The inaugural meeting of Afghanistan’s Parliamentary Business Caucus
By CIPE Kabul Staff
On November 16, CIPE capped off over two years of work by organizing the inaugural meeting of Afghanistan’s Parliamentary Business Caucus. This new body will be a platform to focus on economic policymaking, promoting investment, creating jobs and promoting the rule of law and good governance in the country. The meeting, held at the Serena Hotel in Kabul, brought together 18 Members of Parliament (MPs) and eight representatives of leading business associations to discuss issues of concern to the business community, and ways in which the private sector and MPs can work together to make sure that Afghanistan passes key legislation to spur private sector development.
Attendees included Mirwais Yasini, First Deputy Speaker of the Parliament, Sayed Ikram, First Secretary of the Parliament, Mir Rahman Rahmani, Chairman of the Economic Commission of the Parliament, and MP Ramazan Jumazada. Private sector participants represented FACT, the Afghan Builders’ Association, the Industrialists’ Association, the Fruit Exporters’ Association, the Carpet Exporters’ Guild, the Afghan Chamber, and the Peace Through Business Network – a new women’s association.
CIPE Deputy Director for Strategic Planning and Programs Andrew Wilson offered welcoming remarks, congratulated the participants on the successful launch of the Business Caucus. He remarked that “The promotion of the private sector is critical for creating employment opportunities, economic growth and the development of Afghanistan.” He also affirmed CIPE’s support for, and cooperation with, the Business Caucus. CIPE Kabul staff – Mohammad Nasib, Mohammad Naim, and Ibrahim Hassan – served as moderators, and talked about CIPE-supported National Business Agenda (NBA) and the effort to create the Caucus.
By Andrew Wilson and Marc Schleifer
Last month in Karachi, CIPE’s Deputy Director for Strategic Planning and Programs Andrew Wilson and Pakistan Country Director Moin Fudda took part in a conference organized by the Pakistan Institute for Corporate Governance, together with CIPE and the Association of Chartered Accountants, on the corporate governance implications of concentrated ownership in listed firms. Wilson was invited to give the keynote address and provide an international perspective at this event, which received coverage by the local press in Pakistan. To help spur discussion, we wanted to share Wilson’s remarks on the CIPE blog, since concentrated ownership is an issue that firms, shareholders and regulators grapple with worldwide.
Some of the basic theories of corporate governance start with an idealized picture of a firm with widely dispersed ownership, but in practice, the theoretical model of diffuse ownership faces problems. When a company is owned by numerous small shareholders, it can be difficult for them to get information about the firm’s operations, meaning that a great deal of the real control rests with management; the principal-agent problem arises and company performance can suffer, to the detriment of the owners (the shareholders). This would seem to argue in favor of a more concentrated ownership system, and in fact, around the world we see that diffuse ownership is indeed the exception, not the rule.
In most countries, the dominant organizational form is concentrated ownership, with control of most firms either in the hands of a family, a larger holding company, major institutional investors, or in some cases the state. This is true even in developed economies with robust capital markets and a high level of private ownership, where individual listed corporations are often part of a complex network of international or domestic holdings, which themselves in turn may or may not be listed. There are various reasons why this might be the case.
by Laura Boyette and Teodora Mihaylova
How effective is the current global development agenda? What needs to be done differently going forward? How can we set goals that are more attainable and sustainable?
In 2000, at the dawn of a new millennium, the United Nations laid out an ambitious global development agenda known as the Millennium Development Goals (MDGs), which seeks to resolve some of the most pressing international challenges of our time: eradicating extreme poverty and hunger, achieving universal primary education, promoting gender equality, improving maternal health, reducing child mortality and promoting environmental sustainability, among others. Happily, the world has made some exciting progress toward achieving these goals.
The MDGs will expire on December 31, 2015 and a new set of principles will replace them. In order to face these new challenges, the United Nations once again created a panel to debate the needs that face our world post-2015. In May of 2013, the panel released their report.
At a recent talk at Georgetown University, Chair of the Center for American Progress John Podesta argued that five fundamental shifts have taken place since the inception of the current standards in 2000.