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Private Sector Development

Mongolian government takes action to support small businesses (or Inspections Gone Wild)

David Lawrence's picture


Restaurants in Mongolia can face fines for not having the right number of forks.
Mongolia's done a good job in reforming its business environment since the collapse of communism in the early 1990s. In Doing Business 2009, the country ranked 58th out of 181 economies and outperformed its neighbors, Russia and China, by significant margins. Well done. But that doesn't mean that things are easy for small businesses here. The overall business environment is a serious drag on Mongolia's development prospects, and the situation keeps getting worse as the financial crisis sinks its claws into the economy.

One area fully in Government control is business inspections. This is an important function: inspections protect the health and safety of the general public. But when inspections run wild, they can become a major burden to businesses, especially small ones. Inspections can impose large costs on businesses in terms of time and money, encourage firms to bribe their way out of violations, and even encourage entrepreneurs to operate in the shadows. That means less tax revenue and potentially dangerous products and services being offered to the public.

Is this a problem in Mongolia? Absolutely.

Indonesia: Women in Nias have entrepreneurial spirit

Nia Sarinastiti's picture

Women entrepreneurs in Nias, Indonesia, describe how they manage community loans and expand business ventures.
In the many trips I've taken with the World Bank’s Indonesia Country Director, Joachim von Amsberg, I've always admired how indigenous locals interact with expatriates. I think from the curiosity of whether an expatriate really would like to engage with them and understand their needs, you can actually see the sparkle in their eyes to pose many questions.

In our visit to Hiliweto village of Gido district of Nias, the mission team visited the home of one of the women's group leaders to chat with informal women entrepreneurs on how they manage their community loans and expand their business ventures. At first, the group was reluctant to even answer a question, but Joachim broke the ice by agreeing to have the women ask about him – for example, where he comes from, married or not, children, etc. As the discussion went into a more relaxed mode, we asked what specific program benefits them the most. They all hailed microfinancing. Getting small loans is a common problem in Indonesia because credit is difficult to obtain from banks without having any collateral as a guarantee.

Landing in Gizo: Understanding the Solomon Islands

Edith Bowles's picture

The country is often dismissed as the Pacific's failed state, yet conversations with community members and officials reveal clear visions of what a state can provide in terms of services and a role in community life.
The Gizo airport in Solomon Islands has no parking lot, because there is no road – only a jetty out into the lagoon. It took me several minutes and a walk around the solitary airport building to work this out, by which point my plane had already headed back to Honiara, the country’s capital.

The Gizo airstrip, reportedly built for a visit by Her Majesty Queen Elizabeth II in the 1970s, occupies the entire length of the island of Nusatupe – as a quick look at Google Maps confirms. It is located picturesquely, if ultimately somewhat inconveniently, about two kilometers from the provincial capital island of Gizo. As I was beginning to wonder how I was going to make my way to Gizo, a team from the Government’s Ministry of Agriculture and Livestock fortunately pulled up in an outboard motorboat.

In December, just three months after my arrival in the Solomon Islands to serve as the World Bank’s country manager, I chose Western Province for my second trip out of Honiara. One of the main goals in my first year on the job is to visit each of the nine provinces to begin gaining some understanding of this small but complex country.

Leaving an imprint: Rebuilding the shrimp sector in Aceh, Indonesia

David Lawrence's picture


In my 12 years at the International Finance Corporation (IFC), I've been involved with a lot of different projects. Many of them were successful, some were not. But none of them were as satisfying as the Aceh Shrimp Project, which closed last month. If you've ever hit a bull's eye when playing darts, imagine that feeling multiplied by 100. That's what this project felt like.

Aceh is an autonomous province on the northern tip of Sumatra, in Indonesia, with a population of 4.2 million. It has a colorful history of resistance: they gave the Dutch colonists major headaches, and fought against the Indonesian government for three decades. In December 2004 the Tsunami struck, leaving 165,000 people dead or missing in the space of 30 minutes. This led to the biggest reconstruction effort in history, including IFC's work to build up the private sector, funded by AusAID (pdf) through its Australia-Indonesia Partnership for Reconstruction and Development (AIPRD).

Shrimp is a key sector in Aceh, a livelihood for 100,000 people. In the 1990s, Aceh's shrimp sector was slammed by white spot disease, which devastated shrimp harvests.{C}

Anxiety and hope in Guangdong, China

David Dollar's picture

A large number of export-oriented processing firms have already closed in Guangdong, the heart of China’s export machine. Image credit: lylevincent at Flickr under a Creative Commons license.
I visited the Pearl River Delta in Guangdong this week, the heart of China’s export machine. A large number of export-oriented processing firms have already closed in Guangdong in sectors such as toys and footwear. Of course, firms close all the time in market economies, while others start up. This churning is part of the normal cycle in a market economy and is one of the key sources of productivity growth. Less productive firms die off while the successful new firms have especially rapid productivity growth. As the global economic crisis hits China, it is hard to keep track in real time of the balance of closings and openings.

Entrepreneurs and local officials here are certainly aware that demand for China’s exports has dropped sharply, and they wonder when the global economy will pick up again. Still, at the same time I was impressed at how many see this as an opportunity for China to pursue its rebalancing agenda. These discussions took place at a workshop in Jiangmen on Investment Climate, Innovation, and Industrial Transfer. The phrase “industrial transfer” refers to the fact that the most labor-intensive activities are moving away from the highly successful coastal cities, either to inland China, or other countries (Vietnam, Bangladesh) with lower wages.

Teleport yourself into the discussion on Oct. 30

Elisabeth Mealey's picture

Whether it is connecting with someone in another continent without leaving home or jetting off in a flying car, someone familiar with Second Life knows that pretty much anything is possible in the online virtual world—from the serious to the ridiculous.

On Thursday, October 30, at 2 p.m. Washington time, Second Life users will be able to learn the results of the Doing Business 2009 report when it is launched on this island. Doing Business, a report published by the World Bank and the International Finance Corporation, ranks economies around the world based on how easy it is to do business, considering the level of laws and regulations in a region. The report aims to improve business environments, in part through dialogue and reform.

Lessons from China for Africa - my take

David Dollar's picture

Thirty African officials visited China for 12 days in May on a pilot South-South knowledge exchange organized by the Chinese government with assistance from the World Bank.  My colleague, Phil Karp, has written about the program, including the study tour around China that he accompanied.  I met the officials in Beiji