Syndicate content

Small states (SST)

​Integrating West African economies PPP-wise

François Bergere's picture
Photo: Wikimedia Commons

What do Benin, Niger, Guinea-Bissau, Togo and Mali have in common? Apart from being members of the eight-country strong West African Economic and Monetary Union (UEMOA), they share a common status as low-income countries, faced with huge infrastructure needs and financing challenges.
 
Furthermore, they have decided that one way to address these challenges and sustain their economic growth was to promote public-private partnerships (PPPs) through a regional framework and strategy. This initiative is supported by the Public-Private Infrastructure Advisory Facility (PPIAF) for the World Bank, and Agence Française de Développement (AFD) and Expertise France on the French cooperation side.
 
Which is why — on July 2-3 in the midst of sweltering weather in the leafy  suburbs of Ouagadougou, the capital of Burkina Faso,  which  is also  home to  UEMOA headquarters — 20 or so experts and decision-makers attended a two-day seminar to discuss the framework and strategy. Beyond PPIAF and AFD, regional participants included representatives from the UEMOA Commission, the Regional PPP unit at the West African Development Bank (BOAD), the African Development Bank (AfDB), the African Legal Support Facility (ALSF), the Organization for Harmonization of Business Law in Africa (OHADA), and the Central Bank of West African States (BCEAO).
 
The issues we covered included the need to:

Five lessons of regional integration from Asia, America, and Africa

Sanjay Kathuria's picture
More than 50% of today’s international trade goes through regional trading arrangements.  While trade is a critical component of regional integration, integration has several other dimensions including energy cooperation and intra-regional investment, to name a few.  After carefully examining cases of regional integration in Southeast Asia, the Americas and Africa, we present five lessons for South Asia.

Lesson 1: Facilitate trade in goods and services

Despite falling tariffs, there is still a large gap between the price of the exported good and the price paid by the importer, largely arising from high costs of moving goods, especially in South and Central Asia. On a percentage basis, the potential gains to trade facilitation in South and Central Asia, at 8 percent of GDP, are almost twice as large as the global average. High trade costs have contributed to South Asia being the least integrated region in the world.

FIGURE 1: Intra-regional trade share (percent of total trade), 2012

In the ASEAN region, most countries have established either Trade Information Portals or Single Windows that have enhanced trade facilitation, reduced trade costs and enhanced intra-regional trade. A Trade Information Portal allows traders to electronically access all the documents they need to obtain approvals from the government. A Single Window (a system that enables international traders to submit regulatory documents at a single location and/or single entity) allows for the electronic submission of such documents. These single windows, using international open communication standards, facilitate trade both within the region and with other countries using similar standards.

In services, one barrier to trade involves the movement of skilled workers, accountants, engineers and consultants who may move from one country to another on a temporary basis. The Southern Common Market (Mercosur)’s Residence Agreement allows workers to reside and work for up to two years in a host country. This residence permit can be made permanent if the worker proves that they can support themselves and their family.

Bridging the Gap in LAC Infrastructure

Karin Erika Kemper's picture


The other day I had the opportunity to participate in the annual CAF conference on Infrastructure, this time held in Mexico City. The conference featured CAF's new IDEAL report on the state of infrastructure in Latin America and the conference, attended by many decision and opinion makers from across LAC, was organized around findings of the report.
 
I had a few takeaways from the discussions, notably that (1) there is convergence on a range of key issues and (2) there are some important Bank messages that are unique:

Will the Asian Infrastructure Investment Bank become the new musketeer?

Arturo Ardila's picture
On Monday, China officially launched the Asian Infrastructure Investment Bank (AIIB) in a ceremony with representatives from the bank's 57 founding-member countries. AIIB will have a capital base of US$100 billion, three-quarters of which come from within Asia.
 
Infrastructure is a growing need for Asia,
and collaboration is critical to filling
gaps. Photo: World Bank

At the inaugural ceremony in the Great Hall of the People, Chinese President Xi Jinping reaffirmed the new institution's mission, saying that "Our motivation [for setting up the bank] was mainly to meet the need for infrastructure development in Asia and also satisfy the wishes of all countries to deepen their co-operation."

Indeed, the AIIB is a major piece of China's regional infrastructure plan, which aims to address the huge needs for expanding rail, road and maritime transport links between China, central Asia, the Middle East and Europe. But the AIIB should also represent a huge opportunity for cooperation not only between countries in the region but also with other multilateral development banks.

Our experience working on transport mega-projects co-financed by several multilateral development banks (MDBs) already shows that this collaboration is much needed and critical for the success and viability of mega-projects. The most recent experience with the Quito Metro Line One Project, for example, shows that the co-financing banks – World Bank, Inter-American Development Bank, Andean Development Corporation and European Investment Bank –  brought not only their financial muscle but also their rich and diverse global knowledge and experience.  Incidentally, because of the Quito Metro project, all the MDBs involved in the project were dubbed as the  “musketeers, ” precisely due to the high degree of collaboration and team work that is making this project a success.

PPPs in the Caribbean: Filling the gap

Brian Samuel's picture
Prior to about 2005, for many tourists their Jamaican vacation was ruined at the last minute, by the hot and overcrowded conditions inside Montego Bay’s Sangster International Airport. Fast forward 10 years, and waiting for a flight at Sangster is an altogether more pleasant experience. The air conditioning actually works, and the whole environment is infinitely less stress-inducing than before.
 
A new waiting area at Montego Bay's
Sangster International Airport.
Photo: Milton Correa/flickr

What’s the difference? The private sector.

In 2003, the Government of Jamaica finally succeeded in doing what it had been trying to do for a decade: privatize Montego Bay Airport. A private sector consortium, led by Vancouver International Airport, quickly invested millions of dollars in expanding the terminal building, doubling the airport’s capacity and opening dozens of new retail spaces. Since then, the consortium has invested more than US$200 million on expansions and improvements to the airport, all of which has been entirely off the government’s balance sheet.

Jamaica has gone on to implement several more public-private partnerships (PPPs), with mixed results. The second phase of its ambitious highway construction program — the Mount Rosser Bypass — was recently opened, cutting a swath through miles of virgin territory. However, early indications are that traffic levels are not living up to expectations, probably due to the Bypass’ steep eight percent gradient, which is beyond the means of most Jamaican trucks and buses.

In the energy sector, Jamaica is completing three PPPs with a total of 115 megawatts of renewable energy (RE) capacity, putting the country on track to meet its RE target of 12.5 percent of generating capacity by the end of 2015. Lastly, the government is currently completing formalities for the sale of Kingston Container Terminal (KCT) to a consortium of CMA/CGM and China Merchant Marine, a transaction that is expected to result in a US$600 million capital expenditure program by the port’s new owners.

The World Bank’s Caribbean Entrepreneurship Program: One Woman’s Story of Growth

Michael Grant's picture

After managing businesses in television and tourism, Shirley Lindo returned to Jamaica with a desire to create a community-enriching enterprise. As the daughter of a St. Ann farmer, she chose natural products, free of additives, that could be grown on her "Outa Earth" plot in the old Bernard Lodge sugar lands.

Since castor beans grow fairly easily on Jamaica’s plains, she settled on the production of castor oil, a versatile commodity valued as a food additive, manufacturing element, cosmetic ingredient and healing agent. As a testament to the oil’s quality, it has won blue ribbons at the Denbigh Agricultural show, Jamaica’s largest, three years running.
 
Shirley discovered, after a few years of producing the oil using a laborious traditional process and selling to local and American customers, that her product generated large quantities of waste. Rising everywhere were piles of bean shells and leftover bean pulp, plus the leftover trash from another crop, the moringa seeds that were becoming a popular health food on the island.

After doing some research on uses for these agricultural byproducts, Shirley applied for a grant to use them to develop a sustainable soil conditioner and low-smoke briquettes.

From 300 entrants, Shirley was one of 11 winners selected from across the CARICOM (Caribbean Community and Common Market) region, and one of four women in that group. Her initial progress was slow, as she grappled with the cost of scaling up castor oil production in order to create the critical mass required for producing the newer products more efficiently.
 

Timor-Leste: Starting an education revolution

Harry A. Patrinos's picture
Photo by: Cornelio Quintao De Carvalho / World Bank

In a blog, World Bank Senior Director for Education Claudia Costin praised Fernando La Sama de Araujo, the recently deceased Minister of Education of Timor-Leste, for his visionary leadership. 
 
Indeed, the Democratic Republic of Timor-Leste should be praised for the progress it has made since gaining independence in 2002.  This is despite the fact that the country is still suffering the after-effects of a decade-long struggle for independence.

Tunisia: Understanding corruption to fight it better

Franck Bessette's picture
Ljupco Smokovski l Shutterstock.com

Corruption in the public sector is a multifaceted and complex phenomenon. It can take on a myriad of forms and come to light in various areas.  It ranges from petty corruption among government officials who use their influence for monetary gain to corruption in lobbying and fundraising in election campaigns.  Its reach extends from public procurement to managing conflicts of interest.  It is used to bribe whistleblowers and is present in all cases of cronyism and misappropriation of public funds. 

Financing community-based tourism: 9 ways to get taken seriously

Hermione Nevill's picture



Reducing risk is the only way for community joint-ventures to get serious with commercial banks. Without commercial finance, this niche tourism sector might never deliver on its potential. Photo: World Wildlife Fund
 
Over the last 20 years, joint-ventures between local communities and the private sector have grown up as a feature of the sustainable tourism development agenda. Typically, the community provides the land, the heritage or the wildlife asset base while the private sector brings the capital, management know-how and business networks. When they work well, these partnerships contribute substantially to local economic and social development, as well as providing professional, unique and authentic tourism experiences for visitors.
 
Lena Florry is an Area Manager for Wilderness Safaris, the private-sector partner in a community joint venture (CJV) lodge in Namibia. ”What we have here at Damaraland really changes our lives,” she says. “Previously, in our village, I was herding goats. Now we have good jobs and a much better life.” Crucially, Lena is also a member of the local community and takes personal pleasure in sharing the model’s success story with the camp’s US$500-a-night paying guests.
 
Typical benefits include income for communities through lease or contract agreements, employment and supply-chain opportunities, skills and knowledge transfer from the private sector, and usually a kind of joint “tourism asset protection” like wildlife preservation or heritage protection. In Namibia, for example, community conservation generated about US$7 million in returns for local communities in 2013, and the elephant population doubled in 20 years.
 
While much emphasis has been placed on the development impacts of this model, the actual health of the businesses has often been overlooked. As long as the ventures continue to deliver a development dividend – such as contributions to a community fund, or increased biodiversity – all is believed well. For the venture’s supporters, it may then come as a surprise when applications for commercial finance are rejected.
 
“We would like to finance the sector,” says Christo Viljoen at First National Bank (FNB) Namibia. “But our biggest challenge is to determine the financial viability of the community joint-ventures. We find the risks involved are not properly addressed in the business plans.”
 
Banks report that risks typically have to do with corporate governance, low-quality financial data, collateral, the level of experience of the sponsor, and a host of structural problems in the CJV business – not least, the balance between the development dividend versus the profitability of the business. All these factors help to undermine a firm’s viability. A business that cannot demonstrate financial viability – and, thus, show how it will pay back a loan – cannot be financed.
 
This presents a very real problem.  Without the means to make necessary investments in the business (such as refurbishment or expansion), the quality of the tourism product deteriorates, occupancies and rates decline, and funds for the community and for wildlife protection drop.
 
In an effort to help the various stakeholders increase the financial viability of CJVs, reduce risk and increase loans, the World Bank Group and the World Wildlife Fund released “nine tips” at the recent tourism trade show ITB Berlin 2015. Dr. Hannah Messerli of the World Bank’s Trade and Competitiveness Global Practice said, “We believe that destinations that address these issues are more likely to provide comfort to the banks in lending.”

A technological revolution in the Arab world…..People are assets, not problems

Maha El-Swais's picture
internet - street sign in Arabic l Shutterstock - Vladimir Melnik

It may not be surprising that the number one country in the world with the most Youtube users is Saudi Arabia. But what is surprising, with Youtube’s overall global viewership predominantly male, is that the majority of Youtubers in Saudi Arabia are women. And even more surprising, is that the most-watched Youtube content category   in Saudi Arabia is education. 

Actions speak louder than words: Opportunities abound for forests in combating climate change

Ellysar Baroudy's picture
Franka Braun/World Bank


Over the past several weeks, we have made headway in our efforts to reduce deforestation and promote sustainable land use as part of a broader World Bank Group approach to combat climate change. Partnering with the Forest Carbon Partnership Facility (FCPF), the Democratic Republic of Congo has taken a major step by assessing its readiness for a large-scale initiative in which developing forested countries keep their forests standing and developed countries pay for the carbon that is not released into the atmosphere. Likewise, other countries in the 47-country FCPF partnership are making strides in their efforts to prepare for programs that mitigate greenhouse gas emission and support sustainable forest landscapes.

This approach is also known as REDD+, or reducing emissions from deforestation and forest degradation. Active REDD+ programs can help reduce the 20 percent of carbon emissions that come from forest loss and simultaneously provide support to the 60 million people, including indigenous communities, who are wholly dependent on forests.

Celebrating a fighter for freedom and education

Claudia Costin's picture


Fernando La Sama de Araujo, the recently deceased Minister of Education of Timor Leste, was a freedom fighter and a visionary leader. “La Sama”, which means unbreakable, dedicated his life to the service of his country, Timor-Leste and was recently engaged in a plan to improve the quality of education. I received this news with great sadness, especially due to the engaging meetings we had in Dili, where I was on mission just a few days before he passed away. 
 
Minister La Sama was a leader of Timorese students’ resistance movement in Indonesia and spent six years in prison in Jakarta, together with Xanana Gusmão. Following independence, he held several public positions: President of the National Parliament, Acting President, and Vice Prime-Minister. Following leadership transition in February 2015, Minister La Sama his position as Minister of State, Coordinating Minister of Social Affairs and Minister of Education. 

How forensic intelligence helps combat illegal wildlife trade

Samuel Wasser's picture
 Diana Robinson / Creative Commons Over the past decade, illegal poaching of wildlife has quickly caught up to habitat destruction as a leading cause of wildlife loss in many countries.
 
Poaching African elephants for ivory provides a case in point. Elephant poaching has sharply increased since 2006. We may now be losing up to 50,000 elephants per year with only 450,000 elephants remaining in Africa.  In short, we are running out of time and unless we can stop the killing, we will surely lose the battle. Decreasing demand for ivory is vital over the long term, but the scale of current elephant losses makes this strategy too slow to save elephants by itself. The ecological, economic and security consequences from the loss of this keystone species will be quite severe and potentially irreversible. 

On International Children’s Day, Reflecting on the Impact of Early Childhood Development

Daphna Berman's picture

On International Children’s Day, we reflect on the kind of world our children will inherit. To prosper in a rapidly changing world, all children need more than basic literacy and numeracy. They need to be creative, critical thinkers and problem-solvers. Early childhood development can help level the playing field from the early stages of life.

Picture Trade: How we can visualize intra-regional trade in South Asia and beyond

Siddhesh Kaushik's picture
Intra-regional trade constitutes less than 5 percent of total trade in South Asia, according to World Bank analysis. Economic cooperation remains low, despite the Agreement on a South Asian Free Trade Area (SAFTA). The region’s low level of intra-regional trade is a puzzling phenomenon, and it’s left many interested folks asking questions.

Which regions trade more amongst themselves? What are the top products being exported or imported? Who are the top exporting and importing countries in a particular region?

Here is a visual representation of regional trade in South Asia in WITS that can help quickly unpack some of these questions as they relate to the region. 
 


After the jump, we break down these numbers and show how you can explore the viz. 


Pages