Syndicate content

Private Sector Development

Helping Somalia attract private investment will require realism, rigor and reforms

Klaus Tilmes's picture



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.

The Philippines: Resurrecting Manufacturing in a Services Economy

Birgit Hansl's picture
In recent years, the Philippines has ranked among the world's fastest-growing economies but needs to adjust to the demands of a dynamic global economy.

The Philippines is at a fork in the road. Despite good results on the growth front, trends observed in trade competitiveness, Global Value Chain (GVC) integration and product space evolution, send worrisome signals. The country has solid fundamentals and remarkable human assets to leapfrog into the 4th Industrial Revolution – where the distinction between goods and services have become obsolete. Yet it does not get the most out of this growth, especially with regards to long-term development prospects. In order to do so, the government will have to make the right policy choices.

Local communities combat climate change in Bangladesh

Shilpa Banerji's picture
Mahfuzul Hasan Bhuiyan/World Bank
Bangladesh is among the most vulnerable countries to flooding and climate change impacts. Photo Credit: 
Mahfuzul Hasan Bhuiyan/World Bank

How can a country vulnerable to natural disasters mitigate the effects of climate change? In Bangladesh, resilient communities have shown that by using local solutions it is possible to combat different types of climate change impacting different parts of the country.
 
Every year, flash floods and drought affect the north and north-west regions. Drinking water becomes scarce, land becomes barren and people struggle to find shelter for themselves and their livestock. In the coastal districts, excessive saline makes it impossible to farm and fish.
 
The Community Climate Change Project (CCCP) has awarded grants to around 41 NGOs to address salinity, flood and drought-prone areas. With the help from local NGOs, communities innovated simple solutions to cope up with changing climate and earn a better living benefiting at least 40,000 people in the most vulnerable districts.
 
Raising the plinths of their homes in clusters has helped more than 15,000 families escape floods, and they continued to earn their livelihoods by planting vegetables and rearing goats on raised ground. Vermicomposting has also helped to increase crop yields. In the saline affected areas, many farmers have started to cultivate salinity tolerant crabs with women raising their income level by earning an additional BDT 1500 a month from saline tolerant mud crab culture in high saline areas.
 
Watch how communities use these three solutions to tackle climate change impacts.

Pakistan bridges the gender divide by embracing a digital economy

Priya Chopra's picture
Registration at the Digital Youth Summit. DYS is an age and gender-inclusive diversified digital platform.
Photo Credit: Digital Youth Summit


Standing in line to sign up for the Digital Youth Summit in Peshawar this May, I struck up a conversation with a young woman from Peshawar. I was pleasantly surprised by her level of interest and eagerness in participating at the tech conference.  She was keen to develop an app that would allow her to sell home-based food products at a national level.  She had already gathered a group of friends who would work with her on different aspects of task planning and implementation.  Her enthusiasm was palpable and infectious.  Born and raised in South Asia, I understand the constraints local women face in largely male dominated societies.  I was therefore heartened by the large turn-out of women queuing to enroll for the workshops.  

Our commitment to the people of Afghanistan stays strong

Annette Dixon's picture
Despite government efforts with support from the international community, Afghanistan's development needs remain massive. Photo Credit: Rumi Consultancy/ World Bank

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.

10 important questions to ask the public sector when pursuing a PPP procurement

David Baxter's picture




Much is written about Public-Private Partnerships (PPPs) from the perspective of the public sector, but one often forgets the private sector forms its own perspectives based on national and domestic market perceptions as well. These perceptions are always based on the availability of reliable qualitative and quantitative information.

Discussions with private sector leads has revealed that information gaps, more often than not, have proven to be obstacles that have resulted in “no-go” decisions on poorly articulated procurements initiated by inexperienced public sector procurement officers. Overcoming private sector hesitation is pertinent to the success of a procurement. 

What can Bangladesh do to deliver more and better jobs for everyone?

Qimiao Fan's picture
Bangladesh woman working in flourescent lamp section
Bangladeshi woman works in the flourescent lamp section of SEED Bangla Limited. Photo Credit: World Bank


Bangladesh has made remarkable progress toward ending poverty and sharing prosperity with more of its people. As recently as 2000, about one in three Bangladeshis lived in extreme poverty based on the national poverty line; today, this has fallen to 13 percent. The poorest 40 percent of the population also saw positive per person consumption growth. Like in most countries, a key reason was broad-based growth in earnings. With more than 20 million people still living in extreme poverty and many workers with insecure jobs, Bangladesh cannot be complacent. It needs faster economic growth that can deliver more and better jobs for everyone.

Policy shifts to strengthen China’s power sector reform

Yao Zhao's picture
Over the past few years, China saw more investment and installation in renewable energy than any other country in the world. In fact, in the period between 2010 and 2015, investment in the sector reached $377 billion, more than the next two countries - the United States and Germany – combined. China has 150 GW wind power and 77 GW solar photovoltaic power capacity compared to the U.S., for example, which has 80 GW in wind and 35 GW solar PV.

China has performed well above the global average, shined as the regional leader in East Asia, matched, if not outperformed, OCED countries in many dimensions, many countries with much lower investments and capacity have scored higher on renewable energy indicators.

Why the discrepancy?

The World Bank's Regulatory Indicators for Sustainable Energy (RISE) could shed some light on the issue. Launched in February 2017, RISE is a policy scorecard of unprecendented breadth and depth covering energy access, energy efficiency and renewable energy in 111 countries. It focuses on regulatory frameworks in these countries and measures that are within the direct responsibility of policy-makers. The result is based on data made available to the team at the end of 2015 and thoroughly validated.
 
 

The Middle East, version 2.0.

Bassam Sebti's picture


Let’s be honest. The Middle East and North Africa is burning, and in some areas it is literally burning. Conflict and fragility have long warped what once was the cradle of civilization and the inspiration for the many inventions we can’t live without today. However, in the midst of that fire hope rises, a driver of change that is transforming the ugly reality into a bright future.
 
After I fled the war in Iraq in 2006, I was pessimistic about what the future was holding for that region. Year after another, the domino-effect of collapse became a reality that shaped the region and its people. Yet, fast-forward to 2017, I have witnessed what I never thought I would see in my lifetime: the new renaissance in the Middle East and North Africa.
 
I have just recently come back from attending the World Economic Forum on the Middle East and North Africa at the Dead Sea in Jordan. This year, the Forum and the International Finance Corporation (IFC), the private sector arm of the World Bank Group, partnered to bring together 100 Arab start-ups that are shaping the Fourth Industrial Revolution.
 
There, the positive vibe was all around; no negativity, no pessimism. Instead there was a new sense of optimism and enthusiasm, hunger for change, and the will to take the region to a whole new future, away from conflict and the current norm of pessimism.


Pages