Tag Archives: private sector

Private Sector Plays Crucial Role in Improving Public Services in Arab Nations

Electricity workers repair cables in Sidon, Lebanon (via The Daily Star/Mohammed Zaatari)

When governments have exclusive control over the provision of goods and services, citizens are trapped without an alternative. Because the state monopolizes the entire market, there is no competition to ensure fair prices, sufficient quality, and satisfactory customer service. Taxpayer money is poured into government services, ostensibly to improve their quality, yet private citizens rarely see improvements. For example, many homes and businesses in Lebanon lose power for hours on a daily basis. Public servants are similarly inefficient, making basic bureaucratic procedures a nightmare.

The Lebanese Institute for Market Studies (LIMS), an independent economic think tank in Beirut, advocates for the implementation of free-market economic policies in Lebanon. LIMS’ current work focuses on the government’s inability to reliably provide electricity throughout the country. With CIPE’s support, LIMS launched a campaign to create awareness of the need to repeal the electricity subsidy, stop government investment in the sector, and open the sector to private competition. As a result of LIMS’ advocacy efforts, the Lebanese government announced in February that it would repeal the electricity subsidy this year. The government also announced in June that it decided not to lease Turkish power-generating ships after Lebanese officials discovered bidding process irregularities. These decisions represent progress towards LIMS’ reform objectives.

Read More…

Associations Play an Important Role in Improving Ukraine’s Business Climate

CIPE expert Nataliia Kobylchak (left) and Mykolaiv coalition member Iryna Yerofeyeva (right) at CIPE’s M-Test training in Mykolaiv, Ukraine.

By Nataliya Zhuhay and Caroline Elkin

As in any state ruled by law, local government officials in Ukraine are obligated to work within the framework of existing laws when developing regulations. But in practice, the regulations they create often act as obstacles for entrepreneurs to run their businesses. These flawed regulations can be poorly written, full of holes that corrupt officials can exploit, or do not correspond to existing laws. Until recently, such regulations did not take into account the costs they imposed, for example, on the café owner who wants to open a summertime terrace—or for that matter, any other basic entrepreneurial activity.

In December 2015, Ukraine’s Cabinet of Ministers adopted a resolution requiring all legislators to calculate the cost of implementing regulations for small businesses. This procedure is known as the M-Test. Although the resolution seems to represent a victory for Ukrainian business owners, many challenges remain. First, previously adopted regulations are not subject to the M-Test. Secondly, officials are not required to examine existing regulations for their corruption potential. Thirdly, the State Regulatory Service of Ukraine is unable to change problematic regulations because it can only make recommendations. Thus, only the courts are capable of compelling local governments to withdraw or change regulations. In practice, though, entrepreneurs are reluctant to pursue such matters in court, preferring instead to keep their heads down. As a result, the conditions for doing business on the local level discourage entrepreneurs rather than encourage them.

Read More…

Democracy that Delivers Podcast #81: Vaqar Ahmed on Growth in Pakistan’s Private Sector

From left: podcast guest Vaqar Ahmed and guest hosts Maria Philip and Vivek Shivaram

This week’s guest on CIPE’s Democracy that Delivers podcast is Vaqar Ahmed, Ph.D. Ahmed is deputy executive director of the Sustainable Development Policy Institute (SDPI), which celebrates its 25th anniversary this year.

In this podcast, Ahmed discusses CIPE’s partnership with SDPI, the growth of Pakistan’s economy, and the country’s need for a thriving private sector. After a decade of low gross domestic product (GDP) growth, Pakistan’s economy has begun to improve. The private sector will play a key role in the country’s economic turnaround, and a free, transparent market is necessary for the private sector to flourish.

SDPI’s main aim is to provide a sustainable development community in Pakistan by addressing such issues as climate change, food security and tax reform. With CIPE’s support, SDPI has developed economic programs that have received support from members of the Pakistani parliament.

Want to hear more? Listen to previous podcasts at CIPE.org/podcast.

Subscribe to the podcast on iTunes or on your Android device.

Like this podcast? Please review us on iTunes.

 

Mobile App Gives Investors Instant Access to Corporate Governance Information

App demonstration, watch the full video on the website here.

The recently launched Elapedia app gives investors around the world instant access to corporate governance practices at 100 publically listed companies in the four Pacific Alliance countries (Chile, Colombia, Mexico and Peru). The free Spanish-language app, which relies on publically available data, provides information about boards’ policies related to managing conflicts of interest, risk management, and other topics of interest to investors.

“Until now, there was no easy way to compare information on corporate governance between Pacific Alliance countries,” said Andrew Wilson, CIPE managing director. “With this useful tool, investors can quickly become informed on corporate governance requirements. It’s a way to access that information without having to dig through multiple sources. This app will be a huge benefit to large companies looking to invest, put up a subsidiary or buy a company in Pacific Alliance countries.”

The Elapedia app, which was supported by CIPE and developed by Governance Consultants S.A., represents an important step toward the economic and commercial integration of Pacific Alliance countries. By efficiently harmonizing corporate governance practices, the app will greatly improve the flow of investments and help to strengthen Latin American economies.

Established in 2011, the Pacific Alliance’s goals include establishing the free movement of goods, services and people; driving economic growth; and overcoming socioeconomic inequality. Pacific Alliance countries have made significant progress toward improving standards for corporate governance by fulfilling requirements set forth by the Organisation for Economic Co-operation and Development (OECD), Wilson said.

“With this user-friendly app, CIPE hopes to provide a valuable public service in line with one of our key focus areas—encouraging good corporate governance,” Wilson said. “Good corporate governance is critical to the integrity of business operations and to the overall institutional health of countries because it creates demand for better public governance and prevents devastating economic failures. The Elapedia app is intended to promote transparency and accountability, level the playing field, and encourage the disclosure or elimination of conflicts of interest.”

The Elapedia App can be downloaded for free from the App Store.

John Zemko is the Regional Director for Latin America & the Caribbean at CIPE. 

Improving Afghanistan’s Economy from the Bottom Up

Lead farmer Abdul Rahman with grapes. Afghanistan. 2008.
Photo: © Nicholas Bertrand / TAIMANI FILMS / WORLD BANK via Flickr

CIPE and the local Afghan business community teamed up to develop an initiative that is helping to spur economic growth and create jobs in the provinces. Driven entirely by the provincial business communities in Nangarhar, Kandahar, Balk, and Herat, CIPE’s Provincial Business Agenda (PBA) program has produced a wide range of results that improve the local business climate, which has suffered setbacks in recent years. In areas far from Kabul, the economy has been particularly hard-hit by a drastic reduction in international development spending since 2014, resulting in a huge increase in unemployment in the provinces. This has caused many Afghans who were previously employed by the military and international donors to move to Kabul to look for work—or to leave their country out of desperation to earn a living.

CIPE started working at the provincial level in 2008, but has stepped up its efforts since 2014 as its role has become increasingly vital. CIPE works with home-grown, provincial-level small businesses to identify the day-to-day problems Afghans face when trying to start or grow their businesses, which leads to the creation of more jobs. CIPE takes the bottom-up approach in Afghanistan. We do not create business associations, because in CIPE’s experience, the local business community views donor-created business associations as inauthentic. We work with associations and chambers that formed because the business community came together out of the innate understanding that there is safety in numbers and power in collective action. Given the context of decades of war, continuing violence and deep-rooted ills, removing the obstacles caused by poor governance is a reasonable starting point for a country as complex and as dangerous as Afghanistan. Creating an environment that is friendlier to small businesses is a good first step towards improving the overall economy.

Read More…

Removing Barriers to Investment in Ukraine

panelists from Identifying and Removing Barriers to Investment in Ukraine

By Eric Hontz and Kathryn Walson

Three years after Ukraine’s Revolution of Dignity, a centralized, oligarchic power structure has once again taken hold. This has made it challenging to keep the business environment in Ukraine friendly to western investment, as the new power structure allows for increased influence from oligarchs and leads to increased corruption. Further, ongoing hostility with Russia and corruption act as a serious deterrent for western investors, which bring with them demands for higher standards in compliance, governance, and accountability from government institutions.

Because public funding alone cannot solve the country’s infrastructure problems, foreign investment into Ukrainian infrastructure is essential to the country’s ability to increase exports and gross domestic product. Despite this paradox in expectations and reality, an increase in investment in Ukraine has already begun, as Ukraine has consciously turned its efforts towards recruiting western businesses. CIPE and the U.S.-Ukraine Business Council co-hosted a panel discussion in June to discuss the investment climate in Ukraine, featuring Volodymr Omelyan, Minister of Infrastructure in Ukraine; former Ambassador John E. Herbst, current Director of the Dinu Patriciu Eurasia Center at the Atlantic Council; and Matt London, Deputy Managing Director at Amsted Rail Russia-CIS at Amsted Rail Inc.

Read More…

Democracy that Delivers Podcast #74: Mauro DaCunha on the Democratization of Capital in Brazil

From left: podcast guest Mauro DaCunha, guest host John Zemko, and host Ken Jaques

Mauro DaCunha, the chief executive officer of Brazil’s AMEC (Capital Market Investors Association), discusses the importance of democratization of capital in Brazil.

DaCunha credits CIPE’s partnership with Brazil with increasing public awareness of capital markets and its correlation with economic growth. The development of capital markets in Brazil would positively influence the country’s economy by creating job growth, opportunities for investment and a culture of equity investment.

DaCunha also talks about how corruption and distrust of businesses are hindering the development of capital markets while providing insight on what needs to take place to counteract corruption.

Want to hear more? Listen to previous podcasts at CIPE.org/podcast.

Subscribe to the podcast on iTunes or on your Android device.

Like this podcast? Please review us on iTunes.