Tomas Castelazo | Wikimedia Commons
La revista colombiana Dinero, una de las publicaciones económicas más reconocidas de América Latina, recientemente publicó un estudio del Banco Mundial en el que clasificaba a Colombia como el segundo país más competitivo del mundo—detrás de un empate entre Gran Bretaña y Australia—para financiar obras de infraestructura bajo el modelo de Alianzas Público-Privadas (conocidas como APP). De igual manera, este puntaje (de 83 puntos sobre 100) fue también compartido por las naciones de Paraguay y Filipinas.
A primera vista, este es un virtuoso reconocimiento—por lo menos en papel. En la práctica diaria en la región latinoamericana, así como en la mayoría de las economías emergentes, la complejidad administrativa de los órganos gubernamentales aún representa uno de los más altos retos que demanda de atención inmediata para que las APPs puedan alcanzar su potencial máximo. Hacer esto correctamente integraría realmente el modelo de PPP en el motor de desarrollo económico y social requerido para competir en una economía globalizada.
Tomas Castelazo | Wikimedia Commons
The Colombian magazine Dinero, one of the most respected economic publications in Latin America, recently published a story about a World Bank study that placed Colombia as the second most competitive country in the world—behind a tie between Great Britain and Australia—to finance infrastructure projects under the public-private partnership model (known as PPPs). This score (83 points out of 100) was also shared by Paraguay and the Philippines.
At first glance, this is a virtuous recognition—at least on paper. However, in daily practice in the Latin American region, like most emerging economies, the administrative complexity of government bodies still presents enormous challenges that demand immediate attention if PPPs are to reach their full potential. Getting this right would truly integrate the PPP model into the economic and social development engine required to compete in a globalized economy.
Like winter and summer solstices of investment cycles, every six months we take stock of how much private participation in infrastructure has come to financial close across emerging markets. From Mozambique to Moldova, Chile to China—in power, water, transport, and the backbone of telecom services—the World Bank Group tracks every new public-private partnership (PPP), privatization, auction, concession, lease, and management contract through our PPI Database.
Con disculpas a Charles Dickens
With apologies to Charles Dickens
If you’ve had the opportunity to travel abroad, I´m confident you’ve made comparisons among airports: which one is more efficient? Where did you lose some luggage? How well designed is it? And, of course, which one has the best food? But I bet you never asked yourself if the airports were owned and operated by the government or by a private company.
Against the backdrop of catastrophic natural disasters that struck in Indonesia, the World Bank Group and IMF Annual Meetings took place last week in Bali. No scene could be more illustrative of the fragility of infrastructure in the face of more extreme and frequent weather events—and the urgent need for meticulous planning, with an eye for resilience.
Against a milieu of changing PPP enabling environments in the Middle East and North Africa (MENA), a public-private partnership (PPP) forum took place last month in Dubai focusing on anchoring partnerships and unlocking the potential of PPPs in delivering the national visions that will drive MENA’s future economic growth.
Recently, I published a book about infrastructure public-private partnerships (PPPs) in the most challenging developing countries—a private sector perspective on what is required to bring investment and expertise to partner with governments in providing vital infrastructure services.
There is already a substantial body of work on the potential of PPPs and how to design, finance, and implement them—even in countries where there are limited legal and regulatory frameworks on which to build. What compelled me to write my book is the urge to share, as a practitioner over two decades in some of the most challenging markets, common pitfalls I’ve seen and what appear to be the critical elements of success in creating successful and replicable PPPs.
As recently as 2006, Timor-Leste was in crisis. Only a few years into independence, the country was torn by riots and political turmoil. Not surprisingly, its business climate was one of the region’s worst.
But . Nonetheless, Timor-Leste remains a fragile state, and with oil accounting for 80 percent of GDP, it is the world’s second most oil-dependent nation.
While discussion about Maximizing Finance for Development (MFD) is ramping up with governments and the international development community to seek innovative approaches to mobilize more private sector investment in developing countries, there is a group of countries with an additional layer of complex challenges.
It brings me no pleasure to say this, but a fair number of countries have economic and financial conditions, business environments, and rule of law that are almost always weak. Clearly, these conditions significantly increase the risks of investing in infrastructure for the private sector; consequently, the markets for public-private partnerships (PPPs) tend to be less developed.