Download Government - CFA Society Root

Income Shares
Kenya
Source: WDI Database 2012
Gini Index
Source: WDI Database 2012
Wages
Source: Breakout Nations, Sharma, 2012
Human
Capital
Emerging
Frontier
Emerging
Frontier
Frontier
Frontier
Frontier
Frontier
Frontier
Emerging
Frontier
Frontier
Frontier
Frontier
Frontier
Frontier
Emerging
Emerging
Developed
Emerging
Frontier
Frontier
Frontier
Frontier
Emerging
Frontier
Frontier
Frontier
Frontier
Developed
Developed
Frontier
Frontier
Frontier
Frontier
Developed
Developed
Emerging
Developed
Developed
Developed
Frontier
Philippines
Bangladesh
Indonesia
Vietnam
Pakistan
Qatar
Zimbabwe
Kazakhstan
Costa Rica
South Korea
Mozambique
Botswana
Paraguay
Cote d'Ivoire
Namibia
Ghana
Brazil
India
Australia
China
Malawi
Tanzania
Tunisia
Argentina
South Africa
Rwanda
Kenya
Senegal
Nigeria
United States
France
Uganda
Slovenia
Mauritius
Georgia
Germany
United Kingdom
Russia
Japan
Italy
Greece
Zambia
Literacy rate, adult Population ages 65
Age 35-49 /20Urban % chg
female (% of females
and above (% of
34 2040/2010
2000-2010
ages 15 and above)
total)
GINI index Human Capital
21%
7.9
95.83
3.70
42.98
68
42%
4.5
52.22
4.62
32.12
67
22%
11.7
89.68
5.63
34.01
66
32%
4.5
91.12
6.03
35.57
65
30%
3.8
40.31
4.33
30.02
63
33%
0.9
95.40
1.07
41.10
62
47%
4.5
89.89
4.22
50.10
62
-6%
2.2
99.60
6.68
29.04
62
37%
5.3
96.37
6.68
50.73
62
6%
2.3
99.00
11.53
31.00
59
28%
7.7
42.85
3.32
45.66
59
30%
7.9
84.91
4.08
63.00
59
27%
6.2
92.93
5.20
52.42
58
21%
6.6
46.61
3.84
41.50
56
24%
5.6
88.48
3.73
70.70
56
14%
7.5
61.22
3.88
42.76
54
35%
5.3
90.41
7.19
54.69
54
24%
2.4
50.82
4.99
33.38
54
-3%
1.9
99.00
13.69
30.50
54
13%
9.1
91.33
8.37
42.48
53
7%
4.6
68.49
3.11
39.00
52
6%
4.1
67.50
3.16
37.58
51
26%
3.9
70.96
6.99
41.42
51
22%
2.3
97.83
10.68
44.49
51
23%
4.8
87.04
4.76
63.14
51
12%
5.1
67.53
2.68
50.82
50
16%
2.5
84.18
2.66
47.68
49
15%
2.3
38.67
2.39
39.19
49
8%
7.3
50.41
3.41
48.83
47
-6%
3.2
99.00
13.30
45.00
45
-12%
2.0
99.00
17.07
32.70
45
10%
1.2
64.59
2.50
44.30
42
-5%
(2.8)
99.66
16.72
28.40
42
29%
(0.1)
86.21
7.16
39.00
41
8%
0.2
99.67
14.33
41.34
41
-18%
0.7
99.00
20.59
27.00
41
-8%
0.7
99.00
16.84
34.00
40
3%
(0.6)
99.47
12.76
40.11
38
Review
Frontier Market Asset
-7% Source: BP Statistical
1.6
99.00of World Energy,23.39
37.60 Management,
38 2009
-28%
1.2
98.68
20.58
32.00
34
-10%
1.7
96.10
18.68
33.00
33
4%
0.9
61.75
3.05
54.63
32
2050 Hindsight
• Where are we… where were we?
• Growth Drivers
– Human Capital
• Demographics
• Education, Innovation, Wages
• Middle Class
– Investment
– Government
• Economic Freedom & Rule of Law
• Governability and Veto Points
– Culture
• Trust & Behavior
• 2050 Success and Failure
Capital Formation
Gross capital formation (% of GDP)
60.0
China
Brazil
Bangladesh
50.0
India
Russia
40.0
30.0
`
20.0
10.0
2010
2008
2006
2004
2002
2000
1990
1980
1970
0.0
Source: WDI Database 2012
Investment
Source: McKinsey
Savings
Source: WDI Database 2012
Electricity Losses
Source: WDI Database 2012
Foreign direct
Gross capital investment, net
formation (% inflows (% of
of GDP)
GDP)
Investment
Source: Frontier Market Asset
Management, WDI Database, 2012
Emerging
Frontier
Frontier
Emerging
Developed
Frontier
Frontier
Developed
Emerging
Frontier
Emerging
Frontier
Developed
Frontier
Frontier
Frontier
Emerging
Frontier
Developed
Frontier
Frontier
Frontier
Frontier
Frontier
Emerging
Frontier
Frontier
Developed
Frontier
Developed
Frontier
Frontier
Frontier
Developed
Developed
Emerging
Emerging
Frontier
Frontier
Frontier
Frontier
Developed
Frontier
China
Mongolia
Vietnam
Thailand
Australia
Bangladesh
Kazakhstan
Hong Kong
Chile
Namibia
Russia
Saudi Arabia
Finland
Uganda
Romania
Mauritius
India
Mozambique
Spain
Zambia
Georgia
Zimbabwe
Sri Lanka
Bolivia
Mexico
Botswana
Tanzania
Japan
Senegal
France
Ghana
Nigeria
Venezuela
Italy
United States
Brazil
South Africa
Malawi
Pakistan
Rwanda
Kenya
Greece
Cote d'Ivoire
Gross savings (% of
GDP)
48.45
3.12
52.93
62.51
23.46
27.13
35.01
7.52
31.86
26.63
3.04
30.89
26.68
2.70
24.30
25.15
0.91
38.45
22.19
7.16
27.99
23.38
31.66
29.89
24.65
7.10
23.14
26.53
6.54
33.93
25.00
2.93
27.65
19.12
4.96
33.24
20.88
2.97
20.67
24.64
4.80
18.77
32.15
1.82
26.30
25.44
4.43
16.49
36.59
1.40
33.71
24.34
8.23
10.85
21.54
1.75
18.82
24.96
6.43
22.46
25.62
7.00
9.88
22.78
1.41
29.94
0.97
24.76
19.56
3.17
25.00
25.11
1.91
24.45
31.34
1.78
26.43
36.67
1.89
21.18
19.87
-0.02
23.76
30.63
1.85
19.40
20.64
1.32
17.47
18.56
7.82
20.48
2.99
23.07
0.31
31.47
19.67
0.47
16.99
14.91
1.62
10.91
19.73
2.32
16.53
19.73
0.34
16.45
15.51
2.77
12.83
13.07
1.14
21.76
21.37
0.75
14.97
21.18
0.58
15.56
16.11
0.14
4.63
16.43
1.83
14.73
Electric power
transmission and
distribution losses (%
of output)
Investment
6.10
93
11.27
87
10.11
86
6.34
82
6.06
78
2.08
76
8.03
74
12.71
74
8.22
73
24.66
70
10.13
69
8.91
66
3.43
65
65
11.71
65
63
21.97
60
9.02
58
3.73
57
23.76
57
10.89
57
6.46
57
13.81
57
11.08
56
16.33
55
34.16
55
21.37
54
4.45
51
18.44
50
6.28
46
23.57
44
17.22
43
19.35
42
6.88
37
5.99
36
16.63
34
9.53
32
29
16.08
27
27
15.73
27
6.59
25
23.11
20
2050 Hindsight
• Where are we… where were we?
• Growth Drivers
– Human Capital
• Demographics
• Education, Innovation, Wages
• Middle Class
– Investment
– Government
• Economic Freedom & Rule of Law
• Governability and Veto Points
– Culture
• Trust & Behavior
• 2050 Success and Failure
Government
What is best?
Entrepreneurial
Singapore
U.S.
Hong Kong
Russia
Taiwan
Poland
Thailand
China
Turkey
Indonesia
Philippines
Rules
Chaos
Chile
Greece
Czech Rep
Japan
Italy
India
Mexico
Pakistan
Bureaucratic
Government
Government
Countries Do Change!
Entrepreneurial
Singapore
U.S.
Hong Kong
Taiwan
Poland
Russia
China
2000
Thailand
Turkey
Indonesia
Philippines
Rules
Chaos
Chile
Greece
Czech Rep
Japan
Italy
India
1970
1990
Mexico
Pakistan
1990
Bureaucratic
Heritage Economic Freedom
Source: WDI Database 2012
Heritage Foundation – Economic Freedom Rank
BUSINESS FREEDOM
• Starting a business—procedures (number), time (days), cost (% of income per capita),
minimum capital (% of income per capita)
• Obtaining a license—procedures (number), time (days), cost (% of income per capita)
• Closing a business—time (years), cost (% of estate), recovery rate (cents on the dollar)
TRADE FREEDOM
• The trade-weighted average tariff rate
• Non-tariff barriers: quantity restrictions, price restrictions, regulatory restrictions, investment
restrictions, customs restrictions, and direct government intervention
FISCAL FREEDOM
• The top tax rate on individual income and on corporate income
• Total tax revenue as a percentage of GDP
GOVERNMENT SIZE
• Government spending % of GDP
MONETARY FREEDOM
• The weighted average inflation rate for the most recent three years
• Price controls
INVESTMENT FREEDOM
• Restrictions in sectors related to national security or real estate
• Expropriation risk
• Access to foreign exchange
• Restrictions on transfers or capital transactions
http://www.heritage.org/index/Explore.aspx
(Frontier Countries in Blue)
Source: The Heritage Foundation, 2008
Heritage Foundation – Economic Freedom Rank
FINANCIAL FREEDOM
• Central Bank Independence
• Freedom of credit allocation
• Contract enforcement
• Presence of private financial institutions
• Foreign financial institutions not restricted
PROPERTY RIGHTS
• Private property guaranteed by the government
• There is no corruption or expropriation
• The court system enforces contracts efficiently and quickly.
• The justice system punishes those who unlawfully confiscate private property
CORRUPTION
• Transparency International’s Corruption Perceptions Index (CPI)
LABOR FREEDOM
• Ratio of minimum wage to the average value added per worker
• Hindrance to hiring additional workers
• Rigidity of hours
• Difficulty of firing redundant employees
• Legally mandated notice period
http://www.heritage.org/index/Explore.aspx
(Frontier Countries in Blue)
Source: The Heritage Foundation, 2008
Economic Freedom – The Heritage Foundation
18
The Heritage
Foundation 2013
(Frontier
Markets Blue,
Emerging
Green)
Today’s World:
Argentina:
26 days to start
a business
Brazil:
119 days to start
a business
2012
2007
World Bank Rule of Law & Corruption
Source: WDI Database 2012
World Bank Governance – Change 2010 versus 2000
SA
Source: WDI Database 2012
Government % GDP
Source: WDI Database 2012
Heritage
Economic
Freedom
Government
Source: Frontier Market Asset
Management, WDI Database,
2013
Developed
Developed
Frontier
Emerging
Developed
Developed
Emerging
Developed
Frontier
Frontier
Emerging
Frontier
Developed
Emerging
Frontier
Emerging
Frontier
Frontier
Frontier
Developed
Emerging
Frontier
Frontier
Emerging
Frontier
Frontier
Frontier
Frontier
Frontier
Emerging
Frontier
Developed
Emerging
Emerging
Developed
Frontier
Frontier
Frontier
Frontier
Frontier
Frontier
Frontier
Frontier
Frontier
Frontier
Singapore
Hong Kong
United Arab Emirates
Chile
Germany
Australia
Malaysia
United States
Mauritius
Botswana
Mexico
Macedonia
United Kingdom
Philippines
Zambia
Colombia
Cote d'Ivoire
Ghana
Bangladesh
France
China
Rwanda
Pakistan
India
Namibia
Senegal
Vietnam
Venezuela
Argentina
South Africa
Uganda
Italy
Brazil
Russia
Greece
Mozambique
Lebanon
Nigeria
Tanzania
Kenya
Malawi
Ukraine
Swaziland
Uzbekistan
Zimbabwe
88.0
89.3
71.1
79.0
72.8
82.6
66.1
76.0
76.9
70.6
67.0
68.2
74.8
58.2
58.7
69.6
54.1
61.3
52.6
64.1
51.9
64.1
55.1
55.2
60.3
55.5
51.0
36.1
46.7
61.8
61.1
60.6
57.7
51.1
55.4
55.0
59.5
55.1
57.9
55.9
55.3
46.3
57.2
46.0
28.6
General government
Rule of Law &
Current account
final consumption
Corruption
balance (% of GDP) expenditure (% of GDP) Government
189.6
23.74
10.68
105
184.9
5.70
8.44
104
147.7
8.25
92
180.2
1.79
12.50
90
184.4
5.73
19.73
82
192.9
-2.83
18.20
79
124.0
11.48
12.73
78
176.9
-3.23
17.29
73
147.6
-8.22
13.91
68
149.6
0.31
20.94
65
84.5
-0.55
11.65
65
140.6
-2.18
18.32
63
184.0
-3.33
23.05
62
57.5
4.47
9.72
61
84.5
3.80
13.29
60
94.3
-3.07
16.19
58
31.0
7.25
8.64
56
116.5
-8.36
9.49
54
44.8
2.10
5.37
54
181.1
-1.74
24.83
54
69.3
5.15
13.36
52
116.6
-7.49
14.52
51
36.3
-0.77
7.95
50
87.7
-3.00
11.51
49
125.0
0.25
22.12
46
72.6
-6.77
8.70
46
68.4
-4.03
6.53
45
48.8
3.08
13.27
45
75.5
0.80
14.92
44
118.4
-2.78
21.48
44
63.1
-10.23
11.85
42
120.7
-3.49
21.06
41
118.4
-2.27
21.17
41
45.1
4.75
19.45
39
122.6
-10.26
18.18
37
75.5
-11.61
12.16
35
49.5
-22.84
12.08
34
19.8
1.22
31
70.3
-8.63
18.18
31
34.9
-7.80
16.65
27
92.9
-11.90
20.16
25
40.1
-2.19
20.11
25
92.5
-10.50
26.79
21
9.4
17.58
19
6.2
19.07
15
Total Scores
Source: WDI Database 2013
Developed
Frontier
Developed
Emerging
Frontier
Emerging
Frontier
Developed
Frontier
Frontier
Frontier
Frontier
Developed
Emerging
Frontier
Developed
Frontier
Developed
Frontier
Developed
Frontier
Frontier
Developed
Emerging
Emerging
Frontier
Frontier
Emerging
Frontier
Frontier
Frontier
Frontier
Frontier
Frontier
Frontier
Developed
Frontier
Frontier
Frontier
Frontier
Developed
Frontier
Frontier
Singapore
United Arab Emirates
Hong Kong
China
Vietnam
Chile
Bangladesh
Australia
Mongolia
Kazakhstan
Mauritius
Botswana
Germany
India
Namibia
Japan
Ghana
United States
Mozambique
France
Argentina
Venezuela
United Kingdom
South Africa
Brazil
Tanzania
Uganda
Russia
Rwanda
Pakistan
Senegal
Georgia
Zambia
Cote d'Ivoire
Ukraine
Italy
Kenya
Zimbabwe
Nigeria
Malawi
Greece
Moldova
Swaziland
Human
Capital
-0.19
1.39
-0.66
0.39
0.57
-0.09
0.32
-0.10
0.17
0.18
0.03
0.32
-0.52
-0.09
0.13
-0.56
0.13
-0.32
0.04
-0.36
0.03
0.29
-0.42
0.01
0.22
0.00
-0.31
-0.37
-0.11
0.04
-0.39
-0.33
-0.68
-0.01
-0.05
-0.72
0.02
0.49
-0.20
0.03
-0.46
-0.14
0.12
Investment
1.13
0.14
0.65
1.15
0.84
0.33
0.65
0.29
1.14
0.37
-0.08
-0.24
0.00
0.23
0.04
-0.02
-0.46
-0.48
0.03
-0.15
-0.19
-0.24
-0.46
-0.37
-0.53
-0.04
-0.02
0.19
-0.55
-0.66
-0.18
-0.07
-0.27
-0.94
-0.16
-0.26
-0.56
0.05
-0.51
-0.75
-0.69
-0.66
-1.27
Government
1.64
0.99
1.47
-0.11
-0.13
1.00
0.06
0.72
-0.54
0.07
0.38
0.20
0.67
-0.14
-0.22
0.52
0.06
0.51
-0.53
-0.06
-0.43
-0.66
0.24
-0.29
-0.36
-0.66
-0.37
-0.54
-0.08
-0.13
-0.20
-0.37
0.09
0.06
-0.95
-0.32
-0.77
-1.97
-0.73
-0.83
-0.54
-0.94
-1.04
Z-Score
2.58
2.51
1.46
1.43
1.28
1.24
1.04
0.92
0.76
0.63
0.33
0.28
0.14
0.00
-0.05
-0.06
-0.28
-0.29
-0.46
-0.58
-0.59
-0.61
-0.64
-0.66
-0.67
-0.70
-0.70
-0.72
-0.73
-0.75
-0.77
-0.77
-0.86
-0.89
-1.16
-1.29
-1.31
-1.43
-1.44
-1.55
-1.68
-1.74
-2.19
2050
Source: Frontier Market Asset Management, WDI Database, 2012