Wednesday, 1 January 2014 00:00
By Shanta Devarajan, Co-Authors: Homi Kharas, Wolfgang Fengler
blogs.worldbank.org: We asked our bloggers and guest bloggers for their predictions for 2014. Here is a summary of seven main themes, which we will re-visit in late 2014 to see how well we did.
1. Global growth will remain robust and tapering by the US Fed will be less consequential to emerging markets than expected (Bhaskaran, Zaman, Raiser). China will do better than markets predict (Huang), and East Asia will continue to grow with relative stability (Quah). At the same time, the economic policies of some Latin American countries will bring their economies to a breaking point, causing political chaos as well (Gonzalez). Political turmoil and conflict in the Middle East and North Africa will continue to weigh heavily on these economies, with average growth for the region below 3% (Devarajan).
2. For Europe, 2014 will be a better year. 100 years after the beginning of the First World War, the Balkans will again be the focus of attention but for better reasons. A more pro-European outlook in Germany and a successful launch of negotiations with Serbia will bode well for the EU. Bosnia and Herzegovina, the scene of the assassination of heir apparent Franz Ferdinand which triggered the beginning first world war, will do surprisingly well at the World Cup in Brazil, for which it qualified for the first time ever. The joy, however, will only be short-lived because political infighting will continue to make it one of the least governable states in Europe (Fengler).
3. The steady improvement of both governance and incomes in large parts of Africa will generate greater confidence and dynamism on the continent (Kende-Robb, Quah). The creative arts (film, music, fashion, art), fuelled by Africa’s changing demography, will lead the way in trade and regional integration. Congolese music, Nollywood movies and South African soap operas will sweep the continent (Kende-Robb). However, 2014 will also become the “year of regional conflict”, with significant uptick in violence in border regions spreading out of national conflicts (Hellman). The African Union and other sub-regional bodies will raise the profile of regional security cooperation, as ASEAN and the European Community did when they started (O’Connell). This will be one example of the potential for achieving success in fragile states (Kharas).
4. Girls in developing countries will outperform boys, especially as they move up the education ladder to secondary schools and universities (Andrabi). The incomes of the bottom 40% of Americans will be below that in 2000, and will have fallen in 2014 (Demombynes).
5. Mobile banking and other “leapfrog” technologies will spread widely (Kharas). Drones (or “unmanned aerial vehicles (UAVs)”) will become a game changer for development, by dropping emergency supplies in conflict and disaster-ravaged areas and vaccines in hard-to-reach regions, not to mention natural resource mapping, surveying and animal conservation, as they are already doing in anti-poaching schemes in Nepal or Indonesia (Sanghi).
6. As more and more economists point to the primary of politics in development, political scientists will wake up and wonder why they have been left out of the discussion. A new movement of “political contextualists” will be launched (Hellman).
7. Either Germany (Bundervoet) or Uruguay, repeating history in Brazil (Gonzalez), will win the World Cup in football.