World Business and Economic Analysis
World Business and Economic Analysis
The economic prospect for the world in 2014 is best described as uneventful. It is a strange world we live in that this is the good news. After six years of turmoil marked by financial crises and long stretches of recession in several countries, it is indeed heartening that we are headed for uneventful times with a slow pick-up in global growth.
The world in 2013 grew by 2.4%. We are forecasting a growth of 3.2% in 2014. This is the point forecast. There is a lot that is happening around it, with some countries expected to make a strong recovery, some weak, and some actually slowing. And for each country there are bands of possibilities around their respective point forecasts.
This post is part of a blog series that we hope will provide some food for thought on the critical questions outlined in the report on social safety nets.
Governments in the Arab world have historically relied on subsidies to lower the cost of fuel and food as the principal means for protecting the poor and sharing wealth. Or so they claim. The fundamental problem with subsidies is that they benefit the rich far more than the poor. They are as expensive as they are inefficient, failing to deliver any economic or social value equal to the money spent on them. Subsidies also have negative side effects, distorting consumption and economic activity in unproductive ways. A number of international examples have shown that there are far more effective and less expensive methods for protecting the poor. It is why many countries around the world have abolished subsidies in favor of more efficient instruments, such as targeted cash transfers, and improved social service delivery.
