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: Global Growth Prospects, East Africa’s Farmers, and More

by Isobel Coleman
April 23, 2012

Trucks unload shipping containers from a cargo ship at Qingdao port in Qingdao, China, September 2, 2011 (Courtesy Reuters). Trucks unload shipping containers from a cargo ship at Qingdao port in Qingdao, China, September 2, 2011 (Courtesy Reuters).
Charles Landow reviews IMF forecasts, a study on cash transfers, and reports on East Africa and Indonesia in this edition of Missing Pieces. Enjoy the selection.
  • Global Growth Prospects: The IMF released a sanguine but sober World Economic Outlook last week. “Weak recovery” should take hold in advanced economies while developing ones “remain relatively solid,” the Fund says. But “recent improvements are very fragile.” The U.S. economy is projected to grow at 2.1 percent this year and 2.4 percent in 2013; the Eurozone is forecast to contract 0.3 percent before resuming growth of 0.9 percent. These figures are all up slightly from the IMF’s previous forecast in January. Asia is set to remain the fastest-growing developing region, with China projected to expand by 8.2 and 8.8 percent this year and next. India should grow by 6.9 and 7.3 percent, lagging the region as a whole. Sub-Saharan Africa is forecast to keep growing at just over 5 percent per year.
  • East Africa’s Farmers: A Good magazine piece explores the Ethiopian Commodity Exchange, a four-year-old institution that gives farmers real-time data on the market price of crops. Thanks to this information, distributed by TV, radio, phone, and “electronic boards posted in rural areas,” farmers are less vulnerable to low-paying buyers. The exchange’s CEO says farmers now get 65-70 percent of the export price of coffee, up from less than 40 percent before. According to a blog post by Duke professor Mark Bellemare, the exchange can also “help avert food crises and famines.” A recent New York Times Magazine piece chronicles a Ugandan entrepreneur’s quest to put his country’s coffee on Western supermarket shelves.
  • Cash for Cognition: An article in the American Economic Journal: Applied Economics (also published recently by the Inter-American Development Bank) measures the impact of a cash transfer program in Nicaragua. But instead of examining children’s health or educational outcomes, which many cash transfers seek to promote, the study gauges overall cognitive development. Children in households receiving transfers had higher cognitive development than those in a control group, both during the program and two years later, according to the study. The effect was “modest, but not trivial.” Households receiving transfers invested more in their children’s diets, health, and toys and other stimulation. But the study suggests that cash alone did not produce the cognitive improvements; information campaigns stressing health and education, and the transfer of funds largely to women, could also be responsible.
  • Aceh’s Election: Results emerged last week from the April 9 election for governor of Aceh, the Indonesian province that has stood for centuries as a bastion of devout Islam and resistance to outside rule. Zaini Abdullah, a former leader of the Aceh Free Movement (GAM), which fought a three-decade war for independence from Indonesia, won the race. An Al Jazeera piece reviews the province’s tense history, arguing that the success of “an autonomous and peaceful Aceh” today can serve as a triumph for Indonesia and an example to the world. A ForeignPolicy.com article says that Zaini will need to tackle ongoing security challenges while also boosting the economy, especially by spreading the wealth from Aceh’s natural resources. The GAM’s former leaders, it concludes, have gained what they sought: “control over their own destinies.” Now comes the hard part: governing.

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