Help needs to come immediately to save lives; recovery and reconstruction have to start swiftly to lessen the impact.
However, while money is critical to this response, it’s not just about funding. Indeed, funds need to match the event scale, target the right areas and sectors, and smoothly flow to communities in need. But in order for that to happen, sound public policy on risk and frameworks have to be in place.
To address both urgent financial needs while pursing strategic disaster risk management policy goals, countries have been using the World Bank’s development policy loan with a catastrophe deferred drawdown option or, more widely known as the Cat DDO.
As infrastructure projects are increasingly decentralized to sub-national governments (SNGs) in many countries, policymakers are keenly interested in developing sub-national bond markets to open up access to private-sector financing. However, the transaction costs of bond issuance are still prohibitive for small SNGs.
Pooled financing—through regional infrastructure funds, municipal funds, or bond banks—is being explored as a solution. Yet, many questions remain:
Yet despite these difficulties, the country rebounded strongly with growth at 7.5 percent in Fiscal Year 2017 and was able to achieve significant progress in business through a series of seemingly modest yet important steps.
Over the course of four years, Nepal’s Ministry of Industry, the country's Office of the Company Registrar (OCR) and IFC’s Investment Climate Team implemented a series of reforms to encourage business registration online. In 2013, a new mandatory online registration service was launched. Help desks in the Kathmandu OCR office, extensive training for business owners, a media campaign, and an enabling legal directive eased the speed and efficiency of the registration process for businesses.
Within a short period of time, almost 100 percent of companies – as opposed to 10 percent during the initial phase of launch – were registered online. Registration became simpler, saving money for both businesses and the government. Online registration also addressed the challenges of the government's limited capacity and poor technology readiness through extensive training and peer-to-peer learning. The processes became more transparent with online file tracking.
In the year following the launch of the online registration system, Nepal’s ranking for "Starting a Business" in the World Bank Group’s 2014 Doing Business Report rose by 6 places. The number of days it took to start a business dropped by 45 percent and led to a 24-percent increase in the number of new companies registered annually.
In Nepal, an employee of the Trade and Export Promotion Centre works on the Nepal Trade Information Portal. The portal, financed under the Nepal-India Regional Trade and Transport Project, provides information that traders need to import and export goods, including information on permits, laws and taxes. Photo Credit: Peter Kapuscinski / The World Bank
These successes produced broader lessons for Nepal and others facing similar challenges. These include:
- Make change compulsory, easy and durable. People adapt to new circumstances only if they feel compelled to do so, and only if they fel that the change is not going to disrupt their businesses.
- Ensure coordination between government offices in supporting initiatives. There must be "buy-in" from all government agencies involved at all levels. ICT changes must be fully coordinated with business staff.
- Nurture trust and cooperation between the WBG and government teams. Study and learn about previous experiences, communicate how the current project will be carried out, and keep talking to partners in government.
Some say natural resources are a curse, others say they are neither curse nor destiny (see here and here for examples). The jury may still be deliberating on the evidence but, in the meantime, resource-rich, income poor countries like Liberia, Sierra Leone and others need to find their way forward. They have to be responsive to the enormous needs of their populations or face dire consequences.
For post-conflict countries, the policy learning curve must of necessity be steep, since they neither have the luxury of time nor the expanse of fiscal space to benefit from learning by doing over the longer-term. A primary challenge for policy makers in these countries is to identify a “a fail-safe” model that can, with few degrees of freedom on the political, social, and economic dimensions, deliver sustained, inclusive growth and poverty reduction at levels that will appease a youthful, impatient population.
Imagine a city destroyed by a natural disaster, killing people and wiping away infrastructure. For instance, an earthquake devastated Port-au-Prince, Haiti in 2010, killing over 200,000 people and displacing around 895,000.
Even worse, imagine a city demolished by a manmade disaster: conflict. Recent examples include Aleppo, Syria and Kabul, Afghanistan. Here conflict goes far beyond violence to include erasing a place’s culture, heritage, landmarks, and its traditions.
Now, imagine the enormous undertaking required to rebuild these places and the many stakeholders that need to be brought together. It would take an integrated, holistic approach to restore torn heritage, infrastructure, and service delivery systems after they have been wiped out by a natural or manmade disaster. Culture needs to underpin such a rebuilding approach.
Public procurement of services, works and supplies is estimated to account for 15-20% of GDP in developing countries, and up to 50% or more of total government expenditure. Efficient and effective procurement is vital to core government functions, including public service delivery and provision of infrastructure. Weaknesses in procurement systems can lead to large-scale waste of public funds, reduced quality of services, corruption, and loss of trust in government.
The president of the Somali Chamber of Commerce, Mohamoud Abdi Ali, joins with the country's Minister of Commerce and Industry, Khadra Ahmed Dualle, at the IFC-sponsored Public-Private Dialogue at the Somalia Conference, which was convened in London in May 2017. The need to increase revenue, growth and trust led to the creation of the Public-Private Dialogue. Photo credit: MPF.
Stabilizing countries that have long been afflicted by fragility, conflict and violence (FCV) – and helping them shape effective reforms to strengthen the investment climate – is one of the most difficult challenges in international development. The task is all the more severe when, as in Somalia, a large proportion of the population has been displaced by violence and natural disaster and when the economy is overly concentrated on a few sectors. Such factors make rebuilding investor confidence a daunting challenge for the newly elected government.
However, despite these challenges, Somalia represents a rare example of private-sector resilience. The major sectors of the economy survived the tumultuous period after the collapse of the state in 1991. Entrepreneurs in Somalia and abroad continue to innovate and adapt in a country void of regulatory frameworks or government oversight. Domestic mobile-money transfers average $1.2 billion in monthly transactions, and mobile money usage is above 70 percent.
Nonetheless, economic growth in Somalia has stagnated and has not resulted in a peace dividend for the population. Government revenue is low – around 2.5 percent of GDP – in an economy driven by consumption, as identified in the World Bank Group’s Somali Economic Update (SEU) from 2016. According to the SEU, two of the biggest obstacles to equitable growth are access to finance and lack of regulations. Moreover, investment in priority sectors is low, held back by protectionism, conflict and instability.
Somalia was the focus of an international conference in May 2017 in London that brought together some of Somalia’s top private-sector firms, development institutions and government leaders to discuss how to jump-start private-sector-led growth and achieve long-term peace and development. Among the distinguished attendees were the newly elected president of Somalia, Mohamed Abdullahi Mohamed “Farmaajo”; Prime Minister Teresa May of the United Kingdom; United Nations Secretary-General Antonio Guterres; and the European Union’s foreign-policy chief, Federica Mogherini. The World Bank Group delegation was led by Jan Walliser, the Vice President for Equitable Growth, Finance and Institutions.
On May 31 we had the pleasure of presenting the first phase of the Poland Catching-up Regions Program, an initiative of the European Commission and the World Bank. In just over one year, this initiative has successfully addressed a number of key development challenges faced by two "lagging regions" in Poland – Podkarpackie and Świetokrzyskie.
The initiative's successes range from faster business registration in Rzeszow and Kielce (the capitals of the two regions, respectively) to the setting-up of a vocational education training system in Świteokrzyskie and design of a Technology Transfer Center in Rzeszow. Partnered with outstanding teams from the European Commission and Poland, the World Bank was able to support this progress by bringing together global expertise and hands-on collaboration in both design and implementation of policies. This is important for Poland and for the lessons it provides for other developing countries.
In Afghanistan violence is a daily fact of life. The United Nations Assistance Mission to Afghanistan released their 2016 Annual Report on Protection of Civilians in Afghanistan in February, which documented 11,418 casualties in 2016, a 3% increase since 2015, including 3,498 deaths. Child casualties rose by almost a quarter (24%)—to 923 killed and 2,589 wounded. As a result, there are always lots of questions about how you deliver services in parts of the world like Afghanistan that are affected by ongoing, day to day violence.
Increasingly we live in a world where poverty and violence are deeply interconnected, and if we are to affect the former we have to deal with the latter. But both services and violence come in so many different forms that disentangling the relationship is tough. What works in one context may not work in another. It is too easy to say that nongovernmental organizations are best at delivering services in situations where state authority is contested, just as it may be false to suggest that state delivery of services is always likely to build state legitimacy in the eyes of citizens. The relationships between service delivery and violent conflict are more nuanced than this on the ground and require context-specific analyses that try to understand the nature of the political settlements around conflict, what drives violence and what is the nature of the bargains being struck by local and national elites that either allow or block service delivery.
Well, we have recently tried to do this in a new publication which has just come out, called “Social Service Delivery in Violent Contexts: Achieving Results Against the Odds”. The report tries to disentangle what works and what doesn’t based on research in Afghanistan, Pakistan, and Nepal. It probes how social service delivery is affected by violent conflict and what the critical factors that make or break successful delivery are.
I am still shaken and saddened by the many lives lost to the attacks in Kabul two weeks ago and since then there has been more violence. As we grieve these tragedies, now is the time to stand strong with the people of Afghanistan and renew our commitment to build a peaceful and prosperous country.
To that end, we announced this week a new financing package of more than half-a-billion dollars to help Afghanistan through its struggle to end poverty, increase opportunity to help stabilize the country, and ensure all its citizens can access basic services during a time of economic uncertainty.
Afghanistan has come a long way since 2001 and achieved much progress under extremely challenging circumstances. Life expectancy has increased from 44 to 60 years, maternal mortality has decreased by more than three quarters and the country now boasts 18 million mobile phone subscribers, up from almost none in 2001.
Yet, the development needs in Afghanistan remain massive. Nearly 40 percent of Afghans live in poverty and almost 70 percent of the population are illiterate. The country needs to create new jobs for about 400,000 people entering the labor market each year. The situation is made more challenging by the return of around 5.8 million refugees and 1.2 million internally displaced people.
Our new support is in line with our belief that Afghanistan’s economic and social progress can also help it address security challenges. Our financing package meets the pressing needs of returning refugees, expands private-sector opportunities for the poor, boosts the development of five cities, expands electrification, improves food security, and builds rural roads.
- Sustainable Communities
- fragile states
- fragile and conflict affected states
- Conflict and Fragility
- Urban Development
- Social Development
- Public Sector and Governance
- Private Sector Development
- Migration and Remittances
- Financial Sector
- South Asia