I spent the past 11 years working and living in Afghanistan. I didn’t intend to stay that long in one country office, but I got swept up in the Afghanistan Reconstruction Trust Fund, which under the World Bank, was financing 50% of government expenditures earlier on. Its budget operations grew from $600 million in 2004 to more than $5 billion in 2014.
For anyone working on public financial management, there were a lot of challenges to tackle and no good time to leave. Moreover,
Which regions trade more amongst themselves? What are the top products being exported or imported? Who are the top exporting and importing countries in a particular region?
Here is a visual representation of regional trade in South Asia in WITS that can help quickly unpack some of these questions as they relate to the region.
After the jump, we break down these numbers and show how you can explore the viz.
One of the many successful fiscal initiatives implemented in Afghanistan was the HIPC, the Highly Indebted Poor Country program, a joint IMF–World Bank effort to reduce the public debt of poor countries. We called this the forgiveness of debt.
At an early stage in this work I had to meet with a senior Afghan government official to explain the program. The official, the Deputy Auditor General, was a dedicated, serious man who had trained in the former Soviet Union as an engineer and did not speak English, so we relied on an interpreter.
In those days any Afghan who spoke some English could find work as an interpreter, and ours was a medical doctor. He told me he was anxious to find work in his own field but in the meantime was willing to work anywhere, even interpreting in this arcane field of auditing, although he was unfamiliar with the jargon. The conversation was not to be long; just outline that the external public debt, which was mostly Russian debt from the communist era, would be absorbed by a trust fund and hence “forgiven” if Afghanistan met the program requirements – basically good fiscal transparency and discipline.
Afghanistan. Photo by Steve Utterwulghe.
This latest blog post should start with a mea culpa. Indeed, my 2015 work plan for public-private dialogue (PPD) did start in Dushanbe, Tajikistan, not Copenhagen. However, who can swear that he never tweaked a title a tiny bit to make it catchier?
While Dushanbe hosted the very productive First Regional PPD Forum in the “stans,” the 8th Global PPD Workshop took place in March in the Danish capital. There, “more than 300 representatives from governments, private enterprises, PPD coordination units, investors’ councils, competitiveness partnerships, civil society, business organizations, and various development partners participated in the event. They represented 54 countries and a total of 40 PPD initiatives who joined the event to share their experiences and discuss lessons learned.”
High-powered individuals kick-started the Copenhagen event, including HRH Crown Princess Mary of Denmark, who reiterated that, to make a difference in the world, “it will take partnerships across countries, governments, and between public and private sectors.”
Once the keynote speeches had been delivered, the real work began among the delegates and with the PPD experts. I jumped from impromptu coffee break to coffee break and strategized with the Côte d’Ivoire delegation on how to prepare for the National Day of Partnership/Dialogue in Abidjan; discussed ways to better involve the private sector in Morocco; debriefed with the Guinea Minister of Industry, SMEs and Private Sector Promotion on how the PPD structure that we helped put in place is strengthening the local value chain for extractive industries (see below); and moderated an engaging session on public-private dialogue in fragile states and conflict-affected countries (FCS), which provided great insights as I prepared to fly out on PPD missions to Somalia and Afghanistan.
Aside from the buzz of international gatherings, what really matters for the delegates, from both governments and the private sector, is to get inspired and bring back home ideas that can be adapted locally and successfully implemented. Public-private dialogue is an art defined by some fundamental core principles that can be adjusted according to specific needs and environments.
As a reminder, PPD refers to the structured interaction between the public and private sectors to promote the right conditions for private sector development. Its ultimate function is to contribute to a prosperous economy by expanding market opportunities and enabling private initiative. This is also very much the mission of the new World Bank Group Global Practice on Trade & Competitiveness (T&C). Its Senior Director, Anabel Gonzales, wrote in one of her blog posts on Trade and Development in Africa that fostering competitiveness and strengthening supply chains is a key to development and an integral part of T&C’s offering.
As I reflected on the links between structured multi-stakeholder dialogue, competitiveness and supply chains, I remembered a Harvard Business Review article written by Michael Porter and Mark Kramer, entitled Strategy and Society: The Link between Competitive Advantage and Corporate Social Responsibility.
What particularly caught my attention at the time was the theory on interdependence between companies and society that the Harvard professors put forward. They argued that this interdependence takes two forms: the social impact that a company’s activities has on society, or “inside-out linkages,” and the social influences on the company’s competitiveness, or “outside-in linkages.”
- Competitiveness Policy
- Competitive Industries
- Competitive Sectors
- Public Sector and Governance
- Private Sector Development
- Law and Regulation
- public private dialogue
- Public Private Partnerships
- Fragile and Conflict Afflicted States
- fragile and conflict affected states
- fragile countries
- fragile states
- collaborative governance
- Open Government
- Public Sector and Governance
- Private Sector Development
- Cote d'Ivoire
Supporting the development of private sector participation in infrastructure in fragile and conflict affected states is a strategic priority for PPIAF, where immediate and overwhelming infrastructure needs are apparent.
In that realm, PPIAF has long been supporting Afghanistan and the Palestinian Territories, among many other conflict impacted economies, and has achieved significant impact, particularly in the telecommunications sector in Afghanistan, and the solid waste sector in the West Bank. Increased access to infrastructure is crucial in fragile and conflict-affected states, and resulting services create opportunity and drive economic growth, thereby reducing the risk of resurgent conflict.
While both places face unique challenges, my experiences demonstrate some commonalities that could be applied to other economies with similar situations. Both Afghanistan and the Palestinian Territories have recently undergone political transition, and both have outlined plans to pursue private sector participation to accelerate access to infrastructure and drive economic growth. This comes in the context of growing fiscal constraints and reduced future donor budgetary support.
Let’s look at the specific economic and political context of both Afghanistan and the Palestinian Territories to put things in perspective:
Ahmad Sarmast may owe his life to a fumble with his cellphone. He bent down in his seat to pick up his mobile just as a suicide bomber detonated his charge behind him at a music and theatre performance at the Institut Français d’Afghanistan in Kabul.
The founder and director of the Afghanistan National Institute of Music survived the December blast that killed one and injured more than 10. Dr. Sarmast suffered perforated ear drums and shrapnel in the back of his head. But the experience has not deterred him from his ambition of reviving and rebuilding Afghan musical traditions through establishing and leading the country's first dedicated music school.
“Music represents the right to self-expression of all the Afghan people,” he told me during a tour of the modest building in a suburb of Kabul where ANIM is housed.
The institute’s young musicians, many of them former street vendors or orphans, have toured the world to showcase Afghan music and present a more positive face of the war-torn country. An ensemble played at the World Bank in 2013 and went on to perform amid great acclaim at the Kennedy Center and Carnegie Hall in New York.
Home to Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka, South Asia is one of the fastest growing regions in the world and yet one of the least integrated. Intra-regional trade accounts for only 5% of South Asia’s GDP, compared to 25% of East Asia’s. Meanwhile, with a population of 1.6 billion, South Asia hosts one of the largest untapped talent pools.
To encourage young researchers in the region who aspire to use their research to inform policy making, the World Bank Group calls for research proposals on South Asia regional integration. Proposals will be carefully reviewed and the most suitable proposals (no more than five overall) will be awarded with a grant based on criteria listed below. An experienced researcher from the World Bank’s research department or an external academic will mentor and guide the young researcher in the implementation of the research.
The world economy today presents itself as a diverse canvas full of challenges and opportunities. Advanced economies continue to struggle towards recovery, with the US on its way to tighten monetary policy as the economy picks up while a still weak Eurozone awaits quantitative easing to kick in. At the same time, plunging oil prices have set in motion significant real income shifts from exporters to importers of oil. Astonishingly, amidst all this turmoil, South Asia has emerged as the fastest growing region in the world over the second half of 2014. Led by a strong India, South Asia is set to further accelerate from 7 percent real growth in 2015 to 7.6 percent by 2017, leaving behind a slowing East Asia gradually landed in second spot by China.
While bolstered by record low inflation and strong external positions across the region, the biggest question yet to be addressed by policy makers in South Asia will be how to make the most of cheap oil.
All countries are net oil importers as well as large providers of fuel and related food subsidies, therefore bound to benefit from low oil prices. However, the biggest oil price dividend to be cashed in by South Asia is one yet to be earned, and not one that will automatically transit through government or consumer accounts. The current constellation of macroeconomic tailwinds provides a unique opportunity for policy makers to rationalize energy prices and to improve fiscal policy. Decoupling external oil prices from fiscal deficits may decrease vulnerability to future oil price hikes – something that may very well happen in the medium term. Furthermore, cheap oil offers a great opportunity to introduce carbon taxation and address the negative externalities from the use of fossil fuels.
The World Bank’s latest South Asia Economic Focus (April 2015) titled “Making the most of cheap oil” provides deeper insights regarding South Asia’s diverse policy challenges and opportunities stemming from cheap oil.
A first major realization is that the pass through from oil prices to domestic South Asian economies is as diverse as the countries themselves, thanks to a variety of different policy environments across countries and oil products. This is also reflected in recent dynamics, seeing India taking determined action towards rationalizing fuel and energy prices, even introducing a de facto carbon tax and beginning to reap fiscal and environmental benefits. Other countries have so far shown less or no enthusiasm towards reform, in spite of significant and/or increasing oil dependency (particularly in electricity generation, one of the region’s weak spots).
- Urban Development
- Social Development
- Public Sector and Governance
- Information and Communication Technologies
- Global Economy
- Financial Sector
- Climate Change
- Agriculture and Rural Development
- South Asia
- East Asia and Pacific
- Sri Lanka