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For better returns on development investments, we need a better market

Jorge Moreira da Silva's picture

Financing for development is not a cost, it is an investment. An investment in sustainable cities, quality education, access to healthcare, decent jobs, efficient and responsible agriculture, and ending extreme poverty. In 2015, we recognized that the size of the investment needed to achieve the UN’s Sustainable Development Goals is greater than aid alone can provide. The Addis Ababa Action Agenda called on both public and private actors to use aid, taxation, investment, remittances, philanthropy and innovative financing. This amounts to trillions of dollars in financing of all kinds, which needs to be targeted more strategically to where they are most needed.

Incorporating environmental, social and governance (ESG) factors into fixed income investment

Joaquim Levy's picture
© Maria Fleischmann/World Bank
© Maria Fleischmann/World Bank


Sustainable investments –including socially responsible investing (SRI) and environmental, social and governance (ESG) investing – are gaining a foothold in mainstream financial markets. Asset owners and financial intermediaries increasingly seek to finance development that meets present needs without harming future generations. World Bank Group President Jim Kim has emphasized that our organization is well positioned to help institutional investors play a bigger role.

Globally, sustainable investments grew by a quarter over the last two years, to $23 trillion, according to the Global Sustainable Investment Alliance.  This is around one-quarter of professionally managed assets globally.
The focus of ESG investing has been on equity markets – given its roots in corporate governance and engagement, and with information most readily available on listed companies. 

Realigning investment tax incentives to job opportunities

Sébastien Dessus's picture
Photo by: Gabriel/Flickr


The recent decline in global commodity prices is proving to be very costly for South Africa. The deterioration of South Africa’s terms of trade since 2012 cost at least four percentage points of gross domestic product (GDP) growth. This estimate does not account for some important indirect effects generated by the commodity price shock, including the heightened volatility of the rand and its impact on investment decisions. Instead of global monetary policy developments, commodity price volatility is now understood as being the main driver of exchange rate and capital account volatility in South Africa, and in emerging markets more generally. And 91% of European investors surveyed in the second half of 2014 identified the volatility of the rand as a major constraint to doing business in South Africa.

Philippines: Traffic woes and the road ahead

louielimkin's picture
Traffic congestion results in an estimated productivity loss of around PHP2.4 billion ($54 million) a day or more than PHP800 billion ($18 billion) a year.



From my house in northern Quezon City, I drive more than two hours every day to get to the office in Bonifacio Global City, which is about three cities away where I come from, and two cities away from the capital Manila. It’s a journey that should only take around half an hour under light traffic. That is a total of four hours on the road a day, if there is no road accident or bad weather. It takes me an hour longer whenever I use the public transport system. Along with hundreds of thousands of Metro Rail Transit (MRT) commuters, I have to contend with extremely long lines, slow trains, and frequent delays due to malfunctions. This has been my experience for several years. Many of us might be wondering: why have these problems persisted?

Philippines: Why We Need to Invest in the Poor

Karl Kendrick Chua's picture
A fish vendor waits for customers in his stall in Cebu City. According to the latest Philippine Economic Update, pushing key reforms to secure access to land, promote competition and simplify business regulations will also help create more and better jobs and lift people out of poverty. ​(Photo by World Bank)



In my 10 years of working in the World Bank, I have seen remarkable changes around me. In 2004, Emerald Avenue in Ortigas Center, where the old World Bank office was located, started to wind down after 9 PM.  Finding a place to buy a midnight snack whenever I did overtime was hard. It was also hard to find a taxi after work.

Today, even at 3 AM, the street is bustling with 24-hour restaurants, coffee shops, and convenience stores, hundreds of BPO (Business Process Outsourcing) employees taking their break, and a line of taxis waiting to bring these new middle class earners home. Living in Ortigas Center today means that I also benefit from these changes.

The High-Risk, Low-Risk Scenarios for Russia’s Economic Future

Birgit Hansl's picture

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I discussed our most recent Russia growth outlook at a roundtable at the Higher School of Economics Conference on Apr. 2 with a number of Russian and international experts. This conference is one of the most important and prestigious economic conferences in Russia, and traditionally, the World Bank co-sponsors it as part of its outreach to other stakeholders.

 

The room was packed...

In the Global War on Poverty, Think About Investing Early

Tamar Manuelyan Atinc's picture

When President Obama announced a number of investment priorities for his second term that would expand the economy and strengthen the middle class, his focus on bolstering early childhood education caught my attention. I agree with his premise and furthermore think that what is good for the United States is also good for developing countries. But what stands in the way of a more aggressive, nationwide emphasis on early childhood development worldwide? Are opportunities being missed because of lack of knowledge or coordination failures?

New! Africa Migration Report

Dilip Ratha's picture

Today we released a new report, 'Leveraging Migration for Africa: Remittances, Skills, and Investments'. This report is a joint effort by the African Development Bank and the World Bank. It comes at a time when countries in Africa and elsewhere are grappling with difficult choices on how to manage migration. It marks an effort to fill data and knowledge gaps on migration which in Africa comes in complex forms. 

About 30 million Africans live outside their home countries, and migration is a vital lifeline for the continent. These migrants sent home over $40 billion in remittances last year. And their annual estimated saving, usually held in foreign countries, exceeds $50 billion.

"Homeward Bond" - New York Times Op-Ed on diaspora bonds

Dilip Ratha's picture

The New York Times published an opinion piece on diaspora bonds over the weekend. In this piece, Ngozi and I highlight the potential for mobilizing diaspora wealth for financing infrastructure investments in Africa and other developing regions.

At a time when donor countries are facing fiscal difficulties, new sources of funding and innovative ways to leverage available donor funding are required for meeting the financing needs in developing countries. Indeed, innovative mechanisms for channeling investments to dynamic developing countries may even provide a way out of weak demand and excess capacity prevailing currently in the developed countries. As highlighted by Justin Lin, "a global push for investment along the line of Keynesian stimulus is the key for a sustained global recovery; however, the stimulus needs to go beyond the traditional Keynesian investment....By far the greatest opportunities for productivity-enhancing investments are in developing countries..." (see here ).

Making Educational Investments Grow: Lessons Learned from Korea and Mexico

Christine Horansky's picture

Like plants in a garden, investments in education need certain environmental conditions in order to flourish.Investments in education and human capital have long been recognized as precipitators of future economic growth. Rapid development in Korea in the second half of the 20th century, for instance, has been traced by scholars back to high levels of investments in schooling and training, creating the enabling environment for industrialization and further specialization.

There is no doubt that commitment to education for economic development requires both long-term funding and the multiplying effects of time.

But what causes countries with similar levels of sustained spending to achieve vastly different outcomes? It's a question that burns in the minds and wallets of governments and development efforts around the world.


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