Help needs to come immediately to save lives; recovery and reconstruction have to start swiftly to lessen the impact.
However, while money is critical to this response, it’s not just about funding. Indeed, funds need to match the event scale, target the right areas and sectors, and smoothly flow to communities in need. But in order for that to happen, sound public policy on risk and frameworks have to be in place.
To address both urgent financial needs while pursing strategic disaster risk management policy goals, countries have been using the World Bank’s development policy loan with a catastrophe deferred drawdown option or, more widely known as the Cat DDO.
The call for a price on carbon is growing louder in the corridors of business and government. Last week, former U.S. Treasury Secretary Hank Paulson wrote in The New York Times that climate risks are perhaps the biggest “known unknown” that we face, and he asked “farseeing business leaders” to demand a price on carbon—it’s the quickest, most efficient way to manage these risks.
Paulson was previewing the Risky Business report, which calculated the economic impact of climate change on U.S. businesses’ balance sheets. A few days later, CDP released a report on corporate use of internal carbon pricing.
CDP surveyed executives to find out why leading businesses are already valuing carbon to future-proof their business plans. It is interesting to note that some of the largest U.S. utilities, including American Electric Power and Exelon, price carbon in an effort to avoid stranding large fossil-fuel-fired power plants and to reassure investors. Other less carbon-intensive businesses use internal prices to help achieve corporate sustainability goals—TD Bank aims to go carbon neutral, and Walt Disney Corporation (as well as Microsoft) uses internal pricing to encourage employee innovation while delivering profits. The value of encouraging more sustainable growth like this came through this week in the World Bank Group’s new Adding Up the Benefits report, which calculated the value of climate-smart development in lives, jobs, and economic growth, as well as the climate.
Yet despite these difficulties, the country rebounded strongly with growth at 7.5 percent in Fiscal Year 2017 and was able to achieve significant progress in business through a series of seemingly modest yet important steps.
Over the course of four years, Nepal’s Ministry of Industry, the country's Office of the Company Registrar (OCR) and IFC’s Investment Climate Team implemented a series of reforms to encourage business registration online. In 2013, a new mandatory online registration service was launched. Help desks in the Kathmandu OCR office, extensive training for business owners, a media campaign, and an enabling legal directive eased the speed and efficiency of the registration process for businesses.
Within a short period of time, almost 100 percent of companies – as opposed to 10 percent during the initial phase of launch – were registered online. Registration became simpler, saving money for both businesses and the government. Online registration also addressed the challenges of the government's limited capacity and poor technology readiness through extensive training and peer-to-peer learning. The processes became more transparent with online file tracking.
In the year following the launch of the online registration system, Nepal’s ranking for "Starting a Business" in the World Bank Group’s 2014 Doing Business Report rose by 6 places. The number of days it took to start a business dropped by 45 percent and led to a 24-percent increase in the number of new companies registered annually.
In Nepal, an employee of the Trade and Export Promotion Centre works on the Nepal Trade Information Portal. The portal, financed under the Nepal-India Regional Trade and Transport Project, provides information that traders need to import and export goods, including information on permits, laws and taxes. Photo Credit: Peter Kapuscinski / The World Bank
These successes produced broader lessons for Nepal and others facing similar challenges. These include:
- Make change compulsory, easy and durable. People adapt to new circumstances only if they feel compelled to do so, and only if they fel that the change is not going to disrupt their businesses.
- Ensure coordination between government offices in supporting initiatives. There must be "buy-in" from all government agencies involved at all levels. ICT changes must be fully coordinated with business staff.
- Nurture trust and cooperation between the WBG and government teams. Study and learn about previous experiences, communicate how the current project will be carried out, and keep talking to partners in government.
Since the 1990s, a large part of world savings have gone to institutional investors that manage those funds by investing around the world. Given this accumulation of resources in professional and sophisticated asset managers, one might expect to see significant international diversification accompanying this process. Yet, to date, little evidence exists on how institutional investors allocate their portfolios globally, and what effect their investment practices have on investors, firms, and policymakers.
In a new paper and VoxEU column, we argue that global funds (those that invest anywhere in the world) are not very well diversified, hold a very limited number of stocks (around 100), and seem to leave behind significant unexploited gains from international diversification. Thus, global funds might not constitute the optimal portfolio for individual investors. Moreover, there are significant challenges to the prospects for broad international diversification. To the extent that global funds continue expanding relative to the more specialized funds (those that invest in specific asset classes and regions), the forgone diversification gains could be significant, and the cost to investors, firms, and countries might be large as well, posing significant challenges to policymakers.
Meanwhile, back in the capital, members of Peru’s local and national government, as well as representatives from the World Bank and the Inter-American Development Bank, gathered in Lima at the “Experiences of Women in Rural Roads” conference to discuss the role of women in the transport sector.
The event highlighted women’s participation in rural road construction and maintenance as a significant step toward gender equality: it gave participants a chance to discuss the impact of these projects, share lessons learned, and inform a Gender Action Plan for the ongoing Support to the Subnational Transport Program. Indigenous women from rural communities in in Arequipa, Junín, Huánuco, and the Amazon attended the event and emphasized the importance of these projects in the development of their communities and the role of these employment opportunities in their own lives, their self-esteem, and their aspirations for a better future.
Since 2001, the World Bank Group (WBG) and the Peruvian government have worked together to promote women’s participation in rural transport projects, expanding employment opportunities for women in rural areas. The Peru Decentralized Rural Transport Project has seen the female participation in rural road maintenance microenterprises reach almost 30%.
There are many positive effects of women’s participation in these projects.
Public procurement of services, works and supplies is estimated to account for 15-20% of GDP in developing countries, and up to 50% or more of total government expenditure. Efficient and effective procurement is vital to core government functions, including public service delivery and provision of infrastructure. Weaknesses in procurement systems can lead to large-scale waste of public funds, reduced quality of services, corruption, and loss of trust in government.
The president of the Somali Chamber of Commerce, Mohamoud Abdi Ali, joins with the country's Minister of Commerce and Industry, Khadra Ahmed Dualle, at the IFC-sponsored Public-Private Dialogue at the Somalia Conference, which was convened in London in May 2017. The need to increase revenue, growth and trust led to the creation of the Public-Private Dialogue. Photo credit: MPF.
Stabilizing countries that have long been afflicted by fragility, conflict and violence (FCV) – and helping them shape effective reforms to strengthen the investment climate – is one of the most difficult challenges in international development. The task is all the more severe when, as in Somalia, a large proportion of the population has been displaced by violence and natural disaster and when the economy is overly concentrated on a few sectors. Such factors make rebuilding investor confidence a daunting challenge for the newly elected government.
However, despite these challenges, Somalia represents a rare example of private-sector resilience. The major sectors of the economy survived the tumultuous period after the collapse of the state in 1991. Entrepreneurs in Somalia and abroad continue to innovate and adapt in a country void of regulatory frameworks or government oversight. Domestic mobile-money transfers average $1.2 billion in monthly transactions, and mobile money usage is above 70 percent.
Nonetheless, economic growth in Somalia has stagnated and has not resulted in a peace dividend for the population. Government revenue is low – around 2.5 percent of GDP – in an economy driven by consumption, as identified in the World Bank Group’s Somali Economic Update (SEU) from 2016. According to the SEU, two of the biggest obstacles to equitable growth are access to finance and lack of regulations. Moreover, investment in priority sectors is low, held back by protectionism, conflict and instability.
Somalia was the focus of an international conference in May 2017 in London that brought together some of Somalia’s top private-sector firms, development institutions and government leaders to discuss how to jump-start private-sector-led growth and achieve long-term peace and development. Among the distinguished attendees were the newly elected president of Somalia, Mohamed Abdullahi Mohamed “Farmaajo”; Prime Minister Teresa May of the United Kingdom; United Nations Secretary-General Antonio Guterres; and the European Union’s foreign-policy chief, Federica Mogherini. The World Bank Group delegation was led by Jan Walliser, the Vice President for Equitable Growth, Finance and Institutions.
After spending several years in front of a computer every day, I began to feel removed from those people who were the real reason for my work, which aims to build a safer, healthier and more prosperous environment. But when people I knew were directly affected by the issues I was working on, my work took on more meaning and urgency.
The World Bank and the Catholic Church are the two most influential anti-poverty institutions in the world. One works primarily with governments and the international community; the other through a global network encompassing more than a billion adherents.
I am still shaken and saddened by the many lives lost to the attacks in Kabul two weeks ago and since then there has been more violence. As we grieve these tragedies, now is the time to stand strong with the people of Afghanistan and renew our commitment to build a peaceful and prosperous country.
To that end, we announced this week a new financing package of more than half-a-billion dollars to help Afghanistan through its struggle to end poverty, increase opportunity to help stabilize the country, and ensure all its citizens can access basic services during a time of economic uncertainty.
Afghanistan has come a long way since 2001 and achieved 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 the country now boasts 18 million mobile phone subscribers, up from almost none in 2001.
Yet, the development needs in Afghanistan remain massive. Nearly 40 percent of Afghans live in poverty and almost 70 percent of the population are illiterate. The country needs to create new jobs for about 400,000 people entering the labor market each year. The situation is made more challenging by the return of around 5.8 million refugees and 1.2 million internally displaced people.
Our new support is in line with our belief that Afghanistan’s economic and social progress can also help it address security challenges. Our financing package meets the pressing needs of returning refugees, expands private-sector opportunities for the poor, boosts the development of five cities, expands electrification, improves food security, and builds rural roads.
- Sustainable Communities
- fragile states
- fragile and conflict affected states
- Conflict and Fragility
- Urban Development
- Social Development
- Public Sector and Governance
- Private Sector Development
- Migration and Remittances
- Financial Sector
- South Asia