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The relationship between bank competition, firm access to finance, and economic growth is a much debated topic in the economic literature and in policy circles. This paper uses a panel of 23 manufacturing sectors over 2002-10 to investigate the impact of bank competition on industry growth in the Gulf Cooperation Council economies. The results show that greater competition allows financially dependent firms to grow faster. In addition, the results show that lower restrictions on banks' permissible activities, better credit information, and greater institutional effectiveness mitigate the damaging impact of low competition. These results are robust to a variety of checks. The findings suggest that improving bank competition should be an important aspect of the financial sector development agenda in the Gulf Cooperation Council.

Weather risk and incomplete insurance markets are significant contributors to poverty for rural households in developing countries. Weather index insurance has emerged as a possible tool for overcoming these challenges. This paper provides evidence on the impact of weather index insurance from a pioneering, large-scale insurance program in Mexico. The focus of this analysis is on the ex-post effects of insurance payments. A regression discontinuity design provides find evidence that payments from weather index insurance allow farmers to cultivate a larger land area in the season following a weather shock. Households in municipalities receiving payment also appear to have larger per capita expenditures and income in the subsequent year, although there is suggestive evidence that some of this increase is offset by a decrease in remittances. While the cost of insurance appears to be high relative to the payouts, the benefits exceed the costs for a substantial range of outcomes.

Although several studies have examined why overall price levels are higher in richer countries, little is known about whether there is a similar relationship at the urban and city level across countries. This paper compares the price levels of cities in Sub-Saharan Africa with those of other regions by analyzing price information collected for the 2011 round of the International Comparison Program. Readjusting the calculated price levels from national to urban levels, the analysis indicates that African cities are relatively more expensive, despite having lower income levels. The price levels of goods and services consumed by households are up to 31percent higher in Sub-Saharan Africa than in other low- and middle-income countries, relative to their income levels. Food and non-alcoholic beverages are especially expensive, with price levels around 35 percent higher than in other countries. The paper also analyzes price information collected by the Economist Intelligence Unit's Worldwide Cost of Living Survey, and obtains a similar result, indicating higher prices of goods and services in African cities.

The present report is the second instalment of the state of the Bangladesh economy in FY2016 prepared under CPD's flagship programme titled Independent Review of Bangladesh Development (IBRD). The primary objective of this report is to put forward a set of recommendations in the context of the national budget for FY2017. This report will be followed by a comprehensive analysis of the Bangladesh economy covering FY2016, to be released prior to the presentation of FY2017 budget. The final instalment of this year's IRBD will come up with CPD's reactions to the FY2017 budget once it is presented on June 2016. The present report has been prepared on the basis of analysis of most recent data relating to key macroeconomic, fiscal and monetary variables. The report has also drawn from the recommendations voiced at the pre‐budget dialogue organised by the CPD in Bogra that focused on development of small and medium enterprises (SMEs). Yet another consultation was organised by the CPD with young entrepreneurs and professionals, and their views have also been reflected in this report. CPD had conducted an online opinion survey through Facebook and email platforms to get feedbacks from citizens on expectations from FY2017 budget. This was the first time for the CPD, and views of the participants of this survey have been incorporated in this report. The report has two parts. Section 2 of this report presents a brief overview of the macroeconomic developments in FY2016 which will inform the upcoming budget. In Section 3, recommendations in the context of the upcoming national budget will be presented under six broad categories – fiscal framework, revenue mobilisation, public expenditure, financing of budget deficit, fiscal measures, and economic reforms and transparency in budgetary system. Section 4 closes the report with some concluding remarks.

This report is the third instalment of CPD's flagship programme titled "Independent Review of Bangladesh's Development (IRBD)". The report presents a detailed snapshot of the current state of the national economy and flags the emerging challenges facing the economy. Earlier instalments, released in January and April of 2016, provided an interim assessment of the state of the current economy and concerns regarding the upcoming budget for FY2017. The IRBD exercise to be carried out in this fiscal year will also include an immediate assessment of the upcoming FY2017 national budget, to be released on 3 June 2016 (the day after the national budget is set to be presented at the national parliament). Based on latest national and global micro- and macroeconomic data and information, this report presents CPD's assessments as regards the performance of the economy in FY2016, and the tasks to be addressed in view of the emerging macroeconomic and sectoral scenarios. Discussion of the state of the economy is segmented into following sections which are focused on GDP growth and private investment (Section II), fiscal and budgetary framework (Section III), financial sector performance (Section IV), and the external sector dynamics (Section V). Two thematic issues of current relevance are also discussed in detail; these concern recent crop sector dynamics and policy responses (Section VI), and labour market dynamics and performance (Section VII). The final section closes the report with some concluding remarks.

As the world economy becomes integrated and foreign investment becomes liberalized, most governments compete to attract foreign direct investment (FDI) to their country based on the belief that foreign firms bring advanced technology, create jobs, and boost economic growth. Also, since FDI is one of the most stable capital flows, unlike capital flows in the stock and bond markets, it holds particular importance for developing countries. For these reasons, the determinants of FDI have been broadly studied from a variety of perspectives. Since FDI is determined by the behavior of multinational companies (MNEs), the motive behind the investment from the perspective of the investing firm is relevant. The first motive for FDI is to serve the local market by substituting exports from home to host country, called horizontal FDI. In this case, local market size and purchasing power strongly impact the location choice of MNEs. The second motive for FDI is to gain access to production factors including natural resources, raw materials, and human resources, called vertical FDI. In this case, availability of resources and lower factor costs play important roles. The third and last type of FDI is to relocate certain parts of production, produce goods, and then export them to third countries, which is called export-platform FDI. Since the main reason firms seek export-platform FDI is to save production and trade costs, low labor costs, lax market regulations, and trade openness are crucial determinants.

`The Indonesian Parliament has approved the 2016 budget, which was prepared entirely by President Joko "Jokowi" Widodo's administration.2 Concern about declining growth since the end of the commodity boom in 2011 has prompted the government to increase public spending in order to maintain growth in the coming year. The new budget sets its economic growth target at 5.3 percent in 2016, up from 4.7 percent in 2015, which was the lowest level in a decade. Given that exports and investments are expected to remain subdued due to the weak global economy, public sector spending is expected to be the main driver of growth in the short term. Jokowi has commenced the construction of several key infrastructure projects, such as the building of roads, ports, dams, and power plants, across the archipelago. Moreover, to attract investments into the country, the government has introduced a series of economic packages aimed at cutting down the costs of doing business and at improving the business climate. Amidst continued global uncertainties and the weakened domestic economy, 2016 will be a challenging year for Indonesia. Last year, public spending failed to act as a growth catalyst. This year, however, the expectation that the public sector will deliver the needed boost to the economy is higher. This essay critically examines Indonesia's 2016 budget, and specifically discusses key components and new trends that are notable in it, as well as the key challenges faced by the Jokowi's administration in achieving its development targets.

This paper proposes a framework for ex ante evaluation of sovereign disaster risk finance instruments available to governments for funding disaster losses. The framework can be used by governments to help choose between different financial instruments, or between different combinations of instruments, to achieve appropriate and financially efficient strategies to fund disaster losses, taking into account the risk of disasters, economic conditions, and political constraints. The paper discusses the framework in the context of a hypothetical country, with parameters selected to represent a disaster-prone small island state. The paper shows how a mix of instruments can be chosen to minimize the economic opportunity cost given the underlying disaster risk faced and prevailing economic and financial conditions.

Effective environmental and social risk management in development policy financing (DPF) is central to achieving the World Bank's goals of ending extreme poverty and promoting shared prosperity in a sustainable manner. If the World Bank is supporting far-reaching member country reforms that are intended to contribute to the twin goals, then it should seek to understand the impact of those reforms on the poor. It should also ensure that the country's natural capital and long-term growth prospects will not be undermined. The objective of this learning product is therefore to assess the application of the elements of the World Bank operational policy (OP 8.60) governing DPF related to the implementation of the environmental and social risk management requirements of the policy, and identify lessons learned and good practices. The focus of the study is on Bank actions, policies, procedures, and guidance for environmental and social risk management, based largely on a desk-based portfolio review of a large, random sample of development policy operations (DPOs), complemented by assessment of other relevant documents, and interviews with key stakeholders. This approach requires the Bank to determine whether specific policies supported by a DPO are likely to have significant poverty and social or environmental effects. The Bank emphasized the potential of OP 8.60 to promote positive environmental and social development from the time the policy was approved in 2004.

The 2015 Sustainability Review provides insights into activities undertaken to manage environmental, social, and economic impacts in the World Bank's internal business operations. The content and data in this document relate to the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), together the World Bank.

This 2015 index of sustainability indicators has been prepared in accordance with the internationally recognized standard for sustainability reporting Global Reporting Initiative (GRI) guidelines and complies with the 'core option.' The GRI Index provides an overview of sustainability considerations within the World Bank's lending and analytical services as well as its day-to-day operations and management of staff. The World Bank aims to be comprehensive in its reporting and thus the Index includes indicators from GRIs financial sector supplement. The GRI Index covers activities from fiscal 2015, July 1, 2014, through June 30, 2015.

The 2016 Budget for Malaysia was tabled on 23 October, 2015. It has drawn much interest as it is the first budget under the 11th Malaysia Plan (2016-2020), which is the last medium-term plan in the nation's journey to 'high income' status as laid out in its Vision 2020. Themed 'Prospering the Rakyat', the 2016 Budget continues to be guided by the 'people economy', a concept coined in the previous budget. This budget's allocation for 2016 amounts to RM 265 billion, with 81 per cent for operating expenditure and 19 per cent for development expenditure. The Budget has five priorities, the first three of which are economic – strengthening economic resilience, enhancing productivity, and empowering human capital. The fourth and fifth are more social, and are for advancing the bumiputera agenda and easing the cost of living for the Rakyat. The priorities, their proportion of the total budget allocation, and key strategic initiatives are set out in Table 1.

This paper analyzes the socioeconomic, fiscal, and governance impact of gold mining in Mali. The analysis finds that, at the national level, mining plays an important role by contributing to export earnings and overall government fiscal revenue. In 2013, the mining sector represented 7 percent of gross domestic product, contributed 1.5 percent to growth in total gross domestic product, and accounted for 65 percent of total export earnings and 25 percent of total government budget revenues. At the local level, despite higher population growth, there is some evidence that outcomes (poverty and infrastructure services) are marginally better in mining communes compared with non-mining communes. Local governments receive fiscal windfalls that are spent significantly on education capital expenditures and current expenditures (salaries and non-salaries). Non-salary current expenditures are 10 times higher in mining areas. Analysis of the political economy of public service provision at the local level suggests that technical or absorptive capacities may be the bottleneck to increasing the local benefit of mining instead of corruption or accountability.

The Association of Southeast Asian Nations (ASEAN) brings together ten countries with over 620 million people and a combined gross domestic product of more than USD 2.5 trillion. These countries are well integrated into the global economy and have benefited from this integration. And, as evidenced by their adoption of the ambitious goal of forming an ASEAN Economic Community (AEC) by 2015, they are committed to even deeper regional integration. This report takes stock of ASEAN's achievements in services integration, delineates the potential gains from further integration and highlights the challenges that remain. Recognizing the role of services in spurring economic growth and job creation, including in manufacturing and agriculture, regional policymakers have committed to an ambitious plan for integrating their services sectors as a core element of the AEC. As the report highlights, there are successes in some sectors, such as in health in Thailand, education in Malaysia and finance in Singapore, on which future actions can build. Nevertheless, intra-ASEAN trade in services remains low relative to the economic size, complementarity and geographical proximity of ASEAN member states. As the report notes, there are still a range of policies in ASEAN economies that impede services integration. Overall, the data and analysis show that while there has been good progress in making commitments to integrate services trade, more needs to be done to fully realize the goals laid out in the AEC Blueprint. The report reviews approaches to negotiations and institutional processes underlying services integration. It provides a range of specific recommendations on implementing commitments, enhancing transparency, and strengthening the institutional framework and negotiating modalities. Finally, it highlights priorities for regional regulatory reform and cooperation as a means of deepening services integration.

The purpose of this paper is to capture lessons learned from East African entrepreneurs who were some of crowdfunding's first adopters. Their experiences can serve as a practical guide for entrepreneurs looking to more effectively utilize crowdfunding across all emerging markets. In order to gather this data, the World Bank conducted interviews with a number of East African technology entrepreneurs who ran crowdfunding campaigns, both successfully and unsuccessfully. The following paper offers six key lessons for entrepreneurs in Africa and other emerging markets as they consider when, why and how to launch a crowdfunding campaign: crowdfunding is much more difficult than most entrepreneurs anticipate and is not for everyone. Opportunity costs abound; business needs should dictate platform choice; payment systems impact platform choice; quality and quantity of contributor networks are key; entrepreneurs should tap into complementary resources and organizations to increase their likelihood of success; and crowdfunding can have non-monetary benefits.