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Private Sector Development

The Middle East, version 2.0.

Bassam Sebti's picture
Also available in: العربية | Español | Français


Let’s be honest. The Middle East and North Africa is burning, and in some areas it is literally burning. Conflict and fragility have long warped what once was the cradle of civilization and the inspiration for the many inventions we can’t live without today. However, in the midst of that fire hope rises, a driver of change that is transforming the ugly reality into a bright future.
 
After I fled the war in Iraq in 2006, I was pessimistic about what the future was holding for that region. Year after another, the domino-effect of collapse became a reality that shaped the region and its people. Yet, fast-forward to 2017, I have witnessed what I never thought I would see in my lifetime: the new renaissance in the Middle East and North Africa.
 
I have just recently come back from attending the World Economic Forum on the Middle East and North Africa at the Dead Sea in Jordan. This year, the Forum and the International Finance Corporation (IFC), the private sector arm of the World Bank Group, partnered to bring together 100 Arab start-ups that are shaping the Fourth Industrial Revolution.
 
There, the positive vibe was all around; no negativity, no pessimism. Instead there was a new sense of optimism and enthusiasm, hunger for change, and the will to take the region to a whole new future, away from conflict and the current norm of pessimism.

Que papel devem ter os bancos de desenvolvimento?

Ceyla Pazarbasioglu's picture
Also available in: English | العربية | Español | Français



Em todo o mundo, bancos de desenvolvimento estão avaliando sua atuação e observando onde esses esforços têm mais impacto. O tema foi objeto de uma reunião organizada pelo Banco Mundial e pelo Banco Nacional de Desenvolvimento Econômico e Social (BNDES).

Os bancos de desenvolvimento se tornam peças cada vez mais fundamentais à medida que o mundo busca angariar os recursos necessários para atingir os Objetivos de Desenvolvimento Sustentável. Esses bancos podem ajudar a atrair o setor privado e solidificar as parcerias entre os setores público e privado, principalmente em matéria de financiamento de infraestrutura.

No entanto, o uso abusivo de bancos de desenvolvimento pode gerar riscos fiscais e distorções no mercado de crédito. Para evitar essas armadilhas, os bancos de desenvolvimento precisam de uma missão bem definida e devem operar sem influência política, concentrar-se no combate às grandes falhas de mercado, focar as áreas onde o setor privado não atua, monitorar e avaliar intervenções e realizar os ajustes necessários para garantir o impacto almejado. Também precisam ser transparentes e responsáveis.

A new role for development banks?

Ceyla Pazarbasioglu's picture
Also available in: العربية | Español | Português | Français



Earlier this month, development banks from around the world took stock of where they stand and where they see their efforts having the greatest impact at a meeting organized by the World Bank and Brazil’s development bank, BNDES.

As the world struggles to find funds to meet the Sustainable Development Goals, development banks can be instrumental in narrowing that gap. They can help to crowd-in the private sector and anchor private-public sector partnerships, particularly for infrastructure financing.

However, misusing development banks can lead to fiscal risks and credit market distortions. To avoid these potential pitfalls, development banks need a well-defined mandate, operate without political influence, focus on addressing significant market failures, concentrate on areas where the private sector is not present, monitor and evaluate interventions and adjust as necessary to ensure impact, and, finally, be transparent and accountable.

Two themes characterized the discussion at the meeting: how to leverage private capital and create new markets. To support Small and Medium Enterprises (SME) finance, development banks use partial credit guarantees while letting private lenders originate, fund, and collect on credit. In markets with limited competition, development banks support the creation of an ecosystem of specialized Micro, Small, and Medium Enterprises (MSME) lenders to which they provide a stable funding source. 

Developing local capital markets to fund domestic long-term financing needs

Ceyla Pazarbasioglu's picture
Also available in: العربية | Español | 中文 | Français



Finance fuels economic growth and development. Yet, it is also clear that traditional funding sources – public finances, development assistance or banks loans – will not be sufficient to finance the Sustainable Development Goals.

Both developed and developing countries are turning to capital markets to find new sources of funding and to attract private sector financing, investment and expertise.

A key priority for the international development community is to unlock adequate private sector financing so that emerging market countries can meet their financing needs to fund strategic objectives, such as improving infrastructure.

We estimate that the amount of infrastructure financing covered by the private sector could be more than doubled, if countries harness the full potential of local capital markets.

At the World Bank Group, we are committed to marshal our expertise to increase the use of capital markets for investment financing. Helping countries develop government debt markets is vital to our goals of eliminating extreme poverty and boosting shared prosperity.

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

Bassam Sebti's picture
Also available in: Français | Español | العربية


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?

Panama Canal expansion: A smart route for boosting infrastructure in Latin America

Philippe H. Le Houérou's picture
Also available in: Español
Since it opened in 1914, the Panama Canal has been one of the world’s most important trade assets and a marvel of engineering. Its expansion has doubled the canal’s cargo capacity, adding a new lane and bigger locks that will shake up shipping routes and make seaborne trade less costly and more efficient.
 
© Panama Canal Authority


Panama, already projected to be Latin America’s fastest-growing economy over the next five years, was the big winner when the expanded canal opened its locks on June 26. New port projects and related logistics hubs are in the works to attract global manufacturers and further enhance the country’s competitiveness.

3 reasons why ‘Housing for All’ can happen by 2030

Gloria M. Grandolini's picture


By 2030, almost 60 percent of 8.3 billion people will live in cities, according to UN estimates.

Almost 1400 of the world’s cities will have half a million or more inhabitants.

Cities can connect people with opportunities, incubate innovation and foster growth, but they require urban planning, infrastructure, transport and housing.

Why cultural diversity matters to development

Ede Ijjasz-Vasquez's picture
Culture is an essential component of each and every society. It is the fabric that weaves communities together and gives them their unique identity. Acknowledging and factoring in cultural diversity is essential to working efficiently with our client countries and adapting interventions to the local context.
 
Embracing cultural diversity, especially through the preservation of cultural heritage assets, also brings tangible economic benefits. Preserving or repurposing historic landmarks in downtown cores, for instance, can make cities more vibrant, attract new firms, and foster job creation. In addition, the preservation of cultural assets plays a key part in supporting sustainable tourism, a sector that has significant potential for reducing poverty in both urban and rural settings.
 
On this World Day for Cultural Diversity for Dialogue and Development, Ede Ijjasz and Guido Licciardi tell us more about the role of culture and its importance to the World Bank's mission.
 
If you want to learn more about this topic, we invite you to discover our latest Sustainable Communities podcast.

A virtuous circle: Integrating waste pickers into solid waste management

Martha Chen's picture
Also available in: Português | Español | 中文
Waste – its generation, collection, and disposal – is a major global challenge of the 21st century. Recycling waste drives environmental sustainability by reducing greenhouse gas emissions and stimulates the economy by supplying raw materials and packaging materials.
 
Waste pickers are the principal actors in reclaiming waste for the recycling industry. Across the world, large numbers of people from low-income and disadvantaged communities make a living collecting and sorting waste, and then selling reclaimed waste through intermediaries to the recycling industry. Where others see trash or garbage, the waste pickers see paper, cardboard, glass, and metal. They are skilled at sorting and bundling different types of waste by color, weight, and end use to sell to the recycling industry. Yet waste pickers are rarely recognized for the important role they play in creating value from the waste generated by others and in contributing to the reduction of carbon emissions.
 
Fortunately, around the world, waste pickers have been organizing and cities have begun to promote the virtuous circle that comes with integrating waste pickers, the world’s recyclers, into solid waste management.
 
Brazil was the first country to integrate waste pickers, through their cooperatives, into municipal solid waste management systems and the first to adopt a National Waste Policy, recognizing the contributions of waste pickers and providing a legal framework to enable cooperatives of waste pickers to contract as service providers. The national movement of waste pickers in Brazil was awarded a contract to clean the stadiums during the World Cup.
 

Sustainable tourism, a unique opportunity for developing countries

Ede Ijjasz-Vasquez's picture
With the number of international visitor arrivals now exceeding 1 billion a year, tourism has become one of the fastest-growing sectors of the global economy: overall, the travel and tourism industry contributes to almost 10% of the world’s GDP, and is linked to 1 in 11 jobs.
 
The trend has largely benefited developing countries, which for the first time last year received more tourists than the developed world. At the World Bank, we believe that tourism, when done right, can provide our clients with a unique chance to grow their economies, bolster inclusion, and protect their environmental and cultural assets.
 
In this video, Lead Urban Specialist Ahmed Eiweida tells us more about the potential of sustainable tourism, and explains the Bank’s role in helping low and middle-income countries make the most of the international travel boom.

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