The Unassuming Economist

From the World Bank:

“The report outlines an agenda to strengthen information and communication technology(ICT) services in Rwanda, where network coverage has improved but broadband uptake remains low. Rwanda needs to boost digital service use among consumers and the private sector by increasing access to affordable smart devices, expanding digital skills initiatives, and improving broadband quality and affordability through network upgrades, densification, and stricter competition enforcement. Key regulatory measures include a reference interconnection over (RIO), better spectrum management for next-gen technologies like 5G, and infrastructure sharing to lower service costs. While recent laws on personal data protection and cybersecurity have created a solid regulatory foundation, their implementation is still in progress. To achieve global standards, Rwanda must enhance regulations related to nonpersonal data portability and net neutrality, as current rules restrict cross-border data flows vitalfor digital market integration and e-commerce. This effort should be supported by regional andglobal collaboration on regulatory harmonization. Further public investment is needed to develop foundational digital public infrastructure, such as identifcation, trusted data sharing, and digital payments systems, to scale digital services safely and affordably. Additionally, improvements in the enabling framework and skills development are crucial for wider adoption of technologies like artificial intelligence (AI).”

From UNDP:

“From September 9th to 13th, 2024, Namibia proudly hosted the 3rd Annual African Union Micro, Small, and Medium Enterprises (AU MSME) Forum in Windhoek, under the theme, “Fostering Financial Empowerment and Educational Innovation for African Startups and MSMEs.” This landmark event brought together over 300 entrepreneurs, policymakers, investors, and thought leaders from 54 African countries and marked a significant step forward in advancing Africa’s MSME sector.

The forum served as a vital platform for addressing key challenges facing MSMEs, including access to finance, market opportunities, and capacity-building. With a focus on fostering sustainable inclusive growth and development, participants explored solutions to the pressing financial and structural barriers that limit the growth of MSMEs.

The 20th Ordinary Session of the African Union Conference of Ministers of Industry (CAMI 20) urged member states to create a supportive environment for MSMEs. In response, the AU MSME Development Strategy & Action Plan was launched, aiming to foster sustainable economies, encourage entrepreneurship, industrial development, and enhance regional trade. The AU MSME Forum, which began in Cairo in 2022 and followed in Addis Ababa in 2023, serves as a key platform for knowledge-sharing and collaboration across Africa.”

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From Mirage:

“Consensus, as we all recognize, is APEC’s most vital tool and a testimony to our shared responsibility,” said the 2024 Chair of APEC Senior Officials Ambassador Carlos Vasquez as he welcomed senior officials from the 21 APEC economies to Lima on Monday.

“It is what enables this forum to serve our economies effectively, addressing both today’s priorities and those goals envisioned at APEC’s founding 35 years ago,” he continued. “Today, we find the APEC Putrajaya Vision 2040 and the Aotearoa Plan of Action guiding us towards a dynamic and inclusive Asia-Pacific community.”

The Concluding Senior Officials’ Meeting serves as the precursor to the APEC Economic Leaders’ Week, uniting representatives from the Asia-Pacific to advance APEC’s 2024 priorities, namely trade and investment for inclusive growth, digital innovation, and sustainable and resilient development.

As economies face intersecting global challenges – from climate change and economic inequality to digital transformation – APEC Peru 2024 underscores the importance of collaborative solutions to create a future that is both prosperous and resilient.

“From our meeting last December in Lima to the first ministerial meeting in Arequipa, where we achieved early consensus on key deliverables, we have moved together with purpose, bound by our commitment to APEC’s core values,” said Ambassador Vasquez, noting the high number of results achieved so far this year.

This week’s meetings aim to provide greater policy direction for APEC members to deliver an environment that facilitates trade and harnesses regional economic integration and technologically driven growth, sparks business innovation and employment, and brings a better quality of life to people across the Asia-Pacific.

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From The Statesman:

“India’s economic growth, celebrated in aggregate terms, hides an uncomfortable truth: much of this progress has bypassed the majority of the population, particularly in rural areas. Despite being one of the world’s largest economies, India ranks poorly in per capita income, a stark reminder that GDP growth alone does not equate to widespread prosperity. This widening economic gap has real implications, most notably in terms of demand ~ the very engine of sustainable growth. Recent analyses point to stagnant rural wages, a persisting issue that has kept the purchasing power of millions at a minimum.

Surveys show that the average income for a rural earning person is less than Rs 35,000 a year, or about Rs 2,886 per month. This is barely enough to cover basic needs for an earning person’s family, leaving little room for discretionary spending that could stimulate demand in other sectors of the economy. In fact, a large part of household expenditure in rural India goes towards food ~ nearly 40 per cent ~ reflecting the immense burden of basic costs. Even as the urban middle class begins to feel the strain of stagnant wages, the situation in rural areas is far more concerning. This demand deficit is now reverberating across the broader economy.

Consumption data reveals that rural and low-income urban households spend less than Rs 3,000 and Rs 5,000 per capita monthly, respectively, underscoring a sharp divide in consumer power. Even among salaried urban workers, incomes are modest, with casual labourers faring far worse. Without income growth to support rising aspirations, spending power remains subdued, creating a cycle of low demand that impacts businesses and, ultimately, economic growth. India’s challenge, therefore, is not just about growth, but about inclusive growth. Job creation, particularly in rural areas, is essential. The current trend toward increased informalisation ~ with more people in unstable jobs or self-employment ~ further erodes income stability and social mobility.”

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From a paper by Hagen Kruse:

“This study documented for the first-time patterns in export specialization from an activity perspective, and showed how it can generate additional insights beyond those based on the product perspective. First, export incomes from production activities decline and engineering, managerial, and services support activities grow as countries develop. Second, countries initially specialize along the extensive margin (shifting activities across industries) but later along the intensive margin (shifting activities across occupational classes). Third, new activity specialization is strongly related to the proximity of this activity to the initial export basket, in particular for specializations along the extensive margin and in routine intensive occupations. Fourth, countries that defy proximity and diversify quicker appear to grow faster in GDP per capita. This is correlation however and no claim for causation is made.

We see at least two promising avenues for further research. One avenue is in the modelling of structural change and the role of international trade. The canonical macro-structural change framework focuses on the sectoral composition of the economy in terms of employment and value-added. Trade can shape the sectoral composition in various ways (Alessandria, Yi and Johnson 2021). Lower trade barriers facilitate specialization for example through shifting comparative advantage and promoting economies of scale. Sectoral specialization will consequently affect the sectoral composition of the economy. And given a set of trade barriers, policy changes or technology shocks to the economy may also affect specialization patterns and consequently sector composition. Trade barriers are typically related to products whereas technological change such as automation affects particular activities rather than products or sectors. Modelling the composition of the economy in terms of activities in addition to sectors appears therefore to be a promising way forward as for example in Bárány and Siegel (2018) and Duernecker and Herrendorf (2022).”

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