Country Economic Memorandum

247 items available

Permanent URI for this collection

Items in this collection

Now showing 1 - 10 of 197
  • Publication
    Eswatini - Country Economic Memorandum: In search of the drivers of inclusive growth
    (Washington, DC: World Bank, 2024-06-06) World Bank
    This report intends to be an input into the government’s strategic vision and policymaking to help move Eswatini closer to its ambitious objective of boosting inclusive growth and becoming an upper middle-income economy by: Carrying out diagnostics on past economic performance and undertaking forecasting analysis for potential future growth trajectories while uncovering binding constraints and realistic opportunities; Using a conceptual approach based on well established methodologies and benchmarking analysis with a set of aspirational peer countries; Emphasizing a growth strategy underpinned by greater investment, productivity, innovation, inclusion and government effectiveness; Drawing lessons from the policy experience of countries that faced similar challenges, including some that graduated or are close to graduating from upper middle- to higher-income status.
  • Publication
    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.
  • Publication
    Bosnia and Herzegovina Country Economic Memorandum, January 2024
    (Washington, DC: World Bank, 2024-02-13) World Bank
    Bosnia and Herzegovina (BiH) have made significant development progress since the last Country Economic Memorandum (CEM) in 2005, most notably in obtaining EU candidate status in 2022. Despite persistent political tensions, the country has enjoyed nearly three decades of peace. The infrastructure, severely damaged during the 1990s, has been rebuilt, with ongoing investments in improving road and rail connectivity. The policymaking process involves elected officials navigating a complex, politically fragmented landscape, characterized by national quotas, ensuring representation for Bosnia’s, Croats, and Serbs. The representation of individuals who do not identify with any of these three national groups has not been resolved yet. These factors make BiH unique in Europe, rooted in the Dayton Agreement of 1995, which brought an end to a devastating war that claimed approximately 100,000 lives and displaced over half of the population. Now, almost two decades after the last Economic Memorandum, BiH features as an EU candidate country. Macroeconomic policies have tended to favor short-term objectives at the expense of long-term growth, with a focus on fostering consumption rather than investment. Current budget spending, particularly on public wages, pensions, and social benefits has constrained capital expenditure over the past 10-15 years. Consequently, public capital expenditures in both entities are limited, with only half the size in comparison to their Western Balkan peers. Furthermore, there is a discernable lack of coordination across the entities within sectors such as transport infrastructure, particularly railways and roads that contribute to important intermediate input distortions, as well as digital and energy infrastructure. Moreover, while sharing the same priorities as reflected in the socio-economic reform package, the speed of reform implementation differs across entities. Foreign direct investment inflows, meanwhile, remain insufficient, and significantly below regional peers. Thus, a shift towards structural and fiscal reforms with medium- to long-term benefits, such as a more efficient social transfer system using social cards, as well as higher and more coordinated capital expenditures across the entities could pave the way for higher productivity and thus a more competitive economy.
  • Publication
    Djibouti Country Economic Memorandum, January 2024 - Djibouti Beyond the Ports and Bases: A Path to Prosperity for All
    (Washington, DC: World Bank, 2024-02-12) World Bank
    Over the past two decades, Djibouti’s economy has demonstrated remarkable growth, reaching the status of lower middle-income country. However, this remarkable performance was achieved despite the enduring presence of persistent structural challenges, notably the high cost of electricity and telecommunications, and a fragile business environment. In this context, economic growth has predominantly relied on debt-financed public investment and private investments with limited linkages to the broader economy or job creation. Furthermore, the positive impacts of economic growth have not been evenly distributed across all sections of society, raising concerns about inclusive development. Moreover, Djibouti is increasingly vulnerable to climate change. As Djibouti embarks on its second phase of development, it is crucial to ensure that the benefits of growth are felt by all segments of society, particularly women and youth. Addressing these issues is crucial to foster a more conducive environment for businesses and stimulate economic growth. Recognizing these challenges, the Government of Djibouti has recalibrated its development strategy through the “Djibouti 2035 Vision” and the National Development Plan (NDP) for 2020-2024. By effectively addressing these priorities Djibouti can pave the way to a transformative path toward a more dynamic, inclusive, and poverty-reducing future.
  • Publication
    Malawi Country Economic Memorandum: A Narrow Path to Prosperity
    (Washington, DC: World Bank, 2024-01-08) World Bank
    This Country Economic Memorandum (CEM) argues for a significant shift in policy to enable a virtuous cycle of sustained and inclusive economic growth, outlined infive building blocks. Chapter 1 identifies policy priorities to restore the macroeconomic fundamentals for growth through fiscal reform, debt sustainability, external rebalancing, and monetary stability. The following three chapters address three core structural constraints to growth and propose key reforms to accelerate agricultural commercialization and improve rural labor markets (Chapter 2), enable the private sector to drive productivity growth (Chapter 3), and catalyze exports and foreign investment (Chapter 4). Acknowledging that implementing key growth-enhancing policies—be they macroeconomic or structural—are the result of complex political economy and governance arrangements, Chapter 5 focuses on how past Malawian successes can inform future sectoral policies, reforms, and strategies to achieve the goals outlined in the Malawi 2063.
  • Publication
    Democratic Republic of the Congo Country Economic Memorandum (CEM) - Pathways to Economic Diversification and Regional Trade Integration: Fostering Economic Diversification and Regional Integration for Faster Growth, Job Creation and Poverty Reduction
    (Washington, DC: World Bank, 2023-10-26) World Bank
    Economic Diversification in the DRC is hindered by a business environment and key regulatory and fiscal constraints that are not conducive to private sector-led growth. Policies aimed to address the main bottlenecks hindering sustainable and inclusive growth include: i) improving business regulation; ii) promoting access to digital, electricity, and financing; iii) addressing inefficient taxation and fiscal policy challenges; iv) encouraging fiscal decentralization; and v) attracting value chain development. The two case studies discussed in complementary reports are intended to better illustrate the opportunities and challenges described in the Country Economic Memorandum and considered important for economic diversification and job creation through structural transformation and stronger trade and regional integration. The focus is on two key potential growth-driving sectors (mining and agribusiness) that offer substantial opportunities for expansion in the context of global energy transition, food insecurity, and further regional integration. While opportunities and constraints specific to the EV battery-related mining and cassava value chain are presented (and include a climate dimension), most of the challenges and recommendations could also apply to several other products or sectors of the economy (e.g., maize or any manufactured or processed product). The purpose of the illustrative case studies is to highlight how the business environment in general is not attractive to private investment, SME expansion, or product competitiveness.
  • Publication
    The Union of Comoros Country Economic Memorandum: Boosting Growth for Greater Opportunities
    (Washington, DC: World Bank, 2023-09-14) World Bank
    Comoros is at the crossroads to redefine its future and become an upper-middle income country by 2050, but this would require implementing an ambitious reform agenda that focuses on increasing productivity and private investment. The current business-as-usual policy framework has delivered low private investment and human capital, sectoral growth below potential, and no poverty eradication. Pursuing this policy framework, which would not allow Comoros to reach the GDP growth target of 7.5 percent by 2030 laid out in the national development plan, could result in GDP per capita of US$1,890 and a poverty rate of 22.9 percent by 2050. By contrast, under a policy framework of ambitious reforms that include measures to increase inclusiveness, Comoros could reach a GDP per capita of US$3,934 and reduce the poverty rate to below 5 percent by 2050. Supported by the continuous implementation of ambitious reforms, such a level of GDP per capita could have Comoros reach upper-middle-income status by 2050. Under this ambitious reform agenda, private investment would average 11.9 percent of GDP in 2023–2050, and total factor productivity growth would average 1.45 percentage points per year during the same period.
  • Publication
    Kenya Country Economic Memorandum: Seizing Kenya’s Services Momentum
    (Washington, DC: World Bank, 2023-07-31) World Bank
    Kenya’s economy has been growing solidly but maintaining and increasing growth will depend on increasing private investment and productivity. Between 2010 and 2019, Kenya maintained a steady annual growth rate of 5 percent and the economy was able to rebound relatively rapidly from the COVID-19 pandemic. However, productivity growth did not make much of a contribution to output growth, and growth has been lower than that of some other, fast-growing middle-income countries. This points to the potential for Kenya to increase growth via productivity gains, by expanding the role of the private sector and, especially, accelerating private investment. Doing this has become more urgent as the Government's fiscal space to invest has shrunk, making it crucial also for the sustainability of growth to identify new opportunities for the private sector to contribute. This Country Economic Memorandum (CEM) focuses on the question of how seizing opportunities in Kenya’s services sector can contribute more effectively to long-term economic growth. This report argues that growing the services sector should not be seen as an alternative to industrialization, but rather as an enabler of economy-wide growth, including in manufacturing, and in agriculture too. It focuses on five channels through which services contribute to jobs, economic transformation and inclusion: (i) the need to SHIFT the services sector to higher value-added activities; (ii) how to LINK services better to other economic activities to grow its enabling role; (iii) how to BOOST the productivity of the sector through technology and increasing competition; (iv) how to TRADE more services through removing regulatory barriers to trade and investment; and finally (v) how to SECURE people’s economic livelihoods better, especially those working in lower-skilled and economically more vulnerable services subsectors. Growing the contribution of services will require a program of structural reforms and complementary efforts.
  • Publication
    Papua New Guinea Country Economic Memorandum: Pathways to Faster and More Inclusive Growth
    (Washington, DC: World Bank, 2023-07-13) World Bank
    The Country Economic Memorandum (CEM) focuses on long-term growth, outlining the challenges Papua New Guinea (PNG) faces to achieve sufficient economic growth to expand the incomes of its rapidly growing population as well as what is required for PNG to make the transition to a higher, more stable, and more inclusive growth path. PNG’s modest headline economic growth has translated into limited per capita income growth in the past four decades. While the economy expanded by 3.2 percent on average during 1980-2021, per capita gross domestic product (GDP) recorded an average annual growth rate of only 0.9 percent. Moreover, the gap between PNG’s per capita income level and those of its peer countries has widened. Despite being at a similar level of development in the 1970s and having enormous natural wealth, PNG’s income level is diverging away from the East Asia and Pacific (EAP) region. This calls for a renewed policy focus on boosting economic growth, by addressing PNG’s excessive macroeconomic volatility, low productivity growth, and high reliance on natural capital as opposed to human and physical capital.
  • Publication
    Yemen Country Economic Memorandum 2022: Glimmers of Hope in Dark Times
    (Washington, DC: World Bank, 2023-06-22) World Bank
    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.