Private Sector Development, Privatization, and Industrial Policy

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    Creating Markets in Burkina Faso: Growing Burkina Faso’s Private Sector and Harnessing it to Bolster Economic Resilience
    (International Finance Corporation, Washington, DC, 2019-07-01) World Bank ; International Finance Corporation
    A small landlocked economy in the heart of West Africa’s French-speaking Sahel, Burkina Faso is characterized by its modest economic size, with a rapid population growth, with one of the highest per capita birth rates in the world. Burkina Faso needs to create 300,000 jobs annually to match its demographic growth, while about ninety percent of its workers are in the informal sector. Despite sustained robust economic growth over the past two decades driven by cotton and gold exports, private investment is low. Compounding the considerable development challenges that it faces, Burkina Faso is currently confronted by acute security and climatic threats, together with emerging fiscal risks. This country private sector diagnostic (CPSD) therefore investigates whether opportunities exist for the private sector to contribute more substantially to Burkina Faso’s development. The CPSD proposes a platform for action aimed at boosting Burkina Faso’s development through greater private sector investment. The remainder of the report provides an overview of: (i) the private sector environment; (ii) the cross-cutting constraints to the private sector; (iii) the critical enabling sector bottlenecks to the private sector; (iv) the opportunities for the private sector; and (v) a series of priority private sector focused recommendations.
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    Creating Markets in Morocco: A Second Generation of Reforms - Boosting Private Sector Growth, Job Creation and Skills Upgrading
    (International Finance Corporation, Washington, DC, 2019-06-01) International Finance Corporation ; World Bank
    Morocco has steered significant resources towards large investments in economic sectors identified as strategic to growth, and for increased productivity and value addition. Despite Morocco’s strikingly high investment rate, one of the highest in the world at an average of thirty-four percent of gross domestic product (GDP) annually since the mid-2000s, the returns in economic growth, job creation and productivity, have been disappointing. The Moroccan economy has performed particularly poorly in terms of job creation. A more vibrant private sector is needed to create more jobs. This CPSD identifies policy recommendations and investment opportunities that would foster job creation by the formal private sector and improve labor supply in skills that would anchor Morocco as an emerging economy, to continue its path of growth, and to move into higher value-added and innovative sectors.
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    Creating Markets in Ethiopia: Sustaining Progress Towards Industrialization
    (International Finance Corporation, Washington, DC, 2019-03-20) World Bank ; International Finance Corporation
    Ethiopia has made impressive strides along its developmental path. Job creation is now the critical development challenge, raising the importance of the private sector agenda. After more than a decade of sustained public sector-led growth, the government is revising its growth strategy to allow for a much greater role for the private sector in driving growth and job creation. Broadening the base for job creation beyond light manufacturing toward a wider range of high productivity agricultural and services activities will help to overcome the uneven spatial distribution of manufacturing jobs across the country. Ethiopia has a number of advantages that it can leverage to attract the investment needed for job creation. These include rapidly improving transport and energy infrastructure, low labor costs, a large and growing domestic market, cheap power, an ideal climate, and preferential market access to the European Union, the United States, and other major markets. The purpose of the Ethiopia country private sector diagnostic (CPSD) is to support the transition to a private sector- driven growth model that advances the country’s development objectives and, in particular, delivers the necessary jobs. It identifies investment opportunities that can materialize in the short term, and the reforms that are needed to enable these opportunities to emerge. It also discusses how specific actions by the public sector, in collaboration with the private sector, in filling gaps in public investment, reforming business regulations and trade policy, addressing market failures, and enhancing the efficiency of key backbone services and sectors, while tackling gender inequalities, can fully unleash the potential of private sector investment.
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    South Africa Digital Economy Assessment
    (World Bank, Washington, DC, 2018) World Bank
    An assessment of South Africa’s digital economy has been launched as part of the World Bank Group’s digital economy for Africa (DE4A) initiative, which leverages an integrated and foundations-based diagnostic framework to examine the present level of digital economy development across Africa. The assessment will map the current strengths and weaknesses that characterize the national digital economy ecosystem, as well as identify challenges and opportunities for future growth. Rapid digital transformation is now re-shaping the global economy, permeating virtually every sector and aspect of daily life - changing the way one learns, work, trade, socialize, access public and private services and information. Well-functioning digital economies are thus expected to achieve faster economic growth, offer innovative products and services, as well as create more job opportunities. Assessing where strategic investments and interventions need to be made is a critical first step to enabling digital economy growth. This background paper will provide an overview of digital entrepreneurship in South Africa.
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    Towards Privilege-Resistant Economic Policies in MENA: Shielding Policies from Privileges and Discretion
    (Washington, DC, 2017-06) World Bank
    Unemployment rates in the Middle East and North Africa (MENA) region are among the highest in the world, especially for young graduates. Policy recommendations to date in the field of governance for private sector policymaking have been too general and too removed from concrete, actionable policy outcomes. This report presents, for the first time to fill this policy and operational gap by answering the following question: what good governance features should be instilled in the design of economic policies and institutions to help shield them from capture, discretion, and arbitrary implementation? The report presents an innovative conceptual framework that encapsulates the governance features that can shield policies from capture, discretion, and arbitrary enforcement that limits competition. Based on this framework, a check-list of policy features in a wide range of policy areas relevant to private sector development policy is presented, notably in terms of: (i) the process of policy-making (ex-ante); (ii) the actual policies, regulations, and their implementation (for example, business regulations, procurement, financing, trade); and (iii) competition policy and other attributes like open-business and transparency measures that help identify, and prevent or deter anti-competitive market behavior and outcomes (ex-post). The report benchmarks eight countries along the framework and checklist of indicators, pointing, for each country, to policy gaps and poor governance features that make these countries prone to capture and discretion. The report offers a menu of operational and technical entry-points to engage the capture agenda in a concrete way, one that may be more politically tractable in some of the client countries.
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    Republic of Armenia Export-led Industrial Development Strategy: Implementation Review and Recommendations on New Toolset
    (Washington, DC, 2015-06) World Bank
    The lessons learned from the implications of the global crisis for the Armenian economy led the Government of Armenia to refine its approach to economic development policy. The business environment, the market structure, and the incentive pattern had not fostered reallocation of resources into more productive areas or the emergence of internationally competitive products and services. Despite numerous initiatives and multiple efforts, there was no holistic approach or actionable roadmap for supporting private sector development. The pressing need to restore economic growth despite a small domestic market led the Armenian government to search for new sources of growth in export-oriented industries. At the end of 2011, the Government of Armenia adopted its export-led industrial development strategy. The strategy set as targets improving the general business environment and sector-specific initiatives to address market failures and expand exports. The strategy builds on both a general (crosscutting) and an industry-customized toolset.
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    Islamic Republic of Pakistan : Diagnostic Review of Consumer Protection and Financial Literacy, Volume 1. Key Findings and Recommendations
    (Washington, DC, 2014-03) World Bank
    The diagnostic review for Consumer Protection and Financial Literacy (CPFL) provides a detailed assessment of the institutional, legal, and regulatory framework in four segments of the financial sector: banking, microfinance, securities, and insurance. The review took place in response to a request for World Bank technical assistance in the field of financial consumer protection made by Pakistan's Ministry of Finance (MoF), the State Bank of Pakistan (SBP), and the Securities and Exchange Commission of Pakistan (SECP). The review consists of two volumes. Volume one summarize the key findings and recommendations of the review and Volume two presents a detailed assessment of each financial segment compared against the good practices for financial consumer protection. The key findings and recommendations in volume one cover five areas: (i) the institutional, legal, and regulatory framework for consumer protection; (ii) disclosure; (iii) business practices; (iv) dispute resolution mechanisms; and (v) financial education. Priority recommendations are outlined in table one; a more detailed list of recommendations is included in annex one.
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    Republic of Turkey Reform for Competitiveness Technical Assistance : Fostering Open and Efficient Markets through Effective Competition Policies
    (Washington, DC, 2013-09-23) World Bank
    Competition in domestic markets is critical to ensure increased international competitiveness. Firms facing more intense competitive pressures are more likely to introduce new products and upgrade existing product lines. Firms usually acquire many of their inputs (such as transportation, energy, construction, and professional services) in local markets. Competition policies are defined as the set of policies and a law ensuring that competition in the marketplace is not restricted in a way that reduces economic welfare. This report reviews the current status of competition policy in Turkey, focusing on the economy-wide enforcement of competition rules and on specific regulations and government policies that affect product market competition. Economic and legal analysis is used to identify key challenges and to propose specific areas of intervention and reform. In addition, this report provides an evaluation of the potential benefits of pro-competition policies. Turkey is benchmarked against other economies that represent international best practice, as well as regional and global standards, with particular reference to European Union (EU) countries. This study finds that although Turkey has made significant progress in enforcing competition law effectively, it still faces challenges in achieving a comprehensive and coherent policy framework to promote product market competition. The study also finds that there is significant scope to achieve efficiency gains from procompetitive sector policies and more effective economy-wide competition policy enforcement.
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    Sierra Leone Growth Pole Diagnostic : The Growth Poles Program
    (Washington, DC, 2013-08) World Bank
    This First Phase Report on Sierra Leone growth poles is the result of a 9 months consultative process led by the Office of the President which specifically requested that the output of this diagnostic be in an engaging format. The fundamental concept of growth poles is that they exploit agglomeration economies and spillover effects to spread resulting prosperity from the core of the pole to the periphery. At the basis of this theory is the assumption that economic development is not uniform over a region. Rather, it concentrates around a geographic feature or economic hub. In particular, it frequently concentrates around a key industry, around which linked industries develop. A growth pole can be used to nurture direct and indirect linkages from the flagship industry to supporting sectors, which vastly expands the employment generation potential of new investments in said flagship industry. The expansion of this key industry implies the expansion of output, employment, related investments, as well as new technologies and new industrial sectors.
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    Armenia : Diagnostic Review of Consumer Protection and Financial Literacy, Volume 1. Key Findings and Recommendations
    (Washington, DC, 2012-06) World Bank
    The objectives of the diagnostic review of consumer protection and financial literacy for Armenia are: (i) to assess the existing financial consumer protection framework, by reviewing laws, regulations and practices in Armenia compared to international good practices; and (ii) to provide recommendations on ways to improve consumer protection and financial literacy in Armenia. The review provides a detailed assessment of the institutional, legal and regulatory framework in four financial segments, namely banking, non-bank credit institutions, securities, and insurance. Many key steps have already been taken in financial consumer protection, especially at the regulatory and institutional levels. Regarding the institutional framework, adequate resources need to be allocated to the consumer protection team and modern supervisory tools should be made available. Consumer organizations should be strengthened and motivated to assist the Central Bank of Armenia (CBA) in market monitoring. In terms of consumer disclosure, the CBA should issue regulations that require financial institutions to provide clear, understandable, timely, comparable and standardized information to consumers. In the area of regulation of business practices, the CBA should require that sales agents are well trained and should test them regularly. All financial institutions should regularly analyze the complaints received and the analysis should be provided to the CBA. The Steering Committee for the National Strategy of Financial Education should become the key body to manage financial education in Armenia.