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Private Sector Development

How civil society and others achieved the Paris Climate Agreement

Duncan Green's picture

Michael JacobsA brilliant analysis by Michael Jacobs of the success factors behind last year’s Paris Climate Agreement appeared in Juncture, IPPR’s quarterly journal  recently. Jacobs unpacks the role of civil society (broadly defined) and political leadership. Alas, it’s over 4,000 words long, so as a service to my attention deficit colleagues in aid and development, here’s an abbreviated version (about a third the length, but if you have time, do please read the original).

The international climate change agreement reached in Paris in December 2015 was an extraordinary diplomatic achievement. It was also a remarkable display of the political power of civil society.

Following the failed Copenhagen conference in 2009, an informal global coalition of NGOs, businesses, academics and others came together to define an acceptable outcome to the Paris conference and then applied huge pressure on governments to agree to it. Civil society effectively identified the landing ground for the agreement, then encircled and squeezed the world’s governments until, by the end of the Paris conference, they were standing on it. Four key forces made up this effective alliance.

The scientific community: Five years ago the Intergovernmental Panel on Climate Change (IPCC) was in trouble. Relentless attacks from climate sceptics and a number of apparent scandals – the ‘climategate’ emails, dodgy data on melting Himalayan glaciers, allegations surrounding its chairman – had undermined its credibility. But the scientists fought back, subjecting their work to even more rigorous peer-review and hiring professional communications expertise for the first time. The result was the IPCC’s landmark Fifth Assessment Report, which contained two powerful central insights.

First, the IPCC report introduced the concept of a ‘carbon budget’: the total amount of carbon dioxide the earth’s atmosphere can absorb before the 2°C temperature goal is breached. At present emission rates, that would be used up in less than 30 years. So cutting emissions cannot wait.

The other insight was that these emissions have to be reduced until they reach zero. The IPCC’s models are clear: the physics of global warming means that to halt the world’s temperature rise, the world will have to stop producing greenhouse gas emissions altogether.

The economic community: But it was a second set of forces that really changed the argument. Since the financial crash in 2008–2009, cutting emissions had fallen down the priority lists of the world’s finance ministries. The old orthodoxy that environmental policy was an unaffordable cost to the economy reasserted itself. A new argument was required.

'Davos Every Day': Parliamentarians' ideas enrich the Spring Meetings debate, advancing the Good Governance agenda

Christopher Colford's picture



At the Global Parliamentary Conference 2016, the perspectives of parliamentarians from 70 countries energized the debate before the Bank's and the Fund's Spring Meetings. From left to right, on the Preston Auditorium stage: Jeremy Lefroy, a Member of Parliament in the U.K., who served as the conference chairman; IMF Managing Director Christine Lagarde; and World Bank President Jim Yong Kim.    

Did you happen to miss the Davos conference over the winter? I feel your pain: Somehow, for the umpteenth year in a row, my ticket to the World Economic Forum in Davos must have gotten lost by the Postal Service, too.

Not to worry, however: Twice a year, in April and October, Washington’s motto might as well be “Davos Every Day” – as the great and the good of globalization gather for the formal meetings of the World Bank Group and the International Monetary Fund.

The Bretton Woods siblings are just-now recovering from their semiannual tsunami of scholarship and diplomacy, with still-dazed staff members sorting through their accumulated post-Meetings mountains of newly published policy monographs, economic analyses and deepthink datapoints. This spring’s sprint focused, as is customary, on the speeches, statements and seminars with the Bank’s and the Fund’s scholars, along with the insights of the institutions’ core constituents: the Finance Ministers and central-bank governors who oversee their countries’ daily economic policymaking.

But there was an additional governance-focused feature at this spring's gathering: Meetings-goers also gained the valuable perspective of  the almost 200 lawmakers and observers from 70 countries who convened in Washington, for just the second time, for the annual Global Parliamentary Conference. The gathering was held under the auspices of the Bank- and Fund-sponsored Parliamentary Network, which is now chaired by Jeremy Lefroy, a member of the U.K.’s House of Commons representing Stafford.

Hearing the viewpoints among the lawmakers, just before the executive-branch officials began the Spring Meetings formalities, provided Washingtonians a chance to take the pulse of an additional cohort of opinion leaders whose work is indispensable in delivering effective governance. The conference first brought the parliamentarians to Washington in 2015 – and now the Parliamentary Network is aiming to make Washington the venue for their conference every year.

Linking the lawmakers’ conference with the meetings in Washington will provide a valuable opportunity for the parliamentarians to hear more about the latest research findings of the Bank and the Fund. Moreover, it will help the Bank’s and the Fund’s headquarters staffs in Washington hear, more directly, about the policy priorities and development ideas of the leaders who frame their countries’ laws – some of whom may someday, in their turn, become the Ministers and policymakers who lead their countries’ executive-branch agencies.

Young Tunisian entrepreneurs push to change attitudes to jobs

Christine Petré's picture
Young entrepreneurs - Courtesy of Christine Petre

“There’s no weekend for an entrepreneur,” said 24-year-old Hamdy Ben Salah with a smile, when we met on a sunny Saturday morning at his home-based office, where Elyes Labidi and Boulabiar Marwen—two of his five colleagues—were already sitting in front of their computers. The small room they sit in used to be kept for household garbage. But, with furniture and some paint, today it is the base of AlphaLab.

Vigorous ideas for ‘Powering Up Growth’ through energetic policy reforms

Christopher Colford's picture
In an era of chronically slow economic growth, what steps can policymakers take to help jump-start productivity, spur employment and build long-term wealth? Recognizing that the private sector must create about 90 percent of the economy’s future jobs, which policy reforms can most effectively encourage private-sector investment?

Questions like those – focusing on the private sector as the principal driver of growth, with deft public policy as an indispensable catalyst – inspired a dialogue among some of the developing world’s most experienced policymakers at a major forum, “Powering Up Growth: Ideas for Beating the Slowdown,” during the recent Spring Meetings of the World Bank Group and the International Monetary Fund. All four government Ministers on the panel – from both commodity-exporting and  -importing countries – voiced a sense of urgency, describing their efforts to attract private investment to spur job creation, amid a global economy that seems destined for prolonged weakness.

Before the policymakers ascended the Preston Auditorium stage, sobering updates had arrived from the Bank and the Fund: The Bank’s latest forecast for global growth has been lowered from 2.9 percent to 2.5 percent – with the caveat that this latest forecast is subject to further downside risks. That downward revision is in parallel with the Fund’s similar projection, which sees global growth this year in the neighborhood of just 3 percent.

Policymakers worldwide are eager to explore any option to try to lay the foundation for an eventual return to a long-term economic expansion. It was clear that the panelists in the “Powering Up Growth” event – which was convened by Jan Walliser, the Vice President for the Bank Group’s practice group on Equitable Growth, Finance and Institutions (EFI) and organized by the Global Practice for Macroeconomics and Fiscal Management (MFM) – were focused on long-term structural changes that can energize the private sector’s ability to drive growth.
 
Powering Up Growth: Ideas for Beating the Slowdown


The panelists – from Bolivia, Pakistan, Angola and Ukraine – represented countries from different regions and at various levels of economic development, but they shared a determination to jump-start growth through reforms that will strengthen the private sector’s long-term confidence. The Ministers, at times, seemed to envision opportunities, not just for short-term structural adjustment of their priorities or medium-term structural reform of their policy farmeworks, but for far-reaching structural transformation of their economies and societies.

Development finance frontline: Senegal’s Strategic Investments Fund

Håvard Halland's picture

 

Amadou Hott
Amadou Hott 

“The only way to achieve the sustainable development goals is to use more public capital strategically for unlocking private investment, particularly for infrastructure,” says Amadou Hott, CEO of the Senegalese Fund for Strategic Investments.

The Senegalese Strategic Investments Fund (FONSIS, for its acronym in French) is part of a rapidly expanding network of state-sponsored strategic investment funds (SIFs) now emerging in countries at all income levels. The World Bank Group and its partner, the Public Private Infrastructure Advisory Facility, work with FONSIS in an advisory role, and FONSIS provides input to the Bank’s research on SIFs. In the World Bank Group’s recently issued Climate Change Action Plan, SIFs feature as one of the tools to crowd in private capital to climate mitigation and adaptation projects.

Mr. Hott was in Washington last week for the Spring Meetings, and we caught up with him during a break in his schedule. Mr. Hott represents a new generation of African financial sector professionals and leaders, who have returned to opportunities at home after earning degrees at leading global universities and gaining extensive experience on Wall Street, in the City of London, and in other global financial centers. He was also nominated a Young Global Leader by the World Economic Forum.

Q. FONSIS has been doing some very interesting projects. Could you tell us about some of your signature investments?

 POLIMED (Pôles d’Infrastructures Médicales)
Pôles d’Infrastructures Médicales

One project that I think is innovative is our building and commercial operation of the POLIMED (Pôles d’Infrastructures Médicales) diagnostic center within the public hospital of M’Bour, a coastal city 70 kilometers from Dakar. The hospital itself couldn’t afford to buy the required advanced technological equipment, and we were asked to build and run the diagnostic center as a commercial operation, with the public doctors and technicians of the hospital providing the medical services to keep down patient fees. Since operations started at the end of December 2015, more than 4,000 patients have been diagnosed, and the financial results are looking good so far. We intend to replicate this model all over the country to upgrade our medical infrastructure.

Another interesting project is the 30 megawatt, €41 million, solar energy power plant Santhiou Mékhé, and a 9 km transmission line to the grid. We closed that deal this past February. We were approached by the project’s initial developer, and our role was to structure the financial side of the project, help finalize the power purchase agreement with the off-taker, reach out to potential investors, and negotiate the debt and equity contributions. We also put down about €1.0 million of our own capital as a cornerstone investor, to give the project credibility at the initial stage. We expect the plant to be producing electricity in late 2016. I think we’ve achieved a good result: about €40 of external equity and debt co-investment for every euro that we ourselves invested. In general, we aim to achieve a multiplier of around 10 on our own invested capital, but we achieved an exceptionally high multiplier in this case, as we managed to secure a debt/equity ratio of 80/20.

An innovative partnership for infrastructure in Brazil

Pablo Pereira dos Santos's picture

It is estimated that in order to close the gap in infrastructure, the Latin America and Caribbean (LAC) region requires an additional investment of $120 –$150 billion a year. However, given the current low levels of public investment, coupled with the fiscal challenges faced by the region and limited funding available from Multilateral Development Banks (MDBs), it is clear that private investment will play an important role in future years.

In 2014, the G-20 strengthened MDBs’ mandate to take concrete and practical steps to ensure that MDB-based project preparation facilities (PPFs) and other related initiatives collaborate to support governments by developing prioritized pipelines of economically viable and bankable infrastructure projects that can attract the private sector.

Next steps from the first Global Infrastructure Forum

Laurence Carter's picture

Saturday’s Global Infrastructure Forum was full of firsts:  this unprecedented daylong gathering in Washington, DC brought together the leaders of the multilateral development banks (MDBs), as well as development partners and representatives of the G20, G-24, and G-77, the OECD, the Global Infrastructure Hub and the United Nations.  All shared the goal of enhancing multilateral collaboration to improve infrastructure delivery globally.   

Can other cities be as competitive as Singapore?

Sameh Wahba's picture
 Joyfull/Shutterstock
Photo: Joyfull/Shutterstock
Singapore is an example of one of the most competitive cities in Asia and in the world. Many, many other cities want to be the next Singapore. In fact, Singapore has been so successful that some believe that its success cannot be emulated. They forget that in the 1960s, Singapore faced several challenges – high unemployment, a small domestic market, limited natural resources, not to mention that most of the population lived in overcrowded unsanitary conditions in slums. Challenges that would sound very familiar to a large number of cities in the developing world.

And so, what better place than Singapore for the Asia Launch of the Competitive Cities for Jobs and Growth: What, Who & How report. The World Bank Group, along with the Centre for Liveable Cities and International Enterprise Singapore co-sponsored the launch as part of Urban Week held in Singapore from 8-11 March, 2016. The roundtable was attended by over 100 delegates representing cities from 23 countries.

The competitiveness potential for cities is enormous. Almost 19 million extra jobs, annually, could be created globally if cities performed at the level of the top quartile of competitive cities. Of this potential, more than 1/3, i.e. equivalent to an additional 7 million jobs, comes from cities in East Asia. Between 2000 and 2010, nearly 200 million people moved to East Asia's urban centers – these people will need jobs. Where will these jobs come from? How will they be generated?

Out of the shadows? Are firms more likely to formalize through tax simplification programs?

Caio Piza's picture
Red tape can be a significant barrier to having informal firms formalize and eventually benefit from any business support programs provided by governmental agencies. While the relationship between this formalization, access to finance and a firm’s performance has been implied by anecdotal evidence (de Soto 1989 and 2000), a recent survey of empirical evidence suggests that such programs may in fact achieve the opposite and not necessarily nudge firms to formalize. In fact, the evidence suggests that even with a significant reduction in red tape most informal firms decide to remain informal (see Bruhn and McKenzie 2013 for a survey).
 

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