PSD Blog - The World Bank Group

Opium & alternatives in Afghanistan

Afghanistan produces almost all of the world's illegal opium, and the drug accounts for 1/3 of the country's total economic activity. On Tuesday the World Bank and the United Nations Office on Drugs and Crime (UNODC) released a report on Afghanistan’s drug industry. Among the findings:

• Opium policy in Afghanistan is failing
• Counter-narcotics efforts have deepened corruption, as wealthier opium producers pay bribes to avoid having their crops eradicated
• Opium production in Afghanistan increased by 49% this year

What alternatives exist for the 13% of Afghans who work in opium poppy cultivation? I saw a presentation today from the OTF Group's Rob Henning on the Afghanistan Competitiveness Project. Its goal is to develop clusters of businesses around particular Afghan products. He talked about carpets, but they're also working on marble and dried fruits & nuts.

The challenge is to encourage Afghan entrepreneurs to trade directly with wholesalers in the States, Germany, and elsewhere. Right now, a huge volume of Afghan-produced goods flow through Pakistan, where customs processing is more predictable and business networks better established. See this prior post for more information about Afghan traders, and links to several other PSD Blog posts on Afghanistan.

Aceh Diary: a visit to Nias Island

I knew I wasn’t in Aceh anymore when I saw a man riding his motorcycle with a pig. I doubt that there are any pigs in Aceh, since it practices Shariah law and pigs are considered unclean. But Nias Island is mostly Christian. You can raise pigs and eat pork if you want. You can also drink a beer without breaking any laws.

I don’t miss pork but I have to admit that I enjoyed the beer. But in spite of this luxury, Nias is a challenging place to live and work. It lies off the west coast of Sumatra, a little bit south of Aceh province. Although it had some tsunami casualties, more damage was caused by a massive earthquake in 2005. It is particularly poor and its isolation is an ongoing problem: it takes a full eight hours by boat to reach mainland Sumatra, making markets hard to reach and imports costly.

St Lucia best in Caribbean for Doing Business

My Doing Business colleagues released a new report on the Organization of Eastern Caribbean States (OECS) today.

OECS countries have already harmonized several areas of business regulations such as business start-up, legal rights of borrowers and lenders, bankruptcy procedures and contract enforcement...The greatest remaining obstacles for OECS countries are lack of credit information and inefficient courts. For example, no OECS country has a functioning and comprehensive credit bureau, dampening entrepreneurs’ access to credit.

Related: previous posts on the 2007 report, Brazil, Mexico, Taxes, and Corruption. Okay, no more Doing Business blogging for me until the New Year, I promise.

Export promotion agencies do increase exports

Many thanks to Pablo for pointing me to an excellent note (PDF) from the World Bank on export promotion agencies (EPAs). It's the first cross-country statistical analysis of the impact of these agencies on exports, and it covers 119 countries. The main message (via Jonathan Dingel):

For each $1 of export promotion, we estimate a $300 increase in exports for the median EPA. However, there is heterogeneity across regions, levels of development and types of instruments. Furthermore, there are strong diminishing returns, suggesting that as far as EPAs are concerned small is beautiful.

After a brief summary of the economic debates to date around these agencies, the authors give specific recommendations based on the data:

CSR conference: Good business for all

Proponents of CSR – myself included – argue that effective corporate responsibility programs are good both for the firm and the communities in which they operate. This sense of responsible business' ability to foster a stable social and business environment will come under the microscope at the IV Inter-American Conference on CSR, taking placing in Brazil, December 10-12.  This year's event, themed "Good Business for All", will attract the great and the good of the CSR world from across Latin America.  And this year, there is the added attraction of the beaches in beautiful Salvador. Brazil is a fitting venue for the regional event given that Brazilian firms and institutions are among the leaders in CSR efforts in the region.   

Fair trade holiday shopping guide

The day after Thanksgiving is traditionally, if incorrectly, thought of as the busiest shopping day of the year in the US. For those of us still in a food coma, it's nice to do the shopping from the couch. Thanks to my fabulous intern Kristina, who took a break from infrastructure regulation to find the excellent sites below, we present ten ways to buy fair trade and/or support artists worldwide:

• Novica - an online arts agent for more than 1,700 artists around the world. Check out the impressive collection of chess sets.
• World of Good - affordably priced bags, house wares, jewelry, more.
• Ganesha - home furnishings and accessories from India. Don't blame me if you spend an hour wandering around this fantastically diverse marketplace. Make sure to visit the Bollywood section.

Happy Thanksgiving!

Give thanks, eat turkey, watch football, take nap. Repeat as needed.

Kremlin Inc.?

There is a strong lobby within the [Russian] government to subject all foreign investors seeking minority stakes in certain industries to an approval process controlled by the FSB, the domestic successor of the KGB.

A little scary. From a WashPost story on renationalization, Russian-style.

Meanwhile, in Bolivia traditional nationalization is largely complete on paper, but continues to move slowly in practice. See excellent discussion on the topic from our PSD Blog commenters.

A fresh face for South African wine

Ntsiki Biyela is South Africa's first black female winemaker, at just 28 years old. If you're in the Western Cape, head to the Stellekaya winery to sample her work.

Easterly and Sachs continue to spar

Jeff Sachs, in Scientific American this month:

Von Hayek was wrong. In strong and vibrant democracies, a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness.

Bill Easterly, with virtually no choice but to respond in the WSJ (subscription required) last week:

Mr. Sachs is wrong that Hayek was wrong. In his own global antipoverty work, he is unintentionally demonstrating why more scientists, Hollywood actors and the rest of us should go back and read "The Road to Serfdom" if we want to know what will not work to achieve "The End of Poverty." Hayek gave the best exposition ever of the unpopular ideas of economic freedom that somehow triumph anyway, alleviating far more national and global poverty than more fashionable Scandinavia-envy and grandiose plans to "make poverty history."

Just for fun, I tried to find a blogger attacking Easterly attacking Sachs attacking Hayek. Catallaxy and Economist's View were the best I could do. Seems the blogosphere was glad to see Sachs take a little thumping.