Public Disclosure Authorized Macro Poverty Outlook Country-by-country Analysis and Projections for the Developing World Public Disclosure Authorized Annual Meetings 2024 Public Disclosure Authorized Public Disclosure Authorized MPO © 2024 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations ...

Economic Update - Economic growth in Maldives picked up in early 2024, with real GDP growing by 9.8% year-on-year in Q1, driven by a 9.3% growth in the tourism sector [20] - Tourist arrivals increased by 10.5% year-on-year as of end-August 2024, with Chinese arrivals leading the market at 14.6% of total visitors [20] - Headline inflation declined to an average of 0.5% in H1 2024, but food inflation remained elevated at 6.7% year-on-year [21] - The fiscal deficit narrowed to MVR 677 million (0.6% of GDP) in Q1 2024, with revenue increasing by 9.1% year-on-year, driven by tourism-related tax collections [22] - Expenditure cuts led to a build-up of arrears, with delays in payments to contractors, fishermen, and private hospitals [23] - The current account deficit (CAD) is expected to narrow to 16% of GDP in 2024, supported by robust growth in travel sector receipts [24] - Foreign exchange reserves declined to critically low levels, covering only 1 month of imports as of August 2024 [25] - Public debt rose to 115.7% of GDP in Q1 2024, with domestic debt increasing to 68.4% of GDP due to tighter global financial conditions [27] Outlook and Risks - Real GDP growth is projected to moderate to 4.7% in 2024, supported by the completion of the new terminal at Velana International Airport [28] - Inflation is expected to rise significantly, reaching 7.8% in 2025, driven by the removal of blanket subsidies [29] - The fiscal deficit is projected to narrow to 6.1% of GDP by 2026, with public debt declining to 111.4% of GDP [30] - External debt servicing needs are expected to spike to $1.07 billion in 2026, including bullet payments for the $500 million Sukuk [30] - Downside risks include elevated external and fiscal vulnerabilities, limited buffers, and potential delays in fiscal reforms [31] Policy Priorities for Climate and Development - Sea-level rise (SLR) is a major climate concern, with projections suggesting a potential rise of 0.5 to 0.9 meters by 2100, which could damage up to 3.3% of total assets by 2050 [34] - Coral reefs are under threat, with almost all coral cover potentially lost if global temperatures exceed 2°C, impacting tourism and fisheries [35] - Severe climate-induced impacts are expected to escalate by 2050, with ocean heating potentially causing the collapse of coral reefs and fish stocks [36] - The tourism sector requires accelerated climate adaptation efforts, with over 90% of resorts grappling with beach erosion and infrastructure damage [37] - Fisheries revenue could decline by almost 100% by the end of the century under a high-emission scenario, necessitating alternative livelihood opportunities [38] - Financing requirements for climate adaptation to SLR and flooding alone range between $2 billion and $4 billion [40]

Public Disclosure Authorized Public Disclosure Authorized | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Public Disclosure Authorized Public Disclosure Authorized SASPP Policy Note Series POLICY NOTE 11 | SEPTEMBER 2024 2 SASPP Policy Note Series September 2024 1 KEY RECOMMENDATIONS The Sahel is a dynamic region where population mobility is central to people's livelihoods an ...

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - Low-income countries (LICs) require significant resources to address development challenges, needing an additional annual investment equivalent to 8 percent of GDP through 2030 to meet critical goals [21][22] - The average government debt-to-GDP ratio in LICs rose to 72 percent in 2023, marking a significant increase and indicating widespread debt accumulation across these economies [23] - Fiscal deficits in LICs have expanded from 1.2 percent of GDP in 2019 to 2.4 percent in 2023, driven by rising debt and interest payments [23][24] Summary by Sections I. Introduction - The pandemic and subsequent global shocks have exacerbated development challenges in LICs, with about 40 percent of the population living in extreme poverty as of 2024 [41][42] II. Evolution of Fiscal Positions in LICs - Government revenues in LICs averaged 18 percent of GDP from 2011 to 2019, significantly lower than other emerging market and developing economies (EMDEs) [47] - The average fiscal deficit in LICs is estimated at 2.4 percent of GDP in 2023, reflecting a deterioration in fiscal positions [42] III. Fiscal Vulnerability to Shocks - LICs are particularly vulnerable to global recessions and domestic conflicts, which can lead to significant fiscal imbalances and increased government debt [26][27] - The impact of global recessions on LICs includes an average deterioration of fiscal balances by 1.7 percentage points of GDP [26] IV. Fiscal Policy Options in LICs - Strengthening domestic revenue mobilization and improving spending efficiency are critical for enhancing fiscal positions in LICs [36][37] - The report emphasizes the need for international support to help LICs stabilize their fiscal positions and improve policy management [39] V. Conclusion - The report highlights the urgent need for well-designed national policy interventions to improve fiscal positions in LICs, including better tax administration and enhanced public spending efficiency [36][37]

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - Latin America and the Caribbean (LAC) is nearing a resolution of inflation issues and macroeconomic disruptions caused by the pandemic, with monetary authorities managing challenges effectively [27][28] - Fiscal imbalances and high debt levels remain significant challenges, with a need for reforms in investment, infrastructure, education, and tax policy to stimulate growth [28][29] - The report emphasizes the potential of wealth taxes to generate fiscal space while promoting equity and growth, particularly in the context of global discussions on taxing the ultra-wealthy [29][38] Summary by Sections Chapter 1: The State of the LAC Region - The region is close to controlling inflation, with Brazil and Peru expected to meet their inflation targets in 2024 [30] - Real GDP growth is forecasted at 1.9% for 2024, with significant variation across countries [32] - The debt-to-GDP ratio increased to 62.8% in 2024, necessitating improved fiscal space through efficiency gains and increased tax revenues [33] - Foreign direct investment (FDI) remains below historical levels, indicating a need for structural reforms to attract investment [34] Chapter 2: Taxing Wealth for Equity and Growth - Wealth taxes are gaining attention as a means to address inequality and generate resources for public spending [39] - LAC countries collect only 2% of tax revenue from property taxes, despite 80% of wealth being held in real estate, indicating a significant opportunity for revenue generation [41] - The report highlights the challenges of property tax administration, including outdated valuations and reliance on presumptive taxes [42] - Taxing the ultra-wealthy is unlikely to significantly alleviate fiscal shortfalls in LAC due to the low number of billionaires relative to the population [45] - Reforming tax systems to focus on property taxes could enhance equity, promote growth, and create fiscal space, but requires investment in administrative capacity [46]

Investment Rating - The report indicates that South Asia is expected to remain the fastest-growing region among emerging market and developing economies (EMDEs), with growth projected at 6.4% in 2024 and 6.2% in 2025-26, suggesting a positive investment outlook [29][36]. Core Insights - The report emphasizes the untapped potential of increasing female labor force participation, which could raise per capita income by as much as 50% if women's employment rates were to match those of men [29][30]. - It highlights the need for greater openness to global trade and investment, which could enhance women's employment opportunities and spur firm growth, particularly in the context of shifting global supply chains [29][30]. - The report identifies significant risks, including extreme weather events and social unrest, which could undermine the generally promising economic outlook for the region [29][30]. Summary by Sections Chapter 1: Rising Tide, Hidden Rocks - South Asia's output growth is projected to exceed earlier expectations, driven by strong domestic demand, particularly in India [36]. - The region faces downside risks from extreme weather events, social unrest, and reform delays, which could impact fiscal and external positions [36]. - Increasing productivity growth and employment, especially among women, is crucial for long-term economic stability [36]. Spotlight 1: Heat and Floods in South Asia - Climate change is exposing South Asia to extreme weather, with poorer households and smaller firms being more vulnerable to heat and flooding [30]. - The report suggests that targeted social protection systems are needed to address the disparities caused by climate shocks [30]. Spotlight 2: Mind the Side Effects: Remittances and Economic Structure - High remittance inflows in South Asia can reduce poverty but may also lead to currency appreciation and competitiveness losses [30]. - Governments are encouraged to create a conducive environment for productivity growth while managing the impacts of remittances on the economy [30]. Chapter 2: Empower to Prosper: Women Working for Growth - Women's labor force participation in South Asia is significantly lower than the EMDE average, representing a costly misallocation of resources [30]. - Legal reforms and shifts in social norms are necessary to improve gender equality in the labor market [30]. - The report discusses the "marriage penalty," where women's employment rates drop after marriage, contrasting with a "marriage premium" for men [30].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The World Bank Group's sanctions system is a critical component of its efforts to combat fraud and corruption, ensuring that funds are used as intended and reinforcing a strong message of deterrence while emphasizing prevention and integrity compliance programs [21][22] - In FY24, the Integrity Vice Presidency (INT) received 4,984 complaints, with 354 deemed actionable, and opened 56 new investigations, completing 61 investigations [19][20] - The Office of Suspension and Debarment (OSD) reviewed 14 cases and 13 settlements, temporarily suspending 11 firms and three individuals, and sanctioning 17 respondents [19][20] - The Sanctions Board published two fully-reasoned decisions resolving contested sanctions cases, demonstrating the system's commitment to due process [20] Summary by Sections Fiscal Year 2024 Summary Results - The report covers activities from July 1, 2023, to June 30, 2024, detailing the operations of the sanctions system units [19] - INT substantiated misconduct allegations in three Bank Group staff cases and six corporate vendor cases [19][20] The Sanctions System - The sanctions system addresses allegations of fraud, corruption, collusion, coercion, and obstruction, ensuring accountability for misconduct related to Bank Group funds [21][23] - It operates in three stages: investigation, adjudication, and integrity compliance engagement [23] Investigation - INT opened 56 new investigations and completed 61, with 38 deemed substantiated [36][39] - The average turnaround time for completed staff cases was approximately 224 days, while corporate vendor cases took about 446 days [38] Adjudication - OSD serves as the first tier of the sanctions system, evaluating evidence and recommending sanctions based on the Bank's guidelines [67][70] - The Sanctions Board acts as the second tier, providing final, unbiased decisions on contested cases [29] Integrity Compliance - The Integrity Compliance Office (ICO) engaged with 91 sanctioned entities, helping them meet compliance conditions for release from sanctions [53] - Fourteen entities successfully met their conditions for release, demonstrating the effectiveness of the ICO's outreach [53] Prevention and Risk Management - INT identified 59 of the 181 investigated projects as high integrity risk, reflecting its proactive approach to mitigating fraud and corruption risks [60] - The office provided forensic audit support to 57 investigations, enhancing the effectiveness of its operations [59] Artificial Intelligence and Data Analytics - INT leveraged AI technologies to improve its operations, including document translation services that significantly reduced costs and processing time [62] Outreach and Training - INT engaged with over 3,000 individuals through integrity-based training sessions, strengthening its collaborative efforts against corruption [64][65]

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - Reducing the impact of climate change on poor and vulnerable households is essential for hastening poverty reduction. Climate change disproportionately affects these groups, whose livelihoods depend on natural resources and lack access to savings, credit, and insurance [11][16]. - The document presents a framework for understanding the relationship between climate and poverty, emphasizing how climate change and climate policies affect household welfare [16][22]. - Policies that reduce hazards and vulnerability while providing non-climate benefits should be prioritized, with examples including climate-smart agricultural practices and investments in clean energy access [18][19]. Summary by Sections Background - The World Bank aims to end poverty on a livable planet, highlighting the interconnection between poverty and climate objectives. Progress on poverty reduction has stalled, and climate change poses significant threats to the livelihoods of poor and vulnerable populations [21][22]. The Welfare Impacts of Climate - The report utilizes an asset-based framework to analyze how climate outcomes affect household income and consumption. Poor households are particularly vulnerable due to their reliance on natural resources and limited access to financial instruments [25][27]. - The hazard, exposure, and vulnerability framework is employed to understand how climate change impacts welfare through various channels [32][33]. Measuring the Welfare Impacts of Climate Change - The report discusses the importance of damage or vulnerability functions in assessing the welfare impacts of climate change. These functions relate losses in welfare to climate conditions and are essential for understanding the broader implications of climate change on poverty [54][56].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights that firms in sectors more amenable to remote work experienced a smaller adverse impact from the COVID-19 pandemic in countries with better digital infrastructure [2][13] - The benefits of remote work during the pandemic were more pronounced for exporters in the manufacturing sector compared to non-exporters, indicating a premium associated with exporting [2][13] - The positive effects of remote work flexibility enabled by digitalization do not diminish over time [2][13] Summary by Sections Introduction - The pandemic-induced economic crisis highlighted the importance of digital technologies for firms to mitigate economic losses [6] Data and Descriptive Statistics - The study utilized data from 68,007 firm-level observations across 61 countries, with a significant portion being micro and small firms [20] Empirical Strategy - The analysis focused on the interaction between remote work amenability and digital infrastructure to assess firm resilience during the pandemic [25] Results - Firms in sectors with higher remote work feasibility showed more resilient sales performance in countries with better digital infrastructure, with a statistically significant coefficient of 0.979 for the change in sales [31] - Exporters in sectors amenable to remote work experienced a smaller average sales decline compared to non-exporters, with a notable difference of 6%-7% [33] - The report indicates that the gap in sales decline between different sectors is more pronounced in countries with lower internet usage [35] Robustness Checks - The findings remained consistent when alternative measures for remote work and internet penetration were applied, confirming the robustness of the results [36] Heterogeneous Effects - The impact of digital connectivity and remote work on firm resilience varied across sectors, with significant effects observed in the manufacturing sector for both exporters and non-exporters [47]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The paper identifies key challenges in health care and long-term care as populations age, particularly in developing countries where rapid demographic transitions are occurring [6][14] - A holistic strategy is needed to strengthen health care and long-term care systems, focusing on universal care coverage and shifting from a disease-centered to a person-centered approach [15][16] - The importance of promoting healthy lifestyles throughout the life course is emphasized, as early health choices significantly impact aging [15][16] Summary by Sections Overview - Population aging increases the likelihood of disease, disability, and loss of functional autonomy, putting pressure on health care and long-term care systems [13][19] - Developing countries face unique challenges due to rapid demographic transitions and resource constraints, necessitating proactive government interventions [20][19] Main Trends in Longevity - Global average life expectancy at birth rose from 47.0 years in 1950 to 72.6 years in 2019, with projections indicating it will reach 77.1 years by 2050 [23][24] - The share of individuals aged 65 and older is expected to rise from 9% in 2019 to 16% by 2050, with significant increases in middle-income countries [26][23] Aging, Health, and the Challenges for Health Care Systems - Population aging leads to a rise in chronic diseases and multimorbidity, complicating health care delivery [41] - Health care systems must adapt to ensure coverage, access, and affordability while shifting towards a person-centered, holistic approach [41][42] - The prevalence of chronic diseases is projected to increase significantly, with 83% of global deaths expected to be caused by chronic diseases by 2060 [43][42] Increasing Risk of Functional Dependency and Challenges for Long-Term Care Systems - There is a rising need for long-term care services due to increasing functional dependency among older adults [17][18] - Long-term care services should be accessible, affordable, and person-centered, promoting home care options [17][18] - Integration between social care and health care sectors is crucial for efficient service delivery [18] Final Remarks and Key Policy Considerations - The report calls for increased coordination between health and social care sectors and emphasizes the need for capacity building among human resources in these fields [18] - Addressing distributional issues related to aging, such as gender gaps and socioeconomic inequalities, is essential for effective policy responses [39][40]