Syndicate content

Brazil

Will the Asian Infrastructure Investment Bank become the new musketeer?

Arturo Ardila's picture
On Monday, China officially launched the Asian Infrastructure Investment Bank (AIIB) in a ceremony with representatives from the bank's 57 founding-member countries. AIIB will have a capital base of US$100 billion, three-quarters of which come from within Asia.
 
Infrastructure is a growing need for Asia,
and collaboration is critical to filling
gaps. Photo: World Bank

At the inaugural ceremony in the Great Hall of the People, Chinese President Xi Jinping reaffirmed the new institution's mission, saying that "Our motivation [for setting up the bank] was mainly to meet the need for infrastructure development in Asia and also satisfy the wishes of all countries to deepen their co-operation."

Indeed, the AIIB is a major piece of China's regional infrastructure plan, which aims to address the huge needs for expanding rail, road and maritime transport links between China, central Asia, the Middle East and Europe. But the AIIB should also represent a huge opportunity for cooperation not only between countries in the region but also with other multilateral development banks.

Our experience working on transport mega-projects co-financed by several multilateral development banks (MDBs) already shows that this collaboration is much needed and critical for the success and viability of mega-projects. The most recent experience with the Quito Metro Line One Project, for example, shows that the co-financing banks – World Bank, Inter-American Development Bank, Andean Development Corporation and European Investment Bank –  brought not only their financial muscle but also their rich and diverse global knowledge and experience.  Incidentally, because of the Quito Metro project, all the MDBs involved in the project were dubbed as the  “musketeers, ” precisely due to the high degree of collaboration and team work that is making this project a success.

​Environmental conservation, tourism and economic development: an avant-garde Brazilian solution through PPPs

Maria Emília Barbosa Bitar's picture
Note: This blog entry was adapted from an original submission for the PPIAF Short Story Contest. It is part of a series highlighting the role of Public-Private Partnerships (PPPs) in projects and other transformative work around the world.

For the most part, protected areas in Brazil are managed by the public sector. As a result, like other countries, these areas face conservation difficulties, including a lack of resources for maintenance and other initiatives.
 
Gruta de Maquiné, part of the Peter Lund 
Cave Route. Photo: Francisco Martins/flickr

Because of this lack of public-sector financial and human resources, the private sector has provided a significant portion of funding for managing protected areas. One of these cases is in Brazil’s Minas Gerais State. The Secretary of State for Environment and Sustainable Development (SEMAD), Forest State Institute (IEF) and Public-Private Partnership Central Unit collaborated to develop a PPP model focused on management, conservation and operation of three protected areas, located in the State’s the karst region: PPP Peter Lund Cave Route.

The PPP Peter Lund Cave Route aims to structure a single, singular national and international tourist track, aligning the unique natural and cultural elements of the karst region. This new management model is demonstrating results for conservation and sustainable development, including the mobilization of public policies that value one of Brazil’s greatest characteristics: biodiversity.

Obrigado, Brazil!

Clive Harris's picture
Paving a highway in Brazil. In 2014, Brazil's
 infrastructure investment commitments
​drove an overall global increase.
In March we released the update from the Private Participation in Infrastructure (PPI) Database for the first six months of 2014, covering investment activity in energy, transport, and water and sanitation. The good news of a rebound of investment commitment from a decline in 2013 was noteworthy, alongside the heavy concentration of activity in Brazil.
 
The PPI Database’s 2014 full year update for these sectors has just been released, and it confirms the trends we began tracking for the first six months. Total investment in infrastructure commitments for projects with private participation in the energy, transport, and water and sanitation sectors increased six percent to $107.5 billion in 2014 from levels in the previous year. The total for 2014 is 91 percent of the five-year average for the period 2009-13, which is the fourth-highest level of investment commitment recorded – exceeded only by levels seen from 2010 through 2012. 
 
This increase over 2013 was driven largely by activity in Brazil. Without Brazil, total investment commitments would have fallen by 18 percent, from $77.2 billion in 2013 to $63.4 billion in 2014.  Although this is lower than H1 2014 (57%), Brazil’s large stake is a continuation of a recent trend.
 
The Latin America and the Caribbean (LAC) region saw $69 billion of investment commitments, or nearly 70 percent of the total for 2014. Three of the top five countries by investment commitments in 2014 were from LAC.  The top five, in order, were Brazil, Turkey, Peru, Colombia, and India. 

Campaign Art: The HIV positive poster

Roxanne Bauer's picture

People, Spaces, Deliberation bloggers present exceptional campaign art from all over the world. These examples are meant to inspire.

HIV first emerged in the 1980s, and soon after Brazil's infection rates quickly climbed. A decade later, in the early 1990s, Brazil and South Africa had similar infection rates.  Today, however, the two countries look quite different: South Africa now has one of the highest HIV infection rates in the world, with over 6 million people infected while Brazil has been able to drastically reduce the number of cases to 660,000.

Over the last 25 years, Brazil has initiated a series of steps, including the provision of free condoms and free treatment (due in part to cheap drugs obtained through negotiations with pharmaceutical companies) and was able to reduce the disease’s prevalence. Nevertheless, the number of new HIV cases is  starting to rise again, as international funding for HIV/AIDS programs becomes more limited and as a generation of young people emerges that didn't experience the horror of HIV before widespread treatment was available.

In response, Ogilvy Brazil launched a campaign on behalf of the NGO Life Support Group (Grupo de Incentivo à Vida) that seeks to raise awareness and humanize the disease. They asked HIV-positive individuals to prick their fingers and add a drop of blood to posters that were then placed around São Paulo.
HIV cannot survive for more than an hour outside the human body, rendering the posters completely harmless. The idea is that, just like the posters, people with HIV are not to be feared.
 
VIDEO: The HIV Positive Poster


Do better roads really improve lives?

Eric Lancelot's picture
Also available in: Español | Français | العربية | Português

How can improved roads change peoples’ lives? How much do people benefit from road projects? Answering these seemingly simple questions is, in fact, much trickier than it appears.

We recently concluded an impact evaluation to measure the socio-economic impacts of World Bank-financed municipal road improvements on poor rural households in the state of Tocantins, Brazil. After 10 years of study, what were the results and lessons learned? And how did we go about conducting the evaluation?

The study followed a methodology traditionally used in impact evaluations in the social sector and was based on a precedent in Vietnam. Throughout the state, one of the least-developed and least-populated in Brazil, most municipal roads are unpaved with inadequate maintenance. The World Bank’s municipal roads project helped construct 700 concrete bridges and 2,100 culverts crossing rivers and streams, providing year-round access to remote populations that once couldn’t access municipal centers during rainy season.

The anticipated result chain of the project was as follows: improvement of physical accessibility would contribute to increase travel demand to markets, schools and health services. This would, in turn, contribute to improved education, better health and increased business opportunities. Finally, it would result in long-term household income growth.

Our study aimed at measuring these impacts through a “difference in differences with matching,” a method that compares a treatment group (population benefiting from the interventions) and a control group (population that does not), while ensuring similar socio-economic characteristics (or comparability) between groups. An “instrumental variables estimator” was then used to confirm the robustness of the results.

The results show positive socio-economic impacts to rural residents, as well as provides for several policy implications:

What if we disclosed everything?

Marcos Siqueira's picture
One day in 2012, when I was the head of a Public-Private Partnership (PPP) Unit in a subnational government in Brazil, I woke up at 7:00 am to my phone ringing. I was surprised to see that it was the State Governor calling me – not his assistant but him, personally. He was not happy and had a very direct question: Why are today’s newspapers saying that one of our most successful PPP projects is failing to meet quality standards?
 
Image: www.e-builder.net

The day before I received the Governor’s phone call, I had ordered disclosure of full performance reports for all PPP projects on our website. This was the first time that any government had done that in Brazil. The particular project that the Governor had mentioned was a toll road that scored 83 percent in the previous trimester[1]. This was a fantastic score from a technical perspective. Besides, the performance indicators that we used were created to maintain incentives for improvement over the life of the contract. It was never meant for the private party to score 100 percent. Unfortunately, the news reporter did not understand this and didn’t invest time to ask – so I received the governor’s call. At that moment I knew I had a very strong case to make.

From my experience of more than eight years managing transactions and capacity building programs in Latin America and Africa, a radical approach to transparency is the key to enable PPPs to deliver more and better infrastructure services. In other words, I am fully convinced that opacity is the shortest route PPP projects can take towards the expensive failures mentioned by Laurence in his inaugural blog post.

The crude truth is that opaque PPP policies serve a lot of interests, but almost none of them benefit service users or taxpayers.  Here are some of the key points on transparency in PPPs, from my perspective:

The future of food: What chefs can bring to the table

Donna Barne's picture
Chef David Chang, left, with World Bank Group President Jim Yong Kim at the Future of Food event.
​© Simone D. McCourtie/World Bank


How can everyone, everywhere, get enough nutritious food? A famous chef, the president of the World Bank Group, a mushroom farmer from Zimbabwe, and a proponent of “social gastronomy” explored ways to end hunger and meet food challenges at an event, Future of Food, ahead of the 2015 World Bank Group-IMF Spring Meetings.

About 800 million people go to bed hungry every night. By 2050, there will be 9 billion people in the world to feed. Agricultural productivity will have to improve, said World Bank Group President Jim Yong Kim.

So how can chefs like David Chang, the founder of Momofuku restaurant, help?

Brazil shows how far inclusive green growth has come in 20 years

Rachel Kyte's picture

Also available in: Português

_


World Bank Group Vice President and Special Envoy for Climate Change Rachel Kyte talks about Brazil's shift toward green, inclusive growth and how innovative practices developed there have gone global. The next challenge: developing business models to invest in the restoration of degraded land.

Does political risk deter FDI from emerging markets?

Laura Gómez-Mera's picture

Investors touring a factory in Canada. Source - Province of British Columbia“Ask anyone you meet on the street whether political risk has risen in the last few years, and you’d likely get a convincing yes,” a high official from Canada’s Export Development Center recently wrote.
 
Investors have always worried about the political landscape in host markets. But it’s true. Concerns over political risk are on the rise.
 
The most recent EIU’s Global Business Barometer shows that the proportion of executives that identified political risk as one of their main concerns increased from 36 percent in 2013 to 42 percent in 2014. MIGA’s Political Risk Survey tells a similar story: 20 percent of investors identified political risk as the most important constraint on Foreign Direct Investment (FDI) in developing economies. Indeed, according to risk management firm AON, political risk is now tenth on the list of main risks facing organizations today and is likely to rise in the ranking in the next few years.
 
With FDI from emerging markets also on the rise, are the concerns of these investors any different?

Newest private participation in infrastructure update shows growth and challenges

Clive Harris's picture



In 2013, investment commitments to infrastructure projects with private participation declined by 24 percent from the previous year.  It should be welcome news that the first half of 2014 (H1) data – just released from the World Bank Group’s Private Participation in Infrastructure (PPI) database, covering energy, water and sanitation and transport – shows a 23 percent increase compared to the first half of 2013, with total investments reaching US$51.2 billion.

closer look shows, however, that this growth is largely due to commitments in Latin America and the Caribbean, and more specifically in Brazil. In fact, without Brazil, total private infrastructure investment falls to $21.9 billion – 32 percent lower than the first half of 2013. During H1, Brazil dominated the investment landscape, commanding $29.2 billion, or 57 percent of the global total.

Four out of six regions reported declining investment levels: East Asia and the Pacific, South Asia, Africa, and the Middle East. Fewer projects precipitated the decrease in many cases. Specifically, India has experienced rapidly falling investment, with only $3.6 billion in H1, compared to a peak of $23.8 billion in H1 of 2012. That amount was still enough to keep India in the top five countries for private infrastructure investment. In order of significance, those countries are:  Brazil, Turkey, Mexico, India, and China.

Sector investments were paced by transport and energy, which together accounted for nearly all private infrastructure projects that were collected in this update. The energy sector captured high investment levels primarily due to renewable energy projects, which totaled 59 percent of overall energy investments, and it is poised to continue growth due to its increasing role in global energy generation.

The energy sector also had the biggest number of new projects (70), followed by transport (28), then water and sewerage (12). However, transport claimed the greatest overall investment, at $36 billion, or 71 percent of the global total.

While we need to see what the data for the second half of 2014 show, what we have to date suggests that infrastructure gaps may continue to grow as the private sector contributes less. It also suggests that, in many emerging-market economies, there is much work to be done to bring projects to the market that will attract private investment and represent a good deal for the governments concerned. 
 


Pages