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International Monetary Fund. External Relations Dept.
This paper focuses on telecommunication development in Ethiopia. The paper highlights that there are now over 20,000 telephones in Addis Ababa (in 1969), but the demand for service still exceeds the supply. About 800 installation requests are received each quarter; of these, 600 can be fulfilled. Ethiopia’s annual telephone growth rate has averaged 17 percent over the past six years. Though long-distance lines have been expanded by 125 percent since the early 1950s, the interurban network between Addis Ababa and the rest of the country is seriously overloaded.
This paper elaborates the introduction of surveillance that gave the IMF broader responsibilities with respect to oversight of its members’ policies than existed under the par value system. The IMF’s purview has been broadened under the new system but, by the same token, its members are no longer obliged to seek its concurrence in changes in exchange rates. The continuing volatility of exchange rates, and their prolonged divergence from levels that appear to be sustainable over time, have been matters of growing concern.
This Poverty Reduction Strategy Paper (PRSP) on Djibouti explains past strategies and the PRSP formulation process. Djibouti suffers from a gross lack of reliable health statistics. Available information gives only a fragmented picture of the reality, but globally, it reveals a difficult health situation. The promotion of a coherent and integrated employment policy must be one of the cornerstones of the poverty reduction strategy. Being a new country with few human resources, Djibouti’s governance problems considerably limit the effectiveness of government economic and social programs for the poor.
The modern economy of the Republic of Djibouti is based on rents directly or indirectly originating from the international port of Djibouti and from the country’s strategic position. The Poverty Reduction Strategy Paper discusses that the growth recorded over the last five years is essentially driven by the increase in foreign direct investment—but especially by the activities of the Port of Djibouti. The informal economy constitutes a major proportion of the economic activities of Djibouti and provides a livelihood for much of the Djibouti population.
Following a participatory process involving all development players, the Poverty Reduction Strategy Paper (PRSP) on Djibouti sets goals for poverty reduction and improvement of inhabitants’ living conditions. Analysis of the results of the first three years of implementation of the PRSP reveals a number of significant achievements but shows that chronic weaknesses are still undermining the country’s development efforts. These results were achieved through implementation of priority measures in the social sectors and in the areas of growth support and preservation of macroeconomic stability.
This Selected Issues paper reviews the extent to which growth in Ethiopia has translated into higher living standards. A key feature of the economic strategy has been an explicit commitment to poverty reduction and structural transformation. This is underpinned by the vision of a “developmental state,” whereby a proactive public sector leads the development process and the private sector is oriented to support the development goals. The paper also identifies key bottlenecks hindering further broadening of growth across key sectors to reduce poverty, and highlights the main areas for policy action.
Mr. Arvind Subramanian, Mr. Francesco Trebbi, and Mr. Dani Rodrik
We estimate the respective contributions of institutions, geography, and trade in determining cross-country income levels using recently developed instruments for institutions and trade. Our results indicate that the quality of institutions "trumps" everything else. Controlling for institutions, geography have at best weak direct effects on incomes, although it has a strong indirect effect through institutions. Similarly, controlling for institutions, trade has a negative, albeit, insignificant direct effect on income, although trade too has a positive effect on institutional quality. We relate our results to recent literature, and where differences exist, trace their origins to choices on samples, specification, and instrumentation.