The lockdown in the Philippines not only led to the loss of millions of jobs but also pushed those who remained employed towards lower-productivity agriculture and informal sector work. To preserve the existing skills necessary for economic transformation, the government and its partners need to make a conscious effort to ensure that those who have been laid off in high-productivity sectors such as manufacturing can return to previous or similar employment. Moving forward, it is continued public investment in higher-level education that will increase job security, ensuring the economy is more resilient in similar crises in the future.
This blog examines disaggregated sectoral employment data in the Philippines through the lens of economic transformation, which has implications for the Philippines’ medium- to long-term economic growth, and which may be of relevance to other low- and middle-income countries.

Cambodia has one of the lowest numbers of coronavirus cases in the world but it is facing among the world’s highest economic losses in the wake of the COVID-19 crisis. The IMF expects incomes to contract by 1.6% in 2020 in the baseline scenario as a consequence of major disruptions in tourism, garments and construction. Some sectors are expected to fare better, such as information and communication technology (ICT) and e-commerce, but these industries need to be nurtured more actively and the opportunities need to be made more inclusive if they are to be a significant base for a prosperous and more inclusive recovery.

The increase in global trade in recent decades, through the expansion of production networks and the integration of newly industrialised economies within global value chains (GVCs), has contributed to unprecedented reductions in poverty and historically unparalleled socioeconomic progress. However, severe environmental costs, and other losers within specific industries, have accompanied these socioeconomic gains. Even without consideration of climate change, the coronavirus crisis has laid bare the fragility of global supply chains and of the nature of relationships with suppliers in poorer countries. With a few lead firms (buyers and traders) typically controlling access to end markets, suppliers have reduced market power, which limits their capacity to adapt to demand shocks. Reduced inventory management as a result of just-in-time delivery has presented visceral limitations during the coronavirus pandemic.

Dirk Willem te Velde (Principal Research Fellow, ODI) 18 May 2020 A multitude of trackers cover policy responses to COVID-19 but when it comes to up-to-date monitoring of actual social and economic impacts there appears to be a gap. Impact data are not collected systematically and in a comprehensive manner. Obtaining access to reliable, good … Continue reading “Dirk Willem te Velde (ODI) | Using high frequency data to monitor the economic impacts of crises”

The world is facing major climate change challenges. A number of important international discussions and negotiations are planned for 2020 that relate to trade and the environment. These include discussions around the 12th World Trade Organization (WTO) Ministerial and under the United Nations Framework Convention on Climate Change (UNFCCC), as well as deliberations by Commonwealth Heads of Government and Ministers as part of the United Nations Conference on Trade and Development. The decisions taken, avoided, blocked or misconstrued in these fora will influence how the international support architecture that governs trade and the environment supports or hinders inclusive and sustainable economic transformation.

West Africa started the decade with plans for the eco – its newest single currency. It was announced that, in 2020, the 74-year old CFA franc would be replaced in the 8 member states of West African Economic and Monetary Union (WAEMU).[1] This blog identifies three key risks for the eco and its links to prospects for economic transformation – those of devaluation, shocks and debt.

The socio-economic collapse induced by the Covid-19 pandemic in 2020 has called for stronger government intervention to support the most vulnerable households, firms and sectors. In response, fiscal stimulus packages announced globally from January 2020 to June 2021 have reached $17 trillion (IMF, 2021b). Options for spending fiscal resources have evolved from measures to address immediate health needs, to addressing the economic fall-out from social distancing measures and lockdown, and to building the foundations for more resilient, climate-friendly, gender-sensitive and transformative economic recovery. However, the fiscal resources available to low-income countries (LICs) remain extremely limited, pushing governments to be highly selective in deploying the interventions that would have the most positive short-term and long-term impact.

This paper reviews 94 cross-country, regional and country-level empirical and descriptive studies to identify evidence on fiscal multipliers – the output growth impact of fiscal policy – to provide evidence-based insights to low- and middle-income countries on using fiscal interventions to have the most impact in boosting inclusive and sustainable economic growth. Across countries and all else being equal, a 1% increase in public expenditure tends to increase output by 1%, or a fiscal multiplier close to 1. In reality, countries are not equal, and specific characteristics and economic circumstances influence the effectiveness of fiscal policy on stimulating growth. The following are the key findings from the literature review.

Kenya’s imports and exports have been growing for the past two decades, except in periods of external shocks. By value, exports of goods and services have grown by 40% over the past decade from $8.3 billion in 2010 to $11.5 billion in 2019. However, exports of goods and services as a percentage share of GDP has been gradually falling, from 22% in 2010 to 10% in 2019. This means there is much to explore around promoting the role of exports in Kenya’s economic development.
Many papers examining Kenyan exports either include statistical analyses, some of which are product specific, or are more descriptive of the value chain characteristics. But few bring these components together in a detailed way. The questions we raise in this paper relate to product- and export-market-related details. Not only does the paper ask which detailed products appear promising for export promotion, but also which products are promising for which export destination. And finally, it reviews specific export barriers based on the literature and links this to general policy efforts at international and domestic levels to boost Kenya’s exports. The information we gain from undertaking such analysis can be used to inform financial institutions or institutions that support financial sector development relevant to the development of exports.

carers and consumers. Recent recovery interventions from central banks have not explicitly considered the impacts of their policies on gender equality, which is a missed opportunity. This paper discusses the gender implications of monetary policies, arguing that they are not gender neutral. We examine the evolution of monetary policies in Bangladesh, Kenya, Peru, Sri Lanka and Tanzania and discuss the indirect gender equality implications of these policies. The aim is to complement the country case studies of the project ‘Shaping the Macro-Economy in Response to Covid-19: A Responsible Economic Stimulus, a Stable Financial Sector and a Revival in Exports’.

The stock of UK foreign direct investment (FDI) in ASEAN1 has been volatile in the past five years – recording strong growth
of 15% (to £23 billion) in 2018 and 27% (to £29 billion) in 2019, following double-digit contractions in 2016 to 2017 (owing to
negative FDI flows). The level in 2019 was nearly the same as in 2015.
The share of ASEAN in UK’s FDI stock abroad fell by a quarter from 2.6% in 2015 to 1.9% in 2019. However, profits on UK
FDI in ASEAN have been consistently more than double those in Organisation for Economic Co-operation and Development
(OECD) countries, and there is now a government push to increase trade and investment links with the region.
The stock of UK FDI in the region is currently invested largely in Singapore (50%), Indonesia (22%) and Malaysia (14%). UK
investment in relatively lower-income ASEAN members remains low and stagnant, but UK FDI in Vietnam has been
increasing at a fast rate.
The UK has been investing relatively less (in terms of percentage share of FDI stock) in ASEAN compared to Chinese and
US investors. As with other major investment partners, UK FDI in the region is concentrated in financial services.

The UK has expressed interest in enhancing its trade and investment links with Asia, most recently through the Integrated Review, which emphasises the Indo-Pacific. Many free trade agreements (FTAs) and partnerships have been set in motion.
The UK’s development objectives prioritise trade and development. Trade, investment and global value chains have been crucial in helping Asian countries to develop and transform. The share of Asia is 16.8% in UK goods exports, 11.8% in UK services exports and 12.3% in UK foreign direct investment stock.
The UK’s new international development strategy and putting the ‘Indo-Pacific tilt’ into operation could lead to new, enhanced and differentiated aid and trade relationships between the UK and countries across Asia.

The Heads of State and Government of the African Union in their decisions Assembly/AU/4(XXXIII) of 10 February 2020 and Ext/Assembly/AU/Decl.1(XII) of 5 January 2021 mandated negotiations for an E-commerce Protocol to the African Continental Free Trade Area and endorsed December 2021 as the deadline for its conclusion, respectively. This paper analyses digital trade provisions in existing South–South (S–S) trade agreements, with the aim of helping negotiators and policymakers from Africa better understand the practical policy implications behind typically existing and upcoming digital trade-related provisions. This can help guide the design of an effective E-commerce Protocol in the AfCFTA that facilitates inclusive development in Africa.

THe African Union Commission (AUC) and Overseas Development Institute (ODI) with the support of the Foreign, Commonwealth and Development Office (FCDO) will be hosting an online event on “COVID-19 and Investor State Dispute Settlement provisions: Challenges and actions to protect the economic recovery in Africa” on Monday 14 December 2020.

The purpose of this event is twofold. Firstly, it aims to discuss the use of ISDS by investors in the current context and assess the impact that it may have on African states. It will discuss both the legality of potential claims and the economic assessment of the ISDS actions. Secondly, the event will discuss the options available to governments to protect their countries and people from these claims. It also aims to explore the political discussions that can be undertaken with the agreement of counterparts to, for example, suspend the scope of these provisions.

Economic transformation is one of the main pillars of the African Union Agenda 2063. Increasing trade and investment in general and specifically amongst AU Member States is critical to achieve economic transformation and the African Continental Free Trade Area (AfCFTA) helps to achieve both goals.
Phase I of the negotiations finalised in late 2017 established protocols on the liberalisation of intra-African trade in goods and services as well as the Dispute Settlement Mechanism. Phase II, launched in early 2018 and to be concluded in early 2020, will be oriented towards including provisions on investment, competition policy and intellectual property rights. The increase of intra and extra-African investment in Africa is critical to developing and improving the productive capabilities required to raise productivity and create employment.

The Royal Government of Cambodia (RGC), Digital Economy Policy Working Group, in partnership with the SET programme and supported by Australia’s Department of Foreign Affairs and Trade (DFAT), are hosting a consultation on RGC’s ‘Strategic Framework for Cambodia’s Digital Economy’ in Phnom Penh on 4 November 2019.

The half-day consultation will focus on the opportunities and challenges to inclusion posed by Cambodia’s transition to a digital economy, including the role that digital skills development can play in addressing these challenges. Consultation outcomes will inform the framework’s development.

SET is preparing a study to gain a better understanding of the role of appropriate and good quality education and skills in preparing for a digital economy. The study will support the Cambodian Government in its digital economy policy development.

To this end, SET and Cambodian Development Resource Institute (CDRI) team members engaged with a variety of representatives from government and the private sector in Cambodia in July 2019 to discuss the quality of skills for the digital economy, the impact of the digital economy on Cambodia’s transformation model and the quality and implementation of government policies

On 16 May 2019, the SET programme, in partnership with the Ministry of Industry, Trade and Cooperatives, Government of Kenya, Msingi East Africa and Invest in Africa held the ‘Growing an Inclusive Economy’ event to launch the SET report ‘Integrating Kenya’s micro and small firms into leather, textiles and garments value chains: Creating jobs under Kenya’s Big Four agenda.’ The Hon. Peter Munya, MGH, Cabinet Secretary, Ministry of Industry, Trade and Cooperatives, officially launched the report, praising it, and outlining steps the Government of Kenya is already taking to implement its recommendations.

Tuesday 26 February 2019
Phnom Penh, Cambodia

The Cambodia Development Resource Institute (CDRI), in partnership with the SET programme at the Overseas Development Institute (ODI) and supported by Australia’s Department of Foreign Affairs and Trade, host a workshop on prospects for Cambodia’s economic transformation in Phnom Penh on 26 February 2019.Cambodia has achieved 7% per annum growth over the last decade, which has spurred job creation in garments, tourism and agriculture. However, the economy faces challenges of diversification and further economic transformation, especially in the face of major challenges in sectors such as garments.