Month: January 2020

Supportive Legislation Can Improve Agribusiness and Create Jobs

  International Ph.D. economist Augusto Lopez-Claros was a World Bank director who previously worked as a chief economist and director of the Global Competitiveness Program at the World Economic Forum in Switzerland, where he interacted with senior policy makers and heads of the world’s largest corporations on multiple aspects of economic development. At the World Bank, Augusto Lopez-Claros was involved in the production of the annual Enabling the Business of Agriculture report, which analyzed how regulations affected the business of agriculture in countries across the world.

Agriculture has the potential to create millions of jobs, lifting a lot of people out of poverty while boosting food security. Research shows that 65 percent of the world’s poor working adults are involved in agriculture. Therefore, growth in this sector is up to four times better at raising incomes for these people as compared to growth in other sectors. However, this can only be achieved when regulations support agricultural growth rather than inhibit it. The importance of this issue cannot be overstated. While there has been much progress in the past 3 decades in reducing the incidence of extreme poverty, the progress made has been fairly uneven, geographically speaking. High economic growth in China (and, to a lesser extent, India) has contributed to pulling out of extreme poverty hundreds of millions of people. But the number of poor in Sub-Saharan Africa has actually risen over the same period.

Furthermore, the poverty line used by the World Bank to define extreme poverty is extremely austere: $1.90 per day. At a more reasonable $3.20 per day, the number of poor more than doubles and is close to some 2 billion people, which is unacceptably high. Having a dynamic agricultural sector, therefore, that provides employment and enhances food security is a vital economic goal. Furthermore, the scientific evidence suggests that climate change will have a particularly harmful effect on countries’ agricultural sectors and low-income countries—heavily dependent on agriculture—will be particularly affected. In addition, population forecasts suggest that we are rapidly headed to a world population of some 9-10 billion people by 2050, 95 percent of it taking place in the developing world and creating huge demand for food production.

Farmers and entrepreneurs in the farm-to-plate value chain face a lot of legal barriers that inhibit growth. These barriers affect various elements of agriculture from access to land, seeds, and fertilizer to the availability of credit and transport. Water use and market access are other issues. Inhibiting regulations around these issues impedes agricultural growth. For example, if the procedure for obtaining food export documents in one country is unnecessarily long, it increases business costs and causes food wastage. If legal bottlenecks make it harder to sell or use new tractors, as is the case in South East Asia, farmers cannot farm efficiently, leading to reduced yields.

Government regulations affect agriculture in many ways. The World Bank calls upon governments to implement public policies that support agribusiness growth to end poverty and ensure global food security.

World Bank Acknowledges Legal Reforms for Women Over the Last Decade

International economist Augusto Lopez-Claros is the former director of the World Bank’s Global Indicators Group, over the period 2011-2017. As part of this group, Augusto Lopez-Claros—recent author of Equality for Women = Prosperity for All, published by St. Martin’s Press—was responsible for the World Bank’s benchmarking work, including the Doing Business Report and the Women, Business and the Law Report.

The 2019 edition of the World Bank’s Women, Business and the Law report examined the effect of reforms made in the last 10 years and whether progress had been made in creating equal economic opportunities for women. The report also looked at whether the legislation introduced or reformed around the world made it easier for women to participate in the global economy. The report is based on a database that has been built at the World Bank over the past decade examining the multiple restrictions and discriminations against women that are embedded in the laws of a large number of countries, which may undermine her property rights, limit her mobility, impose restrictions on access to the job market, discourage entrepreneurship and, in general, turn women into second class citizens with reduced opportunities for economic and political empowerment.

Over the years the report has become an extremely useful compendium of gender discrimination, with a particular focus on its legal underpinnings. The data—which is made public for every country and highlights, for instance, some 23 different forms of discrimination against women in Iran—has not only highlighted the destructive role of legal restrictions on women’s economic agency, but has also provided powerful incentives for countries to pursue legislative reforms, increasingly aware that discrimination against women is not only a violation of women’s rights, but also a particularly misguided public policy, with adverse implications for productivity, competitiveness, and economic growth.

The 2019 report analyzed data from 187 economies over the last decade. Researchers gathered data around eight indicators of women’s interactions with the law throughout their careers. The indicators included starting a job, running a business, getting married, managing assets, getting paid, and getting a pension. For example, the having children indicator analyzed laws on maternity and paternal leave while the starting a job indicator evaluated laws on gender discrimination in employment.

The 2019 average global score across all eight indicators was 74.71 meaning women were given only about three-fourths of all the legal rights given to men. The Middle East and North Africa in particular, lagged behind with an average score of 47.37. However, there has been progress. A decade ago, the average score was 70.06. In that 10-year period, 131 countries implemented 274 legal reforms to increase gender equality. Some of the reforms made concerned laws on sexual harassment at work, paternal leave, and non-discrimination in access to credit.

The top six countries with a perfect score of 100 were Belgium, France, Denmark, Latvia, Sweden, and Luxembourg. The top six reformers were from Sub-Saharan Africa and included Guinea, the Democratic Republic of Congo, Mauritius, and Malawi.