Promise, Performance, and Prospects Frontier Market Economies Tommy Chrimes, Philip Kenworthy, Jiwon Lee, Kate McKinnon, Takuma Tanaka, and Hamza Zahid Frontier Market tier Market EconomiesEconomies Economies Economies Promise, Performance, and Prospects Tommy Chrimes, Philip Kenworthy, Jiwon Lee, Kate McKinnon, Takuma Tanaka, and Hamza Zahid e text of this advance edition is part of the report Global Economic Prospects, January 2026 (doi: 10.1596/978- 1-4648-2267-4). A PDF of the %nal book is available at ...

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - Understanding the long-term impact of energy price changes on consumer spending is crucial, as energy prices significantly influence household and business expenditures [20][41] - The analysis utilizes national energy cost shares, a practical indicator measuring the ratio of energy costs to GDP, covering data from 142 countries over 40 years [21][43] - The report highlights a long-term decline in energy cost shares despite rising energy prices, attributed to systematic reductions in energy intensity due to technological advancements and energy efficiency policies [22][23] - Economic growth is associated with a decrease in energy cost shares, with energy prices having a more significant impact on these shares than GDP changes [23][24] - The short-term response to energy price increases is more pronounced, with a 10% rise in energy prices correlating to an approximate 8% increase in energy cost shares in the same year, which eventually stabilizes at around 4.8% [25][26] - The median adjustment period for economies to absorb price increases is about 18 years, indicating a slow adjustment process [26] - Countries exhibit varying capacities to adapt to energy price increases, with high-income nations showing lower long-term price elasticity, suggesting a stronger ability to absorb price shocks [27][28] - Energy efficiency policies play a critical role in mitigating the impact of price increases on cost shares, emphasizing the need for comprehensive energy efficiency frameworks [28][29] Summary by Sections Introduction - The report aims to explore how energy cost shares evolve with changes in energy prices and economic activity, addressing the limited understanding of these dynamics in existing literature [40][41] Dataset Overview - The analysis is based on a comprehensive dataset that includes energy consumption and price data across various sectors and countries, providing a robust foundation for the econometric analysis [51][54] Evolution of Energy Cost Shares - The report presents empirical observations indicating a strong short-term correlation between energy prices and cost shares, which diminishes over time [68][69] - The relationship between energy cost shares and prices varies significantly across different income groups, with lower-income countries showing a more pronounced correlation [74][78] Policy Implications - The findings suggest that targeted energy efficiency policies and fiscal measures can enhance economic resilience to energy price fluctuations, highlighting the importance of tailored reform strategies [29][33][36]

Investment Rating - The report does not explicitly provide an investment rating for the transport resilience sector, but emphasizes the critical need for investment prioritization and resource allocation to enhance road network resilience against climate hazards [17][18]. Core Insights - Road networks are essential for economic growth and social well-being, but they face increasing risks from aging infrastructure and climate change, necessitating adaptation investments projected to exceed hundreds of billions annually by 2030 [17][18]. - Effective transport resilience analysis has evolved into practical, scalable approaches that can be applied even in data-limited contexts, focusing on multidimensional risks at asset, system, and user levels [18][19]. - The report identifies two key analytical tools: the Global Resilience Index (GRI) for rapid vulnerability assessments and the Hazard & Risk Multi-Regional Assessment (HARMA) for in-depth economic analysis of climate impacts on transport networks [21][22]. Summary by Sections Executive Summary - The report highlights the increasing vulnerability of road networks to climate hazards and the urgent need for strategic investment in resilience measures [17][18]. - It outlines a common sequence of analytical steps for transport resilience assessments, emphasizing the importance of integrating economic analysis into prioritization efforts [19][20]. Resilience Assessment Methodology and Tools - The methodology for resilience assessments includes defining the scope, identifying climate hazards, and employing a five-step analytical framework: mapping exposure, assessing vulnerability, analyzing system criticality, identifying resilience measures, and conducting economic analysis [40][41][49][55]. - The GRI and HARMA models are presented as effective tools for conducting resilience assessments, with GRI focusing on rapid screening and HARMA providing detailed economic evaluations [56][58]. Case Studies - The report includes case studies from the Kyrgyz Republic, Nigeria, Pakistan, Brazil, and Malawi, showcasing practical applications of resilience analysis tools and their impact on investment prioritization and infrastructure planning [64][66][68]. - In the Kyrgyz Republic, a GRI application identified high-risk corridors for intervention, while Nigeria's assessment estimated significant repair costs from flooding, highlighting the need for targeted resilience investments [65][82]. - Pakistan's HARMA application demonstrated the tool's capability to assess network criticality and prioritize investments based on climate risks, while Brazil's integration of resilience analysis into operational processes exemplified effective implementation [66][67].

Investment Rating - The report does not explicitly provide an investment rating for the health sector in low- and lower middle-income countries (LLMICs) but emphasizes the need for increased government health spending to achieve Universal Health Coverage (UHC) and Sustainable Development Goals (SDGs) [8]. Core Insights - The report outlines pathways for LLMICs to expand government health spending amidst fiscal constraints, declining external support, and rising competition for public resources [8]. - It highlights that government health expenditure (GHE) per capita in LLMICs doubled in real terms from US$24 in 2000 to US$46 in 2022, but growth has significantly slowed since 2009 [30][31]. - The report identifies institutional, technical, and operational challenges that hinder the mobilization of government financing for health [40][41]. Summary by Sections Part A: Heed the Signs - Government health spending per capita in LLMICs has slowed markedly, with annual increases dropping from nearly 6% (2000-2009) to just 2% (2009-2019) [64]. - In 2022, average government health spending was US$16 per capita in low-income countries (LICs) and US$60 in LLMICs, falling short of the US$70 and US$90 benchmarks needed for UHC [67]. - Nearly half of LLMICs are projected to face stagnation or declines in government health spending due to high debt obligations and competition for resources [68]. Part B: Mind the Returns - The report emphasizes the economic, social, and political returns of investing in health, which are often overlooked due to their complexity and preventive nature [33][35]. - It discusses how government decision-making is centralized, limiting the role of health ministries and leading to fragmented health sectors [34]. Part C: Raise the Game - The report suggests that countries can elevate health as a political priority through policy reforms and institutional changes [41][42]. - It outlines the importance of collaboration between ministries of health and finance to improve budget formulation and execution [41][44]. Part D: Shift the Course - The fiscal pivot pathways proposed in the report include political economy strategies and technical measures to enhance government health spending [40][48]. - The report stresses the need for sustained commitment to health investments despite the challenges posed by external pressures and internal constraints [48].

Investment Rating - The report does not explicitly provide an investment rating for the judiciary sector in Nepal, but it emphasizes the importance of sustained financial investment for the digital transformation process. Core Insights - The judiciary of Nepal, led by the Supreme Court, is prioritizing digital transformation to enhance service delivery and address constraints in justice services, as outlined in its five-year strategic plans and ICT Masterplan [16][20][37]. - The readiness assessment identifies three strategic pillars for digital transformation: organizations and processes, people and skills, and applications, technology, and infrastructure, which are essential for a successful transformation [18][41]. - The report highlights the need for a comprehensive approach that includes technological advancements, organizational changes, capacity building, and effective communication strategies to achieve a more efficient and transparent justice system [34]. Summary by Sections Chapter 1: Introduction - The judiciary has been integrating digital technologies since 2004, with digital transformation being a key agenda in the 5th Five-Year Strategic Plan (2024–2029) [37][38]. - The assessment aims to identify policy issues and operational options for effective digital transformation, providing input to the Supreme Court's strategic plan [38]. Chapter 2: Pillar 1 – Organization and Processes - This pillar outlines the context for ICT integration in the judiciary, emphasizing access, transparency, accountability, and the legal framework necessary for digital transformation [51][52]. - The Supreme Court's ICT Masterplan aims to unify disparate case management systems and replace paper-based processes with a centralized digital system [59][60]. Chapter 3: Pillar 2 – People and Skills - The assessment analyzes staffing conditions and training needs for judicial staff to support ICT reforms, highlighting the importance of human resources in effective institutional performance [43]. Chapter 4: Pillar 3 – Applications, Technology, and Infrastructure - This pillar reviews the technological status of the judiciary, focusing on case processing, automation, and cybersecurity, and emphasizes the need for improved infrastructure and interoperability [44][60]. Chapter 5: Recommendations for Accelerating Digital Transformation - The report provides eight key recommendations, including advancing business process re-engineering, developing an enterprise architecture, strengthening information management, modernizing IT resources, digitalizing judicial services, enhancing cybersecurity, implementing a capacity-building program, and formulating a change management strategy [24][25][26][27][28][30][31][33].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The Rapid Social Response (RSR) program has evolved over 15 years to build social protection systems that address pressing development challenges, initially launched in response to the global financial crisis of 2008 [19][20] - The program has supported nearly 100 countries, mobilizing over $17 billion in operational financing and reaching 176.1 million people [24][29] - RSR has transitioned from crisis response to a focus on long-term resilience and economic inclusion, with a goal to reach 500 million people with social protection and employment support by 2030 [14][25] Summary by Sections Executive Summary - RSR has helped countries build social protection systems to confront development challenges, catalyzing over $17 billion in financing through 420 grants [19][24] - The program has adapted to new challenges, including the COVID-19 pandemic, and has focused on building resilient systems that can absorb shocks [21][25] RSR Phase One: Crisis Response Through Catalytic Action - RSR provided support to 42 low-income countries, protecting 1.58 billion vulnerable people from crises [56] - The program focused on establishing safety nets, maintaining access to essential services, and generating knowledge for policy [58][60] RSR Phase Two: Expand Social Protection and Advance Labor Market Inclusion - RSR evolved to strengthen national social protection systems and improve labor opportunities for marginalized groups [77][82] - The program introduced digital tools and behavioral insights to enhance service delivery and program outcomes [78][82] Strong Foundations for Effective Social Protection Systems - RSR catalyzed innovation in social protection systems, expanded coverage, and ensured inclusivity [85] - Targeted investments in delivery systems and economic inclusion can transform long-term development outcomes [85] Boost Women's Access to Jobs - RSR initiatives have reduced gender gaps in economic opportunity and increased women's participation in the labor force [96] - Programs have addressed structural barriers limiting women's access to jobs and financial systems [96][98] Comprehensive Solutions to Gender-Based Violence - RSR has supported integrated approaches to combat gender-based violence, promoting gender equality through social protection [111][114] - The program has developed tools to leverage safety nets for GBV prevention, emphasizing community engagement [117][118] Deliver Food and Nutrition Security through Stronger Social Protection Systems - RSR has promoted integrated, nutrition-sensitive social protection to improve food and nutrition outcomes [123] - The program has shifted towards data-driven approaches to enhance service delivery and accountability in food security initiatives [124]

Investment Rating - The report does not explicitly provide an investment rating for the Palestinian health system, but it highlights significant challenges and inefficiencies that could impact investment decisions. Core Insights - The Palestinian health system faces structural barriers to equitable service provision due to political fragmentation and movement restrictions, particularly affecting access to health services in Gaza and the West Bank [24][30]. - Health outcomes in the region are mixed, with a high burden of non-communicable diseases (NCDs) and rising maternal and infant mortality rates, indicating a need for improved health policies and interventions [28][40]. - The health financing system is characterized by high out-of-pocket expenditures, significant arrears, and a reliance on external financing, which complicates sustainability and efficiency [31][32]. Summary by Sections Health Outcomes - The Palestinian population is predominantly young, with a high total fertility rate and a declining dependency ratio, indicating potential for a demographic dividend [38]. - Life expectancy has declined from 74 in 2022 to 65 in 2024 due to the ongoing conflict, with maternal and infant mortality rates showing an upward trend [28][40]. - NCDs account for 72% of the disease burden, with high rates of risk factors such as smoking and obesity contributing to this trend [29][44]. Physical and Human Resources, Health System Capacity and Quality - The health service delivery system is fragmented, with a reliance on public facilities and significant shortages of medical equipment and essential medicines, particularly in Gaza [30][52]. - There is a need for improved management of chronic diseases and a more comprehensive approach to service provision, including better training for healthcare providers [52][53]. Overview of Health Financing Flows - In 2022, health spending in West Bank and Gaza was US$1.9 billion, representing 10.5% of GDP, significantly higher than regional averages [31]. - Out-of-pocket spending has increased, highlighting gaps in financial risk protection, with 14% of general government expenditures allocated to health [31][34]. Revenue Raising and Health Expenditures - The government health budget is heavily weighted towards wages and outside medical referrals, limiting resources for investments in primary health care [31][32]. - Health sector arrears exceeded US$900 million in 2024, with financing constraints leading to high unit costs and medicine stockouts [32]. Pooling Arrangements - The Government Health Insurance (GHI) scheme covers approximately 64% of the population, but low contribution rates limit its effectiveness as a risk-pooling mechanism [33]. - Out-of-pocket expenditures have risen significantly, with catastrophic health expenditures affecting 10% of households in 2023 [34]. Purchasing Arrangements - The PMOH is the sole purchaser of health services, relying on passive purchasing modalities, which constrains the ability to improve service quality and efficiency [35][36]. - Outside medical referrals (OMR) are a significant fiscal burden, with high costs and inefficiencies in purchasing arrangements [35][36]. Policy Recommendations - The report suggests a four-step plan to address the challenges in the Palestinian health financing system, focusing on improving purchasing arrangements, expanding coverage, and enhancing governance [37].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The efficiency and quality of the business regulatory environment vary significantly across different locations within EU member states, impacting regional economic convergence [1][2] - Local regulations and their enforcement play a crucial role in shaping the investment climate, affecting firm entry, job creation, and economic growth [2] - Subnational variations in business environments can exceed differences observed between countries, highlighting the need for localized reforms [3][34] Summary by Sections Subnational Variation - Data from the World Bank's assessments between 2017 and 2022 reveal substantial differences in business environments not only among EU member states but also within them, with notable disparities in larger countries like Italy and smaller ones like Croatia [2][3] - In Greece, for instance, the time to register property varies dramatically between cities, with Patra taking 24 days and Heraklion taking 134 days, illustrating the extent of local inefficiencies [3] Centralization and Digital Infrastructure - Countries like Denmark, the Netherlands, and Sweden exhibit high levels of centralization and robust digital infrastructure, leading to more uniform procedures for entrepreneurs across different regions [4] - Denmark offers over 1,500 e-government services through a single portal, streamlining business processes [4] Regulatory Gaps - The widest regulatory gaps are observed in construction permitting, where local authorities significantly influence the process [5] - Other areas with substantial variation include electricity connection and contract enforcement, driven by local court efficiencies and administrative practices [14] Learning from Local Practices - Cities can learn from each other to improve their regulatory environments, as seen in Romania where different cities excel in various indicators [16] - The report suggests that successful local practices in construction permitting from Austria and court reforms in Italy could serve as models for broader national standards [17] Automation and Efficiency Improvements - Innovative practices in Italian courts, such as case management and strategic planning, have led to significant reductions in trial durations and backlogs [26][32] - Automation in case assignment and alternative dispute resolution initiatives in cities like Bologna and Florence are examples of efforts to enhance judicial efficiency [35] Future Assessments - The World Bank will continue to assess the business and investment climate in the EU at the subnational level through the new Business Ready (B-READY) methodology, which aims to address regional disparities in business regulation [42]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Uganda's economic growth remained robust in FY25, with real GDP growth accelerating to 6.3 percent, driven by strong domestic demand and a recovery in household consumption [29][30] - The external position improved, with a narrowing current account deficit from 7.9 percent of GDP in FY24 to 6.4 percent in FY25, supported by rising export receipts, particularly from coffee and gold [30][31] - Fiscal pressures increased, with the overall fiscal deficit widening to 6.1 percent of GDP in FY25, primarily due to a 23 percent rise in government spending [31][34] - The medium-term outlook is positive, with growth expected to remain broad-based and accelerate as oil production commences, projected to start in FY27 [33][34] - Agro-industrialization is central to Uganda's development strategy, offering significant potential for job creation and economic transformation [36][37] Summary by Sections Part 1: State of the Ugandan Economy - Recent Economic Developments - Uganda's economy experienced broad-based growth in FY25, with total consumption rising by 10.3 percent and a significant increase in government consumption [29][53] - Agricultural value-added grew by 6.6 percent, contributing 24 percent to the GDP increase, supported by favorable rainfall conditions [55] - The external position strengthened, with export receipts surging and foreign exchange reserves rising to cover three months of imports [30][31] - Economic Outlook, Risks and Development Priorities - Growth is expected to remain robust in FY26 and FY27, with fiscal and external deficits projected to improve gradually as oil revenues begin to accrue [33][34] - Risks to the outlook include potential fiscal slippages, delays in oil sector development, and climate shocks affecting agricultural productivity [34] Part 2: Cultivating Prosperity Through Agro-Industrialization - Current Context for Cultivating Future Prosperity - Uganda has significant untapped agro-industrialization potential due to its abundant natural resources and favorable climate [37] - However, agricultural productivity remains low, with challenges such as weak foundations in primary production and limited access to finance and infrastructure [38] - Recommendations for Agro-Industrial Transformation - Addressing challenges requires coordinated investments and reforms to strengthen agricultural foundations, improve infrastructure, and mobilize private sector investments [39][41] - The report emphasizes the need for strategic partnerships and sustained political commitment to achieve agro-industrialization goals [41]

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The exponential growth of platform work in developing countries presents opportunities for job creation and productivity enhancement, connecting workers with consumers through digital platforms [6][18]. - Regulatory frameworks are essential to address risks associated with platform work, such as algorithmic management and market power imbalances, which can lead to unfair treatment of workers [7][8]. - A gradual, evidence-informed approach to regulation is recommended, focusing on introducing minimum labor standards and protections for platform workers while considering local economic contexts [12][13]. Summary by Sections 1. Introduction: Platform Work as an Opportunity - Platform work can generate productive employment and improve local economies by matching labor supply with demand [18]. - The diversity of platform work includes both location-based and web-based jobs, each with unique characteristics and challenges [19][21]. 2. Labor Regulations and Conceptual Framework - Appropriate labor regulations can enhance job quality and worker protections, balancing the need for job creation with regulatory measures [34][35]. - The introduction of labor protections must align with the economic realities of the local market to avoid discouraging job creation [35][40]. 3. Characteristics and Preferences of Platform Workers - Web-based platform workers are generally younger, more educated, and predominantly male, while location-based workers show significant regional variation in demographics [56][57]. - Many platform workers engage in gig work as a secondary occupation, often facing financial insecurity and lacking social protection [59][64]. - Workers express diverse preferences regarding their employment classification, valuing flexibility and supplementary income from platform work [65][66].