with research contributions from Zichao Wei
At conferences, in meetings, and even during casual work conversations, I am asked the same two questions: “Which countries are ideal for investments in infrastructure? Where should the investors invest and what new opportunities should they look toward?”
While sitting in the World Bank gives us a bird’s-eye view of emerging markets and developing economies (EMDEs), it doesn’t offer the up-close-and-personal perspective that investors demand in order to answer these questions in a succinct way. Not that there’s any shortage of synoptic responses. Any number of “market gurus” can assess projects in a second, gathering all the low hanging fruits which are out there in EMDEs. If there is a private deal to be made, then the deal is already done.
with research contributions from Zichao Wei
Selecting contractors with the right capacity and experience for large value works contracts is critical for implementation and timely completion of the works.
How do you achieve that?
The China’s Fujian Meizhou Bay Navigation Improvement Project offers some lessons of how the Bank team successfully worked with the client in selecting the right contractors through appropriate procurement strategy and due diligence.
The total project cost is US$138 million and the Bank loan is US$50 million. The project seeks to improve the capacity of the main navigation channel in Meizhou Bay and enhance the management capacity of the Meizhou Bay Harbour Administration Bureau.
Inclusion is the new buzzword in international development. From promoting citizen empowerment to fostering pathways out of fragility, it is all about political processes that are more inclusive and representative.
The newly adopted Sustainable Development Goals are perhaps the most ambitious articulation of this consensus, with Goal 16 in particular calling for building more “effective, accountable and inclusive institutions at all levels”.
And there are good reasons for this call-out. Two findings from research that I undertook for a paper I wrote recently on Political Settlements and the Politics of Inclusion are particularly striking in highlighting the centrality of inclusion:
Is it possible to complete advanced contracting for the construction of Bus Rapid Transit (BRT) lines within two or three months and have the lines in operation within six months?
The simple answer is, yes.
The China Urumqi Urban Transport Project II, a US$537 million project, achieved just this as it looked to improve mobility in selected transport corridors in the city of Urumqi, the capital of the Xinjiang Province in West China.
Last week, I had the opportunity to attend the Singapore Urban Week along with other colleagues from the World Bank Beijing office, as well as delegates from China’s national government and participating cities. For all of us, this trip to Singapore was an eye-opening experience that highlighted the essential role of integrated urban planning in building sustainable cities, and provided practical solutions that can be readily adapted to help achieve each city’s own development vision. A couple of key lessons learned:
Putting people at the center of development strategies
This is only possible when planners always keep in mind people’s daily experience of urban space and invite them as part of decision-making process through citizen engagement.
For instance, in many cities, public transit has been perceived as a low-end, unattractive option of travel, causing ridership to stagnate despite severe traffic congestion. But in Singapore, public transit accounts for 2/3 of the total travel modal share in 2014. Moving around the city by metro is comfortable and efficient because transfers between different modes and lines are easy, with clear signage of directions, air-conditioned connecting corridors, and considerate spatial designs and facilities for the elderly and physically-challenged users. In addition, metro stations are co-located with major retail and commercial activities and other urban amenities, significantly reducing last-mile connectivity issues.
Figure 1: Poverty and inequality in rural China
Carbon pricing is increasingly being used by governments and companies around the world as a key strategy to drive climate action while maintaining competitiveness, creating jobs and encouraging innovation. The importance of carbon pricing was amplified in the run up to the global climate change agreement in Paris last December.
As countries move towards the implementation of the Agreement, it is the focus of a World Bank conference in Zurich this week which brings together over 30 developed and developing countries to discuss opportunities and challenges related to the role of carbon pricing in meeting their mitigation ambitions.
Nearly 50 years ago, books such as Asian Drama: An Inquiry Into The Poverty Of Nations, by the Swedish economist and Nobel laureate Gunnar Myrdal, offered a dire prediction of famine and poverty for the region in coming decades.
Cites are the heartbeat of the global economy. More than half the world’s population now resides in metropolitan areas, making a disproportionate contribution to their respective countries’ prosperity. The opportunities and challenges associated with urbanization are quite evident in the world’s most populous country, whose cities are among the largest and most dynamic on Earth. To better understand what a thriving metropolitan economy looks like in the Chinese context, our Competitive Cities team selected Changsha, the capital of Hunan Province, for inclusion among our six case studies of economically successful cities, as the representative of the East Asia Pacific Region.
As recently as the turn of the millennium, Changsha’s economy was still dominated by low-value-added, non-tradable services (e.g. restaurants and hair salons) – an economic structure commonly seen today in many low- to lower-middle-income cities. Since then, Changsha has achieved consistently high, double-digit annual growth in output and employment, despite its landlocked location and few natural or inherited advantages, such as proximity to trade routes or mineral wealth. With per capita GDP surging from US $3,500 in 2000 to more than US $15,000 in 2012, Changsha has accomplished a feat so many other World Bank clients can only dream of: leapfrogging from lower-middle-income to high-income status in barely a decade, and an economy now comprised of much more sophisticated, capital-intensive industries.
Photos via Google Maps
We took a closer look at the success factors behind this city’s dramatic growth story, and what lessons its experience may hold for cities elsewhere, especially in terms of (1) how to overcome coordination failures and bureaucrats working in silos and (2) how to ensure a level playing field for all firms in the city (that is to say, competition neutrality), even in industries with a strong SOE presence – something still not commonly seen in China these days.
Changsha’s (and Hunan’s) growth has clearly benefitted from a highly conducive national macroeconomic and policy framework, including a plan entitled The Rise of Central China, aimed at spurring development in areas beyond the country’s booming coastal regions. This and other initiatives provided for the removal of investment restrictions, more favorable tax treatment, and enhanced infrastructure and connectivity to coastal commercial gateways. China’s massive stimulus plan in 2009 (in response to the global financial crisis and recession) jump-started construction activity in the country, providing further impetus to one of Changsha’s principal industries, construction machinery and equipment manufacturing. And national government interventions in earlier decades – especially the establishment of dedicated research institutes – provided a critical contribution to Changsha’s accumulation of expertise in such disciplines as machinery or metallurgy.
Notwithstanding these national initiatives, responsibility for local economic development in China is highly decentralized, with municipal government leaders directly tasked with achieving GDP growth and tax revenue targets. Municipal governments also have rights over almost all land in cities, which can be leased or used as collateral to fund local infrastructure. In Changsha, municipal authorities used these prerogatives to improve their city’s economic competitiveness.
- urban competitiveness. Private sector competitiveness
- urban competitiveness
- Private sector competitiveness
- sustainable urbanization
- Urban Policies
- urban policy
- Competitiveness Policy
- Competitive Sectors
- Competitive Industries
- competitive cities
- Public Sector and Governance
- Private Sector Development
- Urban Development
- Sustainable Communities
With this week's kickoff of the 2016 China “Business 20” (B20) proceedings in Beijing, this is an opportune time to reflect on some of the key accomplishments of the 2015 Turkey B20. As many readers of this blog know, the B20 is the premier dialogue platform of the business community with the G20 policymakers representing the most important economies of the world, and it is influential in identifying and supporting policies that are crucial for overall economic development. I believe that taking stock of the past enables us to learn from both successes and failures, and helps sustain the momentum on what worked and generated the desired impact.
Looking back at my involvement as Chair of the B20 Steering Committee, what strikes me as a major achievement is the amplification of the voice of small and medium enterprises (SMEs). I believe that, if we want our economies to have healthy and inclusive growths, this must remain as a key priority for the upcoming B20 in China.
Participants in the Turkish G20/B20 process shared the assessment that SMEs’ potential was not being fully realized. SMEs account for about two-thirds of all private-sector jobs globally and about 80 percent of net job growth. They are the engine for equitable growth and poverty alleviation. And they are the backbone of the middle class and of social stability. Yet they suffer disproportionately from limited access to markets, finance, talent, skills and innovation. In addition, regulations also often put them at a disadvantage. Until recently, SMEs had lacked an organization that would champion their cause.
With these major issues in mind, and with strong deliberations of the B20 Leadership and support from the G20 Finance Ministers, last year TOBB and the ICC officially founded the World SME Forum (WSF), with the mission to help improve the overall growth and impact of SMEs globally, by effectively tackling the key challenges they face. WSF aims to provide SMEs with effective representation and to advance the recognition of the role of SMEs in the global economy by partnering with international financial institutions (IFIs) and development agencies. WSF has membership from associations and chambers working in the SME space from all over the world.
WSF is ready to represent SME interests with regional and global bodies, and to advocate for better rules and regulations among standard-setters.
As I am on my way to Beijing, I cannot help but think that this is indeed a major achievement, which will give the SME development agenda a much better chance at succeeding. WSF can be a “bridge” across B20 presidencies, so that we can ensure continuity in the crucial SME agenda. WSF can help avoid any loss of momentum on the implementation of the recommendations we develop during each cycle.
Even better, after B20 China officially decided to continue the SME Development Taskforce, which was started for the first time by B20 Turkey, they invited WSF to be a Business Network Partner for the Taskforce. WSF will therefore be coordinating the network and will help drive the ideas that emerge from the Taskforce discussions into implementation.