Archive for the ‘International Development’ Category


The Pacific Alliance deserves some applause. Photographer: Alfredo Estrella/AFP/Getty Images

The Pacific Alliance is achieving significant results. Three years ago, Chile, Colombia, Mexico and Peru decided to move toward deeper economic and commercial integration. The effort was based on our common belief that the free movement of people, goods, services and capital can help us achieve greater welfare and social inclusion for our citizens.

Our four countries represent 214 million people, and our economies have a combined gross domestic product of $2.1 trillion, which accounts for 37 percent of Latin America’s total GDP, averaging a 5.1 percent annual growth rate over the past four years. Our foreign trade adds more than $1.13 trillion, and we receive 45 percent of total foreign investment flows in Latin America.

To fulfill our goal of free movement of people, we lifted tourist and business visa requirements for our citizens. Because cultural exchange and education are so important, we put in place special programs to make it easier for our students to study and travel.

We also found ways to expand the free movement of goods and services. A new trade agreement will immediately eliminate tariffs for 92 percent of our common products, and the remaining 8 percent will be phased out, giving extra help to small and medium enterprises.

On the free movement of capital, our stock exchanges are now unified in the Latin American Integrated Market. With the recent addition of Mexico, we are certain that this action will broaden the diversity of financial products that we can offer. More than 750 companies with a market value of $1.1 trillion are represented in our integrated market.

We believe we have come a long way in a short time. However, we want to do more and do it together. We are establishing embassies and trade offices in shared facilities overseas as well as organizing trade and economic missions. We created a fund to promote projects among ourselves and with third parties.

We are particularly committed to working with other countries. With 32 nations now observing the Pacific Alliance, we know there is broad global interest in our shared enterprise and the prospect for wider integration.

We are therefore strengthening our relationship with observer countries by defining projects of cooperation in our core areas. Specifically, we are working on education, trade, small and medium businesses, innovation, science and technology, and infrastructure. More generally, we are open to exploring engagement with other regional integration efforts.

The Pacific Alliance Business Council, which includes representatives of the main private economic institutions of our four countries, is another important partner in our project. As we gather this week in New York City to attend the United Nations General Assembly, we plan to discuss our achievements, challenges and prospects, as well as to deepen a fruitful exchange with the U.S. and the international business community.

If we had to highlight one characteristic of our integration process, it would be this: We firmly believe that the main purpose of the Pacific Alliance is to improve the welfare of all our citizens through the promotion of growth and economic development, and the improvement of the competitiveness of our economies.

Three years ago, we faced the challenge of fostering a process that would strengthen our countries and, especially, help us build a bridge to the Asia Pacific region. This aspiration has now become a reality. We will continue to work together, as partners, to fulfill our common goals and to deepen and extend our vision, for the benefit of our nations.

By  ,  ,  &Michelle Bachelet is president of Chile. Juan Manuel Santos is president of Colombia. Enrique Pena Nieto is president of Mexico. Ollanta Humala is president of Peru

Published on 21 September in


Warning: The 21st century may get a lot more crowded than previously thought.

In a paper published Thursday in Science, demographers from several universities and the United Nations Population Division conclude that instead of leveling off in the second half of the 21st century, as the UN predicted less than a decade ago, the world’s population will continue to grow beyond 2100. (Read “Population Seven Billion” in National Geographic magazine.)

And for the first time, through the use of a “probabilistic” statistical method, the Science paper establishes a range of uncertainty around its central estimate-9.6 billion Earthlings in 2050, 10.9 billion by 2100. There’s an 80 percent chance, the authors conclude, that the actual number of people in 2100 will be somewhere between 9.6 and 12.3 billion.

Chart showing new world population estimate including range of possible values.


That range “is the truly innovative part,” says John Wilmoth, head of the UN Population Division and one of the authors of the Science paper. “It’s a much more plausible analysis of uncertainty—but we may still be off by two billion.”

According to other demographers, the UN has missed the mark by just about that amount. In a paper in press at Global Environmental Changeand in a forthcoming book, Wolfgang Lutz and his colleagues at the International Institute for Applied Systems Analysis (IIASA) in Vienna, Austria, use a very different method—one that involves canvassing a large group of experts—to argue that population is likely to peak at 9.4 billion in 2075 and fall to just under 9 billion by 2100.

The UN team estimates there’s no more than a 5 percent chance of that rosier scenario coming to pass.

Both groups foresee India becoming the world’s most populous country, with its numbers peaking around 2070 and declining to around 1.5 or 1.6 billion by 2100. Where they differ most is in their estimates of the coming population decline in China and of the coming population explosion in Africa south of the Sahara—where most of the world’s growth is going to occur.

According to the UN, the population in that region could quadruple, from less than one billion to nearly four billion. Africa in 2100 would be as densely populated as China is today.

“These are not predictions,” says Wilmoth. “These are projections of what will happen if current trends continue. There is still an opportunity to intervene.”

Read more…

Robert Kunzig

National Geographic



Africa Beyond Ebola

Written on September 15, 2014 by Waya Quiviger in Africa, International Development

MADRID – Among this summer’s grave global worries, the spread of the Ebola virus has monopolized the discussion of Sub-Saharan Africa and reinvigorated hoary notions of disorder and despair – at a time when a new image of a dynamic Africa was emerging. In fact, there is still strong reason for optimism about the region’s prospects.

The Ebola outbreak overshadowed three key events affecting the region. On July 1, a major organizational restructuring at the World Bank Group was implemented. Two weeks later, the BRICS (Brazil, Russia, India, China, and South Africa) announced the establishment of the New Development Bank. And, in early August, African government and business leaders gathered in Washington, DC, for a summit that could portend transformative private investment in Africa.

Such investment is essential in a world in which net private capital flows to developing countries outstrip official development assistance by a margin of ten to one. If this is to be a turning point for Africa, rather than another false dawn, this summer must be the start of a prolonged effort to stimulate private-sector engagement.

The reorganization of the World Bank is a central part of a larger effort under its president, Jim Yong Kim, to reposition the Bank as a facilitator vis-a-vis the private sector, rather than a primary provider. From 2009 to 2013, new investment commitments by the International Finance Corporation, the World Bank’s private-sector lending arm, have risen 73%. Meanwhile, the Multilateral Investment Guarantee Agency, the Bank’s provider of political risk insurance covering investments in developing countries, has moved to expand its activities, both by broadening the types of projects that it supports and widening existing definitions to allow greater coverage.

July’s restructuring occurs within the context of these broader moves. In reorganizing the World Bank Group’s central component, the International Bank for Reconstruction and Development, Kim has adopted a management-consulting model that unites expertise with regional coverage. Seeking to eliminate the bureaucratic “silos” that have isolated regional experts from one another, 14 global practice groups in areas such as energy, water, and education have been established to bring to bear the full force of the World Bank’s considerable knowledge on projects and partnerships.

Just as the World Bank was repositioning itself, the BRICS agreed to establish their own bank. There are significant outstanding issues about how the New Development Bank will operate, but early indications suggest that infrastructure will be central to its activities, with an emphasis on Africa.

The World Bank estimates that insufficient infrastructure reduces productivity in Africa by approximately 40%. The entrance of a new player with initial authorized capital of $100 billion – along with the United States’ Power Africa program, which has garnered $26 billion in commitments since its launch last year, and the World Bank’s new Global Infrastructure Facility – promises to help ease infrastructure financing significantly.

But, as of now, the New Development Bank is little more than a statement of political solidarity, and whether it comes into existence remains to be seen. Even if it does begin to function, the BRICS lack what gives development banks, and the World Bank in particular, legitimacy and weight: a staff composed mostly of dedicated experts who are among the world’s best.

Finally, the high profile of the US-Africa Leaders Summit, with more than 40 heads of state in attendance, as well as President Barack Obama’s direct involvement, generated buzz about Africa. US businesses and investors certainly gained more awareness about Africa’s potential and a deeper understanding of the variety of investment climates throughout the continent.

But, though the summit may be called a success, its long-term implications are unclear, particularly given the uncertainty about what will follow. At the moment, there does not seem to be a plan to institutionalize the summit.

Moreover, the participation of so many heads of state overshadowed that of African business leaders. The practical connections that US companies will need when deciding whether to invest could have been cultivated on the summit’s margins, or in its aftermath, but were not. Laying a foundation for future engagement requires ongoing commitment and effort that goes beyond mere publicity.

The same could be said about the World Bank. There is much work to be done in integrating the new organizational model with existing Bank structures and practice areas. Even if this transition occurs seamlessly, the Bank faces a serious internal struggle against entrenched bureaucratic interests and a pervasive institutional mindset that is overly risk-averse and fixates on processes rather than outcomes.

In recent years, Africa, once a land of pity, has emerged as a land of opportunity. If it is to become a land of performance, the goal must be to facilitate investment, both domestic and foreign. That will demand effort and commitment; given that a stable international order increasingly depends on a prosperous and growing Africa, it is a goal that the world cannot afford to miss.

By Ana Palacio. Published on Sept. 4th in

Ana Palacio, a former Spanish foreign minister and former Senior Vice President of the World Bank, is a member of the Spanish Council of State and a visiting lecturer at Georgetown University. She is also a member of IE Business School’s International Advisory Board.



James Mwangi grew up on the slopes of the Aberdare Mountains in central Kenya. His father lost his life during the Mau Mau uprising against the colonial authorities. His mother raised seven children, making sure both the girls and the boys were well educated. Everybody in the family worked at a series of street businesses to pay the bills.

He made it to the University of Nairobi and became an accountant. The big Western banks were getting out of retail banking, figuring there was no money to be made catering to the poor. But, in 1993, Mwangi helped lead a small mutual aid organization, called Equity Building Society, into the vacuum.

The enterprise that became Equity Bank would give poor Kenyans access to bank accounts. Mwangi would cater to street vendors and small-scale farmers. At the time, according to a profile by Anver Versi in African Business Magazine, the firm had 27 employees and was losing about $58,000 a year.

Mwangi told the staff to emphasize customer care. He switched the firm’s emphasis from mortgage loans to small, targeted loans.

Kenyans got richer, the middle class boomed and Equity Bank surged. By 2011, Equity had 450 branches and a customer base of 8 million — nearly half of all bank accounts in the country. From 2000 to 2012, Equity’s pretax profit grew at an annual rate of 65 percent. In 2012, Mwangi was named the Ernst & Young World Entrepreneur of the Year.

Mwangi’s story is a rags-to-riches Horatio Alger tale. Mwangi has also become a celebrated representative of the new African entrepreneurial class, who now define the continent as much as famine, malaria and the old scourges.

But Mwangi’s story is something else. It’s a salvo in an ideological war. With Equity, Mwangi demonstrated that democratic capitalism really can serve the masses. Decentralized, bottom-up capitalism can be the basis of widespread growth, even in emerging markets.

That theory is under threat. Over the past few months, we’ve seen the beginning of a global battle of regimes, an intellectual contest between centralized authoritarian capitalism and decentralized liberal democratic capitalism.

On July 26, for example, Prime Minister Viktor Orban of Hungary gave a morbidly fascinating speech in which he argued that liberal capitalism’s day is done. The 2008 financial crisis revealed that decentralized liberal democracy leads to inequality, oligarchy, corruption and moral decline. When individuals are given maximum freedom, the strong end up stepping on the weak.

The future, he continued, belongs to illiberal regimes like China’s and Singapore’s — autocratic systems that put the interests of the community ahead of individual freedom; regimes that are organized for broad growth, not inequality.

Orban’s speech comes at a time when democracy is suffering a crisis of morale. Only 31 percent of Americans are “very satisfied” with their country’s direction, according to a 2013 Pew survey. Autocratic regimes — which feature populist economics, traditional social values, concentrated authority and hyped-up nationalism — are feeling confident and on the rise. Eighty-five percent of Chinese are very satisfied with their country’s course, according to the Pew survey.

It comes at a time when the battle of the regimes is playing out with special force in Africa. After the end of the Cold War, the number of African democracies shot upward. But many of those countries are now struggling politically (South Africa) or economically (Ghana). Meanwhile, authoritarian Rwanda is famously well managed.

China’s aggressive role in Africa is helping to support authoritarian tendencies across the continent, at least among the governing elites. Total Chinese trade with Africa has increased twentyfold since 2001. When Uganda was looking to hire a firm for an $8 billion rail expansion, only Chinese firms were invited to apply. Under Jacob Zuma, South Africa is trying to copy some Chinese features.

As Howard French, the author of “China’s Second Continent,” points out, China gives African authoritarians an investor who doesn’t ask too many questions. The centralized model represses unhappy minority groups. It gives local elites the illusion that if they concentrate power in their own hands they’ll be able to move decisively to lift their whole nation. (Every dictator thinks he’s Lee Kuan Yew.)

French notes that popular support for representative democracy runs deep in most African countries. But there have to be successful examples of capitalism for the masses. There have to be more Mwangis, a new style of emerging market hero, to renew faith in the system that makes such people possible.

President Obama is holding a summit meeting of African leaders in Washington this week. But U.S. influence on the continent is now pathetically small compared with the Chinese and Europeans. The joke among the attendees is that China invests money; America holds receptions.

But what happens in Africa will have global consequences in the battle of regimes. If African nations succumb to the delusion of autocracy, we’ll have Putins to deal with for decades to come.

Published on Aug. 4 in the by David Brooks



As Venezuela passed the one-year anniversary of the death of strongman Hugo Chavez today, his successor Nicolás Maduro continued his crackdown against protestors demanding an end to corruption, rampant crime, and economic mismanagement. Since nationwide demonstrations began a month ago, clashes between Venezuelan security forces and protestors have resulted so far in at least 18 deaths and over 250 injuries.

Chavez’s socialist experiment has left Venezuela’s economy and society in shambles. A Gallup poll recently reported that the dire economic situation “pushed Venezuelan pessimism about the nation’s economy in 2013 to an all-time high-62% of Venezuelan adults said the economy is getting worse, while a record-low 12% said it was getting better.” Even official Venezuelan government figures show that one in four basic household goods, such as milk or toilet paper, is in short supply. What’s more, growth in violent crime has accompanied the oil-rich country’s economic slide. The Venezuelan Violence Observatory, a non-governmental group that tracks trends in crime, estimated that the country’s homicide rate had quadrupled since 1998.

As many thousands of Venezuelans across the country have taken to the streets to demonstrate against their deteriorating economic and social conditions, Maduro has used increasingly heavy-handed tactics to silence critics, control the flow of information, and violently suppress political dissent. Regime security forces have banned street protests, fired tear gas and pellets into crowds, and raided offices of opposition members, while also temporarily blocking users from sending or receiving Twitter images, taking a Colombian television station off the air, and threatening CNN and other international media stations covering the protests. News reports indicate the Maduro government has also utilized pro-regime gangs known as colectivos to crack down violently on protestors. As opposition deputy leader María Corina Machado-a member of Venezuela’s National Assembly whom pro-regime lawmakers physically attacked on the legislature’s floor last year-recently warned: “We live under ruthless repression not only by State security bodies, but also by colectivos, and armed paramilitary groups protected by the Government.”

The Maduro government’s resort to violence and intimidation reflects, in no small part, the regime’s growing fragility. Although Chavez used massive state oil revenues to buy public support, years of mismanagement at the state-owned Petroleos de Venezuela have brought the Maduro government’s foreign exchange reserves to a ten-year low. Moreover, Maduro’s failed currency reform has resulted in rampant, 56% inflation. For Maduro, the Wilson Center’s Eric Olson recently noted, “[p]ast strategies for navigating economic hardship with oil largesse are no longer viable given that oil production is falling, some unexploited oil has already been monetized, and the dual currency program is proving economically costly and increasingly untenable.” Read more…

Patrick Christy is a senior analyst at the Foreign Policy Initiative. Published on Mar. 6, 2014 in

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