WEF INCLUSIVE AND DEVELOPMENT REPORT-2015
BANGLADESH SCORES HIGHEST IN EDUCATION, POVERTY CUT
Bangladesh scored highest positions in an international study report on inclusive and development among the 18 low income countries for impressive achievements in education and poverty reduction.
World Economic Forum (WEF) prepared the report to improve understanding of how countries can make use of a diverse spectrum of policy incentives and institutional mechanisms in order to widen social inclusion in the process and benefits of economic growth without dampening incentives to work, save, and invest.
In cross-country and sub-pillar comparison, Bangladesh scored 2.88 in education and 4.98, the highest marks among the low income countries.
“Companies in Bangladesh have better access to finance from banks and the equity market than most other countries at its income level, which is important for supporting business development. But significant efforts will be required to increase the country’s capacity to deliver inclusive growth”, the report said.
“The education system falls short, with lower enrolment rates at all levels than in most other countries, poor quality, and great differences in school performance based on students’ income levels – all of which reinforces inequality”.
The Inclusive Growth and Development report published last week covered 112 countries with a set of quantitative measures across seven pillars and fifteen sub-pillars.
The WEF report observes that Bangladesh needs to make business and job creation more attractive by reducing red tape, upgrading infrastructure and basic services, and tackling rampant corruption, the report said.
“This would help to bring more workers out of the informal economy and into official and less vulnerable employment”, it said.
The report has identified various ways policymakers can drive economic growth and equity at the same time. “There are more ways to make sure that economic growth is inclusive and benefits the poor than just redistribution and improving the skills of workers”.
These recommendations could help countries like SA that have high inequality and poverty levels.
In developed economies where social transfers are an important source of income for the lowest-income groups, policies need to raise the quality and compensation levels of available work and help individuals in these households to move into employment.
In emerging and developing economies, the report found that raising the income of low-income groups has been achieved through both direct employment programs as in India and South Africa) and cash transfers (as in Brazil and Mexico, among many other countries).
“Technological change can be an important driver of economic growth: in developing countries, a 10 percent increase in high-speed internet connections is associated with an increase in growth by an average of 1.4 per cent”, the report said.
“The technological progress of recent decades has been linked to the increasingly unequal global distribution of income: it has increased the premium commanded by high-skilled workers while enabling previously medium-skilled tasks to be performed by lower-skilled workers or off-shored to lower-wage economies.
One study in Niger found that farmers increased their income by 29% when ICT gave them better access to information.
Online work offers opportunities for people who face barriers to working outside the home, whether due to geographical remoteness, physical disability, or cultural barriers (such as those against women’s work in patriarchal cultures).
Likewise, innovations in mobile payment systems and peer-to-peer lending platforms are democratizing access to financial services and credit, the WEF report observes.
“Mobile money apps such as Kenya’s M-PESA are giving small-scale entrepreneurs and low-income households access to a range of financial services, enabling them to grow their businesses and make financial transactions effortlessly”.
“Mobile money can also reduce low-level corruption – minibuses in Nairobi are switching to contactless payment systems, which will reduce the scope for traffic police to solicit cash bribes”.
“Technology has the potential to improve governance in other ways too: by enabling governments to share information more widely with citizens, and granting citizens the knowledge, tools, networks, and means for proactively bringing change to their communities”.
The WEF report has found several other crucial factors relate to improving the investment and business climate.
WEF chief economist Jennifer Blanke said although country-specific solutions to inclusive growth applied, analysis showed that all countries had room for improvement for placing their economies on a more inclusive growth path.
SEPTEMBER 15, 2015