ADB $500 Million Loan to Improve Public Expenditure Management, Reduce Inequality in Indonesia

The program will help promote more efficient public expenditures for better delivery of services such as education.

MANILA, PHILIPPINES (10 November 2016) — The Asian Development Bank (ADB) has approved a $500 million loan to help Indonesia manage and improve its fiscal and public expenditure management in support of ongoing efforts to reduce poverty and income inequality. 

“Improving public expenditure management is a key element of the Indonesian government’s drive to reduce poverty, with one in every ten people still living below the poverty line,” said Sona Shrestha, Deputy Country Director of ADB’s Indonesia Resident Mission. “This program will support better targeting of social protection programs and safeguard expenditure in education, health and infrastructure.”

Insufficient public spending and investment on health, education, and infrastructure have contributed to the widening of Indonesia’s income inequality over the past 15 years. This is due largely to weaknesses in the country’s public expenditure management system that have resulted in low quality public service delivery. 

The first subprogram of the Fiscal and Public Expenditure Management Program (FPEMP) will align the country’s medium-term spending with its national development plan as well as with targets under the Sustainable Development Goals. It will also support increased spending on health, infrastructure, and education, while also expanding coverage of national health insurance to include an additional 4 million beneficiaries among the poorest 40%.

FPEMP will also improve disbursement, reporting, and evaluation of public spending to ensure transparency and accountability for more efficient public services. The program continues ADB’s longstanding commitment to improve Indonesia’s public expenditure management, social protection, and fiscal and governance framework. 

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.

ADB

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Africa Climate Business Plan: Delivering on Climate Plan Promises

STORY HIGHLIGHTS

• A new progress report shows Cote d’Ivoire, Nigeria and several other African countries are successfully implementing climate resilience and low-carbon development recommendations outlined in the World Bank’s Africa Climate Business Plan

• The plan, unveiled during the COP21 climate change conference in Paris, provides concrete actions to help African countries adapt to climate change and build up resilience to climate shocks

• As of Nov 7, 2016, 19 countries in Sub-Saharan Africa have ratified the Paris Agreement for carbon offsetting, and $3.6 billion from the International Development Association has been mobilized to help further the plan’s implementation

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WASHINGTON, November 8, 2016 – Less than a year after the World Bank unveiled and began supporting implementation of its ambitious Africa Climate Business Plan (ACBP) during COP21 in Paris, African countries are beginning to show progress.

A new progress report on ACBP implementation, Accelerating Climate-Resilient and Low-Carbon Development, highlights the success African countries have had since the launch of the ACBP. As of November 7, 2016, 19 countries in Sub-Saharan Africa have ratified the Paris Agreement for carbon offsetting and 45 countries have committed to implement their Intended Nationally Determined Contributions (INDCs). The ACBP had identified various sources of potential financing for the implementation of activities aligned with the INDCs.

The report comes as country leaders, development organization representatives and climate change specialists gather in Marrakech this week for the start of the COP22 climate conference.

“It was fortunate that we launched the ACBP at COP21, where Africa was front and center. Morocco is now taking the baton from France to ensure continuity and renewed attention to the African continent at COP22. This is the time to scale up efforts to accelerate Africa’s climate-resilient, low-carbon development,” said Makhtar Diop, World Bank Vice President for Africa.

The Bank is doing its part to help securing financing for the plan, which outlines actions required to increase climate resilience and low carbon development. Implementation estimates that near-to-medium term implementation will cost about $19.3 billion to be raised by 2020. 

“We have mobilized $3.6 billion from IDA to implement the Business Plan, including projects already approved by our Board since Paris, and projects to be approved by the end of 2016,”  said Benoit Bosquet, Practice Manager for West Africa Environment and Natural Resources Group.

“The Business Plan is an ambitious and comprehensive plan,” he added. “Although the Plan’s full-scale rollout and implementation will take a few years to be completed, some achievements are already visible in resource mobilization and action on the ground.”

The Bank has been working with client countries, development partners, and the private sector to prepare programs and mobilize resources. Through a partnership with the African Group of Negotiators has helped countries sharpen Africa’s negotiating positions and spur climate action. The partnership resulted in strengthened capacity of the group to advocate in favor of climate action in Africa, and also in stronger country ownership of the ACBP. 

Bank experts, African leaders and development partners recently met to discuss the success of the plan’s advancement during the IMF/World Bank Annual Meetings in October. Ministers from Côte d'Ivoire and Nigeria shared progress from their countries and showcased specific and ongoing and planned initiatives.

Daniel Kablan Duncan, Prime Minister and Minister of Economy and Finance for Cote d’Ivoire, reiterated his country’s commitment to reduce greenhouse gas emissions to 28% by 2030, increase the country’s share of renewable energy and minimize deforestation and forest degradation through the implementation of a “zero deforestation agriculture.” He appealed to bilateral and multilateral partners to support Cote d’Ivoire in her efforts to implement the Paris Agreement. “I hope to see this historic Agreement come into force as early as possible in order to preserve our invaluable common good; the earth,” Duncan said.

Hon. Amina J. Mohammed, Nigeria’s Minister of Environment, spoke of Nigeria’s plans on how to turn their Intended Nationally Determined Contributions (INDC) from words to actions. “I think the fact that we are underscoring Africa and that individual countries are in the driving seat is really important,” she said. She further emphasized the importance of long-term partnerships and investments to address the challenges of climate change.

The ACBP progress report notes that with support from the Bank and development partners, African governments have made progress in many key areas of the plan, including the ocean economy, coastal protection, forests, landscapes, agriculture, migration, transport, water, and energy.

On the Ocean Economy, the Bank teamed up with the Government of Mauritius and organized an African Ministerial Conference on Ocean Economies and Climate Change, where 20 countries attended and endorsed the Mauritius Communiqué. This led to a financial and technical package with the African Development Bank and Food and Agriculture Organization, which will be submitted during  COP22.

Agriculture is a major economic driver in Africa. Climate-smart agriculture (CSA) practices, such as agroforestry or livestock and pasture management, can reduce greenhouse gas emissions intensity of agricultural production, as well as remove carbon from the atmosphere and store it in trees and soils. The Bank Board approved 11 projects, totaling $1.4 billion in IDA commitments, reaching more than 1.6 million farmers.

The Bank also remains committed to installing 1 GW of solar capacity by 2020. Bank teams are preparing a $200 million regional project to expand electricity access to households and communities through modern off-grid electricity services in nine target countries. Another $71 million is supporting an additional 280 MW in the Olkaria plants in Kenya for geothermal energy.

As part of their INDCs, countries such as DRC, Ethiopia, Burundi and others are receiving Bank support to achieve the goals of the African Forest Landscape Restoration Initiative, which will bring 100 million hectares of degraded and deforested land under restoration by 2030.

The World Bank

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Record Number of Economies Carried Out Business Reforms in Past Year: Doing Business

WASHINGTON, October 25, 2016 – A record 137 economies around the world have adopted key reforms that make it easier to start and operate small and medium-sized businesses, says Doing Business 2017: Equal Opportunity for All, the World Bank Group’s annual report on the ease of doing business.

The new report finds that developing countries carried out more than 75 percent of the 283 reforms in the past year, with Sub-Saharan Africa accounting for over one-quarter of all reforms.

In its global country rankings of business efficiency, Doing Business 2017 awarded its coveted top spot to New Zealand, Singapore ranks second, followed by Denmark; Hong Kong SAR, China; Republic of Korea; Norway; United Kingdom; United States; Sweden; and Former Yugoslav Republic of Macedonia.

The world’s top 10 improvers, based on reforms undertaken, are Brunei Darussalam; Kazakhstan; Kenya; Belarus; Indonesia; Serbia; Georgia; Pakistan; United Arab Emirates (UAE); and Bahrain.

The report cites research that demonstrates that better performance in Doing Business is, on average, associated with lower levels of income inequality, thereby reducing poverty and boosting shared prosperity.

“Simple rules that are easy to follow are a sign that a government treats its citizens with respect. They yield direct economic benefits – more entrepreneurship; more market opportunities for women; more adherence to the rule of law,” said Paul Romer, World Bank Chief Economist and Senior Vice President. “But we should also remember that being treated with respect is something that people value for its own sake and that a government that fails to treat its citizens this way will lose its ability to lead.”

Doing Business data points to continued successes in the ease of doing business worldwide, as governments increasingly take up key business reforms. Starting a new business now takes an average of 21 days worldwide, compared with 46 days 10 years ago. Paying taxes in the Philippines involved 48 payments 10 years ago, compared to 28 now and in Rwanda, the time to register a property transfer has dropped from 370 days a decade ago to 12 days now.

This year’s Doing Business adds gender measures to three indicators - Starting a Business, Registering Property and Enforcing Contracts - finding disparities in 38 economies. Of these, 23 economies impose more steps for married women than men to start a business. Sixteen limit women’s ability to own, use and transfer property. Doing Business finds that, in these economies, fewer women work in the private sector both as employers and employees.

The report also features expansions to the Paying Taxes indicator, to cover post-filing processes, such as tax refunds, tax audits and administrative tax appeals, to better understand the overall tax environment. Since 2004, when Doing Business started, a total of 443 reforms have been recorded under the Paying Taxes indicator, the second highest number of reforms, with 46 reforms implemented in the past year.

However, easing the requirements for Starting a Business is, by far, the most common area for reform, with almost 600 reforms recorded since 2004. Of these, 49 reforms were introduced during the past year.

“Government policy plays a huge role in the daily operations of domestic small and medium-sized firms and onerous regulation can divert the energies of entrepreneurs away from developing their businesses or innovating. This is why we collect the Doing Business data, to encourage regulation that is designed to be smart, efficient, accessible, and simple,” said Augusto Lopez-Claros, Director of the World Bank’s Global Indicators Group, which produces the report.

This year’s Doing Business report includes a pilot indicator on public procurement regulations. The report studies procurement in 78 economies across five main areas: accessibility and transparency, bid security, payment delays, incentives for small and medium enterprises and complaints mechanisms. Public procurement represents, on average, 10 to 25 percent of an economy’s GDP, making the procurement market a unique pool of business opportunities for the private sector.

By region, East Asia and the Pacific is home to two of the world’s top 10 ranked economies, Singapore and Hong Kong SAR, China, and two of the top 10 improvers, Brunei Darussalam and Indonesia. The pace of reforms picked up significantly in the past year, with the region’s economies implementing a total of 45 reforms to improve the ease of doing business.

The Europe and Central Asia region was also a major reformer during the past year, with Belarus, Georgia, Kazakhstan and Serbia amongst the world’s top 10 improvers. Europe and Central Asia has consistently been the region with the highest average number of reforms per economy and is now close to having the same good practices in place as the OECD high-income economies.

Business reform activity accelerated in Latin America and the Caribbean with over two-thirds of the region’s economies implementing a total of 32 reforms in the past year, compared with 24 reforms the previous year. The bulk of the reforms were aimed at improving tax payment systems, facilitating cross-border trade and starting a new business, with Brazil implementing the most reforms in the past year.

The Middle East and North Africa region saw the most reforms implemented in the past year since 2009, with 35 reforms in 15 of the region’s 20 economies. Among the reformers, the UAE and Bahrain were among the world’s top 10 improvers. However, the region features the greatest gender disparities, with 70 percent of the economies creating barriers for women entrepreneurs.

In South Asia, five of the region’s eight economies implemented a total of 11 reforms in the past year, compared with nine the previous year. Pakistan, which was among the world’s top 10 improvers, implemented several reforms this past year, as did India and Sri Lanka. The bulk of the business reform activity in the region was aimed at facilitating cross-border trade. However, Afghanistan and Pakistan, stipulate additional hurdles for women entrepreneurs.

Sub-Saharan Africa economies stepped up the pace of reform activity, with 37 economies undertaking a total of 80 business reforms in the past year, an increase of 14 percent from the previous year. For the second consecutive year, Kenya was among the world’s top 10 improvers, while seven economies implemented four or more reforms each in the past year. However, 13 economies in the region stipulate additional hurdles for women entrepreneurs.

“The overarching goal of Doing Business is to enable entrepreneurship, for women and men, particularly in low and middle income countries. That governments around the world are taking up the challenge of improving the business climate, to enable job creation, is worth celebrating and we look forward to continue recording the successes we have seen this past year in the years to come,” said Rita Ramalho, Manager of the Doing Business project.

The full report and accompanying datasets are available at www.doingbusiness.org

The World Bank

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Egypt’s Reforms Will Create Jobs and Promote Social Inclusion

CAIRO, November 4, 2016 - The World Bank welcomes Egypt’s recent economic and social reform measures including the floatation of the currency, measures to boost investment especially in Upper Egypt, adjusting energy prices to reflect market conditions, and strengthening the social safety net.

The package of reforms announced by the government would help create jobs and revitalize the economy. They would boost the competitiveness of Egyptian businesses, support export growth, attract new foreign investment, free public resources for priority growth and social programs, and support incomes for the poor and the vulnerable.

“This is an ambitious program of reforms with a strong focus on job creation and on social measures to support the incomes of the poor and the vulnerable,” said Dr. Asad Alam, World Bank Country Director for Egypt.  “In particular, we are pleased to support the government’s social protection efforts especially in the expansion of the Takaful program which already reaches about 4.5 million people in extreme poverty, new investments for job creation in Upper Egypt, as well as through labor intensive works for the youth and for women.”  

The World Bank

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MIGA Boosts Support for Foreign Investors in Sub-Saharan Africa

The World Bank

World Bank Group's Multilateral Investment Guarantee Agency Opens Regional Hub Office in Dakar, Senegal

DAKAR, Oct 27, 2016—With a rapidly growing portfolio in Sub-Saharan Africa currently amounting to US$4.4b, the World Bank Group's Multilateral Investment Guarantee Agency (MIGA) is further increasing its commitment to the continent by opening a new Regional Hub in Dakar, Senegal.

MIGA provides political risk insurance guarantees to private sector investors and lenders, protects investments against non-commercial risks, and helps investors obtain access to funding sources with improved financial terms and conditions.

MIGA's portfolio is currently growing most quickly in Africa among all regions, with over 40 percent of its guarantees being issued in the continent last fiscal year. And at present, almost a third of MIGA's global portfolio, consisting of 48 guarantee projects in 26 countries, are in Africa.

"There is no question that Africa is the region with the most potential for growth," said Keiko Honda, Executive Vice President and CEO of MIGA. "And in support of a global bid to unlock trillions of dollars towards development efforts, MIGA stands ready to strengthen private sector and foreign investor efforts in Africa."

In recent years, MIGA has provided guarantees in numerous sectors across the Region, including:
 

• Power generation: geothermal power in Kenya, hydropower in Angola and Ghana, and gas in Nigeria and Mozambique
• Urban transport and infrastructure: bridge construction in Cote d'Ivoire, upgrading port container terminals in Djibouti and Senegal
• Agriculture: agribusiness in Ethiopia and Zambia
   

​​​​"We are delighted that MIGA is opening a regional hub in Dakar," said Amadou Ba, Senegal's Minister of the Economy, Finance, and Planning. "We look forward to working more closely with MIGA as we did in the past by successfully attracting foreign investment in order to modernize the Port of Dakar. In addition, our position as an important gateway to Africa means more opportunities for both Senegal and Africa as a whole."

 

"By setting up a hub in Dakar, the entire World Bank Group can now work more closely with governments, investors and partners, while responding quickly to on-the-ground needs," added Louise Cord, Country Director for Senegal, Cape Verde, The Gambia, Guinea Bissau, and Mauritania. "It's a major step for MIGA and we are pleased to be strengthening our partnership in the field."

Looking ahead, the Regional Hub will focus its efforts on fragile states, and low-income countries. At present, MIGA's support in Sub-Saharan Africa to fragile states is $1.04b, and $3.11b for low-income countries. Helping governments attract foreign investment in climate change and renewable energy projects will also be a priority.

"MIGA's increased regional presence will help investors better leverage the range of World Bank Group products and services," said Vera Songwe, IFC Regional Director for West and Central Africa. "We look forward to working together to minimize investment risk and find more opportunities in African countries that most need private capital for development."

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Record Number of Economies Carried Out Business Reforms in Past Year: Doing Business

The World Bank

WASHINGTON, October 25, 2016 – A record 137 economies around the world have adopted key reforms that make it easier to start and operate small and medium-sized businesses, says Doing Business 2017: Equal Opportunity for All, the World Bank Group’s annual report on the ease of doing business.

The new report finds that developing countries carried out more than 75 percent of the 283 reforms in the past year, with Sub-Saharan Africa accounting for over one-quarter of all reforms.

In its global country rankings of business efficiency, Doing Business 2017 awarded its coveted top spot to New Zealand, Singapore ranks second, followed by Denmark; Hong Kong SAR, China; Republic of Korea; Norway; United Kingdom; United States; Sweden; and Former Yugoslav Republic of Macedonia.

The world’s top 10 improvers, based on reforms undertaken, are Brunei Darussalam; Kazakhstan; Kenya; Belarus; Indonesia; Serbia; Georgia; Pakistan; United Arab Emirates (UAE); and Bahrain.

The report cites research that demonstrates that better performance in Doing Business is, on average, associated with lower levels of income inequality, thereby reducing poverty and boosting shared prosperity.

“Simple rules that are easy to follow are a sign that a government treats its citizens with respect. They yield direct economic benefits – more entrepreneurship; more market opportunities for women; more adherence to the rule of law,” said Paul Romer, World Bank Chief Economist and Senior Vice President. “But we should also remember that being treated with respect is something that people value for its own sake and that a government that fails to treat its citizens this way will lose its ability to lead.”

Doing Business data points to continued successes in the ease of doing business worldwide, as governments increasingly take up key business reforms. Starting a new business now takes an average of 21 days worldwide, compared with 46 days 10 years ago. Paying taxes in the Philippines involved 48 payments 10 years ago, compared to 28 now and in Rwanda, the time to register a property transfer has dropped from 370 days a decade ago to 12 days now.

This year’s Doing Business adds gender measures to three indicators - Starting a Business, Registering Property and Enforcing Contracts - finding disparities in 38 economies. Of these, 23 economies impose more steps for married women than men to start a business. Sixteen limit women’s ability to own, use and transfer property. Doing Business finds that, in these economies, fewer women work in the private sector both as employers and employees.

The report also features expansions to the Paying Taxes indicator, to cover post-filing processes, such as tax refunds, tax audits and administrative tax appeals, to better understand the overall tax environment. Since 2004, when Doing Business started, a total of 443 reforms have been recorded under the Paying Taxes indicator, the second highest number of reforms, with 46 reforms implemented in the past year.

However, easing the requirements for Starting a Business is, by far, the most common area for reform, with almost 600 reforms recorded since 2004. Of these, 49 reforms were introduced during the past year.

“Government policy plays a huge role in the daily operations of domestic small and medium-sized firms and onerous regulation can divert the energies of entrepreneurs away from developing their businesses or innovating. This is why we collect the Doing Business data, to encourage regulation that is designed to be smart, efficient, accessible, and simple,” said Augusto Lopez-Claros, Director of the World Bank’s Global Indicators Group, which produces the report.

This year’s Doing Business report includes a pilot indicator on public procurement regulations. The report studies procurement in 78 economies across five main areas: accessibility and transparency, bid security, payment delays, incentives for small and medium enterprises and complaints mechanisms. Public procurement represents, on average, 10 to 25 percent of an economy’s GDP, making the procurement market a unique pool of business opportunities for the private sector.

By region, East Asia and the Pacific is home to two of the world’s top 10 ranked economies, Singapore and Hong Kong SAR, China, and two of the top 10 improvers, Brunei Darussalam and Indonesia. The pace of reforms picked up significantly in the past year, with the region’s economies implementing a total of 45 reforms to improve the ease of doing business.

The Europe and Central Asia region was also a major reformer during the past year, with Belarus, Georgia, Kazakhstan and Serbia amongst the world’s top 10 improvers. Europe and Central Asia has consistently been the region with the highest average number of reforms per economy and is now close to having the same good practices in place as the OECD high-income economies.

Business reform activity accelerated in Latin America and the Caribbean with over two-thirds of the region’s economies implementing a total of 32 reforms in the past year, compared with 24 reforms the previous year. The bulk of the reforms were aimed at improving tax payment systems, facilitating cross-border trade and starting a new business, with Brazil implementing the most reforms in the past year.

The Middle East and North Africa region saw the most reforms implemented in the past year since 2009, with 35 reforms in 15 of the region’s 20 economies. Among the reformers, the UAE and Bahrain were among the world’s top 10 improvers. However, the region features the greatest gender disparities, with 70 percent of the economies creating barriers for women entrepreneurs.

In South Asia, five of the region’s eight economies implemented a total of 11 reforms in the past year, compared with nine the previous year. Pakistan, which was among the world’s top 10 improvers, implemented several reforms this past year, as did India and Sri Lanka. The bulk of the business reform activity in the region was aimed at facilitating cross-border trade. However, Afghanistan and Pakistan, stipulate additional hurdles for women entrepreneurs.

Sub-Saharan Africa economies stepped up the pace of reform activity, with 37 economies undertaking a total of 80 business reforms in the past year, an increase of 14 percent from the previous year. For the second consecutive year, Kenya was among the world’s top 10 improvers, while seven economies implemented four or more reforms each in the past year. However, 13 economies in the region stipulate additional hurdles for women entrepreneurs.

“The overarching goal of Doing Business is to enable entrepreneurship, for women and men, particularly in low and middle income countries. That governments around the world are taking up the challenge of improving the business climate, to enable job creation, is worth celebrating and we look forward to continue recording the successes we have seen this past year in the years to come,” said Rita Ramalho, Manager of the Doing Business project.

The full report and accompanying datasets are available at www.doingbusiness.org

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World Bank Doing Business report finds high rates of gender discrimination

DEVEX
Sophie Edwards 

A portrait of Salma Salifu, managing director of Dignity DTRT Apparel in Accra, Ghana. Photo by: Dominic Chavez / World Bank / CC BY-NC-ND

A record 137 countries have removed red tape and made it easier to set up and run businesses in their territories, a new World Bank report has revealed. But the report also found women entrepreneurs are discriminated against in many places across the world.

The finding comes from the latest World Bank Doing Business report, which ranks countries based on how easy it is for private sector companies to start, operate and expand.

The new study, dubbed “Doing Business 2017: Equal Opportunity for All,” points to an overall increase in the number of countries adopting business efficiency reforms, of which 75 percent were in developing countries.

However, the report also finds evidence of gender discrimination: 23 countries impose more steps for married women than men to start a business; 16 countries limit women’s ability to own, use and transfer property; and 17 countries do not place the same weight on a woman’s testimony as a man’s in the civil courts.

The Middle East and North Africa performed especially poorly on gender measures, with 70 percent of the region’s economies discriminating against women. For example, a married woman in Saudi Arabia is required by law to hire a man to manage her business.

Women in Afghanistan and Pakistan also faced additional legal challenges over men, with married women in Afghanistan needing to obtain permission to leave the home prior to registering a company.

The report also found that 13 countries in sub-Saharan Africa imposed additional restrictions on women. For example, women in Cameroon, Benin and Guinea-Bissau are required to take extra steps to register their business compared with men.

This is the first time the Doing Business report, which comes out annually, has included a gender dimension in three indicators: starting a business, registering property and enforcing contracts.

The World Bank produces its rankings by looking at each country’s business regulations and measuring these against a set of 11 indicators, including the time it takes to start a new business, paying taxes, and the time taken to register for a property transfer.

This year, New Zealand topped the rankings followed by Singapore, Denmark and Hong Kong. The U.K. and the U.S. came seventh and eighth, respectively.

Kenya, Indonesia and Pakistan made the top 10 improvers list. Kenya, which was ranked 92 overall, implemented reforms in five areas.

“Simple rules that are easy to follow are a sign that a government treats its citizens with respect. They yield direct economic benefits — more entrepreneurship; more market opportunities for women; more adherence to the rule of law,” said Paul Romer, World Bank chief economist and senior vice president.

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World Vision responds to families fleeing outskirts of Mosul

World Vision

World Vision is one of the first agencies to start supporting children at a new camp just 25km (15 miles) from Mosul, as a military offensive to re-take the city continues.

Child protection staff are creating safe spaces for children in the recently-constructed Zelican camp, north-east of Mosul.

The new camp comes as a military operation, announced a week ago, advances towards the city. Aid agencies fear that up to a million people could flee the fighting.

Aaron Moore, Head of Programmes for World Vision in northern Iraq, says, “Our child-friendly spaces provide a safe place for children to come to terms with the violence they’ve seen, and just take time to play as children again amidst the chaos of this conflict.

“We can only imagine the difficult journeys they’ve made and the horrors they’ve seen on the way. In most cases, they have nothing; they will be tired, hungry, thirsty and in need of food, water and somewhere to sleep.

"Our main concern at this point is the safe passage of children and their families out of Mosul and surrounding areas.”

World Vision’s response work also provides clean water, showers and toilets, hygiene kits, and basic household items like cooking stoves.

The aid agency is already responding to the needs of hundreds of thousands of people who fled Mosul when it was first taken by ISIL in June 2014.

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Improved Fiscal Management Strengthens Indonesia’s Economic Resilience: World Bank

The World Bank

Jakarta, October 25, 2016: Improved fiscal management is supporting GDP growth in Indonesia, projected at 5.1 percent for 2016, according to a new World Bank report.

But external risks such as weaker than expected global growth and volatility in global financial markets pose downside risks to Southeast Asia’s largest economy, says the October 2016 edition of the Indonesia Economic Quarterly (IEQ).

Higher than previously estimated revenue from the tax amnesty program has eased fiscal risks, along with adjustments to government expenditures. The amnesty program collected 56.6 percent of its target by the end of phase 1. This additional revenue is expected to raise capital spending and hence have a positive impact on growth. 

“Improved fiscal management, sounder public policy and structural reforms, including timely responses on food prices, are yielding positive outcomes. Risks have declined and some indicators improved. Looking forward, we are optimistic that ongoing efforts to develop tourism and manufacturing will result in more jobs, boost export earnings, and further support growth,” said Rodrigo Chaves, World Bank Country Director for Indonesia. 

Growth resilience and policy reforms have advanced efforts to reduce poverty. Indonesia’s poverty rate fell by 0.4 percentage points in the first quarter of 2016, marking the biggest year-on-year decline in the last three years. Policies that have contributed to the decline include; efforts to stabilize rice prices (including management of rice imports and market operations by the Bureau of Logistics), and the expansion of social assistance programs such as the Family Hope conditional cash transfer program. The program’s recent expansion to 3.5 million households has contributed nearly one-third of the total observed poverty decline.

Furthermore, the Gini coefficient – a measure of inequality – fell by 1.1 points to 39.7. Although this inequality remains high, the decline was the largest annual drop since the Asian financial crisis of 1997-1998. 

The IEQ also highlights the potential of Indonesia’s tourism sector to unlock private investment, create jobs, boost export earnings, and promote targeted infrastructure investment programs in tourism destinations.

“Indonesia has the potential to develop a world-class tourism industry” said Ndiame Diop, the World Bank’s Practice Manager for Macroeconomics and Fiscal Management in South East Asia and the Pacific. “But tourism destinations need much more infrastructure development, and results require better coordination between government agencies and the private sector.”

The Ministry of Tourism has set a target of attracting US$10 billion in private investment for 10 tourist destinations by the year 2019. According to the World Travel and Tourism Council, every US$1 million travel and tourism spending in Indonesia supports 200 jobs.

This edition of the IEQ, entitled Pressures Easing, also analyzes access to water, sanitation and hygiene services in Indonesia, and its importance in improving indicators for health and nutrition. Poor access to basic sanitation services has contributed to the high rate of stunting in Indonesia, where about 1 in 3 children under 5 years of age are stunted, or suffering low height for their age.

In addition, the report looks at food security policies (including the impact of government subsidies for farming products), and an evaluation of Indonesia’s teacher certification program which shows that increased teacher qualifications are not enough to improve student learning outcomes.

The quarterly reports, now in its 6th year of production, are produced with support from the Australian Government.

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Government of India and World Bank Sign $650 Million Agreement for the Eastern Dedicated Freight Corridor Project

The World Bank

The Eastern Corridor is 1,840 km long and extends from Ludhiana to Kolkata. The World Bank is supporting the Eastern Dedicated Freight Corridor (EDFC) as a series of projects in which the three sections with a total route length of 1,193 km will be delivered sequentially, but with considerable overlap in their construction schedules. EDFC 3, approved by the Board on June 30, 2016, will build the 401 km Ludhiana–Khurja section which goes through Punjab, Haryana and Uttar Pradesh. The project will help increase the capacity of these freight-only lines by raising the axle-load limit from 22.9 to 25 ton axle-load (upgradable to 32.5 ton axle loads) and enable speeds of up to 100 km/hr. The DFC lines are being built to carry bulk freight trains of 6,000 to 12,000 gross tons. The project is also developing the institutional capacity of the DFCCIL to build and maintain the DFC infrastructure network.

“The objective of the EDFC project is to augment railway freight carrying capacity along the Railway Corridor between Ludhiana and Kolkata.  The project will benefit industries of Northern and Eastern India, which rely on railway network for transportation of material inputs and exports that would accelerate creation of jobs in the northern and eastern regions of the country,” said Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance. 

The first loan of $975 million for the 343 km Khurja-Kanpur section in the EDFC program was approved by the World Bank Board in May 2011 and is already under implementation. The project has already awarded contracts worth Rs 5500 crore. The second loan of $1.1 billion for the 402 km Kanpur-Mughalsarai section was approved by the World Bank Board in April 2014 and is in the implementation phase. The major contracts for civil works and systems has been awarded with a total value of Rs, 6300 crore.

“Implementing the Dedicated Freight Corridor program will provide India the opportunity to create one of the world’s largest freight operations. The corridor, which will pass through states like Uttar Pradesh, will benefit from the new rail infrastructure, bringing jobs and much-needed development to some of India’s poorest regions,” said Hisham Abdo, Operations Manager and Acting Country Director, World Bank India. “Moving freight from road to rail will reduce the carbon footprint of freight,” he added.

The EDFC is part of India’s first Dedicated Freight Corridor (DFC) initiative – being built on two main routes – the Western and the Eastern Corridors. These corridors will help India make a quantum leap in increasing the railways’ transportation capacity by building high-capacity, higher-speed dedicated freight corridors along the Golden Quadrilateral. Currently, the rail routes that form a Golden Quadrilateral connecting Delhi, Mumbai, Chennai and Kolkata, account for 16 percent of the railway network’s route length, but carry more than 60 percent of India’s total rail freight.

Augmenting its transport systems is a crucial element of India’s trillion-dollar infrastructure agenda. Since the 1990s, road transport has advanced more rapidly than the railways, and now accounts for about 65 percent of the freight market and 90 percent of the passenger market in India, and those shares are growing.

“The Indian Railways urgently needs to add freight routes to meet the growing freight traffic in India, which is projected to increase more than 7 percent annually. These freight lines will wholly transform the capacity, productivity, and service performance of India’s busiest rail freight corridors. At completion, it will be able to more than double its capacity to carry freight, with faster transit times, being more reliable and at lower cost,” said Ben L. J. Eijbergen, Program Leader, Economic Integration and the Task Team Leader for the Project.

Significant Green Impact: In addition to the efficiency improvement and other operational benefits, the project is expected to bring in significant reductions in Green House Gas (GHG) emissions. 

A Green House Gas Emission Analysis was conducted by DFCCIL for the Eastern DFC Project. The analysis shows that the Eastern corridor is expected to generate about 10.48 million tons of GHG emissions up to 2041-42, as against 23.29 million of GHG emissions in the absence of EDFC – a 55 percent reduction in GHG emissions.

Economic opportunities are also being explored along the freight corridor. The government is planning to set up integrated manufacturing clusters using EDFC as the backbone. These clusters will be set up with an investment of about $1 billion on either side of EDFC.  

The loan, from the International Bank for Reconstruction and Development (IBRD), has a 7-year grace period, and a maturity of 22 years.

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Building Urban Resilience by Empowering Communities

The World Bank

Residents affected by Typhoon Haiyan (Yolanda) carry on with their daily activities on July 13, 2014, eight months after the super typhoon destroyed lives, livelihoods and property, and swept ships on the shores of Tacloban city, Philippines.

STORY HIGHLIGHTS

• In a rapidly urbanizing world, cities are increasingly prone to natural hazards and climate shocks.

• The Habitat III conference is an opportunity for national and city leaders to discuss ways to make cities and communities more resilient to these hazards and shocks.

• One way that the World Bank has helped is through community-driven development (CDD), an approach that gives control over planning decisions and investment resources to community groups and local governments.

 

Every year, the warm waters of the Pacific and Atlantic Oceans give rise to typhoons, hurricanes, and other tropical storms that routinely batter the islands and coasts of the Asia-Pacific and the Caribbean. Hurricane Sandy, Typhoon Haiyan, and now Hurricane Matthew are just some of the storms that have destroyed homes and affected lives across these regions in the past decade. Even as the storms move on, recovering from the aftermath can take years.

Urban areas are especially prone to these natural hazards, and combined with the fact that people increasingly live in urban areas—with a projected 6 billion by 2045—the potential for devastation will only continue to grow. By 2030, without significant investment to improve the resilience of cities around the world, climate change may push up to 77 million urban residents into poverty, according to Investing in Urban Resilience, a new report by the World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR).

This October, as national and city leaders convene in Quito, Ecuador for the thirdUnited Nations Conference on Housing and Sustainable Urban Development, or Habitat III, these recent disasters should weigh heavily on their minds: How can we build cities and communities in a way that makes them more resilient to climate change and natural hazards?

One way that the World Bank has helped is through community-driven development (CDD), an approach that gives control over planning decisions and investment resources to community groups and local governments.

CDD’s bottom-up approach offers unique advantages for building urban resilience. CDD projects build upon the communities’ own resources, solidarity, and skills. By directly providing communities with funds and engaging them in development decisions, CDD programs can tap local knowledge and expertise as well as local understanding of risk, reducing loss of life and economic impacts from disasters.

“Organized communities have their own expertise in managing risk based on their lived experience,” says Margaret Arnold, Senior Social Development Specialist at the World Bank. “To better understand and reduce the risks they face, it is crucial to recognize and support their expertise, and help to foster constructive relationships between communities and their local and national authorities.”

In countries such as Bangladesh, Haiti, and Indonesia, many CDD programs have started as pilot operations but later expanded at regional or national levels. For example, Indonesia has the world’s largest ongoing CDD program, active in more than 70,000 villages and urban wards across the country. With these programs operating nationally, they can be quickly repurposed to meet the challenges of post-disaster recovery or help build up community resilience before hazards strike.  

Some World Bank projects that work to build urban resilience by empowering communities include:

• In Bangladesh, the Low-Income Community Housing Support Project aims to improve shelter and living conditions in selected low-income and informal settlements. The project worked with the country’s National Housing Authority on alternative building standards that struck a balance between necessary standards for safety and mitigation of disaster risks, such as cyclones and floods, and what was realistic for high-density, low-income communities. These new standards helped ensure safety for poor urban communities.
• In Haiti, the Urban Community-Driven Development Project (PRODEPUR) works to build political stability and restore basic services in neighborhoods with high levels of violence and crime across five municipalities by empowering community-based organizations to implement and maintain subprojects. In response to the January 2010 earthquake, the project immediately prioritized cash-for-work subprojects that addressed the disaster recovery needs of communities—for example, subprojects on debris removal and drainage ditch cleaning that provided temporary jobs to over 5,000 people, and housing repair and reconstruction that benefitted approximately 24,800 urban households.
• In the Philippines, Improving Livelihood Opportunities for Vulnerable Urban Communities was a pilot CDD project that aimed to improve livelihoods for about 3,750 households in poor urban communities. The selected communities were the ones in and around Manila most affected by floods from the 2009 typhoon season. The communities invested in subprojects related to livelihoods, assisted in post-disaster economic recovery, and constructed new lined canals and drainage structures that could better cope with flooding.
• In Indonesia, the National Program for Community Empowerment in Urban Areas Project (PNPM-Urban) provides grants and technical support to improve basic infrastructure and social services for 30 million urban residents across 11,000 urban wards (kelurahan). Supported by GFDRR, the program has a focus on disaster response, which serves as a central part of the national government’s post-disaster recovery strategy. Previous urban CDD programs in Indonesia have also proven effective in emergency response, such as reconstruction efforts following the 2004 Indian Ocean tsunami and the 2006 Yogyakarta earthquake.

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ADB President Urges Pakistan to Stay on Course with Economic Reforms to Preserve Gains

ADB

ADB President Takehiko Nakao meeting with Pakistan Prime Minister Mian Muhammad Nawaz Sharif in Islamabad. 

ISLAMABAD, PAKISTAN – Asian Development Bank (ADB) President Takehiko Nakao today met with Pakistan Prime Minister Mian Muhammad Nawaz Sharif to discuss the government’s development priorities and ADB’s partnership with Pakistan. Mr. Nakao conveyed his deepest condolences to the people of Pakistan for the tragic incident that happened in Quetta last night.

The meeting came on the opening morning of a 2-day visit to Pakistan. The ADB President also met with the Finance Minister and ADB Governor, Senator Ishaq Dar, and later with the Governor of the State Bank, Ashraf Mahmood Wathra, along with chiefs of some of Pakistan’s large commercial banks, for a session on infrastructure finance, including the potential for Islamic finance. 

He also had a chance to meet with International Monetary Fund (IMF) Managing Director Christine Lagarde, who was visiting the country.

Tomorrow, Mr. Nakao will give a Special Address at the opening of the Central Asia Regional Economic Cooperation Program (CAREC) 15th Ministerial Conference in Islamabad.

In his meetings, the ADB President noted recent improvements in Pakistan’s macroeconomic performance. Higher external inflows have led to an increase in foreign exchange reserves and a pickup in gross domestic product growth, which is estimated at 4.7% in 2016 and 5.2% in 2017. The country has significantly strengthened macroeconomic fundamentals. Inflation has been brought down to low single digits, and the budget deficit has been markedly reduced. 

Pakistan graduated from a three-year-IMF program in September 2016 under which the country has also taken major strides on comprehensive structural reforms. A tax reform initiative has just begun to improve revenue performance and there has also been progress in public enterprise reform, business climate improvements, and restructuring of the power sector, supported also by ADB and the World Bank.

“While there are still key challenges to be addressed, I am highly encouraged by the government’s resolve to stay on course with structural reforms to reduce the fiscal deficit and contain inflation to boost growth,” he said. “Continued progress depends on addressing remaining issues such as governance and security, reviving the agriculture sector, and increasing exports.” 

Under an ADB country partnership strategy (CPS) 2015-2019 endorsed in August 2015, ADB will support the government’s priorities focusing on infrastructure upgrades and institutional reforms. Sovereign finance for the last three years 2013-2015 was on average $1.5 billion. 

Six sectors are targeted under the CPS—energy; transport; agriculture, natural resources and rural development; water and other urban infrastructure and services; public sector management; and finance. The assistance for 2016 will amount to about $1.46 billion, of which $737 million has already been approved for projects in energy, irrigation, public sector enterprise reform, flood protection, and highways, among others. This is complemented by more than $360 million of cofinancing from bilateral and multilateral sources including funding for the M4 motorway with the Asian Infrastructure Investment Bank and the UK Department for International Development.

ADB is ready to consider increasing its support for continued reform and development efforts of the country.

Projects in the energy sector comprise over half the ADB assistance to Pakistan. In 2015, ADB approved loan assistance of nearly $1.4 billion for two energy sector programs. Out of this the first tranche of $400 million for a multitranche financing facility will help introduce an advanced electricity metering system for power distribution companies, while assistance of $400 million will give budget support to reform policy and build an affordable and secure energy sector. 

ADB is also helping to decongest Pakistan’s overburdened transport systems, upgrading highways and provincial roads to position the country as a future regional trading hub. Under the CAREC framework, ADB is working with Pakistan to expand its key north–south highway network to help boost the country’s trade and connectivity with other CAREC member countries. 

In the social sector, ADB is assisting the Benazir Income Support Programme in reaching out to women beneficiaries through a cash transfer program of $430 million that was approved in 2013. It is helping Pakistan extend income support to poor families and the country’s most vulnerable groups.

Complimenting ADB’s sovereign operations are its nonsovereign operations, providing assistance through guarantees, equity investments, and its ongoing Trade Finance Program (TFP). Private sector operations in Pakistan focus on boosting the supply of electricity based on domestic sources (hydro, gas, wind, and solar), power reforms, and energy security. ADB’s TFP fills market gaps by providing guarantees and loans through partner banks in support of trade.

To facilitate greater private sector participation in the country’s public service delivery and infrastructure development, ADB is preparing public-private partnership (PPP) projects for Sindh and Punjab for approval this year. ADB and the Government are also negotiating a framework agreement for delivery of transaction advisory services starting from 2016. 

Pakistan is a founding member of ADB. As of September 2016, ADB had provided $27.3 billion of sovereign and $1.0 billion of non-sovereign assistance to Pakistan.

During the day, Mr. Nakao will open a photo exhibit commemorating 50 years of ADB’s partnership with the country. 

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.

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Central Asian Countries Identify $94 Billion Energy Investment Needs to 2023

ADB

ISLAMABAD, PAKISTAN – Central Asian countries have identified power investment needs of about $94 billion to 2023, according to an Asian Development Bank (ADB)-commissioned study presented at an energy forum today in Islamabad. Further, the financing gap that the private sector has to fill in the same period amounts to about $38 billion.

The findings were presented at the 1st Energy Investment Forum (EIF) of the Central Asia Regional Economic Cooperation (CAREC). In preparation for the EIF, ADB commissioned a study to identify specific opportunities for private investment in Central Asian countries. 

“Energy is a key component for achieving broad-based and sustainable economic development for not only the CAREC countries but the entire Asia and Pacific region,” ADB Vice-President Wencai Zhang said in opening remarks. “In order to ensure a secure supply of energy, a substantial amount of investments will be needed over the next 20 to 30 years.”

The EIF was held to highlight investment opportunities in the CAREC region by bringing together key government officials, project developers/sponsors, project financiers, equipment manufacturers, and engineering, procurement, and construction contractors. More than 150 high-level government officials and business leaders from 10 countries attended. 

The main topics discussed included how to introduce policies and incentives in CAREC member countries that support investments in the energy sector. Participants shared experiences on successful investments in the CAREC countries, with selected case studies in CAREC member countries, including Pakistan. They also discussed how development funding can be used to systematically address investment risks and encourage private sector participation in energy projects.

The event was organized by ADB and the Private Power Infrastructure Board of Pakistan.

The CAREC Program is a partnership of 10 countries (Afghanistan, Azerbaijan, the People's Republic of China, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan), supported by 6 multilateral institutions, working together to promote development through cooperation. Georgia is set to be admitted as the 11 member. CAREC helps Central Asia and its neighbors realize their significant potential by promoting regional cooperation in four priority areas: transport, trade facilitation, energy, and trade policy.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.

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