PSD Blog - The World Bank Group

Small Business Finance - What Works, What Doesn't?

May 5 and 6 will see an interesting conference on small business finance here in Washington DC, covering topics from lending techniques, innovations, the impact of market structure, government interventions and alternatives to bank finance.

Goodbye Aceh

Ulaanbaatar, Mongolia. Early March, Saturday afternoon. Outside temperature: -15 degrees celsius. I am sitting in my hotel room studying a manual on rescue diving. I am confident that I am the only person in all of Mongolia doing this. You can't get much further from an ocean than this.

I'm a bit fuzzy on the chain of events that led to this. But the result is clear - in a few days I will leave Aceh and move to Ulaanbaatar, the coldest capital city in the world, where I will support IFC's work in Mongolia. The thought of leaving Indonesia is actually painful. But the good news is that I'll be able to get my family back together. Because this was not a family post, we have lived apart for nearly two years. My daughter, now four, has become a native Russian speaker. And my son, now seven, has learned to read and write and Skypes me almost every day. I have missed a lot.

There are many things I had planned to write about but never did: camping with former GAM rebels, illegal logging, the delights of cycling among motorbikes, an Acehnese wedding, camping on a haunted, uninhabited island. And there were many things I never got around to doing. I suppose these will have to wait.

Gates opens market doors for farmers

The Bill and Melinda Gates Foundation recently announced that it will increase its budget for farming projects by 50 percent this year as food prices soar around the globe.  According to its website the foundation will inject  the additional funds into existing projects designed to help farmers cultivate more resilient crops, and helping producers gain better access to markets for their products. The Foundation, created in 1994, focused initially on health and education. In May 2006 it launched a call for a "Green Revolution" in Africa.

No nets, no soccer

Today is World Malaria Day, a few articles have caught my eye lately on the subject. The disease is one of the most deadly in the world, claiming the lives of over one million people annually. In Africa, a child dies every 30 seconds from malaria.

The American professional soccer league, MLS, has partnered with “Nothing But Nets,” a UN Foundation campaign to fight malaria. MLS followed the path of the NBA and other organizations that have joined the campaign. Anyone can donate and with each $10 Nothing But Nets is able to provided one anti-malarial insecticide-treated net.

In another piece of news, Novartis decided cut the price of its anti-malarial drug Coartem by 20 percent starting today. The company said the price reduction was made possible through efficiency gains after expanding its operations - makes one wonder how long Novartis has been waiting for Malaria Day.

To learn more about the disease and even to take quiz on the subject you can visit the World Bank’s Web site on malaria.

Sweeter than sugar?

Nicholas Negroponte’s longtime MIT colleague Walter Bender has recently left the One Laptop per Child program. Bender was responsible for software and content for "XO" laptops including its innovative Sugar operating system. This all happened amidst OLPC’s move to change its open-source approach as it welcomes Microsoft’s Windows operating system. Bender will now try to further the development of the XOs' Sugar, and get it to run on Linux computers other than XOs.

Bender's departure is the second big executive loss to be added to OLPC's setbacks and reportedly Negroponte wants OLPC to operate more efficiently. An executive-search firm has been trying to hire a chief executive for the group for more than a year – anyone needs a job?

Earth Day celebration ideas

To celebrate Earth Day some people join protest rallies, some others disappear into the wild, but here is a list of more conventional ideas. Feel free to send your own.

• Calculate your carbon footprint (and preferably try to reduce it).
• Plant a three to offset 730kg of carbon emissions (if not one cuts it down).
• Bike to and from work.
• Recycle (even if no one is looking).
• Avoid plastic bags.

Sustainable banking awards: who's winning what?

The Financial Times and IFC announced shortlists of potential winners for the 2008 Sustainable Banking Awards. The awards recognize financial institutions that have led the way in integating their policies with social, environmental, and corporate governance objectives. Below is a sample the categories and the shortlisted candidates, the full list is available here.

Sustainable Bank of the Year

• Banco Real, Brazil
• Citi, US
• HSBC, UK
• Rabobank, Netherlands
• Standard Chartered, UK

Sustainable Deal of the Year

• BlueOrchard Finance, Switzerland/Morgan Stanley, US (microfinance loans)
• Calyon, France (solar thermal power plants)
• Citi, US (financing for rural housing)
• Glitnir Bank, Iceland (geothermal power generation)
• Merrill Lynch, US (carbon finance to reduce deforestation)

Banking at the Bottom of the Pyramid

• ASA, Bangladesh
• Banco Bradesco, Brazil
• ICICI Group, India
• Opportunity International, UK
• Wizzit, South Africa

Futarchy: buzzword or viable option?

There's been a lot of buzz about prediction markets recently:

• A McKinsey & Co. report on prediction markets quotes James Surowiecki: "I wouldn’t be surprised to see prediction markets used in many more companies than today, not least as a tool to forecast sales. Consumer-facing companies should be particularly interested."
• Knowledge Management gurus Tom Davenport and Dave Snowden jumped into the fray to cool easy enthusiasm.
• An article in the New York Times introduces the concept of futarchy. According to Robin D. Hanson, an economist at George Mason University and a fan of alternative institutions, futarchy is "a form of government enhanced by prediction markets. Voters would decide broad goals of national welfare, but betting in speculative markets would determine the policy steps to achieve those goals."

Is "futarchy" a viable option for enhancing bottom-up participation in setting development policies? So, far, to my knowledge, Globalgiving has been the only entity to experiment with decision markets in a development context. I look forward to learn about the results of its pilot.

PS: After this post was published the Financial Times  published an article with a number of intersting examples of applications of predictions market to the non-profit sector. 

Locally-grown food in the middle of New York City

New York Magazine asked four architects to design whatever they would like for a full city block of space with no clients to worry about. One design offered was a vertical farm, complete with water tanks and each floor would be used for the cultivation of a different crop. Amale Andraos, of Work AC, the firm responsible for the intriguing idea, said in the article that they “are interested in urban farming and the notion of trying to make our cities more sustainable by cutting the miles [food travels].”

Ok, maybe that’s taking sustainable design to an extreme; does anyone have more eco-friendly (and preferably profitable) ideas?

Reducing carbon emissions but keeping a healthy economy

On a day that media reports were dominated by talks on carbon emissions, one particular McKinsey & Co. report came to mind. It talks about Germany's goal to cut its carbon emissions without compromising its economy. Germany has a goal to reduce greenhouse gas emissions by up to 40 percent of its 1990 numbers during the next 12 years. "By 2020, Germany could eliminate 30 percent of its 1990 level of greenhouse gas emissions, without curbing economic growth," says the report.

You can find the full report here, which contains a set of interactive features that explore the costs and opportunities of several carbon abatement measures.