Syndicate content

Private sector engagement is key to success on gender equity

Anabel Gonzalez's picture

Photo: Visual News Associates / The World Bank

As we celebrate International Women’s Day, if there is one concept to keep in mind above all others, it’s that gender equity is vital 24-7-365, and not just as a once-a-year observance.

You have heard the argument before and you will hear it again: Economies cannot reach their full potential if half the population is systematically blocked from full participation. This fundamental idea motivates the World Bank Group as it redoubles its efforts to address gaps in gender equality.

Our deepening work to close key gender gaps shows that the issues go far beyond economic inequity. Barriers to women’s full economic participation also impose moral, emotional and at times even physical costs.

We see this in the laws that prevent wives from making autonomous decisions about their careers. We see it in instances of violence against women in the workplace. We see this when harassment occurs at rural border crossings where women traders can encounter threats, and worse, from border guards.

In developing and developed countries alike, women face obstacles to starting and managing a business, to accessing finance, to earning equal pay for equal work, and to owning land or other assets. Many countries maintain laws and regulations that advantage men while discriminating against women, often relegating them to the status of a legal minor.

As Emeritus Professor Linda Scott of Oxford University’s Saïd Business School told us recently, “Women are economically disadvantaged in every country on the planet” and “women’s economic exclusion imposes a significant drag on world economies and societies.”

A key part of the Bank Group’s gender effort revolves around the importance of leveraging the private sector to ensure that reform goes beyond policy statements and creates real economic benefits for women and men. The Bank Group’s Trade & Competitiveness Global Practice (T&C) has developed an approach to gender equity that focuses on expanding market opportunities, enabling private initiative, and developing dynamic economies.

The work we are doing recognizes the entrenched nature of the obstacles to fuller economic empowerment for women. Achieving results at scale will require sustained commitment. But we also understand the importance of realizing near-term progress to catalyze change, and we recognize how interventions in particular countries can show the way forward elsewhere.

The concept is simple: Good results generate more good results.

The secret sauce of a ‘start-up nation’

Anabel Gonzalez's picture

Israel has one of the most admired innovation systems in the world. With the highest Research & Development (R&D) spending and venture capital investment as a percentage of GDP, the country has positioned itself as a global leader in research and innovation, earning the title of “start-up nation.”
 
Avi Hasson, Chief Scientist of the Ministry of Economy and Industry and Chairman of the Israel Innovation Agency, was at the World Bank Group last week to share some of the “secret sauce” behind Israel’s success in the innovation and entrepreneurship space.
 
Hasson highlighted the key role played by public-private partnerships over the last 40 years. Those partnerships have resulted in the establishment of an innovation infrastructure — including educational and technical institutions, incubators and business accelerators —anchored within a dynamic national innovation ecosystem built around shared social goals.
 
Specifically, to reduce the risk for investors, the government has focused on funding technologies at various stages of innovation — from emerging entrepreneurs and start-ups to medium and large companies. Strengthened by that approach, the Israeli ecosystem is maturing: according to Hasson, mergers and acquisitions have increased and exit profits have almost tripled over the last three years, with more and more new projects being started by returning entrepreneurs.

Economic diversification: A priority for action, now more than ever

Cecile Fruman's picture

The global economy is stagnating, and uncertainty about its future is rising. These trends weigh heavily on countries that depend on the production and export of a small range of products, or that sell products in only a few overseas markets.  Prices of the minerals and other basic commodities that dominate the exports of many poor countries have also declined sharply. All of this points up the need for diversification strategies that can deliver sustained, job intensive and inclusive growth.

The World Bank Group’s Trade & Competitiveness Global Practice (T&C), a joint practice of the World Bank and International Finance Corporation (IFC), is working with a growing roster of client countries eager to achieve greater economic diversification. This is a worthy goal regardless of economic conditions, but especially so now, as developing countries with sector-dependent economies face mounting pressures.

Chile is an example of a diversified economy, exporting more than 2,800 distinct products to more than 120 different countries. Zambia, a country similarly endowed with copper resources, exports just over 700 products — one-fourth of Chile’s export basket — and these go to just 80 countries. Other low-income countries have similarly limited diversified economies. The Lao People’s Democratic Republic and Malawi, for example, export around 550 and 310 products, respectively. Larger countries that export oil, such as Nigeria (780 products) and Kazakhstan (540 products), have failed to substantially expand the range of products they produce and export.


AJG Simoes, CA Hidalgo. The Economic Complexity Observatory: An Analytical Tool for Understanding the Dynamics of Economic Development. Workshops at the Twenty-Fifth AAAI Conference on Artificial Intelligence. (2011)
http://atlas.media.mit.edu/en/profile/country/chl/#Exports

While the sluggish global economy is creating economic problems for traditional exports, other economic trends offer new routes and opportunities for poor countries to diversify. The trend toward the spatial splitting up of production across wide geographic areas, and the emergence and growth of regional and global value chains, offer new ways for developing countries to export tasks, services and other activities. Value chains offer developing countries a path out of the trap of having to specialize in whole industries, with all of the cost and risk that such a strategy entails.

Home-grown technology firms help drive eGovernment expansion in East Africa

John Wille's picture



Over the past five years, we have seen the emergence of a number of eGovernment applications and platforms in East Africa, leveraging the growth of internet and smartphone penetration to improve the reach and quality of government service delivery. While a number of these technology solutions, particularly in tax administration, trade facilitation and financial management systems, have been sourced from international providers – based in the United States, India and Singapore – African information and computer technology (ICT) firms have also played a major role in this surge in online service delivery to citizens and businesses.

The use of various “managed service” models, such as eGovernment public-private partnerships (PPPs) and cloud hosting, has allowed even governments with limited in-house ICT capacity to deliver services online in a sustainable manner. The World Bank Group (WBG) has also played an important role in developing the ability of local firms to effectively provide services to government clients by sharing good international practices and by funding the development of these locally grown technology solutions.

Kenya e-Citizen improves revenue generation as it cuts compliance costs for citizens and businesses

This digital services and payment platform – https://www.ecitizen.go.ke/ – was initially piloted in 2014 with seed funding from the Kenya Investment Climate Program of the WBG's Trade & Competitiveness (T&C) Global Practice. The technology platform was developed and is now managed through an outsourcing arrangement by government with a local ICT firm. It has grown organically, expanding from eight government-to-citizen (G2C) and government-to-business (G2B) services to more than 100 today, covering such areas as driver’s licenses, passport and visa applications, company and business name registration, work permit administration and civil registration. Citizens are able to register and obtain login credentials online, through a validation process involving the national ID and SIM card registry databases. They can also pay for services using a variety of methods, including bank transfers, credit cards, MPesa (“mobile wallet”) and other mobile money systems.

De-risking impedes access to finance for non-profit organizations

Emile van der Does de Willebois's picture



If you’ve opened a bank account in the last few years, you likely had to answer a bunch of more or less intrusive questions about yourself, your background and why you wanted to open the account. Annoying, but part and parcel of Anti-Money Laundering/Combating the Financing of Terrorism (“AML/CFT”) rules that all banks, in all parts of the world, are subject to.

The ostensible purpose is to enable banks to prevent bad actors using the financial system to launder their funds and, where bad actors are not identified at entry, to detect any suspicious financial activity and provide appropriate background to competent authorities. (Whether they are successful in this endeavour is another question.)

More recently large international banks have been upping the ante and have started to disengage altogether from clients from certain geographical regions or certain sectors because they consider the AML/CFT risks too great- a development known as “de-risking”. Often the business lines or countries exited are those that aren’t particularly profitable; the argument being that only a substantial profit margin justifies taking a larger than average risk. The amount of due diligence to be conducted on a customer cuts into that profit margin and the higher the perceived risk of that customer, the more the due diligence, the lower the profit.

One of the sectors particularly affected are non-profit organizations (NPOs). This is an unfortunate consequence of the mistaken and remarkably persistent idea that all NPOs pose a high AML/CFT risk. According to a report published earlier this month by the Charity and Security Network, two-thirds of U.S.-based NPOs working abroad are facing problems accessing financial services. Apart from account closures and account refusals, these also include delays in wire transfers and increased fees. 

As a result of these delays, they are sometimes forced to move money through less transparent, traceable, and safe channels. The prevalence and types of problems vary by program area, with NPOs working in peace operations/peacebuilding, public health, development/ poverty reduction, human rights/ democracy building, and humanitarian relief reporting the greatest difficulties. One NPO was prevented from sending immediate relief to the persecuted Rohingya minority in Myanmar in the midst of a dire humanitarian crisis. Timely transmittal of those funds might have saved lives, the charity’s director explained.
 

From open data to a collaborative community – looking ahead with TCdata360

Prasanna Lal Das's picture
TCdata360: Your Source for Open Trade and Competitiveness Data


It’s now been about a month since the Trade & Competitiveness Global Practice of the World Bank Group launched TCdata360, our new platform for open trade and competitiveness data from the Bank and external sources. The initial response has been overwhelmingly positive, and it has included a mixture of the anticipated and the unexpected.

Egypt has been the most popular country page during this period, the indicator on the number of days to start a business has been the second most visited page (though it seems to be ceding its spot to the page on venture capital availability) and we have been struck by the number of people that have searched for information on countries that have laws against sexual harassment in the work place (it’s steadily been one of the top 10 most visited pages on the site). Our data stories have attracted attention as well, especially in social media and there has been consistent interest in the API.

The question now is: Where should we take TCdata360 from here? How does a platform grow after the initial excitement around its release has dissipated? How can you or your organization contribute to the growth of the platform?

Here are a few of our ideas at the moment:
 
  • More data – we have a growing inventory of new datasets.
  • Better user experience – we are tweaking several things, while keeping what people like (which is most of the site).
  • More analytics – we have experimented with Datascoper, a tool to uncover hidden patterns in data, but work remains to make these tools more usable and meaningful.
  • Better engagement with our users – we want to show off your work on the site. Tell us about the insightful work you do using our data; we will share it with all our users. And we are all ears about your ideas for other ways to collaborate.
  • Continue contributing to the open data community – we plan to offer data literacy and other support; stay tuned for greater emphasis on applied data; we are working to make this and other data truly useful in an applied sense to governments, the private sector, and others.
  • Better linkages with the open source world – we built the site on open source and want to share our work with the community; we are constantly looking for tools that we can either integrate into the site or that we should be using. Tell us about them.


Help us improve our list – write us at tcdata@worldbank.org or tweet us at #TCdata360.

How urban start-up ecosystems help cities adapt to economic transformations

Victor Mulas's picture

Entrepreneurs at mLab East Africa, Nairobi, Kenya. Supported by the World Bank’s infoDev program, this business incubation center provides knowledge and networking opportunities to local digital start-ups. © infoDev / World Bank 



Start-up ecosystems are emerging in urban areas across the world. Today, a technology-based start-up develops a functioning prototype with as little as $3,000, six weeks of work, and a working Internet connection.
 
Entrepreneurs are not seeking large investments in hardware or office space. Rather, they look for access to professional networks, mentors, interdisciplinary learning, and diverse talent. Cities are best suited to meet their needs, as they provide diversity and allow for constant interaction and collaboration. Thus, the shift caused by the so-called “fourth industrial revolution” makes cities the new ground for organic innovation.
 
The urban innovation model can be applied in cities in both developed and developing countries. The same trends are driving the urbanization of organic innovation ecosystems in New York City, London, Stockholm, Mumbai, Buenos Aires and Nairobi. This presents a great opportunity for developing countries to build innovation ecosystems in cities and create communities of entrepreneurs to support the creation of new sectors and businesses.
 
But while some cities have organically developed urban innovation ecosystems, nurturing a sustainable and scalable ecosystem usually requires determined action. Moreover, not all cities are building their innovation ecosystems at the same pace.
 
To support a local innovation ecosystem and accelerate its growth cities can promote collaboration through creative spaces and support networks, while also hosting competitions to solve local problems. 

8 key approaches to accelerate financial inclusion

Douglas Randall's picture



As World Bank staff working on financial inclusion, our days revolve around a critical question: what are the most promising ways to improve access to and usage of appropriate financial products for the underserved? A big part of our job is to track the wide range of experiences and learnings from around the world and incorporate them into our work advising policymakers and regulators. We thought it would be useful to share our current thinking, distilled into a list of the top eight approaches to accelerate financial inclusion. This list is from a policymaker perspective, and takes into account the fact that policymakers play a multi-faceted role in financial inclusion, balancing promotion, protection and stability.

First, two caveats. This is subjective list, drawn from our experience. We expect reasonable people to disagree with some of our choices and that’s OK – in fact, debate is welcome.

Second, country context plays a critical role in formulating appropriate approaches to financial inclusion. This list is meant as a general guide for what is impactful in most countries, most of the time.
 

Looping in local suppliers rather than forcing out international firms

Anabel Gonzalez's picture



An instructor at the Savar EPZ training center in Dhaka, Bangladesh, helps young women being trained to make shirts. Photo Credit: © Dominic Chavez/The World Bank


Increasing economic prosperity for developing countries is related not only to rising trade, but also – and more important – to transforming the traditional composition of what they produce and export. In the world today, many developing countries strive to diversify away from exporting commodities toward higher-value-added goods and services.

The evolution of trade and investment flows over the last three decades shows that foreign direct investment (FDI) can be a powerful driver of exports, a creator of well-paid new jobs and a crucial source of financing. More important, FDI may become a very rapid and effective engine to promote the transfer of technology, know-how and new business practices, helping to raise productivity and setting a country on the course of convergence. This is particularly the case of efficiency-seeking FDI – that is, FDI that locates productive processes in a country seeking to enhance its ability to better compete in international markets-.
 
The benefits of FDI are further leveraged when local firms can catalyze the presence of foreign investors to connect to global and regional value chains (GVCs). As a result of new international firms investing in a host country, great new opportunities arise for local enterprises to supply the inputs – be it goods or services – that their international counterparts need.

This has been the experience of Bangladesh, where local suppliers have grown in tandem with foreign investors in the garment sector. It is through linkages with international investors that local firms can gradually be lured into producing new goods and services that, until then, were not produced in the host country.  This is how economic diversification and greater value added are generated.

Multinational enterprises (MNEs) and their key partners (Tier 1 suppliers) are generally keen to source locally if a competitive local supplier can be found. However, they are also reluctant to absorb high search-and-find costs, and they will typically not invest in assisting local suppliers with upgrading efforts. Likewise, local firms are generally keen to supply to foreign firms, but are often not ready to make the necessary investments in technology and in processes to meet strict quality standards without a clear line of sight on potential payoff for such investment.

Will Sovereign Wealth Funds Go Green?

Håvard Halland's picture



Sovereign Wealth Funds (SWFs) currently have a very limited role in climate finance and green investment – reportedly, below the average for institutional investors. According to the Asset Owners Disclosure Project (AODP), which evaluates institutional investors on the basis of their low-carbon performance, five of the 10 lowest-rated large investment funds were SWFs.

However, the more progressive SWFs are currently divesting from assets with large climate-related risks, and some countries are pondering whether their SWF should take a more pro-active role in green finance. What lies ahead for SWFs in this rapidly changing landscape?
 
SWFs could have an impact on climate finance
 
The sheer amount of capital managed by SWFs means that their impact on green finance, while marginal historically, has the potential to become significant. According to the Sovereign Wealth Fund Institute (SWFI), SWFs hold assets worth approximately $7.4 trillion, and the total capital of SWFs has more than tripled over the last decade.
 
But SWFs’ mandate does not typically include green finance. To the extent that they have been active in this area, it has been to reduce climate-related risk to their portfolios – including exposure to fossil fuels. For example, last October the $22.6 billion New Zealand Superannuation Fund (NZSF) announced a strategy to address climate-change risks that represent a “material” issue for long-term investors, and to “intensify its efforts” in areas including alternative energy, energy efficiency and “transformational” infrastructure. Norway’s giant Government Pension Fund Global ($873 billion) has adopted similar policies to reduce climate-related risk.

Pages