PSD Blog - The World Bank Group

Getting ready for hurricane season

Limited capacity to borrow funds, lengthy aid disbursement procedures and limited access to insurance are the main setbacks faced in the immediate aftermath of a catastrophe by low-income disaster-prone countries. From the World Bank:

Caribbean States are highly vulnerable to natural disasters--on average, one major hurricane affects a country in the region every 2 years--and have only limited options available to respond. Most recently, losses resulting from Hurricane Ivan in Grenada amounted to 200% of Grenada's gross domestic product (GDP) and were significant in Jamaica and the Cayman Islands

This week, donors announced pledges of $47 million to a Regional Catastrophe Risk Insurance Pool for the Caribbean. This Caribbean-owned, regional institution is the first regional disaster insurance facility in the world. Pooling their risk will save the eighteen participating countries approximately 40% in individual premium payments. For more on cat risk see past conferences.

Food markets

PSD Blogger writes about innovative business models which can help address malnutrition in developing countries.

Bamako at the World Bank

On a first-come first-served basis, 150 World Bank employees had a chance to view the controversial movie Bamako. The film, which casts a dark shadow on the World Bank and the IMF's involvement in Africa, will open in Washington, D.C. in June.

The New York Times published not one but two reviews of the movie. Naturally, we prefer the second one.

Quiet resurgence of privatization

Just launched data for privatization trends – latest year 2005 – shows near record levels. Transactions are concentrated in China, Czech Republic, Hungary, Pakistan, Poland, Romania, Turkey and Ukraine and the top ten deals are largely in banking and telecommunications. For more check out the online database. Only Bolivia, Russia and Venezuela defied the pattern: either through nationalization or restrictions of foreign investment.

Funding what the donor intended

In the World Bank working paper titled "Fungibility and the flypaper effect of project aid: micro-evidence for Vietnam" released earlier this month Dominique van de Walle and Ren Mu ask about the degree to which the donors get what they paid for. The authors examine the World Bank project to rehabilitate 5,000 kilometers of district and commune level roads in Vietnam:

While rural roads have been extensively championed as poverty alleviation instruments by aid donors, rigorous impact assessments have been rare. […] Development assistance continues to be primarily project-based, particularly for infrastructure. The possibility of fungibility is routinely ignored in project work. Project staff often put enormous effort into project selection and appraisal. If fungibility is indeed the reality, then these efforts are wasted.

One way round this type of problem is output-based aid.  For more information about the internal assessment process of the World Bank Group projects visit the Independent Evaluation Group. For a more controversial view read William Easterly.

Business with four billion

This is the title of an upcoming Base of the Pyramid (BOP) conference at the University of Michigan. Between September 9 and 11 in Ann Arbor business managers, policy makers, social entrepreneurs, academics, non-profit experts, and development agency professionals will focus on enterprise-based approaches to alleviating poverty in low-income communities. C.K. Prahalad is a confirmed speaker.

The concept itself has been gaining visibility in the private sector and on the Web. Check out the BOP activities database and a recent BOP debate both at NextBillion.

Corporate susu?

The idea isn't new. Tontines and susu have been known for centuries as a tool for basic insurance and banking. What's new are the financial backers. Your next microfinance provider might be Allianz or Barclays.

The Valentine postscript

Make any propositions last week which you now need to deliver on? If so, let's talk diamonds. They bring their own moral hazard - just watch Leonardo - but the Kimberley Process and the sector leaders are changing that fast. 'Living Up To Diamonds' - the De Beers report to stakeholders - sets the benchmark, not just for the diamond companies, but for reporting in general. It does so much so well: the development impact of its operations, the stakeholder materiality analysis, the A+ rating from GRI (the first I've seen). There is even a 5 minute video summary of the report which to quote my colleague Giulio, would have Edward Tufte clapping once again. (And if I ruled the world.....Tufte's essay on Powerpoint would be core reference material for anybody who will ever use the software. Just a style issue? Read Tufte's analysis of the Columbia disaster and sober up quickly).

Putting on the fee squeeze

I've spent the last week in northern Sudan, talking to informal manufacturers and craftsman about the problems they face in dealing with local taxes and license fees. Many say they would be happy to pay up if only they received services in return. Mohammed, who runs a metal-working shop in Khartoum, is frustrated by the unwillingness of local government to take his concerns seriously:

Why should I pay these taxes when I get nothing in return? They ask us to pay an anti-malaria fee, but we don't see any clinics; they ask us to pay a sanitation fee but we don't have clean water; and look at the rubbish in the streets. We tried to negotiate with the local authorities but it's hard. The tax collectors have targets and if they don't meet them, they lose their jobs. Once we persuaded the court that the fees were illegal but the authorities still came and locked up my workshop until I paid. We also tried to get mediation, but the employers' federation, which only represents large firms, wouldn't listen to us.

Part of the trouble is that local authorities depend on transfers from central government. When the books don't balance they make up for it by squeezing local businessmen. Of the ten fees Mohammed pays, only one is directly related to his trading license. There's no simple answer. But helping local governments understand the effect their actions have on private investment would be a start.

Oscars in Africa

Superbrands organization, the world's largest independent rater of brands, will start ranking leading East African brands at an "Oscar for Brands" ceremony later this year. Top brands in Uganda, Tanzania, Kenya, Rwanda and Burundi will be assessed by a panel of media, branding and marketing, retail and business communications experts, reported the Uganda Monitor.

The winners will have the right to use Superbrands logo and take advantage of its global PR network. And unlike the Academy Awards, all brands will be considered. Good luck.