Country Economic Memorandum

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Solomon Islands Country Economic Memorandum: Unlocking New Sources of Economic Growth
(Washington, DC: World Bank, 2024-10-17) World Bank
A Country Economic Memorandum (CEM) is a diagnostic instrument to analyze key constraints to growth, support policy dialogue with the government, and inform engagement with different stakeholders. During February 2023 and March 2024, a CEM was conducted for Solomon Islands, titled ‘Solomon Islands: Country Economic Memorandum – Unlocking New Sources of Economic Growth’. The CEM examines key barriers to sustainable economic development, with a focus on challenges of economic geography, obstacles to private sector activity, and constraints in four key sectors with high growth potential (i.e., agriculture, fisheries, tourism, and labor mobility). The CEM provides actionable policy recommendations to help overcome the identified barriers and unlock new sources of economic growth.
Zambia Country Economic Memorandum, June 2024: Unlocking Productivity and Economic Transformation for Better Jobs
(Washington, DC: World Bank, 2024-05-28) World Bank
Zambia needs to increase productivity and accelerate economic transformation to achieve sustained and inclusive growth. Zambia’s debt resolution and ongoing reforms are expected to support macroeconomic stability and reignite private-sector investment. By October 2023, the Government of the Republic of Zambia (GRZ) reached an agreement with the Official Creditor’s Committee (OCC) on debt restructuring under the G20 Common Framework and, by late March 2024, it was announced that a deal was reached with bondholders. As of the end of the first quarter of 2024, the Zambian authorities are in the final phase of debt negotiations involving the other private lenders. Since 2021, the GRZ has launched an ambitious reform program. It saw the primary balance improve by 6.6 percentage points in 2022, bringing it to a surplus and cutting inflation by half. The authorities have introduced measures to boost private investment and have rebalanced the composition of government spending. This Country Economic Memorandum (CEM) discusses two pathways that can support Zambia’s productivity-enhancing economic transformation, generate better jobs, and deliver sustained and inclusive growth. Economies transform when more people join the labor force and find jobs, become more productive in them, or reallocate to more productive jobs. These factors cause average labor productivity to rise with labor incomes. But in Zambia, productivity has been on a declining trend, and only the capital-intensive mining sector has seen significant labor productivity increases. Raising the productivity of agriculture is the first pathway for tackling Zambia’s development challenges (Chapter 2). It has enormous potential to drive poverty reduction, but expensive and distortive support programs, coupled with increasing climate hazards, constrain productivity growth and dampen opportunities to diversify beyond maize. The second pathway involves Zambia making critical economy-wide reforms to unlock broad-based private sector productivity growth and increase its role in driving jobs and economic transformation (Chapter 3). Two background papers that take deep dives into these two themes are published alongside this report.
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.
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.
Ghana Rising: Accelerating Economic Transformation and Creating Jobs
(World Bank, Washington, DC, 2021-11-10) World Bank
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.
Lake Chad Regional Economic Memorandum: Technical Paper 1. Socioeconomic Trends in the Lake Chad Region
(World Bank, Washington, DC, 2021-11-09) Masaki, Takaaki; Rodríguez-Castelán, Carlos
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.
Somalia Country Economic Memorandum: Towards an Inclusive Jobs Agenda
(World Bank, Washington, DC, 2021-07-01) World Bank
Somalia has a triple challenge of low levels of labor force participation, low productivity, and high levels of poverty. Economic growth in Somalia has been low, subject to shocks; and thus, insufficient for job creation. Shocks to the economy have contributed to forced displacement, a dominance of jobs outside of agriculture, and rapid urbanization. The Somali economy is largely driven by consumption and supported by external financial flows. In Somalia’s state-building context, enhancing political stability and developing a social contract is fundamental for growth. The objective of the Somalia Country Economic Memorandum (CEM) is to inform the economic policy dialogue and broader debate in Somalia regarding the types of reforms required to stimulate growth and job creation. The Somalia CEM applies and adapts the Jobs and Economic Transformation (JET) Framework. The JET framework has two pillars, one which considers job-creating private investments, and the second that concerns building the capabilities of workers. In the Somali context, efforts have been made to incorporate a gender and inclusion lens, given the particularly low levels of female labor force participation. The report has two special focus chapters on trade and integration and entrepreneurship, due to their importance to growth and jobs in the Somali economy. However, a detailed value chain analysis goes beyond the scope of this report. The report utilizes available quantitative data, primary research conducted for the study, and builds on earlier work. The report considers both the structure of today’s economy and the source of jobs, as well as potential future drivers of growth.
Côte d’Ivoire - Country Economic Memorandum: Sustaining the Growth Acceleration
(Washington, DC, 2021-04) World Bank
The Ivorian economy needs to sustain its growth momentum. During the last decade, Côte d’Ivoire’s growth performance has been impressive. To achieve its ambitious goal of reaching emerging market status within one or two generations, however, it needs to maintain the strong growth for many years to come. Fewer than 15 countries have managed to sustain high growth for over 25 years in the postwar period, and their experience has shown that increasing productivity is at the heart of it. To follow in their footsteps, Ivorian growth also needs to be more inclusive and reduce structural imbalances, including the gap between the economic capital, Abidjan, and the rest of the country. This report addresses this question.
Escaping the Low-Growth Trap: Guinea-Bissau Country Economic Memorandum
(World Bank, Washington, DC, 2020-11-02) World Bank
Guinea-Bissau’s massive economic potential has not so far translated into better livelihoods for its population. Growth per capita has averaged less than 1 percent per year over 2000-2019. This chapter provides an in-depth analysis of the factors behind the economic stagnation. An interplay of three constraints have impeded sustained high growth. First, the low and volatile growth performance is linked to fragility and political instability, which, together with a poorly diversified economy, with raw cashew nuts accounting for 95-98 percent of export earnings, help explain the stop-go growth cycle. Second, human capital accumulation remains low. An acute shortage of a skilled workforce is a major constraint to inclusive growth. The education system is marked by alarmingly low levels of learning. Third, private investment is particularly low—the second lowest in Africa. Years of underinvestment in infrastructure, energy, and human capital are holding the country back from achieving strong, enduring and inclusive growth. The chapter concludes by highlighting how the COVID-19 crisis exacerbates these constraints and discusses areas that could support sustainable growth. The chapter is organized as follows: section 1.1 presents a brief overview of the political and social context. Section 1.2 puts recent growth into historical and comparative perspective. Section 1.3 presents analysis that helps explain the low-growth trap and identifies possible areas that Guinea-Bissau could pursue to escape this trap. Finally, Section 1.4 discusses the economic impact of COVID-19 and potential pathways to recovery.
Iraq Economic Monitor, Spring 2020: Navigating the Perfect Storm (Redux)
(World Bank, Washington, DC, 2020-05-04) World Bank
Iraq, once again, is facing a combination of acute shocks which the country is ill-prepared tomanage. The collapse in oil prices has considerably reduced budgetary revenues and reversed the fiscal surpluses accumulated since 2018. COVID-19, and the lockdown measures needed to contain the pandemic have dealt a severe blow to economic activities especially the services sectors like transport, trade, banking and religious tourism, which constitute around half of the non-oil economy. The growing discontent over poor service delivery, rising corruption, and lack of jobs persists and is coupled with political impasse over the formation of a new government. Iraq's pre-existing conditions going into this crisis limit its ability to manage and mitigate the socio-economic impact. A large dependency on oil revenues coupled with built-up budget rigiditieslimit Iraq's fiscal space to respond to the COVID-19 outbreak and offer a stimulus package to re-start the economy. An undiversified economy, highly dependent on oil outcomes, as well as large presence of the state in economic and commercial activities, make it hard to create the needed private sector jobs for a predominantly young population. Furthermore, rampant corruption and weak governance and service delivery fueled large scale protests across the country calling for better public service delivery and jobs. As a result, all signs indicate that this multifaceted crisis will have a protracted impact. The outlook for Iraq, which was already negative prior to the COVID-19 shock, has markedly worsened since. Near-term economic growth will be subdued by low oil prices, a new OPEC agreement that has reduced oil production quotas, and unfavorable global and domestic conditions including disruptions from COVID-19 spread. As a result, the economy is projected to contract by 9.7 percent in 2020, down from a real GDP growth of 4.4 percent in 2019, with both oil and non-oil sectors contracting by 13 and 4.4 percent respectively. This special focus on digital economy (DE) highlights the importance of digital transformation for Iraq and the urgency behind it. Iraq's economic condition was gradually improving following the deep economic strains of the last three years. However, the recent protests and unrest highlight the continued fragility of the country and the high priority of improving economic opportunities, particularly for youth. Leveraging the DE will help Iraq address some of its citizens' concerns as well as accelerate the achievement of its development objectives.