Governments around the world spend trillions on public procurement each year for everything from office supplies to military equipment to infrastructure megaprojects like this $5 billion Panama Canal expansion.
By Kirby Bryan
For over a decade, the World Bank Group’s Doing Business index has served as quintessential tool for determining how well a country’s institutional infrastructure is suited to the promotion of a productive business environment. But something was missing. Businesses and governments interact on levels beyond permitting and regulation: the public sector can also be a client.
Public procurement can provide opportunities for corruption. When seeking lucrative public contracts, companies look for any opportunity they can take advantage of that will improve their ability to secure a successful bid. Unscrupulous government officials can use their influential positions to attain favors and gifts from businesses pursuing public procurement tenders.
In March 2015, the World Bank Group, in conjunction with the George Washington University Law School, held a release event for the first installment of its Benchmarking Public Procurement Index.
By Kirby Bryan
For sustainable economic growth, developing countries must have the capacity to functionally interact with the global market. Much of the onus for building that capacity rests on a domestic commitment to reforms compatible with global trade. Many emerging markets have lofty aspirations that are unachievable given the current state of affairs, but are determined to rectify the situation. Access to foreign markets can cement reform efforts aimed at improving the local economy and sustaining economic growth.
In late February, the Center for Strategic International Studies (CSIS) released a report from their Congressional Task Force on Trade Capacity Building (TCB) on “Opportunities in Strengthening Trade Assistance.” While the report focuses primarily on US efforts to improve the effectiveness and relevance of its TCB programs, it signals a shift in international engagement and understanding of the role trade plays on the growth of a developing economy.
The shift is also indicative of a growing global development trend toward incorporating the voice of the recipient country from the beginning stages of negotiations through agreement ratification. What is interesting about the current TCB discussions is the recognition by major players in the development world of including the knowledge and expertise of the private sector. Ultimately, it is the private sector in the developing and developed countries that will bear the fruits of economic growth and trade.
An increasing number of policy and governance challenges around the world demand private sector participation to generate viable solutions. Such challenges include poverty reduction, inclusive growth, government accountability, business integrity, national competitiveness, innovation, and access to opportunity. Although the obstacles to dialogue can be high, the value of dialogue is now widely recognized by governments and business leaders alike. Notably, the 4th High Level Forum on Aid Effectiveness in Busan, Korea, recommended that countries embrace “inclusive dialogue for building a policy environment conducive to sustainable development.”
In CIPE’s latest Economic Reform Feature Service article, Benjamin Herzberg, Program Lead, Leadership, Learning and Innovation at the World Bank Group, my colleague Kim Bettcher, Senior Knowledge Manager at CIPE, and I explore the importance of PPD and discuss its practical applications around the world.
Naledi Modisaatsone is a CIPE-Atlas Corps Think Tank LINKS Fellow at the Urban Institute.
Africa is in the news. The U.S.-Africa Leaders’ Summit is being held in August, the first of its kind. President Obama will be welcoming leaders from across the African continent to the nation’s capital in less than two months. The summit holds many promises; it could mark a turning point in U.S-Africa relations.
While there are many issues that can be discussed, not all of them should be on the agenda for this summit. To achieve the maximum benefits, it is very critical for African leaders to prioritize just what to put on agenda, and what to leave out. It is tempting to want to bring all the issues, but highly focused interactions are more successful. Topics for discussion should reflect the most critical issues regarding African economies and address challenges to sustainable growth and development.
One important issue is private sector development. Development finance and private sector entrepreneurship are powerful, but under-utilized, assets for development in Africa. While most countries have set goals for inclusive growth, they will not be achieved without better harnessing private sector resources that are ultimately the drivers of development.
Michael Putra, Shell, discusses open policymaking at the OGP Asia Pacific Regional Conference, May 6. Seated to his left are Y. W. Junardy, President, Indonesia Global Compact Network, and Ahmad Yuniarto, Chairman, Schlumberger Indonesia.
At a tender three years of age, the Open Government Partnership (OGP) is growing toward maturity. It has reached a stage where it can reflect on progress made to date and learn from early attempts to inspire action by government and civil society. While enthusiasm remains fresh – palpable in the youth contingent at the Asia Regional Conference in Bali – champions within OGP are thinking seriously about how to ensure the credibility of national commitments and deliver the fruits of open government to the people.
Yet as an observer in Bali, I was mostly struck by the moments of discovery, the “aha” moments that occurred as new and veteran participants encountered one another. OGP is entirely new to many countries in Asia (Papua New Guinea and Burma, for instance) and equally new to certain segments of society, especially the private sector.
At the session hosted by Indonesia Global Compact Network on “Building Trust between Private and Public Sectors for a Competitive and Sustainable Economy,” prominent business people were amazed to know that there is such a partnership for transparency, accountability, and citizen engagement. They immediately grasped the potential of OGP to address issues of concern to them, including innovation policy, education, health, and local development. The light bulb really came on when they expressed that corporate social responsibility is not sufficient, that companies must become active citizens and engage with civil society and government alike to build trust.
To anyone who has traveled frequently to Venezuela, the deterioration of the country is palpable. By day, people fear driving and getting stuck in traffic because motorcycle thugs will tap on their window, show a gun, and demand the handover of cell phones and cash. By night it is worse: going out on the town could involve robbery, kidnapping, and risk of death, so the streets are empty on Friday and Saturday nights in a city that previously boasted an active nightlife.
Shopping is another sad tale — commercial malls show a lack of maintenance, and stores have little merchandise. The common refrain you hear everywhere is “no hay,” or “there aren’t any.” You hear that when asking for anything from cell phones to toilet paper. You hear it in restaurants, too, where chefs somehow manage to figure out how to cook without basic staples such as cooking oil or flour.
If you can even get an airline ticket to Venezuela—international carriers are prevented from taking their profits out of the country, so they are curtailing flights—you will find prices depend entirely on the exchange rate you are able to obtain. If you change money at official rates you will pay $25 for a sandwich and a cup of coffee. If you are lucky enough to obtain the parallel exchange rate—which is running upwards of 10 ten times the official rate—the same meal will cost you $2.50.
How do Venezuelans cope with living this way? There are significant segments of society that still support the government of Nicolás Maduro despite its inability or unwillingness to tackle the huge economic problems the country faces, and which they have mostly caused. As the economy worsens, however, it seems unlikely that even the poorest segments of Venezuelan society who supported Hugo Chavez and now Maduro will continue to provide that support.
McDonalds, along with some other international firms, closed its stores in Crimea shortly after the Russian annexation. (Photo: Newsweek)
By Iryna Fedets
Recent events have brought uncertainty to the business community of Crimea, particularly with the approach of summer for a region where the economy depends heavily on Black Sea tourism.
A year ago, businesses in Crimea were active, and optimistic. A report on the investment climate in the regions of Ukraine published by the Institute for Economic Research and Policy Consulting in April 2013 placed Crimea in 4th place among the 27 regions of the country according to their attractiveness for investors.
While corruption and extensive business regulations have been the problems for the whole country, Crimea showed better results than most regions of Ukraine in many aspects. In the sub-category “Absence of corruption,” Crimea held the 4th place nationally, and the 3rd place in the “Administrative procedures” sub-rating. Moreover, business there proved to be the most optimistic in Ukraine as Crimea took the 1st position in the “Business optimism” sub-category.
Now, Crimean businesses are looking to the future with anxiety, not optimism. Some international companies like McDonalds are closing their venues in the region, and local entrepreneurs are left with the limited options of either continuing in uncertainty or selling their business.