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The Lure of Local Bonds

IFC announced yesterday that it will issue a $43m local currency bond in Central Africa, a first for the World Bank institution, and also a first for a non-local financial institution. This is IFC's second local currency bond in Sub-Saharan Africa, following its issuance of a West African Kola Bond in late 2006:

How relevant is the location of informal businesses for policy?

Mohammad Amin's picture

A distinction is often made between informal firms operating within, versus outside, household premises. In some sense, the former represent the quintessential informal firms beset with a number of problems, such as low efficiency, etc. Policies aimed at bringing informal firms into the fold of the formal sector could therefore be expected to have a bigger impact when targeted toward informal firms operating within, rather than outside, the household.

Informal Sector Comparison: Manufacturing vs Services

Mohammad Amin's picture

I have been comparing the differences between manufacturing and services firms in the informal or unregistered sector. There is a rich literature on how and why these firms differ, but it is based on firms in the formal or registered sector. It’s a moot point whether differences between manufacturing and service firms in the formal sector also hold for the informal sector. For example, differences in scale economies between service and manufacturing firms are known to be important for the formal sector, but this is not immediately obvious when comparing these firms in the informal sector.

“Unwilling” Entrepreneurs

Mohammad Amin's picture

The common perception of the informal sector is that unregistered businesses are not as efficient as registered or formal businesses. One proposed reason for this is that, by not being registered, informal businesses face severe hardships in accessing finance, markets, public services and government programs. Hence, the usual policy response to informality is simple: try and encourage informal businesses to register.

A Chinese Marshall Plan?

Geoff Dyer explores the idea of using China's massive foreign exchange reserves to form an investment vehicle for emerging markets. He has assembled a series of proposals from leading Chinese thinkers, including some from within the government.

For example: