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Ethiopia

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.

Get smarter: A world of development data in your pocket!

Nagaraja Rao Harshadeep's picture
Many dinner conversations and friendly debates proceed in a data vacuum: “The problem is big… very big!” How big exactly? Most likely your friend has no idea. 

It is often said that we live in a new data age. Institutions such as the Bank, UN agencies, NASA, ESA, universities and others have deluged us with an overwhelming amount of new data obtained painstakingly from countries and surveys or observed by the increasing number of eyes in the sky. We have modern tools such as mobile phones that are more powerful than old mainframes I used to use in my university days. You can be in rural Malawi and still have access to decent 3G data networks.
 
Open data for sustainable development

Pushing water downhill: Considering ICT PPPs

Jeff Delmon's picture
Students using new high-speed Internet in Tonga. Photo: World Bank Group

For private financiers, official government support to information and communications technology (ICT) projects might seem like trying to push water downhill. After all, isn’t ICT incredibly profitable? What’s the point of a public-private partnership (PPP) in this sector, anyway?

Here’s the rest of that familiar argument: Government should stay out of the way and let the private sector carry the communications sector; it is a waste of effort and inefficient to try to push forward something that has its own momentum. Like a rushing river, the naysayers conclude, ICT needs no help advancing down its inevitable course.

It sounds reasonable in theory, but in practice, that approach just doesn’t work. The government needs to guide the river down the best course for the citizens it serves, building a weir or mill to help the river provide maximum benefits to the people who need it. And, just as water is the foundation of life, communication technologies are necessary to prosper in today’s world. Knowledge is power. And specifically, access to markets is improved by mobile phones, as is access to banking services, finance, investment opportunities, and education.

Successful ICT strategies usher in jobs, empowerment and economic growth.

Making forest commitments a reality

Ellysar Baroudy's picture
​Farmers in Zambia's Luangwa Valley discuss sustainable agriculture


​New York this week plays host to Climate Week 2015, where business and government leaders are convening to make pledges and commit to actions to demonstrate that development does not have to come at the expense of the environment. 

One year ago this event was a forum for the New York Declaration on Forests, a public-private compact to end natural forest loss by 2030. 
Now one year on, the World Bank Group remains an active partner working with countries and companies to help turn forestry commitments into actions on the ground. 

Part of the #Youthbiz movement? Share your story!

Valerie Lorena's picture

Also available in: Français | العربية
 



A boat trip from Port Elizabeth to Kingstown, in the Caribbean country of Saint Vincent and the Grenadines, is a one-hour trip that locals take several times a day. It was during one of these journeys that the boat of Kamara Jerome, a young Vincentian fisherman, ran out of gas six miles from Bequia City in what is termed locally as the "Bequia Channel." While waiting for help with strong wind gusts and the sun on his head, the idea of developing a boat that would run with wind and solar energy was born. Soon after, the idea became a prototype; a boat using green technology was on the water making 20-year-old Jerome a winner of international innovation competitions and a role model to other Caribbean youth. 
 
In Mexico, young engineer Daniel Gomez runs a multimillion bio-diesel company originally conceived as a research project for his high school chemistry class. Gomez and his partners - Guillermo Colunga, Antonio Lopez, and Mauricio Pareja - founded SOLBEN (Solutions in bio-energy in Spanish) in their early twenties. 
 
Although Daniel and Kamara have different educational backgrounds, they do share one important skill, the ability to identify a problem, develop an innovative solution, and take it to the market. In other words, being an entrepreneur, an alternative to be economically active, that seems to work and not only for a few.

Improving Public Investment Management: Spotlight on Ethiopia

Mario Marcel's picture
 
Overview of Addis Ababa, Ethiopia. Photo - Arne Hoel / World Bank
Overview of Addis Ababa, Ethiopia. Photo: Arne Hoel / World Bank


Last month I met with ministers and local officials in Addis Ababa to explore areas where we, at the World Bank, can help build institutional capability in Ethiopia. The trip was an enriching experience, both personally and professionally. It was gratifying to see first-hand the good work and commitment to development exhibited by our staff in the country.

We have had a decade-long engagement with Ethiopia with a successful track-record. Ethiopia has one of the largest World Bank portfolios in the Africa Region (US$6.1 billion in 2014) and the partnership is strong, with a robust future.

During my visit, I gave a lecture at Addis Ababa University on Public Investment Management before an audience of faculty, students, civil society organizations and donors. I shared with them how much public infrastructure investment has done for the country. Ethiopia has the third-largest public investment rate in the world and three times the average for Sub Saharan Africa.

This effort has contributed to growth that has averaged 10.9 percent since 2004—a figure higher than that of their neighbors or low-income countries on average. Infrastructure investment has also been helpful in expanding access to services and in gaining competitiveness, being a large landlocked country. 

How to make zones work better in Africa?

Cecile Fruman's picture

Sub-Saharan Arica has launched a new wave of “special economic zones” (SEZs), with more and more countries establishing or planning to establish SEZs or industrial parks. However, can Africa overcome the past stigma and make the zone programs truly successful?

This was one of the hot topics during the China-Africa “Investing in Africa Forum,” held in Addis Ababa, Ethiopia, from June 30 to July 1, organized by the World Bank Group with the government of Ethiopia, the government of China, the China Development Bank and UNIDO.
 
Why did the the African zones fail, in the past, to attract many investors? My answer was they were not truly “special” in terms of business environment and infrastructure provisions, and many constraints were not significantly improved inside the zones. This analysis was supported by another panelist, His Excellency Dr. Arkebe Oqubay, Senior Advisor to the Prime Minister of Ethiopia. According to Dr. Oqubay, past zones in Africa were “missing the ‘basics’ such as power, water and one-stop services, and were not aligned with national development strategy.”

That viewpoint was shared by almost all the other panelists, which included senior African and Chinese officials and international experts at the SEZ session, which was characterized with candid discussions and greatly benefited from the background paper prepared by Douglas Zeng of the World Bank Group’s Trade and Competitiveness Global Practice.

Pathway to profitable women-owned enterprises

Francesco Strobbe's picture

Pathway to profitable women-owned enterprises @ Evgeni Zotov / FlickR

Women entrepreneurs in Ethiopia are disadvantaged from the start. They have less access to the finance, networks, and education which help their male counterparts advance. They face regular discrimination and harassment from society--sometimes even from their own families and communities. The challenges a woman entrepreneur in Ethiopia faces in growing her business are overwhelming.

The case for inclusive green growth

Sri Mulyani Indrawati's picture
Women fishers in Ghana. (Andrea Borgarello/World Bank - TerrAfrica)



Over the last 20 years, economic growth has helped to lift almost a billion people out of extreme poverty. But 1 billion people are still extremely poor. 1.1 billion live without electricity and 2.5 billion people without access to sanitation. For them, growth has not been inclusive enough.

In addition, growth has come at the expense of the environment. While environmental degradation affects everyone, the poor are more vulnerable to violent weather, floods, and a changing climate.

Development experts, policymakers, and institutions like the World Bank have learned a major lesson: If we want to succeed in ending poverty, growth needs to be inclusive and sustainable.

Crowding in Technical and Financial Resources in Support of Forest Landscapes

Paula Caballero's picture
Mexico butterflies by Curt Carnemark / World Bank ​As financing for development talks wrapped up last week in Addis, many conversations revolved around the “how much” as well as on the “how” of achieving universal sustainable and inclusive development in the post 2015 context. Work in the natural resources arena has valuable lessons to offer. 

There is a growing consensus that a new approach is needed to meet the financial needs of developing countries to ensure sustainable, inclusive and resilient growth paths. We all know that Official Development Assistance (ODA) finance is limited and cannot address the massive investment needs of countries. In addition to increased domestic resource mobilization, the more effective engagement of a variety of players, especially from private sector, NGOs, and philanthropic organizations, will be key to close the finance gap. 

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