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November 2009

Africa and the Crisis: What's Next?

Submitted by Brian Hoyt on Mon, 11/30/2009 - 17:31
On Private Sector Development

Vox has an informative article by two South African economists, Peter Draper and Gilberto Biacuana, highlighting the effects of declining trade flows on African growth. The first half of the piece offers an excellent summary of Sub-Saharan Africa's economic state as a result of the crisis. The authors argue that the crisis has affected Africa mostly through reduced exports and commodity prices, along with declining capital inflows.

Roughly 80 percent of the continent's exports are comprised of minerals, metals, and food products. Over half of these exports are destined for Europe and North America (Asia currently comprises under 25 percent of exports). Looking at the data, the link between China and Africa is more about value than volume: Chinese growth raises the overall price for commodities, which then increases the value of Africa's exports to the United States and Europe. The value of these exports is especially important when considering that they are a large source of government revenue. When the crisis sent the price of commodities downward, the value of Africa's overall exports and a disproportionate share of government revenue went down as well.

Africaexportstructure 

Africaexports 

Life and Death in South Asia

Submitted by Eliana Cardoso on Mon, 11/30/2009 - 11:55
On End Poverty in South Asia

In the film, Venus, an old and frail Peter O’Toole discovers the Greek goddess in the guise of his best friend’s niece. The ironic and good humored story explores the theme of the games played in a mutual seduction between the older man with experience, money and a nostalgic yearning for carnal desire and the young woman who soon finds out the power she wields and negotiates three kisses in return for a pair of earrings. In the final scene, wearing only one of his boots on a cold beach, O’Toole feels the caress of the sea’s salty foam with the sole of his foot and smiles. His face expresses the happiness of someone who knows the joys of being alive.

It is impossible to weigh up Peter O’Toole’s smile, measuring the degree of his happiness or comparing it to what you would feel if walking barefoot in the sand. But, the idea that his feelings can be measured as a metric has become fashionable, ever since the King of Bhutan decided that GDP fails to portray the well-being of his subjects and summoned a team to create the Gross National Happiness index.

Least Developed Countries and DM2009

Submitted by Tom Grubisich on Mon, 11/30/2009 - 11:31
On Development Marketplace

The DM2009 competition, whose theme was adaptation to climate change, especially how it impacts the poor and vulnerable on the local level, would seem to have been the perfect fit for Least Developed Countries (LDCs), especially those in Sub-Saharan Africa.  The poorest countries are expected to pay the highest price of climate change on their human, natural, and economic resources.  With generally weak capacity in regional and national government and infrastructure, they would seem to be well suited for the early-stage, community-focused projects of DM2009.  In fact, criteria for National Adaptation Plans of Action for LDCs give No. 1 ranking to "a participatory process involving stakeholders, particularly local communities."

But the fit proved less than perfect.  The 49 LDCs worldwide produced only 26 of the 100  finalists.  Only four were winners -- two from Sub-Saharan Africa (Burkina Faso and Ethiopia) and one each from Middle East and North Africa (Djibouti) and East Asia and the Pacific (Samoa).  Five finalists were from the most populous LDC -- Bangladesh, in South Asia -- but none of those was a winner.  LDCs Tanzania and Uganda -- two of Sub-Saharan Africa's most populous countries -- had only three finalists between them, none of whom was a winner.

Is it too late for the 22 LDC finalists who didn't pick up crystal globes at the Nov. 13 awards ceremony?  Maybe not.  According to most recent findings, the 49 LDCs globally aren't making enough progress in pinpointing potential local climate adaptation projects. 

What if the 10 LDCs from which the 22 non-winning finalists come took a close look at those projects and considered them for funding in their National Adaptation Plans of Action?  Some DM2009 jurors said they had a tough time choosing winners because all the finalists presented strong entries.

Development Marketplace's decision makers are looking at ways to help all the finalists succeed.  Aleem Walji, Practice Manager at the World Bank Institute, which includes the secretariat for the Development Marketplace consortium and other innovation platforms, said in a mini-interview on this blog: "I think we have a responsibility to try and support this entire community of finalists.  We went from 1,750 applicants to a hundred finalists.  What can we do to connect these hundred finalists to everyone who we know who can help them go forward -- funders, capacity builders, past DM winners, each other."

For themselves, their projects, and their countries, the 20 non-winning finalists from LDCs should keep their hope in their hearts.

60 million people threatened

Submitted by Jason Victor on Mon, 11/30/2009 - 10:49
On Development in a Changing Climate
60
million people will be threatened by a 1 m rise in sea level. Such a rise also threatens more than $200 billion in assets in developing countries alone.

Mirages in Dubai

Submitted by Brian Hoyt on Mon, 11/30/2009 - 10:37
On Private Sector Development

Burj-dubai-worlds-tallest Last Wednesday, before heading to California for the long Thanksgiving weekend, I wrote that "Dubai is looking to be the ultimate boom and bust story". As the weekend progressed, things halfway around the world went from bad to worse. The latest news is that the Government of Dubai will not stand behind the debt of its wholly-owned subsidiary, Dubai World. Felix Salmon likens this to over-indebted homeowners in the United States walking away from their homes.

Dubai's troubles have unveiled the complicated power relationships in the Gulf, and given investors pause in regards to the robustness of the current emerging market rally. A simple bailout from Abu Dhabi may be more complicated than was first imagined.

The FT's Middle East columnist Roula Khalaf explains why Dubai's oil-rich neighbors are wary of writing a blank cheque:

Today, while everyone is looking to the Gulf, much of the Gulf is looking to Abu Dhabi to resolve the Dubai World crisis. It has long been assumed that the most endowed emirate in the UAE would always back other members in the federation.

Abu Dhabi, however, is caught in a trap. Though fearful of Dubai World's impact on the UAE economy and the reputation of UAE corporations that are increasingly encouraged to raise funds on international markets, Abu Dhabi has insisted it will not be rushed into action and that any move has to be channeled through the federal government.

Some analysts also point out that, if it were to guarantee Dubai World's debt, Abu Dhabi could open itself up to a host of other demands. "What about contractors in Dubai who have not been paid and what about infrastructure projects that still have to be completed?" says one analyst from a neighboring Gulf state.

Until the UAE sorts out Dubai World, Abu Dhabi - and much of the rest of the region - will try to limit the tremors unleashed by the crisis and hope that investors will not confuse Dubai with the generally healthier state of other Gulf economies.

The unfolding events in Dubai bring into question the stability of the global recovery, which has largely been fueled by extraordinary government support mechanisms. The combination of the Dubai government abandoning the liabilities of its own company, along with Abu Dhabi's reluctance to get involved, shows that government support cannot always be assured, even when capital for a bailout can be easily secured. If Abu Dhabi, home of the world's largest sovereign wealth fund (and a very small population), is unwilling to bail out its own compatriot, can it be guaranteed that Germany will bail our Greece (or Ireland, or Spain)? Or Sweden will bail out Latvia? Or Austria will protect its banks' exposure to Eastern Europe? Or that Washington will bail out California?

For those interested in following the latest events in Dubai, Calculated Risk and the Times of London (which was temporary pulled from newsstands in Dubai) are very resourceful. The more we learn about this crisis, the less likely it seems that it will go away without repercussion.   

The Doha Trade Round is Worth Fighting For

Submitted by Otaviano Canuto on Mon, 11/30/2009 - 10:21
On Growth & Crisis

November marks the eighth anniversary of the Doha Development Agenda– the first multilateral trade negotiation under the auspices of the World Trade Organization.  But what started as a real opportunity to help poor countries prosper through trade, for some it has now become a lost cause. But Doha doesn’t have to be a metaphor for failure. We can still save it and make it work. After all, if we can’t fix Doha, how can we hope to address much greater challenges that confront us, such as climate change?

For many, lowering subsidies and tariffs appears to be a tough sell for their domestic constituencies. They say a Doha deal is not worth the costs because it will not generate enough market access opportunities.  But as we gear up for the upcoming World Trade Organization’s (WTO) ministerial meeting in Geneva on Nov. 30, we have to stress an unequivocal fact: the conclusion of the Doha round is worth fighting for. It will give the world economy a boost when it is most needed, reduce the scope for governments to resort to protectionism, and bolster the prospects for cooperation in other critical areas like the environment.

In terms of improved market access, the modalities under consideration – even taking into account likely exceptions for sensitive products – will generate increased trade that in turn could produce an additional US$160 billion in real global income, as new World Bank research shows.  Are we really in such good economic shape that we can do without the extra stimulus?

Random Hacks of Kindness support disaster relief projects

Submitted by Sameer Vasta on Mon, 11/30/2009 - 09:34
On Inside the Web

Random Hacks of Kindness / Photo by Jeremy Johnstone

A couple of weeks ago, a few World Bank staff members teamed up with Google, Microsoft, Yahoo!, NASA-AMES, disaster relief experts, and the software developer community in Mountain View, California to help find better ways to support disaster relief efforts.

The result, the Random Hacks of Kindness Codejam, brought together about 150 people at the Hacker Dojo, and resulted in some innovative hacks (or solutions to technical problems) that will hopefully shape the way the developer community supports disaster relief efforts going forward.

There has been a lot of coverage of the event already (including a great post on the East Asia & Pacific on the rise blog), so instead of going in to that, here's a quick list of posts and articles about the event that you might want to check out:

 

Random Hacks of Kindness: software developers create and share code to tackle disaster relief

Submitted by Claudia Gabarain on Mon, 11/30/2009 - 00:06
On East Asia & Pacific on the rise

A bunch of software programmers get together, listen to a list of desired projects formulated by aid, emergency, and development experts that would help tackle issues related to disaster relief, work for two days and the result is eleven applications that will allow users to easily report their status in the event of a disaster, locate family, provide data needed by emergency responders, or that will automatically process aerial images taken by Unmanned Aerial Vehicles (UAV), among others.

Presentation of the microUAV image registration system (photo courtesy of Todd Huffman under a Creative Commons license).

This is what happened at the first "Random Hacks of Kindness" event in San Francisco, a hackathon that served as the basis of a global community of developers and subject matter experts that will work on development and reconstruction issues. The idea originated at a Crisis Camp barcamp held at the World Bank in Washington DC last May, when representatives from Google, Microsoft and Yahoo agreed that some matters supersede competitive concerns and decided to cooperate and mobilize developer communities to create software that is openly shared with the international community to have a real impact on the field. The Bank led the partnership and it now includes NASA and SecondMuse as well.

How a Coconut Becomes a Shield Against Climate Change

Submitted by Tom Grubisich on Sun, 11/29/2009 - 13:37
On Development Marketplace

Indigenous Peoples have been contending with destructive weather like cyclones, flooding, and drought for centuries -- as the development community has sometimes belatedly discovered.  Nine of DM2009's winners are projects that tap into that special know-how to help indigenous communities survive the increasingly destructive weather that climate change brings.

Indigenous know-how is invariably practical and low-cost -- like the winner from Samoa.  That project would build three traditional Samoan houses -- called fale, for "open house" -- as models of "safer, accessible, resilient, and sustainable housing."

Here's how a fale is built, as described in a fascinating story on the East Asia & Pacific website of the World Bank: The structure is "lashed and tied together with afa -- an organic sennit rope. Afa is made by twisting together the fibers of dry coconut husks. The lashing work is traditionally done by elderly men while women make the thatch for the domed roof of the fale – either from coconut palm leaves or sugar cane."  (Photo after recent rain shows 80-year-old Pousea, ceremonial house in Samoa that was restored by DM winner Afeafe o Vaetoefaga Pacific Academy of Cultural Restoration, Research, and Development two years ago.)

Building broadband

Submitted by Siddhartha Raja on Sat, 11/28/2009 - 13:52
On Information and Communications for Development

Lessons from the mobile revolution

The spread of the mobile telephone over the past decade has been nothing short of a revolution. According to market tracking firm Wireless Intelligence, in September 1999 there were about 340 million mobile telephone subscriptions worldwide. Ten years hence, that is less than the number of subscriptions in India or China alone, and worldwide the number has grown to 4.5 billion. There are valuable lessons from this revolution for the transformation we are hoping to see in broadband access and use.

DM2009 to Help Indigenous Grassroots Grow in Siberia

Submitted by Tom Grubisich on Sat, 11/28/2009 - 11:54
On Development Marketplace

The 40 Indigenous Peoples of the North, Siberia, and Far East in Russia endure one of the world's most hostile environments.  But it is man, not nature, that threatens the very existence of these communities, which have dwindled to about 250,000 people who live in sometimes besieged camps and villages sprinkled across the vast frozen landscape from the Barents Sea to the Pacific Ocean.  (Photo credit: EALÁT.)

Deforestation, industrialization, and flooding from hydropower drive Russia's Indigenous Peoples from their ancestral homelands.  Illegal fishing, poaching, and the auction of fishing grounds deprive them of their livelihoods.  Russia's Indigenous Peoples are, theoretically, protected by federal laws, but advocacy groups say there's no regulatory force to the laws.  The collective plight of the communities is grim evidence behind those arguments.

Leading the fight to put teeth in the laws is the Center for Support of Indigenous Peoples of the North (CISPN).  Its tenacious struggle, which has won it some legal skirmishes in Moscow and at international forums, has now earned it one of the 26 awards given at the Development Marketplace 2009 competition.  The $200,000 award will go toward a grassroots project that will help indigenous communities leverage their traditional knowledge with contemporary techniques of communication and advocacy that involve engaging all stakeholders.  The goal is a "climate strategy" of adaptation that will finally lead to real, enforceable protection of Russia's indigenous communities.

CISPN Director Rodion Sulyandziga, proudly holding his crystal globe after the Nov. 13 awards ceremony in Washington, said: “It’s a great day.  I’m very proud.  The most important thing is the Indigenous Peoples’ voice is heard in Siberia and everywhere.”

And then it was back to Moscow for Sulyandziga -- to map the Center's new grassroots fight.

A Talking Book for Africa

Submitted by Michael Trucano on Fri, 11/27/2009 - 17:55
On EduTech - ICT & Education

a school in rural Ghana (courtesy World Bank photo archive)How do you provide vital information and literacy training to people with limited access to either -- especially if they are located in rural parts of Africa?  Cliff Schmidt, the founder of Literacy Bridge, recently stopped by the World Bank to discuss his work in northern Ghana to help investigate answers to this question.  Most groups seeking to harness the power of information and communication technologies in developing countries in support of such objectives pilot test their 'solutions' where it is easiest to do so -- often in (reasonably) well-off urban or suburban settings (often buidling off prior experience using such technologies in OECD countries).  Literacy Bridge is notable in that it prioritizes helping people with the greatest challenges, rather than focusing on the easiest to reach. 

The 'Talking Book' is a low-cost audio device device with recording capabilities -- imagine a rubbery MP3 player about the size of a grapefuit -- rather ingeniously engineered (and re-engineered) to meet specific needs and usage scenarios in very poor communities in Africa.  It is designed for use in local languages, using locally produced content, as tool to promote literacy among primary school children (to cite just one goal and target group). One way to think of the device, Cliff said, is as a  'small portable computer without a display'.  While the project is still in its pilot stages, it is notable for its express interest in investigating solutions that are low cost and scalable from the beginning, and in rigorously monitoring and evaluating the impact of its interventions.

Africa and Adaptation: Many Needs, Too Few Projects

Submitted by Tom Grubisich on Thu, 11/26/2009 - 12:13
On Development Marketplace

The economic -- as well as human and environmental -- costs of adapting to climate change will hit developing nations hardest -- none harder than those in Sub-Saharan Africa.  New World Bank projections have adaptation costs carving out almost 7 percent of Sub-Saharan Africa's gross development product annually between 2010 and 2029.  That's more than double the cost projected for Latin America and the Caribbean, and more than triple the cost to GDP that would be borne by developing countries in other regions.  Yet only 16 of the 100 finalists in DM2009 were from Africa, and only three of them -- from Burkina Faso (anti-desertification), Ethiopia (anti-drought), and Nigeria (anti-drought) -- were among the 26 winners.

Below, from left, photos of winners from projects in Burkina Faso (Thomas Granier), Ethiopia (Mohammad Ehsan Dulloo), and Nigeria (Nnaemeka Chidiebere Ikegwuonu).

Of all the adverse impacts of climate change in Africa, the worst is drought.  Already faltering food production in the region could fall by 16 percent long term because of more frequent and intense drier weather, according to recent projections.  If that happens, Africa would be even further from meeting its Millennium Development Goals to reduce poverty.

With most of Africa's food grown by small farmers, most adaptation projects to protect the farmers against climate change will have to start on a small scale.  The implications are as certain as the outlook for drier weather: Africa must become the center of many more projects like the region's three winners at DM2009.

“Saya Cicak” (I am a Gecko): The Power of Public Support

Submitted by Fumiko Nagano on Wed, 11/25/2009 - 16:12
On People, Spaces, Deliberation

On Monday this week, I went to a presentation by Michael Buehler at the Center for Strategic &International Studies in Washington, DC. The title of his talk, “Of Geckos and Crocodiles: Indonesia’s Corruption Eradication Efforts,” piqued my curiosity as I had blogged about Indonesia’s anti-corruption commission earlier this year. Buehler began by giving a comprehensive overview of Indonesia’s corruption eradication measures since 1998 to date, outlining the passage of corruption-related laws and regulations, establishment of independent anti-corruption bodies, and development of anti-corruption programs. He then gave an analysis of the anti-corruption bodies, programs and their weaknesses, chronicled the work of the country’s anti-corruption commission (called the Corruption Eradication Commission, or “KPK” for short in Indonesian), and described the achievements and challenges facing anti-corruption efforts in Indonesia.

The Public’s Proxy?

Submitted by Antonio Lambino on Wed, 11/25/2009 - 14:16
On People, Spaces, Deliberation

I recently attended a brown bag on the Bangladesh Investment Climate Fund (BICF), an advisory facility that seeks to help improve the country’s investment climate.  The International Finance Corporation’s Advisory Services team runs the initiative, generously supported by the UK’s Department for International Development and the European Commission.

Core program areas include regulatory reforms, economic zones, and capacity building and institutional strengthening.  According to Syer Akhtar Mahmood, BICF’s Senior Program Manager, results include the following: a 50% reduction in property registration fees; an online system for business registration; effective consultation mechanisms to identify regulatory issues and recommend reforms; platforms for broad-based public-private dialogue on policy formulation and implementation; and a core group of mid-level government officials who have, among other things, generated notes on reform options and authored 10 articles/op-eds which, according to Mr. Mahmood, rarely happens in Bangladesh.

Independent Advisory Group makes 9th visit to Nam Theun 2

Submitted by Victoria Minoian on Wed, 11/25/2009 - 13:08
On East Asia & Pacific on the rise
The International Advisory Group in action at Ban Sop On, one of the resettled villages at Nakai Plateau.

Over the last two weeks the Nam Theun 2 project received the 9th visit of the International Advisory Group (IAG), one of the  Independent Assessment bodies assigned to the project.

The latest news from Bubblesville

Submitted by Brian Hoyt on Wed, 11/25/2009 - 12:09
On Private Sector Development

FT Alphaville has published a chart, via The Global Property Guide, showing the latest trends in real estate prices from around the world:

Globalhousingchart 

A few observations from the bottom of the list:

  • Western Europe's most vulnerable economies continue to suffer. Spanish home prices are down more than last year, the UK remains in the red, and Irish prices have declined by a whopping 21 percent. As the ECB puts forth its strategy of removing many of its exceptional crisis support provisions, Europe's recovery will become even more uneven (just ask Greece). This has already led some to re-ignite the debate over the future of the eurozone, though currency markets seem to be shrugging it off. 
  • Parts of Eastern Europe's real estate market are in dire straits. Latvian prices are down by nearly 60 percent, while Bulgaria (28%), Russia (19%) and Slovakia (15%) are all experiencing double-digit falls.
  • Dubai is looking to be the ultimate boom and bust story. One year ago, real estate prices had increased by over 61 percent. Now, they are down by 48 percent. The government-owned holding company, Dubai World, is struggling to service its $59bn in liabilities, in spite of a recent $5bn bailout by Abu Dhabi.

How Will Changes in Globalization Impact South Asia?

Submitted by Ejaz Ghani on Wed, 11/25/2009 - 12:07
On End Poverty in South Asia

Globalization has accelerated global growth and global poverty reduction. But it has also raised concerns. The current global crisis may change globalization itself, as both developed and developing countries adjust to global imbalances that contributed to the crisis. Will these changes help or hinder economic recovery and growth in South Asia?

There are three models of globalization. These include (a) trade flows (exchange of goods), (b) capital flows (exchange of money), and (c) macroeconomic management. These three models of globalization may not be the same in the future. Changes in globalization could change the composition of trade flows, capital flows, and economic management, which in turn, could accelerate or restrain growth. So how will changes in these three models of globalization impact economic recovery and growth in South Asia?

South Asia as a region is peculiar. Its trade, capital flows, and economic management differ from other regions in how the region has globalized, although it must be mentioned that there is a lot of diversity within the region.

Who on earth cares about climate change?

Submitted by Andrea Liverani on Wed, 11/25/2009 - 11:32
On Development in a Changing Climate

Answers from a multi-country opinion poll  

Does anyone really know what world leaders are thinking about climate change? Well, at least their public statements are covered on TV.  Knowing what common people think is another ball game entirely. Some opinion polls on climate change shed light on public attitudes, but most pay little or no attention to developing countries.

With this in mind, the team working on the World Bank’s World Development Report 2010: Development and Climate Change commissioned a multi-country poll of public attitudes to climate change, which for the first time targeted developing countries with a comprehensive set of questions regarding climate policy.

Our aim was to a) give the public in developing countries voice in a debate often dominated by developed countries’ views, and b) provide decision makers with a tool to assess the state of public views on climate change in their countries. Countries polled include: Kenya, Senegal, India, Bangladesh, Egypt, Iran, Vietnam, China, Indonesia, Turkey, Russia, Mexico, Brazil, France, Japan, and the USA.

Who Creates Jobs?

Submitted by Dorsati Madani on Wed, 11/25/2009 - 10:24
On Private Sector Development

Editor's note: Dorsati Madani is a Senior Economist at the World Bank's Strategy and Analysis Unit (CICSA) of the Investment Climate Advisory

There is widespread perception that small businesses are the primary creators of jobs in most countries. A presentation from the World Bank's recent Conference on Entrepreneurship and Growth entitled, "Who Creates Jobs? Small vs. Large vs. Young" used US census data to add an interesting twist to the debate regarding the role of firm size in employment creation.

The paper finds that business start-ups contribute substantially to both gross and net job creation, but that young firms also have very high rates job destruction due to frequent failures. Conditional on survival, young firms grow more rapidly (in terms of employment) than their more mature counterparts. A related finding is that once the authors account for firm age, it becomes the definitive factor in job creation. Firms employing 5-499 employees are found to have lower net growth rates than the largest firms (10000 or more workers) in the economy. 

These results raise an interesting policy issue. Assuming a similar pattern of job creation for developing countries, how do we reconcile the emphasis placed by development institutions - including the WBG - on small and medium enterprise (SME) development? Is this sub-sector the right focus of our PSD efforts? If so, how can we ensure not only SME creation, but survival to support net job creation over the medium to long term? On the other hand, if the SME approach does not create the net medium to long term jobs so desperately needed in high unemployment developing countries, what should our policy recommendations be?

The Global Reach of DM2009 -- In 14 Languages

Submitted by Tom Grubisich on Wed, 11/25/2009 - 06:50
On Development Marketplace

When you browse to Development Marketplace's YouTube channel on the right side, you'll find a rich video buffet from the recent competition.  All the finalists talk about their projects -- in one minute or less.  There are interviews with the experts, like Marianne Fay, chief author of World Development Report 2010: Development and Climate Change, and juror Tran Triet of Vietnam, a winning finalist in 2003.

One of my favorites is the medley of welcomes in foreign languages -- 14 in all, one vivid and charming example of how truly global DM2009 was.

(Montage above: Welcomes in Swahili, foreground, Hindi, background/left, and Bahasa, official language of Indonesia.)

World Bank Teams up with Google to Share Development Information

Submitted by Joe Qian on Tue, 11/24/2009 - 15:40
On End Poverty in South Asia

What’s the Gross Domestic Product (GDP) of India? If you type the inquiry into Google now, a graph will immediately display the data ranging from 1960 to 2008 and a figure showing that it is currently $1.22 trillion. If you click on the graph, it will immediately expand and allow you to compare historical figures as well as with that of other countries. I noticed, for instance, that India had a GDP of $36.6 billion in 1960; a 33 fold increase over the last 48 years!

The popular search engine has joined forces with the World Bank in sharing development data through the Data Finder, featuring 17 development indicators based on information provided by the World Bank to make the easy to understand information accessible to a broader audience. The public data tool is exceptionally easy to use and is excellent for comparative research or exploration of data over time. The indicators are as diverse as carbon dioxide emissions, fertility rates, GDP growth, and number of internet users.

What inspires reform (besides Doing Business)?

Submitted by Brian Hoyt on Tue, 11/24/2009 - 10:04
On Private Sector Development

Yesterday I discussed the launch of the latest Doing Business sub-report, which focuses on the ease of paying taxes. This is a laudable effort- paying taxes is painful enough to begin with, why make it more difficult than necessary?

Doing Business seeks to recognize and celebrate policy reforms that improve the ease of doing business, of which tax policy is a critical component. For governments, the incentive to reform in this area seems relatively straightforward: make it easier to pay taxes, and your tax revenue is likely to increase. But what about areas where the results of reform are less immediate and tangible, such as closing a business?

In some cases, it is the desire to improve one's national ranking in the Doing Business report that triggers reform. This was Rwanda's strategy, as outlined by minister of finance James Musoni in a recent World Bank speech (you can review parts of the speech on our Twitter account). These accomplishments fit well into the country's Vision 2020 of becoming a middle income country by the end of the next decade.

footermenu