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Lessons from Five Years of Helping Governments Foster Incentives Transparency

Harald Jedlicka's picture

Global competition to attract foreign and domestic direct investment is so high that nearly all countries offer incentives (such as tax holidays, customs duty exemptions and subsidized loans) to lure in investors. In the European Union, the 28 member states spent 93.5 billion euros on non-crisis State Aid to businesses in 2014. In the United States, local governments provided and average of US$80.4 billion in incentives each year from 2007 to 2012.

In order to better understand the prevalence of incentives worldwide, the Investment Climate team in the Trade & Competitiveness Global Practice of the World Bank Group reviewed the incentives policy of 137 countries. Results showed that all of the countries that were surveyed provide incentives, either as tax or customs-duty exemptions or in other forms. Table 1 (below) shows the rate at which these instruments are used across advanced and emerging economies. For instance, tax holidays are least common in OECD countries and are most prevalent in developing economies. In some regions they are the most-used incentive.[1]





However, despite offering incentives, few countries meet all the requirements of a fully transparent incentives policy. These include: mandating by law, and maintaining in practice, a database and inventory of incentives available to investors; listing in the inventory all aspects of key relevance to stakeholders (such as the specific incentive provided, the eligibility criteria, the awarding and administration process, the legal reference and the awarded amounts); making the inventory publicly available in a user-friendly format; requiring by law the publication of all formal references of incentives; and making the incentives easily accessible to stakeholders in practice. A T&C study now under way on incentives transparency in the Middle East and North Africa (MENA) region showed that none of the eight countries analyzed has a fully transparent incentives policy. (See Graph 1, below.)




Year in Review: 2016 in 12 Charts (and a video)

Tariq Khokhar's picture

Between the social, political, and economic upheavals affecting our lives, and the violence and forced displacement making headlines, you’d be forgiven for feeling gloomy about 2016. A look at the data reveals some of the challenges we face but also the progress we’ve made toward a more peaceful, prosperous, and sustainable future. Here are 12 charts that help tell the stories of the year.

1.The number of refugees in the world increased.

At the start of 2016, 65 million people had been forcibly displaced from their homes, up from 60 million the year before. More than 21 million were classified as refugees. Outside of Sub-Saharan Africa, most refugees live in cities and towns, where they seek safety, better access to services, and job opportunities. A recent report on the "Forcibly Displaced" offers a new perspective on the role of development in helping refugees, internally displaced persons and host communities, working together with humanitarian partners. Among the initiatives is new financial assistance for countries such as Lebanon and Jordan that host large numbers of refugees.


Underage with an ID to prove it

Lucia Hanmer's picture
Rubi’s Story: Exulted, Rubi ran home. As fast as her fifteen-year-old legs could carry her, she ran, exam in hand, excited to share the results with her family. The results, she believed, would shape her fate.
 

 
Yet when she got home, the elation dissipated with the dust. Her father had his own news to deliver. She would not be going to secondary school, as she had worked for, as she had wanted. Instead, she would be getting married, an economic necessity for Rubi’s family as well as a common practice in Bangladesh. Early marriage is on the decline in Bangladesh, but high rates continue to prevail; 59 percent of all girls are married by age 18 and 16 percent by age 15.
 
The Advocates: When little, Rubi had been denied access to primary school because her parents hadn’t registered her at birth. Rubi’s mother got her daughter a birth certificate, and with that, she was admitted to school, a place where she thrived.
 
At 15, smart, ambitious Rubi did not want to get married. So she found advocates in her teachers and Plan International, a child rights organization. With their support, Rubi went to the Union Council Office where the chairman informed her parents about the legal ramifications of child marriage. She was not old enough and her birth certificate proved it. She was underage. So Rubi went back to school and on to graduate at 18.
 
Child Marriage: Rubi’s story highlights the global problem of child marriage, its impact on girls, and the role of identification in empowering girls to prevent it. Child marriage remains pervasive: every year, 15 million girls are married before 18.

Disabled and Forcibly Displaced

Omer Karasapan's picture
Volunteers carry disabled refugee - Nicolas Economou | Shutterstock.com

In February of this year the Syrian Center for Policy Research issued a report stating that 470,000 Syrians had been killed in the war and 1.9 million wounded. That was 10 months ago and with the intensification of the siege and bombardment of Aleppo and ongoing fighting elsewhere in the country, one can only guess at the current toll. What is clear is that each day of fighting adds to the burden that Syria will have to carry for generations to come, not only in terms of the ever mounting physical destruction but also in caring for the growing daily toll of the physically or mentally disabled that the war produces. All this at a time when half the population--nearly 5 million refugees and 6.6 million Internally Displaced Person (IDPs)--have been torn from their homes; and the country’s medical system is in tatters.

Education reform to create entrepreneurs

Hala Fadel's picture
 dotshock l Shutterstock.com

The demographic clock is ticking on both sides of the Mediterranean, from an aging workforce at one end to a workforce surplus on the other. Yet, whatever the demographic dynamics, the Mediterranean area is facing an incredible challenge, that of providing a safe, buoyant and prosperous future for its youth, one which would benefit its societies, their economic development, and progress.

Improving data collection to improve welfare in the Middle East

Aziz Atamanov's picture
Emad Abd Elhady l World Bank

The Middle East and North Africa (MENA) has witnessed a surge of conflict and economic uncertainty and, while the causes of conflict vary, there is no ambiguity about the negative impact it has on people’s wellbeing. Today, the region is both the world’s largest host for displaced populations and the single largest source of forcibly displaced people

An internship spent helping create an internship system for the Middle East and North Africa

Juliette Rosenberg's picture
 dotshock l shutterstock.com

Every high school student in North America understands the importance of what they do during the summer break. Whether it’s working for the minimum wage at a restaurant or waking up early for an internship, the colleges they apply to will evaluate the commitment and effort they put into work experience. Chances are that colleges—and future employers—won’t be very impressed if students spent the whole summer doing nothing.  

Back to the beginning: What I learned about early childhood development in the Arab World

Angelena Simms's picture
 Egyptian Studio l World Bank

This year, I was given the incredible opportunity of a summer internship at the headquarters of the World Bank Group in Washington, DC, researching the different levels of investment that countries in the Middle East and North African (MENA) have made in Early Childhood Development (ECD). As a result, I gained insights into development issues I would not otherwise have been aware of, nor would I have had any idea of how to go about making improvements.

Preparing for the Future: Coordinating Syrian refugees and the diaspora

John Speakman's picture
Refugees from Syria - Jazzmany / Shutterstock.com

I have been looking for possible sources of investment and possible markets that would help both Syrian refugees and their host communities, and, as someone who has worked on the subject of the private sector for two decades now, one of my first questions is—“what role can the diaspora play?”

Q & A: New initiatives for education in the Middle East and North Africa, including for refugees

Safaa El-Kogali's picture
 Egyptian Studio | Shutterstock.com

In Part II of her interview, Safaa El Tayeb El-Kogali, World Bank Practice Manager for Education, explains the initiatives being take to improve all levels of public education in the Middle East and North Africa (MENA), and how important it is for children to be able to go to school, especially when their countries are affected by conflict.

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