Private Sector Development e-discussion: How to Tackle the Problem of Rising Informality?

Join the new online discussion offered by the Rapid Response Web site on Private Sector Development.
How to Tackle the Problem of Rising Informality?
http://rru.worldbank.org/Discussions/topics/topic64.aspx

The number of informal firms – those operating beyond the reach of the law – is rising, accounting for more than 30% of developing world economic activity. Some policymakers believe this is not a serious problem, arguing that it is an indispensable lifeline for the most vulnerable. Others insist that informality carries high social and economic costs. They advocate radical reduction and simplification in regulations to encourage entrepreneurs to formalize – comply with legal requirements to start and run a business. One study of Egypt's informal sector shows that formalization can greatly improve a country's overall economic performance. Why do you think informality is growing almost everywhere, despite economic liberalization and stronger growth? What policy reforms do you think could help reverse this trend?

This online discussion is moderated by Vincent Palmade, lead economist at the Foreign Investment Advisory Service (FIAS) in the Private Sector Development Vice Presidency, a joint facility of the World Bank and International Finance Corporation; and Richard Stern, regional program coordinator for Central and Southern Africa at FIAS.

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DOCON Directory of Consulting Companies

This unique Directory lists consulting companies active in international development cooperation, sorted by country of origin or registration. Here you can find consultants, consortium partners or employers. This information is compiled from public short-list of the World Bank, the ADB, the EuropeAid Coordination Office, consulting associations and other public sources. Please contribute by using the free add feature.
http://www.docon.info

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Why is the supply of BDS to small enterprises often so low?

The supply side in weak BDS markets must be considered carefully during the market assessment. Macro-economic constraints to BDS market development must be identified and removed before starting the market development. The "crowding out" of private suppliers by competition of subsidized monopoly providers must be revealed and stopped. The cost of creating permanent public benefits should be identified  and subsidized by public or donor funds. In markets, where the supply is low compared to the demand, facilitating and stimulation market development can be done by the activities suggested above. NGOs should ensure that their efforts do not distort, but facilitate, market development and should follow a pragmatic approach, depending on the level of development of BDS markets. The intervening organization can act as a facilitator, provider, or a combination of both at different stages in a program. In general, acting as a provider should be only an interim measure, and an exit strategy should be part of the upfront design.

Paper by Karsten Weitzenegger 2005
http://www.weitzenegger.de/new/supply.pdf

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Why do small business hesitate to invest in people management and training?

Investing in people management and training is the only chance for a small business to overcome market disconnectedness in an Era of Knowledge-Based Economies. BDS can be the bridge for providing access to procedures and practises, standards and innovation. Entrepreneurs accustomed to free services are likely to resist paying for those services later. Resistance should not be equated with inability to pay. Reasons behind resistance can be various economic or socio-cultural facts. Advisors must be conscious about the  owner-manager’s difficulties and resistance when passing on power and knowledge to the staff for reaching a team managed stage of organisation. Instead of pushing the owner-manager too much into this conclusion, BDOs can have better results, if the owner-manager can be assisted in developing own thoughts and strategies towards skills development. BDO can stimulate demand by marketing the benefits and possibilities of their services, considering the reasons behind resistance to training.

Paper by Karsten Weitzenegger 2005
http://www.weitzenegger.de/new/noinvest.pdf

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Case study: Hamburg’s Initiative for Business Start-ups and Innovation

Hamburg’s Initiative for Business Start-ups was designed as public-private-partnership to strengthen the demand of BDS by a training voucher system. At the same time, the supply was structured and made transparent in a catalogue and a directory. The large number of existing providers was oriented more towards business starters. The local government did not “crowd out” the providers, but took the lead in developing a network in a market-friendly approach. For the donor the system is an efficient and effective way to reach the beneficiaries without maintaining a costly institution. The attraction for the BDS providers is, that they are recognized by the government, get free marketing and earn fees with a new client group. After 10 years, the related network is an important information tool in the market. The donor intervention is relatively small, but designed to be permanent. The public benefits were kept clear and out of political party struggles. Pre-conditions for success were a high degree of demand and supply in a large city.
Paper by Karsten Weitzenegger 2005

http://www.weitzenegger.de/new/hei.pdf

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Remittances to Africa overtake FDI

An United Nations report finds that remittances from Africans working abroad during 2000-2003 averaged about US$17 billion annually, while FDI flows averaged about US$15 billion during the same period. Official development assistance is still the main external resource flow for
Africa. The report highlights the need for reducing the cost of transmitting remittances to facilitate their transfer, and points out that the largest recipients of FDI have been countries with large mineral and petroleum reserves and growing natural resources industries.http://www.un.org/africa/osaa/press/Resource%20flows%20to%20Africa.pdf

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Foreign remittances could overtake FDI and aid, says Asian Development Bank

Foreign remittances could overtake FDI and aid, says Asian Development BankThe Asian Development Bank — http://www.adb.org — predicted that in most developing countries in
Asia foreign remittances are growing at a rate that will make them exceed FDI flows and overseas development assistance combined in the near future. Foreign remittances are currently estimated to exceed US$200 billion annually, with four countries in Asia (India, the Philippines, China and
Pakistan) being the largest recipients. For these beneficiaries, foreign remittances have become a large and growing source of national income, a trend that is likely to continue. http://www.adb.org/Documents/Events/2005/ADB-IADB-MIF-UNDP/default.asp

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The Role of Outsourcing in Reversing the Brain Drain into Brain Gain

According to a report published by the Public Policy Institute of California, economic opportunities in China and India are drawing well-educated and U.S. based Chinese and Indian entrepreneurs back home, reversing the brain drain that the two countries have experienced. Brain Drain, or the migration of skilled and educated individuals from one nation to another, is first and foremost a response to lack of opportunities at home. In recent years, countries like India and China, which have exported their brightest for decades, have started to reverse this trend. And outsourcing is said to have played a large role by creating jobs, raising incomes and generating disciplined, efficient workforces that have in turn provided a platform for economic growth.http://topics.developmentgateway.org/mdg?intcmp=903

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Migration and Development: How to make migration work for poverty reduction

This report produced by the UK Parliament illustrates how governments and organisations can make migration work for the poor. It looks at the opportunities for improving the quality of migration, and ways in which policy can shape and respond to migration to make it work better for development and poverty reduction. The report argues that the impact of migration depends upon the nature of the migration, and on the links which migration establishes between home and host societies. It looks at issues including brain drain, trafficking and smuggling, migrants' rights, temporary mobility schemes, and the role of the Diaspora. http://www.publications.parliament.uk/pa/cm200304/cmselect/cmintdev/79/79.pdf

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Success of Fair Trade in Europe

A recent survey, carried out in 25 European countries, shows that Fair Trade sales in
Europe have been growing at an average 20% per year since 2000. The annual net retail value of Fair Trade products sold in
Europe now exceeds EUR 660 million. This is more than double the figure five years ago. Fair Trade has thus become one of the fastest growing markets in the world. Fair Trade products can now be found in 55,000 supermarkets all over
Europe and the market share has become significant in some countries. Fair Trade is an efficient tool to overcome poverty and to reach the Millennium Development Goals. It gives producers a fair deal, not only by paying a fair and stable price for their products. Fair Traders also help their partners in the South to get better market access, to protect the environment and to comply with European standards. The research ''Fair Trade in Europe 2005 – Facts and Figures on Fair Trade in 25 European countries'', carried out by Jean Marie Krier, is published by the Fair Trade Advocacy Office in
Brussels.
More information: http://www.ifat.org/downloads/marketing/FairTradeinEurope2005.pdf
See CTA publications on fair trade
http://www.anancy.net/index.php?destination=advanced_plus&sign=yes&tema=selected&file_id=2657&files=yes&language=english&pubyear=2005
DFID support to fair trade
http://www.dfid.gov.uk/news/files/fair-trade-2006/fortnight-summary.asp

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European Commission proposes concrete measures to deliver EU aid better and faster

In three communications approved today, the EC proposes concrete measures to improve the effectiveness of EU development aid and external assistance. These proposals follow-up on the EU’s commitments in 2005 to scale-up aid substantially and to improve its impact and its speed of delivery, in order to meet the challenges of the Millennium Development Goals by 2015. The Commission proposes an action plan including joint programming of assistance with Member States and sees the
Union on track to deliver on its financial commitments.
Related links: http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/06/256&format=HTML&aged=0&language=EN&guiLanguage=en
Questions and Answers: The ”Aid effectiveness Package”
http://europa.eu.int/rapid/pressReleasesAction.do?reference=MEMO/06/103&format=HTML&aged=0&language=EN&guiLanguage=en
Development: EUtightens aid, control
http://www.ipsterraviva.net/Europe/article.aspx?id=3054

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AL-Invest III celebrates two years of results

After almost two years of implementation, the AL-INVEST III programme is now at the halfway stage. Since its launch in December 2003, the programme has benefited more than 22,000 SMEs and business associations. The AL-INVEST III network includes more than 200 organisations in Europe and Latin America and is still growing fast. Contact: Virginia Bustos bustos@al-invest3.org and Fernando Ramos al-invest3@eurochambres.be AL-Invest III Website: http://195.207.138.65/

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Economic Report on Africa 2005: Job creation lies at the heart of the poverty battle

The Economic Report on Africa 2005 (ERA 2005 http://www.uneca.org), ECA’s flagship publication, this year is entitled ''Meeting the Challenges of Unemployment and Poverty in
Africa”. It analyses the vicious cycle of inadequate economic performance and high unemployment. Despite showing signs of rapid change, at a record 5.2 percent growth in 2005,
Africa’s economy is dampened by record unemployment and higher rates of poverty than ever before. The implication is that poverty has been unresponsive to economic growth. ''As long as people are kept from participating in the economy as productive agents, people will continue to benefit only sparsely to whatever growth is actually achieved,” said Augustin Fosu, the director of ECA’s Economic and Social Policy Division which prepared the report. And the record growth rate is still not enough. For a significant reduction in poverty, it must climb still further to over 7 percent a year on average. Email: ecainfo@uneca.org

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The Poverty Reduction Strategies – A survey of the literature

Forum Syd, a Swedish-based NGO and Eurodad member takes a critical look at PRSPs. The report provides an excellent overview of the PRSP process to date; assessing just how well the process has lived up to its principles of ensuring a country-driven, results-orientated, partnership-focused approach to development. The paper notes that the evaluations published by the international financial institutions typically end up being optimistic noting ''permanent learning and improvement''. But reports from the United Nations, CSOs and universities question whether the PRSPs are in fact the right road to poverty eradication with the weaknesses of the PRSPs appearing to be of a permanent nature, and providing no real break with the dismal experiences of the structural adjustment policies. http://www.eurodad.org/articles/default.aspx?id=643

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eContentplus Program

The European Parliament and the Council approved the eContentplus Program, a multiannual Community program to make digital content in
Europe more accessible, usable and exploitable. The 4-year program (2005–08), proposed by the European Commission, will have a budget of € 149 million. The Programme addresses specific market areas where development has been slow: geographic content, educational content, cultural, scientific and scholarly content.  A new call for proposals will be launched under the eContentplus programme in 2006. The provisional date for publication is end of June. The provisional deadline for receipt of proposals will be beginning of October 2006. See http://europa.eu.int/information_society/activities/econtentplus/index_en.htm

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Improving transparency of the EU institutions

Improving transparency of the EU institutions

The European Parliament takes action to ensure transparency and democratic scrutiny of the EU institutions. In two reports adopted Tuesday, MEPs call for the Council to meet in public when it is acting as a legislator, and requests the Commission to revise existing rules and to table new legislation by the end of this year on ''the right of access'' to European Parliament, Council and Commission documents. http://www.europarl.eu.int/news/

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Trade and Environment Review 2006 released by UNCTAD

UNCTAD highlights the increasing impact of environmental requirements on exports of developing countries and states that developing countries could turn environmental requirements in export markets from trade barriers into trade opportunities. Stringent environmental, health, and safety standards for everything from electronics to food are making it harder for the world’s poorer nations to export products to lucrative markets in North America, Europe and developed
Asia — but the right approach could turn these barriers into trade opportunities, reports UNCTAD.http://www.unctad.org/Templates/webflyer.asp?docid=6895&intItemID=1397&lang=1

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EP focuses on fighting corruption in developing countries

''Corruption hurts the poor'': MEPs back report on development aid and the fight against corruption
MEPs have called for tougher measures in the fight against corruption and more effective EU aid. Noting that 25% of
Africa's GDP is lost annually to corruption, – the report calls on all EU members to implement the OECD and UN Conventions on corruption and for greater accountability and openness in EU aid programmes. Good governance, media freedom, developing budget capacity in developing countries and boosting civil society ''watchdogs'' are just some measures proposed
http://www.europarl.eu.int/news/

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Discussion: What events will make the most difference in changing the aid industry?

A new Development Gateway Members Forum discussion topic has been posted on the dgAid Effectiveness page: ''What Events Will Make the Most Difference in Changing the Aid Industry?'' Almost everyone–from aid donors to recipients–seems to agree that changes are needed in delivering overseas development assistance to make it more effective in reducing poverty. What events of the next year might make the most difference in making the system more effective?
Please add your comments to this important topic at http://topics.developmentgateway.org/aideffectiveness/

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dgCommunities Member Directory opened

The new Member Directory is up and running, and many of you have established your profiles! We are amazed at the diversity and caliber of the dgCommunities membership, and it is our privilege to serve your needs with online collaborative tools that make a difference. With over 30,000 registered dgCommunities members, the Member Directory provides a one-stop shop for key contacts and collaboration worldwide. We invite you to take advantage of this unprecedented collaborative tool and add your profile today! http://www.developmentgateway.org

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Venture capital goes global

Venture capital goes global
According to the findings of the 2005 Global Venture Capital survey undertaken jointly by Deloitte & Touche LLP and the National Venture Capital Association (published in January 2006), U.S.-based venture capitalists are planning to expand further their investments abroad. China and India are considered to be among the top destinations for international venture capital. The survey also finds that impediments to expanding abroad include lack of investment profile matches, intellectual property issues and potential difficulties in exiting markets. For non-U.S. venture capital investors, the United States is viewed as the most attractive destination.

http://www.deloitte.com

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Economic prospects for the world 2006

According to the World Economic Situation and Prospects (WESP), the world economy is expected to continue to grow at a rate of 3 per cent during 2006. The United States economy remains the main engine of global economic growth, but the growth of China,
India and a few other large developing economies is becoming increasingly important. On average, developing economies are expected to expand at a rate of 5.6 per cent and the economies in transition at 5.9 per cent, despite the fact that these economies may face larger challenges during 2006. The employment situation worldwide remains unsatisfactory. The slowdown in growth partly explains this. More importantly, though, employment creation is falling short of the increment in labour supply in the majority of countries. Driven by higher oil prices, inflation rates have edged up worldwide. Core inflation rates, which exclude the prices of energy and food, have been more stable, indicating that the pass-through of higher oil prices to overall inflation is limited. http://www.un.org/esa/policy/wess/wesp2006files/es_2006_english.pdf

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SADC-EU Trade Negotiations

SADC-EU Trade NegotiationsThe challenges of overlapping memberships of regional groupings are coming to the fore as African,
Caribbean and Pacific (ACP) countries seek a new economic partnership with the European Union (EU). As negotiations for an economic partnership agreement (EPA) swing into gear, regional groupings such as the Southern African Development Community (SADC) find themselves having to clear the first hurdle of how to deal with member states that also belong to other regional groupings. The 14-member SADC finds itself having to go into the negotiations as a depleted grouping. About six countries – who are members of both SADC and the Common Market for Eastern and Southern Africa (COMESA) – have broken ranks with SADC for purposes of the negotiations and are discussing with the EU under the Eastern and Southern Africa (ESA) banner. These are the Democratic Republic of Congo, Madagascar, Malawi, Mauritius, Zambia and
Zimbabwe. Only Angola, Botswana, Lesotho, Mozambique, Namibia,
Swaziland and the United Republic of Tanzania are negotiating as SADC.
South Africa participates only as an observer after having concluded its own trade agreement with the EU in the late 1990s. The challenges of overlapping membership are likely to weaken negotiating positions of SADC and COMESA. Complicating the situation will be the request by
South Africa for the EU to consider having a single SADC trade pact based on its own free trade deal with the Europeans. http://allafrica.com/stories/printable/200604210099.html

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Discussion: Employment Generation and Decent Work for All

Discussion: Employment Generation and Decent Work for AllThe ILO’s International Institute for Labour Studies (IILS) invites experts to participate in the E-forum on ‘‘Employment Generation and Decent Work for All’‘. The E-forum is meant to engage experts, civil society representatives and academia in informal discussions on this topic, in order to enrich the ECOSOC deliberations in July with the insights of a broader group of stakeholders. A summary of the e-Forum will be circulated among participants to the high-level segment, to be held in
Geneva from 03 to 05 July 2006. The Forum is scheduled from 18 May to 02 June 2006. To join the discussions, please send a blank email to employment-forum-subscribe@unicttaskforce.org. For more information, background reading and issues notes on the forum, please visit the website- http://www.un.org/docs/ecosoc/meetings/2006/hls2006/e-forum/

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U.N. adopts code of conduct for investments

In April 2006 the United Nations has quietly adopted a code of conduct for businesses worldwide to promote socially responsible investing. The ‘‘Principles for Responsible Investment’‘ provide a framework for avoiding investments in companies with poor records on pollution, labor relations or corporate governance. The voluntary guidelines encourage investors to seek disclosures from companies about whether their policies encourage socially responsible behavior among employees and management. Corporations also are asked to report on their progress in complying with the principles, which were developed in the past year by a group of international financiers organized by the UN. http://www.wpherald.com/storyview.php?StoryID=20060510-110203-4458r

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