New Firms and Clusters, Increased Productivity, Improved Competition, Industrial Upgrading, Innovation, and Job Creation
The World Bank Group achieves results by financing strategic investments in specific industrial sectors and by working with governments to overcome economic and structural barriers to industry growth, such as import-export barriers.
It applies a customized approach in each engagement, considering the context of the client country, the key issues in the local economic environment, and the available resources. These engagements:
- Empower and crowd-in the private sector, which accounts for 90 percent of all global employment
- Focus on maximizing growth and inclusion throughout value chains and, in particular, in those that have the potential for transformational change, and
- Leverage technological change and knowledge transfer to accelerate returns from improvements in economic management, investment climate, infrastructure and social services.
CI initiatives support entire industries, value chains, or clusters, rather than individual firms. They place a particular emphasis on gains from improved interconnectedness of value chains. They also emphasize open processes, monitoring of fiscal costs, and vigilance about the risks of “regulatory capture.”
The tools and policy interventions offered by the World Bank Group’s CI approach focus on three broad themes:
- Sector policy and growth – delivering multi-sector analytics and diagnostics, policy reform, and implementation support with a specific focus on agribusiness, manufacturing, tourism and services sectors
- Competitive Cities – providing research and advisory support in analyzing city competitiveness to allow for the effective growth and creation of jobs in cities
- Spatial growth strategies – undertaking the design and implementation of approaches to attract private sector investment via special economic zones, growth poles, growth corridors, clusters, and anchor investments (e.g., in extractive industries, agribusiness, manufacturing)
The CI offering combines advisory support for projects concentrating on specific sectors with World Bank lending and technical assistance focused on mechanisms for industry growth (clusters, growth poles, zones, and other instruments). These efforts are complemented by the targeted use of resources from donor-funded programs, such as the recently established Competitive Industries and Innovation Program (CIIP) and the long-standing Facility for Investment Climate Advisory Services (FIAS).
In Afghanistan, an engagement is helping the government leverage mining investments into a resource corridor – in a conflict-afflicted environment where accelerated job creation will be vital to post war stabilization and security.
Advice and technical assistance has helped Bangladesh become the first low-income country to adopt a roadmap for reducing carbon emissions from export processing zones. Short-term steps have already generated savings of $844,000 and have reduced carbon emissions by 9,000 metric tons.
In Brazil, an advisory project has generated $1.3 billion in new investment in light and heavy manufacturing, renewable energy, agribusiness and services, creating more than 7,000 jobs. The majority of investment and most of the resulting job creation have occurred in the frontier states of Para and Pernambuco.
In Ethiopia, a project is supporting the county’s ambitious structural transformation agenda by strengthening institutional and regulatory framework for industrial zone development, with a particular focus on enhancing linkages to small and medium enterprises.
In Macedonia, an engagement is underway to strengthen competitiveness by removing structural bottlenecks in export-oriented sectors. This will create more conducive conditions for developing high-value-added manufacturing, unlocking the potential of agribusiness and upgrading trade logistic services.
In Madagascar, a multi-faceted lending and technical assistance effort in support of growth poles in tourism and light-manufacturing sectors, includes the implementation of targeted and integrated interventions aimed at overcoming barriers to private investment in the country’s poorest regions, already creating 4,000 jobs.
In Rwanda, an advisory project is helping the government remove critical constraints to increased investment in the country’s horticulture and tea sectors. Reform of a pricing mechanism for Greenleaf tea resulted in higher prices for farmers’ crops in 2013, improving livelihoods and productivity. The new pricing mechanism is expected to increase the earnings of over 60,000 farmers. Reforms will strengthen sustainability as the government embarks on an expansion plan to double tea exports from Rwanda by 2020.
Media contact: Karolina Ordon Mazurkiewicz, email@example.com
Last updated: September 2014