A Maaro Njawaan rice paddy in Mauritania
NOUAKCHOTT, Mauritania — In a country where just 5 percent of top managers are women, Safietou Kane is something of an anomaly. Starting your own company as CEO at 23 years of age, on the other hand, might be considered remarkable in any context — male or female — but that is precisely what Safietou did when she founded her family agribusiness firm, Maaro Njawaan, in her hometown of Tékane in Traza, Mauritania, after completing her Bachelor of Science degree in International Business and Management at the University of Tampa in the United States last year.
Hailing from the fertile Senegal River Valley zone in the south, Safietou is no stranger to agriculture and was brought up keenly aware of the problems that plague Mauritanian farmers, most notably the lack of commercial outlets for their production and competition from imported agricultural goods, particularly rice. Like its regional neighbors, Mauritania consumes twice as much rice as it produces. Food imports have increased exponentially in recent years, particularly since the food crisis in 2007. As Safietou acknowledges, however, such a high level of imports often comes at the expense of local farmers and smallholders, whose livelihoods depend on rice.
Despite falling demand prices, however, Safietou saw an opportunity for her and her community, establishing a private company that would support local rice producers by buying their high-quality rice and then milling it in a local factory before packaging and transporting the product to stores in Nouakchott and Nouadhibou in the north.
Working along the entire value chain, Safietou’s firm is able to purchase rice directly from producers, regularizing production and providing stable employment in her hometown. It is widely recognized that nurturing national agricultural production has great potential for economic development and poverty reduction, particularly in rural areas, although Safietou admits that she was also motivated by other considerations.
“What we want to show is that high-quality rice is already available here in Mauritania, and [that] we should be proud of our local products.” As in many African countries, Mauritanian goods suffer from a poor image among consumers. Indeed, Mauritanians often deride their own country's products as being of lower quality, preferring to pay a higher price for rice from Asia.
“What good is the law if laws are ignored or never enforced?” a young civil society activist asked us as part of a group discussion recently. We began to explain that the law should provide a framework through which power can be constrained and policies implemented- but the conversation had already moved on to a loud and frustrated debate about the myriad ways that lawmakers abuse their positions, steal public money and undermine governance through the law itself.
“Should we focus our efforts on foreign investment or domestic investment?” Policymakers in developing economies often ask this question when the World Bank Group advises them on how to improve their countries’ investment climate or investment promotion efforts. Our answer is: They do not need to choose one over the other. In order to grow and diversify, an economy needs both domestic investment and foreign direct investment (FDI). The two forms of private investments can be strong complements.
Recognizing the Potential Benefits of FDI
The economic benefits of FDI were identified a long time ago. A Harvard Business School paper published 30 years ago summarized the benefits of FDI based on an extensive review of economic literature (Wint, 1986). In short: Benefits traditionally attributed to FDI include job creation, transfer of technology and know-how (including modern managerial and business practices), access to international markets, and access to international financing.
Granted, some of these benefits also occur thanks to domestic investment. For instance, domestic investments create jobs in a host economy – usually many more than FDI. However: What FDI does well is enhance or maximize some of the benefits already generated by domestic investments in a developing economy.
To stay with the example of job creation: Foreign firms might not create as many jobs as the domestic private sector, but they often create better-paid jobs that require higher skills. That helps elevate the skills level in host economies. The same can be said for other FDI benefits. For instance, more advanced technologies and managerial or marketing practices can be introduced in a developing economy through foreign investment, and at a much faster rate than would be the case if only domestic investment were allowed. Moreover, through partnerships with foreign investors who have existing distribution channels and commercial arrangements around the world, developing countries’ firms can benefit from increased market access.
In China, millions of rural residents each year migrate to cities to seek work. As they find jobs in modernizing industries, they gain the skills they need to earn higher incomes. In this photo, an employe in Chongqing is learning higher-level computer skills. Photo: Li Wenyong / The World Bank
Nowadays, forming strategic alliances across sectors has become the new operating norm. But the blurring of sectoral boundaries among governments, businesses and NGOs makes it increasingly difficult to assess functions traditionally performed by a certain sector, since conventional boundaries have dissolved, and power and influence are distributed in networks. One sub-set of such collaborations – business-NGO interactions – has attracted much attention, as NGOs begin to move away from their informal, social roles and venture into economic and political territories.
Business-NGO collaborations may come in many forms: NGOs could partner with firms to function as “civil regulators”, primarily by addressing market and government failures through the development of soft laws, social standards, certification schemes, and operating norms; leverage social capital to transfer localized institutional knowledge to firms; mobilize collective action between governments and firms; and serve as information brokers to connect otherwise disparate groups.
How do we assess business-NGO dynamics? Why are they are established? And in what forms are they governed? I source a few inspirations from business, political science, and public administration theories and offer three theoretical lenses through which we can examine business-NGO partnerships.
In light of this challenge, we began to explore the following question: what are the real implications of waiting time, frequency and reliability of transport systems in terms of improving access to urban opportunities such as education and health services?
In a series of blogs, we introduced a new tool that helps us quantify urban accessibility to such services. This tool allows us to calculate how many opportunities -be it jobs, schools, hospitals- become more accessible using public transport. The tool is also useful for comparing various transportation scenarios, modes of transport, service and infrastructure plans, as well as for better understanding land use and spatial patterns.
On May 25, I attended a workshop organized by the Harvard School of Public Health, titled “Causal Inference with Highly Dependent Data in Communicable Diseases Research.” I got to meet many of the “who’s who” of this literature from the fields of biostatistics, public health, and political science, among whom was Elizabeth Halloran, who co-authored this paper with Michael Hudgens – one of the more influential papers in the field.
In a world of slow growth and very low interest rates in most major economies, there is increasing interest in infrastructure development. Building quality infrastructure helps spur economic activity and jobs in the short term and expand countries’ capacity and potential growth in the medium term. It also contributes to higher confidence levels — a key ingredient to macroeconomic stability.
Today, the private sector still provides only a small share of the total investment in infrastructure for emerging markets, despite the importance of private operators in many countries, especially where there are strong fiscal constraints to financing public investment.
"I believe that banking institutions are more dangerous to our liberties than standing armies."
- Thomas Jefferson, an American Founding Father and principal author of the US Declaration of Independence (1776). He was elected the second Vice President of the United States (1797–1801), serving under John Adams, and in 1800 was elected third President (1801–09). Jefferson was a proponent of democracy, republicanism, and individual rights.
- Quote of the Week
Unemployment often rises during an economic crisis and policymakers take a range of actions to try to mitigate this increase. For example, 22 countries around the world used some form of wage subsidy program to promote employment retention during the recent crisis. Many studies have looked at the effect of wage subsidies on employment in non-crisis times, with mixed findings. But, there is not much evidence on whether wage subsidies can raise employment in the wake of a crisis.
Conceptually, wage subsidies during a crisis may make sense since layoffs could slow down the recovery as re-hiring and training workers may be costly for firms. This is particularly true for workers with job-specific skills. For these workers, it may be beneficial for firms to not let them go in the first place. However, as firms face lower demand for their products, they may not have the financial means to keep paying these workers, particularly in the presence of credit constraints, which are often exacerbated during a crisis. This is where wage subsidies come in. But, ultimately, we just don’t know whether these subsidies really cause firms to retain workers they otherwise would not have retained.