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from India Insight:
Thirty-three percent of world’s poorest live in India
(Any opinions expressed here are those of the author and not necessarily of Reuters)
India has 33 percent of the world’s poorest 1.2 billion people, even though the country's poverty rate is half as high as it was three decades ago, according to a new World Bank report.
India reduced the number of its poor from 429 million in 1981 to 400 million in 2010, and the extreme poverty rate dropped from 60 percent of the population to 33 percent during the same period. Despite the good news, India accounts for a higher proportion of the world's poor than it used to. In 1981, it was home to 22 percent of the world's poorest people.
The World Bank report comes just days after it proposed a $12 billion to $20 billion plan to reduce poverty levels over four years in the Indian states of Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh. Sixty percent of the financing would go to state government-backed projects, according to the Hindu Business Line newspaper.
from Global Investing:
Twenty years of emerging bonds
Happy birthday EMBI! The index group, the main benchmark for emerging market bond investors, turns 20 this year. When officially launched on Dec 31 1993, the world was a different place. The Mexican, Asian and Russian financial crises were still ahead, as was Argentina's $100 billion debt default. The euro zone didn't exist, let alone its debt crisis. Emerging debt was something only the most reckless investors dabbled in.
To mark the upcoming anniversary, JPMorgan - the owner of the indices - has published some interesting data that shows how the asset class has been transformed in the past two decades. In 1993:
- The emerging debt universe was worth just $422 billion, the EMBI Global had 14 sovereign bonds in it with a market capitalisation of $112 billion.
- The average credit rating on the index was BB.
- Public debt-to-GDP was almost 100 percent back then for emerging markets, compared to 69 percent for developed markets.
- Forex reserves for EMBI countries stood at $116 billion
- Per capita annual GDP for index countries was less than $3000.
Now fast forward 20 years:
- The emerging debt universe is close to $10 trillion, there are 55 countries in the EMBIG index and the market capitalisation of the three main JPM indices has swollen to $2.7 trillion.
- The EMBIG has an average Baa3 credit rating (investment grade) with 62 percent of its market cap investment-grade rated.
- Public debt is now 34 percent of GDP on average in emerging markets, while developed world debt ratios have ballooned to 119 percent of GDP.
- Forex reserves for EMBIG members stand at $6.1 trillion
- Per capita annual income has risen 2.5 times to $7,373.
from Global Investing:
Easy business trend in emerging Europe
Polish central bank governor Marek Belka doesn't apportion a lot of importance to the fact that Poland can boast the second biggest improvement in the latest World Bank's ease of doing business index, after Kosovo.
"This year we have improved, but I don’t care too much about it," Belka said at a meeting in London today.
from Breakingviews:
IMF’s long-term worry: decades of higher rates
By Christopher Swann and Martin Hutchinson
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
The International Monetary Fund has a new long-term worry: decades of higher interest rates. Don’t get too comfortable with low borrowing costs, is the downbeat message from the normally overoptimistic fund’s flagship World Economic Outlook. Slightly feebler growth of 3.3 percent for 2012 is the short-term concern. But past fiscal excesses and an ageing population could push up interest rates for a generation.
from David Rohde:
The BRIC laggard
SAO PAULO – For decades, Denis Dias’s parents could never break into Brazil’s middle class. They started a bakery and a pizzeria in the 1970s and 1980s, but the country’s economic instability and hyper-inflation consumed their businesses and their hopes. His father ended up owning a newsstand. His mother worked as a maid. And Denis attended dilapidated state-run schools.
Over the last 10 years, Denis and at least 35 million other Brazilians have achieved their parents’ dream. Denis is a corporate lawyer at a Brazilian energy company and a new member of Brazil’s middle class, now 100 million people strong. Denis, his company and his nation have ridden the exports of iron ore, soy, oil and other natural resources to prosperity.
from Africa News blog:
Is Joyce Banda the answer to Malawi ’s problems?
By Isaac Esipisu
The continents’ newest and second Africa’s female president took over the reins of power in Malawi to offer a new and more responsive style of leadership that is expected to spur economic recovery of one of Africa’s poorest nation. Joyce Banda was sworn in as president two days after President Bingu wa Mutharika died of heart attack at 78.
The new president, Joyce Banda started her presidency in an enthusiastic and robust way; mending ties with foreign donors that could see Malawi pull out of an economic crisis. The new president of Zambia , Michael Sata, is making the transition easier, contributing 5 million litres of petrol that should help the economy. Banda, a 61-year-old policeman's daughter who won recognition for championing the education of underprivileged girls, now enjoys widespread support among a population whose lives grew increasingly difficult under Mutharika
from Felix Salmon:
Is the World Bank board sure what Jim Kim thinks?
William Easterly is uncharacteristically credulous today. He spoke to one of those Senior Administration Officials on Wednesday, and the Official gave Easterly the official explanation for why Jim Yong Kim has failed to RSVP for the CGD/Washington Post forum or for any other public appearance.
The official said it was purely logistical: Kim has been constantly on the road meeting member governments, and would continue to be on the road right up until the vote.
from Breakingviews:
World Bank wackiness explains odd U.S. choice
By Rob Cox
This column appears in the April 9 issue of Newsweek. The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
If the competition to become the World Bank’s next president were a normal process, Jim Yong Kim wouldn’t stand a chance. The Dartmouth College president lacks two of the traditional qualifications for running an international lending body: financial savvy and diplomatic experience. But the race to lead the World Bank is everything but ordinary - particularly this time.
from Felix Salmon:
Why Jim Yong Kim won’t change the World Bank
Thomas Bollyky has a subtle and slightly confusing op-ed in the NYT today, entitled "How to Fix the World Bank". Worldbankpresident.org, your one-stop shop for all news on the race, calls it "an important endorsement for Jim Kim, and for change at the World Bank". But while it's the latter -- Bollyky's case for change is strong and compelling -- it's by no means the former. Indeed, Kim in many ways represents the status quo ante, and a vote against change at the Bank.
The heart of Bollyky's argument is the undeniable case that since the world has changed, the Bank needs to change too.
from Felix Salmon:
Jim Yong Kim’s depressing tactical silence
When Barack Obama nominated Jim Yong Kim to be the president of the World Bank, the most notable thing that he said was about Trayvon Martin. And since then, Kim has disappeared. Jesse Griffiths put up a post on Sunday starting a Kim-watch, but so far nothing; it's increasingly obvious that he's not going to turn up, for instance, for the CGD/World Bank Q&A sessions next week. (They're being webcast; Okonjo-Iweala is up at 3pm on Monday, while Ocampo is scheduled for 4pm on Tuesday.)
(*Update: Kim has actually given a handful of on-the-record interviews, which make it very clear that giving on-the-record interviews is not a great way for him to get the job. Indeed, the most striking thing about them is his propensity to flat-out lie. “I am very proud to be part of what is the first contested, merit based, open election ever for presidency of the World Bank,” he told Capital Ethiopia. “I am proud of being part of the first transparent, merit-based election in the World Bank history,” he said to the Hindustan Times. "I'm coming into this election and not asking people to support me because I'm an American," he told Nikkei. "I ask people to support me because of my experience." But of course it goes without saying that this election is not transparent, and is not merit-based. If it were merit-based, the Canadians and the Japanese would probably have met with Okonjo-Iweala and Ocampo before declaring their support for Kim. It's bad enough that Kim is being installed in the presidency of the World Bank by the divine right of POTUS. But it's much worse that he thinks that if he wins, he's going to have done so fair and square.)
