World Development Report 2022: Finance for an Equitable Recovery examines the central role of finance in the economic recovery from COVID-19. Based on an in-depth look at the consequences of the crisis most likely to affect low- and middle-income economies, it advocates a set of policies and measures to mitigate the interconnected economic risks stemming from the pandemic—risks that may become more acute as stimulus measures are withdrawn at both the domestic and global levels. Those policies include the efficient and transparent management of nonperforming loans to mitigate threats to financial stability, insolvency reforms to allow for the orderly reduction of unsustainable debts, innovations in risk management and lending models to ensure continued access to credit for households and businesses, and improvements in sovereign debt management to preserve the ability of governments to support an equitable recovery.
Myanmar's economy continues to be severely tested by the ongoing impacts of the military coup and the surge in COVID-19 cases in 2021. While some real-time indicators have improved in recent months, they remain consistent with a much lower level of economic activity than prior to the February coup. Reported COVID-19 cases have fallen to low levels (and few reported cases of the Omicron variant as of early January 2022), while real time indicators of mobility, manufacturing activity, and exports are showing signs of recovering. On the other hand, indicators of conflict suggest that the security environment has deteriorated in many parts of Myanmar, including in states and regions which have historically been relatively peaceful. This has affected businesses' operations, logistics, confidence, and appetite to invest. After the sharp decline in incomes and employment observed across the economy, available indicators suggest domestic demand remains very weak. At the same time, supply-side constraints persist and some have worsened in recent months. Access to kyat liquidity, credit, and foreign currency remains severely constrained. A sharp exchange rate depreciation in September 2021 has raised import prices across the economy, including of fuel and other critical inputs to production, increasing transport costs. Electricity outages are a growing concern and internet disruptions continue to reduce the reliability of firms' and households' connectivity and ability to access information and connect with markets (see Part III: Digital Disruptions and Economic Impacts).
The objective of this technical report and the accompanying skills profiles report is twofold. First, the technical report explains the methodology used to transform job postings text into OV data and in turn, illustrates how to use those data to produce labor market intelligence valuable to different users. Second, the report presents answers to questions often asked by end-users and policymakers. This work is part of a series produced by the World Bank to support the Government of Indonesia in strengthening its labor market information system (LMIS). The OVO presents the results of one of four data pilots that, if adopted by the government, will provide the information needed to fill in important data gaps and to provide key labor market intelligence services to different users. Moreover, while this work focuses on the Indonesian context, it may also inform decisions in other developing countries that are considering the utilization of these data and having concerns about their validity when there is limited access to the internet and widespread informality.
Global economic growth has picked up in 2021 and has now surpassed its pre-pandemic level. The National Bank of Rwanda (NBR) has maintained an accommodative monetary stance and other measures to support the recovery, taking advantage of low inflation. The government's continued fiscal expansion is also providing support to the economy. Regional integration offers significant benefits for Rwanda, including greater potential for scale economies, opportunities for learning to export and produce higher-quality goods, and cooperation to improve trade facilitation. Regional trade will be enhanced by boosting trade with non- East African Community (EAC) members. The African continental free trade area (AfCFTA) can boost growth and trade integration. The development of Rwanda as a regional logistics hub, serving as an intermediating node between the East and Central Africa regions offers prospects to increase revenues and generate efficiency gains through the concentration of logistics services. The white paper on logistics and distribution services strategy for Rwanda, prepared with the support of the World Bank, laid out a two-phase strategy for the rollout of Rwanda as regional logistic hub. This involved: (i) improving the efficiency of Rwanda's role as a land-bridge for re-exports to Goma in Democratic Republic of Congo (DRC); and (ii) establishing a regional logistics hub in Rwanda linked to a primary multi-modal hub at Kisangani and a secondary multi-modal hub at Kindu.
The report focuses on sectoral choice as one of the contributors to the gender gap in firm performance. It explores the difference in profits among female entrepreneurs who cross over into male-dominated sectors (MDS) compared to those who remain in traditionally female-concentrated sectors (FCS). The report provides a snapshot of the factors associated with being a female entrepreneur who crosses over to MDS, including the most salient cross-country ones that are associated with breaking into and surviving in these sectors. Based on this analysis, it offers evidence-based programs and policies which can support women to cross over into more profitable sectors and contribute to their business performance more generally. The studies in this report were conducted across three regions and in ten countries (Sub-Saharan Africa: Botswana, Uganda, Ethiopia, and Guinea, in Latin America and the Caribbean: Peru and Mexico, and in East Asia and Pacific: Cambodia, Lao People's Democratic Republic (PDR), Vietnam, and Indonesia). The report also draws from the findings of the global multi-country future of business survey of entrepreneurs carried out through a social media platform.
South Sudan faced significant headwinds in FY2020/21, with the pandemic, floods, and violence flareups affecting economic activities. Consequently, the economy is estimated to have contracted by 5.4 percent in FY2020/21. Oil production declined by 5.9 percent as floods affected production and the COVID-19 pandemic delayed new investments to replace exhausted wells. In the agriculture sector, flooding precipitated estimated losses of 38,000 tons of cereals (4.3% of 2020 production) and 800,000 livestock according to FAO estimates. The overall cereal deficit was projected to reach 465,610 metric tons in 2021, equivalent to about 35 percent of the overall food requirement for the year, sustaining high levels of food insecurity. Living conditions continue to be impacted by violence, displacement, and inadequate access to basic services. With improving macroeconomic conditions supported by an ongoing macro-fiscal reform program, a modest growth rebound of 1.2 percent is projected in FY2021/22. Nevertheless, poverty levels are expected to remain exceptionally high. As the economy recovers from multiple shocks, a focus on policy options to stimulate the creation of a sufficient number of quality jobs to absorb a young and expanding labor force should take center stage. Economies that create jobs, particularly for the youth, are generally more stable and can elevate public confidence in the Government's capacity to deliver. In South Sudan, an effective jobs support program would invest in immediate livelihood support, the recovery of modest business activities, and the revival of markets.
Global Water Security & Sanitation Partnership, Development Research Center of State Council ; China is a global leader in the use of ecological compensation ("eco-compensation")—fiscal transfers for environmental and natural resources management. China is one of the most fiscally decentralized countries in the world, with 85 percent of government spending occurring at subnational levels. In this context, fiscal transfers are one of the national government's most important tools for motivating and aligning environmental actions across levels of government and jurisdictional boundaries. The government has signaled a strong interest in expanding eco-compensation as part of reforms towards a higher quality greener growth model. Drawing on a unique dataset built from records across government, academia, and news media, this report traces the rise of eco-compensation, explores its current use, provides recommendations to strengthen impacts, and distills broad lessons from China for similar policies globally.
The scale and scope of Lebanon's deliberate depression are leading to the disintegration of key pillars of Lebanon's post-civil war political economy. Monetary and financial turmoil along with surging inflation continue to drive crisis conditions. Public finances improved in 2021 as spending collapsed faster than revenue. Lebanon urgently needs to adopt and implement a credible, comprehensive, equitable reform plan if it is to avoid a complete destruction of its social and economic networks and immediately stop irreversible loss of human capital.
Supervision of business activities through an inspections system is a key component of a government's regulatory apparatus. Several jurisdictions have attempted to address these challenges by further standardizing the approaches, resources, practices, and tools used by two or more inspectorates, a process also known as integration. This note offers insights for reformers and practitioners based on lessons from selected case studies, with a focus on in-land inspections systems integrated in the past decade and discusses some recent developments in inspection reform. A previous World Bank Group (WBG) publication identified five integration models. This study, while confirming that these models remain relevant, examines integration efforts using the five key areas of inspection reform as a lens: institutional frameworks, legal instruments, strategy planning and operational tools, competences, and e-Inspections.
Recognizing the severity of the crisis, the GoI devised a national reform plan (the white paper) that sets out a old blueprint of structural reforms to achieve sustainable medium-term growth through economic diversification and boosting private sector growth and private sector job creation. The GoI has also devised an implementation and governance framework for the white paper in which it proposed a detailed reform matrix and launched a High Reform Council headed by the Prime Minister to accompany the implementation. Actions have already been realized starting with the reforms adopted in the 2021 budget law and other areas including in the business environment and the financial sector. The ultimate success of the reforms though depends on the political will and public support to implement the proposed measures and lead the country out of a long-standing fragility trap. Iraq's economic outlook hinges on global oil markets prospects, the implementation of the white paper reforms, and on the evolution of COVID-19 (coronavirus). The economy is forecast to gradually recover on the back of rising oil prices and rising OPEC+ production quotas. GDP is projected to grow by 1.9 percent in 2021 and 6.3 percent on average over the subsequent two years (Table 1). Non-oil GDP is forecast to recover in 2021, growing by 5.5 percent before converging to historically low potential growth trend in 2022–23. The currency devaluation is estimated to push inflation to 8.5 percent in 2021 due to limited capacity for import substitution. This will present an additional pressure on Iraqi households' wellbeing. The fiscal stance remains expansionary with only limited reform measures being included in the 2021 budget law after an extended deliberation in the Parliament. Higher oil revenues in tandem with the devaluation effect on those receipts are projected to narrow the fiscal deficit to 5.4 percent of GDP in 2021. Financing needs are forecast to remain elevated compared to pre-COVID-19 levels, averaging at 13.7 billion Dollars per year (7.5 percent of GDP) in the outlook period (2021–2023). The 2021 approved budget includes limited reforms such as new consumption taxes and better targeting of PDS transfers which are in line with the GoI white paper. If implemented they could help moderate the fiscal deficit and exchange rate pressures. However, more structural issues such as public wages and pension rigidities remain unaddressed.
On July 1, 2020, Mauritius officially joined the ranks of High-Income Countries (HIC). It is a cruel historical irony that Mauritius reached the High-Income milestone during one of the worst years in its history. Mauritius delivered a highly successful health response to the global Covid-19 pandemic through a hard lockdown and subsequent quarantine measures, and as a result has effectively been 'Covid-free' from April 2020 to March 2021, when a second outbreak occurred. With a total of 1246 cases and 17 deaths, Mauritius has so far been able to avoid the large-scale health crisis observed in many other countries. However, Covid-19 has caused severe economic disruptions in Mauritius. An oil spill in August and Mauritius' inclusion in the EU list of High Risk Third Countries for Money Laundering in October 2020 added further pressure. While the events of 2020 require dedicated responses in the short term, addressing the underlying challenges cannot be postponed if Mauritius is to make a strong recovery. The best strategy for a solid recovery lies in a combination of temporary support to firms and households affected by the shock with a comprehensive reform program to address pre-existing structural challenges. It is unlikely that a strategy of simply addressing the short-term effects by supporting ailing firms while waiting for global conditions to improve would suffice to put Mauritius' economic and social development back on track. On the other hand, the crisis affords policy makers with the opportunity to confront long-festering challenges.
This report presents an analysis conducted by the World Bank to assess macro-fiscal impacts of earthquakes and floods in European Union (EU) Member States (MS), analyze the financial instruments in place to manage this risk and identify any associated funding gaps. The analysis is underpinned by the outputs of two regionally consistent probabilistic catastrophe risk models, one developed by JBA Risk Management (JBA) for fluvial and surface water flood, and one by the Global Earthquake Model Foundation (GEM) for seismic risk. The report provides, (i) an indication of future losses for each country; (ii) an indication of each countries funding gap based upon the information available on national and EU level financial instruments; and (iii) options for consideration to strengthen financial resilience at the EU and the national level. Overall, this report finds that financial instruments to manage disaster risk are limited in most of the countries and at the EU level, despite the devastating impacts disasters pose to welfare, fiscal balance, and more broadly the economy.
This assessment of gender responsive public financial management (GRPFM) for 2020 of the government of Ukraine (GoU) has been conducted using the draft Supplementary Framework for Assessing Gender Responsive Public Financial Management and is one of the first pilots using this framework. The purpose of the PEFA supplementary assessment on gender responsive budgeting (GRB) is to collect information on the extent to which gender is mainstreamed in Ukraine's public financial management (PFM) system and to establish a baseline for future assessments. The government of Ukraine has been at the forefront of introducing and mainstreaming gender, so the assessment results are expected to facilitate the measurement of progress on an initiative that is already underway.
Since 2015, a year of the adoption of the Waste Management Code, Georgia has achieved significant progress towards an integrated solid waste management system. Regardless, there are several solid waste management challenges that the country struggles to overcome and is far from meeting the ambitious targets detailed in the National Solid Waste Management Strategy, which is harmonized with European Union standards. Some of the challenges include the need for improving waste collection coverage; reducing waste quantities in landfills; managing waste in an environmentally sound, safe manner; eliminating illegal dumping and littering through better waste collection, monitoring, and law enforcement; transforming municipal solid waste (MSW) management service delivery organizations from almost fully subsidized entities into truly autonomous, self-sufficient organizations with full cost-recovery; and introducing circular economy principles, including those for waste prevention, re-use, redesign, recycling and recovery. With a view to identify key solid waste sector gaps looking at the sector holistically and suggest short to longer-term interventions together with required investments, in mid-January 2021 the World Bank launched a solid waste sector study. The study was carried out by a team of local and international experts using combined methods of a desk review of existing literature and data, interviews with key decision-makers (e.g. representatives of the Ministry of Environmental Protection and Agriculture (MEPA), Solid Waste Management Company of Georgia (SWMCG) and cleaning /amenity services of local municipalities), questionnaire surveys of local municipalities, a gap analysis and, a spatial analysis via application of Geo-Information Systems (GIS). This paper seeks to assess high-level, solid waste management in Georgia to identify gaps in implementation of the National Waste Management Strategy (NWMS) and National Waste Management Action Plan (NWMAP) and to propose solutions linked to an operational roadmap and a program for short-, medium-, and long-term interventions for hard and soft investments.
According to latest estimates, the economy grew by 2.0 percent in 2020, 4 percentage points less than projected before the onset of COVID-19 (coronavirus). The primary sector grew by 5.2 percent, supported by strong performances of subsistence crops and cotton. The tertiary sector, the largest component of the economy, contracted by 4.9 percent on account of COVID-19 social distancing measures. Inflation returned to positive territory in 2020 and closed the year above 4 percent. The pandemic had a positive impact on the external sector and a negative impact on the fiscal accounts. In 2020, the trade balance improved by 1.0 percentage point of GDP supported by historically high gold prices and low oil prices. The structurally negative services balance improved by 0.3 percentage points of GDP on account of cheaper electricity imports from neighboring countries. The fiscal deficit as a share of GDP reached 5.2 percent in 2020, an increase from 3.2 percent in 2019. Public debt stood at 47.6 percent of GDP by end-2020. Although many impacts of the COVID-19 shock persist, the economy is projected to continue its recovery in 2021. On the demand side, the recovery is supported by consumption and private investment. With security, humanitarian, health, and social challenges persistingthroughout the year, the fiscal deficit is projected to remain elevated at 5.2 percent of GDP. As concessional funding is finite and no other funding options are available, the Government will have to resort to more expensive borrowing in the regional market, which will shift the composition of the public debt stock towards a majority share of domestic debt.