Monday, August 6, 2007

Two recent economic reports from World Bank

Mexico 2006-2012 - creating the foundations for equitable growth;
Abstract: The chapters, or "policy notes," of this report, creating the foundations for equitable growth in Mexico 2006-2012, are dedicated to trying to solve parts of the puzzle as to why Mexico's level of economic development has failed to approach the level of its NAFTA trading partners, or the level of a typical OECD member state. Each chapter of this new report uses the 2000 policy notes as a reference. In this report, the authors have tried to be selective on the issues, and they explored multi-sector issues by joining themes such as education and labor markets in one chapter, or health and old age security in a single chapter. In this overview, the authors set the stage by outlining the common themes and messages that emerge from the eleven chapters of this report. There are three themes that are highlighted: 1) Mexico can do better; 2) Mexico is between two worlds and there are two worlds within Mexico. Mexico's standards of living, human and physical capital and institutions are all quite advanced compared to low income countries or compared to lower middle income countries in Latin America. On the other hand, Mexico lags far behind OECD averages. Within Mexico, there is a further dichotomy due to the high degree of inequality across individuals and across regions; 3) Policies for equitable growth are the answer. In the chapters of this report, it is emphasized that institutional change is the key to improving the regulation and performance of both the public and private sectors. The authors also highlight that restructuring government spending in a variety of sectors-in particular, establishing a more progressive allocation of spending-would be the key to initiating a phase of more growth and more equitable growth. Finally, they note that despite progress in improving economic and environmental stability in Mexico, there is still a remaining agenda of reform to assure sustainability.


India - Himachal Pradesh : accelerating development and sustaining success in a hill state
Abstract: This Economic Report is the first by the World Bank on the economy of Himachal Pradesh (HP), and the first on a hill state in India. HP is a unique state in many respects-most importantly because of the enormous success it has achieved over the past three decades, despite severe structural disadvantages of relative remoteness, environmental fragility, and a difficult hill terrain, characteristic of Himalayan states in India. The study sets out to document, first, the remarkable success that the state has achieved in terms of sustained growth and human development, and the underlying reasons in terms of supportive policies and social cohesion. In this respect, HP makes an important contribution to lessons of success for the other nine Himalayan hill states in India. The second, and more extensive part of the Report, is forward-looking. It describes how it might be possible to build on the past success that HP has achieved, and, at the same time, address some crucial economic and social transitions that will be essential for the state to firmly secure its future: (i) a sustained increase in income levels along with an enabling environment for the private sector; (ii) the creation of suitable jobs based on enhanced productivity and skill s of its young labor force that can shift from public to private sector employment; and (iii) the utilization of natural resources like hydropower, forests, and water resources wisely and well. There is every reason to be confident that HP can meet these challenges. The state's past enviable track record is testimony to the ability of its people and leadership to forge a social consensus and compact necessary to achieve such goals. The Report seeks to provide an analysis of HP's current economic situation, and to lay out a menu of reform options that can help build on HP's considerable strengths and opportunities, and address some of the main challenges ahead.

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