Avoiding Middle-Income Growth Traps
Authors: Pierre-Richard Agénor, Otaviano Canuto, and Michael Jelenic
Since the 1950s, rapid growth has allowed a significant number of countries to reach middle-income status; yet, very few have made the additional leap needed to become high-income economies. Rather, many developing countries have become caught in what has been called a middle-income trap, characterized by a sharp deceleration in growth and in the pace of productivity increases. Drawing on the findings of a recently released working paper (Agénor and Canuto 2012), as well as a growing body of research on growth slowdowns, this note provides an analytical characterization of “middle-income traps” as stable, low-growth economic equilibria where talent is misallocated and innovation stagnates. To counteract middle-income traps, there are a number of public policies that governments can pursue, such as improving access to advanced infrastructure, enhancing the protection of property rights, and reforming labor markets to reduce rigidities — all implemented within a context where technological learning and research and development (R&D) are central to enhancing innovation. Such policies not only explain why some economies — particularly in East Asia — were able to avoid the middle-income trap, but are also instructive for other developing countries seeking to move up the income ladder and reach high-income status.
The Economic Premise notes are produced by the Poverty Reduction and Economic Management (PREM) Network Vice-Presidency of the World Bank. The views expressed here are those of the authors and do not necessarily reflect those of the institution.
To read more, please click here: http://siteresources.
worldbank.org/EXTPREMNET/ Resources/EP98.pdf To read previous Economic Premise notes, please click here: www.worldbank.org/
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Category: International Trade News
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World Bank Note: Avoiding Middle-Income Growth Traps
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Global Services Coalition Statement on Plurilateral Service Agreement
Global Services Coalition Statement on Plurilateral Services Agreement
Washington. Referring to talks in Geneva toward a plurilateral agreement on services, eleven business organizations comprising the Global Services Coalition (GSC) today applauded Governments for their concerted efforts in responding to business calls to reignite global interest in the growth and development of the services sector.
The agreement includes 19 countries comprising more than 70% of global services trade. Among the eleven members in the Global Services Coalition are some of the world’s largest and most dynamic economies. They are listed below.
The Coalition calls on those WTO members which have not yet participated in these meetings to delay no longer and to join in as soon as possible to launch formal negotiations by the end of this year, to achieve early practical outcomes in support of global economic growth.
The complete text of the Coalition’s Communique follows:
Global Services Coalition Communique
Washington, DC, 19 September 2012
Services – The New Agenda!
Meeting at the 4th Global Services Summit in Washington DC on 19 September 2012, business organizations comprising the Global Services Coalition (GSC) applauded Governments for their concerted efforts in responding to business calls to reignite global interest in the growth and development of the services sector.
Over recent months, a group of WTO members have been meeting regularly in Geneva as the “Really Good Friends of Services” to consider what could be done, and how, to allay business frustration over stalled Doha Round outcomes on services. Discussions have focused on developing a coherent, new agenda towards an international plurilateral services agreement that would be ambitious, flexible, and inclusive with the goal of attracting maximum support and providing a means for extending its outcomes to all WTO members.
The Global Services Coalition calls on those WTO members which have not yet participated in these meetings to delay no longer and to join in as soon as possible. The Global Services Coalition urges all the participating Governments to move rapidly to capture the existing hard-won momentum towards launching formal negotiations by the end of this year – to achieve early practical outcomes in support of global economic growth.
The services sector accounts for the bulk of GDP and new job-creation in most of the world’s economies. Services industries are everywhere providing the key value-added which is enabling more and more economies to find an entry into global supply chains, enhancing growth, development, and job opportunities. But international business in services is severely hampered by long-standing trade, investment, and regulatory barriers of all kinds, and it is threatened by new protectionist restrictions.
In the current global environment, marked by low growth in many economies, Governments need to take concerted action to reverse recessionary drift. Opening up to international business is the most efficient spur to economic growth. By operating both the demand and supply levers at the same time, reform of trade and investment regimes is the most effective means of bolstering commercial expansion, facilitating business innovation, and creating jobs. New market access abroad means new export opportunities, while acting as a catalyst for inward flows to bring the benefits of cheaper inputs and more efficient businesses at home.
The fourth Global Services Summit, entitled, “Services – The New Agenda!” was oriented to shed new light on key challenges facing services trade and investment in the current global economic climate, emphasizing the urgent need to tackle them through a coherent new negotiating agenda in the interests of growth and wealth-creation worldwide. Insightful discussions included cross-border trade and the digital economy; the problems for business of local preferences and other localization requirements; the impact of state-owned and state-assisted enterprises; the role of trade facilitation and enhanced logistics in global value chains and the role of services in generating momentum in the Asia Pacific economies.
The Global Services Coalition brings together businesses that lie at the heart of the functioning of modern, competitive economies. The Coalition’s members are committed to working together with all Governments to help reap the productivity gains and development dividends that services sector reform can deliver.
The Global Services Coalition includes:
Australian Services Roundtable
Canadian Services Coalition
Coalition of Service Industries Malaysia
Coalition of Services Industries (USA)
European Services Forum
Hong Kong Coalition of Service Industries
Japan Services Network
Mexican Services Network
NASSCOM (India)
Taiwan Coalition of Services Industries
TheCityUK (United Kingdom)
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The New Financial Landscape — What It Means for Emerging Market Economies
The New Financial Landscape: What It Means for Emerging Market Economies
Authors: Otaviano Canuto, Catiana García-Kilroy, and Anderson Caputo Silva
As the year 2012 unfolds, its main legacy will be its game changing impact on global financial markets. Waning global growth along with central banks’ bold monetary easing policies in advanced economies (AEs) to try to reverse it are changing market dynamics in unexpected ways, across both AEs and emerging market economies (EMEs). The combination of monetary stimulus, fiscal austerity and hesitant structural economic policy reforms in AEs, particularly in Europe, is taking the global financial system into increasingly uncharted territory. How the European Union will address the future of the eurozone, including uncertainties over its banking sector, as well as how the United States handles its Fiscal Cliff, will weigh heavily on economic balances across all economies worldwide. This seems to be a significant point of inflection on the speed of the rebalancing of economic relevance of AEs in favor of EMEs taking place over the last 12 years. Under this scenario, the ability of EMEs to handle their own fiscal, financial, and real economy weaknesses is critically tied to their ability to weather external shocks and take advantage of growing global savings while searching for yield and growth opportunities.
The Economic Premise notes are produced by the Poverty Reduction and Economic Management (PREM) Network Vice-Presidency of the World Bank. The views expressed here are those of the authors and do not necessarily reflect those of the institution.
To read more, please click here: http://siteresources.
worldbank.org/EXTPREMNET/ Resources/EP87.pdf To read previous Economic Premise notes, please click here: www.worldbank.org/
economicpremise Economic Premise is now a partner of Roubini Global Economics and is available on RGE’s Partner Content: www.roubini.com/
partnercontent. PREM’s Twitter feed tracks the World Bank’s efforts to help countries fight poverty and close gaps in income and opportunity. Follow us at twitter.com/WBPoverty.
To subscribe to this Economic Premise update click here, to unsubscribe click here, or to send comments email us at economicpremise@worldbank.org.
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CSI Announces Election of Citigroup’s Samuel A. Di Piazza, Jr. to CSI Board Chairman
Washington, D.C. – The Coalition of Service Industries (CSI) announced today that Samuel A. Di Piazza, Jr., Vice Chairman of Citi’s Institutional Clients Group, has been elected Chairman of CSI’s Board of Directors. Di Piazza succeeds William J. Toppeta, former President, MetLife International, who now serves as Senior Advisor at the Promontory Financial Group in New York.“I am honored and very excited to take on the Chairmanship of CSI. The global economic environment has struggled in the past few years and the improvement of free trade overall, especially in the services sectors, is critical to the recovery. Services dominate global trade and this is the right time to make the best use of new opportunities to secure liberalization on an international scale. The International Services Agreement being considered in Geneva, the Trans-Pacific Partnership, and the US-EU High-Level Working Group dialogue are especially rich opportunities for progress,” Di Piazza said.
Di Piazza has enjoyed a very distinguished business career. Prior to joining Citi as a Senior Banker serving institutional clients in May 2011, he served as global chief executive officer of PricewaterhouseCoopers International Limited. He has served as a trustee and member of the executive committee of the International Accounting Standards Committee Foundation as well as a trustee of the US Financial Accounting Foundation. He is past chairman of the World Business Council on Sustainable Development, serves on the USA Foundation board of the World Economic Forum, and is a member of the Board of Trustees of the Mayo Clinic. He is the past global chairman of Junior Achievement Worldwide as well as The Conference Board and currently serves as a member of the executive committee of both the New York Inner City Scholarship Fund and the National September 11 Memorial & Museum, among other notable activities.
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2012 Global Services Summit: The New Agenda
The 2012 Global Services Summit: The New Agenda will be held on Wednesday, September 19, 2012 at the Grand Hyatt Washington in Washington, DC.
This year marks a critical turning point in the long effort to liberalize services trade and investment. A group of 20 members of the World Trade Organization (WTO) have begun discussions aimed at launching an ambitious agreement on trade in services, known informally as the International Services Agreement (ISA). Significant services commitments are now being negotiated in the Trans-Pacific Partnership talks, and the EU-US High-Level Working Group will aim to address long-standing market access barriers to services. The 2012 Global Services Summit will explore the path ahead for all of these important opportunities.
To date, confirmed speakers include U.S. Trade Representative Ron Kirk, New Zealand Trade Minister Tim Groser, Colombian Trade Minister Sergio Diaz Granados, Mexican Secretary of the Economy Bruno Ferrari, United Kingdom Trade Minister Norman Lamb and other senior government, business, and opinion leaders.
Ian Bremmer, President of the Eurasia Group, also will address the Summit about Winners and Losers in a G-Zero World.
The event will include a series of panel discussions and breakout sessions on topics including:
- The New Agenda for Services Liberalization
- Services Investment Liberalization: Avenues for Progress
- Defining The Challenge: Services Trade Restrictions
- Cross-Border Trade and the Digital Economy: The “Lifeblood” of Services Trade
- The Urgent Challenge Posed by State-Owned and Assisted Enterprises
- The Role of Trade Facilitation and Enhanced Logistics in the Global Value Chain
- China – Developing the Critical Services “Growth Sector”
- India – Refocusing the Dialogue
For further information and for individual registration at $250/person, go to http://uscsi.org/about-csi/global-services-summit-2012. Questions may be directed to CSI at servicessummit@uscsi.org.
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World Trade Report 2012
Regulatory measures for trade in goods and services raise new and pressing challenges for international cooperation in the 21st Century. The World Trade Report 2012 examines why governments use these non-tariff measures and to what extent such measures may distort international trade.
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WTO agrees to hold 9th Ministerial Conference in Bali, Indonesia
The chair of the General Council, Amb. Elin Johansen (Norway), warmly thanked Indonesia for its “kind offer”, which she said was “a clear sign of its commitment towards this organization.” She added that members would discuss the precise dates of the 9th Ministerial Conference after the summer break.
Indonesia, in thanking members for the decision, said: “In the situation where crisis is still hampering the global economy, Indonesia continues to believe that the multilateral trading system has a significant role in fostering a fair global trade, sustaining the world economic growth, eradicating poverty and creating job opportunities. In this regard, the next MC9 will therefore be very important to re-energize the negotiation process and the progress achieved so far, and to strengthen the multilateral trading system. Finally, Indonesia fervently hopes that the exotic ambiance of the land of the gods and goddess, the warm weather and the hospitality of the people of Bali, will rejuvenate and renew the constructive spirit of the Doha Development Agenda negotiation in the WTO.”
The Ministerial Conference is the highest decision-making body of the WTO. It usually meets every two years. The 8th WTO Ministerial Conference was held last December in Geneva.
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Lamy reports to General Council on Doha Round and urges negotiators to ‘change gears’
Director-General Pascal Lamy told WTO members in the General Council on 25 July 2012 that they should “change gears” after the summer break and engage seriously to produce results. He told members that an “all or nothing” strategy is the best way to ensure paralysis and added that the “ball lies in your court”.