The recent surge in food and fuel prices
has prompted countries with high dependence on food imports
to try and lock in future food supplies through direct
investment in agricultural production in other countries.
The price surges also led to a wave of proposals to invest
in biofuels investments in agricultural land. While such
investment can provide large benefits, it also carries
considerable risks both to investors and citizens in the

Bangladesh represents a success story
among developing countries. Poverty incidence, which was as
high as 57 percent at the beginning of the 1990s, had
declined to 49 percent in 2000. This trend accelerated
subsequently, reducing the poverty headcount rate to 40
percent in 2005. The primary contributing factor was robust
and stable economic growth along with no worsening of
inequality. Respectable GDP growth that started at the

In this issue: dollar a day revisited;
focus: strategies for developing countries; farm policy in
developing countries: what next? Land in transition: reform
and poverty in rural Vietnam; unpredictable aid;
microfinance meets the market; and development impact of the
war on drugs.

A watershed is an area that supplies
water by surface or subsurface flow to a drainage system or
body of water. Watersheds vary from a few hectares to
thousands of square kilometers. Watershed management (WSM)
is the integrated use of land, vegetation, and water in a
specific drainage area with the objective of conserving
hydrologic services and reducing or avoiding damage
downstream or underground. The first generation of WSM

The workshop brings diverse perspectives
from outside the World Bank, providing a forum in which to
exchange ideas and debate in the course of developing the
World Development Report (WDR). Participants at the 2006
Berlin Workshop gathered to discuss challenges and successes
pertaining to agriculture and development. Agriculture is
the major sector contributing to economic development in
many poor countries. Three out of every four poor people in

This study uses the Ricardian approach
to analyze the impact of climate change on Ethiopian
agriculture and to describe farmer adaptations to varying
environmental factors. The study analyzes data from 11 of
the country's 18 agro-ecological zones, representing
more than 74 percent of the country, and survey of 1,000
farmers from 50 districts. Regressing of net revenue on
climate, household, and soil variables show that these

Income inequality in China has risen
rapidly in the past decades across regions, between rural
and urban sectors, and within provinces. The dynamics of
divergence across these sub-national areas have taken the
form of a "race to the top" - meaning that all
segments of the population, including the poor with low
education in lagging inland rural areas, have experienced
gains in average income. The largest gains have been

Developing countries are most exposed to
the impact of climate change and within these countries, the
poor face the brunt of the burden. Climate change is not a
discrete problem that can be dealt with through isolated
reforms: impacting economic growth, health, and
institutional capacity, it represents a full-frontal
challenge to development. This note traces the
multi-dimensional impacts of climate change, particularly on

Irrigation has made a major contribution
to poverty reduction in the past decades, enabling higher
yields and better nutrition. Despite these achievements,
large-scale irrigation schemes have usually yielded low
returns and attracted negative publicity because of their
adverse environmental and social impacts. As a result, the
Bank has largely switched its support for irrigation away
from new construction toward rehabilitation and policy

Agricultural and Rural Development (ARD)
is a fundamental component of Ethiopia's economic
growth and poverty reduction strategy. The agricultural
development strategy under Agriculture Development Led
Industrialization (ADLI) and Sustainable Development and
Poverty Reduction Program (SDPRP) focused on enhancing the
productive capacity of smallholder farmers, promoting crop
diversification, shifting to a market based system, ensuring

This paper compares and contrasts the
performance of rural and urban manufacturing firms in
Ethiopia to assess the impact of market integration and the
investment climate on firm performance. Rural firms are
shown to operate in isolated markets, have poor access to
infrastructure and a substantial degree of market power,
whereas urban firms operate in better integrated and more
competitive markets, where they have much better access to

South Asia has attracted global
attention because it has experienced rapid GDP growth over
the last two decades. What is not so well known is that
South Asia is the least integrated region in the world.
South Asia has opened its door to the rest of the world but
it remains closed to its neighbors. Poor market integration,
weak connectivity, and a history of friction and conflict
have resulted in two South Asias. The first South Asia is