Country Economic Memorandum

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  • Publication
    Zimbabwe Country Economic Memorandum: Boosting Productivity and Quality Jobs
    (Washington, DC, 2022-10) World Bank
    Despite various economic setbacks, Zimbabwe regained lower middle-income country (LMIC) status in 2018 and aspires to become an upper middle-income country (UMIC) by 2030. The focus of this Country Economic Memorandum (CEM) is to identify options for structural reforms to help Zimbabwe accelerate economic growth and to achieve UMIC status. This is the first CEM for Zimbabwe since 1985 and it comes at a critical juncture along Zimbabwe’s development path. The objective of the report is to support and inform policy makers and stakeholders on policies to accelerate economic growth, boost productivity, and create high-quality jobs. In this regard, the CEM first establishes macroeconomic stability as a necessary condition for high and sustained growth. It then uses productivity as an overall framing to identify key structural bottlenecks, before providing deep-dives on informality and trade as priority areas to address in order to unleash productivity growth. Importantly, the report also aims to present data about Zimbabwe’s economic performance in a systematic fashion, focusing on the previous two decades and comparing Zimbabwe with its peers in the region, as well as aspirational peers globally.
  • Publication
    Ethiopia’s Great Transition: The Next Mile - A Country Economic Memorandum
    (Washington, DC : World Bank, 2022-06-17) World Bank
    Ethiopia’s rapid growth over the past two decades has resulted in a surge in income per capita levels, with the country approaching fast the middle-income milestone. Over the past decade, fast growth was driven by capital accumulation, but the extent to which this growth has been equally distributed is unclear. Public infrastructure spending accelerated dramatically in the first half of the 2010s, helping underpin fast economic growth. However, this approach seems to have had important shortcomings. Contrary to the findings of World Bank (2015) which examined an earlier period, total factor productivity (TFP) declined during 2011-2020, contributing negatively to growth. In addition, inequality at the household level increased between 2011 and 2016. Finally, macroeconomic imbalances have widened, a trend exacerbated by recent shocks. This report discusses the drivers of growth in Ethiopia and, in the absence of official subnational gross domestic product (GDP) figures, examines whether there has been convergence in economic activity at the subnational level.
  • Publication
    Directions for Reform: A Country Economic Memorandum for Recovery and Resilience in South Sudan
    (Washington, DC: World Bank, 2022-06-10) World Bank
    South Sudan is at a crossroads in its recovery, reconstruction, and development. Having gained independence in 2011 after two protracted civil wars, the country twice relapsed into conflict: first in 2013 and again in 2016. While the economy began to recover following the 2018 peace deal, progress has stalled amidst a multitude of crises – including the COVID-19 pandemic, climate shocks, and dwindling oil production. At the same time, the broad-based rise in commodity prices due to the war in Ukraine have on balance affected South Sudan adversely. A decade after independence, South Sudan remains caught in a web of fragility and economic stagnation, with weak institutions, recurring cycles of violence, and ubiquitous poverty. Overall, the conflict is estimated to have cost South Sudan an accumulated loss in aggregate GDP of some US$81 billion during 2012 – 2018, equivalent to $11.6 billion per year on average (80 percent of 2010 GDP). Consequently, South Sudan’s real GDP per capita in 2018 was estimated at being one third of the counterfactual estimated for a non-conflict scenario. With the fragile peace deal largely holding despite challenges in implementation, the authorities initiated an ambitious reform program aimed at macroeconomic stabilization and modernization of the young country’s public financial management systems. This report discusses South Sudan’s economic performance since independence, with a focus on leveraging the country’s endowments of natural capital – oil and arable land – to support recovery and resilience. Three messages emerge from this report. First, there is a peace dividend in South Sudan. South Sudan’s real GDP per capita in 2018 was estimated at one third of the counterfactual estimated for a non-conflict scenario. Thus, maintaining peace can by itself be a strong driver of growth. Second, with better governance and accountability, South Sudan’s oil resources can drive transformation. Third, South Sudan’s chronic food insecurity could be reversed with targeted investments to improve the resilience of the agricultural sector.
  • Publication
    Georgia Country Economic Memorandum: Charting Georgia’s Future
    (Washington, DC, 2022-06) World Bank
    From the Coronavirus (COVID) pandemic to the war in Ukraine, the world and Georgia are experiencing more uncertainty and accelerating disruption. As a small open economy looking to integrate with the global economy, Georgia must carefully navigate these trends by being prepared for the risks and on the lookout for emerging opportunities. A more capable, competitive and connected Georgia will be better placed to navigate these trends. This Country Economic Memorandum (CEM) aims to inform the policies that could offset these headwinds. To sustain productivity growth, Georgia needs to facilitate its structural transformation and the corresponding spatial adjustment (Chapters 1 and 2). Furthermore, growth will increasingly need to come from improvements in total factor productivity (TFP) in Georgia’s firms (Chapter 3) and advancement in their ability to exploit opportunities in external markets (Chapter 4). Finally, more active and better-skilled labor (Chapter 5) can help offset existing demographic trends and augment productivity. Progress in these areas, supported by higher savings, will make Georgia’s economy more competitive, connected, and capable, help sustain robust GDP growth over the long-term and turn Georgia’s aspirations into reality.
  • Publication
    Gabon Country Economic Memorandum: Toward More Inclusive and Greener Growth
    (Washington, DC: World Bank, 2022-05) World Bank
    Over-reliance on natural resources has held back diversification of Gabon’s economy, as growth, exports, and fiscal revenues are still largely dependent on extractives. Despite Gabon’s abundant natural resources, growth has been slow to reduce poverty. In the context of dual shocks from low oil prices and the COVID-19 pandemic in 2020, government authorities committed to fiscal consolidation, structural reforms, and economic diversification as part of the Accelerated Transformation Plan (PAT). In addition, at their exceptional summit in August 2021, the Economic and Monetary Community of Central Africa (CEMAC) heads of state provided a strong political endorsement for structural reforms, with emphasis on improved management of public funds and governance, business environment reforms, and regional integration of human capital. This Country Economic Memorandum (CEM) is framed along the new reforms supported by the CEMAC heads of state to achieve faster, more inclusive, and sustainable growth. In this CEM, the green economy is viewed as an opportunity for Gabon to position itself as a champion. Economic transformation is necessary to find a better, sustainable model for job creation: reinforcing labor supply through better skills and job-search training, and creating economic opportunities in a more conducive environment for investment and trade. This CEM aims at supporting policy makers in their reform efforts. Their goal is to help Gabon, a small economy of 2.3 million people, break free from its resource-dependent growth model and create the conditions to move people into jobs in promising green sectors.
  • Publication
    Leveraging Global Value Chains for growth in Turkey: A Turkey Country Economic Memorandum
    (Washington, DC: World Bank, 2022-03-02) World Bank
    Turkey saw phenomenal growth in the 2000s as economic reforms ushered in FDI, GVCs expanded, and productivity increased. The early 2000s saw Turkey exit from major economic crisis with a strengthened fiscal framework, a strengthened, inflation-targeting mandate for the Central Bank, the establishment of an independent bank regulator, and importantly, a recently agreed Customs Union agreement with the EU. From 2001 to 2017, incomes per capita in Turkey doubled in real terms and tripled in current dollar terms. Turkey transformed from a lower-middle-income country (LMIC) at the start of the 2000s to very nearly reaching high-income status by 2014. This drove a rapid fall in poverty from above 30 percent to just 9 percent1. Very few other countries matched Turkey’s growth over this period, and almost all of them were new EU member states.
  • Publication
    From Swimming in Sand to High and Sustainable Growth: A Roadmap to Reduce Distortions in the Allocation of Resources and Talent in the Pakistani Economy
    (World Bank, Washington, DC, 2022) World Bank Group
    This report focuses on growth in Pakistan, and on key aspects of its proximate determinants: productivity, capital, and talent accumulation. Productivity is crucial in accounting for differences in standards of living across countries and time. In addition, and particularly at the level of development of Pakistan, factor accumulation, investment, and human capital, also matters. Specific and policy relevant questions around these broad themes are this report's center of attention. The underlying framework of analysis and orientation of public policy recommendations is what is known as the 'ABC' of growth. This 'ABC' implies improving allocative efficiency of resources and talent, encouraging business-to-business connections and spillovers, and strengthening firms' capabilities. Public policies oriented to create an enabling environment around these three pillars will be powerful in boosting sustainable growth. However, the efficient allocation of talent and resources, and the business-to business interactions leading to spillovers and the conditions to upgrade capabilities, are limited by economic distortions (or market failures) that inhibit the growth process, sometimes making it as difficult as swimming in sand.
  • Publication
    Georgia Country Economic Memorandum: Charting Georgia’s Future : Competitive, Connected, Capable
    (Washington, DC: World Bank, 2022) World Bank
    From the Coronavirus (COVID) pandemic to the war in Ukraine, the world and Georgia are experiencing more uncertainty and accelerating disruption. As a small open economy looking to integrate with the global economy, Georgia must carefully navigate these trends by being prepared for the risks and on the lookout for emerging opportunities. A more capable, competitive and connected Georgia will be better placed to navigate these trendsThis Country Economic Memorandum (CEM) aims to inform the policies that could offset these headwinds. To sustain productivity growth, Georgia needs to facilitate its structural transformation and the corresponding spatial adjustment (Chapters 1 and 2). Furthermore, growth will increasingly need to come from improvements in total factor productivity (TFP) in Georgia’s firms (Chapter 3) and advancement in their ability to exploit opportunities in external markets (Chapter 4). Finally, more active and better-skilled labor (Chapter 5) can help offset existing demographic trends and augment productivity. Progress in these areas, supported by higher savings, will make Georgia’s economy more competitive, connected, and capable, help sustain robust GDP growth over the long-term and turn Georgia’s aspirations into reality.
  • Publication
    Bangladesh Country Economic Memorandum: Change of Fabric
    (World Bank, Washington, DC, 2022) World Bank Group
    Bangladesh’s development progress over the past decades has been remarkable. Bangladesh has been among the fastest growing economies in the world. Economic development has translated into higher living standards and improved social and health outcomes. The next years will determine Bangladesh’s longer term development trajectory. The milestones ahead reflect the deep structural transformation of Bangladesh’s economy over the past decades, but also serve as a reminder that further transformation will be required for a prosperous future. Sustaining fast growth and addressing these global challenges will require overcoming three critical growth constraint. This report explores these constraints and proposes actionable reforms to sustain development. It is expected to inform the public and help the authorities design policies to achieve the goals set out in the eighth five year plan and Bangladesh vision 2041. The report focuses on three growth constraints: (i) diversifying exports and increasing competitiveness to reach the next development stage through export-led growth; (ii) mobilizing domestic and international savings to channel them toward productive investment; and (iii) upgrading urban areas, unleashing secondary cities, and improving connectivity to sustain structural transformation and increase productivity. In addition, the implications of digital development and climate change are explored as crosscutting themes across the three topics.
  • Publication
    Nigeria Country Economic Memorandum : Charting a New Course: Synthesis Report
    (Washington, DC: World Bank, 2022) World Bank
    Nigeria has vast potential, but development has stagnated over the past decade. The country is characterized by strong spatial inequalities and a large north-south divide. Creating better jobs is a necessary condition for accelerating poverty reduction and economic transformation. A combination of limited job creation, booming demographics, and unfulfilled aspirations is pushing young Nigerians to emigrate abroad in search of gainful employment. As a result, Nigeria is at a critical historical juncture, with a choice to make. To chart a new and inclusive growth path, Nigeria needs macroeconomic and institutional enablers and investment accelerators. To catalyze private investment and offer more opportunities to the youth, the priority is to restore and preserve macroeconomic stability. To do so, it will be critical to improve the availability of FX, and the predictability and credibility of the exchange rate system to ensure a level playing field across all firms and individuals. While there is no silver bullet to accelerate growth, Nigeria can become a rising growth star again if it implements a comprehensive set of bold reforms in a timely manner. To implement this set of prioritized reforms, the authorities need to walk the talk and shift their focus from the “what” to the “how”.