Taxation plays a fundamental role in effectively raising and allocating domestic resources for governments to deliver essential public services and achieve broader development goals.
Private Sector Development
Welcome to the “10 Candid Career Questions” series, introducing you to the infrastructure and PPP professionals who do the deals, analyze the data, and strategize on the next big thing. Each of them followed a different path into infra and/or PPP practice, and this series offers an inside look at their backgrounds, motivations, and choices. Each blogger receives the same 15 questions and answers 10 or more that tell their career story candidly and without jargon. We believe you’ll be as surprised and inspired as we were.
Photo: Free-Photos / Pixabay Creative Commons
In order for investors to see the potential in developing long-term attractive infrastructure assets, projects must be well prepared. The lack of such primed projects is a major obstacle for ramping up global infrastructure, particularly in developing and emerging economies.
This is one of the priorities for the G20, as Argentinean President Mauricio Macri emphasized in December 2017: "Infrastructure for development" will be one of the key issues of focus during the country's G20 Presidency and it will "…seek to develop infrastructure as an asset class by improving project preparation."
"In Chad, young people increasingly turn to innovative entrepreneurship but often become demoralized when confronted with the common issue of lack of early-stage financing.” This is how Parfait Djimnade, co-founder of Agro Business Tchad, a leading e-commerce agribusiness and social enterprise in Chad, described the challenge many aspiring entrepreneurs face in securing the necessary capital to fund and grow their start-ups, specifically in the Sahel and West Africa.
The frustration Parfait highlights is common across the Africa region, where more than 40 percent of entrepreneurs cite access to finance as the major factor limiting their growth, according to World Bank Enterprise Surveys. West African start-ups and innovative young SMEs are indeed facing the classic ‘valley of death’ — the space between where the entrepreneur’s own resources from family and friends (“love money”) gets depleted and when the company is financially viable enough to attract later-stage investment and financing available on the market. The shortage of financing in the market starts from the pre-seed stage (US$20,000) to early-venture capital stage (US$1 million).
The World Bank Group (WBG) is currently implementing a new approach to development finance that will help better support our poverty reduction and shared prosperity goals. This crucial effort, dubbed Maximizing Finance for Development (MFD), seeks to leverage the private sector and optimize the use of scarce public resources to finance development projects in a way that is fiscally, environmentally, and socially sustainable.
There are several reasons why cities and transport planners should pay close attention to the MFD approach. First, while the need for sustainable urban mobility is greater than ever before, the available financing is nowhere near sufficient—and the financing gap only grows wider when you consider the need for climate change adaptation and mitigation. At the same time, worldwide investment commitments in transport projects with private participation have fallen in the last three years and currently stand near a 10-year low. When private investment does go to transport, it tends to be largely concentrated in higher income countries and specific subsectors like ports, airports, and roads. Finally, there is a lot of private money earning low yields and waiting to be invested in good projects. The aspiration is to try to get some of that money invested in sustainable urban mobility.
- mass transit
- public transport
- credit guarantees
- Bus Rapid Transit
- urban rail
- climate finance
- Green Bonds
- Land Value Capture
- infrastructure financing
- urban transport financing
- transport financing
- Private sector participation
- public-private partnerships
- urban mobility
- urban transport
- sustainable cities
- sustainable mobility
- Sustainable Communities
- Public Sector and Governance
- Private Sector Development
- Financial Sector
- Climate Change
- Urban Development
Eco-industrial parks (EIP) refers to putting in place serviced industrial infrastructure conducive to attracting new investments, especially in manufacturing, while at the same time promoting environmental sustainability.
We know that the justice system dampens the business climate in many of the countries where we work. In Bank reports, national strategies, and in common parlance, we lament that poorly performing courts delay business activity, undermine predictability, increase risks and constrain private sector growth. Going further, we conclude that weak justice systems disproportionately hamper micro, small and medium sized enterprises (MSMEs) because they have less buffer to absorb these problems - which can become make-or-break for their businesses.
So that’s the ‘what’ but, precisely, how, do courts impact businesses?
The World Bank Group has helped strengthen the ecosystem for digital entrepreneurs and seed digital incubators in several countries around the world, including Kenya, Senegal, and South Africa, just to name a few. Start-ups in these “mLabs” have developed or improved more than 500 digital products or services, and some 100 early stage firms raised over $15 million in investments and grant funding. But is this the answer to scaling growth entrepreneurs on the continent?
Photo: Dylan's World / Flickr Creative Commons
A decade before the financial crisis, Australia was a bastion of infrastructure successes. The country’s four major airports (Melbourne, Perth, Brisbane and Sydney) were privatized. Numerous greenfield projects were also launched, for example, extensive highway construction, and new projects were continually added to the pipeline.
Some of these new projects, however, faced significant difficulties: some were constructed without robust performance data, leading to overambitious forecasting and overaggressive financial structures. In part, this led Australia to suffer multiple high-profile defaults and brought the country’s infrastructure project pipeline to a halt.
But, The state’s economic growth has reached 3.5%, outstripping the country’s average rate of 2.8%, and even the G20 average (which stands at 3%). As such, NSW’s infrastructure model has likely had a multiplier effect on economic activity—and has been identified as a potential playbook for other jurisdictions.
There is a well-known idiom saying that you can't compare apples and oranges. But this is precisely the challenge researchers often face when it comes to measuring the jobs impact of development projects. Having standardized impact evaluation tools and methods is a milestone for private sector-led job investments, and it allows international financial institutions, development practitioners, and governments to build on existing knowledge to develop solutions. And this is precisely one of the goals that Let's Work partnership, composed of 30 different institutions, is currently pursuing; to track the number of jobs generated from private sector-led interventions, the quality of those jobs, and how inclusive those jobs are in a standardized way, so apples are compared to apples and oranges to oranges.