Isobel Coleman

Democracy in Development

Coleman maps the intersections between political reform, economic growth, and U.S. policy in the developing world.

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Missing Pieces: Doing Business Rankings, China’s Economy, and More

by Isobel Coleman
October 25, 2011

A general view of Singapore’s financial district from Merlion Park, April 14, 2010 (Tim Chong/Courtesy Reuters).

In this week’s Missing Pieces, Charles Landow reviews a new World Bank report as well as developments from Africa, Asia, and Latin America. I hope you enjoy the selection.

    • Taking Care of Business: The World Bank last week released its 2012 Doing Business rankings, which assess countries on the ease of starting and operating a business. Singapore came in first, followed by Hong Kong, New Zealand, the United States, and Denmark. Morocco made the biggest improvement from last year, jumping 21 places to 94th. As David Bosco writes on foreignpolicy.com, the BRICS have historically fared poorly in the rankings. This year is no exception, though new member South Africa ranks a respectable 35th. Sundeep Reddy of the Wall Street Journal points out that many emerging economies have improved significantly over time, but they have a long way to go. Bosco and Reddy also note criticism of Doing Business, especially that it glorifies deregulation.
  • China’s Economy: When growth of more than 9 percent looks slow, you know times are good. China’s third-quarter GDP numbers, released last week, show a 9.1 percent expansion, the slowest rate in over two years. This aligns with Beijing’s attempt to moderate growth and control inflation, the Financial Times reports. But any slowdown still worries investors since China is one of precious few bright spots in the global economy. The Economist highlights China’s scarce credit, which is fostering an expansion of informal lending. This could cause problems as businesses that borrow informally have trouble repaying. But the situation is not yet grave, the magazine reports. The Wall Street Journal gives a useful rundown of economists’ views on the latest GDP figures. Most see a “soft landing” as opposed to a crash.
  • Colombia’s Drug-Fueled Politics: Colombia, once synonymous with lawlessness, has made considerable strides. In the past decade, the U.S. State Department notes, “more than 54,000 paramilitaries and guerrillas have demobilized, while kidnappings have fallen 90 percent, homicides 46 percent, and terrorist attacks 71 percent.” But Elizabeth Dickinson writes on ForeignAffairs.com that violence is again rising as local elections approach. With the main parties to Colombia’s conflict, such as FARC, greatly weakened, a new set of criminal gangs has arisen. They are contesting control of lucrative drug trade routes, “and they know that capturing government offices is the most reliable way to ensure their access to the trade.” This means harassment–or worse–of candidates for office, bribing and intimidation of voters, and a chance that some election winners will be cozy with criminals. The results, Dickinson warns, could lead to “another round in Colombia’s four-decade-long conflict.”
  • Pakistan’s City of Dreams: Karachi is widely known as Pakistan’s vibrant but troubled megacity. Its infrastructure and basic services are woefully inadequate for a population of some 18 million and growing. Its politics regularly turn violent, as I noted on the blog last month. But Steve Inskeep has a surprising take in a foreignpolicy.com piece. Despite out-of-control development and massive inequality, he argues that Karachi offers solid opportunities, with better health care, higher education, and job openings than in the countryside. All this has spawned a rising middle class. And while public education is patchy at best, some private schools do better. The article is not entirely uplifting, but it offers at least some hope about Pakistan.
  • Piracy and Tourism in Kenya: Somalia’s pirates are wreaking havoc next door in Kenya. Two recent attacks attributed to pirates–one in which a British woman was abducted and her husband killed, and another in which a French woman was kidnapped–have spooked visitors to Kenya’s Lamu Island resort area, imperiling the vital tourism industry. Last week the French woman, Marie Dedieu, died; her captors had not taken her medication for cancer and heart problems. The economic effects for Kenya stand to be serious. According to the World Bank, nearly 1.4 million foreign tourists visited the country in 2009, generating more than $1 billion. But the United Kingdom and France are now warning their citizens against travel to the area surrounding Lamu. One hotel executive recently told the Financial Times, “My business is over, completely.” Another says that tens of thousands of livelihoods are at stake. A Newsweek piece last week offered a harrowing account of Dedieu’s kidnapping, as well as other recent cases.

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