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World Bank Supports Maldives in its Journey Towards Resilience and Prosperity

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Minister of Finance for Maldives, Hon. Ibrahim Ameer and the World Bank Country Director for Maldives, Nepal and Sri Lanka, Dr. Idah Pswarayi-Riddihough. Photo: Richa Bhattarai/World Bank

The World Bank is providing support to the Government of Maldives to strengthen the country’s sustainability of public finances while minimizing impacts of natural hazards. Two complementary agreements – one to enhance budget credibility and reduce fiscal pressures, and the other to help the government support reforms for increased resilience and take immediate action during an emergency – were signed to that effect. 

The first agreement, a $20 million Development Policy Financing (DPF), will focus on improving the policy framework for enhancing sustainability of public finances and strengthening the policy framework to increase budget credibility. The second agreement is a $10 million Catastrophe Deferred Drawdown Option, (Cat DDO), with an associated Pandemic Emergency Financing Facility (PEF). The Cat DDO will help enhance the Maldives’ financial capacity to effectively manage the human, physical and fiscal impact of climate change, natural disasters and diseases.

The suite of instruments are quick disbursing sources of financing that will support the government to take immediate response, relief and recovery activities following a disaster or an emergency, including health.

The agreements were signed today at the Ministry of Finance by Minister of Finance, Hon. Ibrahim Ameer and the World Bank Country Director for Maldives, Nepal and Sri Lanka, Dr. Idah Pswarayi-Riddihough.

“The agreements are part of integrated risk management options to improve the country’s resilience to shocks and safeguard macroeconomic sustainability,” stated Idah Pswarayi-Riddihough, World Bank Country Director for Maldives, Nepal and Sri Lanka. “In addition, it is for the first time that a country in South Asia has prepared a Cat DDO that is linked with this new pandemic emergency financing. This is a kind of insurance for the future.”

Maldives has made considerable progress in its macroeconomic and human capital indicators. However, due to its unique geographical placement, vulnerability remains high, and Maldives can increase its resilience by strengthening its fiscal management and preparedness for shocks. The country also continues to be vulnerable to natural hazards and extreme climatic events with considerable economic consequences.

The co-task team leaders of the projects, Fernando Im and Armando Guzman, commended the Maldivian government on their vision, and commitment in achieving a remarkable and innovative milestone. This is particularly important given that Maldives is a small island state. 

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Development

Tanzania’s Economic Growth by Transforming Its Tourism Sector

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As Tanzania’s tourism sector recovers from the harsh effects of the COVID-19 (coronavirus) pandemic on businesses and employment, the latest World Bank economic analysis says the country also has a unique opportunity to revamp the tourism industry to drive inclusive growth over the long term, and promote climate adaptation and mitigation.

The 16th Tanzania Economic Update, Transforming Tourism: Toward a Sustainable, Resilient, and Inclusive Sector notes thatthe near-cessation of tourism activities globally due to the pandemic deeply affected Tanzania’s tourism sector. Economic activity in the sector contracted sharply in 2020, resulting in job losses and business shutdowns which has had negative knock-on effects for inter-related sectors. While partial recovery is underway, business revenues and derived taxes for government still remain below pre-pandemic levels.

“The latest news point to the fact that we are not out of the wood yet, as the third wave of COVID-19 with a more deadly variant seems to be spreading,” said Albert Zeufack, World Bank Africa Chief Economist. “The countries that have weathered the storm more successfully so far have moved quickly and decisively to protect their people, strengthen their health systems, safeguard human capital gains, increase intra-reginal trade, and embrace digitalization, therefore laying down the basis for much needed economic transformation.”

Amid the ongoing crisis, the report says Tanzania’s GDP growth decelerated to an estimated 2.0 percent in 2020. Surveys of businesses and households, conducted by the World Bank in collaboration with the National Bureau of Statistics between June 2020 and March 2021, revealed that business slowed across a wide range of sectors and sizes of firms, especially export-oriented sectors such as tourism and manufacturing, and job creation has deteriorated. Overall business performance and expectations indicators have partially rebounded but remain subdued, emphasizing the gravity of the shock and sluggish recovery. The slowdown in GDP growth and the deterioration of business sales and financial security is estimated to have increased the number of poor Tanzanians by 600,000 in 2020. Zanzibar’s economy was even more severely impacted with GDP growth slowing to an estimated 1.3 percent, driven by a collapse of the tourism industry.

This Economic Update spotlights the pandemic’s impact on the Tanzanian economy through the sharp decline in tourism in 2020 and sluggish recovery in 2021. It is a call to action to help the sector recover, ‘build forward better’ and support private sector development more broadly. This is a critical agenda to protect the welfare of poor and vulnerable households, attract new foreign and domestic investment, and support an employment-intensive recovery,” said Bill Battaile, World Bank Lead Economist for Tanzania.

The economic update proposes priorities for sustainable recovery for Tanzania’s tourism sector, including creating an efficient, reliable and transparent business environment, improving tourism information management system, ensuring affordable financial support to struggling businesses across the value chain, strengthen adherence to health and safety protocols and data transparency, and supporting nature-based landscape and seascape management through development of co-investment and partnership arrangements.

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Human Rights

Conflict, COVID, climate crisis, likely to fuel acute food insecurity in 23 ‘hunger hotspots’

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The combined effects of the drought, COVID-19 and the insecurity upsurge have undermined the already fragile food security and nutrition situation of the population of southern Madagascar. WFP/Tsiory Andriantsoarana

Life-saving aid to families on the brink of famine is being cut off in several countries by fighting and blockades, the UN’s Food and Agriculture Organization (FAO) and World Food Programme (WFP) said in a new report issued on Friday.

Of grave concern are 23 ‘hunger hotspots’ which over the next four months are expected to face an acute level of food insecurity due to the combined economic repercussions of COVID-19, the climate crisis and fighting. 

“Families that rely on humanitarian assistance to survive are hanging by a thread. When we cannot reach them, that thread is cut, and the consequences are nothing short of catastrophic,” warned David Beasley, WFP Executive Director. 

Supporting agriculture

Bureaucratic obstacles and a lack of funding also hamper the agencies’ efforts to provide emergency food assistance and enable farmers to plant at scale and at the right time.

“The vast majority of those on the verge are farmers. Alongside food assistance, we must do all we can to help them resume food production themselves,” said FAO Director-General QU Dongyu.

“So far, support to agriculture as key means of preventing widespread famine remains largely overlooked by donors. Without such support to agriculture, humanitarian needs will keep skyrocketing,” he added.

Hotspot nations

The 23 hotspots identified are Afghanistan, Angola, Central Africa Republic, Central Sahel, Chad, Colombia, Democratic Republic of the Congo, Ethiopia, El Salvador together with Honduras, Guatemala, Haiti, Kenya, Lebanon, Madagascar, Mozambique, Myanmar, Nigeria, Sierra Leone together with Liberia, Somalia, South Sudan, Syrian Arab Republic, Yemen.

FAO and WFP have warned that 41 million people were already at risk of falling into famine. 2020 saw 155 million people facing acute food insecurity at crisis or worse levels in 55 countries, according to the Global Report on Food Crises.

This is an increase of more than 20 million from 2019, and the trend is only expected to worsen this year.

The report highlights that conflict, climate extremes and economic shocks, often related to the economic fallout of COVID-19, are likely to remain primary drivers of acute food insecurity for the August-November period this year.

Transboundary threats are also an aggravating factor in some regions. In particular, desert locust infestations in the Horn of Africa and African migratory locust swarms in Southern Africa.

Communities cut off

Humanitarian access constraints are another severe aggravating factor, increasing the risk of famine.

Countries currently facing the most significant obstacles preventing aid from reaching them include Afghanistan, Ethiopia, the Central African Republic, Mali, Nigeria, South Sudan, Somalia, Syria and Yemen.

“The road to zero Hunger isn’t paved with conflict, checkpoints and red tape. Humanitarian access isn’t some abstract concept.

It means authorities approving paperwork in time so that food can be moved swiftly, it means checkpoints allow trucks to pass and reach their destination, it means humanitarian responders are not targeted, so they are able to carry out their life- and livelihood-saving work,” said Mr. Beasley.

‘Highest alert’ hotspots

Ethiopia and Madagascar are the world’s newest “highest alert” hunger hotspots according to the report. Ethiopia faces a devastating food emergency linked to ongoing conflict in the Tigray region. 

Reaching those desperately in need remains an enormous challenge, with 401,000 people expected to face catastrophic conditions by September.

This is the highest number in one country since the 2011 famine in Somalia. Meanwhile, in southern Madagascar, 28,000 people are expected to be pushed into famine-like conditions by the end of the year.

This is due to the worst drought in 40 years, combined with rising food prices, sandstorms, and pests affecting staple crops.

The new highest alerts issued for Ethiopia and Madagascar add to South Sudan, Yemen, and northern Nigeria, which remain among the acute food insecurity hotspots of greatest global concern.

In a few areas, some of these countries are already experiencing famine conditions and significant numbers of people are at risk of falling into famine.

World’s worst

In Afghanistan, where acute food insecurity is becoming increasingly critical due to ongoing drought, there is rising conflict-driven displacement as well as high food prices and widespread unemployment fuelled by COVID-19.

Meanwhile, the already precarious situation in Haiti is expected to get worse as the country faces likely lower staple crop production due to lack of, or irregular, rainfall. It is also reeling from worsening political instability and food price inflation, and the impacts of COVID-19-related restrictions.

The report warns that humanitarian action is urgently needed to prevent hunger, famine and death in all 23 hotspots.

It provides country-specific recommendations covering both shorter-term emergency responses, as well as anticipatory actions to protect rural livelihoods and increase agricultural production, so at-risk communities can better withstand future shocks.

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Human Rights

COVID-19: Education replaced by shuttered schools, violence, teenage pregnancy

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A culture of “safety, friends and food” at school has been replaced by “anxiety, violence, and teenage pregnancy”, with remote learning out of reach for millions, the UN Children’s Fund, UNICEF, said on Tuesday.

Due to the COVID-19 pandemic, “more than 600 million children in countries not on academic break are still affected by school closures”, James Elder, UNICEF spokesperson at a press conference at UN Geneva.

In countries such as Uganda, this has led to a “20 per cent spike in the last 15 months in teen pregnancies, or pregnancies of 10-24-year-old girls, who were seeking antenatal care. Across the globe in all continents we’ve seen child helplines, a good precursor to understanding kids who are reporting violence, seeing often triple-digit increases,” said Elder.

COVID-19 school closures

In nearly half of countries in Asia and the Pacific, schools have been closed for around 200 days. Latin America and the Caribbean have seen some of the longest closures ever with 18 countries and territories affected by either full or partial closures.

As of today, the UN agency estimates in Eastern and Southern Africa that 40 per cent of all children aged 5 to 18, are currently out of school. 

Elder added that if these figures “did not resonate with those in power, then a World Bank report estimates a loss of $10 trillion in earnings over time”, for this generation of students.

Remote learning ‘out of reach’

Equally alarming is the fact that the solution of remote learning is “simply out of reach” for at least a third of the world’s schoolchildren, the UNICEF spokesperson continued. In East Asia and the Pacific, “80 million children have no access whatsoever to any remote learning.

In Eastern and Southern Africa, Uganda school children have gone more than 300 days out of school, while home internet connectivity “is the lowest on the planet there at about 0.3%”.

‘Situation cannot go on’

In a call for action, UNICEF appealed for five main steps: Schools should reopen as soon as possible; governments and donors must protect the education budget; enrolment should be extended to children who were already out of school pre‑COVID‑19 – by removing financial barriers and loosening registration requirements – and cash transfers to the most vulnerable, must be increased. 

“Everything needs to be done to bring an end to the pandemic,” Mr. Elder said, starting with making vaccines available everywhere by sharing excess doses and financing to support the roll-out of vaccines.

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