complementary theoretical perspectives: the resource dependence theory, the resource management view and the stakeholder theory. Especially the resource management view has proved valuable to explaining how firms create value for customers, society and shareholders. The research results provide an extension of the resource management view with two additional considerations. The first extension is the further specification of the external orientations that guide internal resource management practices. Firms benefit from adopting multiple external orientations, such as market orientation, CSR orientation and supplier orientation. These external orientations foster different qualities of the firm and thereby jointly increase overall firm performance. The second extension of the resource management view, based on our results, is that while individual external orientations are an internal driver of innovativeness, our results have demonstrated another, external, driver of focal firm's innovativeness, i.e. supplier's innovativeness. The second contribution to academic research relates to the pivotal role of innovativeness in the research results. The results build a strong case for the concept of open innovation. The central idea behind open innovation is that knowledge has become so widely distributed that firms cannot afford to rely entirely on their own resources for their innovation strategies. The results demonstrate that, next to internal sources of innovation, external sources of innovation help to attain competitive advantage. Supplier's innovativeness emphasizes the role of suppliers in the concept of open innovation. The third theoretical contribution is to the field of purchasing and supply management. The results have shown that suppliers do not directly affect the customer. Suppliers, though, prove to be valuable to the innovation processes of the focal firm. Also, a supplier orientation has shown a valuable concept for boosting a firm's current performance. The research results show that a value-orientation in purchasing and supply management contributes to realizing current and future firm performance. Implications for practitioners For business practitioners our findings emphasize the importance of innovativeness in satisfying customers and in achieving superior performance. A firm's innovativeness is driven by two sources: internal as well as external sources. Internally, innovativeness is triggered by a firm's external orientations such as market orientation and CSR orientation. Externally, a firm's innovative capability is affected by the innovative capability of the suppliers the firm lines up with. We briefly explain the internal and external sources for innovation. Our results have shown that combining different stakeholder perspectives and requirements in business activities positively contributes to overall firm performance. Although market orientation has become fashionable among practitioners, CSR orientation and supplier orientation are not yet common practice. Based on the outcomes of this dissertation, we recommend investing in CSR as a driver of innovation. Next, supplier relationship management is essential to increase the competitiveness of the firm. The results of the dissertation suggest it is worth pursuing all these different stakeholder orientations at the same time. If firms want to actively pursue an innovative strategy, it is vital to initiate relationships with suppliers that have superior innovative capabilities. Establishing relationships with innovative suppliers may require a different attitude with regards to supplier selection and supplier relationship management. Firms seem better off establishing sophisticated selection processes that are not primarily driven by achieving lowest transaction costs. Rather, firms should prefer to cooperate with suppliers that are innovative and that are willing to share skills, and abilities. Next, after contracts have been put in place, practitioners need to continue their efforts to enable suppliers to share their best and most up-to-date knowledge with the focal firm. A contract, however, will not assure the supplier's best efforts. Not only purchasing and supply management, but all disciplines that potentially benefit from supplier knowledge, have to invest in the buyer-supplier relationship. As our research has demonstrated, new ideas from suppliers are an important external trigger for developing more innovative customer solutions, environmentally friendly business processes and, hence, a solid basis for future firm performance.

Inhaltsangabe: Introduction and Course of Work: In 2007, at their meeting in Tanzania, the central bank governors of the Southern African Development Community (SADC) laid out a strategy to strengthen regional integration, containing the development of a common market by 2015, fixed exchange rates by 2016, and, ultimately, a monetary union with a single currency in 2018. In pursuit of this agenda, a free trade area absent of intra-regional tariffs was arranged in August 2008 with a regional customs union to follow this year. The currently fourteen member countries of the SADC committed themselves towards achieving economic convergence and to deepen monetary cooperation. In the 21st century, Africa finds itself increasingly separated from economic developments in the remaining world and fails to prosper from increased globalization. Despite a large abundance in natural resources, many countries have suffered from an extremely poor economic performance, which mainly originated from internal strives and weak and distortionary policies. Inward looking governments, conducting clientele policies, are focused on reaping economic rents rather than on fostering growth. Furthermore, tribal conflicts and civil war have sparked recurring border conflicts with neighboring countries. Although Africa has seen a large number of regional arrangements and trading blocs throughout the continent, the overall success for growth and trade expansion was limited. Against this background, the formation of a monetary union is believed to counteract economic and political weaknesses, to improve regional cooperation and to enhance both the political and economic standing in the world. A monetary union and a common currency entails both gains and losses for its members. On the cost side, countries in a monetary union effectively loose the ability to pursue independent monetary policies and to use the exchange rate as adjustment instrument to stabilize the economy. On the other hand, countries inside a monetary union benefit from reduced transaction costs and the elimination of internal exchange rate volatility. Furthermore, countries which suffer from weak internal stability and high inflation rates benefit by using the fixed exchange rate in a monetary union as external anchor. By transferring the power over monetary policy to a supranational central bank, the risk of homegrown inflation and currency devaluations is banished and economic agents are able to borrow at more favorable interest rates. Both the gains and losses from a monetary union are determined by structural characteristics inside the countries. If, in total, the benefits from a single currency exceed the costs in that the constraints imposed by fixed exchange rates are not harmful to the economy, the countries constitute an optimum currency area. In essence, the theory of optimum currency areas considers the desirability for each country to join a monetary union. The trade off between costs and benefits is affected by three features: First, the degree of intra-country trade influences the gains in efficiency and reduced uncertainty from fixing the exchange rate. Second, the degree of correlation in output fluctuations determines whether a common monetary policy is adequate for all countries. And third, the response to output shocks is eased by several adjustment mechanisms, including price flexibility and factor mobility, which restore the initial equilibrium. The purpose of this study is to evaluate whether a monetary union in Southern Africa is both desirable and feasible from an economic point of view, to discuss institutional challenges and requirements, and to give direction for which countries are best candidates to form a monetary union. Both the motivation and requirements for a successful monetary union are drawn from the theory of optimum currency areas. Unfortunately, the various aspects of the theory have been gradually developed over time and are often confounded and fragmentary in theoretical work. The aim is therefore to first derive a framework that includes relevant benefits and costs, which are subsequently related to country-specific structural criteria. Since economic integration is an important aspect for Africa, emphasis will be put on the endogenous trade effects of monetary integration. Similarly, special attention is given to fiscal distortions and weak institutions, which are sources of high inflation rates and low monetary credibility. Next, the theoretical foundations are applied to the SADC to examine the suitability of countries to form a monetary union. Although a number of studies have discussed monetary integration in various parts of Africa (Masson and Pattillo 2001, Debrun, Masson and Pattillo 2005, and Houssa 2008, for instance, cover monetary unification in West Africa while Kishor and Ssozi 2009 analyze the East African Community), relatively little has been done concerning the SADC in particular. Relevant exceptions are Agbeyegbe, Bayoumi and Ostry, Buigut and Valev, Karras and Khamfula and Huizinga. However, while the studies mentioned typically focus on one aspect of the theory of optimum currency areas, there are very few attempts so far to include all relevant aspects in one framework. Overall, the findings suggest that a monetary union encompassing the whole SADC is infeasible at this stage, and unlikely in the foreseeable future. However, there is evidence for a monetary union consisting of a smaller group of countries, based on the long standing CMA arrangement. In addition to South Africa, Lesotho, Namibia and Swaziland, countries proposed for a monetary union are Botswana, Mozambique and Zambia. On the other hand, there is little evidence that the remaining countries would benefit from monetary unification in any time soon. Countries in the SADC generally differ much in their economic and political development. While some countries, namely South Africa, feature a relatively advanced economy, other countries like Congo and Zimbabwe experienced economic deterioration and high inflation rates. Especially the findings of low regional trade intensities do not hold much promise of large gains from transaction cost savings. Furthermore, both the comovement of business cycles and the correlation of output disturbances are strikingly low, indicating that a common monetary policy is unsuited for most countries. For a small number of countries with a history of high and volatile inflation rates, a common, stable currency would be however attractive in giving higher price stability and an institutional framework to insulate monetary policy from domestic fiscal pressures. Nevertheless, this path is unrealistic since it will be impossible to merge the interests of undisciplined countries with those of low inflation countries like South Africa. In sum, it is inadvisable to proceed with monetary unification to rashly. A monetary union is far from certain to promote regional integration and should not be seen as substitute for political initiatives to solve regional problems and restraining poor fiscal policies. The analysis is divided into three main sections: Section 2 reviews the theoretical implications from the theory of optimum currency areas. After introducing the benefits and costs from monetary unification, both the traditional and endogenous criteria are described to judge the desirability of a monetary union. Next, two models of monetary policy are presented so as to formalize the concept of monetary cooperation. Section 3 subsequently applies the criteria to the SADC. Special attention is given to the correlation of business cycles and comovement of output shocks. A structural vector autoregression analysis is carried out in order to separate underlying supply and demand shocks from output disturbances. Section 4 evaluates the feasibility of a monetary union in the SADC by drawing lessons from the CMA and EMU. Finally, further challenges in the transition to a monetary union are pointed out. Section 5 summarizes and concludes.Inhaltsverzeichnis:Table of Contents: List of Figuresiii List of Tablesiii List of Abbreviationsiii 1.Introduction1 2.Theoretical Foundations of the Optimum Currency Area Theory5 2.1Benefits and Costs of Monetary Integration7 2.1.1Benefits of Monetary Integration8 2.1.2Costs of Monetary Integration11 2.2Criteria of Optimum Currency Areas12 2.3Endogenous Effects in Monetary Integration17 2.4Policy Implications20 2.5Fiscal Distortions and Monetary Credibility22 2.6Theoretical Conclusions27 3.Theory and Empirical Evidence in the Southern African Development Community28 3.1The Economic Situation and Convergence in Southern Africa29 3.2Empirical Approaches of the Optimum Currency Area Theory and Evidence in Southern Africa38 3.3Correlation and Structure of Output Shocks and Business Cycles46 3.4Results52 4.Evaluating the feasibility of the SADC as a Monetary Union and future Prospects54 4.1The Experience of the Common Monetary Area56 4.2Lessons from the European Monetary Union58 4.3The role of Monetary and Fiscal Policies in Southern Africa60 4.4Challenges and the Path to a Monetary Union62 5.Summary and Conclusion68 AAppendix70 A.1Appendix for Section 2.570 A.2Appendix for Section 3.372Textprobe:Text Sample: Chapter 3, Theory and Empirical Evidence in the Southern African Development Community: To recapitulate: The main criteria which have been identified in the optimum currency area theory are (i) the correlation of output shocks, (ii) the extent of regional trade and production diversification, (iii) financial integration, (iv) price flexibility and factor mobility, and (v), inflation differentials and fiscal distortions. It is generally accepted that the formation of a monetary union requires participants to first achieve convergence in a variety of criteria. In this respect, fiscal and institutional convergence and low debt burdens are of special interest since both are a measure of sustainable economic policy. Furthermore, a similar level of per capita income indicates that countries have comparable institutional developments and interests. A monetary union that fails to satisfy these preconditions tends to be instable and may lack credibility from the very beginning. Over the last years however, a number countries in the SADC have experienced an increasing rate of divergence. The transition process in the SADC towards a monetary union is supported by a number of preceding arrangements. The Southern African Customs Union between South Africa, Botswana, Namibia, Lesotho and Swaziland has promoted a certain degree of regional trade. Economic integration has been however limited since the main objective of the customs union was to ease the collection of customs duties rather than industrial cooperation. Regional integration within the SADC advanced in 2008 with the Free Trade Area, which established zero tariffs for 85% of traded goods. However, for goods that have been declared as import-sensitive, most notably food and clothing, liberalization has been deferred. The overall impact on regional trade is therefore uncertain. Despite various efforts for trade liberalization in the past, political commitment has been low so far. Financial relations in the SADC are mainly limited to foreign direct investments. Nevertheless, some recent efforts have been made to harmonize national payment systems. Moreover, the SADC has agreed to work towards full currency convertibility. Since microeconomic data for Africa is scarce, the empirical evidence on optimum currency areas is mainly based on the correlation of output shocks and inflation or exchange rate differentials. Of the other criteria, factor mobility and price flexibility are especially hard to measure and estimates rely on very few observations. Not all of the criteria can therefore be analyzed in similar depth or for the same set of countries. Data was obtained from the World Bank World Development Indicators, the United Nations statistics division, the International Monetary Fund and the African Economic Outlook Database. 3.1, The Economic Situation and Convergence in Southern Africa: The SADC is unique among all regional arrangements in Africa due to the dominant role of South Africa. With a share of over 65% in real GDP (USD at 2000 prices) and 18% of the total population, South Africa is by far the largest and most industrialized economy in the region. In comparison, the remaining countries differ remarkably in size, income and economic structure. The Seychelles, the smallest country with little more than 85,000 residents, is the richest country with a real per capita income (in PPP) of over 19,000 USD in 2008 while Congo and Zimbabwe are among the poorest countries in the world with a real per capita income of approximately 290 USD and 185 USD respectively (see table 1). Life expectancy is low for most countries with an average of 53 years (ranging from 44 years in Zimbabwe to 73 years in the Seychelles) which is an indicator for the high poverty rate among the population. Income inequality as measured by the GINI Index varies considerably across contries, where South Africa (58), Angola (58) and Namibia (70) display one of the highest inequalities worldwide. Economic growth was robust for almost all countries since 1990 except in Congo and Zimbabwe and accelerated in Angola, Mauritius, Tanzania and Mozambique in recent years. Average annual GDP growth from 1990-2008 was highest for Angola (6.2%) due to increasing oil export revenues, but also the most volatile with a standard deviation of 10.5. In the four countries of the CMA, the growth performance was driven by the end of Apartheid in South Africa in 1994 and averaged to 3.7% from 1990-2008. The reeintegration of the South African economy in the world market attracted new foreign investors and trade, and more than tripled growth rates in the post-Apartheid period (from 1980-1992 the average was 1.1. On the other hand, Zimbabwe and until recently Congo experienced a drastic fall in income levels. While Congo still suffers from the aftermath of the civil war and political instability, Zimbabwe was run down by the Mugabe regime. Since at the same time these countries also have the lowest per capita income levels, it appears that the economies in the SADC diverge. Figure (4) illustrates the relationship between average per capita growth rates and relative income for 14 SADC members in the period 1990-2008. The results show that most countries with an initially high income level also had the highest average growth rates, which led to a widening of the income gap (striking examples are Botswana and Mauritius). The ambiguous relationship is a sign that positive developments in individual countries were determined by external factors rather than by improved regional cooperation. Production structure and trade: Production and export structures vary to a large extent among the SADC. While South Africa, Lesotho, Zimbabwe and Swaziland have a relatively advanced manufacturing sector, most other countries depend on primary goods production (except for Mauritius which is specialized in financial services). In the rural countries Malawi, Tanzania, Congo, Mozambique and Madagascar, agriculture still accounts for a large, although declining production share. Raw materials (mining and oil) are a main income source for Angola, Botswana, Zambia, Congo and Namibia and contribute to a large part of foreign reserves. Accordingly, those countries usually exhibit surpluses in their trade and current account (see table 1). Similar to production structures, the composition of merchandise trade reported in table (2) differs considerably across countries. A higher income level is generally associated with high export shares in manufacturing and primary products, while low income countries tend to export food products and import manufactures. As a result of different production and trade structures, the ratio of intra-industry trade are ineffectual small for all countries except South Africa, reflecting the low degree of industrialization. Regional trade in the SADC is dominated by South Africa, which exports high value manufactures in return for small amounts of raw material imports. Especially countries inside the SACU maintain important trade connections to South Africa. Commodity imports from South Africa represent on average over 44% of total imports in other SADC countries and account for approximately 80% of total imports in Lesotho, Swaziland, Namibia and Botswana (see table 3). On the other hand, export shares from the SADC towards South Africa amounts to only 15% on average with Swaziland (38%), Namibia and Lesotho (both 27%) having the strongest trade linkages. As a result, South Africa typically generates substantial regional trade surpluses. In contrast, trade integration among the remaining SADC countries is at very low levels, also because of a shortage in infrastructure. The only substantial trade flows are between neighboring Namibia and Angola (10% of Namibias exports), Zimbabwe and neighboring Zambia (14% of Zimbabwes exports) and landlocked Swaziland and Mozambique (9% of Swazilands exports). Although informal trade is assumed to account for a large proportion of total trade, most of the regional trade flows are negligible. To promote intra-regional trade, various efforts have been started in recent years. Overall trade has been substantially liberalized in the past and import restrictions reduced so that effective tariff protection rates declined in most countries. Accordingly, the average share of regional merchandise exports in percent to total merchandise exports increased from 8% in 1990 to 19% in 2008, and overall merchandise exports have grown on average by 10% per year since 1990.

El mundo con los ojos puestos en Barack Obama Varios medios informan al respecto: "The Economist": "Challenges facing Barack Obama: Obama's world. How will a 21st-century president fare in a 19th-century world?": http://www.economist.com/displaystory.cfm?story_id=12551938 "The economic crisis: Wolves at the door. Financial mess and gathering recession dominate Barack Obama's economic agenda": http://www.economist.com/displaystory.cfm?story_id=12551926 "The presidency: Signed, sealed, delivered. Barack Obama owes his victory to blacks, Hispanics, the young, women of all races, the poor and the very rich": http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=12566893 "El País" de Madrid: "El primer cara a cara entre Obama y Bush, frente a la Casa Blanca": http://www.elpais.com/articulo/internacional/primer/cara/cara/Obama/Bush/frente/Casa/Blanca/elpepuint/20081110elpepuint_4/Tes"El mundo que espera a Barack Obama: Las guerras de Irak y Afganistán y la crisis con Irán y Rusia son las prioridades - La nueva Administración es partidaria de rebajar las sanciones contra Cuba": http://www.elpais.com/articulo/internacional/mundo/espera/Barack/Obama/elpepuint/20081110elpepiint_1/Tes"Le Monde":"Barack Obama annonce un plan de relance":http://www.lemonde.fr/elections-americaines/article/2008/11/08/barack-obama-annonce-un-plan-de-relance_1116415_829254.html#ens_id=863164"CNN":"Bushes welcome Obamas to White House": http://edition.cnn.com/2008/POLITICS/11/10/obama.bush/index.html"CNN" presenta sitio con links a artículos relacionados a la victoria de Barack Obama:http://topics.edition.cnn.com/topics/barack_obama"MSNBC":"Obama planning U.S. trials for Gitmo detainees: President-elect has described camp as 'sad chapter in American history'": http://www.msnbc.msn.com/id/27640617/"Who will be Obama's top diplomat?: The next secretary of state will face challenges in Iraq, Russia, Pakistan": http://www.msnbc.msn.com/id/27678239/"El Tiempo" de Colombia:"Barack Obama y George Bush se reunieron por dos horas para alistar cambio en la Casa Blanca": http://www.eltiempo.com/mundo/euycanada/home/barack-obama-y-george-bush-se-reunieron-por-dos-horas-para-alistar-cambio-en-la-casa-blanca_4656194-1"BBC":"Obama meets Bush at White House": http://news.bbc.co.uk/2/hi/americas/us_elections_2008/7720137.stm"Times":"Bush 'rebuffed Obama on car industry bailout'": http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5130170.ece"Times" presenta sitio con links a artículos relacionados a la victoria de Barack Obama:http://timesonline.newspaperdirect.com/epaper/viewer.aspx"La Nación":"Obama, en busca de un posible acercamiento a Afganistán e Irán: Según publica el diario The Washington Post citando a asesores de presidente electo, la estrategia "más regional" se pondría en marcha al comienzo del mandato": http://www.lanacion.com.ar/nota.asp?nota_id=1068879"Barack y Obama, los nombres de moda: La obamamanía llega a los bebes": http://www.lanacion.com.ar/nota.asp?nota_id=1068764"Obama ya puso un pie en la Casa Blanca: Se reunió con Bush para iniciar la complicada transición": http://www.lanacion.com.ar/nota.asp?nota_id=1068759"Consejos para el presidente electo: Por Andrés Oppenheimer": http://www.lanacion.com.ar/nota.asp?nota_id=1068731"Obama pretende trasladar a los presos de Guantánamo a EE.UU.: Sería el primer paso para cumplir su promesa de cerrar la controvertida cárcel": http://www.lanacion.com.ar/nota.asp?nota_id=1068728"China Daily":"Bush, Obama all smiles during White House visit": http://www.chinadaily.com.cn/world/2008-11/11/content_7192994.htm"El Mercurio" de Chile:"Matrimonio Bush recibió con sonrisas a los Obama en la primera visita a su nueva casa":http://diario.elmercurio.com/2008/11/11/internacional/_portada/noticias/2C1E60CF-E333-4C8B-AA6B-1D8435085F1B.htm?id={2C1E60CF-E333-4C8B-AA6B-1D8435085F1B}"Time":"Time" presenta sitio con links a artículos relacionados a la victoria de Barack Obama:http://www.time.com/time/politics AMERICA LATINA "CNN" informa: "Flooding, heavy rains delay Honduras elections": http://edition.cnn.com/2008/WORLD/americas/11/05/honduras.elections.ap/index.html"El Tiempo" de Colombia anuncia: "Huracán 'Paloma' se esfuma sobre Cuba sin dejar víctimas pero sí destrozos":http://www.eltiempo.com/mundo/latinoamerica/home/huracan-paloma-se-esfuma-sobre-cuba-sin-dejar-victimas-pero-si-destrozos_4651453-1"MSNBC" publica: "Death toll rises to 94 in Haiti school collapse: Firefighters use sonar, cameras and dogs in search for victims": http://www.msnbc.msn.com/id/27595445/"CNN" plantea: "Officials not expecting more survivors in Haiti school collapse": http://edition.cnn.com/2008/WORLD/americas/11/10/haiti.school.collapse/index.html"China Daily" anuncia: "Death toll rises to 94 in Haiti school collapse": http://www.chinadaily.com.cn/world/2008-11/11/content_7193299.htm"El País" de Madrid: "Al menos dos muertos en enfrentamientos tras las elecciones en Nicaragua: La oposición rechaza los resultados y afirma que se están publicando los resultados favorables al Frente Sandinista": http://www.elpais.com/articulo/internacional/muertos/enfrentamientos/elecciones/Nicaragua/elpepuint/20081110elpepuint_16/Tes"BBC" publica: "Nicaragua election clash 'deaths'": http://news.bbc.co.uk/2/hi/americas/7721253.stm"El Tiempo" de Colombia anuncia: "Oposición rechaza cómputos de elecciones municipales en Nicaragua, donde sandinistas llevan ventaja": http://www.eltiempo.com/mundo/latinoamerica/home/oposicion-rechaza-computos-de-elecciones-municipales-en-nicaragua-donde-sandinistas-llevan-ventaja_4654457-1"El País" de Madrid plantea: "Calderón nombra a un abogado como nuevo secretario de Gobernación de México: Fernando Francisco Gomez Mont sustituirá a Juan Camilo Mouriño, quien falleció la semana pasada en un accidente aéreo en Ciudad de México": http://www.elpais.com/articulo/internacional/Calderon/nombra/abogado/nuevo/secretario/Gobernacion/Mexico/elpepuint/20081110elpepuint_13/Tes"CNN" anuncia: "New Mexico interior minister named after deadly crash": http://edition.cnn.com/2008/WORLD/americas/11/10/mexico.interior.ministry/index.html"El Mercurio" de Chile informa: "Calderón y Uribe acuerdan crear un frente común contra la delincuencia transnacional: Mandatarios fortalecerán cooperación en lucha antidrogas, seguridad y justicia.": http://diario.elmercurio.com/2008/11/11/internacional/_portada/noticias/C828EDE7-B5C1-4892-BA3F-958EA29AEAF1.htm?id={C828EDE7-B5C1-4892-BA3F-958EA29AEAF1}"CNN" informa: "FARC rebels to exchange letters on hostages": http://edition.cnn.com/2008/WORLD/americas/10/28/colombia.farc/index.html"El Universal" de Méjico plantea: " Preparó las FARC a jóvenes para infiltrarlos en universidades: La escuela de formación hacía parte de los frentes de las FARC y durante la instrucción a los jóvenes les designaban la universidad a la que debían ingresar": http://www.eluniversal.com.mx/notas/554657.html"El Mercurio" de Chile informa: "Jorge Enrique Botero, periodista que escribe sobre la guerrilla colombiana: "Las FARC han recibido este año los golpes más grandes de toda su historia"": http://diario.elmercurio.com/2008/11/11/internacional/internacional/noticias/BA1A228F-15B7-4C7C-8AC2-558AC883539D.htm?id={BA1A228F-15B7-4C7C-8AC2-558AC883539D}"El Tiempo" de Colombia anuncia: "Hugo Chávez ordena tomar militarmente aeropuerto de estado gobernado por disidente": http://www.eltiempo.com/mundo/latinoamerica/home/hugo-chavez-ordena-tomar-militarmente-aeropuerto-de-estado-gobernado-por-disidente_4655811-1"La Nación" publica: "Militariza Chávez un aeropuerto regional : Ofensiva del mandatario contra el gobernador de Sucre": http://www.lanacion.com.ar/nota.asp?nota_id=1068724"El Universal" de Méjico publica: "Muestran a Lugo documentos sobre víctimas de dictadura": http://www.eluniversal.com.mx/notas/554636.html"La Nación" informa: "Uruguay: el Senado aprobó la despenalización del aborto: Con 17 votos a favor dio luz verde a la polémica ley; Tabaré Vázquez, férreo opositor, podría vetarla":http://www.lanacion.com.ar/nota.asp?nota_id=1068827"El País" de Madrid plantea: "China busca tener peso político y comercial en Latinoamérica: Pekín fija como prioridades la energía y los minerales": http://www.elpais.com/articulo/internacional/China/busca/tener/peso/politico/comercial/Latinoamerica/elpepuint/20081110elpepiint_6/Tes ESTADOS UNIDOS / CANADA"La Nación" publica: " Palin dijo que espera la ayuda de Dios para llegar a la Casa Blanca: La ex candidata republicana a vicepresidenta no descartó ser electa en 2012; "si hay una puerta abierta para mí, entonces entraré por esa puerta", expresó":http://www.lanacion.com.ar/nota.asp?nota_id=1068801"El País" de Madrid informa: ""Bush cuela una ayuda de 108.000 millones a los bancos. El presidente saliente aprobó sin publicitar una rebaja de impuestos que alivia la situación de las entidades": http://www.elpais.com/articulo/economia/Bush/cuela/ayuda/108000/millones/bancos/elpepueco/20081110elpepueco_6/Tes"El Tiempo" de Colombia anuncia: "Comandos de E.U. pueden atacar a Al Qaeda en cualquier país del mundo": http://www.eltiempo.com/mundo/euycanada/home/comandos-de-eu-pueden-atacar-a-al-qaeda-en-cualquier-pais-del-mundo_4656193-1EUROPA"El País" de Madrid plantea: ""Alerta máxima" en la frontera de Melilla tras el nuevo intento de saltar la valla: Unos 150 inmigrantes han tratado de entrar en suelo español.- Es la quinta vez que sucede en el último mes": http://www.elpais.com/articulo/espana/Alerta/maxima/frontera/Melilla/nuevo/intento/saltar/valla/elpepuesp/20081110elpepunac_2/Tes"CNN" anuncia: "Police, migrants clash at border of Spanish enclave": http://edition.cnn.com/2008/WORLD/europe/11/10/migrants.spain.melilla.ap/index.html"El País" de Madrid informa: "Turquía reafirma su diplomacia en una región conflictiva: Quiere demostrar que sus relaciones de buena vecindad y su vocación de potencia regional no merman ni su alianza con Washington ni su anhelo de ingresar en el club europeo": http://www.elpais.com/articulo/internacional/Turquia/reafirma/diplomacia/region/conflictiva/elpepuint/20081110elpepuint_11/Tes"El País" de Madrid publica: "La UE retomará las negociaciones para un acuerdo estratégico con Rusia": http://www.elpais.com/articulo/internacional/Turquia/reafirma/diplomacia/region/conflictiva/elpepuint/20081110elpepuint_11/Tes"MSNBC" informa: "Report: Russian accident sub intended for India: Navy was allegedly to lease brand-new nuclear ship that suffered 20 deaths": http://www.msnbc.msn.com/id/27642888/"BBC" plantea: "Medvedev bid to extend presidency: Russian President Dmitry Medvedev has sent to parliament a bill that extends the presidential term to six years from the current four, the Kremlin says.":http://news.bbc.co.uk/2/hi/europe/7722460.stm"MSNBC" anuncia: "Brown to call for new global financial system: U.K. leader to push for update to Bretton Woods agreement at G20 summit":http://www.msnbc.msn.com/id/27640252/"Times": "Girl of 13 becomes youngest suicide bomber in day of carnage":http://www.timesonline.co.uk/tol/news/world/middle_east/article5126873.ece"Los Angeles Times" publica: "Britain's prime minister urges nations to tackle economy together: Gordon Brown calls for countries to boost the global economy, orchestrating stimulus packages and forging an international trade deal.": http://www.latimes.com/news/nationworld/world/la-fg-brown12-2008nov12,0,3095277.story"El Universal" de México informa: "Recuerda Europa 90 aniversario de fin de la Primera Guerra Mundial: El presidente francés Nicolás Sarkozy y el príncipe Carlos de Gran Bretaña asistieron a la ceremonia en la ciudad nororiental de Douaumont, cerca del sitio de la Batalla de Verdún donde murieron 300 mil soldados": http://www.eluniversal.com.mx/notas/554443.html Asia – Pacífico /Medio Oriente"El País" de Madrid plantea: "Al menos 28 muertos en un triple atentado en Bagdad: Cerca de 70 personas han resultado heridas a causa de dos coche bomba y un terrorista suicida": http://www.elpais.com/articulo/internacional/28/muertos/triple/atentado/Bagdad/elpepuint/20081110elpepuint_6/Tes"Time" informa: "Iraqi Soldier Kills 2 US Troops After Dispute":http://www.time.com/time/world/article/0,8599,1858492,00.html"MSNBC" publica: "Netanyahu: Peace talks will continue if elected: Israel's opposition leader backs away from hints he would abandon talks": http://www.msnbc.msn.com/id/27644796/"MSNBC" informa: "China says no progress made at Tibet talks: Dalai Lama accused of using demands for autonomy to split the country": http://www.msnbc.msn.com/id/27637812/"BBC" anuncia: "Detained Chen in Taiwan hospital: A court proceeding against Taiwan's former President Chen Shui-bian has been suspended after he asked to be taken to hospital.": http://news.bbc.co.uk/2/hi/asia-pacific/7721468.stm"Time" informa: "Taiwan Arrests Former President":http://www.time.com/time/world/article/0,8599,1858363,00.html"MSNBC" plantea: "Indonesia executes Bali bombers, fears revenge: 2002 attack left 202 dead, many of them foreign tourists":http://www.msnbc.msn.com/id/27623145/"Time" analiza: "The Key to Afghanistan: India-Pakistan Peace":http://www.time.com/time/world/article/0,8599,1857953,00.html AFRICA "CNN" publica: "Cholera spreads in Congo amid standoff": http://edition.cnn.com/2008/WORLD/africa/11/10/congo.fighting.cholera.ap/index.html"MSNBC" anuncia: "In Congo, drunken gunfire ruptures tense calm: Soldiers, rebels brawl as aid workers battle cholera among the displaced": http://www.msnbc.msn.com/id/27637840/ "The Economist" analiza: "Congo: Murder, muddle and panic. As chaos and massacres overwhelm north-eastern Congo, diplomats and peacekeepers are struggling to get a grip": http://www.economist.com/world/mideast-africa/displaystory.cfm?story_id=12573363"CNN" plantea: "Singer, anti-apartheid icon Miriam Makeba dies": http://edition.cnn.com/2008/SHOWBIZ/Music/11/10/makeba.obit/index.html"BBC" anuncia: "UN cuts food rations in Zimbabwe: The UN food agency says it has had to start cutting rations to 4m people in Zimbabwe because of a lack of funds.": http://news.bbc.co.uk/2/hi/africa/7722631.stm"El País" de Madrid informa: "La UE aprueba la fuerza militar contra la piratería en Somalia: Entre ocho y diez barcos vigilarán el golfo de Adén con capacidad para utilizar la fuerza contra la piratería. -España contribuirá con dos barcos y un avión": http://www.elpais.com/articulo/internacional/UE/aprueba/fuerza/militar/pirateria/Somalia/elpepuint/20081110elpepuint_8/Tes ECONOMÍA"The Economist" presenta el informe semanal: "Business this week":http://www.economist.com/business/displaystory.cfm?story_id=12573661"Le Monde" plantes: "AIG et Fannie Mae enregistrent des pertes colosales": http://www.lemonde.fr/economie/article/2008/11/10/aig-et-fannie-mae-enregistrent-des-pertes-colossales_1117093_3234.html#ens_id=863164"MSNBC" informa: "Wall Street ends lower after rally fizzles out: Traders turn pessimistic about China's stimulus plan aiding America": http://www.msnbc.msn.com/id/3683270/"MSNBC" anuncia: "Oil settles near $62 on shaky stock markets: Weakening greenback could be luring investors to purchase crude": http://www.msnbc.msn.com/id/12400801/"BBC" publica: "Shares fall on more economy fears: Global shares have fallen sharply on renewed concerns that the world economy faces an extended downturn.": http://news.bbc.co.uk/2/hi/business/7723127.stm "China Daily" informa: "Europe markets follow Asia down on economic fears": http://www.chinadaily.com.cn/world/2008-11/11/content_7195230.htm OTRAS NOTICIAS"El País" de Madrid anuncia: "Brasil e Italia analizan su posición ante el G20: Lula apuesta por recurrir "a menos analistas de mercado y a más analistas sociales" para crear un nuevo sistema económico": internacional http://www.elpais.com/articulo/internacional/Brasil/Italia/analizan/posicion/G20/elpepuint/20081110elpepuint_14/Tes"MSNBC" publica: "G20 urge government spending in face of crisis: They also say developing countries should have voice in decisions": http://www.msnbc.msn.com/id/27630946/"MSNBC" informa: "Blueprints for Auschwitz camp uncovered: Plans, found in Berlin apartment, include drawing of gas chamber": http://www.msnbc.msn.com/id/27648309/"BBC" analiza: "World recalls end of World War I": http://news.bbc.co.uk/2/hi/in_depth/7721396.stm"La Nación" informa: "El mundo conmemora el fin de la Primera Guerra Mundial: Se cumplen 90 años del cese de fuego del gran conflicto bélico que tuvo alrededor de 20 millones de muertos; sentidos actos de Sarkozy, Bush y Obama":http://www.lanacion.com.ar/nota.asp?nota_id=1068936"Los Angeles Times" anuncia: "NASA ends Phoenix mission on Mars: After not hearing from the power-drained spacecraft in a week, officials believe it has gone to sleep -- permanently -- after lasting nearly three months longer than expected": http://www.latimes.com/news/nationworld/nation/la-sci-phoenix11-2008nov11,0,3821977.story

Throughout, the history of the Latin America and Caribbean (LAC) region, natural resource wealth has been critical for its economies. Production of precious metals, sugar, rubber, grains, coffee, copper, and oil have at various periods of history made countries in Latin America-and their colonial powers-some of the most prosperous in the world. In some ways, these commodities may have changed the course of history in the world at large. Latin America produced around 80 percent of the world's silver in the 16th through 19th centuries, fueling the monetary systems of not only Europe, but China and India as well. The dramatic movements in commodity markets since the early 2000s, as well as the recent economic crisis, provide new data to analyze and also underscore the importance of a better understanding of issues related to boom-bust commodity cycles. The current pattern of global recovery has favored LAC so far. Countercyclical policies have supported domestic demand in the larger LAC economies, and external demand from fast-growing emerging markets has boosted exports and terms of trade for LAC's net commodity exporters. Prospects for LAC in the short term look good. Beyond the cyclical rebound, however, the region's major longer-run challenge going forward will be to craft a bold productivity agenda. With LAC coming out of this crisis relatively well positioned, this may well be possible, especially considering that the region's improved macro-financial resiliency gives greater assurance that future gains from growth will not be wiped out by financial crises. In addition, LAC has been making significant strides in the equity agenda and this could help mobilize consensus in favor of a long overdue growth-oriented reform agenda. But it remains to be seen whether the region will be able to seize the opportunity to boost long-run growth, especially considering the large gaps that LAC would need to close in such key areas as saving, human capital accumulation, physical infrastructure, and the ability to adopt and adapt new technologies.

The World Bank's Debtor Reporting System (DRS), from which the aggregates and country tables presented in this report are drawn, was established in 1951. The debt crisis of the 1980s brought increased attention to debt statistics and to the World debt tables, the predecessor to Global development finance. Now the global financial crisis has once again heightened awareness in developing countries of the importance of managing their external obligations. International capital flows to the 128 developing countries reporting to the World Bank Debtor Reporting System (DRS) fell by 20 percent in 2009 to $598 billion (3.7 percent of Gross National Income (GNI), compared with $744 billion in 2008 (4.5 percent of GNI) and a little over half the peak level of $1,111 billion realized in 2007. Private flows (debt and equity) declined by 27 percent despite a rebound in bond issuance, portfolio equity flows, and short-term debt flows. Both foreign direct investment (FDI) flows and bank lending fell precipitously. By contrast, the net inflow of debt-related financing from official creditors (excluding grants) rose 175 percent as support was stepped up to low- and middle-income countries severely affected by the global financial crisis.

Since 2003, Peru has emerged as an open, rapidly growing economy. Over the review period of 2003-09, successive governments adopted policy platforms aimed at maintaining macroeconomic stability, furthering the private sector supply response, broadening participation in growth, improving social service delivery, and strengthening public institutions. The World Bank Group (WBG) supported each of the three pillars of the government's poverty reduction strategy, namely: (i) broad-based economic growth that engaged a higher share of the population; (ii) enhanced human development through improved social service delivery; and (iii) strengthened public sector institutions. Independent Evaluation Group (IEG) recommends that the WBG: (i) tailor its strategy to support long-term integration of Peru's three distinct regions; (ii) seek opportunities to support large-scale infrastructure development; (iii) develop a more strategic approach to helping improve public sector management; (iv) seek further innovations in International Bank for Reconstruction and Development (IBRD's) instruments against a backdrop of declining demand for its financial resources; (v) seek to help develop a strategic planning function in Peru; (vi) build a close strategic partnership with development partners that provides concessional finance in the social sectors to optimize synergies with IBRD policy lending and analytic and advisory activities; (vii) develop a strategic focus for International Finance Corporation (IFC) around employment- generating industries in emerging sectors; (viii) maintain IFC's additionality by supporting lower-tier and more regionally dispersed private companies; and (ix) leverage the strong country presence of IBRD and IFC to enhance Multilateral Investment Guarantee Agency's (MIGA's) marketing and risk assessment functions.

The diaspora of developing countries can be a potent force for development for their countries of origin, through remittances, but also, importantly, through promotion of trade, investments, research, innovation, and knowledge and technology transfers. This book brings relevant experience from both developed and developing countries to bear on issues confronting today's governments in linking with their diaspora. The chapters present different approaches used by countries that have tried to maximize the possible gains from migration by engaging more comprehensively with different diaspora groups and individuals. Some African countries are pursuing policies to develop links with Africans abroad, either to encourage them to return or to use their skills, knowledge, or financial capital to foster African development. The book discusses concrete examples of diaspora initiatives that are being implemented in Africa. There are comprehensive reviews on how the diaspora can promote trade and investment linkages. Some developing countries are using dual citizenship to deepen ties with their diaspora. The book directly addresses the issues of remittances-linked financial instruments, investments by the diaspora, diaspora bonds, contributions of skilled and unskilled diaspora in transferring knowledge, analytical research on return migration, and concrete circular migration experiences. There is a need to have a better understanding of these initiatives and to see whether they can be scaled up or replicated in other countries worldwide.

Benign financing conditions since the global financial crisis and, more recently, rising financing needs have fueled a rapid increase in credit to the nonfinancial private sector, especially to the corporate sector, in emerging markets and developing economies. Credit growth has been most pronounced, and nearing the pace associated with past credit booms, in commodity exporting countries. In contrast, in commodity importers, credit-to-gross domestic product ratios are elevated but have been stable or shrinking over the past few years. That said, in a few, mostly energy exporting, emerging and developing countries, credit to the private sector is now near levels that have been associated with past episodes of financial stress.

Growth in the six South East European countries (SEE6) rebounded to 2.1 percent in 2015, as investment revived. The SEE6 region is not only growing but also rebalancing to more durable sources of growth. While higher growth in 2015 brought new jobs in the private sector, and helped poverty reduction to resume, unemployment is still entrenched. In 2015, fiscal deficits continued to narrow in all SEE6 countries except Montenegro. With inflation at historic lows, accommodative monetary policy supported growth, and credit to the economy slowly began to grow. The near-term baseline outlook for the region is positive. Fiscal and current account deficits must decline further to support growth. Sustaining the nascent rebalancing requires unlocking the growth potential of the SEE6 economics by reversing productivity dynamics that have been deteriorating since 2008. The agenda for reducing the structural rigidities that impede growth is broad based and centered on five pillars: eliminate disincentives and barriers to formal; employment; improve the business climate and governance; reduce the size of government while improving quality of service delivery; deepen trade and financial integration; and ensure that natural resource use is sustainable.

Chinas economic growth continues to moderate, in 2014 gross domestic product (GDP) expanded by 7.4 percent, within the governments indicative growth target of about 7.5 percent for the year, but sharply slower than the 10 percent annual growth rate china averaged for three consecutive decades. An orderly correction in real estate - reflecting policy efforts to reduce supply mismatches and tighten nonbank credit - continues to weigh on economic activity. Ongoing adjustments in real estate, a buildup of excess capacity, and decelerating export growth are affecting industrial activity. In contrast growth in services remained robust as composition of growth continues to improve.

This Fifth Edition of the Uganda Economic Update presents evidence that if the urbanization process is well managed, it has the potential to stimulate economic growth and to provide productive jobs for a greater proportion of Uganda's young and rapidly expanding population. In many countries across the world, the growth of cities has stimulated the establishment and expansion of productive businesses by reducing the distance between suppliers and customers. The growth of cities has also facilitated provision of social services and infrastructure through economies of scale. These positive effects from urbanization are already visible in Uganda since the poverty rate is seven percentage points lower in urban areas than in rural areas. Most of the recent job creation is found in cities, and social indicators are also better in urban areas, especially in education and health.

The Lebanon Economic Monitor provides an update on key economic developments and policies over the past six months. It also presents findings from recent World Bank work on Lebanon. It places them in a longer-term and global context, and assesses the implications of these developments and other changes in policy on the outlook for Lebanon. Lebanon continues to be impacted by the domestic political stalemate and regional turmoil, particularly along its border with Syria. Economic activity picked up in the second half of 2014. Stronger economic performance and lower oil prices pushed real GDP growth to an estimated 2.0 percent in 2014, compared to 0.9 percent in 2013. One-off cosmetic and unsustainable measures rather than policy actions helped improve the fiscal balance in 2014. We estimate the overall fiscal deficit to have declined by 2.3 percentage points. Declining imports lead an improvement in the current account balance. In 2014, a fall in merchandize imports induced a 4.4 pp reduction in the current account deficit to a still-elevated 22.2 percent of GDP. This trend is projected to continue in 2015 helped by falling oil prices and a depreciating euro, Headline inflation plummeted from 2.7 percent in 2013 to 1.9 percent in 2014 and is expected to remain tempered over the medium term. Lebanon s economy continues to be exposed to external shocks. The border with Syria is increasingly menacing as coordinated attacks by ISIS and Al Nusra are being launched more frequently from their bases in Syria. Inefficiencies in power generation impose sizable macroeconomic costs on Lebanon. The Lebanese electricity sector has been underperforming for decades with considerable socio-economic costs. The macroeconomic impact has been massive.

Based on preliminary estimates, the Lao People's Democratic Republic (PDR) economy grew by 7.5 percent in 2014, compared to an average of 8 percent over 2011-13. Looking forward, real gross domestic product (GDP) growth is projected to slow further in 2015 before accelerating in the medium term. Average annual inflation in 2014 decelerated to 4.2 percent from 6.4 percent a year earlier, driven primarily by slower growth in food prices and a decline in fuel prices. In response to a widened fiscal deficit in FY2012-13, the government embarked on much needed fiscal corrective measures in FY2013-14 and FY2014-15. Foreign exchange reserves coverage remains low as compared with prudential benchmarks. While the nominal exchange rate remained relatively stable within the band set by the Bank of Laos (BOL), the real exchange rate continued to appreciate. Indications in 2014 are that bank credit growth is slowing down sharply compared to its previous rapid pace over several years. In order to grasp new opportunities and enjoy the benefits of regional integration, it is necessary for Lao PDR to take steps to create a conducive business environment. In order to achieve broad-based, inclusive growth and poverty reduction in Lao PDR, channeling greater resources toward tackling key workforce skills and productivity challenges is of significant importance.

Russia's economy experienced two shocks in 2014. On top of the structural crisis that began in 2012, Russia had to deal with cyclical and idiosyncratic challenges to the economy. One of the new shocks illustrates Russia s integration into the world economy through its natural resource exports, and thus its dependence on the global commodity cycle: oil prices more than halved between July and December 2014, giving Russia a terms-of-trade shock. The ruble lost 46 percent of its value against the US dollar, which worsened already eroded business and consumer confidence. The monetary tightening in response made credit expensive, further dampening domestic demand. The other, more idiosyncratic, shock was related to the geopolitical tensions that began in March 2014 and led to economic sanctions. The tensions not only heightened perceptions that Russian investments had become riskier, they also dramatically increased the costs of external borrowing for Russian banks and firms. Spreads on Russian credit default swaps peaked in December at 578 basis points, compared to 159 a year ago. Together with the financial sanctions imposed on Russia in late July, which have restricted the access of Russia s largest state-connected banks and firms to Western international finance markets, this all but extinguished investment. The current World Bank baseline outlook, however, sees the national poverty rate increasing from 10.8 percent in 2013 to 14.2 percent in 2015 and 2016. Poverty is expected to increase because real disposable income and consumption will decline. This would be the first significant increase in poverty rates since the 1998-1999 crises. Russia weathered the 2008- 2009 crisis well as disposable incomes continued to grow slightly. Given the current limited fiscal space, additional support for the poor and vulnerable is likely to be less generous than it was during the 2008-2009 crisis. Although people at the bottom of the income distribution are the most vulnerable, there will be less opportunity for an increase in shared prosperity in 2015-2016, and there is a worrisome possibility that recent achievements might be reversed.

This Fifth Edition of the Uganda Economic Update presents evidence that if the urbanization process is well managed, it has the potential to stimulate economic growth and to provide productive jobs for a greater proportion of Uganda s young and rapidly expanding population. In many countries across the world, the growth of cities has stimulated the establishment and expansion of productive businesses by reducing the distance between suppliers and customers. The growth of cities has also facilitated provision of social services and infrastructure through economies of scale. These positive effects from urbanization are already visible in Uganda since the poverty rate is seven percentage points lower in urban areas than in rural areas. Most of the recent job creation is found in cities, and social indicators are also better in urban areas, especially in education and health. This report conveys the following key messages: (1) over the past 12 years, the number of people living in Uganda s urban areas has been increasing by an average of 300,000 people per year, (2) during the past few decades, similarly rapid rates of urbanization have been recorded in many emerging countries, (3) as is the case in many other developing countries, the prospects of good jobs, higher incomes and better living conditions in the cities continue to attract Ugandans from rural areas, (4) currently, the opportunity presents itself for Uganda to leverage urbanization to benefit a large proportion of the population, and (5) through the implementation of smart policies, Uganda can ensure that its cities are both competitive and livable.