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Record investment in transport boosts overall private participation in infrastructure in 2014

Henry Kasper's picture

Imagine record commitments in transport that are 26% higher than the next best year since the inception of the Private Participation in Infrastructure (PPI) Database in 1990. That’s exactly what took place in 2014—massive private participation in transport that culminated in the fourth highest level of global investment (transport, energy, and water) ever recorded. Indeed, the PPI Database’s 2014 Global Update released in June, 2015, shows that total investment in transport hit a record high of US$36.5 billion, driven by a handful of outsized deals in
Latin America and, more specifically, Brazil—including a mega airport project totaling US$10 billion. Meanwhile, energy fell 19 percent year-over-year due to fewer commitments in five out of six regions, while water grew 14 percent, driven by key deals in Brazil, Mexico, and Peru. In a separate report, Telecom showed modest year-over-year declines, extending a trend of fewer projects and lower investment over the past five years.  

A better way to build -- promoting sustainable infrastructure

Robert Montgomery's picture

As countries prepare to meet at the G20 summit in Turkey next week, global growth and infrastructure needs will be at the top of decision makers’ concerns. And rightly so: Infrastructure – roads, bridges, ports, power plants, water supply – drive economic growth in many countries by facilitating manufacturing, services and trade. But it’s not just a matter of building more. To achieve good development on a planet stressed by climate change and diminishing natural resources, infrastructure needs to be sustainable.

Natural Capital Accounting: Going beyond the numbers

Stig Johansson's picture
Guatemala. World Bank

Here are some facts that you might not know: Do these numbers just seem like bits of trivia? In fact, these are all important results that came out of natural capital accounting (NCA) – a system for generating data on natural resources, such as forests, energy and water, which are not included in traditional statistics. NCA follows standards approved by the United Nations to ensure trust, consistency and comparison across time and countries.
The results above are among the numerous NCA findings that are being generated every year, with support from a World Bank-led global partnership called Wealth Accounting and the Valuation of Ecosystem Services (WAVES). In response to the growing appetite for information on NCA, WAVES has set up a new Knowledge Center bringing together resources on this topic.

Competitive Cities: Bucaramanga, Colombia – An Andean Achiever

Z. Joe Kulenovic's picture

Modern business facilities, tourist attractions, and an expanding skyline: Bucaramanga, Colombia. 

When the World Bank’s Competitive Cities team set out to analyze what some of the world’s most successful cities have done to spur economic growth and job creation, the first one we visited was Bucaramanga, capital of Colombia’s Santander Department. Nestled in the country’s rugged Eastern Cordillera, landlocked and without railroad links, this metropolitan area of just over 1 million people has consistently had one of Latin America’s best-performing economies. Bucaramanga, with Colombia’s lowest unemployment rate and with per capita income at 170 percent of the national average, is on the threshold of attaining high-income status as defined by the World Bank.  

Bucaramanga and its surrounding region are rife with contrasts. On the one hand, it has a relatively less export-intensive economy and higher rates of informal business establishments and workers than Colombia as a whole. Indeed, informality has often been cited as a key constraint to firms’ ability to access support programs and to scale up. On the other, Santander’s rates of poverty and income inequality, and its gender gap in labor-force participation, are all better than the national average, and it has consistently led the country on a number of measures of economic growth, including aggregate output, job creation and consumption.   
But the numbers tell only part of the story. A qualitative transformation of Bucaramanga’s economy is under way. Once dominated by lower-value-added industries like clothing, footwear and poultry production, the city is now home to knowledge-intensive activities such as precision manufacturing, logistics, biomedical, R&D labs and business process outsourcing, as well as an ascendant tourism sector. Meanwhile, Santander’s oil industry, long a major employer in the region, has been a catalyst for developing and commercializing innovative technologies, rather than just drilling for, refining and shipping petroleum.

All these achievements are neither random nor accidental: They are the result of local stakeholders successfully working together to respond to the challenges of globalization and external competitive pressures.

What can South Asian cities learn from Colombia's Medellin?

Sangmoo Kim's picture
Cable Car in Medellin
The Metro Cable in Medellin has facilitated greater access to mobility, services, and opportunities through connecting poorer neighborhoods with facilities and services throughout the city. Joe Qian/World Bank
Cities are created for human experiences and not for satellites in the sky. So why are there so many cities that while look impressive on a map, exclude so many of their residents from enjoying the full extent of their benefits? The key may be that details matter for inclusion of cities.
Inclusion means that all people and communities have access to rights, opportunities, and resources. Urbanization provides cities the potential to increase prosperity and livability. However, many suffer from poor environments, social instability, inequality, and concentrated pockets of poverty that create exclusion. In South Asia, as in other regions, segregation within cities cause poorer areas to suffer from the lack of access to facilities and services that exacerbate misery and crime.

Medellin, Colombia was once the most dangerous city on the planet with astounding gaps between the wealthy and the poor, vastly different access to services, and the highest homicide rate in the world. Its turnaround has been impressive. Much of the progress has been attributed to the thoughtfulness of its planning to ensure greater inclusion. What can South Asian cities learn from this South American city?

Planning policies and action have often been concentrated on the broad structures and functions of cities. However, drilling down the details can realize an inclusive urban environment that improves life for all in public spaces. In our definition, inclusive cities provide:                                                                              
  • Mobility: A high level of movement between different neighborhoods that provide opportunities for jobs, education, and culture;
  • Services: All neighborhoods have a basic level of facilities and affordable necesities such as housing, water, and sanitation;
  • Accessibility: Urban spaces are designed so that everyone can easily and safety enjoy public spaces. 
 Social inclusion requires greater planning at a micro scale
Scale matters: Inclusion requires greater planning at a micro scale. Sangmoo Kim/World Bank

What happened in Medellin, Colombia? Medellin offers an inspiring example of how improved planning and sound implementation can increase social inclusion. Two decades ago, Medellin was the homicide capital of the world. Illicit drugs were a major export and hillside slums were particularly affected by violence. In response, the government created public facilities inclusive of libraries and schools, public transportation links, and recreational spaces in the poorest neighborhoods; and connecting them with the city’s commercial and industrial centers. As a result of a planning model that seeks to serve all residents, the city has become safer, healthier, more educated and equitable. 

The reforms behind the Doing Business rankings

Cecile Fruman's picture

In Mozambique in 2003, it took an entrepreneur 168 days to start a business. Today, it takes only 19 days. That kind of transformation has major implications for ambitious men and women who are seeking to make a mark in business, or, as is often the case in Africa, seeking to move beyond a life in agriculture. In economies with sensible, streamlined regulations, all it takes is a good idea, and a couple of weeks, and an entrepreneur is in business.

This week, the World Bank Group launched its annual Doing Business 2016 report, which benchmarks countries based on their progress undertaking business reforms that make it easier for local businesses to start up and operate.

For the second straight year, Singapore topped the list, with New Zealand, Denmark, the Republic of Korea, and Hong Kong SAR, China, coming in closely behind.

In the developing world, standouts included Kenya and Costa Rica, both of which rose 21 positions; Mauritius, Sub-Saharan Africa’s top-ranked economy; Kazakhstan, which moved up 12 places to rank 41st among all countries; and Bhutan, which topped South Asia’s list of reformers. In the Middle East and North Africa, 11 of the region’s 20 economies achieved 21 reforms despite the challenges caused by a number of civil and interstate conflicts.
The reforms tracked by Doing Business are implemented by governments, but the results show up most in the private sector, which is critical to driving a country’s competitiveness and to creating jobs. Ensuring an enabling environment in which the private sector can operate effectively is an important marker of how well an economy is positioned to compete globally. 
For those of us working with governments to help improve their investment climates – and to create a policy environment in which business regulatory costs are reasonable, access to finance is open, technology is shared, and trade flows within and across borders – the real work begins long before the Doing Business rankings are published.

In the World Bank Group’s Trade and Competitiveness Global Practice (T&C), our mandate is to work with developing countries to unleash the power of their private sector for growth. Much of this work involves reforms in the very areas measured in the Doing Business report: starting a business, dealing with construction formalities, or trading across borders, among other factors.

Our experience working with clients confirms one of this year’s key findings: Regulatory efficiency and quality go hand-in-hand. A good investment climate requires well-designed regulations that protect property rights and facilitate business operations while safeguarding other people’s rights as well as their health, their safety and the environment.

Madagascar: Expanding the bandwidth of the extreme poor

Andrea Vermehren's picture
​Photo: Laura B. Rawlings / World Bank

It is 8 AM. The winter sun begins to appear over the gray-green mass of trees above the village of Tritriva in Madagascar’s central highlands. The courtyard of a stone church is already filled with women, many holding still-sleeping children in their arms. They have assembled for the first time in two months to receive a cash payment from the Malagasy state.

The women are poor and all live on less than $2 per day. The money they receive from the government amounts to about a third of their cash income for the two months in between each payment: it will go a long way in helping them support their families for the rest of the winter.
Initiated by the Madagascar government,  with support from the World Bank, the payments are part of a new program implemented by the Fonds d'Intervention pour le Développement (FID) to combat poverty in rural Madagascar and provide sustainable pathways to human development.

Higher education: returns are high but we need to fund it better

Harry A. Patrinos's picture
University students at a laboratory.

Photo: Nafise Motlaq / World Bank

This week I was invited to speak at The Economist’s Higher Education Forum in New York to share my thoughts on how higher education can be expanded. I believe that we need a fair and sustainable cost-recovery model at the university level using future earnings to finance current education.

Over the past two decades, there has been a tremendous increase in the number of university students and graduates worldwide, which should have led to decrease in the rate of return to investment to higher education – if supply outpaced demand, of course.  While there has been some decrease in overall rates of return, investment in education is still a highly profitable investment.  Global demand for high levels skills such as working with new information and problem-solving has kept the returns to schooling high in even the poorest countries of the world. In fact, the returns to higher education are higher in lower-income countries – except in the Middle East and North Africa due to rigid labor market regulations.

School feeding: A tool for social inclusion

Andy Chi Tembon's picture
Photo Credit: Andy Tembon / World Bank

October 16 is World Food Day, a day when people come together to declare their commitment to eradicate hunger within a lifetime.

Many school-age children across the globe depend on school feeding programs for morning and mid-day meals.  School feeding programs incentivize parents to keep children in school and provide students the essential nutrients to stay healthy and able to learn. 

How Colombia is improving access to justice services

Jorge Luis Silva Mendez's picture
A female farmer near Santander, Colombia. Photo: © Charlotte Kesl / World Bank

Proposed Sustainable Development Goal 16: “Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.”

The UN General Assembly adopted this ambitious objective as one of the 17 new Sustainable Development Goals (“SDGs”) when they convened last week.  This is a landmark recognition of the importance of justice services for poverty eradication and sustainable, inclusive development. But how will it work in practice?

In the midst of ensuing debates around this question, Colombia offers valuable lessons. In a country torn by almost seven decades of civil war and conflict, access to justice is critical for the advancement of peace and development. Yet inefficiencies of the courts, and their concentration in select urban centers, raise the cost of access. Compounded by lack of information, these barriers have kept justice services out of reach for many citizens, particularly for the poor and most vulnerable.