This report, funded by the Trust Fund for Environmentally and Socially Sustainable Development (TFESSD), seeks to identify labor market inequalities in the ten countries outlined above, to relate these inequalities to other forms of social exclusion, and to propose areas for policy action aimed at boosting labor market participation. The remainder of the report is structured as follows. Chapter two describes the role that jobs play in fostering good living standards, productivity and social cohesion, and contextualizes the discussion on jobs and participation in the ten countries. Chapter three zooms in, highlighting inequalities in labor force participation across demographic groups. Chapter four shifts the focus to the factors explaining unequal labor force participation across groups, and discusses a policy agenda for these ten countries, drawing on experiences from the rest of the world. Chapter five concludes.
The global toll of human suffering and material loss due to disasters has led to growing public concern and expanded institutional response in the form of disaster relief and recovery assistance from individuals, governments, and intergovernmental organizations. Initial humanitarian concern has primarily been focused on dealing with the consequences of disasters. However, we must begin to address the causes of these events while ensuring the implementation of policies to reduce disaster risks or losses. Low- and middle-income countries will experience a doubling of their building stocks in the next 15- 20 years, and it is crucial to assure that this new construction does not recreate and expand the disaster vulnerability of the present. Priority must be placed on the production of safe and resilient cities, communities, and homes. While safer, code-compliant construction may add to initial construction costs, these investments can be balanced against the reduced loss of life and property in future disasters. The agenda provides the international community with an opportunity to leverage regulatory governance as a powerful means to shift the focus from post-disaster relief and response to proactive population protection, disaster prevention, and sustainable and resilient urban development.
Beginning in 2003, Turkey initiated a series of reforms under the Health Transformation Program (HTP) that over the past decade have reshaped the health system. Understanding the political economy of this process is important for the future of Universal Health Coverage (UHC) in Turkey, and also for many other countries and the development agencies that assist them. This report analyzes the historical context and complex political economy challenges of the reform. Our findings are based on stakeholder interviews and a review of literature. First, we identified five contextual factors that were important in bringing health reform to the policy agenda in Turkey, and were helpful in sustaining the reform during adoption and implementation: (1) a long history of reform plans and attempts; (2) fiscal pressure to reform the social sectors; (3) public support for health reform; (4) strong economic growth; and (5) favorable demographic conditions. Second, we assessed four political economy challenges central to the reform and the strategies used by the Ministry of Health (MoH) to overcome them. First, the MoH built public support for reform among the broad base of beneficiaries by focusing on highly visible and fast changes. Second, the MoH overcame well-organized interest group opposition to the reforms by splintering their support or delegitimizing their views. Third, Turkey asserted its own domestic priorities over those of the IMF and World Bank in cases of direct conflict. Fourth, the MoH circumvented potential political and institutional opposition to the large expansion of benefits and coverage through a carefully sequenced adoption and implementation plan that could be executed mostly without requiring the support of other ministries. This analysis also highlights important trade-offs made by the MoH with respect to the redistribution of resources, quality of care, financial sustainability, and physician satisfaction, which will all have to be considered as Turkey enters its next phase of health system development.
The Latin America and Caribbean (LAC) region has seen a decade of remarkable growth and income convergence. Growth has been a key driver for reducing poverty and boosting shared prosperity. It has been debated how much of this decade of growth has been driven by policy reforms and how much was due to the favorable external conditions. While external factors were supportive and relevant, the effect of domestic policies was just as relevant for explaining LAC's recent growth performance. The emphasis of domestic policy has shifted from stabilization policies to structural policies. In addition, a benchmarking exercise reveals which policy gaps will lead to the highest potential growth-payoffs for each country and helps identify potential trade-offs. The authors analyze growth in LAC using descriptive statistics and growth econometrics. The authors use these results for explaining the pattern of growth in LAC over the last decade, for looking ahead, and to identify potential policy gaps.
Sudan has the potential to become a dynamic economy and a bread basket for the Arab world and East-Central Africa. However, resource endowment is not sufficient to bring about sustainable growth and prosperity. Sudans macroeconomic conditions remain weak since the secession of South Sudan in 2011, despite some improvements. The repercussions of the secession of South Sudan present enormous challenges for Sudan with respect to managing the macro-fiscal adjustment and promoting a structural re-orientation of the economy. The signing in March 2013 of the implementation matrix of the agreement between Sudan and South Sudan provides some fresh financial relief to Sudan and creates a great opportunity for further policy reforms to address the post-secession challenges. Sudans growth strategy should involve policies aimed at improving the investment climate and broadening private sector-led growth, and diversifying the economy toward non-oil sectors such as agriculture, industry, export, and local trade.
What do we know about the links between economic development and corporate governance in emerging markets? Stijn Claessens and Burcin Yurtoglu have sifted through scores of academic studies on various countries, sectors, and business organizations - from state-owned enterprises to publicly listed companies - to determine how corporate governance can influence economic development and well being, and what is needed to promote good practices. The Focus 10 draws on new evidence that has become available since Focus 1: Corporate Governance and Development was published in 2003. While the paper reviews research literature, it is written to be accessible to the nonacademic audience: board members, investors, government regulators, development professionals, and other CG practitioners. Research findings sited in the Focus include: 1) improved corporate governance practices increase firm share prices; 2) operational performance is higher in better corporate governance countries; 3) well governed companies have less volatile stock prices in times of crisis; 4) companies with boards composed of a higher fraction of outsider or independent directors usually have a higher market valuation; 5) improvements in corporate governance quality lead to higher GDP growth, productivity growth, and the increased ratio of investment to GDP; 6) when a country's overall corporate governance and property rights systems are weak, voluntary and market corporate governance mechanisms have limited effectiveness; 7) large, more concentrated ownership can be beneficial, unless there is a disparity of control and cash flow rights; 8) the quality of shareholder protection positively correlates with the development of countries' capital markets; and 9) better corporate governance leads to a better developed financial system. The paper concludes by identifying several main policy and research issues that require further study. For example, more research is needed on family-owned, state-owned or controlled firms that predominate in many sectors and economies. For more publications on IFC Sustainability please visit www.ifc.org/sustainabilitypublications.
Direct cash transfers for vulnerable elderly and disabled populations have been provided by the Ministry of Social Welfare (Kementerian Sosial, Kemensos) since 2006; a similar cash transfer for at-risk youth was inaugurated in 2009. The Government of Indonesia's (GoI) pro-poor development initiatives, international agreements and domestic laws and regulations, and considerable experience delivering more general social assistance programs led to the creation of cash transfers for these historically neglected and difficult-to-reach groups. These programs Jaminan Sosial Lanjut Usia (JSLU), Jaminan Sosial Paca Berat (JSPACA), and program Kesejahteraan Sosial Anak (PKSA) for the elderly, disabled, and youth respectively transfer cash directly to beneficiaries. They account for increasing shares of the Kemensos overall budget, but subsidies directed to care and rehabilitation facilities as well as direct provision of institutional care still account for a noticeable portion of the Kemensos budget for these groups. Program support operations socialization and outreach; allocation, targeting and prioritization; monitoring and evaluation; and complaints and grievances have very small budgets and depend crucially on cooperation and enthusiasm from local governments and facilitators. A full range of safeguarding activities is spelled out in program guidelines but these have not been institutionalized at the local implementation level. There is variation in the content, methods, frequency, completion rates, and outcomes in all safeguarding activities, and no easy-to-use reporting process that would ensure information from implementation level reaches the central funding and policy agency, Kemensos. The note summarizes quantitative and qualitative evidence in order to build a sound foundation for evaluating the cash transfer programs JSLU, JSPACA, and PKSA provided by Kemensos. The evidence on which the evaluation is based here is composed primarily of first-hand observation of the programs in operation. Where possible information collected from administrative records, including monitoring and evaluation reports, and from Kemensos itself, is summarized. Design features, efficiency and effectiveness of program implementation and operation, and impacts (intended or not) the program produces for beneficiaries are all analyzed in as much detail as possible. Current policy planning within Kemensos assumes expansion of these programs in the coming years, so an evaluation of the programs' features is relevant for Indonesian policymakers and stakeholders.
Azerbaijan is a secular, majority-Shiite, oil and gas-rich country whose per-capita income quadrupled in real terms during the period 2004-10. While rising incomes have reduced poverty, steps towards a more secure, diversified economy are held back by a public sector that rests on vested interests, patronage-based incentive structures, and ingrained patterns of behavior that include significant rent extraction, particularly from the non-oil economy, with minimal checks and balances from Parliament, the private sector, and civil society. Bank engagement in Azerbaijan at the country level focused on areas which had government support. Some modest results have been achieved, even though in many cases modern laws and practices were adopted without adequate plans for implementation. At the project level, the Bank has supported the strengthening of project implementation units (PIUs) and tools for monitoring, and governance and institutional filters have signaled that Governance and Anticorruption (GAC) processes need to be embedded in the Bank projects. At the sector level, the Bank's work was highly relevant in supporting oil revenue transparency, primary education, roads, and the development of safeguards. It was substantially relevant in public financial management, and private sector development and procurement. Bank engagement was moderately relevant in decentralization, civil service reform, and accountability institutions.
Bangladesh is one of the world's poorest and most densely populated countries, and subject to annual cyclones and flooding. Despite these challenges, it benefits from strong economic growth, good performance on health and education, and poverty reduction, alongside weak governance and pervasive corruption. The reasons include strong macroeconomic policy, pro-poor spending, credible elections, export growth and remittances, improved capacity for managing natural disasters, and a stronger civil society than comparable countries. After over a decade of intense engagement with the Bank on governance, Bangladesh adopted in 2006 a governance-oriented Country Assistance Strategy (CAS) with four main objectives: to improve implementation capacity; to 'tackle corruption' by fully operationalizing the Anti-Corruption Commission; to lay the foundation for comprehensive legal and judicial reform; and to strengthen 'voice, empowerment and participation.' The choice of a wide range of instruments and areas of intervention was appropriate, given the political instability at the time of 2006 CAS preparation. The Bank signaled it was ready to engage in all areas, and could scale up or pull back depending on emerging political and bureaucratic commitment. The 2006 CAS yielded mixed results, and the subsequent Country Partnership Strategy (CPS) has been more selective on GAC issues. At the project level, governance has been a key priority, in line with the South Asia region's heavy emphasis on GAC-in-Projects. Investments in GAC-in-primary education, a local government project, anti-corruption efforts in the power sector, and projects strengthening the investment climate have yielded positive results. Investments in GAC-in-roads projects have had mixed results in terms of effectiveness. GAC activities were mainly adopted prior to the 2007 GAC strategy. Although Bangladesh was a Country Governance and Anticorruption (CGAC) country, the country team chose not to use CGAC funds because the country had already been intensively using GAC approaches well before the GAC strategy was adopted.
This case study summarizes the findings of desk reviews and a field visit carried out in January 2011 as part of IEG's evaluation of the 2007 Governance and Anticorruption (GAC) strategy. The case study sought to evaluate the relevance and effectiveness of Bank support for GAC efforts over the FY2004-10 period, to assess the contributions of 2007 strategy implementation, and to identify early outcomes and lessons. This Background Paper is based on findings of the mission that visited Liberia in January 2011. The team is particularly grateful for informative meetings with officials from the Government of Liberia, Bank staff, and members of civil society. The evaluation aims to help enhance the Bank's approach to governance and anticorruption and to improve its effectiveness in helping countries develop capable and accountable states that create opportunities for the poor. Pursuant to this objective, the evaluation assessed the relevance of the 2007 GAC strategy and implementation plan, as well as the efficiency and effectiveness of implementation efforts in making Bank engagement with countries and other development partners more responsive to GAC concerns. It also sought to identify early lessons about what works and what does not in helping to promote good governance and reduce corruption. The Liberia case study is based on an extensive desk review as well as a field visit to Monrovia from January 17-22, 2011. It evaluates the relevance and effectiveness of Bank support for governance and anticorruption efforts since the launch of the Bank's GAC strategy in 2007. It elaborates on a desk review of the GAC responsiveness of the Bank's Liberia program and reviews the following GAC entry points: core public sector reform (public financial management and decentralization); demand for good governance (including social accountability issues); GAC in the road sector; and the investment climate. The case study also examines the extent to which the Bank's GAC Strategy has made a difference in staff attitudes toward addressing GAC issues in their operational work. The mission interviewed government, Bank, donor, and nongovernmental organization (NGO) staff based in Washington and in Monrovia.
The firming of the economic recovery is putting the policy spotlight back on the longer term challenge of faster, more inclusive Gross Domestic Product (GDP) growth. Modest investment rates despite attractive returns and low savings rates despite favorable demographics are important impediments. A virtuous cycle of faster capital accumulation, job creation (especially for the youth), and technological advancement needs to be stimulated. There are no quick fixes that can produce the desired stimulus. The quest for inclusive growth calls for a different, bolder approach. Integration of the advanced and less-developed economies and more effective integration with the global economy, using factory Southern Africa as a platform, hold considerable potential. South Africa's medium-term growth prospects point to a strengthening recovery. GDP growth is projected to be 3.5 percent in 2011, 4.1 percent in 2012 and 4.4 percent in 2013. The long term potential growth rate under the current policy environment is estimated at 3.5 percent. In light of South Africa's low national savings, the reemergence of high current account deficits, financed mostly through volatile portfolio flows, will reemerge as the biggest cause for macroeconomic concern over the medium term. With considerable strengthening of the economic recovery and GDP projected to reach its potential by 2014, the focus shifts back to the longer term challenge of raising GDP growth to 6-7 percent and making it much more inclusive to tackle the extremely high unemployment. This first issue is anchored in the national aspirations of faster and more inclusive growth, with special emphasis on the issues of savings and investment.
Moldova has suffered over the last two decades from rising poverty, territorial secession, armed conflict, and the spillover effects of a regional financial crisis, with declining population size and life expectancy, and an economy approximately one-half of what it was in 1990. The return of the Moldovan Communist Party (PCRM), which won two major elections after 2001, contributed to increasing centralization of governmental authority along with a reform agenda that emphasized greater state control over the economy, fiscal support to state enterprises and collective farms, land consolidation, economic protectionism, and the tolerance of monopolies in industry and energy. At the same time, the government has increased social expenditures, and taken major steps to improve public financial management. Bank engagement was moderately effective at the country and project levels, and substantially effective at the sector level. There was progress in several aspects of public financial management (PFM). Regulatory streamlining has reduced costs to business, although resistance to civil service reform has left much work to be done. The Bank has also helped achieve progress on Governance and Anticorruption (GAC) issues in primary education, roads, and private sector development. Education progress is highly uneven across regions, for example, overweight trucks continue to tear up roads, and private investment is not enough to make a dent in high unemployment. A graduated approach to country systems and road sector technical audits help address GAC issues at the project level. The overall impact of GAC strategy implementation was moderate. The GAC committees set up at the regional and sectoral Bank department levels are particularly useful mechanisms for disseminating practices from the GAC Council. Staff has been proactive in using Country Governance and Anticorruption (CGAC) resources. However, three applications for window one funding were not approved, reducing the ability of this small program to seize opportunities.
Over the last decade, Kenya's society and economy have changed fundamentally and these deep trends will continue. Rapid population growth and urbanization will create many new challenges which need to be managed well to support Kenya's economic take-off in the medium-term. This fourth edition of the Kenya economic update argues that Kenya can turn the tide in turbulent times and make the most of the ongoing structural shifts. In 2011, Kenya will need to address short-term domestic and international shocks, including higher inflation, pressures on the exchange rate and, most importantly, a volatile political environment. The government will need to navigate through these shocks successfully and to continue with its economic reform program to achieve higher growth. At the same time, the government will be making major strategic decisions in Kenya's decentralization architecture which will shape the medium-term development prospects of the country. Economic success is possible, as the 5.6 percent growth in 2010 has shown. If growth will accelerate to an average of 6 percent this decade, Kenya will achieve middle income country status by 2019.
Sustainable investment (SI) has a strong niche foothold in Sub-Saharan Africa, anchored in the region's largest investment market, South Africa. Yet more work is needed, at policy and portfolio levels, to grow this investment theme. This report recommends measures to expand SI in Sub-Saharan Africa. It forecasts that over the next five years there will be considerable growth of environmental, social, and governance (ESG) considerations applied to investment in South Africa, Kenya, and Nigeria. While these three countries form the basis of the study, the lion's share of data and observations emerged from South Africa, which is home to the continent's most developed capital markets.
The involvement of the rural private sector in water supply in Cambodia is unique to the country. The presence of this private sector allows other entities to respond to new demands from people living in the larger villages for household water supply, which the State is not yet able to address. These entrepreneurs operate on a merchant basis, lacking an institutional structure which is still being created. Their business is most often based on pushcart delivering water barrels at the house of villagers or more recently on small piped networks usually distributing raw surface water. Service is rough; the water quality is uncertain, but the users are satisfied with this service, because for them, it constitutes another alternative to the already considerable choice of water supplies available-ponds, wells, boreholes, and rivers. Their demands focus more on a practical objective (a supply in the household) than on a sanitary one, even if surveys show that villagers have a good understanding of health risks associated with water. Through the implementation of 14 small scale water supply systems, the goal was to enhance a qualitative improvement of the water service in some Cambodian small towns through the transformation of rough and informal merchant services to a basic water service supplying drinking water to an extended population under a formal institutional arrangement. The MIREP (Mini Reseaux d'Eau Potable - Small Scale Piped Water Supply System) program, launched in 2001 to transform these very basic initiatives into basic services, began as a pilot project supporting one entrepreneur in the implementation of a small piped water system. In order to move forward, the MIREP program made a choice, in particular linked to its proximity to the Ministry of rural development, to assist the nascent involvement of communes in decentralization, to strengthen provincial power through the process of decentralization, and to respect the cultural heritage of those who devised and financed the project.
