Sector/Thematic Studies

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http://hdl.handle.net/10986/2110

Economic and Sectoral Work are original analytic reports authored by the World Bank and intended to influence programs and policy in client countries. They convey Bank-endorsed recommendations and represent the formal opinion of a World Bank unit on the topic. This set includes the sectoral and thematic studies which are not Core Diagnostic Studies. Other analytic and advisory activities (AAA), including technical assistance studies, are included in these sectoral/thematic collections.

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Now showing 1 - 10 of 297

China Economic Update, June 2023: Sustaining Growth through the Recovery and Beyond

(Washington, DC: World Bank Group, 2023-06-30) World Bank

Economic activity bounced back in Q1 2023 with the removal of mobility restrictions and a surge in spending on services. However, growth momentum has slowed since April, indicating that China’s recovery remains fragile and dependent on policy support. China’s GDP growth is projected to rise to a 5.6 percent in 2023, led by a rebound in consumer spending. The economic recovery offers an important opportunity for policymakers to refocus their efforts on achieving China’s longer-term development objectives. Structural reforms remain crucial to solidify the recovery and achieve the longer-term goals to (i) become a high-income country by 2035 through productivity-led and environmentally sustainable growth; (ii) peak carbon emissions before 2030 and become carbon-neutral by 2060; and (iii) share the gains from economic growth more equally among the population.
Cambodia Economic Update, May 2023: Post-COVID-19 Economic Recovery

(Washington, DC: World Bank, 2023-06-27) World Bank

Cambodia’s economic recovery solidified in 2022 with real growth accelerating to 5.2 percent. After shifting to “living with COVID-19” in late 2021, the economy is firmly on a path to recovery and has now returned to its pre-pandemic growth trajectory. Initially led by the strong performance of export-oriented manufacturing, growth drivers are rotating to the services and agriculture sectors. Meanwhile, the agriculture sector is benefitting from improved access to regional markets, thanks to newly ratified bi-lateral and regional free trade agreements. Weakening external demand is, however, starting to weigh on the country’s economic recovery. Despite weakening goods export performance, the current account balance is improving, thanks to the rebound in the travel and tourism industry and remittances, while the oil price shock eased. The economic recovery and good revenue administration underpinned an across-the board improvement in domestic revenue collection. The authorities continued to provide cash transfers for poor and vulnerable households, although the worst of the pandemic is now behind us. In this regard, the Cambodian authorities have extended the COVID-19 cash transfer program, with an additional budget. To enhance the long-term resilience and competitiveness of the economy, efforts are needed to further promote export product diversification.
Indonesia Economic Prospects, June 2023: The Invisible Toll of COVID-19 on Learning

(Washington, DC: World Bank, 2023-06-26) World Bank

Commodity windfalls and private consumption have sustained Indonesia’s growth despite a difficult global environment, but signs of normalizing domestic demand are emerging. Inflation is easing at a faster pace than markets anticipated. Indonesia’s external vulnerabilities remain moderate. The fiscal stance has normalized reflecting faster fiscal consolidation, anchored by a broad-based rise in revenues and prudent public spending. Softening inflation and resilient capital flows have led Bank Indonesia (BI) to ease its pace of monetary tightening. The outlook remains stable as the economy normalizes following the post-pandemic recovery. While this is a robust outcome given levels of global uncertainty, Indonesia still faces declining productivity growth like other emerging market economies. Policy makers are encouraged to build on recent reforms and adopt further market-friendly policies and reduce constraints to competition to accelerate productivity growth. The Government of Indonesia (GoI) has put tremendous efforts into mitigating the learning disruption caused by COVID-19. This study provides new evidence of learning loss in math and language, comparing data on grade 4 student learning before and after the COVID-19 pandemic-induced school closures across Indonesia. In line with international literature on COVID-19 - induced learning losses, students’ future earnings and Indonesia’s future productivity will be negatively affected if no action is taken. This study highlights the urgency of addressing learning loss by stimulating political commitment for learning recovery and prompting deliberate actions, with adequate resources to complete them.
Pacific Economic Update, February 2023

(Washington DC, 2023-03-14) World Bank

This publication is the inaugural edition of the future publication series on Pacific Economic Update (PEU). It consists of two parts. Part A analyzes the recent economic developments in Pacific Islands. Based on these developments, the PI EU summarizes the outlook for the region’s economies and risks to this outlook. Second, the PEU provides an in-depth examination of a public debt issues in the Pacific and proposes policy recommendations to address public debt related challenges. The PEU is intended for a broad set of audience, including regional forums, policy makers, business leaders, international donors and the community of analysts and professionals engaged in the economies of Pacific Island countries. In dealing with the challenges of rising inflation, tepid recovery from the pandemic and global slowdown, the PICs should strike a balance between supporting livelihoods and reducing future public debt risks. The need for fiscal support during the current environment of high inflation and tepid economic recovery is understandable as it provides the much needed relief for vulnerable households and businesses to navigate the crisis. Nonetheless, these support measures create significant fiscal burdens, and are unsustainable, particularly if the high energy and food prices persist longer than envisaged. Most PICs already face low capacity to finance unexpected shocks which would be further tested by a natural disaster event. Therefore, PICs should tread a delicate balance between fiscal support measures and achieving fiscal sustainability. Any forthcoming fiscal support should be well-targeted, time-bound, and deficit-neutral. Over the medium-term, fiscal efficiency gains and ongoing donor support is critical to finance key development challenges and climate adaptation. Revenue-based fiscal consolidation measures could include improving the efficiency of tax collections and eliminating tax exemptions. On the expenditure side, PICs have limited room to sharply cut spending given the expected modest growth and ongoing development needs. Therefore, it becomes imperative to improve the efficiency of public spending, to maximize social dividends for every dollar spent. Resulting savings from fiscal consolidation measures could help build sovereign wealth funds to provide added fiscal buffers during shocks and economic downturns. Due to high vulnerability to disasters and climate change, PICs will need to seek ongoing concessional financing for critical climate adaptation and development needs.
Islamic Finance and the Development of Malaysia’s Halal Economy

(World Bank, Washington, DC, 2022-10) World Bank Group

The halal economy (HE) plays an important role in Malaysia’s economic growth, contributing 7.5 percent to the Gross Domestic Product (GDP) as of 2020. Under the Twelfth Malaysia Plan, 2021-2025 (12MP), one of the key strategies to boost Malaysia’s economic growth is enhancing the competitiveness of the halal industry to capture a more significant share of the global halal market. The term halal refers to anything that is permissible or lawful under Islamic Law that dictates the way of life of a Muslim (a follower of the Islamic faith). Hence, the scope of the HE is broad and can be defined as an industry that is involved in the provision of halal products and services, including food, clothing and fashion, cosmetics and personal care, travel, and financial services. Consequently, Islamic finance is both parts of the broader HE (Hassan et al., 2021) and can facilitate the development of the HE. This report requested by Bank Negara Malaysia (BNM) explores the role of Islamic finance in supporting the development of Malaysia’s HE with the objective of informing policy discourse on enhancing existing strategies to increase access to Islamic finance solutions to underserved HE enterprises. The report comprises the following chapters, (1) the current state of the HE; (2) the financing ecosystem of Malaysia’s HE, (3) enhancing role of Islamic finance for the HE in Malaysia; and concludes in Chapter 4 with a set of recommendations for stakeholders in Malaysia. While the recommendations focus on Malaysia, they may also be relevant for other developing economies where the HE and Islamic finance are prominen
Myanmar Financial Sector Reforms: Policy Note

(Washington, DC : World Bank, 2022-07-08) World Bank

During Myanmar's decade of reforms, financial sector reforms were widely recognized to be a critical underpinning of Myanmar's democratization process, enabling the transition to a more egalitarian, accessible economy. Accordingly, the government developed a program of wide-ranging financial sector reform and development as described in the Financial Sector Development Strategy 2015-2020, and then supplemented and updated their approach via other strategy documents. informal providers, who could charge usury rates with little oversight. Despite significant political economy challenges and capacity constraints, since 2011 policymakers were able to carry out a substantial program of reforms to strengthen the financial sector and promote market development. However, due to the impact of COVID and the coup of February 2021, this reform agenda is at severe risk of stagnation or reversal. Progress in the modernization and accessibility of the financial sector is contingent on stability and the confidence of the public in financial institutions. Rectifying the damage to the sector under current circumstances seems especially challenging, unless there is stability and the public's confidence in the financial system is restored incrementally.
China Economic Update - June 2022: Between Shocks and Stimulus - Real Estate Vulnerabilities and Financial Stability in China

(Washington, DC, 2022-06) World Bank

After a strong start in early 2022, the largest COVID-19 wave in two years and resulting mobility restrictions have disrupted China’s growth normalization. The global environment has also significantly worsened following Russia’s invasion of Ukraine. Real gross domestic product (GDP) growth is projected to slow sharply to 4.3 percent in 2022. In the face of domestic and external headwinds, China's policymakers should carefully calibrate its policies. In the short term, China should balance COVID-19 mitigation with supporting economic growth. Over the medium term, greater efforts are needed to shift away from the old playbook of stimulus-led investment to boost economic growth. Decisive action to encourage a shift toward consumption, tackle social inequality, and rekindle innovation and productivity growth would help achieve a more balanced, inclusive, and sustainable growth trajectory for China.
An Exploration of Nature-Related Financial Risks in Malaysia

(World Bank, Washington, DC, 2022-03) World Bank ; Bank Negara Malaysia (BNM)

Malaysia is one of the world's megadiverse countries, and many of its economic activities are directly or indirectly dependent on nature and its associated ecosystem services.' The Coronavirus (COVID-19) pandemic, with its far-reaching economic impacts, is a reminder of the link between human health and planetary health, given that most human infectious diseases are transmitted between species. In parallel to climate-related risks, nature-related risks can lead to economic and financial losses. Central banks have recently started to investigate biodiversity and other nature-related impacts and dependencies of financial systems. The NGFS, of which Bank Negara Malaysia (BNM) is a member, has recommended several first actions that could be taken by financial sector regulators and supervisors to help build the foundations for more comprehensive measures. BNM, as part of its mandate to promote monetary and financial stability conducive to the sustainable growth of the Malaysian economy, has an interest in understanding nature-related financial risks to the financial sector. to the financial sector. A better understanding of nature-related financial risks is important for prudential supervision to identify and address any emerging risks in the loan books and investments of banks and other financial institutions. This report assesses the exposure of Malaysian banks to sectors and regions that are highly vulnerable to nature-related risks. This study makes use of both Malaysian and global data.
Malaysia - Assessment of the Start-Up Financing Ecosystem

(Washington, DC: World Bank, 2022-02-28) Kuriakose, Smita ; Fong, Kristina Siew Leng ; Loh, John Jaan Hui ; Zakaria, Mohamad Izwan Bin

In the context of the Coronavirus (COVID-19) pandemic and its impact on Malaysia's economy, the need to foster the emergence of an innovation-led economy has taken on increasing urgency. Public-sector involvement in the early-stage financing phase of the ecosystem is integral to crowding-in private investments, as seen by the impact of the establishment of government-sponsored venture capital (VC) funds in several small OECD countries, including Estonia and Finland. In turn, improved access to finance at the initial stages of a start-up and the crowding in of private capital will play a pivotal role in strengthening the entrepreneurship ecosystem. The government has devised a number of developmental roadmaps that emphasize the greater use of alternative forms of financing, such as VC and digital platform based models, including peer-to-peer financing (P2P) and equity crowdfunding (ECF). These strategies are an integral part of the government's strategies for maintaining growth as Malaysia achieves high-income nation status. This study aims to identify the financing gaps in Malaysia's start-up financing ecosystem and to propose specific policy levers to address the identified constraints on both the availability of and access to early-stage financing.
Malaysia - SME Program Efficiency Review

(Washington, DC: World Bank, 2022-02-28) Kuriakose, Smita ; Tiew, Haris Syahir Bin Mohd Zulkifli

With Small and Medium Enterprises (SMEs) constituting a large proportion of Malaysian enterprises and making significant contributions to employment, GDP, and exports, it is vital for the achievement of Malaysia's development aspirations that these SMEs are enabled to achieve higher levels of productivity and performance. Malaysian firms in general, but most particularly its SMEs, face a number of fundamental issues and challenges related to innovation and the adoption and effective use of new technologies. The effects of the rapid evolution of the modern business environment that have resulted from the introduction of innovative new technologies and business practices have been exacerbated by the current high level of uncertainty related to the pandemic, placing increased emphasis on the need to improve firm capabilities. The Coronavirus (COVID-19) crisis has forced businesses to adapt and adopt digital tools in order to operate in the current environment. Given the considerable fiscal challenges resulting from the pandemic, there is an urgent need to recalibrate Malaysia's provision of public support for SMEs to enable the post-pandemic recovery to be driven by the private sector. In this context, the overall objective of this study is to analyse the composition of Malaysia's SME and entrepreneurship support policies so as to identify opportunities to decrease redundancies and to increase efficiencies by ensuring that public support towards SME development responds effectively to the most pressing needs of SMEs.