Economic Premise
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The Economic Premise series summarizes good practices and key policy findings on topics related to economic policy. They are produced by the Poverty Reduction and Economic Management (PREM) Network Vice-Presidency of the World Bank.
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Publication
Changing for the Better: The Path to Upper-Middle-Income Status in Uzbekistan
(World Bank, Washington, DC, 2013-06)As a low-middle-income country with a gross domestic product (GDP) per capita of US$1,715 and a population of 30 million (nearly half of all of the Central Asian population), Uzbekistan has seen stable economic progress since the mid-2000s, both in terms of growth and poverty reduction. Growth has averaged 8 percent per year since 2004 and extreme poverty has declined from 27 percent in 2000 to 15 percent in 2012. Encouraged by this outstanding growth performance, the Uzbek authorities have set an ambitious goal for the country, to join the group of upper-middle-income countries by 2030. This note discusses the main challenges that the government is likely to face and the structural transformations that the economy will have to undergo to achieve this objective. -
Publication
South East Europe Six : From Double-Dip Recession to Accelerated Reforms
(Washington, DC, 2013-01)This note discusses the external environment, economic outlook, and key policy challenges for the six South East European Countries (SEE6)-Albania, Bosnia and Herzegovina (BIH), Kosovo, the former Yugoslav Republic (FYR) of Macedonia, Montenegro, and Serbia-as they seek to reignite economic recovery. After two years of fragile recovery from the global recession, as a group, SEE6 countries experienced a double-dip recession in 2012. Deteriorating external conditions, the impact of the severe winter on economic activity, and a continuing rise in unemployment early in the year took a toll on consumption, investments, and exports. The rise in unemployment continues to threaten the social fabric. Credit recovery and fiscal consolidation are under threat. Nonperforming loans (NPLs)-thought to be stabilizing only a few months ago-are again on the rise. As a result, both within and outside the region, the environment has become much more difficult to navigate, and the policy trade-offs necessary to stabilize economies and reignite growth have become more difficult to make. To overcome these challenges, SEE6 countries need more intensive policy reform to reduce public debt and accelerate structural reforms, especially in fiscal consolidation and the financial sector, labor markets, and business environment. Additional external financing from International Financial Institutions (IFIs) for growth and jobs could prove effective, but only if accompanied by intensified fiscal and structural reforms. -
Publication
European Bank Deleveraging : Implications for Emerging Market Countries
(World Bank, Washington, DC, 2012-04)Just before the 2008-9 global financial crises, policy makers were concerned about the rapid growth of bank credit, particularly in Europe; now, worry centers on a potential global credit crunch led by European banking institutions. While recognizing that concrete evidence is limited by significant data gaps and lags, this note discusses the dynamics of European bank deleveraging and possible implications for emerging market economies (EMEs). Overall, the information available as of early 2012 shows a marked deterioration of credit conditions across Europe. Data also suggest that spillover effects are already being felt around the globe and imply significant channels through which deleveraging could have disruptive short and long-term consequences for credit conditions in EMEs, particularly in Central and Eastern Europe (CEE). However, the significant liquidity support provided by the European Central Bank (ECB) since December may be a 'game changer,' at least in the short term, because it has helped revive markets and limited the risk of disorderly deleveraging. The extent, speed, and impact of European bank deleveraging will henceforth depend largely on the evolution of market conditions, which in turn are guided by the ultimate impact of ECB liquidity support, attainment of sovereign debt sustainability and fiscal convergence within the euro zone, and credibility of the European rescue fund as an effective firewall against contagion. -
Publication
Russia 1998 Revisited : Lessons for Financial Globalization
(World Bank, Washington, DC, 2010-10)In 1998, the Russian Federation experienced one of the most severe emerging market crises of the 1997-2001 periods. It occurred less than six months after the attainment of single-digit inflation, which was supposed to launch the economy onto a sustainable growth path. This note sets out why that occurred and discusses the lessons learned.