Private Sector Development, Privatization, and Industrial Policy

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Czech Republic: Assessment of the SME Policy Mix
(World Bank, Washington, DC, 2019-10-01) World Bank Group
This report provides an assessment of the policies devoted to supporting small and medium enterprises (SMEs) in the Czech Republic. It presents an original analysis of all national-level SME-related policy instruments, totaling 93 instruments operational from 2013 to 2017 and disbursing 108.5 billion CZK (4.71 billion USD), using an analytical framework that compares the SME policy mix to the country needs (see Annex 1 for framework and methodology). The analysis integrates three interrelated segments: 1) A country needs assessment to determine the national needs for SME policies. The needs assessment included a macro-level analysis of the Czech Republic's performance in productivity and trade; an analysis of national- and firm-level innovation performance; a firm-level analysis of productivity across firm sizes, sectors, and regions (leveraging original data from the Czech statistics office); and an analysis of market and institutional conditions that influence resource allocation and firm productivity. 2) A policy mix analysis to determine if the Czech Republic's SME policy mix matches the needs identified in the country needs assessment. The policy mix analysis included a review of relevant SME policy stakeholders, institutions, and governance; a review of national-level strategies; identification of the characteristics of SME policies instruments (administering agency, mechanism of support, beneficiaries, etc).; and a cluster analysis to evaluate the internal consistency of the policy mix and identify overlaps. 3) Recommended areas for policy action were developed using the needs assessment and policy mix analysis to improve the effectiveness of the policy mix and the business environment.
Creating Markets in Kenya: Unleashing Private Sector Dynamism to Achieve Full Potential
(International Finance Corporation, Washington, DC, 2019-07-31) International Finance Corporation
Kenya has the opportunities and resources to stimulate sustainable economic growth and development, but its potential has been constrained by under-investment and low firm-level productivity. Altogether, its development has not been sufficiently sustainable or equitable to transform the lives of ordinary citizens. Poverty remains high, with thirty-six percent of Kenyans living under the national poverty line, whereas the richest ten percent of the population receive forty percent of the nation’s income. This country private sector diagnostic (CPSD) sheds light on how the private sector can more effectively contribute to advancing the country’s developmental goals. Applying a sectoral lens, it puts forward operational recommendations highlighting strategic entry points for diversification and growth and addresses key constraints to private sector engagement. It also seeks to inform World Bank and IFC strategies, paving the way for joint programming to create markets and unlock private sector potential.
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.
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.
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.
Looking Beyond the Horizon: A Case Study of PVH’s Commitment in Ethiopia’s Hawassa Industrial Park
(World Bank, Washington, DC, 2017-06) Mihretu, Mamo; Llobet, Gabriela
The story of how the PVH Corp. (referred to throughout this document as PVH) came to leada group of its top suppliers to build factories and a fabric mill in Ethiopia’s Hawassa IndustrialPark (HIP) is the study of a strong collaboration between a private company looking to optimizeits business model and a government aiming to transform its economy through global strategic repositioning. The success of this story hinges upon the intersection of their goals and a shared vision of development that includes a strong commitment to social and environmental goals.PVH was motivated to invest in Ethiopia to respond to shifts in the global apparel sector, its growing desire to retool its business model and to address its concerns about compliance with social and environmental standards in its traditional sourcing locations. PVH had decided to rethink its business model and to look beyond the horizon towards a new region in which tolocate its manufacturing base. To have better oversight and enforcement, PVH moved to adopta fully integrated vertical supply chain, including direct investment in one of the manufacturingfacilities.Key to Ethiopia’s success in attracting this important investor was the government’s ability and willingness to strategically evaluate its foreign direct investment (FDI) needs and strategy and to take steps to evolve into an attractive location for higher value-added export-oriented investment.This case study explains a private investor’s site selection process. It assesses the elements PVH prioritized when deciding to commit to Ethiopia, and specifically to HIP. The case study further assesses the government of Ethiopia’s strategy, level of readiness, interest, and commitment, and sets out some key challenges that lie ahead for this partnership. The case study is structured in ten sections. Section second offers a brief background on the textile and apparel industry, including an explanation of its value chain. It provides a brief corporate profile of PVH and its current global footprint and business model. Section third describes the site selection process: PVH´s initial explorations in Africa, its consideration of several African countries, and its initial conversations and negotiations with Ethiopian authorities. Section fourth discusses the Ethiopian government’s strategy to attract and expand export-oriented investments, including efforts to bolster the country’s competitiveness. This section attempts to offer some explanation why Ethiopia was the right fit at the right time and its level of readiness to land such an investment. It provides a brief profile of PVH’s Africa point of entry, the HIP. Section sixth covers the challenges that lie ahead for this-project---potential setbacks that will affect not only the consolidation and growth of the textiles and apparel industry in Ethiopia, but also the government’s vision of becoming the “manufacturing powerhouse of Africa.” Section eighth concludes with some key lessons from PVH’s decision to invest in Ethiopia. Such lessons may be relevant to countries or regions interested inattracting FDI and may be of particular interest to other African countries in their quest to attract major investments in the textile and apparel sector.