Voices

Solving the G8 transparency equation for businesses: Bottom line + development impact = Open and Collaborative Private Sector initiative

Businesses create jobs and spur growth. But businesses can do more. As competitive pressures increase and as resources around the world become harder to sustain, foresighted businesses have started to adopt new, collaborative and open private sector practices that accomplish two goals at once: improve the bottom line and increase development impact.

The reason businesses do this? Not because of old do-gooding principles, but because solving development issues around the value chain becomes a crucial part of doing business through crowd-sourcing innovations, reducing cost and managing risk.

But the questions are, how can practices that benefit both the bottom line AND development, be scaled up? Can we encourage mass-adoption of the sustainable approaches that IFC has been promoting for years? How do we mainstream that which Michael Porter has called “Creating Shared Value”? How do we go from a few smart companies to millions adopting open and collaborative practices?

To begin answering these questions, the World Bank Institute is launching the “Open and Collaborative Private Sector” initiative. This will complement efforts that others at the World Bank and elsewhere have been advancing on Open Aid, Open Data and Open Government.

The problem with the World Bank’s 20th anniversary in Kyrgyzstan last November was that everybody else’s party had happened already.

There has been a blur of speeches, gala concerts, jazz bands, canapés, toasts and traditional performances as one embassy after another feted twenty years of partnership with the Kyrgyz Republic. The same guests, speeches, and – truth be told - probably the same canapés.

We had to do something different. So, as we celebrated the last 20 years of our work in Kyrgyzstan (which have been quite good), we toasted the next 20 years as well.

Just six months ago, in the previous South East Europe Regular Economic Report (SEE RER) covering the six Western Balkan countries of Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia (SEE6), we looked at the double-dip recession in this region, and structural policies needed for recovery.

Now, we are happy to report that recovery is, indeed, under way in each of these countries. In 2013, the SEE6 region is projected to grow 1.7 percent, thus ending the double-dip recession of 2012. Electricity, agriculture, and even some exports are helping with this rebound of output. Kosovo is leading the pack with a growth rate of 3.1 percent, with Serbia (which accounts for nearly half of the region’s GDP) expected to grow by 2 percent on the heels of increased FDI, exports, and a return to normal agricultural crops. (In 2012, by contrast, agricultural output in Serbia dropped 20 percent on account of a severe drought). Albania, FYR Macedonia, and Montenegro are all expected to grow by between 1.2-1.6 percent. Rounding out this group is Bosnia and Herzegovina – with expected growth of 0.5 percent.

So, are things finally looking up in the Balkans? Not exactly.

Figure 1: SEE6 Unemployment Rates, 2012

Source: LFS data and ILO. Kosovo’s tentative data suggest unemployment as high as 35 percent.

Students gather outside a PNDCC school in Benin. World Bank Photo. In community-driven development (CDD) projects, communities that have been given control over planning decisions and investment resources for development often decide to undertake small-scale infrastructure projects, such as rural roads, small bridges or schools. A project in Benin has demonstrated that schools built by communities can be built faster at lower cost than those built by outside contractors.

An assumption behind CDD is that communities with local knowledge of resources and environment are better positioned to figure out the best way to build their own public infrastructure in their interest. Indeed, there is some evidence that community-built infrastructure can be cheaper when compared to infrastructure built by government or outside contractors (for example, Wong (2012) introduces several cases of “CDD’s cost effectiveness as compared to equivalent works built through other government service delivery mechanisms”).

However, much of the available evidence comes from a comparison between “community-built infrastructure” and “other-entity built similar infrastructure” constructed at a different time. It is difficult to find, or to set up, an experiment where a set of identical infrastructure projects are built by both communities and others at the same time under similar conditions, and in numbers large enough to allow for comparison between outcomes.

In this regard, the recently completed National Community Driven Development Project (“PNDCC” in French) and the Fast Track Initiative (FTI) Education project in Benin present just this type of “natural experiment.”

Also available in: Español | Français | العربية

Globally, 165 million children under age 5 suffer from chronic malnutrition – also known as stunting, or low height for age. Much of this damage happens in pregnancy and the first two years of a child’s life. It means a child has failed to develop in full and it is essentially irreversible – which means that the child will have little hope of ever achieving her full potential.

The evidence tells us that malnutrition costs lives, perpetuates poverty, and slows economic growth. We now know that nearly half of all child deaths globally are attributed to malnutrition. I have seen in my own country, Indonesia, how stunting caused by malnutrition has diminished too many children’s futures before they even begin. Malnourished children are more likely to perform poorly in school and drop out earlier than their better-nourished peers, limiting their future earnings. Data from Guatemala show that boys who had good nutrition before age 3 are earning nearly 50% more as adults, and girls had a greater likelihood of having an independent source of income and were less likely to live in poor households.

Malnutrition diminishes not only the futures of individuals, but also of nations. Recent estimates suggest that as much as 11% of gross national product in Africa and Asia is lost annually to the impact of malnutrition. To end extreme poverty and promote shared prosperity, the world must commit to end child stunting due to malnutrition. I will be joining leaders from around the world in London this week to focus on this critical challenge.

Also available in: Español | Français | 中文 | العربية

Photo: Nandita Roy / World Bank

"Five years ago, I was no one," said Kunti Devi to me, sitting up straight against the wall of her one-room mud hut in Bara, a small village in India's eastern state of Bihar. "Now, people know me by my own name, not just by the name of my children."

I was sitting on the floor, across from Devi, a mother of eight, who belonged to one of the most vulnerable and socially excluded castes in India. She recalled how when her husband got injured and lost his job a few years ago, the family was pushed over the brink — from subsistence to hunger and poverty. At the time, Devi took a bold step for a poor woman used to living in the shadows of society. She joined a women's self-help group in her village and took a small loan to raise goats. With the income she generated, she repaid her first loan and took another one — this time to lease land to produce grain. She borrowed again when her family faced a health crisis. Today, Devi has several sources of income. She is also planning ahead. She wants to open a food outlet on a busy road. And now, with two of her sons married, she wants to find a larger living space for her growing family.

Also available in: Español | Français | العربية

Mother and newborn baby in a clinic This week I had the pleasure of attending Women Deliver 2013 in Kuala Lumpur, Malaysia — the largest global gathering of the decade to focus on the health and well-being of girls and women. The conference convened several thousand people from 140 countries — including many ministers and parliamentarians — to generate momentum and political commitment for girls’ and women’s rights and reproductive health.

We heard the voices of the wealthy and powerful — like Melinda Gates and Chelsea Clinton — as well as the voices that too often go unheard — including young people, sexual minorities, widows, women with disabilities, and women living with HIV and AIDS. I was really inspired by the passion of all the participants — of whom, by the way, 40% were male, quite a high proportion for gender events — and was reminded that the safe and healthy experience I had having my own kids is so far from the reality of many millions of women around the world.

Over the last decade Montenegro has trebled its gross national income (from $2,400 in 2003 to $7,160 in 2012), has reduced its national poverty headcount from 11.3 percent in 2005 to 6.6 percent in 2010, and enjoys the highest per capita income among the six South East European countries.

Despite this considerable progress, however, Montenegro remains a country in need of a new economic direction. The global financial crisis has exposed Montenegro’s economic vulnerabilities and has called into question the country’s overall growth pattern. The period between 2006 and 2008 was characterized by unsustainably large inflows of foreign direct investments (FDI) and inexpensive capital, which fueled a domestic credit consumption boom and a real estate bubble. When the bubble burst in late 2008 and in 2009 real GDP shrank by almost 6 percent, triggering a painful deleveraging and a difficult recovery that is not yet complete. With the base for Montenegro’s growth narrowing and the country’s continued reliance on factor accumulation rather than productivity, it has become clear that this old pattern cannot deliver the growth performance seen just a few years ago.

So, what kind of growth model can drive Montenegro’s next stage of development in the increasingly competitive environment of today’s global economy?

As spelled out in the recent report “Montenegro – Preparing for Prosperity” this country can go a long way toward returning to the impressive economic gains it was making just a few years ago by emphasizing three critical areas of development: sustainability, connectivity, and flexibility.

KINSHASA, Democratic Republic of Congo — For too long the people of the Great Lakes region of Africa have suffered from conflict and insecurity. We need to bring peace, security, and development to the region with great urgency to build on an 11-country peace framework arrangement. I am joining with U.N. Secretary-General Ban Ki-moon on a historic trip to the region — the first ever taken together to Africa by the heads of our organizations. Watch the video of my crossing the Congo River, from Brazzaville to Kinshasa, at the very beginning of the trip.

Also available in: 中文 | Español | Français | العربية

Having just returned from Dartmouth and meetings with the Center for Health Care Delivery Science, I’ve been thinking about the phrase “Delivery Science.” World Bank Group President Jim Yong Kim’s use of the term in recent speeches is related to using evidence-based experimentation to improve poor health, education, water, and basic service outcomes in the developing world.

Reflecting on this, I think, in many ways, “science” and “delivery” are distinct and need to be understood as different but reinforcing principles. So let’s break it down.