Country Economic Memorandum
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Publication
Yemen Country Economic Memorandum 2022: Glimmers of Hope in Dark Times
(Washington, DC: World Bank, 2023-06-22)Yemen’s economy has been transformed by eight years of violent conflict. War has shattered the country’s already fragile economic equilibrium, touching upon virtually every aspect of life. The compounded shocks of the COVID-19 pandemic and rising global prices have only deepened the economic and humanitarian disaster precipitated by the war. Since the start of the conflict, economic analyses have tended to focus on the deterioration of macroeconomic indicators, the sharp rise in poverty and food insecurity, and the destruction of infrastructure and the capital stock, but relatively little attention has been paid to the current structure of the economy or what prospects can be envisaged for the country. Also, it is important to situate this analysis within the political economy dynamics of the country which majorly affect the economic development challenges of the country. Data constraints and the unique characteristics of Yemen’s recent experience limit the effectiveness of traditional growth-analysis methodologies. This Country Economic Memorandum (CEM) uses novel data-collection methods and analytical techniques, triangulating its findings with traditional approaches and direct data collection to close the economic knowledge gap. Information sources include extensive key-informant interviews, household phone surveys, and remotely sensed geospatial data based on satellite imagery, including nighttime illumination data. This CEM also combines an in-depth political economy analysis with economic development investigation. -
Publication
Pathways to Sustainable Growth in Niger: A World Bank Group Country Economic Memorandum
(Washington, DC, 2022)This country economic memorandum aims to support Niger’s efforts to walk on a path conducive to a resilient and sustainable economic growth. It does so by attempting to answer the following five questions, each of which constitutes a separate chapter: (i) what were the salient structural characteristics of Niger’s growth performance in the last 20 years; (ii) what are the margins to accelerate growth in the medium to long term; (iii) how can technology be a vehicle for private sector development; (iv) how can the country’s large natural resource endowments be managed in a transparent way that benefits the whole population; and (v) how can the current disaster management framework be strengthened to increase resilience to natural shocks -
Publication
Lake Chad Regional Economic Memorandum: Technical Paper 3. Estimating the Spillover Economic Effects of Foreign Conflict - Evidence from Boko Haram
(World Bank, Washington, DC, 2021-11-12)Violent conflicts present a formidable threat to regional economies. Throughout the world, border regions in many countries are possibly impacted by the cross-border economic effects of regional insurgencies in neighboring countries or national state failures, i.e. "bad neighbors". This raises two questions. First, what is the magnitude of the spill-over economic effects of foreign conflict and what are the channels through which they operate Second, what policies can governments adopt in the potentially exposed regions to mitigate such spill-over effects. In this paper, we adopt a difference-in-difference (DiD) framework leveraging the unexpected rise of the Boko Haram insurgency in Northeastern Nigeria in 2009 to study its economic effects in neighboring areas in Cameroon, Chad and Niger that were not directly targeted by Boko Haram activities. We find strong cross-border economic effects that are likely driven by reduced trade activities, not the diffusion of conflict. Factors of local economic resilience to this foreign conflict shock then include trade diversification and political and economic securitization. More generally, conflicts, if they have regional economic effects, may necessitate regional responses. -
Publication
Ghana Rising: Accelerating Economic Transformation and Creating Jobs
(World Bank, Washington, DC, 2021-11-10)Ghana has been a rising growth star and a beacon of hope in West Africa. Strong economic growth over the past two decades led to a near doubling of GDP per capita, lifting the country through the threshold for middle-income status in 2011. GDP per capita grew by an average of 3 percent per year over the past two decades, putting Ghana in the top ten fastest growing countries in Sub-Saharan Africa (SSA). A rising tide has tended to lift all boats. Poverty rates more than halved between 1998 and 2016, and the extreme poverty rate declined from 36.0 percent in 1991 to 8.2 percent in 2016. The net primary school enrollment rate rose from 62.5 percent in 2000 to 86.0 percent in 2019. This progress has motivated the government’s goal to lift the country to high-income status by 2057. The focus of this Country Economic Memorandum (CEM) is to review options for Ghana to create enough higher quality jobs through economic transformation. Economic transformation, or inclusive productivity growth, occurs as people and resources shift from lower to higher productivity activities. It raises household incomes and living standards, thereby lifting people out of poverty. It can be achieved through the movement of workers and other resources between firms and sectors, or through workers staying within existing firms that benefit from within-firm productivity growth by adopting better technologies and capabilities. -
Publication
Lake Chad Regional Economic Memorandum: Technical Paper 1. Socioeconomic Trends in the Lake Chad Region
(World Bank, Washington, DC, 2021-11-09)The Lake Chad region, which is an economically-and socially integrated area spanning across four countries of Chad, Cameroon, Niger, and Nigeria in north-west Africa, has been trapped in a vicious circle of suboptimal territorial development and fragility. This note shows that the Lake Chad region lags in multiple dimensions of development ranging from poverty, human capital, and access to services. A poverty rate in the Lake Chad region is found to be much higher than other parts of the countries surrounding the lake. The regional poverty rate in the Extreme North region of Cameroon (59 percent) is three times higher that of the rest of the country (19 percent). In Nigeria, the Lake Chad region203 has a poverty rate (72 percent) nearly twice as high as in the rest of the country (38 percent). Chad is the only exception, where the poverty rate in the country’s Lake Chad region (31 percent) is lower than the rest of the country (40 percent).204 This is explained by the fact that the Chad region around the lake lies near the capital of the country, with a consequently higher urbanization rate and a relatively high population density. The note is organized as follows. Section 2.2 provides key statistics on poverty, sector of work, and human capital indicators in the Lake Chad region vis-à-vis other parts of the country and examine how the Lake Chad lags behind in different dimensions. Section 2.3 provides a diagnostic of economic geography with a focus on three dimensions of density, distance and division. Section 2.4 identifies a set of structural factors, aggregate shocks and selected policies that might be associated with the dynamics of economic activity and social inclusion across the region. -
Publication
Aiming High: Navigating the Next Stage of Malaysia’s Development
(World Bank, Washington, DC, 2021-02-02)Malaysia is likely to make the transition from an upper-middle-income economy to a high-income economy within the next five years, despite thesetback of the COVID-19-induced recession in 2020. This transition represents an important milestone in Malaysia’s development, having transformed living standards in less than a generation, slashing the extreme poverty rate to less than one percent of the population, and ending the country’s long tenure in the “middle-income trap”. However, Malaysia has been severely affected by COVID-19 and it will take several years beforethe scars of the pandemic are fully erased. The country experienced a “triple shock”: the direct health impact of the virus; the economic impact of movement restrictions; and the growth impact of a global recession. With Malaysia on the verge of achieving this transition, it is an opportune time to address a number of questions regarding the speed of Malaysia’s growth, its quality, and its sustainability. Malaysia is growing slower thanmany countries that achieved high-income status in recent decades. In addition, compared to many other countries that have graduated from middle-income status, it has a lower share of employment at high skill levels and higher levels of inequality. And, compared to countries in the OECD, Malaysia collects less in taxes, spends less on social protection, and performs relatively poorly in terms of measures related to environmentalmanagement and the control of corruption. Many of these fault lines have become exposed during the pandemic. Most significantly, there is a growing sense that despite economic growth, the aspirations of Malaysia’s middle-class are not being met and that the economy hasn’t produced enough well-paying, high-quality jobs. There is a widespread sense that the proceeds of growth have not been equitably shared and that increases in the cost-of-living are outstripping incomes, especially in urban areas, where three-fourths of Malaysians reside. Policies and institutions that have worked in the past may no longer be appropriate for the next stage of Malaysia’s development, with a different set of policies and institutions required at higher levels of income and development. The policies that enabled Malaysia to successfully make the transition from low- to middle-income need to be adapted to meet the challenges it will face in the future. At an earlier stage of its development, factor accumulation was a key driver of Malaysia’s growth. As it makes the transition, it will increasingly need to depend upon more knowledge-intensive and productivity-driven growth, closer to the technological frontier and with a greater emphasis on achieving inclusive and sustainable development. As Malaysia positions itself for the next phase of its development and beyond the pandemic, many of the issues related to this transformation are being addressed and discussed, including through the 12th Malaysia Plan and the Shared Prosperity Vision 2030. With the impact of the COVID-19 pandemic and its potential to depress growth into the future, issues related to Malaysia’s readiness for the future have become even more significant. The analysis in this report suggests that for Malaysia to fulfil its potential, to transition successfully to high-income and developed country status, and to sustain equitable growth beyond that point, reforms are needed in six broad and inter-linked areas: (i) revitalizing long-term growth; (ii) boosting competitiveness; (iii) creating jobs; (iv) modernizing institutions; (v) promoting inclusion; and (vi) financing shared prosperity. -
Publication
Mines and Minds: Leveraging Natural Wealth to Invest in People and Institutions
(World Bank, Ulaanbaatar, 2020-09)Mines represent Mongolia’s present, while minds - broadly defined to include people and institutions - are its future. Current policies are excessively focused on preserving the mining-driven prosperity at the risk of future stagnation. Such complacency is ill-timed when climate change concerns and the COVID-19 shock require an acceleration of structural transformation. Mongolia faces deep-rooted, interrelated challenges: macroeconomic policy mistakes have amplified external shocks, an oligopolistic ownership structure and limited competition have led firms to become more inward-looking and less inclined to innovate, and gross underutilization of human capital - evident by an unprecedented exodus of young and educated workers to foreign countries - has eroded the foundation of a diversified economy. -
Publication
Mauritania Country Economic Memorandum: Accelerating Growth Through Diversification and Productive Cities
(World Bank, Washington, DC, 2020-05)The Mauritanian economy is at an important crossroad. Despite significant increases in itsnatural resource wealth, economic development in Mauritania remains weak. The over-reliance on natural resources has left the economy undiversified with growth, exports, and fiscal revenues all dependent on extractives. Responding to the 2015 commodity price shock, the authorities implemented a strong fiscal consolidation program that restored macroeconomic stability andsteered the economy onto a recovery path. The new administration—appointed following the election in mid-2019—now has the challenge and opportunity to map out a more sustainable development model and steer the economy onto a path of accelerated and equitable economic growth for the rapidly growing population. The objective of this report is to support policy makers in Mauritania in their reform efforts to accelerate growth as outlined in the National Development Plan (SCAPP).It attempts to answer the following questions: (i) Why Mauritania could not diversify its economy in the past and what are the opportunities to do so in the future? (ii) What are the reasons behind the weak link between urbanization and growth, and is Nouakchott lifting its weight as anurban agglomeration? (iii) Which policy actions could help build those pathways? By answering these questions, the report aims to contribute to the economic discussion and provide policy recommendations for the choices that Mauritania is facing to accelerate growth and improve theliving standards of its population. The report is organized around five chapters. Chapter 1starts with a brief introduction. Chapter 2 analyzes the key characteristics of Mauritania’s past growth performance. Chapter 3 evaluates the current and future potential for economic and export diversification. Chapter 4 examines the challenges that are preventing urbanization from contributing to growth, with a focus on Nouakchott. Chapter 5 concludes by proposing a menu of policy recommendations that could help Mauritania achieve faster and more sustainable economic growth. -
Publication
Vibrant Vietnam: Forging the Foundation of a High-Income Economy
(World Bank, Hanoi, 2020-05)Vietnam’s development strategy requires an urgent upgrade. Past growth has been impressive. But as a favorable domestic and international environment changes, future growth must be productivity-driven—obtaining more and higher quality output from firms, infrastructure, workers and natural resources. The World Bank’s Vibrant Vietnam report discusses priorities for an upgraded growth model based on extensive consultations, international experience and academic findings. -
Publication
Kyrgyz Republic Country Economic Memorandum
(World Bank, Washington, DC, 2020-03-26)The Kyrgyz Republic has experienced modest and volatile economic expansion since the economy bottomed out from the transition recession in 1995, when GDP amounted to about half of its pre-independence levels. As a result of structural reforms at the start of transition, the emergence of remittances and commodity exports, largely gold, as powerful new drivers of growth, and improvements in the macroeconomic management in the recent decade, per-capita real GDP grew by 3.1 percent a year on average since 1995. The Kyrgyz Republic is now a lower middle-income economy, as it was in 1990. Economic expansion has benefitted from fixed investment that has risen to 31 percent of GDP, one of the highest in Europe and Central Asia and well-above the threshold of 25 percent reached by the group of successful countries studied by the Growth Commission in 2007. Lower fiscal deficits and low inflation indicate the success of recent macroeconomic policies. These achievements notwithstanding, Kyrgyz Republic’s growth and productivity performance has lagged most relevant comparators, frustrating the needs of the poor and the young. As a result, while per-capita GDP in constant prices has doubled since 1995, it has still not caught up with pre-independence levels. Per-capita incomes in the Kyrgyz Republic have increased by 20 percent less than the average of lower middle-income countries since 2000 and 40 percent less than the average for the Caucasus and Central Asia. Productivity increases – proxied by changes in total factor productivity, have averaged half a percent since 2000, leaving largely factor accumulation as the driver of economic growth. And while ‘Productivity isn’t everything, but in the long run it is almost everything’, highlighting one of the main challenges of the country’s current growth model.3 Poverty has declined, but modest growth has made a modest dent, leaving the poverty rate as high as 31 percent, with a substantial part of the population living in regions with more limited and lower quality government services than in Bishkek.