The global economy is stagnating, and uncertainty about its future is rising. These trends weigh heavily on countries that depend on the production and export of a small range of products, or that sell products in only a few overseas markets. Prices of the minerals and other basic commodities that dominate the exports of many poor countries have also declined sharply. All of this points up the need for diversification strategies that can deliver sustained, job intensive and inclusive growth.
The World Bank Group’s Trade & Competitiveness Global Practice (T&C), a joint practice of the World Bank and International Finance Corporation (IFC), is working with a growing roster of client countries eager to achieve greater economic diversification. This is a worthy goal regardless of economic conditions, but especially so now, as developing countries with sector-dependent economies face mounting pressures.
Chile is an example of a diversified economy, exporting more than 2,800 distinct products to more than 120 different countries. Zambia, a country similarly endowed with copper resources, exports just over 700 products — one-fourth of Chile’s export basket — and these go to just 80 countries. Other low-income countries have similarly limited diversified economies. The Lao People’s Democratic Republic and Malawi, for example, export around 550 and 310 products, respectively. Larger countries that export oil, such as Nigeria (780 products) and Kazakhstan (540 products), have failed to substantially expand the range of products they produce and export.
AJG Simoes, CA Hidalgo. The Economic Complexity Observatory: An Analytical Tool for Understanding the Dynamics of Economic Development. Workshops at the Twenty-Fifth AAAI Conference on Artificial Intelligence. (2011)
While the sluggish global economy is creating economic problems for traditional exports, other economic trends offer new routes and opportunities for poor countries to diversify. The trend toward the spatial splitting up of production across wide geographic areas, and the emergence and growth of regional and global value chains, offer new ways for developing countries to export tasks, services and other activities. Value chains offer developing countries a path out of the trap of having to specialize in whole industries, with all of the cost and risk that such a strategy entails.
As a country that is particularly vulnerable to flooding, Malawians know that they cannot halt the forces of nature, but they can prepare and plan for their impacts – and they did. Supported by the Global Facility for Disaster Reduction and Recovery (GFDRR) and the World Bank, the Government of Malawi undertook a series of community mapping activities in which it collected data about the environment for a flood risk modeling exercise and other preparedness activities. So in January 2015, when Malawi experienced its most devastating flood in a century, the data that its government collected was used to support recovery activities.
Robust and actionable information like this can help those at risk understand and prepare for hazards, saving lives and assets. However, even in this era of big data and hyper-connectivity, when one would think that every place on earth is already mapped in great detail, such information is often inaccessible, disparate, or altogether nonexistent. Even as recently as this month’s earthquake on the border of Tanzania and Uganda, people still scrambled for spatial information. Doing so in the moments after a disaster, though, is too late.
On April 22 and April 29, 2016 representatives from Cote d’Ivoire, Ghana, Kenya, Liberia, Malawi, Sierre Leone, South Africa, and Tanzania came together in a virtual South-South Knowledge exchange hosted by the World Bank in collaboration with the Open Government Partnership to discuss an issue of mounting concern: managing records and information to support open government. These countries – committed to the goal of open government, and a number with new right to information laws and open data initiatives - were motivated by increasing recognition that their commitments to make information open cannot be fully realized until they increase their capacity to manage records and information, especially the growing amount of information in digital form.
I have worked on public procurement and governance for most of my life. But I have never been more excited to finally have a solution at hand that has potential to change the legacy of opaqueness, fraud and lack of effectiveness in public contracting in many African countries.
Africa still need billions in investments to build infrastructure and provide quality services to its citizens, many of them vital: health care centers, food for school children, water services and road to help farmers market their produce. Investments as part of the Sustainable Development Goals in infrastructure alone carries a price tag nearly $100 billion a year. Unfortunately, like in many countries around the world, public contracting in Africa has been characterized by poor planning, corruption in picking contractors and suppliers and contracts are poorly managed.
But the good news is that this is changing. The series of blogs I’m kicking off will highlight the shifting of the norm towards open contracting in Africa.
While countries around the world reap the benefits of an expanding digital environment, development challenges persist, adversely impacting low-income countries from achieving that same rate of growth.
The 2016 World Development Report (PDF) recently highlighted these findings in addition to three factors that contribute to a government’s responsiveness towards these digital changes.
According to the report, public services tend to be more amenable to improvements through digital technologies if the proposed system allows for fluid feedback, a replicable development process, and an outcome that can be easily measured and identified.