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November 2015

Leveraging Islamic finance promotes growth and prosperity of small businesses

Bertrand Badré's picture
Shop owners get ready for another day of work in Cairo, Egypt. © Dominic Chavez/World Bank

From the smallest rural villages in Bangladesh to the large, bustling metropolitan centers of Cairo or Istanbul, small and medium enterprises (SMEs) are the lifeblood of Islamic communities around the world, keeping local economies humming.

I first became interested in the potential of leveraging Islamic finance to grow SMEs when I led a seminar on the topic in 1997. I’ve come full circle, almost 20 years later, when I had the opportunity to speak last month in Istanbul at a conference on “Leveraging Islamic Finance for SMEs” organized by the World Bank Group, the Turkish Treasury, the Islamic Development Bank and TUMSIAD, the largest association of SMEs in the country with 10,000 members.

More voices mean smarter cities

Stephen Davenport's picture
Urban cityscape.  Photo: © Curt Carnemark / World Bank

With the ink barely dry on the Sustainable Development Goals, naturally the just-completed Open Government Partnership annual summit focused on how greater openness can accelerate progress toward the goals.
The open government agenda is most closely linked to the ambitious Goal 16 on Peace, Justice and Strong Institutions, which among other targets includes the objective of ensuring “responsive, inclusive, participatory and representative decision-making at all levels.” Though progress in this area is maddeningly difficult to quantify, evidence increasingly shows that participation, the next transparency frontier, matters to development outcomes. Making the target explicit, it is hoped, will galvanize efforts in the right direction.
There are many issues one could propose to tackle with citizen engagement strategies, but to narrow the topic of discussion, let’s consider just one: enabling smart growth in the world’s exploding cities and megacities.  Estimates suggest that by 2035 most of the world’s extreme poor will live in urban areas.

Tunisia: the leaders of tomorrow also have something to say today

Sadok Ayari's picture
Youth Event

Like a poppy resisting the wind, Tunisia is resisting all efforts to drag the country down. The ability of this tiny country in the Middle East and North Africa region to face up to challenges has been  well known since ancient times. The secret to this resilience lies in both the nature of Tunisia’s men and women and their commitment to effecting the kind of change that continues to seize the attention of the world.

Quote of the week: Ben Bernanke

Sina Odugbemi's picture

Ben Bernanke“Individually rational behaviour can be collectively irrational. And that’s why the regulators have to do what they can to constrain individual behaviour, so that it doesn’t lead to collectively irrational outcomes.”

- Ben Bernanke, an American economist currently working at the Brookings Institution. He served two terms as chairman of the Federal Reserve, the central bank of the United States, from 2006 to 2014. During his time as chairman, Bernanke oversaw the Federal Reserve's response to the late-2000s financial crisis. Bernanke wrote in his 2015 book, The Courage to Act, that the world's economy came close to collapse in 2007 and 2008 and that it was only the innovative efforts of the Federal Reserve, in cooperation with other agencies and agencies of foreign governments, that prevented an economic disaster greater than the Great Depression.  Prior to serving as chairman of the Federal Reserve, Bernanke was a member of the Board of Governors of the Federal Reserve System from 2002-2005 and proposed the Bernanke Doctrine concerning the source of deflation.  

Winning Streak: Sub-Saharan Africa Leads the Way in Doing Business Reforms

David Bridgman's picture

It was another landmark year for doing business in Sub-Saharan Africa.
After a record-setting 2015, the region was once again recognized for its impressive performance in this year’s report, Doing Business 2016: “Measuring Regulatory Quality and Efficiency.
Sub-Saharan Africa alone accounted for 30 percent of all the reforms implemented worldwide in the past year, passing 69 reforms in 35 economies. The region even boasts half of the world’s top-10 improvers: Benin, Kenya, Mauritania, Senegal and Uganda all made major leaps in the global ranking.
So what have we learned from a second consecutive year of strong results?
First, countries are owning the reform process. That means that technical teams within government ministries are becoming experts in the mechanics of regulatory reform. This is in part thanks to the Ease of Doing Business initiative, an annual peer-to-peer learning platform that the World Bank Group has supported over the past six years. The most recent Ease of Doing Business conference, which took place in Uganda in May 2015, gathered reformers from 16 countries to share their experiences. Exchanging best practices and lessons learned not only has helped fast-track the reform process but has also strengthened reform agendas.
Second, momentum for reform is positively contagious. Rwanda has led the pack over the past decade, and its success has encouraged other Sub-Saharan African countries to follow suit and push through business-environment reforms. This has proven to be a smart move in the wake of the downturn in commodities prices, highlighting the need for Sub-Saharan African countries to further diversify economic growth.

Third, the World Bank Group’s Trade & Competitiveness Global Practice (T&C) has played a major role in the region’s reform story, with active business-reform advisory programs in 34 countries. If anything, this year’s Doing Business results are an encouraging sign for T&C’s programs and motivation for client governments.
Fourth, this year was not an exception but part of a bigger narrative in the African region. Over the past decade, Sub-Saharan Africa has implemented 25 percent of all reforms globally, making it the second-most-active region in terms of improvement on the distance to frontier score.
The impact of these reforms has been immense. In 2005, incorporating a company in less than 20 days meant having to set up shop in either Burundi, Ghana or Rwanda. Today, that number has expanded from three countries to 28.  From 2014 to 2015, only 30 percent of economies in region had implemented reforms. Today, 75 percent have done so.
As Sub-Saharan Africa continues its reform journey, T&C is committed to providing support every step of the way by strengthening multi-year advisory programs that help economies unleash their private-sector potential. 

Finally a matching grant evaluation that worked…at least until a war intervened

David McKenzie's picture
Several years ago I was among a group of researchers at the World Bank who all tried to conduct randomized experiments of matching grant projects (where the government funds part of the cost of firms innovating or upgrading technology and the firm the other part). Strikingly we tried on seven projects to implement an RCT and each time failed, mostly because of an insufficient number of applicants.