Latin American Economic Outlook 2020 – Digital Transformation for Building Back Better
The Latin American Economic Outlook (LEO) 2020 focuses on the role of digital transformation in helping to navigate through challenging times. The Covid-19 pandemic is having a profound impact on socio-economic conditions, accentuating the already complex scenario faced by a region with significant structural weaknesses.
This unprecedented crisis comes at a time of high aspirations and reinforces the need to transform the very foundations of the development model in the region. The report explores how digital transformation can help to cope with the current socio-economic situation, boost productivity, strengthen institutions and achieve higher levels of inclusion and well-being.
The LEO 2020 also highlights that international partnerships are fundamental to reaping the benefits of the digital transformation. The LEO is a joint annual publication produced by the OECD Development Centre, the United Nations Economic Commission for Latin America and the Caribbean (UN ECLAC), the Development Bank of Latin America (CAF) and the European Union (EU). It is the first pillar of the EU Regional Facility for Development in Transition for Latin America and the Caribbean.
Published on September 24, 2020 Also available in: Spanish
OECD Development Centre Working Papers
The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.
Using Google data to understand governments’ approval in Latin America
This paper studies the potential drivers of governments’ approval rates in 18 Latin American countries using Internet search query data from Google Trends and traditional data sources. It employs monthly panel data between January 2006 and December 2015. The analysis tests several specifications including traditional explanatory variables of governments’ approval rates – i.e. inflation, unemployment rate, GDP growth, output gap – and subjective explanatory variables – e.g. perception of corruption and insecurity. For the latter, it uses Internet search query data to proxy citizens’ main social concerns, which are expected to drive governments’ approval rates. The results show that the perception of corruption and insecurity, and complaints about public services have a statistically significant association with governments’ approval rates. This paper also discusses the potential of Internet search query data as a tool for policy makers to understand better citizens’ perceptions, since it provides highly anonymous and high-frequency series in real-time.
West African Papers
The West African Papers series explores African socio-economic, political and security dynamics from a regional and multidisciplinary perspective. It seeks to stimulate discussion and gather information to better anticipate the changes that will shape future policies. The series is designed for a wide audience of specialists, development practitioners, decision makers and the informed public. Papers are available in English and/or French, and summaries are available in both languages. Initiated by the Sahel and West Africa Club (SWAC) to highlight and promote West African issues, the work presented is prepared by its Secretariat, Members and partners, other OECD departments, related international organisations, associated experts and researchers.
The structure of livestock trade in West Africa
This paper uses network analysis to map and characterise live animal trade in West Africa. Building on a database of 42 251 animal movements collected by the Permanent Inter-State Committee for Drought Control in the Sahel (CILSS) from 2013-17, it describes the structure of regional livestock trade at the network, trade community and market levels. Despite yearly fluctuations in the volumes and spatial patterns of trade, the paper shows that regional livestock trade operates on well-established trade corridors as animals flow in specific directions. The study also confirms that livestock trade is structured around several national and cross-border groups of markets that exchange more animals than expected by chance. Close to two-thirds of all animals are shipped internationally, indicating that regional animal trade in the Economic Community of West African States (ECOWAS) is remarkably cross-border. Finally, the paper finds that the hub markets that concentrate the most shipments also handle more animals and trade with more markets. Additionally, peripheral markets have more defined roles as primarily origins or destinations of animal shipments than markets in the core of the network. Of the nine key markets identified, three are close to borders, highlighting the importance of Nigeria as a livestock consumption destination for regional livestock production.
Valerie C. Valerioi iUniversity of Florida
01 Sep 2020 34 pages No. 29
Debt Burden of Least Developed Countries continues to climb to a record USD 744 billion in 2019
More detailed and more disaggregated data on sovereign debt will help implement debt relief efforts in least developed countries.
In response to an urgent need for greater debt transparency, the latest edition of the International Debt Statistics (IDS) report provides more detailed and more disaggregated data on external debt than ever before in its nearly 70-year history—including breakdowns of what each borrowing country owes to official and private creditors in each creditor country, and the expected month-by-month debt-service payments owed to them through 2021.
Before the onset of the COVID-19 pandemic, rising public debt levels were already a cause for concern, particularly in many of the world’s poorest countries as discussed in our Four Waves of Debt report published in December 2019. Responding to a call from the World Bank and the International Monetary Fund, the G20 endorsed the Debt Service Suspension Initiative (DSSI) in April 2020 to help up to 73 of the poorest countries manage the impact of the COVID-19 pandemic.
According to the 2021 IDS report the total external debt of DSSI-eligible countries climbed 9.5 % to a record USD 744 billion in 2019 from the previous year highlighting an urgent need for creditors and borrowers alike to collaborate to stave off the growing risk of sovereign-debt crises triggered by the COVID-19 pandemic. The pace of debt accumulation for these countries was nearly twice the rate of other low- and middle-income countries in 2019.
The debt stock of DSSI-eligible countries to official bilateral creditors, composed by mostly G-20 countries, reached USD 178 billion in 2019 and accounted for 17 % of long-term net debt flows to low- and middle-income countries. Within the G-20 creditor group there have been some important shifts characterized by a marked increase in lending by G-20 member countries that are themselves middle-income countries. For example, China, by far the largest creditor, has seen its share of the combined debt owed to G-20 countries rise from 45 % in 2013 to 63 % at end-2019. Over the same period the share for Japan, the second largest G-20 creditor, has remained broadly the same at 15 %.
The 2021 IDS data release also reflects progress made to increase coverage of complex debt instruments, given their rising prominence in the debt profiles of developing countries. The central bank and currency swap arrangements that represent loans from other central banks also occur in low- and middle-income countries. The World Bank is working to ensure that these debt instruments are captured in the IDS dataset.
Increased debt transparency will help many low- and middle-income countries assess and manage their external debt through the current crisis and work with policymakers toward sustainable debt levels and terms.
“Achieving long-term debt sustainability will depend on a large-scale shift in the world’s approach to debt and investment transparency,” said World Bank Group President David Malpass. “The time has come for a much more comprehensive approach to tackling the debt crisis facing the people in the poorest countries—one that involves debt-service suspension as well as broader efforts such as debt-stock reduction and swifter debt-restructuring, grounded in greater debt transparency.”
Greater debt transparency is critical to productive investment and debt sustainability. The World Bank Group has called for full transparency of the terms of the existing and new debt and debt-like commitments of the governments of the poorest countries. It has urged creditors and debtors alike to embrace this transparency—to facilitate analysis that would enable countries to identify sovereign-debt levels that are consistent with growth and poverty reduction.
“Debt is what enables governments to have extra resources they need to invest in health systems, education, or infrastructure,” said World Bank Chief Economist Carmen Reinhart. “If you have a debt problem, all those ambitions suffer. That’s why it’s important to get the debt onto sustainable ground as quickly as possible. We can’t afford another lost decade.”
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. It is supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. It expects to deploy up to USD 160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes USD 50 billion of new IDA resources through grants and highly concessional loans.