Debt service risks, Special Drawing Rights allocations, and development prospects
On August 23, 2021, the International Monetary Fund (IMF) issued $650 billion equivalent in new Special Drawing Rights (SDRs) to its members. The SDRs do not change any country’s net wealth—each country has a liability that exactly equals the new assets it has been issued—but they do represent a sizable injection of liquidity because the SDRs can be voluntarily exchanged on demand for hard cash—U.S. dollars, euros, yen, renminbi, or other tradable currency. If SDRs are converted and the cash is used to pay down debt, then SDRs can be a mechanism to replace more expensive debt with cheaper debt, improving country creditworthiness. Alternatively, cashed-out SDRs can be used to supplement public revenues to increase spending for countries whose development prospects have been particularly hard hit by the pandemic.
This brief looks at SDR allocations from two perspectives:
To what extent can SDRs ease the debt service burden falling due in the next five years in developing countries?
To what extent can SDRs ease a recovery in development prospects?
The focus of the brief is on developing countries only. We exclude those economies classified as high income by the World Bank. We start by discussing the impact of the current, statutory allocation of the new issuance of SDRs, and then speculate on the impact of any voluntary reallocation that may occur if countries with surplus SDRs choose to on-lend a portion of this surplus to other countries. A range of “what-if” scenarios are presented to identify the impact of a hypothetical $100 billion reallocation of SDRs.
Download the full policy brief here.
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How Chile implemented its computer science education program
Computer science (CS) education helps students acquire skills such as computational thinking, problem-solving, and collaboration. It has been linked with higher rates of college enrollment (Brown & Brown, 2020; Salehi, Wang, Toorawa, & Wieman, 2020), and a recent randomized control trial showed that lessons in computational thinking improved student response inhibition, planning, and coding skills (Arfé et al., 2020). Since these skills take preeminence in the rapidly changing 21st century, CS education promises to significantly enhance student preparedness for the future of work and active citizenship.
CS education can also reduce skills inequality if education systems make a concerted effort to ensure that all students have equitable access to curricula that provide them with the needed breadth of skills—regardless of their gender, ethnicity, or socioeconomic status.
Based on prior analyses and expert consultations, we selected 11 CS-education country, state, and provincial case studies with lessons that can broadly apply to other education systems. These cases come from diverse global regions and circumstances and have implemented CS education programs for various periods of time and to different levels of success. As such, we have examined information to extract lessons that can lead to successful implementation.
This particular study will examine how Chile is training a future workforce of creative problem-solvers to maintain its status as one of the higher-income countries in Latin America. To accomplish this goal, the Ministry of Education designed the National Plan for Digital Languages to prepare students to compete in an increasingly digital global economy. Now in the early stages of implementing this plan, the government seeks to increase the number of students learning about CS and computational thinking in the coming years.
An overview of CS education in Chile
Chile has been preparing its schools, teachers, and students for CS education for many years. The federal education program, Enlaces, introduced digital devices and internet connectivity to nearly all schools in the 1990s and early 2000s. While this infrastructure was not originally intended for CS lessons, educators have used these devices for CS and computational thinking lessons in the last few years. Even more recently, the Ministry of Education’s Innovation Center and NGO partners have also run programs and introduced online platforms to train teachers in computational thinking, programming, and project-based learning (Jara et al., 2018). Even without mandating that schools adopt any of these activities, the government estimates that about half of primary schools will offer computational thinking lessons by 2022. Yet, despite the Ministry of Education’s and partners’ efforts, CS education in Chile has not developed as hoped.
Lessons learned
Though Enlaces gained more political and financial support over time, it lost flexibility to implement new projects. This may have delayed the progress of CS education.
The Ministry of Education leans on private companies and nonprofit partners for expertise in teacher training and student engagement activities. However, regular funding and stable training programs, including for preservice teachers, are needed for better quality and more widely available CS education.
Chile does not require schools to teach CS but encourages and supports educators that want to include the subjects in their classroom activities. While this mitigates the possibility of alienating teachers who are unfamiliar with the subject, it also risks low-scale and unequal access to CS education.
Read the full case study > >
How Chile implemented its computer science program
Computer science (CS) education helps students acquire skills such as computational thinking, problem-solving, and collaboration. It has been linked with higher rates of college enrollment (Brown & Brown, 2020; Salehi, Wang, Toorawa, & Wieman, 2020), and a recent randomized control trial showed that lessons in computational thinking improved student response inhibition, planning, and coding skills (Arfé et al., 2020). Since these skills take preeminence in the rapidly changing 21st century, CS education promises to significantly enhance student preparedness for the future of work and active citizenship.
CS education can also reduce skills inequality if education systems make a concerted effort to ensure that all students have equitable access to curricula that provide them with the needed breadth of skills—regardless of their gender, ethnicity, or socioeconomic status.
Based on prior analyses and expert consultations, we selected 11 CS-education country, state, and provincial case studies with lessons that can broadly apply to other education systems. These cases come from diverse global regions and circumstances and have implemented CS education programs for various periods of time and to different levels of success. As such, we have examined information to extract lessons that can lead to successful implementation.
This particular study will examine how Chile is training a future workforce of creative problem-solvers to maintain its status as one of the higher-income countries in Latin America. To accomplish this goal, the Ministry of Education designed the National Plan for Digital Languages to prepare students to compete in an increasingly digital global economy. Now in the early stages of implementing this plan, the government seeks to increase the number of students learning about CS and computational thinking in the coming years.
An overview of CS education in Chile
Chile has been preparing its schools, teachers, and students for CS education for many years. The federal education program, Enlaces, introduced digital devices and internet connectivity to nearly all schools in the 1990s and early 2000s. While this infrastructure was not originally intended for CS lessons, educators have used these devices for CS and computational thinking lessons in the last few years. Even more recently, the Ministry of Education’s Innovation Center and NGO partners have also run programs and introduced online platforms to train teachers in computational thinking, programming, and project-based learning (Jara et al., 2018). Even without mandating that schools adopt any of these activities, the government estimates that about half of primary schools will offer computational thinking lessons by 2022. Yet, despite the Ministry of Education’s and partners’ efforts, CS education in Chile has not developed as hoped.
Lessons learned
Though Enlaces gained more political and financial support over time, it lost flexibility to implement new projects. This may have delayed the progress of CS education.
The Ministry of Education leans on private companies and nonprofit partners for expertise in teacher training and student engagement activities. However, regular funding and stable training programs, including for preservice teachers, are needed for better quality and more widely available CS education.
Chile does not require schools to teach CS but encourages and supports educators that want to include the subjects in their classroom activities. While this mitigates the possibility of alienating teachers who are unfamiliar with the subject, it also risks low-scale and unequal access to CS education.
Read the full case study > >
Ed tech and educational opportunity during the COVID-19 school closures
The purpose of this study is to identify gaps and challenges in the use of education technology (ed tech) in Chennai, Tamil Nadu during COVID-19. Specifically, we investigated how use of ed tech differed by type of school (government or private), household socioeconomic status, and student gender—and how it changed during the COVID-19 school closures. Ultimately, we wanted to know how the use of ed tech may exacerbate or mitigate the unequal impact of school closures on student learning.
Through phone surveys of 201 households and a total of 271 primary-school-aged children in February of 2021, we sought to understand households’ educational practices in Chennai pre-COVID-19 and during the school closures. Our survey data showed that access to ed tech in schools and households before the pandemic was extremely limited and differed by household socioeconomic background and the type of school (government or private) children attended. Thus, we also explored educational activities from non-ed-tech sources that may have taken place.
Our survey findings indicate that during the pandemic-related school closures, students in private schools and those from high-socioeconomic status households have more access to digital devices and are more engaged in regular educational activities during COVID-19 than their peers in government schools and from low-socioeconomic status households; findings also indicate that girls are more likely than boys to have access to digital devices for learning and to engage in more regular educational activities. Unsurprisingly, parents turned out to be a major source of educational activities of young children during the school closures.
Alarmingly, 1 in 5 children in our sample were enrolled in schools that do not offer any remote instruction during the school closures, and even among the children whose schools had begun remote instruction, only slightly more than half attended all the classes.
Altogether, these preliminary results shed light onto a likely growing inequality of educational opportunity in India and around the world, suggesting the need for policymakers to broaden access to continuous and equitable learning opportunities across the student population.
Read the full report»
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A proposal for long-term COVID-19 control
Introduction
Four successive waves of COVID-19 have buffeted the United States for the past year and a half. With each wave, we have bet on different measures to push us through: First, public health measures, then drugs and treatments, and now, with our fifth wave, we hold out hope for vaccine-led recovery. But from the outset, we have underestimated this virus and its ability to maneuver the public health battleground; it is escaping the best defenses we are able to muster and finding new avenues of attack.
In this paper, I propose a multimodal strategy for long-term COVID control, one that sets up multiple barriers of protection so that we are able to not only contain SARS-CoV-2 and eliminate COVID-19 as a major life-threatening disease, but also return to a new social and economic life. The strategy uses the best of what we have on hand today—a rapidly growing arsenal of vaccines and antiviral drugs and public health measures— with an eye towards future improvements and developments.
The most immediate priority should be supporting additional research on the molecular biology of SARS-CoV-2, of which we still know surprisingly little. This is particularly important since there is great likelihood that COVID-19 will become endemic. Unlike the viruses that cause smallpox or polio, SARS-CoV-2 has demonstrated an impressive ability to adapt and thrive in both humans and animals, including our much-loved pet, cats and dogs. Even if we can eliminate the disease from our own communities, it is unlikely we can do the same across the globe and for all our animal populations at the same time.
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The best we can hope for is containment of COVID-19 at levels we can tolerate both personally and economically. We have to use all the tools we have at our disposal— being aware of the inequities and disparities from country to country and within countries—that have made this and other diseases so hard to address.
Download the full working paper
Remote work wanted? Evidence from job postings during COVID-19
Abstract
As the COVID-19 pandemic pushed firms to comply with social distancing guidelines, the relative demand for work that could be performed from home was expected to increase. However, while employment in “remotable” occupations was relatively resilient during the pandemic, online job postings—which measure demand for new hires—for these occupations dropped disproportionately. This apparent contradiction is not explained by prior job “churning” in “non-remote” jobs, nor by the recomposition of the labor market across economic sectors. The underperformance of postings in “remotable” jobs during the pandemic concentrates in essential occupations and occupations with high returns to experience.
Download the working paper
Global governance after COVID-19: Survey report
Background
The Global Economy and Development Program at Brookings conducted a survey on multilateralism in the Spring of 2021 as part of a project on the future of global governance. This report summarizes and analyzes the results. It comes at a time when the new Biden administration has re-committed the United States to multilateral cooperation and multiple initiatives—notably on international taxation, the issuance of $650 billion of new Special Drawing Rights (SDRs), and ramped up efforts to cut emissions to combat climate change—are underway. At the same time, the rivalry between the United States and China is growing, threatening a new form of Cold War, and new technologies are emerging, promising enhanced human welfare while introducing the risk of misuse. The COVID-19 pandemic is still far from under control in most developing countries due to a lag in vaccination rates and the uneven recovery from the pandemic-induced economic recession.
However, multilateralism has been in crisis long before the pandemic. Growing political discontent with globalization has been associated with the failure of the multilateral system to stem the tide of rising inequality, social fragmentation, and job insecurity heightened by technological change. Moreover, calls to reform global governance to better reflect the shift in economic, demographic, and political weight of developing countries have gone largely unheeded. Political rigidities in multilateral organizations such as the International Monetary Fund (IMF), World Bank, United Nations (U.N.), and World Trade Organization (WTO) have prevented adequate reform.
Disillusionment with the existing multilateral system has prompted various alternative visions, such as replacing multilateral agreements and rules with bilateral deals or groupings of like-minded or geographically proximate countries. We believe that these alternative approaches cannot adequately replace true multilateralism since a world facing inherently global challenges—as evidenced by the COVID-19 pandemic—requires globally concerted actions and responses. For the Global South, the consequences of weak multilateralism—on climate change, trade, conflict prevention, and countless other issues—are particularly high.
COVID-19 has laid bare key vulnerabilities of an economic system designed to maximize short-term efficiency at the expense of robustness and resilience. As governments struggled to procure vital medical goods and mount an effective response to COVID-19, international cooperation broke down, sparking export bans and political recriminations. This followed recent trends of nationalist leaders calling for inwardlooking policies. The irony, of course, is that just as the world was turning away from multilateralism, COVID-19 underlined its necessity: given that the virus spreads seamlessly across borders, the threat of further spikes in infections will persist unless countries collaborate on expanding access to vaccines and ending the pandemic. And epidemiologists warn that an even worse pandemic could hit the world at any time, further highlighting the need for global cooperation.
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Looking ahead, new technologies introduce great opportunities but also grave dangers, particularly in domains such as cyberspace, artificial intelligence, or biotechnology, where global rules are urgently needed. There is also the urgent climate change problem, which demands immediate and coordinated global action.
Against this backdrop, the great powers face the risk of moving towards confrontation, as opposed to a multilateral approach, that would fragment the world into rival blocs. A world in which rival great powers, particularly the United States and China, seek to protect their own spheres of influence through its own rules and standards, could strip smaller and poorer countries from having agency or space to maneuver. This would fail to provide the type of solutions needed for today’s global problems. Furthermore, the direction the rivalrous relationship between the U.S. and China takes will have implications for all nations.
As the world begins to pivot from reacting to the pandemic to planning for recovery, many policymakers have embraced the mantra, “build back better.” A multilateral architecture fit for the 21st century ought to prioritize the wellbeing of the worst-off and build a more robust and inclusive global system while respecting the legitimate demands for policy autonomy. It should help prevent beggar-thy-neighbor policies, facilitate the provision of global public goods, and help manage the global commons. And where appropriate, it should draw on the skills and resources of a broad range of actors beyond the nation-state, including cities, scientists, civil society organizations, businesses, and labor, all of whom have important roles in global problem solving.
Download the full report
Global governance after COVID-19
Background
The Global Economy and Development Program at Brookings conducted a survey on multilateralism in the Spring of 2021 as part of a project on the future of global governance. This report summarizes and analyzes the results. It comes at a time when the new Biden administration has re-committed the United States to multilateral cooperation and multiple initiatives—notably on international taxation, the issuance of $650 billion of new Special Drawing Rights (SDRs), and ramped up efforts to cut emissions to combat climate change—are underway. At the same time, the rivalry between the United States and China is growing, threatening a new form of Cold War, and new technologies are emerging, promising enhanced human welfare while introducing the risk of misuse. The COVID-19 pandemic is still far from under control in most developing countries due to a lag in vaccination rates and the uneven recovery from the pandemic-induced economic recession.
However, multilateralism has been in crisis long before the pandemic. Growing political discontent with globalization has been associated with the failure of the multilateral system to stem the tide of rising inequality, social fragmentation, and job insecurity heightened by technological change. Moreover, calls to reform global governance to better reflect the shift in economic, demographic, and political weight of developing countries have gone largely unheeded. Political rigidities in multilateral organizations such as the International Monetary Fund (IMF), World Bank, United Nations (U.N.), and World Trade Organization (WTO) have prevented adequate reform.
Disillusionment with the existing multilateral system has prompted various alternative visions, such as replacing multilateral agreements and rules with bilateral deals or groupings of like-minded or geographically proximate countries. We believe that these alternative approaches cannot adequately replace true multilateralism since a world facing inherently global challenges—as evidenced by the COVID-19 pandemic—requires globally concerted actions and responses. For the Global South, the consequences of weak multilateralism—on climate change, trade, conflict prevention, and countless other issues—are particularly high.
COVID-19 has laid bare key vulnerabilities of an economic system designed to maximize short-term efficiency at the expense of robustness and resilience. As governments struggled to procure vital medical goods and mount an effective response to COVID-19, international cooperation broke down, sparking export bans and political recriminations. This followed recent trends of nationalist leaders calling for inwardlooking policies. The irony, of course, is that just as the world was turning away from multilateralism, COVID-19 underlined its necessity: given that the virus spreads seamlessly across borders, the threat of further spikes in infections will persist unless countries collaborate on expanding access to vaccines and ending the pandemic. And epidemiologists warn that an even worse pandemic could hit the world at any time, further highlighting the need for global cooperation.
Related Content
Looking ahead, new technologies introduce great opportunities but also grave dangers, particularly in domains such as cyberspace, artificial intelligence, or biotechnology, where global rules are urgently needed. There is also the urgent climate change problem, which demands immediate and coordinated global action.
Against this backdrop, the great powers face the risk of moving towards confrontation, as opposed to a multilateral approach, that would fragment the world into rival blocs. A world in which rival great powers, particularly the United States and China, seek to protect their own spheres of influence through its own rules and standards, could strip smaller and poorer countries from having agency or space to maneuver. This would fail to provide the type of solutions needed for today’s global problems. Furthermore, the direction the rivalrous relationship between the U.S. and China takes will have implications for all nations.
As the world begins to pivot from reacting to the pandemic to planning for recovery, many policymakers have embraced the mantra, “build back better.” A multilateral architecture fit for the 21st century ought to prioritize the wellbeing of the worst-off and build a more robust and inclusive global system while respecting the legitimate demands for policy autonomy. It should help prevent beggar-thy-neighbor policies, facilitate the provision of global public goods, and help manage the global commons. And where appropriate, it should draw on the skills and resources of a broad range of actors beyond the nation-state, including cities, scientists, civil society organizations, businesses, and labor, all of whom have important roles in global problem solving.
Download the full report
Addressing youth unemployment in Africa through industries without smokestacks: A synthesis on prospects, constraints, and policies
Young people between the ages 15 and 24 constitute 20 percent of sub-Saharan Africa’s population, making it the youngest continent in the world. While this trend is an opportunity for increased creativity and innovation, it is also a risk for many youths in the region not in education, employment, or training. And the number of young people continues to rise. The World Bank estimates that by 2050 half of the 1 billion people in sub-Saharan Africa will be under the age of 25, highlighting the importance of creating employment opportunities for Africa’s youth.
By some estimates, 20 million new jobs need to be created every year to meet the increasing demand for jobs (Fox and Gandhi, 2021). Yet the job creation capacity of African economies is only half of what it should be, and the lack of adequate employment opportunities has slowed the continent’s structural transformation and progress on poverty reduction. The development of export-led manufacturing, which has historically been a successful job creation strategy for other parts of the world, notably East Asia, is playing a much smaller role in Africa due to rising competition for low-cost work and decline of the sector. The services industry is largely absorbing the bulk of African youth leaving agriculture and moving to cities. This shift reflects the impact of technological progress, the rapidly evolving global marketplace, and natural resource endowments on Africa’s industrialization prospects.
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There is an opportunity for other industries—notably subsectors of agribusiness and service-oriented industry—that share firm characteristics with manufacturing to offer productive jobs for African youth (Baumol, 1985; Bhagwati, 1984). Similar to manufacturing, these sectors are tradable and have high value added per worker. They have the capacity for learning and productivity growth, and some exhibit scale and agglomeration economies (Ebling and Janz, 1999; Ghani and Kharas, 2010). Importantly, they have the capacity to absorb low-skilled labor. For lack of a better term, we call these “industries without smokestacks” (IWOSS) to distinguish them from traditional, “smokestacks” (e.g., manufacturing) industry. Moreover, reductions in transport costs and progress in information and communications technologies (ICT) have spurred the development of such subsectors.
IWOSS activities are defined as those that are:
– Tradable;
– Have high value added per worker—relative to average economywide productivity;
– Exhibit the capacity for technological change and productivity growth; and
– Show some evidence of scale and/or agglomeration economies.
The industries that conform to this definition and are explored in this paper include horticulture and high-value agribusiness, tourism, business services, and transport and logistics. Today, many African economies are turning to these industries to lead the process of structural change (Newfarmer, Page, and Tarp, 2018)—the movement of labor and other productive resources from low-productivity to high-productivity economic activities. The main question we address in this report is: Do these sectors have the potential to solve Africa’s youth employment problem and create large-scale formal productive jobs? Our research shows that there is an opportunity:
Key findings
IWOSS sectors have been growing at a faster pace than many other sectors (Newfarmer, Page and Tarp, 2018).
IWOSS have higher job creation potential compared to the rest of the economy and tend to employ women and young people more intensively compared with other sectors.
IWOSS sectors tend to have higher labor productivity compared with agriculture.
If government policies support the development of IWOSS sectors well, including by addressing key constraints—like infrastructure, skills, and the capacity to export—IWOSS sectors have the potential, over the next decade or so, to generate between 65 and 75 percent of all new formal sector jobs in the majority of countries.
The skill requirements in these sectors generally include soft skills, digital skills, and intrapersonal skills. Equipping young people with these skills will make them employable in IWOSS sectors.
Public policy priorities to support IWOSS range from improvements to the investment climate—reliable electrical power, lower costs of transport, workers better able to perform their jobs, and competition—to industry-specific interventions—such as investments to improve trade logistics in agro-processing and horticulture.
Although the case studies were largely conducted prior to the COVID-19 pandemic, follow-up work in four countries (South Africa, Uganda, Kenya, and Senegal) suggests that, in spite of the vicissitudes of the pandemic, the policy prescriptions in this report remain highly relevant in the post-COVID world.
In this paper, we will share deeper insights on the IWOSS sector in Africa and provide recommendations as we look ahead: Section 2 presents a review of crosscutting themes drawn from the country studies—Ghana, Kenya, Rwanda, Senegal, South Africa, and Uganda—undertaken under the project.1 Section 3 seeks to answer the central research question of the project: Which IWOSS sectors offer the greatest potential for employment of Africa’s growing young population? Section 4 sets out the constraints to growth of IWOSS sectors, built around four drivers of industrial location that have largely shaped the global distribution of industry—with and without smokestacks. Section 6 sets out a number of policy recommendations to relieve the constraints to the growth of IWOSS sectors. Section 7 summarizes the main policy recommendations arising from the research, Section 8 deals with the impact of the COVID-19 pandemic on IWOSS, and Section 9 offers some concluding remarks.
Download the full working paper > >
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The impact of COVID-19 on industries without smokestacks in Uganda
Abstract
In Uganda, the spread of COVID-19 and its economic impacts gained momentum in March 2020 when the country’s first case was reported. By March 30, the government of Uganda had declared a nationwide lockdown in addition to other critical measures to minimize its spread.
The impacts of the virus itself together with government initiatives to control its spread have been felt in the political, social, and economic spheres of life of the country. Simply put, there have been losers and winners as the pandemic took its toll on the economy.
This brief examines the potential economic impact of COVID-19 on Uganda’s industries without smokestacks as a follow-up on the previous work undertaken in the same sectors prior to the pandemic. The aim is to ascertain whether the recommendations made prior to the pandemic are still relevant.
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