Feed the world

Feed the world

The Economist: Daily news and views

How hunger has changed across the developing world

TWENTY-NINE countries suffer from "alarming" levels of hunger, most of which are in sub-Saharan Africa, according to a report published on Monday October 11th. The "Global Hunger Index" (GHI) gives developing countries scores based on three indicators: the proportion of people who are undernourished, the proportion of children under five who are underweight, and the child mortality rate. The worst possible score is 100, but in practice, anything over 25 is considered "alarming". Scores under five, meanwhile, are indicative of "low hunger". Since 1990 the overall level of the index has fallen by almost a quarter (though the data do not cover the period of the global recession beginning in 2008). Two-thirds of the 99 countries counted in 1990 have reduced their populations' hunger levels. Kuwait, Malaysia, Turkey and Mexico have been the most successful, cutting their scores by over 60%. Those where hunger has increased include North Korea, Comoros and Congo. Congo's GHI score fell by over 60%, the worst of any country.

More Daily charts ...

Sent with Reeder

 

Making the case for microsavings

Making the case for microsavings

PSD Blog - The World Bank Group

Editor's Note: Jeanette Thomas is a Communications Manager at CGAP.

It's never been too difficult to make the case for what savings can do for poor people. Stuart Rutherford's work with SafeSave nailed that one fairly convincingly some years back. Since then, MicroSave and many others such as Women's World Banking and the Portfolios of the Poor project have reinforced the message time and again: low-income clients see considerable consumption-smoothing benefits from savings.

But what's always been much harder is convincing microfinance institutions that savings make good business sense. So news from a research study released last week is highly welcome. CGAP researchers Glenn Westley and Xavier Martin Palomas had full access to the 2008 books of two institutions offering savings—ADOPEM in the Dominican Republic, and Centenary Bank in Uganda.

Savings accounts with small balances are a very high-cost product for MFIs. And yet, when looking at the whole picture, the study found that offering savings to small savers can make good business sense. Profits generated by cross-sales of loans and other products and by the fee income from the savers turn out to be significant: 400% of the savings balances in Centenary, and over 1000% in ADOPEM. And without the small savers, these two very profitable institutions would lose about 30% of their total profits. The authors conclude that "there is a compelling case for serving small savers in these two MFIs."
 
With a variety of ways to generate income for the institution by cross-selling other products, or through fees charged on the savings accounts themselves, the authors reckon that "many MFIs are already serving small savers profitably and many more could do so." While the authors only got to peek behind the scenes at two institutions, the findings—if they can be generalized—look promising indeed for those looking to marry the business of microfinance with the realities of what poor people need.

Technology can play a role here too. One of the institutions studied, Centenary Bank, is using ATMs to attract and retain clients, boost savings levels, and cut costs. Westley and Palomas deconstruct the cost elements and show that by using ATMs, Centenary reaps significant cost reductions and income from fees. It's a great illustration of how technology can be integrated as part of a business plan, and points to how going beyond expensive branches can make it a viable proposition to bank low income people.

Sent with Reeder

 

Impact evaluations, good and bad

Impact evaluations, good and bad

Chris Blattman

In an interesting new working paper, Michael Clemens and Gabriel Demombynes discuss different levels of rigor in the context of evaluating the impact of a specific intervention. Roughly speaking, they compare the current approach being used in that project (before and after) to a better approach (using ex post matched controls) to the 'best' approach (randomizing ex ante). For instance: one impact currently claimed is increased cell phone penetration, but of course that has been happening everywhere as time passes, so it mostly goes away (as a direct impact) when controls are used.

Part of what makes the paper interesting is that their chosen example is a large (potentially huge) media-friendly intervention: the Millenium Villages Project. Doing evaluation right is important, especially so for exciting but untested ideas. But part of what I found interesting is that there is no randomization, although they show how it could easily be incorporated. It's worth keeping in mind that one can fall somewhat short of the gold standard, or very short, and this makes a big difference; the world is not binary.

So when, if ever, should we not doing a rigorous evaluation? Probably the best answer I've heard to that is: when ambiguity is useful as political cover. For instance, one could argue that conditional-cash-transfer programs (e.g. Oportunidades) are mostly redistributive in nature, and the conditional dimension exists to keep conservatives happy. Doing a rigorous evaluation might suggest that these are not cost-effective ways to, say, increase school attendance rates. Not doing the evaluation allows the primary goal to continue without having to argue for it solely on the cost-effectiveness merits. Or so one could argue.

Sent with Reeder

 

When Rigorous Impact Evaluation Is Not a luxury: Scrutinizing the Millennium Villages

When Rigorous Impact Evaluation Is Not a luxury: Scrutinizing the Millennium Villages

Global Development: Views from the Center

Back in 2004 a major new development project started in Bar-Sauri, Kenya.  This Millennium Village Project (MVP) seeks to break individual village clusters free from poverty with an intense, combined aid package for agriculture, education, health, and infrastructure. The United Nations and Columbia University began the pilot phase in Bar-Sauri and have extended it to [...]

Sent with Reeder

 

Aid and austerity

Aid and austerity

Baobab

IN THE print edition this week, we have a piece on the Global Fund, the main multilateral agency dealing with AIDS, tuberculosis and malaria, and the difficulties of extracting money from donors in these austere times. Here on Baobab, we have delved deeper into the issue.

Before the meeting the Global Fund distributed three hypothetical financing scenarios to show what was at stake. In the first scenario, the fund gets $13 billion, the minimum investment needed for the organisation to tread water. In practical terms, this would result in 4.4m people being on antiretroviral therapy, compared with 2.5m in 2009 (and compared with the current global need, estimated at 15m). The annual distribution of insecticidal nets would reach 110m, saving an estimated 16m life-years. The prevention of mother-to-child HIV transmission would reach 610,000 mothers annually compared to 345,000 in 2009. In scenario number two, it gets $17 billion, the minimum to ensure that progress can be maintained. In the final option, it gets $20 billion which would allow faster progress towards achieving the health-related Millennium Development Goals (MDGs).

When the party was over the Global Fund was left with $11.7 billion in pledges, not even enough to keep treading water. In development, disappointment and cynicism are commonplace. But the fact that the Global Fund could be so under-funded just weeks after the world pledged anew its commitment to the MDGs still comes as a shock. 

The problem is not that the donors think that the Global Fund is an ineffective health financing mechanism. An independent report by the EU found that aid disbursed through the Global Fund had made a significant contribution to tackling HIV/Aids, tuberculosis, and malaria. Recent research from the Centre for Global Development paints a positive overall picture of the fund. 

According to a recent study on malaria financing by a research programme in Nairobi, global funding for malaria is already 60% short of the $4.9bn needed to properly control the disease in 2010. Precise funding allocations haven't been announced but past trends give some clues. The Global Fund has historically allocated 29% of its budget to combat malaria and  so it probably spent about $795m on malaria in 2009—around 40% of global malaria spending. Financing for the Global Fund will be up by roughly 20% from 2008-2010, this will remain far below what it needed to guarantee coverage.

Multilateral aid makes it hard for individual countries to take credit because it obscures the ultimate source of funding. So some hope that governments may increase their giving rather than giving more to the Global Fund. This is unlikely though so the challenge will be to find more money. According to Professor Bob Snow, one of the authors of the study mentioned, this should include putting pressure on malaria-endemic countries with large domestic incomes—such as Gabon and Equatorial Guinea—to do more to help themselves. "A failure to maintain the momentum will mean money spent so far will have been for nothing" said Mr Snow. Existing treatment levels will be maintained under the minimal Global Fund replenishment but a smaller proportion of the infected will be treated as these diseases continue to spread. 

There is a sense in the aid community now that efficiency appears to strictly mean "more with less". Not that aid commitments were on track before the recession. But global debt and widespread belt-tightening are likely to provide convenient excuses. The latest OECD estimates suggest that rich countries will fall short of their promises for 2010 by $20 billion and won't come close to their commitment to provide aid equivalent to 0.7% of GNP. Some countries, such as the Nordic ones and Britain, might but a lot of it could be through clever accounting.

One encouraging shift in the global development effort is that the donor roster is growing. If aid from the West suffers it will be partially offset by aid from non-traditional sources, such as Brazil, China and other emerging economies—what the development community refers to as "south-south co-operation". It was estimated that these new donors contributed between 8%-10% of total aid in 2006. But the interventions of this new club of donors tend to focus on infrastructure, agriculture and opening up the extractive industries rather than health.

Ultimately, African governments will need to cover costs in the health sector. According to Paula Akugizibwe, Advocacy Coordinator for the AIDS and Rights Alliance for Southern Africa, "the colossal funding gap will test the strength of African governments' rhetorical commitments to the fight against HIV". Unfortunately, African governments don't have a great track record with respect to fulfilling promises to their citizens either. Overall, the outlook appears bleak for the global fight against disease.

Sent with Reeder

 

Evaluating the Millennium Villages

Evaluating the Millennium Villages

Africa Can... - End Poverty

Here's the quick summary of a new working paper I have co-authored with Michael Clemens of the Center for Global Development:

When is the rigorous impact evaluation of development projects a luxury, and when a necessity? We study one high-profile case where it is a necessity: the Millennium Villages Project (MVP), an experimental intervention in rural Africa. We compare development trends inside versus outside the villages in three countries, and show that estimates of the project's effects depend heavily on the evaluation method.

The impact evaluation currently planned by the MVP is unlikely to yield adequate estimates of its effects on Africans in general, for five reasons we explain. But it is not too late to carefully measure the project's effects, by making small and inexpensive changes to the next wave of the project.

Michael's own blog post gives more details about the paper. The paper uses publicly-available data from the MVP mid-term evaluation report and Demographic and Health Surveys  (DHS). Field visits played no role in the study.

But after the study I found myself wanting to learn more about a couple of the places behind the statistics. So after we completed the analysis, during September 26-28, I took a trip with several World Bank colleagues to the western edge of Kenya. We visited two village clusters in Nyanza Province: first the MVP site in Bar-Sauri, and then the town of Uranga, 50 km to the west, which is not an MVP site.

Here's a picture of me pressing the flesh with the kids at Nyamninia Primary School in Bar-Sauri:

read more

Sent with Reeder

 

Decoupling is back, with a vengeance

Decoupling is back, with a vengeance

Dani Rodrik's weblog

In the early days of the global financial crisis, there was some optimism that developing countries would avoid the downturn that advanced industrial countries experienced. After all, this time it was not they that had engaged in financial excess, and their economic fundamentals looked strong. But these hopes were dashed as international lending dried up and trade collapsed, sending developing countries down the same spiral that industrial nations took.

But international trade and finance have both revived, and now we hear an even more ambitious version of the scenario. Developing countries, it is said, are headed for strong growth, regardless of the doom and gloom that has returned to Europe and the United States. More strikingly, many now expect the developing world to become the growth engine of the global economy. Otaviano Canuto, a World Bank vice president, and his collaborators have just produced a long report that makes the case for this optimistic prognosis.

I am of two minds on this. Here is why.

Sent with Reeder