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Off the mark on microfinance via PSD Blog - The World Bank Group December 29th, 2008 at 22:42

image Writing in the Ethical Corporation newsletter, Rajesh Chhabara recently opined on the near-term prospects for microfinance in Asia. Their take? Things are just hunky-dory:Despite the trouble in global financial markets, investors continue to put money into Asian microfinance. A $40m fund aimed at financing start-ups in microfinance was launched in October by the India-based Institute for Financial Management & Research Trust, supported by a group of investors including India’s Icici Bank. In May, ASA International of Bangladesh, ranked number one on the Forbes list of top 50 microfinance institutions, raised $125m in funding – the largest ever by a microfinance institution – through private equity firm Catalyst Microfinance Investors...Diverse sources of funding and a...

Legislating for doing good via PSD Blog - The World Bank Group December 17th, 2008 at 19:20

image While the financial and economic crisis has prompted much soul searching on the appropriate government and business boundaries and the right balance of regulation, it will be interesting to see how this filters down to emerging markets such as India and China -even at the local level there are now efforts to legislate for corporate responsibility. In China the focus to date has mostly targeted clarifying and increasing standards in production – see CSR Asia’s report on labor standards being tested in Yiwu City. This makes sense when companies are reliant on export markets sensitive to such issues, but as exports decline and consumers focus even more on price savings, the momentum may be sucked from such efforts. In India, the states of Gujarat and Karnataka exemplify an alternative...

A deluge of kidnappings in Afghanistan’s investment climate via PSD Blog - The World Bank Group December 16th, 2008 at 19:28

image Editor's Note: Arvind Jain is a private sector development specialist working on survey implementation in the Enterprise Surveys group. Welcome! What does it take to get data on Afghanistan's investment climate? It's a lot harder than simply figuring out an appropriate survey design. During recent fieldwork in Afghanistan, the Enterprise Surveys group found out exactly what it takes. Although one might assume that the targets of kidnappings in Kabul are Westerners and international aid workers, the primary targets are actually Afghani businessmen. A successful kidnapping provides the perpetrators with quick cash - it is a much larger criminal enterprise compared to abductions conducted for ideological purposes. This meant it was not at all easy for interviewers from Enterprise Surveys...

The hidden side of globalization via PSD Blog - The World Bank Group November 26th, 2008 at 17:09

image In debates over globalization, much attention is given to so-called 'North-South' relationships. Often, data on 'South-South' exchanges it too limited to say much. A new paper on Global Migration of the Highly Skilled by Theo Dunnewijk of United Nations University helps shed some new light on 'South-South' brain drain/brain strain/brain circulation. Previous datasets had overlooked these particular exchanges: South Africa originating in Zimbabwe, Botswana, Namibia and Lesotho; Russia from Kazakhstan, Ukraine and Belarus; Ukraine, from Brunei Darussalam; Czechoslovakia (former) from Iran; Malaysia from China and India; Latvia from Israel; Romania from Moldova; Jordan from Palestine Autonomous Region; Tajikistan from Uzbekistan; Bulgaria from the Greece Is this brain drain, brain...

Tashabos: Entrepreneurship Education in Afghanistan via CIPE Development Blog November 21st, 2008 at 15:49

image A few years ago I had the pleasure of serving as a Peace Corps volunteer in Uzbekistan. While the Uzbek people were incredibly generous and hospitable, the frustration and dismay over the crumbling economy was clearly evident. The breakup of the Soviet Union had disrupted trade and supply lines that threw the economy into chaos. Business declined and unemployment rose. There was little optimism and much resignation. Then I got to know a few local businessmen. To them, the situation was anything but bleak. They would talk endlessly about how easy it was to make money if you knew what you were doing. Business opportunities were abundant. They encouraged me to stay in Uzbekistan and start a business. They said I would be a fool to work anywhere else. The dichotomy was shocking. It...

“Educational Reform and Employment Opportunities in Sri Lanka” via CIPE Development Blog November 18th, 2008 at 15:14

image Education is the backbone of any modern, competitive society. In this Feature Service article, Manilka W. Leanage, 3rd place winner in CIPE’s 2007 Youth Essay Contest in the category of ‘Education Reform and Employment,’ talks about the need to make Sri Lanka’s education system more responsive to the needs of students and the market. Despite very high literacy rate and free education up to the tertiary level, young Sri Lankans find themselves unprepared for the challenges of a modern workplace. Many are unable to pass highly selective university entrance exams; and even those who complete their university education often lack the skills and entrepreneurial drive to succeed professionally. Leanage highlights the problem of youth unemployment among the educated: “I personally...

Fact and Fiction via CIPE Development Blog November 14th, 2008 at 14:48

image On Monday of this week, I was surprised and pleased to read in one of Pakistan’s English language newspapers, Dawn, that the mayor of Karachi had been ranked the world’s second-best mayor by Foreign Policy magazine. I was also a little puzzled. Karachi has made some great strides as a city in the last few years, with the mayor leading some innovative approaches to solving the problems of slums, food shortages, massive electricity outages, and unclean water that often disable Pakistan’s financial capital, in addition to efforts to green-ify the city. But second-best in the world…? When I went to find the FP article in question, I ran across this blog post: Yesterday, we started receiving e-mails from readers and journalists in Pakistan asking for comment on reports...

New Representation for Pakistan’s Women Entrepreneurs via CIPE Development Blog October 7th, 2008 at 20:36

We are seeing the historic emergence in Pakistan of chambers and other bodies established by women to represent the needs of women entrepreneurs. This development is in part due to regulatory changes that allow women to represent themselves, and also in part due to CIPE’s active support. Read what’s happening in the words of pioneering women’s advocates Shehla Javed Akram and Shamim Akhtar: First Women Chamber of Commerce and Industry in Pakistan; Leadership with Strategy for Sailing Through the Main......

Slipping up on the details via CIPE Development Blog September 29th, 2008 at 19:46

It’s difficult to know exactly what is happening in the north of Sri Lanka these days (media representatives are not allowed into the conflict-riddled war zone), but it’s clear that recent police actions in Colombo could have potentially disastrous effects – in an area rather open to international scrutiny at the moment. As reported by The Economist and the BBC, civilians who have arrived from the northern [Tamil-majority] areas to the [Sinhalese-majority] capital and surrounding areas in the past five years have, over the past week, been required to register with the police, supposedly in an effort to combat the suicide attacks that have become tragically more frequent of late. The “census,” as it is being called, could of course be just that – a simple tally of how many...

Aid in Afghanistan via CIPE Development Blog September 26th, 2008 at 19:32

Anne Applebaum is not the first to criticize the rebuilding efforts in Afghanistan, just the latest. Her recent article in the Washington Post points out the shortcomings of aid programs in Afghanistan. She states that This is a country in which all the best people are being hired away from the national government by the alphabet soup of aid agencies on the ground; in which the same aid agencies are driving up real estate and food prices; in which millions are squandered on dubious contractors, both local and foreign; in which the minister for rural development admits he doesn’t know what all of the NATO reconstruction teams in rural districts do; in which the top U.N. official, given a mandate to coordinate the donors, says the donors don’t respond to his attempts to...

Armed With Guns and Human Rights via CIPE Development Blog September 24th, 2008 at 16:25

CS Monitor has a very interesting piece - on monks with guns - profiling a new model of dissent in Burma.  As you may remember from protests last year, young monks were particularly proactive in calling for change in Burma (is it a coincidence that young monks were also a lot more vocal in Tibet earlier this year?).  Now, dissatisfied with the slow pace of reforms, they are calling for fresh tactics, from teaching human rights theory to stockpiling arms. Its a dual approach full of contradictions.  On the one hand, young monks are increasingly talking about using violence to stand up to oppression - something that goes against the very nature of Buddhism.  On the other hand, they are also exploring new ways of reaching out to people, including education on the basics of political...

Our way is the highway via CIPE Development Blog September 22nd, 2008 at 17:46

The King Cobra is not the fastest snake, and it is not the biggest snake, but it just might be the most revered. The city of Nagercoil, at the southern tip of India, contains a temple to the King Cobra, worshipped as a deity. India’s new mascot might be the King Cobra. It is not the fastest growing economy, nor is it the biggest, and who doesn’t like Ghandi? India’s newest metaphorical cobra is a 3,633 mile long highway connecting its four major population centers, Delhi; Kolkata; Mumbai; and Chennai. Dubbed the “Golden Quadrilateral (GQ)” by the Indian Government, officials expect it to stimulate further economic development in rural India, where 70 percent of India still live, by facilitating the movement of goods into and out of the country. Combined with...

Annual Reports: Country Reports, Failed States, Human Rights/South Asia, Humanitarian Accountability, Religious Freedom via Forced Migration Current Awareness Blog September 22nd, 2008 at 13:41

The 2007 Humanitarian Accountability Report (HAP International, August 2008) [text] 2008 Report on International Religious Freedom (U.S. Department of State, Sept. 2008) [text] Country reports 2007: Belarus, Moldova, Russian Federation and Ukraine (ECRE, July 2008) [text] Failed States Index 2008 (Foreign Policy & Fund for Peace, July/August 2008) [text] South Asia Human Rights Index 2008...

Two steps forward, one step back: The media in Indonesia via CIPE Development Blog September 18th, 2008 at 17:32

Yesterday, I attended a roundtable discussion on the state of the media in Indonesia after Soeharto, held by the Center for International Media Assistance of the National Endowment for Democracy.  Some interesting points relating to different types of media:  Print: Janet Steele (George Washington University School of Media and Public Affairs; author of a book on Tempo, an independent magazine during the Soeharto years), praised the relatively free regulatory environment instituted by the post-Soeharto government and noting that the last remaining great obstacle is the civil defamation law and its enforcement. Citing a poorly educated judiciary with little understanding of press freedom, she told one story of how, when a rival print news outlet’s conglomerate owner was logging...

Can Islamic Finance go micro? via PSD Blog - World Bank Group September 17th, 2008 at 19:40

image With more than half-a-trillion dollars in assets and an annual growth rate that has outpaced conventional banks’ by nearly 50 percent, the Islamic finance industry is already making waves among investment fund managers. And this not only applies to the Muslim world: The Banker magazine recently named the United Kingdom to its list of the top 15 countries managing Sharia-compliant assets. The new CGAP Publication Islamic Microfinance: An Emerging Market Niche argues that the Islamic finance industry, with its unprecedented popularity and growth, may be well-placed to address a critical need in microfinance: reaching the some 72 percent of people in Muslim-majority countries who do not use formal financial services.Much of that gap owes to unmet demand for products that comply with...

Doing Business 2009 - Five years of reforms via PSD Blog - World Bank Group September 10th, 2008 at 01:05

image Doing Business 2009 is here! The sixth in the World Bank Group's annual series on business regulations, DB 2009 allows us to take a look at five years of reforms since DB 2004. But before I get to that, let me hit the highlights of DB 2009: This year's top reformer is...drum roll please...Azerbaijan! Azerbaijan improved on 7 out of 10 of the indicators tracked by DB and moved up 64 slots in the overall rankings. Two regions - Eastern Europe and Central Asia and Sub-Saharan Africa - accounted for 7 of the top 10 reformers: Azerbaijan, Albania, Kyrgyz Republic, Belarus, Senegal, Burkina Faso, and Botswana. The other top 10 were Columbia, Egypt, and Dominican Republic. Once again, Singapore tops the rankings, followed by New Zealand, the United States, and Hong Kong, China. ...

Doing Business in India via PSD Blog - World Bank Group August 27th, 2008 at 19:44

image Doing business in India may be getting easier in the not too distant future. An article in the Business Standard talks about a proposed law that aims to speed up the enforcement of contracts (Hat tip: Dahlia Khalifa). And what prompted this interest in a new law? You guessed it:The Centre had taken notice of the World Bank’s Doing Business Report 2007, which said that it takes as many as 1,420 days in India to implement a financial contract. The report had given India an overall ranking of 177 in the report, a rank that remained unchanged in 2008....

In India, it’s all about location, location, location via PSD Blog - World Bank Group August 26th, 2008 at 16:02

image The Financial Times reports today that Tata Motors, the company behind the Rs100,000 (US$2280) Nano mini car, has faced protests over the location of its factory. Some 2,000 state police blocked the road to the factory in West Bengal. Protestors are concerned that farmers have been unfairly displaced from Tata's 1,000-acre site. On the upside for Tata, FT reports that it has received proposals for relocation from at least nine Indian states. I guess the diminutive Nano is in demand. This doesn't seem to be the only case in India's recent history of such protests, though.      Vedanta University, the brainchild of Indian businessman Anil Agarwal, has also faced opposition over its sprawling campuses in the state of Orissa. Agarwal wants a truly elite university for...

Workforce development as a response to information asymmetry via PSD Blog - World Bank Group August 25th, 2008 at 16:36

image In an earlier post, I discussed the Indian approach to workforce development. A lot of Indian companies spend a lot of money on in-house training for their employees. Although I didn't mention it at the time, one of the things that puzzled me is why companies would invest so much money on in-house training; employees could simply leave after a short tenure, and the company would have lost money on the cost of the training. One explanation could be that the skills provided through this kind of training are highly firm-specific, but I find that proposition dubious. An article in the Financial Times today made me think of another possibility:India's outsourcing industry is battling a rising number of "résumé cheats" - recruits who lie about their experience or qualifications -...

Supply and demand in higher education via PSD Blog - World Bank Group August 21st, 2008 at 22:37

image It might still be an international market with stiff barriers, but higher education is definitely becoming more competitive. The U.S., traditionally dominate, has been losing market share due to increased competition from the rest of the world. A new report from the Council of Graduate Schools drives home the point. While the number of international graduate students continues to increase globally, the U.S. has seen a slowdown in applications from the rest of the world: Growth from India in particular dropped off steeply, from 12 percent to 2 percent. While it may not bode well for American universities, the increasing competition in the international education market will certainly increase the options open to aspiring businessmen and scientists from the developing world....

Losing Press Freedoms via CIPE Development Blog August 19th, 2008 at 20:41

Significant growth in violence in Afghanistan has been capturing the headlines over the past few weeks.  But somewhat beneath the surface, another type of attacks has become everpresent in the country — attacks on media.  These attacks are carried out by government agencies unhappy with reporting.  Interesting is the government’s position in regards to media, especially when reports clash with national security interests: Some officials argue that these bounds are crossed when critical reporting weakens the central government and strengthens the Taliban. They point out that given present security conditions reporters also have an obligation to protect the national interest. “The media does not reflect the achievements of the government,” Sadeq Mudaber, the...

The greatest return on investment via PSD Blog - World Bank Group August 18th, 2008 at 16:00

image I previously posted on the myth of the entrepreneurial middle class. A post on the India Development Blog on What Does Productive Loan Use Look Like reminded me of this issue. Michael Chasnow reports on new research on the use of credit in the slums of Hyderabad. Here are the reasons people took out loans (often not from any microfinance institution, and at interest rates of 80%): Health expenses (17%) Marriage (13%) Temporary difficulty (10%) Home construction (10%) Consumption (10%) Start a new business (7%) Business expansion (1.33%)The use of credit to invest in business falls pretty low on the list. Chasnow questions the efforts of microfinance institutions to closely monitor loan use or to create specialized products to promote business development. I would tend to agree with...

Outsourcing credit card defaults via PSD Blog - World Bank Group August 15th, 2008 at 14:57

image The Financial Times reports today that US credit card defaults prove a boon to India. According to the article:Firstsource, an Indian business process outsourcing company that handles credit recovery for most of the top five US banks and half of the top 10 credit card issuers, said it was increasing staff numbers to win business from growing credit card defaults in both national markets. "There is more demand for that service. If I could add 100 people today, overnight, I would do it," said Ananda Mukerji, Firstsource chief executive, in an interview with the Financial Times...Mr Mukerji said: "There are more credit card outstandings being defaulted on today than there were a year back, so that's a growth opportunity for us."If I were asked to devise a way to increase protectionist...

Universities and development via PSD Blog - World Bank Group August 12th, 2008 at 18:00

image Every year around this time, the Shanghai Jiao Tong University makes waves with its Academic Ranking of World Universities. As always, North America dominates in the short list of top 100 universities, with the Ivy League universities occupying most of the top slots. And as always, aggrieved parties produce howls of pain along with numerous complaints about methodological flaws - see a few examples here and here. While there are certainly flaws, part of the problem lies in the inherent impossibility of ranking universities. These institutions devote themselves to many different tasks, while the Jiao Tong rankings examine only one task - research. (For an excellent discussion of the debate around rankings, see this commentary from Alex Usher of the Educational Policy Institute.) Jiao...

“Addressing Problems That Tear Families Apart: Why Good Governance Matters for Family Firms” via CIPE Development Blog July 25th, 2008 at 16:08

Family firms have long been excluded from the debate on good governance, since corporate governance is conventionally viewed as applicable only in the domain of public corporations. Yet only 15 percent of family-owned businesses survive until the third generation, indicating a great need for improved governance. In his Feature Service article, Mr. A. Razak Dawood, Chairman of the Pakistan Business Council and the former Federal Commerce Minister of Pakistan, addresses crucial problems faced by family firms, such as inadequate focus on preserving their human and intellectual capital rather than just financial assets. He also talks about the ways in which governance in family firms can be improved, starting with the formulation of a statement outlining the purpose, values, and goals of...

Workforce development, Indian style via PSD Blog - World Bank Group July 24th, 2008 at 22:12

image A new paper from the Kauffman Foundation talks up the successes of India's approach to workforce development. According to How the Disciple Became the Guru, Indian companies have done such a good job at training their workforce that the U.S. should consider adopting some of India's practices in this regard (thus the title of the article). Or, as the authors of the paper conclude:Indian companies have learned how to take the output of a weak education system and turn graduates into world-class engineers and scientists. Imagine what could be done with a worker base that has received the high quality of education available in the United States.Respectfully, I disagree with the authors' conclusion.The authors talk in glowing terms about the huge outlays of top Indian companies. Here are a few...

Computers in the (Indian) classroom via PSD Blog - World Bank Group July 17th, 2008 at 18:18

image Some of my previous posts (see here and here) raised doubts about the value of spending gobs of money to introduce computers into classrooms in the developing world. A new study from the Poverty Action Lab at MIT provides some additional insight exactly this question. Leigh Linden, the author of Complement or Substitute? The Effect of Technology on Student Achievement in India, offers up some truly useful information by asking a better question than others have asked - namely, not whether computers improve learning on average but rather in what context and for whom they improve learning. Employing a pair of randomized evaluations of computer use in classrooms in Gujarat, India, Linden found that computers improve learning outcomes when they are used as a complement to the normal...

Who benefits from the brain drain? via PSD Blog - World Bank Group July 16th, 2008 at 21:15

image There is considerable debate about whether the mobility of highly skilled labor constitutes a brain drain or a brain circulation. A publication of the Association of Universities and Colleges of Canada makes it clear that to the extent there is a brain drain, then Canada is a large beneficiary (Hat tip: GlobalHigherEd). Between 2001 and 2006, more than 3,000 Chinese PhD holders emigrated to Canada. Another 1,200 Indian PhD holders emigrated to Canada in that same time period. I have to wonder how many yuan and rupees the Chinese and Indian governments spent on educating these individuals before they took their skills elsewhere?   ...

Air India and the beauty premium via PSD Blog - World Bank Group July 11th, 2008 at 20:24

image Over at the New York Times's Freakonomics Blog, Stephen Dubner contemplates the beauty premium. In a recent post, he decided to ask some real people whether looks matter in their career. Most of the people he spoke to said that looks mattered - the only exception was an environmental engineer who works with wastewater! Of course, Dubner's selection of people wasn't exactly random; one of the respondents is in the "adult entertainment" industry. And the respondents rate themselves on average about 8 out of 10 on a scale of attractiveness, which suggests the sample is a bit lopsided (or perhaps just highly self-regarding?). In any case, while looks obviously matter in the adult entertainment industry, how much looks matter for the rest of us has been open to speculation. Now, at least...

Women Leadership in Pakistan – A Change in the Making via CIPE Development Blog June 24th, 2008 at 16:49

The challenges to increasing female participation in mainstream economic activity, and the creation of leadership within women entrepreneurs, are manifold. These challenges range from social taboos; conservative lobbies; lack of access to education, information, and finance to discriminatory behaviors by male counterparts, severely inhibiting the ability of women to develop leadership skills and to participate in the policymaking process. Yet another complexity is the non-existent gender focused institutions such as women chambers, which generally act as facilitators in networking, mentorship, and learning opportunities. In Pakistan, the low literacy rate, especially for girls, is alarming. That is compounded by a high dropout rate from schools. According to the Population Census the...