In the wake of the terrible disaster in which the collapse of a factory building caused more than a thousand deaths, the Founder of the Grameen Bank Mohammad Yunus argues here the case for an international minimum wage in the garment industry and a small price premium to establish a Garment Workers Welfare Trust in Bangladesh.
"I propose that foreign buyers jointly fix a minimum international wage for the industry. This might be about 50 cents an hour, twice the level typically found in Bangladesh. This minimum wage would be an integral part of reforming the industry, which would help to prevent future tragedies. We have to make international companies understand that while the workers are physically in Bangladesh, they are contributing their labour to the businesses: they are stakeholders. Physical separation should not be grounds to ignore the wellbeing of this labour."
There is of micro and macroeconomics in this piece not least the question of price sensitivity of consumers in rich nations.
The BBC's Chief Business Correspondent Linda Yueh @lindayueh has new page on developments in global economy http://www.bbc.co.uk/news/correspondents/lindayueh/ - definitely one for students and teachers to follow. The opening article focuses on a concept that we have been pushing in our own macro coverage in recent times, namely the emergence of a multi-polar world economy with growth coming from a bigger number of countries / regions and less dependent on the advanced western economies. Read the article here
This presentation looks at three evaluation questions in A2 macro and suggests an approach to scoring high marks for evaluation.
Here are some notes taken from a talk given by Linda Yueh on the Chinese economy at the RSA in London on the 18th April, 2013read more...»
The latest edition of African Pulse published by the World Bank focuses on growth and development prospects in Sub-Saharan Africa and the overall sentiment is that the region is set to continue with a strong growth performance.read more...»
The LSE’s Jason Hickel writes, narrates and directs this short video looking at the extreme truth of how wealth is divided globally.
A newly constructed Social Progress Index has been unveiled for the first time with the hope that over time, it might become as widely quoted and recognised as the Global Competitiveness Index as a benchmark of progress made by individual countries in achieving sustainable, balanced and inclusive growth and development. In the 2013 rankings, Sweden comes first and the United Kingdom is second.read more...»
The annual NORFACE migration conference at University College London this week has generated plenty of new research papers on the economics of international migration, a topic that of growing significance for students of globalisation, competitiveness, innovation and growth. Some of the key findings are summarised below together with external links to relevant articles and news reportsread more...»
A recent World Bank report asked ‘Where is the Wealth of Nations?’ Calculations presented at the Economic History Society’s 2013 annual conference show that for Britain, the answer is undoubtedly in its people.
Dr Jan Kunnas and his colleagues calculate that Britain’s ‘human capital’ has grown by a multiple of 123 over the past 250 years. The main drivers of this phenomenal growth have been the growth in the workforce and the growth in wages.
The researchers define human capital as the knowledge and skills embodied in individuals – and they measure it by the discounted earnings the population is expected to earn during their time in the labour force.We have an extended revision note on human capital and economic growth - read it here
The Changing Wealth of Nations - World Bank reports can be accessed here
New figures from the OECD find that overseas development aid fell by 4% in real terms in 2012, following a 2% fall in 2011. Aid payments have dropped in large party because many governments of developed countries are embroiled in fiscal austerity and choosing to cut aid as a result. The OECD data shows too that there is also a shift in aid allocations away from the poorest countries and towards middle-income countries.
What if Africa were to become the hub for global science? This is a deeply optimistic piece which stresses the low base of higher education opportunities in Africa at the moment but which reveals the potential of cross country collaboration and the gains that will come from reversing the brain drain. A great example to use when discussing human capital and long-term development. More on the Square Kilometre Array
This 10-question revision quiz focuses on protectionism.
A brief overview of economic developments in Angola, one of the fastest growing countries in the world - contains updated links to study resources on Angola.
This 10-question revision quiz looks at introductory concepts of development economics
Revise the development topics of overseas aid, micro finance and Fair Trade and then test yourself with our short revision online quizread more...»
Revision blog on the economics of foreign direct investment in Africa with a special focus on investment from China and other BRIC countriesread more...»
Indian e-commerce lags behind countries such as China and a growing number of African nations. A new report in the economist looks at the future for the Indian mobile technology sector - can the adoption of cheap smartphones and adoption of 3G and 4G phone networks create new competitive advantages for the Indian economy? Who will investto build the telecoms capacity infrastructure? To what extent is the industry held back by hugely complex laws and endemic corruption? India is expected to have close to 165 million mobile Internet users by March 2014, up from 87.1 million in December 2012 - the potential is vast.
Attention is often focused on the tariff and non-tariff barriers to trade and in particular, the extent to which trade from developing countries to advanced high-income nations is influenced by import taxes. Average tariff rates have come down to historic lows in recent years although non-tariff barriers proliferate.
New research from a group of European economists finds that trade costs - a concept that captures the broader expenses of getting goods and services across borders into international markets - are much higher than tariffs. And for developing countries these costs have not fallen to the same extent as richer countries.read more...»
A team of Economic students at Greenhead College, led by A2 student Harry Edwards, recently organised and presented the inaugural ‘Real World Economics’ event during which many Economics and Business issues were showcased. Donations from the evening have been given to a Micro-finance agency ‘Kiva’. The committee have created a portfolio of loans for specific entrepreneurs in developing countries. These loans allow them to grow their fledgling businesses, meaning that they become better equipped to provide for their families and improve their standard of living without becoming excessively dependent on unsustainable levels of aid from developed countries. The hope is to give these people, along with their families and communities, an opportunity to forge a better life for themselves.
Some of the investments undertaken by the committee include a Housing programme in Nicaragua and Agriculture in Rwanda.
Oxfam senior researcher and former co-author of the UN's annual Human Development Report Kate Raworth visits the RSA in London to explain 'doughnut economics' -- the bold new theory that is sweeping the development world. A really clear seventeen minute video covering some of the key environment challenges that threaten sustainable growth and a call to make central to the debate the protection of natural capital and social capital.
As part of our revision for the Unit 4 macro paper we have been discussing in school growth and development issues in South Korea. The country now has a per capita income in excess of $30,000 and is a high-income developed country with membership of the OECD. Having escaped the middle-income trap, can South Korea continue to prosper or will the country have to modify their development strategies to meet fresh competitive challenges and changing expectations?
Oxfam senior researcher and former co-author of the UN's annual Human Development Report Kate Raworth visits the RSA to explain 'doughnut economics' - the bold new theory that is sweeping the development world
Schools and College up and down the country are preparing for all sorts of different activities for the Comic Relief Red Nose Day this Friday (15th March). Are you doing anything with your class?
Here is a ready-made Powerpoint game to run for approximately 20 to 25 minutes in your class this Friday. Whilst being a fun, team-based challenge, the multi-choice questions are all about facts and figures related to the causes that Comic Relief are attempting to support. As such, the information contained within the game should prove a useful stimulus for discussion within your class about the causes of poverty in Africa, as well as alcohol-abuse and other social issues within the UK. It could also prove a useful tool with discussing why these problems exist and what government solutions could be implemented (as well as asking why they haven't already been put in place!).
Click on this link to go to the Powerpoint file that contains the game.read more...»
Mobile commerce can be an important driver of growth and development. Here is an example of emerging business opportunities for leveraging the power of mobile telephony in Indonesiaread more...»
Bringing innovations to the market is crucial for countries wanting to focus on green industries as a source of economic growth. This blog will provide a number of short news videos on innovation in environmental products.read more...»
The Middle-Income Trap has become a popular and much quoted concept in development economics. Much discussion on the policies and strategies to lower the risks of growth slowdowns before a country has achieved high income status. But how relevant is the middle income trap? The absence of a clear definition of the idea makes it difficult to measure, this article from the Economist has a go and is highly relevant for students taking courses in development economics, especially EdExcel Unit 4.
Raising productivity and sustainable yields in the farm industry is a crucial component of the development/growth agenda in India. Here is a case study from Guardian Global Development of progress in achieving this aim.
This is a quite remarkable short video looking at the largest human migration on earth as up to 1bn Chinese people each year go home to their roots. The FT's Patti Waldmeir reports on the phenomenal combined buying power of China's 260m migrant workers and looks at the type of gifts they are buying this year. Consider this in the context of Chinese growth and development, the deep and persistent gaps in living standards between urban and rural areas and the challenges facing Chinese policy-makers as they seek greater regional balance in their development process. What opportunities are there for Western businesses in the Chinese countryside?read more...»
It has suddenly become fashionable to be concerned about China’s growth rate slowing down. This is not a matter of a short-run cyclical downturn, with normal service being resumed shortly as the economy roars ahead once more. It is a worry that there will be a permanent slowdown by the end of this decade. Instead of annual growth rates around 10 per cent and even more, the Chinese economy will settle down to the much more sedate rates seen in the West in the 1950s and 1960s in the range 3 to 5 per cent.
On Thursday 31st of January 2013, the long-awaited LSE Growth Commission Report was published and launched in London. The document itself is available for download from this link and I urge all teachers and students interested in growth, competitiveness and the fairness agenda to have a look at it. It is full of rewarding and important insights into the drivers of balanced growth in a modern advanced economy.
I will be adding new resources and links to this blog following the launch event
Key Points from LSE Growth Report
- Strong rule of law
- Generally competitive product markets
- Flexible labour market
- A world-class university system
- Openness to foreign investors and migrants
- Independent regulators including competition authorities
- Strengths in many key sectors including high end manufacturing
LSE Commission Growth Agenda
- Greater autonomy for schools, tackle the long tail of under-performance. Conditional cash transfers for families to pupil attendance and performance. Focus league tables less on % attaining 5 A-C grades. Reveal performance at the bottom end.
- Concentrating on skills (improving human capital) gives people the resilience to recover from global shifts in the division of labour
- Critical infrastructure essential for competitiveness in modern economy. For the UK, transport and energy are infrastructure areas with biggest issues; there has been a lack of clear strategy and lots of dithering / political delays.
- Huge opportunities for UK - industrial revolution driven by search for low-carbon technologies driving innovation - can the UK keep up?
LSE Commission proposes:
- 1) Strategy Board (for planning)
- 2) Planning Commission (for delivery)
- 3) Infrastructure Bank (for funding)
- Innovation is the third channel for increased growth
- Problems in UK capital markets mean innovation is not properly funded - short-termism remains a structural weakness of the markets
- More competition in retail banking
- Business bank that prioritises lending to SMEs and innovative firms
Changing the compass of economic performance
- Commission suggests that focus on GDP is not helpful
- GDP misses out on who gets the growth and measures production not income
- Need more focus on Median Household Income
- Median household income and GDP per capita have been decoupled since about 2002. GDP no longer tracks it
UK trend growth rate can be lifted by 0.5% with effective structural reforms - large compound effect on incomes over the long run
Institutions and incentives matter for growth. Macro stability important too. UK politics too short term and adversarial. Fundamental weakness is the failure to create a stable policy framework.
More focus needed on evidence based policy making to make government smarter.
Here Professor John Van Reenen, Director of CEP and co-chair of the LSE Growth Commission, presents a 'manifesto for growth' for the UK economy over the next 50 years, backed up by the Growth Commission's report.read more...»