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Private Sector Development

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.

Reasons for optimism in closing the infrastructure financing gap

Jason Zhengrong Lu's picture

There is no doubt a significant financing gap exists for investments in infrastructure in emerging markets and developing economies, a gap that stands in the way of funding projects crucial to providing basic services to transform living conditions across the globe. We at the Global Infrastructure Facility (GIF) recognize that addressing the infrastructure gap can get us closer to eliminating poverty and boosting shared prosperity.
 
After attending a discussion with a prestigious panel of finance ministers and senior financiers at the event “Making Infrastructure Rewarding,”—hosted by the GIF on the eve of the IMF-World Bank Group’s 2016 annual meetings in Washington, D.C, I feel there is a lot to be optimistic about in the way infrastructure is viewed and financed using the right instruments to fill the gap.
 
Given the standing-room-only attendance at the event—which was also live-streamed—and the number of comments and tweets that came in using #investininfra, there is clearly enormous interest in how we get from point A to B.

All text messages are not created equal

Pierre Guislain's picture
Photo credit: Adam Fagen/Flickr
Eight months after the launch of the World Development Report 2016 on Digital Dividends, I am happy to report that our efforts to operationalize the findings are well under way. For digital technologies to benefit everyone everywhere, affordable access to broadband internet is key. This requires both robust broadband infrastructure, and the strengthening of analog complements to digital solutions, including a pro-competitive and effective regulatory framework, a sound business environment, good governance and digital skills.

One of our main areas of focus is the enabling environment – helping governments foster digital development by putting in place the right policies and regulations.

Now, what are some of the main issues?

First, across the world, but especially in developing countries, competitiveness continues to be dragged down by ‘red tape’, including numerous procedures, authorizations and delays to start a business or launch a service, costly and unreliable property registration, or stifling labor regulations. I am sure you are all familiar with the Doing Business report and the World Bank’s many programs to support business reforms worldwide.

While the digital industry also faces these regulatory hurdles, it is confronted with additional challenges.

Let me give you an example. With your phone in hand, you are about to send a text message to a friend. Your phone offers you a choice: to send the text message through your mobile operator, or to send it via the internet through an app. Depending on what platform you use, your text message will be taxed differently. All text messages are not created equal: different digital services are treated differently from a regulatory and fiscal point of view, with no real level playing field.

I’ll take my coffee green, no cream, no sugar

Ellysar Baroudy's picture
Photo credit: Katie O’Gara

Ethiopia, the single largest African coffee producer and the world’s fifth largest, is commonly considered to be the birthplace of coffee.  It’s hardly a surprise that when you survey the landscape of Ethiopia’s Oromia region, an area the size of Italy, it is bespeckled with native Coffea arabica farms. 
 
In Ethiopia, about 95 percent of the coffee is produced by an estimated 1.2 million smallholder farmers. So it was quite fitting to focus on the country’s smallholder coffee farmers in Oromia for a project to help promote climate-smart “green” practices.
 
This week, the World Bank Group’s BioCarbon Fund Initiative for Sustainable Forest Landscapes (ISFL) announced it was taking part in a project together with the Bank Group’s private sector arm, the International Finance Corporation (IFC), along with the international coffee company, Nespresso and the non-profit, TechnoServe.

From billions to trillions: converting billions of official assistance to trillions in total financing

Bassam Sebti's picture


Urgent action is needed to mobilize, redirect and unlock trillions of dollars of private resources to ensure global growth and shared prosperity.

Since 1956, the International Finance Corporation (IFC), the World Bank Group’s member focused exclusively on the private sector, leveraged $2.5 billion in paid-in capital from its shareholders to invest over a trillion dollars for private sector development. IFC’s 60 years of experience has demonstrated the private sector’s ability to create innovative, commercially viable solutions that deliver development impact.

“A year ago, we all signed up to the Sustainable Development Goals. The only way to achieve these goals is if private capital funds them and private business implements them,” said Gavin Wilson, CEO of IFC’s Asset Management Company (AMC) during the World Bank Group/IMF Annual Meetings 2016.

“That’s why we came up with the phrase ‘Billions to Trillions’ last year with our multilateral institutions in the run-up to the Addis conference on financing for development,” he added.

But what does “Billions to Trillions” actually mean? Wilson explained that “we must convert billions of official assistance … to the trillions in total financing.” But he raised a very important question: how are we going to combine commercial capital with development needs?

Bangladesh: Setting a global standard in ending poverty

Qimiao Fan's picture



There is a lot for Bangladesh to celebrate in the latest World Bank research on global poverty and inequality.
The new report, entitled Poverty and Shared Prosperity 2016: Taking on Inequality”, uses revised data to give a more accurate estimate of how many poor people live in Bangladesh. What the report shows is that 18.5 percent of the population was poor in 2010 compared with 44.2 percent in 1991.

This is a major achievement that will receive global recognition on October 17 when the World Bank Group marks End Poverty Day with the Bangladesh people at an event in Dhaka.

This achievement means that 20.5 million Bangladeshis escaped from poverty between 1991 and 2010. It means that Bangladesh beat the deadline by an impressive five years in achieving Millennium Development Goal number 1, an internationally recognized target to cut extreme poverty rates by half by 2015.

It is worth remembering how far Bangladesh has come.

5 priorities to boost Afghanistan’s development

Annette Dixon's picture
Photo credit: Rumi Consultancy / World Bank


Today I joined leaders and representatives from 70 countries and 20 international organizations and agencies at the Brussels Conference on Afghanistan. Together with its development partners, the World Bank Group pledged its continued support to the Afghan people and outlined a course of action to help all Afghans realize their dream of living in peace and prosperity.
 
Afghanistan has come a long way since 2001 and has made much progress under extremely challenging circumstances: life expectancy has increased from 44 to 60 years, maternal mortality has decreased by more than three quarters and, from almost none in 2001, the country now counts 18 million mobile phone subscribers.
 
Yet, enormous challenges remain as nearly 40 percent of Afghans live in poverty and almost 70 percent of the population is illiterate. This is made worse by growing insecurity and the return of 5.8 million refugees and 1.2 million internally displaced people. Much also remains to create jobs for the nearly 400,000 people entering the labor market each year.
 
To that end, here are five priorities we need to address to ensure a more prosperous and more secure future for all Afghans:

Five actions governments can take now to encourage private investment in infrastructure

Laurence Carter's picture


Of the 56 poorest countries, over half had no private investment in infrastructure in the past five years. And in 2015, only 14 energy, transport and water projects involving private investment were concluded in that whole group of 56 countries—with all of them occurring in just eight of the countries. In the past five years, only one country – Bangladesh – has seen private investment in infrastructure each year. Given that well-structured private infrastructure projects can bring a useful infusion of management (and sometimes money) to help provide better quality and access to infrastructure services, this seems like a missed opportunity. Here are five suggestions for actions that governments can take immediately to improve their chances of attracting good quality private management and financing for some infrastructure services.

Finding opportunities in Upper Egypt’s underdeveloped regions

Axel Baeumler's picture
Upper Egypt - Emad Abd El Hady l World Bank

Two-thirds of Egypt’s poor—about 12 million people—live in Upper Egypt, where the level of economic development lags significantly behind other regions in the country. But finding solutions to kick start private sector growth in lagging regions like these can be an intractable challenge.

Understand the differences, act on the commonalities in a globalized economy: How can Public-Private Dialogue be of help?

Steve Utterwulghe's picture



The Mongolian government’s economic advisors. Photo by Steve Utterwulghe


Misunderstanding, distrust, lack of genuine consultation. These are some of the words that I hear the most from various public and private stakeholders during my regular missions to developing countries.

From Bamako to Ulan Bator, where I am writing this post, the relentless echo of grievances points to the fact that the government doesn’t understand – or want to listen to – the private sector, and therefore doesn’t trust it. And likewise, the private sector sees public authorities as often incompetent, corrupt and an impediment to competitiveness and wealth creation.

While generalizing is a dubious exercise, the similarity and recurrence of complaints across the globe warrants deeper digging.

The issue of trust in policymaking is a complex field of study. The origin of mistrust of the private sector by the government in many developing countries is embedded in the socio-political culture and economic history of the state.
That being said, it is now rare to find a government that categorically denies the contribution of the private sector to the economic development of a nation. About 90 percent of the jobs are created by the private sector in the developing world, and about 50 percent of those are created by small and medium-sized enterprises (SMEs). Furthermore, as José Juan Ruiz from the Inter-American Development Bank (IDB) has written, “Policymakers realize that they need to access the deep knowledge held by the private sector in order to learn about market failure and formulate the right policies to address them.”

On the other hand, the private sector wants a stable and transparent regulatory environment in which to operate. It doesn’t want more regulations, but better regulations that will protect its investments. For that, it needs the government to listen and act in a way that will create an enabling business environment. Building trust is hard work.

Differences between public and private stakeholders certainly exist, but so do commonalities. It never takes long for parties to acknowledge that there is a clear common ground to strive for: sustainable economic development that should lead to inclusive growth. That, in turn, will spur job creation and revenue collection for the state. That’s an irrefutable win-win scenario.


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