Download Shifting Wealth: Economic and Social Challenges A Regional Comparison

Mario Pezzini,
Director, OECD Development Centre
Shifting Wealth:
Economic and Social
Challenges
A Regional Comparison
UNESCAP
February 2015
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I. Shifting Wealth
II. Economic and social challenges
III. Perspectives from Africa and Latin
America
I. SHIFTING WEALTH
Shifting Wealth is reshaping the world economy
The “Three Speed World” in the 1990s
Source: Perspectives on Global Development 2010: Shifting Wealth, author’s calculations based on World Bank Data 2009
Note: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.
The “Three Speed World” in the 2000s
Source: Perspectives on Global Development 2010: Shifting Wealth, author’s calculations based on World Bank Data 2009
Note: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.
Shifting weight of global economic activity is continuing …
Share of GDP in PPP terms
%
70
60
50
40
30
20
10
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Brazil
China
India
Indonesia
Russian Federation
South Africa
OECD
Non‐OECD
Source: Authors’ calculations based on World Bank (2014), World Development Indicators (database) http://data.worldbank.org/data‐catalog/world‐development‐indicators.
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Changing the global geography of production
China is the main driver, but other countries are also contributing
World top 20 manufacturers, 2010
Country share in total world manufacturing value added
%
1990
2000
2010
30
25
20
15
10
5
0
Source: OECD (2013), Perspectives on Global Development 2013 -Shifting up a Gear: Industrial Policies in a Changing World, OECD, Paris.
Shifting Wealth – Shifting Partners:
South-South Partnership
Africa's emerging trading partners
(average 2009-11)
% of the Total Trade, Billion USD
Top 15 destinations of Chinese FDI, 2003-12
Number of jobs created by Chinese FDI projects in the
recipient country
Africa's trade flows with it's emerging parteners
(average 2010-12) % of the Total
Oth.EPs
23%
Turkey
4%
Korea, Rep.
6%
Brazil
7%
China
44%
India
16%
Note: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.
Source: OECD (2013), Perspectives on Global Development 2013 -Shifting up a Gear: Industrial Policies in a Changing World, OECD, Paris.
OECD Development Centre, calculations based on UN COMTRADE (database), via http://wits.worldbank.org/wits/.
Shifting Partners: China is leading trade with Africa
Africa's Trade flows with selected partners
2000-2012 (in Billion USD)
Billion USD
EU27
400
350
300
250
200
150
100
China
IND+BRA+K
OR+TUR
+RUS
USA
50
0
Intra-African
II. Economic and social challenges
Many upper middle-income countries are not
on course of convergence
Average annual GDP growth needed from 2012 to 2050 to reach OECD per capita average in 2050
%
15.00
SEN
KEN
STP
NGA
CMR
10.00
IRQ
AGO
ZAR
IND
VNM
TON
LCA
GRD MEX
PLW
HUN
TUNCOL DOM PER
ZAF
UKR
BRA
THA
TUR MYS
ROM
GEO
PAN
ARM
TKM
CHN
AZE
KAZ
BLR
BGR
SYC
BTN
MDA
DZA
5.00
MNG
IDN
LKA
RUS
0.00
0.00
Low‐income
5.00
10.00
Average annual GDP growth 2000‐12
Lower middle‐income
Upper middle‐income
%
15.00
High‐income
Source: Authors’ calculations based on World Bank (2013), World Development Indicators (database)
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Although increases in production and innovation capabilities have been
made, many developing countries are still lacking behind OECD average
 Targeting resources to specific scientific and technological areas (new materials, biotechnology and clean energy vehicles; healthcare, etc.).
Intensity in R&D investment and private sector contribution, 2009
4.0
Korea
3.5
Japan
R&D invesment (% of GDP), 2009
3.0
Singapore
 Pubic procurement for innovation (e.g. Brazil, China, India and South Africa) Germany
United States
2.5
OECD Average = 2.3 %
2.0
France
 Attracting more knowledge‐
intensive FDI (e.g. Brazil, Costa Rica, Malaysia, Morocco)
China
United Kingdom
1.5
Brazil
Russian Federation
1.0
India
Argentina
0.5
Thailand
Indonesia
0.0
0
10
20
Malaysia
Costa Rica
Kenya
 Promoting start‐ups (Brazil, Colombia, Peru)
Promoting cluster development (e.g. Brazil, Chile, India)
South Africa
Morocco
30
40
50
60
70
80
90
100
R&D investment financed by the private sector (%), 2009
Source: OECD (2013), Perspectives on Global Development 2013 -Shifting up a Gear: Industrial Policies in a Changing World, OECD, Paris.
The rise of new “middle classes” & growing
social challenges
By 2030, 80% of the world’s middle classes will be living in developing economies
Note: « Middle classes »: People living between 10 and 100 USD PPP a day.
Source: OECD Development Centre based on Kharas (2010).
A success story?
•
•
•
•
•
•
•
A lower‐middle income country
Average 5% annual growth rate since 1990
Nearly 100% primary enrolment in 2008
80% health care coverage
‘Prudent public debt management’ (42.8% of GDP in 2009) 3% fiscal deficit Inflation at approx. 3% in the 2000s
Tunisia
Source: OECD/AfDB/UNECA (2010), African Economic Outlook.
Social norms and institutions: Drivers of gender inequality
with huge impact on social and economic performances
Discrimination against women by region
Civil Liberties
Son Bias
Restricted
Resources
and…
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Discriminatory
Family Code
Restricted
Physical
Integrity
Source: OECD Development Centre’s Social Institutions and Gender Index (SIGI) 2012
EAP
ECA
LAC
MENA
SA
SSA
III. Perspectives from Africa and Latin America
Africa
2/27/2015
La Banque africaine de développement
aujourd'hui
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External Financial Flows – FDI is picking up
250
20%
Remittances
18%
16%
14%
150
12%
10%
100
8%
6%
50
4%
% GDP
Current USD, billion
200
Official
Development
Assistance
Portfolio
investments
2%
0
0%
-2%
-50
Foreign direct
investments
-4%
% GDP
Source: African Economic Outlook 2014, OECD Publishing 2014
1,000
900
800
700
600
500
400
300
200
100
0
200
150
100
50
0
Youth Population
Youth Employment
Source: African Economic Outlook 2012, OECD Publishing 2012
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GDP (right axis)
GDP, Billion (2005 PPP int. $)
250
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Young (15-24) People, Million
While GDP is growing, jobs for the young population are
not
Africa could have made more of the resource boom
14%
12%
1995
Africa's share of global resource assets
2005
10%
8%
6%
11%
10%
11%
9%
4%
2%
12%
5%
0%
Mining
Energy
Agriculture
Source: Authors' calculations based on data from World Bank (2012), The Changing Wealth of Nations, World Bank, Washington, DC.
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For example:
 In mining: spending on exploration in Africa has
remained below $5 per square kilometre;
 whereas in Canada, Australia and Latin America the
average is $65 per square kilometre.
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Share of global intermediate imports
Africa’s share of trade in intermediate goods is small but
growing
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
2.2%
1.4%
0.00
OECD countries
Non‐OECD countries
Source: African Economic Outlook 2014, OECD Publishing 2014
African countries
Latin America &
the Caribbean
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La Banque africaine de développement
aujourd'hui
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The economic slowdown in Latin America
continues
GDP growth: Latin America and the Caribbean vs OECD (annual %)
Source: OECD(2014), OECD Economic Outlook, Vol. 2014/1, OECD Publishing. CEPALSTAT and " Preliminary Overview of the Economies of Latin
America and the Caribbean 2014 " (CEPAL, 2014)
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Policies can make a difference for inequality
Gini coefficients before and after taxes and transfers in Latin American countries
Source: OCDE (2008a) for OECD countries excluding LAC, OECD (2008b) for Argentina, Brazil Colombia
and Peru.
New resources for development
Greater fiscal space in the 2000s vis-à-vis the 1990s
Fiscal revenue to GDP ratio (%)
Source: Authors’ calculations based on World Bank (2011).
Education: Enrolment rates increased
But efforts are needed in pre-primary and tertiary
education
Enrolment rates by level of education (%), circa 2012
Panel A. Pre-primary and Primary
Pre-primary (net rate, %)
Panel B. Secondary and Tertiary
Primary (net rate, %)
100
90
80
70
60
50
40
30
20
10
0
Secondary (net rate, %)
Tertia ry (gross rate, %)
100
90
80
70
60
50
40
30
20
10
0
Source: UNESCO Institute for Statistics (UIS) database.
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Education: Latin America lags behind in terms
of performance and equity
High school student performance and equity (PISA 2012)
Source: based on OCDE/PISA 2012.
29
Latin America particularly affected by skills deficit
Percent of firms identifying an inadequately educated workforce as a major constraint
Source: Enterprise Surveys (2012), World Bank, Washington DC.
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Regional Economic Outlooksidentifying economic and social challenges and suggesting innovative policy
solutions to the region’s policy makers
LEO 2015: Education and Skills for Development
2009: Fiscal Policy for Development 2010: Migration for Development
2011: Middle Classes
2012: Transforming the State for Development
2013: SMEs Policies for Structural Change
2014: Logistics and Infrastructure for Development
SAEO 2015 : Strengthening Institutional Capacity
2010: Transport Infrastructure and regional integration
2011/2: Green Growth
2013: Narrowing Developing Gaps 2014: Middle Income Trap
AEO AEO 2015: Spatial Inclusion (…)
2010: Public Resource Mobilisation & Aid
2011: Emerging Partners
2012: Promoting Youth Employment 2013: Structural Transformation & Natural Resources
2014: Global Value Chains and Africa’s Industrialisation
THANK YOU
Mario Pezzini, Director OECD Development Centre
www.oecd.org/dev
2/27/2015
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