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Middle East and North Africa

Investment Promotion with Impact: The Case of Invest in Bogota

Submitted by Kusi Hornberger on Thu, 2011-12-08 15:40

Over the last two decades the number of investment promotion agencies (IPAs) has mushroomed from only a few dozen in the early 1980s to roughly 250 agencies worldwide today.  Despite this growth, relatively little attention has been paid towards whether or not investment promotion agencies actually have an impact on the growth in FDI to a location. 


Figure 1: Bogota, Colombia # of inbound FDI projects (by quarter) between 2003-2011


 Source: fDi Markets Database, Authors Calculations


What’s Next for Dubai World?

Submitted by Leonardo Lemes on Wed, 2010-02-17 11:57

Editor's Note: Leonardo Lemes is a Private Sector Development Consultant in the Investment Climate Department's Insolvency Technical Assistance Program.

On December 14, 2009 the Government of Dubai, under the patronage of Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, issued Decree 57 ("The Decree") exclusively to supervise existing and future formal reorganization and restructuring of the Dubai World Group of companies (DWG). DWG manages and supervises a portfolio of businesses and projects for the Dubai government across a wide range of industry segments, and projects to promote the emirate's economic growth.

The decree is a customized version (with specific alterations) of the existing Insolvency Law and the Insolvency Regulations of the Dubai International Financial Center (DIFC), which is regarded as cost-effective, efficient, timely, and balances the interests of debtors and creditors. It features a comprehensive financial restructuring and reorganization framework to manage the disputes related to resolving the financial position of Dubai World and its subsidiaries.

How do companies acquire land when looking abroad for their investments?

Submitted by Kusi Hornberger on Tue, 2010-02-16 17:47

Identifying a suitable location for investment is among one of the first decisions to be made once a company has committed to entering a local market for an FDI project. Many assume that foreign companies would automatically seek to acquire land in the most secure and legally available option – typically either purchasing freehold from a private seller or in a long term lease from the government. Doing so would allow the investing company to earn income over time on the asset (such as foreign investors have done investing in bungalows in Singapore), maintain complete control over land use and possibly use the property for collateral. 

However, this assumption is at times contradicted by the facts. Many foreign companies investing abroad may actually prefer to acquire land in the form of lease contracts. A recent example of this is the announcement by George Soros-backed Adecoagro to acquire land for its Brazilian agribusiness/sugar investment by entering into a long term lease contract. This could be because lease contracts often are easier to obtain and provide better protection against basic investor risks. How?

Doing Business in Colombia 2010

Submitted by Brian Hoyt on Tue, 2010-02-16 13:32

DBColombia2010 The World Bank's Doing Business team has launched its second annual Subnational Colombia report. Colombia was among this year's top 10 reformers in the general Doing Business survey, with every city pulling its weight.

Each of the 13 regions previously benchmarked showed improvements in at least one of the areas measured. Over 75 percent of cities now offer one-stop shops to start businesses.

Doing business is easiest in Manizales, Ibagué and Pereira, and more difficult in Cali and Cartagena.

One of my favorite aspects of the subnational reports is that they showcase how different regions within the same country can learn from each other. A hypothetical Colombian city that adopted all the best practices identified in this report would rank 17th of 183 countries globally -- 20 places ahead of Colombia’s position in the global Doing Business 2010 report.

Dubai Update

Submitted by Brian Hoyt on Tue, 2010-01-12 14:03

Felix Salmon reports the latest news from Dubai, arguing that the $10bn cash injection from Abu Dhabi is no panacea for the Emirate's long-term woes:

If you think that the Dubai situation has pretty much been resolved with that cash infusion from Abu Dhabi, think again. Paul Whitfield and Vipal Monga explain that nothing really has been cleared up at all, and that there are far more — and far bigger — uncertainties surrounding the emirate’s finances than most of us had suspected.

For one thing, Dubai has no real legal structure capable of dealing with a default on this level, which has forced it to hurriedly import a jury-rigged system with UK and Singaporean jurists, based on British and American (not Islamic) legal structures.

Stability in Iraq depends on a business-friendly government

Submitted by Blake Newman on Thu, 2009-12-10 11:49

NPR story cited World Bank report

In the report, "Iraq's Shaky Economy Poses Threat to Future," NPR cites The World Bank's Doing Business report that ranks economies based on the ease of doing business in particular countries:

The process of setting up a business in Iraq requires 11 procedures,

at 11 different ministries, says Frank Gunter, a professor of economics

at Lehigh University. On average, Gunter says, it takes 77 days and

costs about $2,800 in fees alone — and that assumes you have good legal

advice.

Gunter studied Iraq's business climate as the senior

civilian economic adviser to the U.S. military in Iraq from 2008 to

2009. He cites a recent study by the World Bank that measures the cost and ease of starting a business in 183 countries. Iraq scored close to the bottom, at 153.

Small business drives economic growth

As recognized by Professor Guntor and NPR, lowering the barriers to starting a business and reducing the corruption within local governments to make it easier to launch a start-up, will ultimately help fuel developing economies and provide new jobs, reduce unemployment, stabilize a region and reduce poverty.

Corruption Roundup

Submitted by Brian Hoyt on Wed, 2009-12-09 17:21

This morning I published an interview with Jean Pesme from the World Bank's anti-corruption program StAR. Here's a look at what else happened on Anti-Corruption Day:

Thousands marched against corruption in Indonesia. Plus, bloggers from the Huffington Post think there's more to come.

The World Economic Forum has published its Global Agenda Council on Corruption.

Transparency International asks, "What does Anti-corruption stand for"?

The OECD held a roundtable discussion on "Foreign Bribery: Who Pays the Price".

A look into what Switzerland is doing to fight corrupt money.

Ban Ki-moon argues, "Corruption is not some vast impersonal force. It is the result of personal decisions, most often motivated by greed."

(h/t Transparency International Twitter)

How to govern climate-change funds

Submitted by Rachel Kyte on Wed, 2009-12-09 13:28

A lot of brouhaha has been brought about by The Guardian’s supposed steal on a leaked non-paper drafted by the Danes. Though the non-paper has been around for a while, the drama put fuel on the fire of the discomfort and sense of injustice felt by many developing country delegations. The other story dominating the headlines is bankers' pay. Let me try to link the two in the context of the financing discussions in Copenhagen.

In Praise of Anti-Corruption Day

Submitted by Brian Hoyt on Wed, 2009-12-09 11:05

STARVERTICA December 9th is the UN's official anti-corruption day, and in order to celebrate, PSD blog has been working with the World Bank's Stolen Asset Recovery Initiative (StAR), a partnership between the United Nations Office on Drugs and Crime and the World Bank. It is driven by four guiding principles:

  1. StAR encourages and supports the ratification, domestication and implementation of the UN Convention Against Corruption, which provides the legal framework for international collaboration in the return of stolen assets that are the proceeds of corruption 
  2. StAR is focused on international asset recovery, targeting financial centers in developed countries
  3. Asset recovery is a demand driven, country-led activity
  4. StAR provides assistance in the technical dimensions of asset recovery

I sat down with Jean Pesme, Manager of the World Bank's Finance and Private Sector Development Financial Market Integrity unit - which is a key contributor to the StAR initiative -  to discuss the initiative in further detail:

PSD: What sets StAR apart from other anti-corruption programs? What role will the private sector play?

Copenhagen: web 2.0 has come of age, but does it make any difference?

Submitted by Giulio Quaggiotto on Tue, 2009-12-08 17:37

When one looks at the flurry of web 2.0 activity around the ongoing Climate Change Conference in Copenhagen, I would venture that it is no exaggeration to affirm that this conference marks the moment when web 2.0 has reached its maturity for the development sector and citizen engagement: from fundraising to campaigning, from real-time reporting to visualizing impacts of the decisions taken by politicans. 

Never before has the full arsenal of web2.0 tools been so prominently in display: from prediction markets to Second Life streaming, from visualisation and YouTube contests to Google Earth layers. UNFCCC’s website itself offers a rather impressive gallery of “virtual participation” options to the conference. From the tours on Google’s Climate Change/COP site, some of my personal favourites around the event include:

And the list could go on and on. And yet, amidst all this reporting, lobbying and information dissemination efforts, one is left with a fundamental question: will web 2.0 make any difference at all on the outcomes of the conference? (Social) media impact is notoriously difficult to quantify, but can we in any way claim that, thanks to the panoply of tools at their disposal, our citizens are better informed, our politicians take better decisions, lobbying and campaigning efforts are more transparent?

As Business Week pointed out earlier this week, “the best way to avoid a..  [social media] backlash today is for social media's practitioners… to shift the focus from promises to results. It may be the only way to convert the skeptics—and flush out the snake oil”.

Will Copenhagen be the snake oil remedy for web2.0 and the development sector?