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 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, , 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: . 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 countries made considerable gains during the 2000s, resulting in a large reduction in extreme poverty and a significant expansion of the middle class. More recently that progress has slowed—and the prognosis is for more of the same, given an environment of lackluster global trade, a lack of jobs coupled with skills mismatches, greater income inequality, unprecedented population aging in richer countries, and youth bulges in the poorer ones. As a result, developing countries are unlikely to close the development gap anytime soon.
The region is also not homogenous. There is a large disparity in the levels of treatment per country: we see countries like Chile, which treats 90% of its wastewater, and countries like Costa Rica, which treats approximately 4% of its wastewater.
This year’s UN Permanent Forum on Indigenous Issues, which kicked off last week in New York, marks the 10th anniversary of the United Nations Declaration on the Rights of Indigenous Peoples.
The World Bank’s Forest Carbon Partnership Facility (FCPF) is coming up on its own 10-year anniversary. Since 2008, the FCPF has run a capacity building program for forest-dependent indigenous peoples. The initiative, with a total budget of $11.5 million, has worked to provide forest-dependent indigenous peoples, national civil society organizations, and local communities with information, knowledge and awareness to increase their understanding of efforts to reduce emissions from deforestation and forest degradation (REDD+), and to engage more meaningfully in the implementation of REDD+ activities. The program recently wrapped up its first phase (2008-2016), which included 27 projects, and presented the results at a side event to the Permanent Forum.
Photo: paulisson miura | Flickr Creative Commons
It is well-established that the lack of infrastructure is one of the main problems facing developing countries. Good infrastructure is one of the most important drivers for development and competitiveness. The question that follows is straightforward: how can we mobilize private financing for high-quality infrastructure investment in these countries?
Quality and innovative education policies emerge usually from a combination of factors such as good teachers, quality school management, and parental engagement, among others. In Brazil, a country with tremendous diversity and regional inequalities, good examples have emerged even when they are least expected. Ceará, a state in the northeast region of Brazil — where more than 500,000 children are living in rural areas and where poverty rates are high — is showing encouraging signs of success from innovative initiatives in education. The figures speak for themselves. Today, more than 70 of the 100 best schools in Brazil are in Ceará.
As we continue our efforts to increase awareness around on-foot mobility (see previous blog), today, I would like to highlight a project we developed for Paraisópolis.
While most of the community has access to basic services and there are opportunities for professional enhancement and cultural activities, mobility and access to jobs remains a challenge. The current inequitable distribution of public space in the community prioritizes private cars versus transit and non-motorized transport. This contributes to severe congestion and reduced transit travel speed; buses had to be reallocated to neighboring streets because they were always stuck in traffic. Pedestrians are always at danger of being hit by a vehicle or falling on the barely-existent sidewalks, and emergency vehicles have no chance of getting into the community if needed. For example, in the last year there were three fire events—a common hazard in such communities—affecting hundreds of homes, yet the emergency trucks could not come in to respond on time because of cars blocking the passage.
Long one of the world’s most unequal countries, Brazil surprised pundits by recording a massive reduction in household income inequality in the last couple of decades. Between 1995 and 2012, the country’s Gini coefficient for household incomes fell by seven points, from 0.59 to 0.52. (For comparison, all of the inequality increase in the United States between 1967 and 2011 amounted to eight Gini points – according to this study.)