Private Sector Development, Privatization, and Industrial Policy

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  • Publication
    The African Regional Weather Enterprise: Current Private Sector Landscape
    (Washington, DC, 2023-10-25) World Bank
    This study focuses on the role of the private sector in the development and delivery of hydrological and meteorological (hydromet) and early warning services (EWS) in Sub-Saharan Africa within the current landscape of the Africa Regional Weather Enterprise (ARWE). The study begins with a global industry overview of 87 participating companies who either work in or have interest in the region’s hydromet market. It highlights the types of activities, end-user categories, research and development, and focuses on innovation and capacity building initiatives that underpin the key components of the following pages. The study analyzes how private sector actors operate within the framework of national, regional, and international hydromet projects. It makes an inventory of ongoing initiatives that focus on the current status of public-private engagements (PPE) and partnerships for development of the ARWE.This report concludes by drawing on lessons from the positive dynamics and gaps in partnerships and engagements between public and private actors. It supplies 16 recommendations to further improve the ARWE by emphasizing PPE, successfully completing African hydromet programs, and satisfying enduser needs. The recommendations are focused on protecting lives and property while supporting national economies for the prosperity of all.
  • Publication
    Creating Markets in Eswatini : Strengthening the Private Sector to Grow Export Markets and Create Jobs - Country Private Sector Diagnostic
    (Washington, DC, 2022-09) International Finance Corporation
    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) International Finance Corporation
    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) Wei, Wenting; Sanchez Ortega, Luis Aldo
    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) Gu, Yunfan; Nayyar, Gaurav; Sharma, Siddharth
    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) World Bank
    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) World Bank
    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) Martinez Licetti, Martha; Miralles Murciego, Graciela; De Aguiar Falco, Guilherme; Ore Monago, Tilsa; Ringeling, Camila
    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.
  • Publication
    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.
  • Publication
    Creating Markets in Ghana: Country Private Sector Diagnostic
    (World Bank, Washington, DC, 2017-11) World Bank Group
    The objective of the Ghana Country Private Sector Diagnostic (CPSD) is to identify the main opportunities for the private sector that will have a strong development impact in Ghana and to highlight the key constraints (both cross-cutting and sector-specific) hampering private sector growth. The CPSD consists of a systematic assessment of all of Ghana’s economic sectors along two dimensions: (a) desirability: how private investments in these sectors could help Ghana to address its development challenges; and (b) expected feasibility: how the constraints standing in the way could be removed. This sector scan led to identification seven priority sectors, of which, three were selected to conduct deep dive studies: namely agribusiness, ICT and education.Four main opportunities exist for the private sector to make a major contribution by creating markets in Ghana. First, the private sector can help to develop new high-value export markets, such as horticulture and ICT-enabled services, in which Ghana is already well positioned. Second, the private sector can leverage ICT to improve the performance of Ghana’s most important sectors, including for improving government activities and services. Third, the private sector can help to promote efficiency and innovation in the key social sectors of education and health. Fourth, the private sector can play an important role in helping to address the main cross-cutting constraints, such as facilitating trade, providing competitive green energy, opening rural land markets, developing technical skills, and financing promising small and medium enterprises (SMEs).There are fewer opportunities for transformative private sector investments in the other sectors (mining, tourism, retail, construction, water and sanitation, and manufacturing).Ghana can seize these opportunities through a mix of public and private interventions:The government should pursue essential economic reforms to resolve the energy crisis by reforming the regulatory framework for electricity tariffs; facilitating trade, through customs reforms and the Ghana Community Network Systems;These reforms would pave the way for the private sector to invest in projects with a high development impact, including through large firms. Such opportunities already exist in Ghana in the three priority sectors of ICT, agribusiness and education that are reviewed in this report.The government should also consider supporting the entry of ‘pioneer’ investors, which are often in the form of foreign direct investment (FDI).Supporting promising SMEs will also be critical, especially during their acceleration phase.This could be achieved through a combination of public financing and capacity building, technical support adapted to the sector in which they operate, and risk-sharing and mezzanine finance facilities. Similar to the pioneer investors, such support should be provided in an inclusive, transparent and competitive manner. Examples of promising SMEs were found in all three deep-dive sectors.