Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Policy Research Working Paper 10941 Digitalization and Inclusive Growth A Review of the Evidence Gaurav Nayyar Regina Pleninger Dana Vorisek Shu Yu Prosperity Practice Group Office of the Chief Economist October 2024 A verified reproducibility package for this paper is available at http://reproducibility.worldbank.org, click here for direct access. Public Disclosure Authorized Policy Research Working Paper 10941 Abstract ...

Investment Rating - The report does not explicitly provide an investment rating for the agricultural sector in Malaysia. Core Insights - Malaysia's economy is projected to grow by 4.9% in 2024, driven by robust private consumption, increased investment, and improved export performance [17] - The agrofood sector contributes 11.6% to Malaysia's GDP and employs approximately 1.87 million people, highlighting its significance in the economy [18] - Digital Agricultural Technologies (DAT) are identified as transformative solutions to enhance productivity and market access for farmers [18] Summary by Sections Recent Economic Developments - Malaysia experienced strong economic growth in Q2 2024, with GDP growth of 5.9%, supported by robust household consumption and investment [17][20] - Gross Fixed Capital Formation (GFCF) grew by 11.5%, driven by private sector expansion in manufacturing and services [20] - The labor market showed improvement, with a slight increase in the labor force participation rate to 70.5% [20][22] Economic Outlook - The economy is expected to expand at a faster pace in 2024, with inflation projected to moderate due to softer global commodity prices [17] - The government aims to transform key sectors, including agriculture, to achieve high-income status [18] Agricultural Sector Insights - The agrofood sector is crucial for Malaysia's economic growth, with a focus on becoming globally competitive and innovative [18] - Key challenges in agriculture include high transaction costs and information asymmetries, which can be addressed through DAT [18] - Recommendations for scaling up DAT adoption include investing in public goods and fostering innovative ecosystems [18]

Industry Overview - Argentina has exhibited exceptionally high fiscal procyclicality and GDP volatility, ranking among the most volatile economies globally, with economic recessions occurring approximately 33% of the time over the past seven decades [9] - The country's fiscal policy has historically been highly procyclical, characterized by persistent fiscal deficits that exacerbate economic fluctuations and hinder stable growth, ranking among the top four nations in terms of public spending and GDP cyclicality correlation over the past 22 years [9] - Public spending in Argentina rose significantly from 25% of GDP in 2005 to 41% of GDP in 2016, primarily driven by recurrent expenditures, outpacing revenue and leading to fiscal imbalances, liquidity constraints, and debt restructuring [9] Fiscal Policy Analysis - Argentina's fiscal procyclicality stems primarily from expenditure policies, particularly those related to pensions and public wages, with both influenced by the "price" effect and the "quantity" effect, especially for the public wage bill [2][13] - The cyclically adjusted primary balance (CAPB) in Argentina has significantly declined, with discretionary policies being more pronounced during economic booms, and the country's heavy reliance on agricultural commodities exacerbates procyclicality [2][17] - Argentina's unconventional taxes, such as export duties and financial transaction taxes, exhibit a negative correlation with the economic cycle, contributing to fiscal procyclicality [16][80] Public Spending Breakdown - Argentina's public wage bill has displayed strong procyclicality, driven by both "price" and "quantity" effects, with the number of public servants and their average wage showing pronounced procyclical behavior at both national and subnational levels [15][46] - Pension spending in Argentina is highly procyclical, influenced by erratic indexation mechanisms and the "price" effect, with the real value of benefits strongly linked to the economic cycle [14][64] - Public investment and consumption in Argentina have exhibited strong procyclical tendencies, with correlations of 0.59 and 0.61, respectively, over the past two decades [41] Tax Policy Analysis - Argentina's traditional tax sources, such as CIT, PIT, and VAT, exhibit a relatively acyclical policy stance, with correlations between changes in tax rates and real GDP being positive but not statistically significant [76] - Unconventional taxes, including export duties and financial transaction taxes, contribute significantly to Argentina's tax revenue, with export duties showing a weak but negative correlation with the economic cycle, indicating procyclical behavior [80] - The tax structure in Argentina deviates from international standards, with unconventional taxes accounting for nearly one-third of total tax revenue, limiting the effectiveness of traditional tax rate cyclicality analysis [72] Structural Fiscal Balance - The structural budget balance (CAPB) in Argentina has deteriorated significantly over the past decades, even prior to the conclusion of the commodities super-cycle, indicating the presence of procyclical discretionary policies [17] - During the commodities super-cycle, cyclical revenues from commodities-related export duties contributed nearly 1.1% of GDP in additional receipts, with a hypothetical stabilization fund potentially generating revenue equivalent to 2% of GDP between 2006 and 2008 [102] - Argentina's fiscal policy has exhibited a procyclical nature, failing to effectively stabilize the economy, with expansionary fiscal policies during economic upswings hindering improvements in savings and raising sustainability concerns [111]

HUMAN DEVELOPMENT PERSPECTIVES OVERVIEW Investment Framework for Nutrition 2024 Meera Shekar Kyoko Shibata Okamura Mireya Vilar-Compte Chiara Dell'Aira Editors HUMAN DEVELOPMENT PERSPECTIVES Overview Investment Framework for Nutrition 2024 Meera Shekar Kyoko Shibata Okamura Mireya Vilar-Compte Chiara Dell'Aira Editors | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The September 2024 update to the Poverty and Inequality Platform (PIP) introduces new methodologies and indicators for measuring global poverty, including the Prosperity Gap and nowcast estimates up to 2024 [5][9] - The update confirms recent poverty trends, indicating that global extreme poverty has returned to pre-pandemic levels, although low- and lower-middle-income countries continue to face challenges [10][11] - The report highlights significant regional disparities, with South Asia showing the largest reduction in poverty, while the Middle East and North Africa have experienced the most significant regression [10][11] Summary by Sections 1. Introduction - The update revises poverty and inequality estimates up to 2022, with new nowcast estimates available for 2024 [9] 2. Nowcasting Poverty - Nowcasting estimates are provided using both global and country-specific models, allowing for real-time poverty assessments [19][20] 3. New Measures of Shared Prosperity - The Prosperity Gap is introduced as a new measure, indicating the average factor by which incomes need to be multiplied to reach a standard of $25 per person per day [23][24] - The report also includes the count of countries with a Gini index greater than 40, highlighting high-income inequality [26] 4. Bottom Coding of Welfare Distributions - Adjustments are made to account for measurement errors in consumption and income distributions, improving the accuracy of poverty indicators [27][28] 5. Synthetic Distributions from Grouped Data - The report details a new method for calculating poverty indicators from grouped data, enhancing consistency across the platform [30][31] 6. New Analytical Dashboards - Two new analytical tools, Growth Incidence Curves and Poverty Decompositions, are introduced to analyze economic growth distribution and changes in poverty rates [33][34] 7. Changes to Welfare Distributions - The report discusses spatial deflation adjustments in Indonesia, improving the accuracy of poverty estimates by accounting for regional cost of living differences [39][40]

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - Togo's economy has shown resilience with an average growth rate of 5.1% since 2013, although it has faced challenges such as high public debt and structural issues that hinder faster growth [9][10][11] - The agricultural sector, which employs 40% of the workforce, remains crucial for poverty reduction and economic transformation, but it suffers from low productivity and vulnerability to climate change [13][30] - The report emphasizes the potential of agroforestry as a nature-based solution to enhance agricultural productivity, food security, and carbon sequestration, requiring significant initial investments [15][16] Summary by Sections Chapter I – Towards Sustainable Poverty and Debt Reduction - Economic activity in Togo has been resilient, with growth projected to moderate to 5.3% in 2024 due to fiscal consolidation and regional uncertainties [11][23] - The poverty rate is expected to decline gradually, with a projected decrease of 4.4 percentage points from the 43.8% rate observed in 2021 [11][12] - Structural factors, including low investment rates and disparities in economic opportunities, continue to hinder Togo's growth compared to regional peers [10][29] Chapter II – Agroforestry and Climate Change: The Natural Solution? - The agricultural sector's productivity is stagnant, with climate change posing significant risks to yields, particularly for rain-fed crops [13][30] - Scaling up agroforestry could significantly enhance food security and farmer welfare, with potential benefits including increased crop production and carbon sequestration [15][16] - Investment needs for a national agroforestry plan are estimated to reach about 0.8% of GDP, with the potential to triple crop production from converted areas [15][16]

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - Effective and efficient management and sale of distressed assets are crucial for minimizing risks to financial stability and supporting economic growth. The experiences of deposit guarantee funds in Serbia and Ukraine, along with practices from Western European asset management companies, provide valuable insights for improving bank liquidation frameworks [20][25][31]. Summary by Sections Executive Summary - The paper summarizes the asset management and divestment experiences of deposit guarantee funds in Serbia and Ukraine, highlighting key factors for successful distressed asset management, including sound governance, comprehensive strategies, active asset management, transparent valuation, and competitive sales [20][26]. Chapter 1: Introduction - The introduction outlines the importance of addressing non-performing loans (NPLs) for financial stability and economic growth, emphasizing the need for effective asset management and divestment strategies [29][30]. Chapter 2: Asset Sales - Serbia's Experience - Serbia's NPL resolution strategy was initiated in 2015, leading to a significant reduction in NPLs from a peak of 21.6% to below 5% within three years. The Deposit Insurance Agency (DIA) played a crucial role in managing distressed assets, overseeing a portfolio valued at approximately EUR 8.2 billion in 2016 [37][40][42]. - The DIA's governance framework is based on the Law on the Deposit Insurance Agency, ensuring autonomy and independence in its operations [43][44]. - The DIA's strategic plan focuses on maximizing recovery value through efficient asset management and frequent distribution of proceeds to creditors [46]. Chapter 3: Asset Sales - Ukraine's Experience - The report does not provide specific details on Ukraine's experience in this section. Chapter 4: Important Aspects of Asset Management and Divestment - Key aspects include the establishment of clear legal frameworks, comprehensive asset management strategies, active management to maximize returns, and transparent asset valuation processes [25][26]. Chapter 5: Key Recommendations for Agencies Responsible for Bank Liquidation - Recommendations emphasize the need for strategic planning in asset management, including setting clear objectives, optimizing disposal processes, and ensuring transparency in sales [26][29]. Annexes - Annex 1 provides an overview of bank resolution and liquidation frameworks in Central, Eastern, and South-Eastern European countries, while Annex 2 summarizes asset management practices from various European asset management companies [35][36].

Investment Rating - The report does not explicitly provide an investment rating for the industry [7]. Core Insights - Tonga's economic growth has been historically weak and has faced significant challenges due to multiple shocks, including natural disasters and the COVID-19 pandemic, which have potentially reversed previous welfare gains [22][54]. - Despite these challenges, poverty and inequality in Tonga fell substantially between 2015 and 2021, with the national poverty rate declining from 27.4% to 20.6% [25][26]. - The report highlights the critical role of remittances in poverty reduction, indicating that without them, the number of poor individuals would have been 50% higher [35][38]. Summary by Sections Executive Summary - The report utilizes the 2021 Household Income and Expenditure Survey (HIES) to assess poverty and inequality in Tonga, filling critical knowledge gaps [22]. - Improvements in monetary well-being were observed, with household ownership of key assets increasing and access to basic services improving [28]. - The report identifies remittances as a significant driver of poverty reduction, with nearly 90% of households receiving them [35][38]. Introduction - Tonga is classified as an upper-middle-income nation with a GNI per capita of US$7,160, facing unique developmental challenges due to its geographical isolation [53]. - The economic growth rate has historically lagged behind other Pacific Island countries, with a series of shocks significantly hindering growth [54][56]. Poverty and Inequality Patterns - The poverty rate declined across both rural and urban regions, with urban Tongatapu having a lower poverty rate compared to 'Eua and Ongo Niua [25]. - Spatial disparities in well-being persist, with urban areas accommodating a significant portion of the impoverished population [25][28]. Human Capital and Labor Market - Labor force participation remains low, and there are significant skills mismatches in the domestic labor market, impacting employment opportunities [30]. - The average child born in Tonga is projected to be only 53% as productive as they could be under optimal conditions, highlighting the need for improved human capital [30][31]. Poverty and Social Protection - Current social assistance programs have limited coverage and impact on poverty reduction, necessitating policy changes to increase benefit levels and coverage [32][34]. - The report suggests that substantial increases in remittances have been a more significant factor in poverty reduction than social assistance programs [35]. Conclusion and Recommendations - The report emphasizes the need for developing effective social protection systems and enhancing human capital to ensure sustainable poverty reduction [47][50]. - It calls for a more in-depth investigation of the impacts of temporary labor schemes on the private sector and overall household outcomes [51].

Investment Rating - The report does not explicitly provide an investment rating for the offshore wind industry in Romania, but it highlights significant potential for growth and development in this sector, suggesting a favorable outlook for investment opportunities. Core Insights - Offshore wind (OSW) technology can deliver large volumes of energy at competitive prices compared to conventional generation technologies, with Romania having the potential for up to 7 GW of OSW capacity by the early 2030s [18][19] - The Black Sea region is expected to develop a regional market for OSW, which could provide further opportunities for Romanian suppliers [19] - The report emphasizes the need for a robust policy framework and clarity on energy strategy to fully leverage Romania's offshore wind resources [25][31] Summary by Sections Renewable Energy in Europe - The EU aims for at least 60 GW of OSW capacity by 2030 and 300 GW by 2050, with the Black Sea identified as a key area for development [20][21] - The European Commission's REPowerEU Plan seeks to accelerate OSW development in response to geopolitical challenges [21][22] Renewable Energy in Romania - Romania's electricity supply has transitioned significantly, with a target of 30.7% renewable energy in gross final energy consumption by 2030, which is expected to increase [24] - The report models a potential installation of 15 GW of OSW by 2050, alongside significant onshore wind and solar capacity [24] The Opportunity and Potential Impact of Offshore Wind in Romania - OSW can provide a local, competitively priced, large-scale clean electricity source and create long-term jobs [25][30] - The report outlines the need for clarity on energy strategy, including targets for OSW deployment and significant upgrades to the transmission network [25][30] Roadmap for Offshore Wind in Romania - The report provides a strategic vision for OSW development, considering both low and high growth scenarios, with recommendations for enabling actions by the government [35][36] - Key recommendations include establishing OSW energy areas, developing a new OSW law, and upgrading the transmission network [25][38]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Somalia has made macroeconomic progress, achieving a historic HIPC completion point with external debt falling to 6% of GDP in 2023, and joined the East African Community in March 2024, but growth has not been sufficient to increase GDP per capita [41] - Over half of the population lives below the national poverty line (54%), with the highest poverty rate among the nomadic population (78%) and the lowest in urban areas (46%) [42] - Non-monetary poverty is even higher than monetary poverty, with over three-quarters of the population considered non-monetary poor, particularly among the nomadic population (95%) [44] - Education inequality is significant, with regional differences driving inequalities in access to education and services [45] - The report focuses on three deep-dive topics: Somali livelihoods, shocks (particularly climate shocks), and the welfare conditions of the nomadic population [46] Summary by Sections Part A: Poverty and Economic Context - Poverty remains high in Somalia, particularly in rural and nomadic areas, with unchanged national poverty rates from 2017 to 2022 despite urbanization [42][43] - Demographic factors such as household size, IDP status, and education level are associated with poverty levels [43] - The economy is exposed to climatic shocks, affecting consumption and poverty rates [41] Part B: Livelihoods - The Somali labor market features very low labor force participation (LFP) and a high dependency on wage employment, with limited agricultural opportunities [47][48] - Household enterprises account for a significant share of employment but rarely generate sufficient profit to lift households out of poverty [51] - The dual labor market shows that better jobs are concentrated among educated individuals and those from wealthier households [50] Part C: Policy Recommendations - Continued economic progress and stability are essential for poverty reduction, with a focus on harnessing urbanization for improved service delivery and strengthening rural/nomadic livelihoods [57][58] - Policies should aim to increase labor demand for low-skilled workers and improve access to education and services for marginalized groups [59][60]