Questions like those – focusing on the private sector as the principal driver of growth, with deft public policy as an indispensable catalyst – inspired a dialogue among some of the developing world’s most experienced policymakers at a major forum, “Powering Up Growth: Ideas for Beating the Slowdown,” during the recent Spring Meetings of the World Bank Group and the International Monetary Fund. All four government Ministers on the panel – from both commodity-exporting and -importing countries – voiced a sense of urgency, describing their efforts to attract private investment to spur job creation, amid a global economy that seems destined for prolonged weakness.
Before the policymakers ascended the Preston Auditorium stage, sobering updates had arrived from the Bank and the Fund: The Bank’s latest forecast for global growth has been lowered from 2.9 percent to 2.5 percent – with the caveat that this latest forecast is subject to further downside risks. That downward revision is in parallel with the Fund’s similar projection, which sees global growth this year in the neighborhood of just 3 percent.
Policymakers worldwide are eager to explore any option to try to lay the foundation for an eventual return to a long-term economic expansion. It was clear that the panelists in the “Powering Up Growth” event – which was convened by Jan Walliser, the Vice President for the Bank Group’s practice group on Equitable Growth, Finance and Institutions (EFI) and organized by the Global Practice for Macroeconomics and Fiscal Management (MFM) – were focused on long-term structural changes that can energize the private sector’s ability to drive growth.
The panelists – from Bolivia, Pakistan, Angola and Ukraine – represented countries from different regions and at various levels of economic development, but they shared a determination to jump-start growth through reforms that will strengthen the private sector’s long-term confidence. The Ministers, at times, seemed to envision opportunities, not just for short-term structural adjustment of their priorities or medium-term structural reform of their policy farmeworks, but for far-reaching structural transformation of their economies and societies.
Two billion people worldwide still lack access to formal and regulated financial services. In 2015, the Bank Group with private and public sector partners committed to promoting financial inclusion and achieving Universal Financial Access by 2020. We've invited our partners to reflect on why they've joined the UFA2020 initiative and how they're contributing toward this goal. This contribution comes from the Pakistan Microfinance Network. #FinAccess2020
Photo Credit: Muhammad Kaleem, Courtesy of the Farmers Friend Organization (FFO)
Kaneez Fatima is a 50 year-old entrepreneur living in Sheikhupura, a city situated 40 km northwest of Lahore, Pakistan. Years before when her husband passed away, she had no idea to find the means for raising a family of six and her future seemed bleak. In her childhood she had acquired the skill of stitching footballs, and she thought about setting up her own workshop. But as a woman in a male dominated market, in an already challenging entrepreneurial environment, she faced what seemed to be an uphill challenge.
Sadly, Kaneez is not alone. World Bank Group Findex data estimates that Pakistan is home to 100 million unbanked people, or 5.2% of the world’ unbanked population, and the ‘Access to Finance Survey 2015’ commissioned by the State Bank of Pakistan states that only 23% of adults use formal financial services offered by formal financial intermediaries with only 16% of Pakistani adults have an account with a formal financial institution.
There’s a lot of good news in the World Bank’s latest economic report on South Asia: the region is the fastest growing in the world and its limited exposure to global economic turbulence means that its near-term prospects look good.
The so-called “Panama Papers” scandal reminds us that concealing wealth and avoiding tax payments is neither uncommon nor — in many cases — illegal. But the embarrassing leak exposes something else: The public trust is breached when companies, the rich and the powerful can hide their money without breaking the law. If this breach is left unaddressed, those who aren’t rich enough to hide money will be less willing to pay and contribute to the social contract in which taxes are exchanged for quality services.
As finance minister in my home country of Indonesia, I saw firsthand how a weak tax system eroded public trust and enabled crony capitalism. Shadow markets arose for highly subsidized fuel, family connections secured jobs, and bribes helped public servants beef up their salaries. Tax avoidance among the elites was common and the country couldn’t mobilize the resources we needed to build infrastructure, create jobs, and fight poverty.
The world must move quickly to fulfill the promise of the climate change agreement reached in Paris four months ago and accelerate low-carbon growth, World Bank Group President Jim Yong Kim said on the opening day of the Spring Meetings.
More than 190 countries came together last December to pledge to do their part to halt global warming. The result was an unprecedented agreement to keep warming below 2 degrees Celsius over pre-industrial times, with the goal of limiting warming to 1.5° C.
While countries around the world reap the benefits of an expanding digital environment, development challenges persist, adversely impacting low-income countries from achieving that same rate of growth.
The 2016 World Development Report (PDF) recently highlighted these findings in addition to three factors that contribute to a government’s responsiveness towards these digital changes.
According to the report, public services tend to be more amenable to improvements through digital technologies if the proposed system allows for fluid feedback, a replicable development process, and an outcome that can be easily measured and identified.