Indonesia’s strategy to become one of the 10 major world economies by 2025 – part of a long-term program outlined in its Masterplan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI) – relies heavily on how quickly it can build new infrastructure to support its rapid growth. This entails cooperation among the central government, local governments, state owned enterprises, and the private sector. Of the four parties, according to experts on the ground, “the private sector has a vital role to play in this masterplan (in the form of PPP schemes), as it is expected to contribute the bulk of financing.”
Whatever your ideological biases about ‘the private sector’ (often weirdly conflated with transnational corporations in NGO-land), markets really matter to poor people (feeding families, earning a living, that kind of thing). But ‘making markets work for the poor’ turns out to be really difficult and, just as with attempts to tackle corruption or improve institutions, there is a rethink going on in the aid business. Critics of conventional approaches (of which I am one) argue that systems thinking and complexity both explain why a lot of previous approaches haven’t worked that well, and suggest some new ways to tackle the problem.
To catch up on some new research on all this, I spent a fascinating afternoon at DFID last week. The ‘knowledge hub’ BEAM Exchange (they don’t like to be called a thinktank) presented a discussion paper and technical paper on ‘rethinking systemic change’, along with a warts-and-all case study from Palladium on the difficulty of trying to put this into practice in a large market development programme in Uganda. Some highlights.
The discussion and technical papers reviewed the lessons from the 3 elements of New Economic Thinking: evolutionary economics, new institutional economics and complex adaptive systems. Eric Beinhocker’s influence much in evidence. The papers draw some useful and pretty challenging conclusions:
‘The aim of development must be to enhance the evolutionary process in an economy and create access to this process for all levels of the society, both politically and economically.’
Ever notice how cities can really encapsulate many of the things that make life enjoyable? Green spaces to enjoy the outdoors, access to jobs, affordable housing for all, a well-connected public transportation system, access to healthy food, schools for all children, and so on. Some cities achieve this better than others, but creating a city that works for all of its citizens can be a challenge for governments and communities alike.
Why? Let’s look at some numbers: Up to 1 billion people living in slums in the cities of the world are in need of better services; Cities consume 2/3 of the world’s energy and account for 70% of greenhouse gas emissions; 66 out of 100 people will live in cities by 2050, which tells us the global population is becoming increasingly urban.
Every city is a work in progress in this sense and for organizations like the World Bank, cities offer opportunities to help people raise themselves out of poverty. With so many people concentrated geographically, it’s possible to make improvements that benefit many, and with investments across multiple sectors in cities, governments can really make an impact on the lives of their citizens.
How many school children can be endangered by the schools themselves? The answer was over 600,000 in metropolitan Lima alone.
In the region, fraught with frequent seismic activity, nearly two-thirds of schools were highly vulnerable to damage by earthquakes. Working with the Peruvian Ministry of Education (MINEDU), the World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR) conducted a risk assessment that ultimately helped make an estimated 2.5 million children safer and paved the way for a $3.1 billion national risk-reduction strategy.
Whether it is building safer schools or deploying early warning systems, disaster risk management is an integral part of caring for our most vulnerable, combating poverty, and protecting development gains.
Over the last 30 years, the world has lost an estimated $3.8 trillion to natural disasters. , and to undo decades of development progress overnight.
The PPP Knowledge Lab was launched a year ago with the goal of making resources on public-private partnerships (PPPs) more accessible to the PPP community and filling a gap in knowledge around infrastructure and PPPs. Emboldened with this goal, the world’s top multilateral development agencies came together to create a central platform of comprehensive information on PPPs. Resources on the PPP Knowledge Lab have grown tremendously since its launch.
An innovative World Bank project with a co-management agreement hopes to make conservation more equitable in one of Mozambique’s most beautiful national parks.
If paradise exists, it looks like central Mozambique’s Bazaruto archipelago. White-sand beaches and sky-high dunes ring Indian Ocean islands draped in forest, savannah, and wetland. Crystal-clear waters support an abundance of marine-life—manta rays, sharks, and whales make their homes amongst the mangroves, beds of algae, and coral reefs.
Altruistic and marketing motives aside, a private operator of infrastructure (in particular in an arrangement as highly structured as PPP) is likely to implement renewable energy technology only if profitable and/or mandated in the PPP arrangements. Critics are often angry that private operators think first about the bottom line, rather than make decisions based on the best interests of the environment. This is unfair to some extent, as private companies are often committed to climate friendly efforts (whether truly altruistic or for marketing opportunities). But as a general premise, the private sector will do what you pay it to do.