Private Sector Development, Privatization, and Industrial Policy
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Publication
Creating Markets in Eswatini : Strengthening the Private Sector to Grow Export Markets and Create Jobs - Country Private Sector Diagnostic
(Washington, DC, 2022-09)Eswatini is facing multiple challenges. It was already experiencing weak economic growth before the COVID-19 pandemic, a reflection of longstanding, deeply rooted issues such as fiscal unsustainability, declining private investment, weakening productivity and competitiveness, and falling export diversification and complexity, compounded by the impact of climate shocks. It shifted from a private investment–led higher-growth model to a government spending–led lower-growth model after the end of apartheid in South Africa. With weak investment in productive sectors, Eswatini’s job market failed to keep pace with an expanding, younger labor force, leading to a large informal sector. Eswatini’s public sector–driven growth model is unsustainable under current fiscally constrained conditions, and there is a need to reduce and reprioritize public spending. An assessment of existing sectoral data and consultations with Eswatini’s private sector and policy makers suggest that four sectors can help drive the export-led private sector growth model. To return to an export-led growth model, Eswatini needs to increase export competitiveness by advancing regulatory reforms and improvements in trade logistics that include regional collaboration to address trade facilitation constraints. Finally, given the country’s vulnerability to climate risks, policies to foster economic resilience amid extreme weather events (mainly droughts that affect agriculture) and improve disaster preparedness need to be pursued. The private sector must adapt to this challenge and work with the government to improve climate resilience. -
Publication
Creating Markets in Chile: A Stronger Private Sector for a More Productive and Inclusive Society - Country Private Sector Diagnostic
(Washington, DC, 2022-06)Chile has long had a strong private sector that has enjoyed an accommodating and supportive policy environment. The imperative of building a green, knowledge-based, inclusive economy will inevitably continue to rely on the private sector playing a potent role as a partner in development. In an environment constrained by lower growth and productivity, Chileans are demanding access to better opportunities and improved services. The current constitutional process is an opportunity to set the stage for the private sector to be a stronger partner in building a more inclusive society and an innovative, productive, and greener economy. For this to happen, this country private sector diagnostic (CPSD) argues that three avenues will be essential: enhancing productivity, building a knowledge-based economy through more support to innovation, and upgrading skills for greater inclusion and innovation. -
Publication
Business Registration Reforms in China: A Case Study
(World Bank, Washington, DC, 2022)In the past, the business registration system in China was complicated and market access was highly restricted and regulated. The business registration process focused too much on administrative approvals for market entry and not enough on oversight of firm activities. Firms are not allowed to start operations before being registered and receiving a business license and the business license is the only document indicating a firm’s legal identity. Before the 2014 business reform initiative, firms were also legally required to obtain various registration certificates in addition to a business license. People’s Republic of China (PRC or China) has been making a great effort to simplify its business registration process, enhance its efficiency, and reduce its cost. China has reduced both the amount of time and the number of procedures required to start a business by more than two thirds within the past decade.In 2014, China launched a country-wide multi-year National Business System Reform Initiative to ease market access, making it easier to start a business by streamlining administrative procedures, while strengthening post-registration supervision by setting up the corporate social credit system. China has made remarkable progress to reform its business registration system over the past decade, cutting the number of procedures to register a business by more than two-thirds, and shortening time to register from 34 days in 2014 to 9 days in 2020. -
Publication
Gearing Up for the Future of Manufacturing in Bangladesh
(World Bank, Washington, DC, 2021-06-21)Labor-intensive, export-oriented manufacturing driven by the ready-made garments industry has transformed Bangladesh's economy. But with automation, changing trade patterns and servicification reducing the importance of wage costs globally, the creation of more sustainable jobs in the manufacturing sector now needs the upgradation of firms' capabilities and technology adoption. Drawing on the World Bank's "Bangladesh Firm-level Adoption of Technology Survey", this report shows that there is significant scope to improve the manufacturing sector's performance and future prospects by promoting the adoption of better technologies in firms. It discusses how Bangladesh can achieve this aim through policies that address informational barriers to the acquisition of capabilities in firms, leverage international connectivity for technology diffusion, and strengthen key markets and institutions that underpin firms investment in technology. -
Publication
Thailand Manufacturing Firm Productivity Report
(World Bank, Bangkok, 2020-06-17)Thailand is an enduring development success story. Between the late 1960s and mid-1990s, strong and sustained economic growth propelled the country from low-income to upper-middle-income status. To achieve high-income status by 2037, the authorities will need to draw on the experiences of other upper-middle-income countries that have successfully completed the transition, as well as those that continue to struggle. The Coronavirus (COVID-19) outbreak has severely impacted growth in Thailand, with the economy expected to contract in 2020 amid heightened uncertainty surrounding the path of the pandemic. This report focuses on the manufacturing sector builds on a framework that emphasizes the microeconomic and macroeconomic linkages of the sources of productivity growth. In line with this framework, Chapter 1 begins with an overview of Thailand’s productivity dynamics at the macroeconomic level and identifies the causes of its slowing GDP growth rate.7 Chapter 2 analyzes the characteristics of Thai manufacturing firms and sub-sector productivity dynamics, revealing the drivers of firm productivity and distinguishing the relative contributions of within-firm effects, between-firm effects, and market dynamism. Chapter 3 evaluates the impact of competition on firm productivity by comparing market entry and exit indicators with price markups. Chapter 4 concludes with a set of policy recommendations designed to boost firm productivity in Thailand’s manufacturing sector. -
Publication
Benchmarking Madagascar’s Free Zone Competitiveness
(World Bank, Washington, DC, 2020-06-17)The Government of Mauritius is implementing the Mauritius Africa Strategy, which is focused on positioning Mauritius as a bridge for investment and trade in order to open new markets in Sub-Saharan Africa (SSA). A cornerstone of this strategy is sharing the successful experience of Mauritius in providing an attractive business environment bundled with good infrastructure and services in order to accelerate investments in trade, services and manufacturing in SSA countries. This technical note is in response to a request from both the MAF and Government of Mauritius and the EDBM and GoM for: i) an update of the current status of the SEZ regime in Madagascar i.e. policy, legal, regulatory and institutional framework and current proposals being considered by the GoM as well as opportunities for improvement, ii) benchmarking Madagascar’s main competitors in the global textile and apparel markets (such as Bangladesh, Ethiopia and Kenya) and comparing their SEZ regimes for textile and garment zones to identify competitiveness strengths and weaknesses and lessons learned, and iii) outline opportunities for successful development of the proposed zone for consideration by both the GoM and the MAF and Government of Mauritius. -
Publication
Deep Versus Shallow PTAs: Rules Affecting Competition Dynamics–Antitrust, Competitive Neutrality, and Pro-Competition Economic Regulation
(World Bank, Washington, DC, 2020-01)Even though many countries have opened to trade, markets in developing economies oftenunderperform due to anticompetitive behavior and restrictive regulatory frameworks by a fewdominant players. Effective competition policies offer a tool to complement and support governments’ efforts to reduce barriers to trade. Active competition among market players has the potential to mitigate vested interests and facilitate the opening of markets to trade and investment. Greater competition within national markets reinforces international competitiveness of potential exporters through increased incentives to foster productivity, innovation and efficiency. Additionally, international trade reinforces competition in national markets by increasing contestability, entry and rivalry through increased presence of foreign products, services and investments. Empirical evidence suggests, for example, that: (i) the elimination of entry barriers, increased rivalry and leveling the playing field in upstream sectors contribute to export competitiveness in downstream manufacturing sectors; (ii) pro-competition market regulation that reduces restrictions and promotes competition is an important determinant for trade; (iii) competition law enforcement can be traced to export performance and is complementary to trade reforms; and (iv) industries with more intense domestic competition will export more.