In this video, Lead Urban Specialist Maria Angelica Sotomayor presents some of the key findings from the diagnostic, and explains how the World Bank is collaborating with local stakeholders to make Addis Ababa a stronger, more resilient city.
If you are curious to know which country has achieved double digit growth in the last 12 years, making it the fourth fastest-growing in the world, the answer is Ethiopia. And what is more striking is that if Ethiopia sustains its current pace of growth, it will become a middle income country by 2025.
The White Nile in South Sudan. Photo by Steve Utterwulghe.
As I was landing in Juba, the bustling capital of South Sudan, I couldn’t help but reminisce about my days working in Khartoum for the UN Deputy Special Representative of the Secretary General. The war between the North and the South, of what was then, in 2004, still the Sudan, was raging as the peace negotiations were taking place in a plush resort on the shores of Lake Naivasha in Kenya. I was mainly focusing on guaranteeing access to the people of the Nuba Mountains, one of the three fiercely contested areas between Khartoum and the Sudan People’s Liberation Movement/Army (SPLM/SPLA). I was doing my fair share of shuttle diplomacy, going back and forth between the SPLM/SPLA leadership based in Nairobi and the Government of Sudan in Khartoum. At that time, hopes were high that one would soon see the end of decades of a bloody war in Africa’s largest country. The Comprehensive Peace Agreement was finally signed in 2005. In 2011, South Sudanese participated in a referendum and 99 percent voted for independence. South Sudan became the newest country in the world.
But what should have been a new era of peace and prosperity quickly turned into a feeling of dejà vu. Dreams were shattered as a new internal violent conflict broke out in December 2013, putting the progress achieved at significant risk and disrupting economic activities and livelihoods.
The country is very rich in natural resources, including oil, minerals and fertile arable land. However, with 90 percent of its population earning less than US$1 per day, South Sudan is ranked as one of the poorest countries on the planet. South Sudan remains an undeveloped economy facing important challenges, including high unemployment, weak institutions, illiteracy and political instability. The economic overview of the country by the World Bank suggests that “South Sudan is the most oil-dependent country in the world, with oil accounting for almost the totality of exports, and around 60 percent of its gross domestic product.” The conflict has dramatically affected the production of oil, which has fallen by about 20 percent and is now at about 165,000 barrels per day. This, combined with the sharp global drop in oil prices, has greatly affected the fiscal position of the government.
In such an environment, private sector development is a must, since it has the potential to create market-led jobs and growth. However, private sector growth requires a conducive investment climate and an enabling business environment.
South Sudan has made progress in this area, thanks in part to support from the international community, including the World Bank Group. Yet more needs to be done. South Sudan ranks 187th out of the 189 economies in the Doing Business ranking, just ahead of Libya and Eritrea. In addition, among the top constraints reported by firms in the World Bank Group's Enterprise Survey, 68 percent mention political instability and 58 percent cite access to electricity, followed closely by access to land and finance.
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In the run-up to the COP21 climate conference, one question becomes central: where will we find the solutions on the ground—and the people to implement them—to realize the renewed political ambitions on climate?
Named by Peruvian fishermen because of its tendency to appear around Christmastime, El Niño is the planet’s most large-scale and recurring mode of climate variability. Every 2-7 years, a slackening of trade winds that push sun-warmed water across the Pacific contributes to a rise in water temperature across large parts of the ocean. As the heat rises, a global pattern of weather changes ensues, triggering heat waves in many tropical regions and extreme drought or rainfall in others.
The fact that we are undergoing a major El Niño event should cause major concern and requires mobilization now. Already, eight provinces in the Philippines are in a state of emergency due to drought; rice farmers in Vietnam and Thailand have left fields unplanted due to weak rains; and 42,000 people have been displaced by floods in Somalia.
And this is before the event reaches its peak. Meteorologists see a 95% chance of the El Niño lasting into 2016, with its most extreme effects arriving between now and March. Coastal regions of Latin America are braced for major floods; India is dealing with a 14% deficit in the recent monsoon rains; and poor rainfalls could add to insecurity in several of Africa’s fragile states. Indeed, Berkeley Professor Soloman Hsiang has used historical data to demonstrate that the likelihood of new conflict outbreaks in tropical regions doubles from 3% to 6% in an El Niño year.
But despite its thousand-year history, the devastation associated with El Niño is not inevitable. Progress made by many other countries since the last major event, in 1997-98, shows that we can get a grip on its effect – and others caused by climate trends.
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Consider this: By the time you had breakfast this morning, the world’s urban population grew by some 15,000 people. This number will increase to 180,000 people by the end of the day and to 1.3 million by the end of the week. On a planet with such a vast amount of space, this pace of urbanization is like crowding all of humanity into a country the size of France.
Cities are where most of the world’s population lives, where more and more of population growth will occur, and where most poverty will soon be located.
But why do so many people choose cities? Poor people constantly pour into Rio de Janeiro and Nairobi and Mumbai in search of something better. The poorest people who come to cities from other places aren’t irrational or mistaken. They flock to urban areas because cities offer advantages they couldn’t find elsewhere. The poverty rate among recent arrivals to big cities is higher than the poverty rate of long-term residents, which suggests that, over time, city dwellers’ fortunes can improve considerably.
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.
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.