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Think Finance, Think Access, Think Equal!

Sri Mulyani Indrawati's picture

Read it in Chinese.

Read in French.

 

I am often invited to pose as an example of how far women can go. And I am typically asked how I feel about my career having worked in positions that were often exclusively held by men. I am of course proud of my achievement, fully aware that at no time in my upbringing was I told that I could not do certain things because I was female. But I am also aware that many women around the world face barriers and challenges that prevent them from succeeding in politics, from earning a living, from looking after their families, from running successful businesses or even from opening a bank account.

I “googled” the words “women and barriers” and I got 48,500,000 results. The World Development Report 2012 on Gender Equality and Development says clearly: Gender equality is smart economics. So leveling the playing field is not only about doing the right thing, it will help economies to develop. Our work on development should help us aspire to get less hits when we search for “women and barriers” on the web.  Removing barriers to access to finance for women and making finance equal is not a small weapon in this battle.

A New Mechanism for South-South Knowledge

Susana Carrillo's picture

In my previous blog entry, I mentioned the expected growing engagement between Brazil and Sub-Saharan African countries in 2012, to exchange knowledge and further economic and social development.

Tanzania: Building bridges through education and small businesses

Jacques Morisset's picture

Stevan Lee, Senior World Bank Economist, is co-author of this post.

Attracted by the prospects of large unexploited natural gas reserves in the south of Tanzania, big players are in town. The British Gas Group has publicly announced that it may invest over US$35 billion in the next 25 years – 1.5 times Tanzania’s current GDP. Policymakers and donors are jockeying to position themselves and understand what is at stake.

Tanzania: Building bridges through education and small businesses

Jacques Morisset's picture

Attracted by the prospects of large unexploited natural gas reserves in the south of Tanzania, big players are in town. The British Gas Group has publicly announced that it may invest over US$35 billion in the next 25 years – 1.5 times Tanzania’s current GDP. Policymakers and donors are jockeying to position themselves and understand what is at stake.

The excitement is well founded but perhaps a little bit premature. According to the most optimistic projections, revenues from natural gas will not materialize for 5-7 years. Moreover, international experience shows that commodity-driven growth does not guarantee success. The Tanzanian authorities are therefore right to prepare for the future by setting up the fiscal and financial rules required for future transparent and rational use of these funds now. They should not forget also to focus on the coming 5-7 years because the economy is facing a number of challenges.

What can we do to help Africans trade with each other?

Paul Brenton's picture

Uganda has become a successful exporter of education services to countries in East Africa. In West Africa, Nigerian financial institutions have expanded branch networks throughout the region making available the benefits of scale to consumers in very small countries. African supermarket chains are spreading throughout the continent. These are some of the successes Africa is seeing as it fights to integrate the market for regional trade in services.

UN Sustainable Energy for All Initiative offers global platform to power up the world

S. Vijay Iyer's picture

Sustainable Energy for All (SEFA)On the margins of a big conference last month in Abu Dhabi with the modest (!) title of the World Future Energy Summit, an important meeting chaired by United Nations Secretary General Ban Ki-moon took place. This meeting agreed on a ‘framework document’ for launching the Sustainable Energy for All (SEFA) Initiative.
 
This SEFA Initiative has three goals: universal energy access, double the share of renewable energy in the global mix (from the current 15% to 30%), and double the improvement in energy efficiency…all of which are to be achieved by 2030.

It will be a big challenge. To give you an idea of just how big, consider these factors:

Crystal gazing with McKinsey on resources for the future

Alan Miller's picture

In 1980, the biologist Paul Ehrlich and business school professor Julian Simon famously wagered on the likelihood of resource scarcity over the coming decade. Based on his expectation that population growth would lead to a rapid growth in demand for basic resources, Ehrlich bet that the prices of five commodity metals would increase; Simon, argued that rising prices incent human innovation and consequently that resource prices should be stable or declining. In the decade that followed, despite population growth of 800 million, the prices of all five commodities chosen by Ehrlich declined and he paid the bet. In July 2011, the investor Jeremy Grantham noted that if the bet had been extended to 2011, Ehrlich would have won – by a lot. 

McKinsey Global Institute, a research arm of McKinsey & Company, recently revisited the debate about economic growth and resource scarcity with the release of a major study, “Resource Revolution: Meeting the world’s energy, materials, food, and water needs”. One of the lead authors, McKinsey partner Jeremy Oppenheim, recently visited the World Bank in Washington DC to describe the report’s conclusions and discuss its implications for development strategy, particularly for the World Bank. His presentation captivated a large audience and provoked a lively discussion.

The key findings of the report can be summarized in two categories – challenges and opportunities. The former starts from the projected increase of up to 3 billion more middle class consumers in the next 20 years, driving up demand at a time when finding and extracting resources is becoming increasingly difficult and expensive, while also resulting in enormous environmental pressures.

The good news is the existence of sufficient technically and economically feasible efficiency improvements and alternative technologies to meet nearly 30 percent of predicted demand and offset much of the projected growth. Some of these measures are already identified and well understood, such as improving the efficiency of buildings and irrigation – a “resource productivity revolution”. These measures would, however, not be sufficient to alleviate poverty and avoid global warming in excess of the two degrees Centrigrade widely considered the threshold.

To meet these goals, McKinsey outlines an additional level of ambition with respect to clean energy and carbon sequestration.

Electricity Simplified via Simpa Networks

Parvathi Menon's picture

This article was originally published on http://www.innovationalchemy.com/. Simpa Network has partned with SELCO, an India DM winner in 2011.

Simpa Networks has evolved a ‘Progressive Purchase‘ model for solar electricity, lighting up rural homes through a flexible payment option.  

The International Energy Agency estimates that about 1.5 billion people around the globe do NOT have access to electricity and 85% of these people live in rural areas.  In India, close to 40% of the country’s population still lives with limited access to grid electricity. This is not to say that rural India is in complete darkness. The up-front cost of procuring clean, affordable energy is high and so several parts of rural India rely on kerosene, charcoal and other forms of fuel that are easier to access and in local purchase terms, cheaper. The existence of these alternatives indicates that people have the ability to pay for energy, but it needs to be in a format and amount that they can access. Regular energy sources have not been able to find ways to fit this need yet. Simpa Networks leverages this insight into the rural market to find a way to fit within the ‘ability to pay’.

“Customers pay up to $1000 over 8-10 years for kerosene lanterns why not capture what the customer is willing to pay and give them a cleaner alternative?”says co-founder Michael Macharg.

Based in Bangalore, Simpa Networks aims to develop affordable energy solutions for the poor. Their product makes solar electricity accessible and affordable to the rural and under served consumer through their innovative pricing system called ‘Progressive Purchase’.

Recent reforms in Sierra Leone: Beating the effects of global economic downturn

Vijay Pillai's picture

Pay phone operator in FreetownThe year 2011 ended on a high note for the reformers in Sierra Leone.  There were two significant reforms which the government saw through – reforms that had been long overdue, but which now hold the potential of unleashing new investments and economic growth in the country.  Can Sierra Leone’s use these reforms to beat the potential effects of a global economic downturn?  One hopes so.

The energy sector in Sierra Leone has long faced under-investments. Not very long ago Freetown had the dubious distinction of being the darkest capital in the world and the Bumbuna dam remained elusive.

Knowledge Gaps on Innovation for Green Growth

Mark Dutz's picture

Small but sometimes radical new steps toward greener energy and green growth are happening on our stressed planet, but we don’t hear enough about them, nor do we sufficiently explore and share policy lessons.
 

Examples include ‘smart grid’ R&D activities that deploy sensors to gather data on incoming electricity from wind, solar and other renewables with varying power outputs, better management of outages, factoring in the needs of electric vehicles, and installing more energy-efficient power meter usage in homes and offices. At the other end of the spectrum, Husk Power Systems, a company operating in Bihar, India has devised a novel single fuel gasifier for rural electrification based on discarded rice husks – one of India’s most common waste products. Thanks to the risk husks, 60 mini-power plants have now been installed. They  power about 25,000 households in more than 250 villages in rural India. 

Prospects Weekly: Global GDP growth forecast is significantly downgraded in latest World Bank Global Economic Prospects report

Global Economic Prospects report. Though the slowdown in high-income economies will be sharper, developing countries will also be affected. Downside risks related to the loss of markets confidence in the ability of one or more high-income countries to repay their debt remains a serious concern. Since August credit default swap rates in both high-income and developing countries have increased significantly. Sub-Saharan Africa was one of the fastest growing developing regions in 2011, but remains vulnerable to outturns in the global economy.
Global GDP growth forecast is significantly downgraded in latest World Bank Global Economic Prospects report. The global economy is now expected to expand 2.5 and 3.1 percent in 2012 and 2013 versus the 3.6 percent projected in June for both years. High-income country growth is now expected to come in at 1.4 percent in 2012 and 2 percent in 2013, versus forecasts in June of 2.7 and 2.6 percent for 2012 and 2013 respectively. Growth in developing countries has been revised down to 5.4 and 6.0 percent versus 6.2 and 6.3 percent in June. While developing countries are in much better shape than high-income countries, they remain vulnerable to significant downside risks. If global conditions were to deteriorate sharply, then low- and middle-income countries, would also likely be affected. Indeed, in contrast to 2008/09, they have much less fiscal space available to respond to a new crisis
Developing country Credit Default Swaps (CDS) rates move higher since August. The resurgence of market concerns about fiscal sustainability in Europe and the exposure of banks to stressed sovereign European debt pushed CDS rates of most countries (including developing countries) upwards beginning in August 2011. By early January 2012, emerging-market bond spreads had widened by an average of 117 bps from their end-of-July levels, and developing-country stock markets had lost 8.5 percent of their value. Since October, however, the median CDS rates of developing countries with relatively good credit histories have declined to 162 points and developing country sovereign yields have eased from 672 to 616 basis points. Further, notwithstanding the recent downgrades to the credit rating of nine Eurozone countries, CDS rates in developing countries have held steady. 

Growth in Sub-Saharan Africa remained robust, inching up from 4.8% in 2010 to 4.9% in 2011, remaining just shy of its pre-crisis average of 5%. Excluding South Africa, which accounts for over a third of the regions GDP, growth in the rest of Sub Saharan Africa was even stronger at 5.9% in 2011, making it one of the fastest growing developing regions. Higher investment flows, rising consumer spending, the coming on stream of new mineral exports in a number of countries, and the rebound to growth in Cote’d’Ivoire, should support Sub-Saharan Africa’s growth acceleration to 5.3% in 2012 and 5.6% in 2013. Nonetheless, risks to growth prospects remain weighted on the downside as heightened uncertainty from the Eurozone debt crisis could shave growth in Sub-Saharan Africa by up to 1.7 percentage points in 2012, as merchandise exports, tourism receipts, commodity prices, foreign direct investment, and remittances -important growth drivers - remain susceptible to the turn of events in the Eurozone.

Download the Prospects Weekly as PDF here.

Brazil and Africa: Bridging the Atlantic

Susana Carrillo's picture

Linked in the distant past through colonial-era trade enterprises, Brazil and Africa are becoming close partners again. More than two centuries after establishing a slave trade route across the Atlantic, both regions are again re-engaging, this time to exchange knowledge and further economic and social development.

Sub-Saharan African countries are looking to replicate Brazil’s successes in boosting agricultural production and exports, and private investments, which have made Brazil a key economic player in the international arena. This is no coincidence. The world is going though rapid changes, resulting in a new financial architecture, with emerging economies and countries in the South increasingly participating and influencing global decisions.

What did Durban deliver?

Andrew Steer's picture

At 4.30 on Sunday morning, after 36 hours of overtime (a record), the 194 country members of the UNFCCC pulled a rabbit from the hat. Special flights had been put on by South African Airways as a way to encourage delegates not to leave.

Putting the Puzzle Together

Three big pieces of the jigsaw needed to fall into place in order to clinch the `Durban Platform’. First, a new commitment period of the Kyoto Protocol, without which developing countries would have walked. Second, a road map towards a truly global deal to be effective by 2020 at the latest, without which the EU wouldn’t sign on to a new Kyoto. Third, the launch of the Green Climate Fund, without which developing countries wouldn’t sign on to such a global road map.  

Putting the pieces together required compromise and was accompanied with brinksmanship, emotion, and millions of words spoken, usually repeating what had already been said. The outcome, however, is highly positive for the long term prospects for a deal, and delivered all that could reasonably be hoped for (see my earlier blog: Will Durban Deliver?).

Thus, in a nutshell, delegates left Durban having agreed on:

  • A new commitment period under Kyoto for the EU and 11 other countries beginning January 1, 2013.
  • An agreement to negotiate a global deal by 2015, which would be effective from 2020 with "legal force" applying to all countries.
  • A Green Fund launched, with regional groupings to nominate board members in the coming three months. Board selection will be very important since most operational details yet to be designed.

Making carbon finance work for the poor

Rachel Kyte's picture

During this week in Durban, we announced two new financial initiatives designed to help the least-developed countries access financing for low-carbon investments and enable them to tap into carbon markets after 2012 - the Carbon Initiative for Development (Ci-Dev) and the third tranche of the BioCarbon Fund (BioCF T3).

The funds, focused on agriculture and access to energy, are designed to strengthen links to private sources of capital via carbon markets for some of the world's poorest communities.

The new instruments will help client countries to buy carbon credits from a range of projects including household biogas systems in Nepal, cook stoves in Africa, reforestation in the Democratic Republic of Congo, soil carbon in Kenya, and municipal solid waste in Uganda.

Ci-Dev, aiming to raise USD 120 million, is a partnership of donor and recipient countries, where public and private sector are pledging their support to capacity building and carbon market development in the poorest countries of the world.

The second initiative, the BioCF T3, will focus on reforestation and agriculture projects.

The agriculture projects are another example of the climate-smart agriculture we have been talking about all week – and deliver a triple win of increased food security and resilience through reduced soil erosion and increased land fertility as well as the access to new carbon markets.

Can the world avert locking itself into an unsustainable future?

Vijay Iyer's picture

“The world is locking itself into an unsustainable future.” That’s the headline on the press release for this year’s World Energy Outlook(WEO). This conclusion, coming from the sober, serious International Energy Agency (IEA), sure grabbed attention at a panel discussion I moderated here in Durban Monday.

In presenting the Outlook, Laura Cozzi, IEA’s Senior Economist, laid out the WEO’s three scenarios for the future. Two of them, the ‘Current Policies’ scenario — that is, business-as-usual — and the ‘New Policies’ one, that is, governments cautiously implement commitments already made — do not get us where we need to be by 2035. Only one of them does that, the third, so-called ‘450 Scenario’, which sets out an energy path consistent with a 50%-chance of holding global temperature rise to two degrees Celsius. Past and current choices have the world ‘locked into’ a high emissions path. Laura showed that the 450 scenario takes the world to a situation of ‘no carbon space left’ for new energy generation by 2017. At that point, either only zero-carbon new energy generation can go forward or, if not, for every power plant commissioned, an equivalent dirtier one will have to be shut down. 

It provoked a lively discussion. Dr. Leena Srivastava, Executive Director of India’s Energy and Resources Institute, pointed out that the ‘lock-in’ is caused not just by current patterns of production, but also by lifestyles and patterns of consumption. This resonated with the other two panelists: Dr. Subho Banerjee, Deputy Secretary of the Australian government’s Climate Change and Energy Efficiency Department, as well as Dr. Lu Qiang, of Beijing’s Energy Research Institute, a think-tank under China's National Development and Reform Commission. They reminded the audience that policy must influence patterns of consumption along with energy generation.


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