A new paper on financial access from researchers at the Bill and Melinda Gates Foundation details the regulatory challenge of new banking models. Every new model to broaden access to financial services is a new challenge for regulatory reform. Taking on that challenge goes beyond helping finance serve the poor; it also reduces the possibility of another financial crisis like the world has seen over the past few years.
As the world continues to slowly and painfully recover from the economic recession the dominant question is, without fiscal stimulus, what policies can stave off a double-dip recession? The G-20 is trying to address such predicament as well as global governance in a world that is in need of better coordination on international politics. While the G-20 is not what it could be, their meetings provide clues to their concept of global politics and its implications. The group’s recent conference in Busan, South Korea was followed by a communiqué containing two key points.
The global financial crisis in West Africa, despite being less severe or immediate than in the U.S. or Europe, has affected local economies, governments, and citizens alike. In this Feature Service article, Dr. Charles Mensa, founder and chairman of The Institute of Economic Affairs (IEA) in Ghana, talks about that impact and how to recover from the crisis. West African governments and the private sector must work together. The essence of such public-private partnerships is to figure out solutions to common problems through building strong organizational relationships, not just personal contacts. By cooperating in that way, businesses and governments can become partners in building a brighter economic and democratic future.
Article at a Glance
- Although the global financial crisis has not been as severe in West Africa as in the United States or Europe, it does have an effect on remittances, manufacturing, and financing for business.
- The crisis has not undermined the basic confidence of West Africans in democracy and market economy but it has highlighted the need for stronger governments.
- Stronger government does not equal strongman rule or too much control over the economy; it means strong institutions that can make democracy deliver regardless of who is in power.
There are roughly 26 million registered firms in the United States. Only six million of them have employees and less than 650,000 firms employ more than 20 people. A scant 18,000 firms employ more than 500 people. Small firms in the U.S. are often touted as the engine of economic growth and job creation – in the U.S. they produce 69 percent of new jobs. Firms less than five years old were responsible for nearly all net job creation from 1980-2005. Today, somewhere between 30 -40 percent of U.S. GDP comes from firms that did not exist in 1980. Small firms don’t always stay small; between 1982 and 2006, about 40 firms a year were knocked out of the Fortune 500, replaced by fast-growing younger firms.
Despite the H1N1 fears, the majority of those that registered for the conference were in Kyiv today. We were very glad to welcome about 70 people from 20 countries this morning. Today was quite exciting with three panels engaged in very lively discussions on lessons from successful and unsuccessful transition, anti-corruption strategies, and corporate governance.
John Sullivan, CIPE executive director, set the tone for the two days with the remark that each country travels its own path; it is important that the reform process is built up from the grassroots to identify issues that are important locally and turn them into an agenda for reform.
Reflecting upon the challenges to democracy in the face of economic crisis, Vidar Helgesen, Secretary-General of the International Institute for Democracy and Electoral Assistance (International IDEA), highlights an important distinction between faith in democracy as an aspiration, and trust in democracy as a conviction based on the experience of democracy and its effective delivery. He says,
We witnessed a deep faith in democracy as tens of thousands of young people filled the streets of Tehran a couple of months ago. Yet, trust in democracy – particularly if measured by the popular rating of institutions such as political parties and parliaments, including in long-standing democracies of the North – is shorter in supply. Whatever the reason, trust has probably been further eroded by the financial crisis as millions lost their jobs and their homes.
They’re all making strides in corporate governance. In the recent issue of Corporate Governance Trends, a quarterly CIPE publication, you’ll read about new tools for family-owned businesses in Lebanon to implement corporate governance, a private sector-driven initiative to create the Corporate Governance Code in Algeria, and a successful program in the Philippines using scorecards to rank companies’ corporate governance performance. Even in these uncertain times, CIPE partners continue to move forward in their efforts to create better business environments and promote good governance. With the global downturn on everyone’s mind, we’ve also included an interview with CIPE Executive Director John D. Sullivan about the importance of good governance as a response to the economic crisis. The publication is available in Arabic, French, and English.