The money workers send home to their families from abroad has become a critical part of many economies around the world. Based on the most recent data, remittances, as this money is called, will only grow in importance. Officially recorded remittances amounted to a record $529 billion in 2018, and are on track to reach $550 billion in 2019.
This money is flowing at about the same levels as foreign direct investment (FDI), but if China is excluded, they are the largest source of foreign exchange earnings in low- and middle-income countries, according to Migration and Remittances Brief 31, published by the World Bank Group and KNOMAD, the Global Knowledge Partnership on Migration and Development. In other words, if China is excluded from the analysis, remittances have already overtaken FDI as the biggest source of external financing.
What are the pathways people follow to better jobs? Economies grow when more people find work, when they get better at what they do, and when they move from low-productivity work to better, higher-productivity jobs. Our newest report `Pathways to better jobs in IDA countries’ takes a closer look at how people benefit through jobs in the process of development. It identifies how the available jobs change with economic transformation and shows how the structure of labor markets differs between low, lower-middle, and middle-income countries. It points to key challenges in ensuring that workers can transition between sectors, between locations, and between self- and waged employment.
The outlook for the global economy in 2019 has darkened.
International trade and investment have softened. Trade tensions remain elevated. Several large emerging markets underwent substantial financial pressures last year.
Against this challenging backdrop, growth in emerging market and developing economies is expected to remain flat in 2019. The pickup in economies that rely heavily on commodity exports is likely to be much slower than hoped for. Growth in many other economies is anticipated to decelerate.
In addition, risks are growing that growth could be even weaker than anticipated, the World Bank’s January 2019 Global Economic Prospects reports.
Superstar firms have been in the minds of world’s leading bankers and economists lately. Policymakers are concerned that America’s leading firms such as the FAANG stocks — Facebook, Apple, Amazon, Netflix and Google — are having adverse results on the rest of us and making economic policy less predictable. Why is this? Many of the companies have improved the lives of people across the world with highly desirable and useful products. These superstar firms have also done very well for many of their stakeholders and investors. The numbers are staggering. These five tech companies together account for roughly half of the gains achieved by the Standard & Poor’s 500 stock index in 2018. And in recent weeks, Apple became the world’s first trillion-dollar corporation, with Amazon not far behind. While the superstar firms have made life easier for many consumers, it’s hard for economists not to wonder whether the effects of their stratospheric success are entirely benign.
Creating more and better jobs is central to our work at the World Bank and a shared goal for virtually all countries —developed and developing alike. But oftentimes the policy debate turns to the cost and effectiveness of programs and projects in creating jobs.
As an example, I recently found myself in the middle of a discussion regarding a development project aimed at creating employment: one of the reviewers objected given that the cost per job created was too high. “More than $20,000 per job,” he said, comparing it to much lower numbers (between $500 and $3,000 per job) usually associated with active labor market programs such as training, job search assistance, wage subsidies, or public works. Continue reading →