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Climate of hope, amid a season of summitry: Anticipation builds for vital summits on sustainability and climate change

Christopher Colford's picture
Speeding through a season of summitry, the world’s policymakers now have sustainability at the forefront of their autumn agenda – and the private sector, as well, must rise to the sustainability challenge. Anticipation is building for this month’s opening of the United Nations General Assembly, where the next-generation blueprint for global development – the long-awaited, painstakingly crafted Sustainable Development Goals (SDGs)  – will enshrine sustainability as the central long-term international priority.
Sustainability writ large – in all its environmental, social and economic dimensions – has been the theme driving the global debate as the SDGs have taken shape. A comprehensive plan that prioritizes 17 objectives – with 169 indicators to measure their progress toward completion – the SDGs will frame the global agenda through 2030. The SDGs’ adoption – at a U.N. summit from September 25 to 27 – will be a pivotal checkpoint along this year’s complex pathway of diplomacy, which will culminate in Paris in December with a crucial conference on the greatest of all sustainability issues: climate change.

Optimism seems to be steadily increasing as diplomats continue to negotiate a global climate-change deal. The hope is for an ambitious agreement at the so-called COP 21 conference – the 21st gathering of the Conference of Parties in the climate-change negotiations. The question, however, is how ambitious that pact will be.

As Rachel Kyte – the World Bank Group Vice President and Special Envoy on Climate Change – pointed out in a start-of-September forum at the World Bank: “I think that everything is in place for a deal to be struck in Paris, a deal that is universal, that brings everybody in to the table. . . . So a universal deal, a universal framework . . . is possible. The question, I think, is how strong a deal it's going to be.”
Rachel Kyte on Climate Action

As the clock ticks down to the deadline for a deal in Paris, Kyte (in conversation with Kalee Kreider of the United Nations Foundation) offered a detailed analysis of the intricacies surrounding the final stages of the negotiations: “The question, really, now is the level of ambition, the strength of that deal. And that's politics, not science. That's politics, not economics.”

Should governments support the development of agricultural insurance markets?

Daniel Clarke's picture

How governments can ensure that low-income farmers are financially protected against natural disasters, such as droughts, was at the heart of a panel discussion at the “Global Index Insurance Conference,” which concluded earlier this week in Paris.

Mission to Myanmar: Promoting the Full Development Potential of an Economy in Transition

Cecile Fruman's picture
In Yangon, the urban modernization of Myanmar is well under way | Photo by Stephanie Liu

How do you help a burgeoning democracy like Myanmar with its transition to a market-based economy after 50 years of isolation, poor infrastructure and limited capacity for reform? You do it by  engaging closely with the government, the private sector and development partners, and by providing the full range of data, financing and knowledge available across all sectors of the economy.

As I conclude my first visit to Myanmar, a fragile and conflict-affected country where the World Bank Group started our development engagement just three years ago, I've witnessed first-hand how the WBG can best support such an economy in transition. As Myanmar looks forward to its first free and fair election in over two generations – an event coming up in November – the challenge will be to ensure continued reform momentum during a period of dramatic political change.
Seldom have we faced such dramatic circumstances in a country where our engagement is in such an early stage and where the development potential is so great. A country of 50 million people that went from once being the rice basket of Asia to today having the lowest life expectancy and the second-highest rate of infant and child mortality among ASEAN countries as well as vast untapped farmland, Myanmar provides a once-in-a-lifetime development opportunity. This situation offers a chance for the WBG’s Trade and Competitiveness Global Practice to contribute to the transformation of an economy and society by supporting regulatory reforms, improving trade policy and trade facilitation, helping generate investment and improving the ability of the country to compete in one of the world’s most dynamic regions.
I was privileged during my visit to meet with the Minister and Deputy Minister of Commerce and their senior staff, and to open the Third Session of the Trade Sector Working Group, which the WBG co-chairs with the European Union and the Ministry of Commerce. Surrounded by India, China, Bangladesh, Thailand and Lao PDR – countries that together have about 40 percent of the world’s population – Myanmar has markets at its doorstep that are ready to be tapped. The removal of investment and trade sanctions by the West has also opened significant new opportunities farther afield.

Can index insurance protect poor farmers against climate change risks?

Gloria M. Grandolini's picture
Insuring crops against unforeseen weather events is a standard practice among farmers in rich countries.
Traditional insurance is either unavailable or is very expensive in many developing countries, leaving small farmers particularly vulnerable.
A severe drought, a devastating earthquake or another weather disaster can wipe out small farmers. Such uncertainties also make them more risk averse and less likely to invest in their farms.

Financial inclusion in Asia – time for disruption?

Nataliya Mylenko's picture

More than half of the world’s population lives in Asia and its robust growth is supporting the world economy.  After weathering well the 2008 crisis Asia is now in the spotlight with currencies depreciating and capital markets in retreat.  One widely voiced concern is rapid expansion of credit in the past decade fueled by abundant liquidity.  Globally, and in Asia, regulatory response to the 2008 crisis has been to strengthen financial regulation and de-risk financial intermediation.  Yet the reality of credit markets in most Asian economies is quite different from that in high income economies.  While domestic credit by financial sector represented on average over 100% of GDP for high income OECD countries, emerging Asia’s average in 2014 stood at 60%. The differences across countries are substantial in this diverse region, but in two thirds of Asian economies domestic credit is less than 60% of GDP.  The reality for most economies in Asia is that of limited and often inefficient financial markets which do not serve fully their growth needs. Low level of financial inclusion is a major contributing factor and a major challenge.

To Meet the Jobs Challenge, Maximize the Impact of SMEs

Klaus Tilmes's picture

The urgent challenge of generating jobs and incomes – as the world’s working-age population is poised to soar – will require making the most of all the job-creating energies of the private sector and the strategy-setting skill of the public sector. Today in Ankara, Turkey, the World Bank Group renewed its commitment to strengthen the global economy’s most promising and inclusive source of job creation: small and medium-sized enterprises (SMEs).

At a signing ceremony at the B20 conference of global business leaders – coinciding with the G20 forum of government leaders from the world’s largest economies – the Bank Group joined in a partnership with a new organization promoted by the B20: the World SME Forum (WSF), which is to become the global platform to coordinate practical assistance and policy support for SMEs.

Based in İstanbul, WSF has been founded through a partnership between the Union of Chambers and Commodity Exchanges of Turkey (TOBB), the International Chamber of Commerce (ICC), and ICC’s World Chambers Federation.

World Bank Group President Jim Yong Kim – in Ankara, Turkey, on September 4, 2015 – signs a Memorandum of Understanding to confirm the Bank Group's partnership with the World SME Forum. Also signing the document, along with President Kim, is Rifat Hisarciklioglu, the Chairman of B20 Turkey and the President of TOBB (the Union of Chambers and Commodity Exchanges of Turkey).

SMEs are a vital engine of innovation and entrepreneurship, and the success of the SME sector is central to every country’s prospects for job creation and economic growth. Providing support for SMEs is a fundamental priority for the World Bank Group, as we pursue our global goals of eradicating extreme poverty by the year 2030 and boosting shared prosperity.

SMEs are crucial to every economy: They provide as much as two-thirds of all employment, according to a recent survey of 104 countries – and, in the 85 countries that showed positive net job creation, the smallest-size enterprises accounted for more than half of total net new jobs.

Unpacking the bond surge and slump in Emerging Markets

Erik Feyen's picture

The volatility that’s now shaking the global financial system seems likely to have some of its most profound effects on the world’s emerging markets and developing economies (EMDEs). As policymakers seek to ride out the late-summer storm, it’s more vital than ever for economists and investors to understand how and why those economies got into today’s predicament.  

In the wake of the global financial crisis that began in 2007, the extraordinary monetary policies (EMPs) pursued by the world’s developed economies – its wealthier nations – triggered a buying spree in emerging and developing economies (EMDEs). Those countries experienced an unparalleled surge in total gross capital inflows from an annual average of $0.5 trillion from 2000 to 2007 to $1.1 trillion from 2010 to 2013. EMDE external bond issuance, which had been increasing steadily before the crisis, accelerated rapidly post-crisis and has now reached unprecedented levels.

From 2009 to 2014, EMDE corporates and sovereigns cumulatively issued $1.5 trillion in external bonds – almost a tripling from $520 billion in the period from 2002 to 2007. The recent surge in issuance is driven by corporates, which issued a total of about $300 billion in 2014 compared to $14 billion in 2000 (Figure 1). Most of that issuance is denominated in foreign currencies (Figure 2). Cumulative post-crisis issuance of bonds relative to the size of the economy has risen to unprecedented levels – a phenomenon that is widespread and not driven by a single country or region (Figure 3).

Activist strategies to sharpen economies' competitive edge: When Bernanke & Company speaks, policymakers listen

Christopher Colford's picture

So much for the myth that Washington empties out during the month of August. A standing-room-only throng flocked to a Monday-morning Brookings Institution seminar this week featuring a relative newcomer to the think-tank communityBen S. Bernanke, the former chairman of the U.S. Federal Reserve System. His wide-ranging and nuanced analysis – with all the gravitas that he once brought to his graduate economics seminars at Princeton – explored not just Brookings’ main topic of the day (“The Defense Economy and American Prosperity”) but also such subjects as macroeconomic management, the gradual recovery from the Great Recession, and lawmakers’ need to avoid hasty budget-cutting that would damage vital investment in long-term priorities. Offering some of the wit of his new blog for Brookings, Bernanke’s whirlwind analysis whetted Washingtonians’ appetite for the October 4 publication of his latest book, “The Courage To Act.”

The economic impact of U.S. military spending was the focus of Monday’s seminar, chaired by Brookings defense-policy scholar Michael O’Hanlon – but an additional, broader theme was unmistakable throughout the discussion. The competitiveness of every economy is shaped by its ability to make sustained investments in productivity-enhancing technologies – and, as the panelists explored within the context of the U.S. economy, R&D-intensive industries (whether military or civilian) have been on the leading edge of innovation, patenting, productivity growth and job creation.

Competitiveness is the holy grail of economic policymakers everywhere – and activist strategies can help every economy hone its competitive edge. For both theorists and practitioners in development, working with economies large or small, the Brookings panel’s focus on pursuing far-sighted and pro-active investment strategies holds implications for every country’s competitive positioning.

Consultation on how to improve SMEs’ access to finance through better public credit guarantee schemes

Pietro Calice's picture

Also available in: Español | Français

Small and medium-sized enterprises (SMEs) play a major role in most economies, particularly in developing countries. However, more than 50 percent of SMEs lack access to finance. Without it, many SMEs languish and stagnate. Credit markets for SMEs often don’t work.
A common form of intervention to improve access to finance for SMEs is a public credit guarantee scheme (CGS).

Credit guarantee schemes provide third-party credit risk mitigation to lenders by absorbing a portion of the losses on the loans made to SMEs in case of default, in return for a fee. CGS are popular partly because they combine a subsidy element with market-based arrangements for credit allocation. This allows less room for distortions in credit markets, unlike more direct forms of intervention, such as state-owned banks.

Credit guarantee schemes are present in more than half of developing countries. Their numbers are growing.

Governments have become interested in CGSs in the aftermath of the global financial crisis and amid the international community’s emphasis on SMEs as an engine for growth and job creation in developing countries. However, to be effective, CGSs need to be designed and implemented in a financially sustainable manner.

With this in mind, the World Bank Group and the FIRST Initiative convened a task force to design, implement and evaluate public credit guarantee schemes for SMEs.

Tourism ecosystems: A way to think about challenges and solutions to tourism development

Shaun Mann's picture

Ecosystem: A complex of living organisms, their physical environment, and all their interrelationships in a particular unit of space.
Tourism: A social, cultural and economic phenomenon that entails the movement of people to countries or places outside their usual environment for personal, business or professional purposes.

I was part of a tourism ecosystem, once, when I built and operated a small lodge on the banks of the Nile in Uganda. While I was living in a tent in the bush building the lodge, life was simple: My little ecosystem was the land around the lodge and the tribulations of fending off monkeys and snakes by day and leopards, hippos, elephants and mosquitoes at night. The sun and rain beat down hard, and tools and workers broke down regularly. The generator was a particular pain in the neck.

Apart from supplies coming in, I was not really connected to the outside world. Money ran out for awhile and I had to rush to Kampala and persuade the bank give me a bigger overdraft (at 26 percent interest – thieves!).
Once the lodge was finished, I had to join another ecosystem: the world of registering the company, getting licenses, drawing up employment contracts, getting a bank overdraft, getting a tax ID number – all the elements of the enabling environment for me to do business. Then I had to join another one: I needed bums on beds, and I had to link my wonderful product to local markets; I had to develop promotional materials and packages; I had to interact and contract with tour operators and local travel agents to supply me business; I needed market access. 

Nile Safari Camp: home for two years

Then, guess what? My business plan wasn’t panning out. I didn’t get the occupancies or the rates that I projected from the local market. I had to step into yet another ecosystem: the world of international long-haul travel. I needed more and better-paying customers. I had to understand how the big international tour operators sold their product, what they were looking for in new product and how they contracted. I had to join another ecosystem to make that happen. Turns out my little product wasn’t enough to attract international customers on its own, I had to team up with other lodges and offer a fuller package; we had to cluster our products. I had to diversify and innovate and find ways to add value to my accommodation offer – birdwatching, fishing, guided walks, weddings and honeymoons, meetings and workshops. . . . Well, there are whole ecosystems around each of those market segments. You need to understand them before you can do business with them.