Source: Authors’ calculations based on World Development Indicators
In an effort to boost trade and investment relations between Africa and the United States, President Barack Obama this summer hosted the first-ever US-Africa Summit in Washington, D.C. The meeting resulted in $33 billion of public and private commitments to expand trade and investment in the African continent. Remarkably, US companies accounted for half of these pledges, including commitments by General Electric, Blackstone Group (in a joint deal with the Nigerian firm Dangote Industries) and the Carlyle Group to invest in energy infrastructure and to complement the $300 million per year announced by President Obama for the expansion of his administration’s energy initiative, Power Africa. The World Bank and the government of Sweden announced an additional $6 billion in support for enhanced access to electricity in Africa.
This is good news for Africa. FDI inflows will undoubtedly contribute to the technological development, industrial diversification, and economic growth of host countries. And the specific target of these investments – infrastructure – is particularly heartening. The state of Africa’s infrastructure is an important constraint to the continent’s economic development.
The correlation is simple: Job creation is the hinge connecting the three pivotal elements of economic development: living standards, productivity gains, and social cohesion. Promoting access to the labor market for all, including traditionally marginalized groups, is therefore paramount to achieving real, sustainable growth.
Following the success story of “Women, Business and the Law,” which focuses on legislative gender discrimination and its impact on the economy, the World Bank Group is now launching a new initiative that will develop a set of indicators measuring discriminatory legislation on the basis of racial and ethnic origin, religion and sexual orientation. The project was presented externally for the first time on November 11 by Federica Saliola, Program Manager and Task Team Leader of the project, speaking at Sexual Orientation and Gender Identity & Development: International Human and Economic Development, LGBT Rights and Related Fields conference, organized by The Williams Institute at UCLA.
In her speech, Ms. Saliola reminded the audience that, despite the rapid growth in emerging economies, not all sectors of society have benefitted equally, income inequality has risen, and 1 billion people are still left under the poverty line. In the coming three years, the new project will thus expand the knowledge base of laws, regulations and institutions that discriminate against ethnic, racial, religious and sexual minorities and will collect data across a number of economies covered by the Global Indicators Group.
- Policies and regulations within the sector matter, but countries must look across sectors to identify and remove constraints
- Transaction support and capacity building ensures governments can achieve their goals
- Investment in the private sector is critical for scalability
Crowdfunding – think Kickstarter, Indiegogo or Kiva – is popular and growing. About a year ago, infoDev, a global innovation and entrepreneurship program in the Trade and Competitiveness Global Practice, released a report titled ‘Crowdfunding’s Potential for the Developing World’ in which it explored what crowdfunding, on a larger scale, could mean for high-potential enterprises in developing countries. The study quantified for the first time the value of crowdfunding, estimating a global market of $96 billion by 2025 – 1.8 times today’s global venture capital industry. The study outlined specific recommendations for policymakers and business accelerators that focus on high growth entrepreneurs and innovative ways of access to finance.
Now, almost a year later, infoDev is seeing the first results of the pilots it is putting in place to test the viability of crowdfunding within its network of incubators. With the support of Crowdfund Capital Advisors, infoDev’s Kenya Climate Innovation Center (KCIC) is implementing the Crowdfund Investing Pilot, a project designed to mentor and train six carefully selected Kenyan startups on crowdfunding and online fundraising campaigns.
With the six entrepreneurs already working on their campaigns, it’s time to reflect on a few key recommendations of the report.
After all the gloom, there’s a glimmer of hope on the horizon.
Front-loading the impact of its double-barreled motto, “Global Challenges, Global Solutions,” the Annual Meetings season may have finally gotten the grim “challenges” part over and done with. This week – starting at 9 a.m. on Tuesday, livestreaming via “World Bank Live” from the Bank’s Preston Auditorium – we’re about to explore one of the most promising solutions now inspiring the development community: the pro-growth, pro-jobs Competitive Industries and Innovation Program (CIIP).
The competitiveness conference will brighten the mood after last week’s barrage of bad news, which seemed relentless throughout the week as downbeat economic and geopolitical forecasts dominated the debate at the Annual Meetings of the World Bank Group and the International Monetary Fund. From Jim Kim’s exhortation that the world’s inadequate response to the ebola crisis must be strengthened, to Christine Lagarde’s stern warning of an “uneven and brittle” era of “prolonged subpar growth [with] excessive and rising inequality,” there was plenty of disheartening data. Lagarde offered a deflating new coinage: “the New Mediocre.”
The sobering numbers within the IMF’s new World Economic Outlook underscored the sense that the global economy (and especially its wealthier countries) may indeed be stuck in an era of “secular stagnation.” So did the conclusion by Financial Times economic scholar Martin Wolf that the once-buoyant, now-humbled leaders of the global economy are in “an extraordinary state” of not just a gnawing malaise but a ‘managed depression’.”
As if all that weren’t dispiriting enough, the news late in the week that the world’s leading financial regulators were holding an unprecedented “stress test” of their crisis-response system – to analyze whether its newly strengthened safeguards can indeed protect against the risk of another cross-border crash of the financial system – made some skeptics wonder, “What do those guys know that we don’t know?”
Amid all the dreary news about the futile quest for elusive growth and the imbalanced rewards in a class-skewed society, one could be forgiven for feeling downcast. Yet Largarde’s rallying cry – “With the risk of mediocrity, we cannot afford complacency” – should remind optimists that we mustn’t let momentary doubts induce a drift toward the do-nothing paralysis of laissez-faire. An array of nuanced, pro-active strategies can help revive growth and jump-start job creation – and the World Bank Group conference this week will bring together some of the world’s leading economic-policy scholars to explore those strategies.
The “New Growth Strategies” conference – on Tuesday, October 14 and Wednesday, October 15 – will explain and expand upon the pro-growth thinking that undergirds the Competitive Industries approach. Targeting investment at the sector and industry levels to strengthen productivity and unlock new job creation, a wide range of analytical, investment and advisory projects are already under way – in both low-income and middle-income countries – through the Competitive Industries and Innovation Program (CIIP), which is convening the conference.