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private investment

Winning the Game of Mining Taxation

Paul Barbour's picture

The last few years have brought an uptick in the number of mining investments that have been the subject of disputes between investors and governments. This trend is of considerable concern to the players in the sector across the globe.
 
Yet, there is a wealth of wisdom to be—pardon the pun—mined from the literature over the past few decades in an attempt to distill what the main risk factors are in agreements that govern investments in the sector, with specific focus on taxation regimes. 

Number of Expropriatory Acts by Sector – three-year rolling averages
 
Source: Chris Hajzler (2010), “Expropriation of Foreign Direct Investments: Sectoral Patterns from 1993 to 2006,” University of Otago in MIGA,World Investment and Political Risk 2011

Weekly Wire: The Global Forum

Roxanne Bauer's picture
These are some of the views and reports relevant to our readers that caught our attention this week.
 

Thanks to Urbanization, Tomorrow's Megalopolises Will Be in Africa and Asia
Foreign Policy
Tokyo will still be the world’s largest city in 2030, but it will have many more contenders on its heels. According to a fascinating new report from the United Nations, the globe will have 41 “mega-cities” -- defined as those with 10 million or more inhabitants -- up from 28 now. Although the world’s largest urban centers have historically been concentrated in the developed world, fast-paced urbanization in Africa and Asia means that the megalopolises of tomorrow will be found in the developing world. By 2030, Asia and Africa will host nine of the world’s 10 largest cities, according to the report.

Mobilizing Private Investment for Post-2015 Sustainable Development
Brookings
The sustainable development goals are likely to have a more ambitious scope than the Millennium Development Goals. Accordingly, they will need a more ambitious financing for development strategy that can mobilize much more public, private, and “blended” finance.  Very rough estimates indicate that at least $1 trillion of additional annual investment is required in developing and emerging economies.  At first glance this might appear to be a large number, but it represents only approximately 10 percent of extra investment above current levels. It is clear that official development assistance, on its own, would be incapable of meeting financing needs, even if the target to provide 0.7 percent of gross national income were to be achieved by all developed countries. But official development assistance (ODA) could, through leverage and catalytic support, help mobilize substantially more private capital. 
 

Mongolia: Crisis increases demand for corporate governance

David Lawrence's picture

The President of Mongolia, Elbegdorj Tsakhia, sat at the table behind a Greek salad. We were at a lunch hosted by the Corporate Governance Development Center, an NGO which brings international best practices in corporate governance to Mongolia. Also present were the Minister of Education, the Director of the Financial Regulatory Commission (FRC), the Deputy Chief of Party of the USAID-funded Economic Policy Reform and Competitiveness Project (EPRC), which helped to establish the Center with the Institute of Finance and Economics, and CEOs of leading Mongolian firms. Several International Finanace Corporation (IFC) clients were among them.

The salad looked delicious, but it would have to wait. President Elbegdorj was speaking about the role of corporate governance in Mongolia. "Corporate governance is important for Mongolia's competitiveness," he said. I was delighted. I've been waiting a long time for this moment.

Is Bangladesh Getting Public Investment Right?

Zahid Hussain's picture

Economic growth in Bangladesh began to decline since FY06 at roughly the same time that its public investment rate started falling. The decline in growth also appears to coincide with slowdown in growth of infrastructure capital in the hard infrastructure sectors; particularly energy, transport and communication. It is therefore tempting to think that the two may be correlated.

Indeed, economic theory suggests that the availability of economic and social infrastructures makes it conducive for the private sector to invest; higher public capital increases productivity and reduces production costs; and by increasing demand public investment gives rise to profit and sales expectations which in turn induce private investments. These are known as the crowding-in effects of public investment.

Crowding in, however, cannot be taken for granted. Public investment can also crowd out private investment if it is made in activities that compete with the private sector. In addition, the growth impact of increased public investment depends on how it is financed. If it is financed through higher public debt, which implies higher future taxation levels, private investments may get crowded out.

The winds of change are blowing in Malaysia

Philip Schellekens's picture

The winds of change are blowing in Malaysia, as the government is taking on an ambitious agenda of structural reform. The objective is to climb up the income ladder and join the league of high-income economies. This is a difficult challenge – one which not many countries have successfully met in the post-war period.

Against this backdrop, the World Bank’s launch of a new report on the Malaysian economy (full disclosure: I lead the team who authors the report) is timely. The Malaysia Economic Monitor, which will be published twice a year, aims to provide context to the challenges facing Malaysia and serves as a platform for discussion and the sharing of knowledge.

Improving investment climate important to boost economic growth in Thailand

Xubei Luo's picture

The investment climate is the fundamental socio-economic framework in which firms operate – the macroeconomic and trade policies they face, the labor and financial markets in which they recruit and raise money, the available infrastructure and impo

Sustaining growth: China’s need for a new growth model

David Dollar's picture

China’s big stimulus plan will help keep the economy growing at a healthy rate, though 2009 will be a rough year with probably the slowest growth in nearly 20 years. While China applies stimulus to deal with the immediate downturn, it would be good to be thinking ahead. China needs a new growth model, and it should evaluate its possible spending plans both in terms of immediate stimulus and in terms of contribution to this new growth model.

China needs a new growth model because after the global downturn comes to an end, exports will never again play the same role as they have in the past two decades. I would argue that the four basic principles that account for the Chinese miracle since 1978 remain valid, each of which needs some tweaking in the new environment.

Empowering the poor: Helping urban slums to help themselves

Chris Pablo's picture

The poor need to be empowered, and solutions have to be designed by them. Community organization, a difficult yet key element to successful slum upgrading, is often successfully carried out.

Supply meets demand: Chinese infrastructure financing in Africa

David Dollar's picture

China is emerging as a major financer of infrastructure projects in Africa, as documented in Building Bridges, a report released this week by the World Bank.  This is a very welcome development because Africa has an infrastructure deficit and China has both the financial resources and the construction industry capacity to help meet the demands.