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Financial Sector

In Afghanistan, new technologies for doing business in the 21th century

Ikramullah Quraishi's picture
 
The Enterprise System is handed over to Hashim Naeem Tailoring Company and its employees, Parwan, Afghanistan
The Enterprise System is handed over to Hashim Naeem Tailoring Company and its employees, Parwan, Afghanistan

Sail Food Production Company is one of the largest food manufacturing factory in Nangarhar Province, Afghanistan. Despite countless hours spent on manual bookkeeping, its owner always complained about errors when reporting profits and losses on the company’s balance sheets.

At the close of each monthly accounting period, the company was always late in submitting profit and loss statements to the Provincial Department of Finance. Similarly, there were many inefficiencies in production and raw material tracking due to the absence of a proper inventory control system.

The scarcity of information technology integration within business operations has limited the development of Sail Food Production and many other Afghan small and medium enterprises (SME) as they are trying to remain competitive in a global business environment. How could this be improved?

Afghanistan debt - when words get lost in translation

Paul Sisk's picture
Photo Credit: Rumi Consultancy/World Bank

 

One of the many successful fiscal initiatives implemented in Afghanistan was the HIPC, the Highly Indebted Poor Country program, a joint IMF–World Bank effort to reduce the public debt of poor countries. We called this the forgiveness of debt.
At an early stage in this work I had to meet with a senior Afghan government official to explain the program. The official, the Deputy Auditor General, was a dedicated, serious man who had trained in the former Soviet Union as an engineer and did not speak English, so we relied on an interpreter.

In those days any Afghan who spoke some English could find work as an interpreter, and ours was a medical doctor. He told me he was anxious to find work in his own field but in the meantime was willing to work anywhere, even interpreting in this arcane field of auditing, although he was unfamiliar with the jargon. The conversation was not to be long; just outline that the external public debt, which was mostly Russian debt from the communist era, would be absorbed by a trust fund and hence “forgiven” if Afghanistan met the program requirements – basically good fiscal transparency and discipline.

Shaping a procurement plan for emergencies

Felipe Goya's picture
Volunteers unload relief materials in Nepal
Volunteers transporting relief supplies. Credits: Rajib Upadhya. World Bank​

Nepal is coping with the consequences of a disastrous earthquake. During the next months the government will be under a lot of pressure to respond quickly to the needs of the population.

Public procurement units across the country will also feel this pressure. They will be deciding over the purchase of goods and services with taxpayer money. On the one hand, the purchases are urgently needed. On the other, there is a risk that taxpayer money can be wasted if decisions are taken too hastily.

One instrument that can be helpful in this kind of situation is a framework agreement. This should be part of any country’s Disaster Risk Management plan. Its aim is to have a procurement system ready that responds quickly to an emergency. But this quick response should not increase risks beyond what policymakers have defined as acceptable. Special procurement procedures for emergencies should be part of disaster management systems and should especially include tailored framework agreements.

Why do smaller countries benefit from greater trade with their neighbors?

Sanjay Kathuria's picture
Quay cranes on docks Sri Lanka. Dominic Sansoni/World Bank

The real end winner of NAFTA (North American Free Trade Agreement) is going to be Mexico […]” said then Mexican president Vicente Fox, in 2001. He was referring to Mexico’s gains from trade integration with the USA through NAFTA.

Vicente Fox was right. Mexico has continued to make sustained gains in trade over a 20 year period after signing NAFTA in 1994 with the US, its much larger partner (figure 1).



​Opening up trade is not easy because losses can be immediate, while gains, despite being potentially much larger and more widespread, are often dispersed over time. Producers that may sustain losses from more open imports are often well organized and can hold up reforms quite effectively. Moreover, when one of the countries involved in mutual trade liberalization is disproportionately large, it enables the smaller country lobbies to raise the specter of being swamped by imports from its larger partner.

In the case of South Asia, a history of political differences further complicates deeper trade and economic cooperation within the region. Under these circumstances, opening up trade to neighbors requires strong leadership and a bold vision about the role of trade and regional integration in economic development.

Corridors for Shared Prosperity: A Case for Replication

Pallavi Shrivastava's picture

For those trying to address challenges in global poverty, inclusive businesses offer solutions to some of the world’s most intractable social problems. Business models that create value for the low-income communities are becoming viable - these have been tested, fine-tuned and perfected by some of the finest brains. Once perfected, it makes sense to contextualize and spread these innovations or the knowledge to markets across the globe. To be able to do this, replication is an important tool.

Strengthening the Ecosystem to Mainstream Inclusive Businesses

Pallavi Shrivastava's picture



“Intelligence and capability are not enough; there must also be the joy of doing something beautiful.”
These words by Dr. Venkataswamy tower over us as we enter the flagship Aravind Eye Hospital in Madurai, India, and continue to reflect in the staff’s philosophy during our short visit.

The Aravind Eye Hospital needs no introduction. Tucked in the remote south of India, it is the result of its founder’s vision of eliminating needless blindness. Started in 1976 by Dr. Venkataswamy, the hospital provides accessible, affordable and quality eye care to all sections of the society through cross-subsidization, which creates a commercially viable and sustainable business model.

Aravind Eye Care is an example of a business model innovation, also referred to as an ‘inclusive business model’. IFC defines inclusive business models as those offering goods, services and livelihoods to the poor in financially sustainable and scalable ways. Globally, inclusive businesses are being recognized as important players for development. More entrepreneurs are realizing the bottom of the pyramid (BoP) market as an opportunity to design and implement innovative solutions. As per an IFC study, the BoP represents a potential market of $5 trillion globally - the largest slice of this lies in South Asia, particularly India, given the size of BoP population in the region.

However, inclusive businesses continue to face several barriers in scaling and replicating their success such as lack of access to finance, absence of trained human resources, weak supply chain linkages etc. and above all, an underdeveloped support ecosystem to overcome critical market gaps. Addressing these barriers will not only help capitalize on the growth potential but also mainstream the sector.

World Bank Group is playing a catalytic role in unlocking opportunities for innovative, impact focused businesses. The South Asia Inclusive Business Program has been working towards enhancing private sector participation and inclusive business activity in the region. While working on the high level through systemic interventions, the team is also connecting with organizations on the ground by supporting them to scale sustainably and/or replicate across borders.

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