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Egypt: Shifting Public Funds from Infrastructure to Investing in People

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Egypt has an opportunity to capitalize on current reforms by enabling more private investment in infrastructure and freeing up public funds for investments in people’s education, health and social protection. This is according to a new World Bank report launched today in Cairo,‘’Egypt: Enabling Private Investment and Commercial Financing in Infrastructure’’, which calls for increasing the public funds available for building human capital by expanding successful energy reforms to other key sectors, such as transport, logistics, water and agriculture.

Egypt can learn from global experience and gain by increasing the use of private sector finance, management expertise and innovation in commercial infrastructure and agriculture, conserving public sector resources for where they are needed most”, said Clive Harris, Head for Maximizing Finance for Development for the World Bank.

Egypt is now beginning to reap the benefits of its transformative economic reform program. Macroeconomic stability and market confidence have been largely restored, growth has resumed, fiscal accounts are improving, and the public debt ratio is projected to fall for the first time in a decade.

Egypt has demonstrated that by having a package aimed at reducing economic risks, pursuing sector level reforms and well-prepared bankable projects, large scale foreign and domestic investment can be achieved, This is visible through the  US$ 2 billion invested in the largest solar park in the world, Benban, as well as US$ 13 billion in the Zohr field and other natural gas projects” said Ashish Khanna, Program Leader for Sustainable Development at the World Bank.

The report indicates that the action plan to further enabling private investment requires clear policy actions to resolve four cross cutting barriers to private investment – namely better management of land, transparency in Government procurement, efficiency in state owned enterprise and encouraging long term domestic financing. This needs to be complemented with developing projects for private investments with maximum economic impact, like the regional energy hub, logistics corridors, freight transport and agricultural transformation hubs.

The gains from reforms would also free up scarce public resources and allow for them to be re-allocated to investments in the education and health of Egyptians, the country’s human capital. Reforms in the energy sector provide an example of what is possible. The reform of energy subsidies freed up US$14 billon, reduced the pressure on the national budget and allowed the quadrupling of the investments in social safety net programs.

According to the report, for Egypt to maintain its reform momentum and focus on investing in its citizens, it will need to broaden and deepen its reform agenda to other sectors. This would be part of a fundamental shift away from the state as a provider of employment and output to an enabler of private investment; with the economy driven by a dynamic private sector generating jobs for the youth.

The report identifies four sectors which have huge potential for private investments and illustrates how successfully attracting those investments would generate growth, create jobs and ultimately contribute to developing Egypt’s human capital. The four sectors analyzed in the report are: transport, energy, water and sanitation, and agriculture.

The World Bank provides technical, analytical and financial support to help Egypt reduce poverty and boost shared prosperity. The focus of Bank support includes social safety nets, energy, transport, rural water and sanitation, irrigation, social housing, health care, job creation, and financing for micro and small enterprises. The World Bank currently has a portfolio of 16 projects with a total commitment of US$6.69 billion.

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Increasing Data Accessibility and Usability for Prosperous Nepal

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Over 75 Nepali professionals from the academia, media, and private and non-profit sectors successfully completed the first phase of the Nepal Data Literacy Program today.

The first of the three-phase data literacy program which began on 23 June provided 40 hours of classroom-based introductory lessons on data analysis, visualization and data-driven decision making and storytelling to participants.

An initiative of the World Bank’s ‘Partnership for Knowledge-based Poverty Reduction and Shared Prosperity Project’ supported by DFID, the Nepal Data Literacy Program aims to sustainably transfer data literacy skills to Nepali professionals to strengthen their capacity to proactively engage in evidence-based policy making, increase data literacy of Nepalis, and support federalism in the country.

“Data literacy is an essential skill in today’s data driven world, especially for Nepal as the country works towards implementing its development vision,” stated Faris Hadad-Zervos, World Bank Country Manager for Nepal. “This presents a unique opportunity to build a consortium of data institutions from the public and private sectors and civil society to support evidence-based policymaking and innovations for the economic growth and wellbeing the people of Nepal.”

The curriculum developed through this course has been published in an open source format to be adapted and used to increase data literacy capacity for groups of diverse backgrounds. With the completion of the training, the participants are expected to provide data literacy training to their colleagues within their organizations while representatives from the academia are expected to incorporate concepts from the data literacy program in their existing courses.

“I have been impressed to see participants’ engagement at the program and to hear them voice their dedication toward engaging in evidence-based policy-making discourse. It was also really heartening to see the impact of the training on participants who came in quite nervous but went away much more confident in their ability to use data with new skills they had gained,” reflected Craig Irwin, Statistics Advisor, DFID UK in Nepal.

The next two subsequent phases of the program scheduled for July to September of 2019 will cover intermediate lessons and guide participants in writing contextual analysis papers and blog posts to get hands-on experience with data-driven storytelling and decision making.    

On the sidelines of the program, an interactive workshop on Open Government Data with officials from the Government of Nepal was also organized in Kathmandu on 26 June under this project in collaboration with the World Bank’s Public Financial Management Multi-Donor Trust Fund. The workshop discussed the importance of Open Government Data in accelerating government priorities and increasing access to government data in Nepal, together with ideas to pilot initiatives to increase quality use of government data in the country.

“Open Government Data has enormous potential in Nepal, and I look forward to partnering with the World Bank to make our data publicly available in a user-friendly way so everyone can benefit more from our data,” said Ramesh Siwakoti, Joint Financial Comptroller General.

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Afghan returnees face economic difficulties, unemployment

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Afghan refugees who returned to Afghanistan between 2014 and 2017 tend to be worse off financially and face multiple economic difficulties compared to refugees who stayed in Pakistan, finds a new joint report by the World Bank and UNHCR in Afghanistan.

The report entitledLiving Conditions and Settlement Decisions of Recent Afghan Returnees” is the first joint report resulting from the collaboration between UNHCR Afghanistan and the World Bank. The report analyzes the living conditions of the large Afghan refugee population that returned from Pakistan between 2014 and 2017.

The report shows that despite high poverty and limited employment opportunities, most Afghans returned to their home provinces, with Kabul and Nangarhar provinces together hosting a third of all returnees. According to the report findings, Afghans living in their province of origin were more likely to be employed, benefitting from established social ties. Lower access to education and healthcare services are other challenges faced by returnees and host communities, the report highlights.

“The living conditions of Afghan returnees are extremely challenging and require deep and urgent attention,” said Henry Kerali, World Bank Country Director for Afghanistan. “To understand the fundamental needs and challenges Afghan returnees face in their daily lives and to identify and agree on the best ways of addressing those challenges, access to accurate data and analysis is key. Our joint report with UNHCR helps increase coordination among partners and improve the work in support of Afghan returnees.”

In 2019, we are marking 40 years of Afghan displacement, and while several programs are in place to assist returnees and facilitate their sustainable reintegration in Afghanistan, much remains to be done,” said UNHCR’s Representative in Afghanistan, Caroline Van Buren. “The data and analysis in this report will be crucial to UNHCR and our partners, including the Government of Afghanistan, as we try to improve the way we support Afghan returnees.

The report assesses the existing challenges and identifies opportunities to further enhance returnees’ sustainable reintegration within Afghanistan’s socio-economic landscape. It recommends focusing on the voluntary and gradual repatriation of Afghan refugees as a long-term solution to forced displacement and encourages the Government of Afghanistan and its partners to put in place measures to facilitate the return in safety and dignity. The findings of the report will contribute to further expanding the close collaboration between UNHCR and the World Bank, including on projects that promote self-reliance and support the development of community infrastructure.

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A New Boost for Fiscal Federalism in Nepal

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World Bank Country Manager for Nepal, Faris H. Hadad-Zervos, and Secretary, Lal Shanker Ghimire during the project signing. Photo: Akash Shrestha/World Bank

The World Bank has renewed support to the Government of Nepal to strengthen the country’s efforts towards fiscal federalism and improving public financial management under the Second Programmatic Fiscal and Public Financial Management Development Policy Credit Project. The $100 million project is geared towards the accomplishment of reform actions coordinated by the Ministry of Finance which was built on reforms supported under the first Development Policy Credit project. The agreement was signed today at the Ministry of Finance by Secretary, Lal Shanker Ghimire and the World Bank Country Manager for Nepal, Faris H. Hadad-Zervos.

“We are thankful for the support of the World Bank and development partners in the ongoing and dynamic process of federalism in Nepal,” stated Secretary Lal Shanker Ghimire. “Coordination and capacity are one of the primary pillars for the success of Nepal’s three-tier government and it is important we build accountability with responsibility in our pursuance of the country’s development objectives.”

This project supports reforms to advance Nepal’s federalism agenda, under two pillars. The first pillar supports measures to establish fiscal federalism through various legislations, policies and regulations. An umbrella legislation, enacted at the federal level, will guide budget execution and improve the accounting and financial reporting framework, and will form the basis of model laws to be adopted by local governments, to govern their budget processes.

The second pillar supports reforms to strengthen the policy framework for public financial management at the subnational levels. This will be achieved through legislation and regulations that govern the budget cycle and promotes transparency and accountability to citizens, guides preparation of the Medium-Term Expenditure Framework, strengthens expenditure control, and supports the development of a revenue collection system. These reforms also include gender responsive budgeting, and measures to address Nepal’s vulnerability to climatic shocks and improve disaster risk management.

“Nepal’s transition to a federal state is an ambitious agenda and the World Bank Group is committed to support the government in fulfilling this goal,” stated Faris H. Hadad-Zervos, World Bank Country Manager for Nepal. “The sustainability of the proposed reforms under this budget support is a critical aspect. The partnership between the government and development partners will further enable strengthening of public institutions, inclusion and resilience as Nepal progresses with the federalism agenda.”

This project builds on the reforms supported by the first Development Policy Credit to establish the legal frameworks to govern resource allocation across the three tiers of government and guide operations of local governments. It also supported measures to strengthen budget execution and public financial management systems at the federal level.

Nepal’s transition to a federal state aims to bring services closer to the people and to increase the government’s effectiveness in the delivery of social and infrastructure services.

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