1. The Global Economic Crisis and
The World Bank
The Global Economic Crisis and
the South Caucasus Countries: Prospects for Recovery and Growth
Asad Alam
Regional Director
March 2010

2. CONTENT The Global Economic Crisis Key Transmission Channels
Recovery and Growth

3. A global economic recovery process, which started with the large emerging economies, is now under-way

4. The crisis has “hit home” in South Caucasus…

5. The crisis has “hit home” in South Caucasus…

6. Growth is lower…

7. …and poverty is higher

8. Budgets are under stress…

9. Labor Force – Shrinking and Aging Population
Factors of production are constrained
Labor Force – Shrinking and Aging Population
Foreign private capital - Access to be scarcer and costlier

10. The crisis has changed the world
Poverty and inequality have risen, eroding past gains
Access to foreign private capital will likely be scarcer and costlier; suggests productivity enhancements will be more important
Sectoral growth drivers need to be rebalanced; less reliance on construction and financial services
Policy/institutional frameworks to attract scarce FDI carry a higher premium
Risk management and mitigation is a must—e.g. through strengthening social safety nets, and diversifying trade

11. Productivity is key to growth prospects
Emphasis on Business Environment and Technology
Openness/Export orientation
Labor skills
Infrastructure
Tax policy
Trade facilitation
Low cost of business transaction
Macro stability

22. THANK YOU