The relation between roads and poverty Weekly Compass, No. 105, 23 March 2012
Infrastructure, mostly seen as a responsibility of the public sector, lacks funding in many developing countries and private investments are often far from sufficient to fill the financing gap. A new report published by the Private Infrastructure Development Group reviews how support from Development Finance Institutions helps with infrastructure funding and provision. It also analyses its impact on development outcomes and finds that while Development Finance Institutions seek to enhance economic growth, they do “far less” to directly impact poverty. The report also provides recommendations for how to better target infrastructure investment to be pro-development.
BRIC’s aid reduces poverty, but debt sustainability is a concern Weekly Compass, No. 104, 16 March 2012
The infrastructure focus of BRIC (Brazil, Russia, India, and China) development financing has benefited Low Income Countries by alleviating key bottlenecks, boosting export competitiveness and making goods and services more affordable to consumers according to this paper IMF working paper by Nkunde Mwase and Yongzheng Yang. Continued cooperation can increase economic growth and reduce poverty in the long run, but there is concern over debt sustainability, pace of employment creation, labor practice, and competition with local firms.
Arab youth on Chinese payroll Weekly Compass, No. 102, 2 March 2012
One of the root causes of the uprisings in North Africa last year was unemployment among a large part of the population, the youth. Their unemployment rate in the region is 24%, and notably higher than in other parts of Africa where only 12% of young people don’t have a job. Dealing with this problem requires coherent national socio-economic policies by North African governments and one way of facing the challenge is securing ‘smart’ foreign direct investment – FDI that brings economic benefits and also guarantees job creation and skills transfer. A new paper published by the African Development Bank and co-authored by ECDPM’s Faten Aggad-Clerx looks at the role of China in reducing youth unemployment in North Africa. Two case studies from Algeria and Egypt provide a comparison on how Chinese investments have contributed to job creation in both countries. The paper provides policy recommendations to North African governments.
“Africa can embark on industrialization, just as China and India” Weekly Compass, No. 102, 2 March 2012
An issues paper by the African Union Commission and UNECA, prepared for the upcoming annual meeting of African Finance Ministers, examines key institutional and policy factors that are shaping Africa’s economic growth. It highlights the opportunities for the continent to become “a pole of global growth”, but to unleash this potential, African countries need to effectively address a set of constraints. Urgent and determined action of leaders is needed, for example when it comes to providing critical infrastructure or human capital development, the paper says.