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World Bank Annual Report 2023: A New Era in Development

(Washington, DC: World Bank, 2023-09-28) World Bank

This annual report, which covers the period from July 1, 2022, to June 30, 2023, has been prepared by the Executive Directors of both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)—collectively known as the World Bank—in accordance with the respective bylaws of the two institutions. Ajay Banga, President of the World Bank Group and Chairman of the Board of Executive Directors, has submitted this report, together with the accompanying administrative budgets and audited financial statements, to the Board of Governors.
New Approaches to Closing the Fiscal Gap

(Washington, DC : World Bank, 2022-10-04) World Bank

As the COVID‐19 crisis recedes, Latin America and the Caribbean (LAC) is back to work and looking forward. Reported deaths related to the pandemic are low and have plausibly converged to global levels. Yet low vaccination rates in some countries leave them vulnerable to new variants. In most countries, gross domestic product (GDP) and employment have fully recovered their 2019 levels, although forecasted growth rates might be said to be “resiliently mediocre”: banking systems appear sound, and rising debt burdens are manageable so far, but growth is not expected to exceed the low levels of the 2010 decade. Poverty in terms of income (monetary poverty) has largely receded with the economic recovery, but the longer‐term scars of the pandemic in terms of education and health have planted deep seeds of future inequality. Redressing these problems and undertaking the structural reforms needed to reach higher levels of growth and reduce poverty remain central on the policy agenda. The new and unwelcome entrant in the policy space is inflation. While comparable to advanced country levels and well managed by regional monetary authorities, inflation nonetheless is being propelled by forces that may give it more staying power than originally hoped. Finally, public deficits induced by the pandemic and the need to finance critical government programs and directions have opened a fiscal gap and led to constrained fiscal space. The need to close the fiscal gap, put debt on a sustainable footing, and generate fiscal space to finance necessary physical and social investments has led to a search for new revenues and in particular to pressure to increase income taxes. In looking at any tax hike, concerns center on the possible depressive effects on growth, overall progressivity, and possible incentives for informality. This report presents new evidence on these effects for value added taxes (VAT) and income taxes. It also advocates for steps to cut wasteful government spending and increase government efficiency - both to generate substantial resources and as an entry point to a broader agenda of state modernization and generating public trust.
Internet Access and Use in Latin America and the Caribbean: From the LAC High Frequency Phone Surveys 2021

(World Bank, Washington, DC, 2022-09) World Bank ; United Nations Development Programme

While most households in Latin America and the Caribbean use mobile broadband via smartphones, expensive fees and poor service quality pose major obstacles for potential users. In addition, power outages are a challenge for nearly 40 percent of existing mobile broadband users. Addressing the region’s need for faster, cheaper, and more reliable internet connections is thus a policy and investment priority. There are persistent and significant gaps in digital infrastructure between countries in the region, as well as weighty rural-urban gaps within some countries. Bridging these digital divides will be key to inclusive digital transformation. Households with tertiary education are on average more connected (with better quality service and higher expenditures on data) compared to the rest of the population. As education level is correlated with income, digital inequalities mirror and may amplify existing social inequalities – underscoring the critical need to address them. Over two-thirds of connected households in the region are concerned about privacy and security when using the internet. However, households on average across Latin America and the Caribbean still reported increasing their use of the internet amid the pandemic, suggesting that neither issue poses a barrier to their internet use at present.
Opportunities for Reducing Poverty and Inequality in Costa Rica: World Bank Poverty and Inequality Assessment

(Washington, DC: World Bank, 2022-09-01) World Bank

The purpose of this poverty assessment is to shine a new light on poverty, inequality, and its drivers in Costa Rica. The report provides a descriptive overview of poverty trends in the country and examines why the poorest do not reap the benefits of economic growth. It provides high-level policy directions, i.e., areas that merit a high level of attention according to the results of the analysis and broad implications of the findings for policy makers. The report should be interpreted as a contribution to the debate within Costa Rica on how to improve the country’s model of growth for the benefit of all. It is important to mention at the outset that the analysis presented in this report was completed at the time the conflict in Ukraine started. The conflict is expected to have substantial repercussions in Costa Rica and the rest of the Latin America region. The conflict is expected to hit the poorest hardest, as food and fuel – the prices of which are expected to increase due to the conflict – make up a large part of their consumption. However, these possible implications of the conflict are not reflected in the report.
Not There Yet: Slow Recovery and Many Left Behind as Latin America and the Caribbean Navigates the Ripples of the Pandemic - 2021 High-Frequency Phone Surveys - Wave 2

(World Bank, Washington, DC, 2022-09) World Bank ; United Nations Development Programme

To continue monitoring how the Coronavirus (COVID-19) pandemic has affected the welfare of households in the region, the World Bank and the United Nations Development Programme (UNDP) joined forces in 2021 to implement a second phase of High-Frequency Phone Surveys (HFPS) in Latin America and the Caribbean (LAC). A first wave was collected between May and July 2021, and a second between October 2021 and January 2022. This last wave takes the socio-economic pulse of households and measures the region's well-being almost two years into the pandemic. This note presents the emerging results in the areas of labor markets, income, food security, coping mechanisms, education, health, and gender.
The Learning Crisis in Latin America and the Caribbean and the COVID-19 Pandemic: Sobering Results of a Deepening Trend

(Washington, DC, 2022-04) World Bank

The Latin America and the Caribbean (LAC) region was suffering from a deep learning crisis, before the COVID-19 outbreak, with most students being below minimum proficiency levels for critical foundational competencies in numeracy and literacy, according to the Fourth Regional Comparative and Explanatory Study (ERCE). The pandemic that hit the region in March 2020 led to a massive shutdown of educational systems, placing LAC as the region with the longest duration of school closures in the world. The impact of school closures on education service delivery was significant. The forced move to distance learning negatively impacted attendance in the education process, both when compared to enrollment rates (-10 percent) and with pre-pandemic attendance rates (-12 percent). Most worryingly, one in four students attending the education process during the pandemic confirmed being disengaged from learning activities while at home. The COVID-19 led to a crisis within a crisis, deepening pre-existing inequalities that characterize the LAC region, as the most vulnerable populations were disproportionately affected. A significant increase in drop-out rates and decrease in learning outcomes is expected, especially for these groups and countries which were already not doing well pre-pandemic. There is a sizeable schooling and learning recovery agenda ahead of LAC, where re-enrollment campaigns, standardized and in-classroom assessments, and programs to teach to the right level will be fundamental to determine the exact depth of educational losses and start recovering.
Digital Economy for Latin America and the Caribbean: Country Diagnostic - El Salvador

(Washington, DC, 2022-04) World Bank

The widespread adoption of digital technologies is transforming how individuals, businesses, and governments interact, as well as creating new opportunities for boosting shared prosperity and reducing poverty. Digital technologies are playing an increasingly important role in El Salvador’s economic development and will play an even larger role as the global economy continues to digitize. Digital transformation can help El Salvador address its persistent growth challenges and explore new avenues toward green, resilient, and inclusive development. This report builds on the strategic priorities of the digital agenda (DA) 2020-2030, assesses the state of digital economy development in El Salvador, and provides detailed analysis and policy recommendations to inform the reform agenda in the country. The report provides a comprehensive overview El Salvador’s digital economy development across six foundational elements of a digital economy: digital infrastructure, digital platforms, digital financial services, digital businesses, digital skills, and trust environment. The diagnostic and recommendations are based on analysis of secondary data, structured interviews, surveys, and focus group discussions with key government and private sector stakeholders. The findings of the report are organized in six chapters - each dealing with a pillar of the digital economy. Policy recommendations are presented in the form of sequenced action plans that can inform relevant efforts by national authorities, the private sector, and development partners. The report summarizes the main findings on each digital economy pillar.
World Development Report 2022: Finance for an Equitable Recovery

(Washington, DC: World Bank, 2022-02-15) World Bank

World Development Report 2022: Finance for an Equitable Recovery examines the central role of finance in the economic recovery from COVID-19. Based on an in-depth look at the consequences of the crisis most likely to affect low- and middle-income economies, it advocates a set of policies and measures to mitigate the interconnected economic risks stemming from the pandemic—risks that may become more acute as stimulus measures are withdrawn at both the domestic and global levels. Those policies include the efficient and transparent management of nonperforming loans to mitigate threats to financial stability, insolvency reforms to allow for the orderly reduction of unsustainable debts, innovations in risk management and lending models to ensure continued access to credit for households and businesses, and improvements in sovereign debt management to preserve the ability of governments to support an equitable recovery.
Poverty and Shared Prosperity 2022: Correcting Course

(Washington, DC : World Bank, 2022) World Bank

Poverty and Shared Prosperity 2022: Correcting Course provides the first comprehensive analysis of the pandemic’s toll on poverty in developing countries. It identifies how governments can optimize fiscal policy to help correct course. Fiscal policies offset the impact of COVID-19 on poverty in many high-income countries, but those policies offset barely one quarter of the pandemic’s impact in low-income countries and lower-middle-income countries. Improving support to households as crises continue will require reorienting protective spending away from generally regressive and inefficient subsidies and toward a direct transfer support system—a first key priority. Reorienting fiscal spending toward supporting growth is a second key priority identified by the report. Some of the highest-value public spending often pays out decades later. Amid crises, it is difficult to protect such investments, but it is essential to do so. Finally, it is not enough just to spend wisely - when additional revenue does need to be mobilized, it must be done in a way that minimizes reductions in poor people’s incomes. The report highlights how exploring underused forms of progressive taxation and increasing the efficiency of tax collection can help in this regard. Poverty and Shared Prosperity is a biennial series that reports on global trends in poverty and shared prosperity. Each report also explores a central challenge to poverty reduction and boosting shared prosperity, assessing what works well and what does not in different settings. By bringing together the latest evidence, this corporate flagship report provides a foundation for informed advocacy around ending extreme poverty and improving the lives of the poorest in every country in the world. For more information, please visit worldbank.org/poverty-and-shared-prosperity.
The World Bank Annual Report 2022: Helping Countries Adapt to a Changing World

(Washington, DC : World Bank, 2022) World Bank

The Annual Report is prepared by the Executive Directors of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)--collectively known as the World Bank--in accordance with the by-laws of the two institutions. The President of the IBRD and IDA and the Chairman of the Board of Executive Directors submit the Report, together with the accompanying administrative budgets and audited financial statements, to the Board of Governors.