: ©2016 The World Bank Group 1818 H Street NW Washington, DC 20433 ABOUT FIAS Telephone: 202-473-1000 Internet: www.worldbank.org The FIAS partnership was established in 1985 to provide advice to governments on reforms needed to improve their Through FIAS, investment climates. Today the FIAS program is cofinanced T&C implements by the World Bank Group and nearly 20 development advisory services partners. in developing All rights reserved. This volume is a product of the staff of the World Bank Group. The World Bank Group refers to the member institutions of the World Bank The Facility for Investment Climate The FIAS program is administered and countries that Group: The World Bank (International Bank for Reconstruction and Development); International Finance Corporation (IFC); and Multilateral Investment Guarantee Agency (MIGA), which are separate and distinct legal entities each organized under its respective Articles of Advisory Services (FIAS) operates at the intersection of government and private managed by the Trade & Competitiveness Global Practice, a joint IFC-World Bank foster open, Agreement. We encourage use for educational and non-commercial purposes. enterprise to ensure that business unit of the World Bank Group. Through productive, and environments—as reflected by laws, FIAS, T&C implements advisory services The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Directors or Executive Directors of the respective institutions of the World Bank Group or the governments they represent. The World Bank Group does not regulations, and other elements—enable in developing countries that foster open, competitive guarantee the accuracy of the data included in this work. private sector growth and are not unnecessarily burdensome. FIAS aims to productive, and competitive markets and unlock sustainable private investments markets and Rights and Permissions develop dynamic and resilient economies in sectors that contribute to growth and unlock sustainable The material in this publication is copyrighted. 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GLOBAL PARTNERSHIPS INVESTMENT INNOVATION JOB CREATION HIGHER PRODUCTIVITY 2 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 3 Abbreviations and Acronyms Table of Contents BoP base of the economic pyramid Abbreviations and Acronyms ...............................................................................................................................................................................................................................................4 BRIICS Brazil, Russia, India, Indonesia, China, and South Africa Executive Summary ........................................................................................................................................................................................................................................................................7 CCS compliance cost savings CIIP Competitive Industries and Innovation Program Chapter 1: Results and Learning from the FY12–16 Strategy Cycle.....................................................................................................................................11 CIC Investment Climate Department Context and Results of the FY12–16 FIAS Strategy.....................................................................................................................................................................11 COMESA Common Market for Eastern and Southern Africa Key Lessons from the FY12–16 Strategy Cycle...............................................................................................................................................................................13 EAP East Asia and Pacific Region Chapter 2: Strategic Context for FY17–21........................................................................................................................................................................................................... 15 ECA Europe and Central Asia Region ECOWAS Economic Community of West African States Complex Development Challenges and Choices...............................................................................................................................................................................15 EFI Equitable Growth, Finance & Institutions Global Practice Group The Private Sector as an Engine of Growth........................................................................................................................................................................................16 EPZ export-processing zone FIAS within T&C: Vision, Mission and Themes................................................................................................................................................................................... 17 F&M Finance & Markets Global Practice Innovation and Evolution of FIAS......................................................................................................................................................................................................................18 FCS states in fragile and conflict-affected situations Chapter 3: What FIAS will Do............................................................................................................................................................................................................................................ 21 FDI foreign direct investment FIAS Facility for Investment Climate Advisory Services Reform Diagnostics, Global Engagement, and Partnerships............................................................................................................................................22 FY fiscal year The FIAS Strategic Pillars.........................................................................................................................................................................................................................................25 GDP gross domestic product Strategic Pillar 1: Improve the Business Environment.................................................................................................................................................25 GEF Global Environment Facility Strategic Pillar 2: Expand Market Opportunities.................................................................................................................................................................26 G2B government-to-business Strategic Pillar 3: Strengthen Firm Competitiveness....................................................................................................................................................28 GP Global Practice FIAS Programmatic Themes..................................................................................................................................................................................................................................30 GVCs global value chains Gender and Inclusion............................................................................................................................................................................................................................................30 IBRD International Bank for Reconstruction and Development Transparency, Political Economy, and Sustainability of Reforms.................................................................................................................32 ICBL Investment Climate Business Line Green Competitiveness......................................................................................................................................................................................................................................33 ICT information and communication technologies Targeting High-Growth Businesses...................................................................................................................................................................................................34 IDA International Development Association IEG Independent Evaluation Group Chapter 4: Measuring Success: Outcomes, Impacts, and Targets......................................................................................................................................... 37 IFC International Finance Corporation Results Framework to Achieve FIAS and T&C Goals..............................................................................................................................................................37 IMF International Monetary Fund Scorecard for Tracking Targets..........................................................................................................................................................................................................................38 LAC Latin America and the Caribbean Region Chapter 5: Operating Principles....................................................................................................................................................................................................................................... 41 LDC least-developed countries FIAS Stakeholders............................................................................................................................................................................................................................................................... 41 MDTF Multi-Donor Trust Fund How FIAS Serves its Clients................................................................................................................................................................................................................................... 42 M&E monitoring and evaluation FIAS to Serve T&C’s Integrated Delivery Platform.....................................................................................................................................................................43 MENA Middle East North Africa Region Scaling Up Impact through Leverage..........................................................................................................................................................................................................43 MIGA Multilateral Investment Guarantee Agency NEM non-equity modes of investment Chapter 6: Institutional Set-up and Funding.................................................................................................................................................................................................. 45 NFZ Nouadhibou Free Zone Governance, Reporting, and Midterm Evaluation...........................................................................................................................................................................45 ODA official development assistance Funding Targets for FY17–21.................................................................................................................................................................................................................................46 OECD Organisation for Economic Co-operation and Development Administration of Donor Funds...........................................................................................................................................................................................................................47 OHADA Organization for the Harmonization of Business Law in Africa Annex 1: The FIAS Midterm Evaluation and Management Response............................................................................................................................... 49 PEA political economy analysis PMR product market regulation Excerpts from Executive Summary of the FIAS Midterm Evaluation by the Independent Consultant.......................49 PPD public-private dialogue Excerpts from T&C Management Response........................................................................................................................................................................................50 ProPEL Productivity Policy Evaluation Lab Annex 2: FIAS FY12-16 Reform Totals (through FY15)....................................................................................................................................................................... 51 SAR South Asia Region Annex 3: Results Highlights, FY11–15..................................................................................................................................................................................................................... 53 SDGs Sustainable Development Goals SEZ special economic zone Acknowledgments........................................................................................................................................................................................................................................................................... 54 SME small and medium enterprise T&C Trade & Competitiveness Global Practice TFSP Trade Facilitation Support Program WBG World Bank Group WTO World Trade Organization 4 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 5 DURING THE FIRST FOUR YEARS Executive Summary OF THE FY12–16 STRATEGY CYCLE, FIAS HELPED BRING ABOUT ... In the face of evolving global and regional economic FIAS is building circumstances, the Facility for Investment Climate on three decades Advisory Services (FIAS), too, is evolving in the expertise of experience helping and products it delivers, the issues that it takes on, and developing client countries create and enhance the climate 265 REFORMS in $1.36 BILLION the way in which it provides services and implements for investment, promoting solutions. For the fiscal years (FY) 2017–2021 strategy trade, and fostering increasingly competitive 75 Client Countries cycle, FIAS is carrying on its core mission of helping industries. developing countries strengthen their economies while IN PRIVATE INVESTMENT WAS with a particular emphasis on member countries innovating in a number of new areas related to impact of the International Development Association GENERATED FOR THE CYCLE measurement, services, and themes. (IDA), Sub-Saharan Africa, and fragile states. WITH FIAS SUPPORT This exceeds the five-year target of 250 reforms. well above the target of $1 billion. With strong development partner support, private sector savings—$350 million in FIAS is stepping up its mission of sustaining economic growth, increasing compliance cost savings (CCS) and $250 million in trade-related savings—as a result The FIAS agenda productivity, creating jobs, and lifting of investment climate projects and related for the next five THE FIAS STRATEGY CYCLE GOAL incomes in developing countries through reforms. With a year to go in the cycle, an integrated suite of financial and actual private sector savings have reached years continues advisory services. The focus remains $626 million—including $193 million in CCS this progress while WAS TO HELP CLIENTS ACHIEVE on expanding market opportunities and and $433 million in trade-related savings. enabling private initiative across the Additional CCS savings are expected by expanding into developing world, particularly for the most the end of FY16. new fields, such $600 MILLION IN PRIVATE SECTOR vulnerable people. FIAS is building on three decades of The FIAS agenda for the next five years continues this progress while expanding as global value SAVINGS have reached ... With a year to go in the cycle, actual private sector savings chains, and offering experience helping developing client into new fields, such as global value chains, countries create and enhance the and offering a wider array of advisory a wider array of $626 MILLION climate for investment, promoting trade, and technical services to clients. The and fostering increasingly competitive Trade & Competitiveness Global Practice industries. During the first four years of (T&C), which implements FIAS-supported advisory, technical, the FY12–16 strategy cycle, FIAS helped bring about 265 reforms in 75 client programs, leverages all the World Bank Group’s key tools and instruments, and financial countries, with a particular emphasis on enabling FIAS to enhance its private sector development focus. New and expanded options to clients. member countries of the International Development Association (IDA), Sub- areas of FIAS-supported activity include: Saharan Africa, and fragile states. This progress exceeds the five-year target of • Expansion of impact measurement to 250 reforms. Private investment generated include jobs and productivity. with FIAS support reached $1.36 billion • Delivery of solutions to enhance for the cycle, well above the target of $1 firm competitiveness in international billion. The FIAS strategy cycle goal was markets. to help clients achieve $600 million in 6 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 7 EXECUTIVE SUMMARY • Mainstreaming of foundational derive benefits from the global economy. increasing the capabilities of all workers. tracks spending indicators, reforms themes, including gender, political An important part of this process, then, FIAS also encourages new and innovative achieved, client satisfaction, investment THE FY17–21 CYCLE, The FIAS economy, transparency, green must involve enhancing the contribution of economic activities that would benefit generated, and compliance cost savings, THIS WORK IS competitiveness, and firm growth. globalization to sustainable development. refugees and host communities alike. In as well as new impact indicators for strategy is In this context, FIAS helps to leverage the the Middle East and North Africa region, jobs and productivity. The indicators are GROUPED INTO THREE • Scaled-up projects that integrate integrally tied World Bank and International Finance investments needed to achieve the SDGs. for example, T&C is exploring initiatives to tracked by priority areas, including the STRATEGIC PILLARS: expand the use of special economic zones continuing focus on IDA countries, Sub- 1 Corporation (IFC) solutions so that to achieving the advisory services leverage lending Striking a balance between (SEZs) as part of broader development Saharan Africa, and fragile states. Improving business environmental goals and the international strategies. New and enhanced elements of the Bank Group’s and investment. competitiveness of countries and individual program include projects geared toward environments in • Leveraging of public and private client countries Twin Goals firms endures as a concern for developing T&C’s joint IFC-World Bank structure client country sector competitiveness, 2 sector investment. country policymakers. The green economy promotes collaboration across the Bank integration into global value chains, of eliminating offers an opportunity to improve both Group, enhancing the ability to both competitive cities projects, contestable Expanding market The FIAS strategy is integrally tied to global governance and the domestic respond to crises and work toward and competitive domestic markets, opportunities extreme poverty achieving the Bank Group’s Twin Goals of achieving long-term goals. Beginning in 3 environment to ensure that economic sustained implementation of reform, eliminating extreme poverty and boosting and boosting shared prosperity. The FIAS theory of integration contributes to a green economy in the context of sustainable development FY15, the task of implementing the FIAS program moved from the Investment inclusive platforms for private sector dialogue with government, and the Strengthening firm competitiveness shared change emphasizes the importance of fostering a robust private sector, which and poverty reduction. Climate Department (CIC) to T&C, a global practice that brings together some 500 mainstreaming of themes such as gender and green competitiveness. prosperity. must bear the burden of creating 90 percent of the 600 million new jobs The endeavor to meet these ambitious World Bank and IFC staff members To support this enhanced program, the goals is unfolding in the midst of the working in more than 80 developing needed by 2030 to achieve those goals. greatest mass refugee and migration countries. For the FY17–21 cycle, this overall donor funding target for the SUPPORTING THESE FIAS-supported programs help clients crisis since World War II. Policymakers are work is grouped into three strategic FY17–21 strategy cycle is $200 million PILLARS ARE FOUR at the intersection of government and pillars: (or an average of $40 million per year), private enterprise to ensure that laws, urgently looking for ways to take action to help resolve this situation. Part of the representing a nearly 10.8 percent PROGRAMMATIC • Improving business environments in regulations, trade structures, and other solution involves creating more conducive client countries. increase over the amount actually THEMES: THAT elements of the business environment contributed by our partners for the enable private sector growth and are not business environments, resulting in • Expanding market opportunities. last cycle. SERVE AS GUIDING enhanced employment opportunities and a unnecessarily burdensome. FIAS aims to reduction in the pressures that contribute • Strengthening firm competitiveness. PRIORITIES ACROSS develop dynamic and resilient economies FIAS-supported work has demonstrated that promote economic inclusion through to conflict. Supporting these pillars are four the importance of a conducive THE PORTFOLIO investment, job-creation, and higher programmatic themes that serve as business environment to private sector Projects supported by FIAS help lower Gender and productivity. As developing country guiding priorities across the portfolio and development. At the same time, it has barriers to starting a business, facilitating economies gain a more competitive are embedded and mainstreamed within shown that an adequate business inclusion increased firm start-ups and competition, position to participate in international the FIAS pillars: environment alone is insufficient. which in turn boosts employment. Such markets, new routes will open up to lift projects reduce firm operating costs (for • Gender and inclusion. Developing countries need to engage Transparency and people out of extreme poverty. example, costs associated with licenses • Transparency and political economy. with strategies and policies geared to political economy and permits) thereby increasing firm the sector and firm levels so that their FIAS works with T&C to make good on • Green competitiveness. private sectors can compete in the global Green productivity, growth, and employment. the World Bank Group’s commitments to Furthermore, they support reforms • High-growth businesses. marketplace. It is not enough to help competitiveness achieving the Sustainable Development to reduce investment barriers so as businesses get started; they need an Goals (SDGs), and to supporting the to attract both domestic and foreign T&C has developed a scorecard to environment where proactive investment High-growth Financing for Development initiatives investments into labor-intensive sectors. measure how its programs influence and is rewarded, thereby giving businesses businesses to close the global investment gap in T&C coordinates FIAS-supported activities leverage investment, create jobs, and the staying power to innovate and developing countries. Indeed, there is with national institutions to initiate skills- meet a number of other geographic and compete. a continuing need to support efforts by development programs geared toward thematic benchmarks. The scorecard developing countries to integrate into and 8 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 9 325 Chapter 1 PROJECTS SO FAR IN THE RESULTS AND LEARNING FROM FY12–16 STRATEGY CYCLE THE FY12–16 STRATEGY CYCLE 72 66 31 The strategy and objectives for the FIAS FY12–16 operational cycle were set out % of FIAS supported % % in Managing for Impact: FIAS Strategy for FY12–16, endorsed by the World Bank Board in May 2011. Working in some 77 client countries during a period that included reforms achieved in economic and fiscal crises and a major Bank Group reorganization, FIAS neared IDA countries in SSA in FCS the end of the FY12–16 cycle on track to meet or exceed the objectives set out in the strategy. Indeed, this was confirmed by the external independent evaluation of the FIAS FY12–16 strategy and program.1 In the case of facilitating new foreign investment in client countries, FIAS-supported programs have already exceeded the WORKING TO BRING PRIVATE five-year target of $1 billion. SECTOR FIRMS TOGETHER The FIAS Midterm and IEG Investment The FIAS Midterm Evaluation called FIAS’ the work focused the right programs in Climate evaluations, both published performance “highly commendable” for the right countries, with implemented in November 2014, found that FIAS exceeding its reform and investment reforms aimed at reducing costs to WITH CLIENT GOVERNMENTS, maintains a strong impact-oriented generation targets, particularly in businesses. IEG recommended expanding culture committed to delivering impressive vulnerable states. The evaluation the goal of reducing these costs to include results (see Box 1). The FIAS 2015 Annual found that the focus on private sector potential or achieved social benefits, FIAS HAS EFFECTIVELY MET Review also compiles results for the cycle development ties directly to the World such as inclusion and shared prosperity, through FY15. Bank Group’s Twin Goals of eliminating resulting from reforms. Both reports extreme poverty and boosting shared recommended increasing the focus THE $3 BILLION TARGET FOR prosperity. The creation of the Global on gender and political economy and Practices, including T&C, as part of expanding and improving diagnostics and The FIAS Midterm the reorganization of the World Bank impact measurement. Evaluation called Group, anchors FIAS in a group with the NEW INVESTMENT FIAS’ performance experience, skill-set, and commitment CONTEXT AND RESULTS OF THE “highly commendable” FY12–16 FIAS STRATEGY to results essential to achieving the As the FIAS FY12–16 strategy cycle for exceeding its reform and program’s goals.2 began, commodity price increases were investment generation targets, 90 The Bank Group’s Independent Evaluation creating opportunities in resource-rich particularly in countries as investors struggling to Group (IEG) reported on the reform work %SATISFACTION vulnerable states. CLIENT of the Investment Climate Department recover from the 2008 financial crisis (CIC) dating back to fiscal 2007, including sought higher yields in developing FIAS-supported work. It concluded that countries and regions. Climate change and energy prices were driving a RATING 1 Ecorys. 2014. Midterm Independent Evaluation of FIAS 2012–2016 Strategy and Program. Final Report. https://www.wbginvestmentclimate.org/donor-partners/upload/FIAS-Midterm- Evaluation-11-Nov-2014.pdf. 2 The term “World Bank Group” and the abbreviated “Bank Group” refer to the collective work of the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). The term World Bank refers only to IBRD and IDA. 10 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 11 CHAPTER 1: RESULTS AND LEARNING FROM THE FY12–16 STRATEGY CYCLE re-evaluation of resource use and an Through FY15, FIAS-supported teams cargo loss and damage, capital carrying draw interest from increasing numbers of reform work, meanwhile, has met or of reforms have been achieved in Sub- emphasis on efficiency. Increasing have helped client governments generate charges, and inventory costs. Estimates of developing countries. FIAS supported exceeded targets: through FY15, 72 percent Saharan Africa, a FIAS priority region, and investment encompassed both foreign 265 investment climate reforms, of private sector savings are based 72 projects in FY12, 89 in FY13, 95 in of FIAS reforms have been achieved in IDA 31 percent have come in states in fragile direct investment (FDI) by major firms and surpassing the strategy cycle target on a rigorous formula that measures FY14, and 69 in FY15, for a total of 325 countries, well ahead of 60 percent target; and conflict-affected situations (FCS). Key growth of domestic small and medium of 250 reforms—with nearly a year both direct costs—the fee for licensing projects. Client satisfaction ratings have and 72 percent of reforms were captured lessons from the FIAS-supported work enterprises (SMEs). The resulting growth, remaining in the cycle. Working to bring a new business, for example—and the averaged over 90 percent through the first by Doing Business reports, well above the during the strategy cycle are outlined particularly in Sub-Saharan Africa, private sector firms together with client indirect cost involved when cumbersome four years of the cycle. The distribution 50 percent target. In addition, 66 percent below (see Box 2). increased client motivation to institute governments, FIAS has effectively met regulations impose lengthy delays before investment climate reforms in the hope of the $3 billion target for new investment, a new business is licensed to operate or replicating the spectacular growth seen in with $1.36 billion of that total in the form before cargo can move through a port. East Asia. of FDI in priority sectors (surpassing the The FY12–16 strategy set a goal of $600 Box 2: Key Lessons from the FY12-16 Strategy Cycle $1 billion target) and $1.6 billion invested million in private sector savings. With a Careful evaluation of the results attained so far in the FY12–16 cycle have helped the T&C team reinforce a number of key Throughout this period, FIAS focused by new firms following business entry year to go, the total had reached $626 lessons which are being incorporated into the design of the new FY17–21 strategy: increasingly on the implementation reforms (approaching the target). million. FIAS-supported work generated of projects and programs and the $193 million in CCS through FY15 against • Unpredictable and opaque administrative processes, as well as the uneven enforcement of regulations, can deter measurement of outcomes and impacts. One of the key benchmarks of the FIAS a target of $350 million. Because these firm creation and investment, marginalize segments of the business community, and ultimately impede productivity. Results-based management produced program is private sector cost savings savings typically occur late in a project, Developing country governments face increasing pressure to devise transparent and effective regulatory frameworks, and clear case studies and South-South achieved through reform. T&C tracks or after its completion, significantly more to be accountable for how they implement agreements, decisions, and reforms. lessons that expanded client demand. two indicators: compliance cost savings compliance cost savings is expected by However, in the last year of the strategy (CCS) and trade-related cost savings. • Developing economies need support and proactive investment at the sector and firm levels to achieve sustainable growth the end of the cycle. Trade-related savings cycle, a sharp global downturn in CCS measures the impact of reforms on and to maximize the potential of global value chains to foster investment, jobs, and enterprise growth. reached $433 million through FY15, well commodity prices was forcing resource- the cost of doing business for investors, above the target of $250 million. • Many markets continue to underperform due to unreasonable constraints on competition in domestic markets even dependent economies to focus more entrepreneurs, and private sector firms in though they have opened to trade and improved their business environment. New or strengthened competition policies attention on diversification. With FIAS developing countries. Trade savings are Robust growth in the FIAS portfolio should aim at removing constraints to private sector development, fostering well-functioning markets, and enhancing support, T&C responded with advisory generated by trade logistics reforms that reflects strong and increasing client productivity. offerings geared toward helping benefit importing and exporting firms due demand for investment climate reform economies make this transition. to a reduction in user fees and charges, work as the positive impacts of reform • Commodity prices were not going to increase indefinitely. Resource-rich developing countries that benefited from commodity price growth must make themselves more resilient to price shocks by improving their business climate and diversifying their economies. Box 1: Conclusions from the FIAS Midterm and Investment Climate Evaluations • Producing change requires close attention to the political economy of each client country and the interests and influence of stakeholders. The Evaluation “sees integration of CIC and the FIAS program into the Trade & Competitiveness Global Practice from a position of strength with a well-honed product range—very impressive results pipeline—strong brand equity—deep- • When the FY12–16 strategy began, the FIAS program lacked a model for measuring impact. Diagnostic tools developed rooted M&E (monitoring & evaluation) impact oriented culture, with the vast majority of programs optimally placed to during the cycle have proved their value and are being expanded and integrated into a ‘scorecard’ to measure such make a direct and significant contribution to the WBG [World Bank Group] Twin Goals.” benefits as job creation and the spillover effects of FIAS-supported policies. — FIAS Midterm Evaluation “The World Bank Group has supported a comprehensive menu of investment climate reforms. These reforms were generally supported in the right countries and generally addressed the right areas of the regulatory environment. … Many markets continue to underperform due to unreasonable constraints on Intervention and country case analysis shows that, within the limits of the available measures of investment climate competition in domestic markets even though they have opened to trade and improved indicators, the Bank Group has been successful in improving investment climate in client countries, as measured by number of laws enacted, streamlining of processes and time, or simple cost savings for private firms.” their business environment. New or strengthened competition policies should aim at — IEG Investment Climate Evaluation removing constraints to private sector development, fostering well-functioning markets, and enhancing productivity. 12 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 13 Chapter 2 $18.9 TRILLION STRATEGIC CONTEXT GLOBAL TRADE TOTALED $18.9 TRILLION IN 2014, A MORE THAN FIVEFOLD INCREASE FROM 1990, FOR FY17–21 Complex Development Challenges and Choices FIAS embarks on the next five-year strategy cycle 90 % THE PRIVATE SECTOR at a time of increased global economic uncertainty. WITH DEVELOPING COUNTRY TRADE ACCOUNTING Dynamic factors include the unresolved implications of IS RESPONSIBLE FOR ABOUT 90 FOR NEARLY HALF THE TOTAL. SOUTH-SOUTH the European fiscal and monetary crisis, the deceleration PERCENT OF JOBS IN of growth in China and other key emerging markets, TRADE ALONE REPRESENTS A QUARTER OF WORLD the impact of falling commodity prices on developing THE DEVELOPING WORLD. TRADE. IN ADDITION, MORE THAN HALF OF THE regions, access-to-finance challenges stemming from VALUE-ADDED IN EXPORTS FROM DEVELOPING rising interest rates, rapidly evolving security and conflict 70 issues, and the uncertain impact of mega-regional trade COUNTRIES INVOLVES GLOBAL VALUE CHAINS. negotiations on developing countries. Migrants and refugees from Africa and in the developing world. As some 20 million % $500 BILLION the Middle East are arriving in neighboring new working-age youths per year in Asia Net private capital flows regions in unprecedented numbers, a and Africa alone enter the work force, it will to developing countries result of economic pressures and security be essential to address this surge through issues. According to the Global Monitoring increased job opportunities in services and GLOBAL DEMAND increased to roughly $1 Report 2015/2016: Development Goals in manufacturing. an Era of Demographic Change, released FOR FOOD IS TRILLION in Peru at the start of the 2015 Annual Meetings of the World Bank Group and Global demand for food is expected to increase by 70 percent over the next EXPECTED TO INCREASE BY 70 per yr.* the International Monetary Fund (IMF), the world is undergoing a major population shift 35 years, driven by rising population, increasing urbanization, and an expanding PERCENT OVER THE middle class—trends that are especially certain to reshape economic development NEXT 35 YEARS, WORKER REMITTANCES WERE ESTIMATED for decades. This shift intensifies the strong in developing countries. Agricultural production will need to increase DRIVEN BY RISING TO HAVE REACHED $500 BILLION BY 2015. challenges facing institutions whose role is substantially—both in absolute terms, and to foster conditions in developing countries in terms of the efficiency of production— POPULATION, that mitigate the forces driving emigration. Increased South-South Together, these private capital flows dwarf the total amount to meet this rising demand. The private INCREASING Job-creation represents the single highest sector will play a central role in developing investment has driven net private of annual official development assistance (ODA) of about priority. By 2030, the global economy will innovations in technology and production URBANIZATION, capital flows to developing $135 billion. However, these flows are concentrated in need to have 600 million more jobs than in agribusiness, trade, and transport. AND AN EXPANDING countries to roughly $1 trillion a small number of largely middle-income countries and in 2005, requiring generation of between Developing country governments must MIDDLE CLASS. 9 million and 12 million jobs per year in key streamline trade, customs, and inspection per year. sectors, whereas access to private credit in low- and lower- developing regions such as Sub-Saharan regimes to ensure their agribusiness middle-income countries continues to remain a challenge. Africa and South Asia. The private sector sectors can participate in international is responsible for about 90 percent of jobs markets. 14 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 15 CHAPTER 2: STRATEGIC CONTEXT FOR FY17–21 Climate change poses significant risks Governments need to design targeted unrest. The increasing demand for Figure 1: Joint World Bank-IFC Global Practices to developing countries in terms of interventions that do not distort markets. citizen participation in decision-making, food production and a number of other Generating finance for development and as reflected in events such as the Arab economic sectors. Changing climate and achieving the SDGs, such as supporting Income inequality Spring, also occurs in the economic rainfall patterns threaten to constrict female entrepreneurship, increasing the is on the rise in many sphere. In the latter context, businesses food production, particularly in semi-arid exports of developing countries, and countries, and the gap are demanding more transparency and regions such as the Sub-Saharan African enhancing market access for exports between the richest and legal resources when disputes arise Sahel. Climate change is also increasingly from least-developed countries (LDCs), poorest countries is widening, over investment agreements and other linked with the competitiveness of will require mobilizing and leveraging as some of the world’s transactions. firms and industrial sectors. Industry external financing. The global community poorest countries JOINT is responsible for 21 percent of direct needs a paradigm shift to move the FIAS WITHIN T&C: VISION, GPs fall into a greenhouse gas emissions. Particularly discussion from “billions” in official MISSION AND THEMES “poverty trap.” T&C, which implements the FIAS in developing countries, industry will development assistance (ODA) to need both public and private sector “trillions” in investments from all kinds program, is one of the 14 Global Practices support to compete in global markets of sources: public, private, national, that went into operation in July 2014 and meet increasingly stringent emission and global—including both capital and flows are concentrated in a small number (the beginning of FY15), following a requirements. Furthermore, developing capacity. Globally, achieving the SDGs of largely middle-income countries and reorganization of the World Bank Group. countries will need assistance in will require the best possible use of sectors, whereas access to private credit It is one of only two Global Practices—the meeting the benchmarks promulgated each available dollar, whether from in low- and lower-middle-income countries other being Finance & Markets (F&M)— in the international climate agreement international institutions, philanthropy, continues to remain a challenge. The six that leverages IFC as well as World negotiated in Paris in 2015. remittances, South-South flows, other largest middle-income countries account Bank staff (see Figure 1). Later in FY15, Box 3). Clients are working to foster by identifying competitiveness challenges official assistance, or from foreign for roughly the same share of global gross in a move designed to further promote inclusiveness, transparency, and societal that cause their firms and industries to THE PRIVATE SECTOR AS direct investment. To reach the needed domestic product (GDP) as the six largest collaboration, the Bank Group clustered buy-in for reforms in ways that address lag behind. In addition, FIAS helps client AN ENGINE OF GROWTH trillions, additional flows must come from high-income countries. Nevertheless, the Global Practices under three main the particulars of their own political countries develop strategies and solutions Meeting these challenges requires two principle sources: public domestic income inequality is on the rise in many groups. T&C is now part of the Equitable economies. They must tap into the best to raise their performance. identifying new growth opportunities and resources, where the most substantial countries, and the gap between the Growth, Finance & Institutions Global Practice Group (EFI), along with four available global economic knowledge, combining the creative energies of the development spending happens; and richest and poorest countries is widening, The team advancing the FIAS agenda other Global Practices: F&M; Governance; informed not only by experience in public and private sectors. The potential private sector finance and investment, as some of the world’s poorest countries mobilizes a considerable array of Macroeconomics & Fiscal Management; their own country and region but by benefits stemming from trade, global value the largest potential source of additional fall into a “poverty trap.”4 development experience across the Bank and Poverty & Equity. successes throughout the developing chains, new developments in information funding which FIAS-supported activities Group and regions: While FIAS-supported programs have world. FIAS-supported programs bring and communication technology (ICT), aim to stimulate. Achievement of helped developing countries streamline The Global Practice model is helping state-of-the-art analytics to help clients • Global knowledge, with more than and increased participation by the the SDGs also depends on policies the administrative processes required FIAS achieve development partner understand the obstacles to economic 500 T&C staff with expertise in private sector in development all argue undertaken in developing countries to start a business, governments are objectives by providing ready access to development and support the strategies trade, investment climate, sector for sustained public-private dialogue with support from the international concerned that these reforms have not global knowledge, field-tested solutions, with the best chance of overcoming competitiveness, and innovation and (PPD) and cooperation to achieving community. necessarily led to the expected firm collaborative approaches, and innovative those obstacles. Such programs also help entrepreneurship. higher economic growth. Global trade Increased South-South investment creation and growth. Governments and new ideas adapted to local context (see clients find pathways to global networks totaled $18.9 trillion in 2014, a more than fivefold increase from 1990, with has driven net private capital flows their constituencies are demanding developing country trade accounting for to developing countries to roughly $1 not only reform, but delivery on the nearly half the total. South-South trade trillion per year. Worker remittances were promise of growth from reform. Failure alone represents a quarter of world estimated to have reached $500 billion to achieve results can have political Box 3: T&C’s Vision and Mission Align with the Core Goals of FIAS Development Partners trade. In addition, more than half of the by 2015. Together, these private capital and security implications, including flows dwarf the total amount of annual incumbent governments being voted out T&C Vision: Sustained economic growth, productivity gains, job creation, and rising incomes for developing countries to value-added in exports from developing ODA of about $135 billion. However, these of office and attendant rising political eradicate poverty and boost shared prosperity. countries involves global value chains.3 T&C Mission: T&C is the partner of choice for countries that seek to develop dynamic and resilient economies, expand market opportunities, and enable private initiative. It helps boost trade, enhance the investment climate, improve competitiveness in 3 World Bank Group and World Trade Organization. 2015. The Role of Trade in Ending Poverty, pp. 13–14. https://www.wto.org/english/res_e/booksp_e/worldbankandwto15_e.pdf. sectors, and foster entrepreneurship and innovation. 4 World Bank Group and International Monetary Fund. 2015. From Billions to Trillions: Transforming Development Finance. Report prepared jointly by the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank, the International Monetary Fund and the World Bank. http://siteresources.worldbank.org/DEVCOMMINT/Documentation/23659446/DC2015-0002(E)FinancingforDevelopment.pdf. 16 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 17 CHAPTER 2: STRATEGIC CONTEXT FOR FY17–21 • Global reach, with T&C staff located activities at the firm and sector levels by Facilitation Support Program, and the • FIAS-supported teams will develop new strategy cycle. However, there • Participation in global value chains in more than 80 offices worldwide, supporting business climate enhancement. Umbrella Facility for Trade, which is under and deliver solutions to enhance will be additional elements by which to will be encouraged by building ensuring proximity to clients, IFC, in turn, helps mobilize private sector development. firm competitiveness, particularly further leverage support, including new on client country comparative sensitivity to political economy investments to unleash the potential supporting the most promising products, partners, and services. These advantages in key sectors. issues, and a unique rapid-response of investment climate reforms. FIAS- INNOVATION AND EVOLUTION OF FIAS sectors of a client country so that are described in detail in the FIAS “Pillars” capability. supported programs help shape the global The FY17–21 strategy cycle combines firms can compete on an equal section and are summarized here: As a result of the Bank Group economic agenda through international continuity with innovation and expansion. footing with peers in international reorganization and the creation of the • An integrated platform that delivers The core FIAS goal of enhancing the engagement and working with multilateral markets. • The beneficial impact of FIAS- Global Practices, trade logistics work using the full array of World Bank climate for investment, job creation, institutions, knowledge frontier and supported work will be scaled up will be funded primarily through the Group instruments: advisory and sustainable growth in developing networks, and centers of excellence. • Cross-cutting themes will be through integrated World Bank T&C Umbrella Facility for Trade. After services and analytics; technical countries—particularly the poorest and mainstreamed, ensuring that gender Group solutions that combine successful incubation in T&C, work in the assistance; World Bank policy-based most vulnerable—continues. A number Support from FIAS and other global and inclusion, political economy lending, investment, and advisory fields of tax simplification, transparency, lending and IFC investments; global of new areas of endeavor and program development partner platforms enables and transparency, and green services. and debt resolution has been consolidated public goods; convening services; delivery will enhance the FIAS mission, T&C to deliver on the FIAS agenda competitiveness and firm growth are • FIAS-supported teams will leverage in other Global Practices. and global engagement. while better integrating it with core with expertise and financial services integrated across the full range of private investment. activities of the Bank Group as a whole FIAS projects and programs. In sum, the evolution of FIAS now includes In support of these broad goals and organized around four core themes: trade; (see Figure 2). FIAS is innovating in a • The portfolio will be expanded to the delivery of an expanded roster of pursuant to its strategy, FIAS promotes investment climate; competitive sectors; number of new areas related to impact The core elements of FIAS—the work in include manufacturing, services, programs through integrated global and selective country engagements through and innovation and entrepreneurship. measurement, services, and themes: investment climate, competitive sectors, and spatial solutions—for example, regional teams to achieve broader impact, strategic investments in data and Other trust funds implemented by T&C and competition policy, and the focus competitive cities, growth poles, and while maintaining consistent operating dialogue, robust cross-practice analytics, complement the FIAS strategy. They • Impact measurement will be on IDA, conflict-affected countries and zones. principles (see Box 4). and integrated, customized solutions. include InfoDev, the Competitive Industries expanded to include jobs and Sub-Saharan Africa—continue into the T&C helps to position IFC investment and Innovation Program, the Trade productivity. Figure 2: Evolution of FIAS Operating principles remain consistent, with new programs, broader impact, and integrated delivery Box 4: Three FIAS Cycles—Client Focus, Innovation, and Impact FY08–11: Client-facing projects were economy-wide in scale. The approach to client needs was product-centric. The use of 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 indicators and benchmarking was centered on the Doing Business model. The role of FIAS-funded activities was to design solutions and support implementation. Teams managed for outcomes. Cross-cutting themes were accorded little emphasis and Majority Economy wide. Addition of Deepening economy-wide; and expanded only anecdotal results were available as to their outcomes. Client Facing Economy wide Agribusiness and Tourism sectors sector competitiveness agenda. FY12–16: A majority of client-facing projects were done on an economy-wide basis, with the addition of projects in the agribusiness and tourism sectors. The approach to client needs increasingly emphasized issue-based, programmatic Product centric Increasingly issue-based, programmatic Integrated solutions for connectivity and approaches. Benchmarking highlighted investment climate indicators and product-level assessments. The role of FIAS-funded Approach to Client Needs approach open markets. activities was to promote innovation and facilitate and catalyze the incubation of ideas. Teams managed for development impact. Key cross-cutting themes were identified in the areas of social inclusion, economic governance and transparency, the Diagnostics that help clients define promotion of competition, and green growth. Use of Indicators and Investment climate indicators and competitive position and options; and effective Doing Business centric product-level assessments Benchmarking feedback loops to asses progress and reach. FY17–21: Client-facing projects synthesize economy-wide endeavors and an expanded agenda focused on the competitiveness of specific sectors in client countries. The approach to client needs seeks to integrate solutions for connectivity and open Global thought leadership through markets. Indicators and benchmarking involve diagnostics that help clients define their competitive position and options. Solution design and implementation Innovation, incubation facilitator and analytics and pilot activities; sustaining Role of FIAS-Funded Activities The role of FIAS-funded activities is to sustain implementation results, leverage Bank Group instruments and private sector support catalyst implementation results; and leveraging World Bank Group instruments and private sector. engagement, and establish global thought leadership. Competition policy work will address price-fixing cartels, strengthen competition laws and policies, eliminate unreasonable constraints on competition, and enhance the technical capacity of Impact on jobs and productivity to achieve government agencies that work to ensure open and competitive markets. Teams will manage for impact with regard to jobs Managing for … Outcomes Development Impact twin goals. and productivity geared toward achieving the Bank Group’s Twin Goals. Themes will be mainstreamed across the three FIAS pillars (improve the business environment, expand market opportunities, and strengthen competitiveness) and will be Cross-cutting themes: Social inclusion; Mainstream cross-cutting themes into monitored through improved results tracking. Cross-Cutting Themes Little Emphasis/Anecdotal Results economic governance and transparency; promoting competition; pillars through improved results tracking. and green growth 18 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 19 THE FIAS FY17-21 STRATEGY Chapter 3 WHAT FIAS WILL DO RESTS ON THREE PILLARS DESIGNED TO HELP THE PRIVATE SECTOR REALIZE ITS The FIAS theory of change is centered on support for a robust and responsible private sector that contributes to development solutions in many areas, GROWTH AND DEVELOPMENT POTENTIAL encompassing inclusive growth and poverty reduction, jobs, service delivery, food WITHIN CLIENT COUNTRIES security, climate change mitigation, environmental sustainability, and contributions to taxes. 1} The FIAS FY17–21 strategy rests on and international trade; and (3) improvements in transparency, inclusion, IMPROVE BUSINESS ENVIRONMENT three pillars designed to help the private sector realize its growth and operationalizing programs to increase firm-level competitiveness and efficiency. and sustainability toward outcomes and impacts that link FIAS-supported THAT AFFECTS DECISIONS TO OPEN development potential within client At the outset of a project, FIAS employs projects to the economic growth, productivity, and jobs agenda that are at AND OPERATE A BUSINESS countries: (1) improving the economy- wide business environment that strong analytical and diagnostic support the heart of T&C’s strategy. This, in turn, affects decisions to open and operate to determine the right combination ties in with the Twin Goals of eliminating a business; (2) delivering sector- and of interventions for each of the three extreme poverty and boosting shared market-specific solutions to allow firms pillars. Implementation support prosperity (see Figure 3). 2} to expand and compete in domestic through the three pillars also drives EXPAND MARKET OPPORTUNITIES DELIVERING SECTOR- AND MARKET-SPECIFIC Figure 3: FIAS Theory of Change FIAS Theory of Change contributes to T&C Objectives and World Bank Group Twin Goals SOLUTIONS TO ALLOW FIRMS TO GROW AND COMPETE IN DOMESTIC AND Reform Diagnostics Global Engagement, and Partnerships INTERNATIONAL TRADE 3} T&C GP WBG Twin FIAS Pillars Instruments Objecttives Goals Client’s Development Challenges }} OPERATIONALIZING PROGRAMS TO INCREASE FIRM-LEVEL 0 Improve Business Advisory Services 0 Economic Growth 0 Eliminate Extreme Poverty COMPETITIVENESS AND EFFICIENCY Environment 0 Leveraging: Investment 0 Productivity 0 Expand Market Operations (IBRD, IFC, 0 Boost Shared Opportunities and private sector) 0 Jobs Prosperity THE PILLARS ARE SUPPORTED BY FOUR PROGRAMMATIC THEMES 0 Strengthen 0 Private Investment GENDER AND TRANSPARENCY, POLITICAL ECONOMY, GREEN TARGETING HIGH- Competitiveness INCLUSION AND SUSTSAINABILITY OF REFORMS COMPETITIVENESS GROWTH BUSINESS Themes: Gender and Inclusion I Transparency and Political Economy I Green Competitiveness I High-Growth Businesses 20 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 21 CHAPTER 3: WHAT FIAS WILL DO REFORM DIAGNOSTICS, GLOBAL of relevant private sector actors, and the impacts. Along with this tool, clients decision making and business regulation, starting in FY17. The program, known as ENGAGEMENT, AND PARTNERSHIPS inclusiveness of the change process itself. benefit from a set of expanding specialized especially in fragile and post-conflict the Productivity Policy Evaluation Lab The FY17–21 strategy places a stronger diagnostics, including: environments. The recently developed (ProPEL), supports a research strategy FIAS emphasis on analysis and global To address these challenges, FIAS is Reform Sustainability Checklist provides a focused on knowledge gaps in the areas leadership with a specific platform for strengthening its thought leadership • Competition policy assessments: tool covering several dimensions of political of investment climate, competitiveness, reform diagnostics, global engagement, and global engagement, improving its Evaluations of product market economy, both internal and external to and related private sector issues. ProPEL and partnerships. Supported by this analysis and understanding of political regulations and competition governments. It is being further refined to aims to strengthen client competency strengthened foundation, FIAS projects economy issues in project design and dynamics that restrict competition incorporate issues more directly relevant to undertake research and capture the can deliver measureable outcomes implementation, upgrading and better at the national and sub-national to inclusiveness. results. The effort encompasses impact and impacts within the portfolio while integrating its reform diagnostics and levels in key sectors of the economy, evaluations as well as inferential research IS STRENGTHENING informing and influencing non-FIAS strategies, and delivering advances in applied research and impact evaluation. and using the data to recommend Applied Research and Impact Evaluation to push the knowledge frontier regarding projects in the wider T&C portfolio. In regulatory actions that encourage The new strategy continues the the effectiveness of policy reform, with ITS THOUGHT some cases, FIAS influence and project The effort focuses on five areas described firm entry and rivalry. This includes expansion of FIAS-supported work on a particular emphasis on design and LEADERSHIP approaches have yielded lessons relevant in greater detail below: integrated measuring the impact of the lack applied research and impact evaluations, implementation of policy instruments to to projects supported by other World diagnostics; political economy analysis of competition on key economic incorporating additional areas of activity, achieve higher impact. AND GLOBAL Bank Group Global Practices and Cross- (PEA); applied research and impact variable indicators. partner institutions, and client countries. ENGAGEMENT, Cutting Solution Areas. This improved evaluation; global engagement; and • Investment reform map: Identification In the area of applied research, FIAS Global Engagement enhancing partnerships. In combination is expanding its links with multilateral FIAS-supported teams are global thought IMPROVING ITS integration of advisory services with World Bank technical assistance and lending with improved integration across the of relevant investment policy, organizations. For instance, a product leaders in: diagnosing obstacles to ANALYSIS AND enhances the value of the FIAS program, Bank Group, these upgrades generate institutional, and FDI promotion priorities and barriers that can be market regulation (PMR) methodology sustainable growth; designing solutions; knowledge spillovers across governments, has been used by the Organisation for marshaling public and private sector UNDERSTANDING OF allowing for greater reach, increased the Bank Group, and development partner addressed through a mix of legal and Economic Co-operation and Development partners around these solutions; assisting scale, and expanded sector-specific work. POLITICAL ECONOMY Building on the FY12–16 strategy with its strategies and programs. They also ensure institutional support. (OECD) for 16 years to collect and classify client countries with implementation of that diagnostic outputs, project work, and, regulation as to the degree to which it reform; and rigorously analyzing results ISSUES IN PROJECT innovations in impact, industry-specific more generally, private sector development • Sector scan and reform diagnostics: promotes or restricts competition in the and impacts. This leveraging of the work, and competition policy, the FY17–21 Identification of a client’s DESIGN AND strategy expands the range of impacts are better reflected in Strategic Country comparative advantages at the market place. T&C is partnering with OECD Bank Group’s convening power takes on Diagnostics and Country Partnership IMPLEMENTATION, measured and provides better analytical Frameworks. sector level through economic data to expand the PMR database to countries beyond OECD and BRIICS countries.5 In additional depth in the FY17–21 cycle as FIAS elevates issues of private sector tools and diagnostics, while at the same analysis, investor and stakeholder UPGRADING AND time empowering a broader range of consultations, and technical most lower-income countries, regulatory development more prominently in the Integrated Diagnostics BETTER INTEGRATING stakeholders within client countries. In the FY17–21 cycle, the T&C team is regulatory reviews to identify barriers to entrepreneurship and global agenda. FIAS-supported thought regulatory protection of incumbents in leadership and global engagement REFORM Governments seeking to foster growth and focused on identifying binding constraints avenues for growth, resource efficiency and job creation. the service sectors constitute the largest priorities include links to the Sustainable and integrating and improving diagnostics DIAGNOSTICS AND capitalize on the competitive advantage that help address the complexity drivers of the overall restrictiveness of Development Goals, Financing for of their economies face an increasingly Political Economy Analysis PMR to competition. Development, OECD initiatives, World STRATEGIES, AND complex array of strategic choices in policymakers face in taking action and Local and regional expertise combined Economic Forum agendas, and G20 communicating initiatives to stakeholders Building on four years of experience, ADVANCING ITS meeting their development priorities, such and the public. Beginning in FY17, 360 with global knowledge contributes to the FIAS-supported Joint Donor Impact initiatives, among others. A Tourism as determining which sectors, value chains, improved political economy analysis (PEA) Impact Forum in FY16 brought together APPLIED RESEARCH growth corridors, and regulatory areas Diagnostics will be provided through applied prior to and during all project Program has launched a new round of Bank Group Global Practices, private an online portal for investment climate AND IMPACT should receive the most attention and data and benchmarking. This enables interventions. The new strategy makes about 10 impact evaluations focused on: (1) skills and firm upgrading to increase sector representatives, and academia to resources. The decision-making process PEA a more integral part of project design, analyze, advocate, and voice the concerns EVALUATION. is further complicated by the rapidly T&C teams to collect, consolidate, and ensuring that reform efforts reflect an productivity; (2) incentives to change of developing countries on global policy shifting external economic environment. mix data with the goal of providing firm behavior; and (3) improvement of issues that impact their prospects for understanding of the relationship between Project teams seeking to assist these dynamic and interactive analytical tools institutions and regulations that relate to productivity-led growth and jobs. This the economy and the state, including policymakers face increasing challenges to better target, design, and measure the private sector. This cooperation points effort, and others led by FIAS, continues power dynamics and conflict triggers. T&C of their own. They can no longer simply policy interventions. The 360 Diagnostics to the need to streamline the Impact the forging of strong networks with clients, expertise in public-private dialogue feeds apply best-practice models. Rather, tool helps policymakers and project Program to better cover all T&C areas of academia, development partners, and into PEA through stakeholder assessment they must apply in-depth knowledge of designers identify, benchmark, and work. Accordingly, the team is collaborating the private sector. T&C is also working and mapping, as well as through citizen legal and technical issues, the range of implement improvements in country or with the EFI chief economist to transition with the G20 on developing a Framework engagement. This work is critical to stakeholders to be engaged, the local regional competitiveness and increase to an updated program of research for Inclusive Business that will produce building trust through transparency of political economy, the relative strength the prospects of delivering measurable 5 BRIICS stands for: Brazil, Russia, India, Indonesia, China, and South Africa. 22 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 23 CHAPTER 3: WHAT FIAS WILL DO recommendations for governments, the active role in shaping and supporting the THE FIAS STRATEGIC PILLARS notice and comment systems, and feedback private sector, and other stakeholders to future of FIAS. FIAS-supported projects In the FY17–21 strategy cycle, FIAS- loops for citizens and businesses. Good RECENT WORK enable and facilitate this special type of now benefit from the leverage and links to supported work is divided into three practice also involves an increased focus IN MYANMAR business activity. donor and foundation country programs broad categories, or strategic pillars, that on regulatory transparency, the political The objective of that these relationships provide. define the goals of the FIAS program: economy of reforms, and the capacity of HIGHLIGHTS THE Enhancing Partnerships improve the business environment; expand implementing agencies. FIAS work under INCREASED EMPHASIS Strengthening global engagement, In sum, FIAS works to better leverage market opportunities; and strengthen firm Pillar 1 is to improve improving analytical work, and delivering relationships with existing members and A further extension of this work focuses ON POLITICAL enhanced and integrated diagnostics are new partners to deepen its understanding competitiveness. In many cases, individual programs implemented with FIAS support on risk-based regulation. Helping regulations, reduce ECONOMY. THE not possible without improvements in the and application of various analytical help achieve multiple objectives under countries with effective enforcement regulatory costs and range and depth of FIAS partnerships. tools, including political economy and modern, risk-based regulatory ESTABLISHMENT At the heart of this system are the analysis. Improved integration of stand- more than one pillar. The emphasis on the private sector is evident in all three pillars, mechanisms has the dual effect of the amount of time OF THE MYANMAR member partners within FIAS itself. FIAS alone diagnostics and indicators should and although the titles are new, much of reducing excessive discretion and lowering involved in starting has grown and improved its delivery of enhance the quality of its FIAS-supported the cost to the public sector of regulatory BUSINESS FORUM impacts with the support of interactive operations, improve its positioning for the work in each of these areas builds oversight. This work has grown the most and licensing upon the extensive real-world experience TO IMPROVE PUBLIC- relationships with its members and global engagement with partners both of FIAS-supported teams. in the context of construction permits and businesses, and donors (see Box 5). Multilateral institutions, inside and outside the World Bank Group, sector-specific inspections, such as food PRIVATE DIALOGUE bilateral donors, agencies, and now private and increase the already high levels of Strategic Pillar 1: safety and other quality systems. ease uncertainty FOR REFORM LED TO foundations all value the ability to take an client satisfaction. Improve the Business Environment for businesses and The objective of FIAS work under Pillar 1 is Leveraging new technology and AN IN-DEPTH PEA IN to improve regulations, reduce regulatory approaches is another aim of Pillar 1. FIAS investors. PREPARATION FOR Box 5: FIAS Experience in Reform Diagnostics, Global Engagement, and Partnerships costs and the amount of time involved in has an established track record in the starting and licensing businesses, and ease area of government-to-business (G2B) REFORM PROGRAMS Recent work in Myanmar highlights the increased emphasis on political economy uncertainty for businesses and investors. service delivery and integration. This work analysis. The establishment of the Myanmar Business Forum to improve public- ON INVESTMENT private dialogue for reform led to an in-depth PEA in preparation for reform Government regulations play a decisive helps countries and sub-national regions role in creating a predictable and conducive develop and implement e-registries as business process services, software, POLICY, AGRIBUSINESS programs on investment policy, agribusiness and tourism. The combination of framework for businesses to form, operate, and transactional portals for regulatory and the creative industries (see Box 6). improved emphasis on local context with stakeholder engagement is paying AND TOURISM. dividends with increased political trust in project teams and a common and grow. They are critical to protecting service delivery that reduce discretion and increase access to information. It also A recent innovation in FIAS-supported understanding of the route to achieving an impact. investor and consumer rights, public health, leverages the leap-frogging opportunities projects has involved increasing and general safety. Achieving sustainable of mobile and technology solutions to engagement with the private sector In its joint work with the OECD, the FIAS-supported team has expanded the growth at both the economy-wide and product market regulation (PMR) database to 16 countries in Sub-Saharan Africa, reduce information asymmetries and boost to improve reform design and sector-specific levels requires a balance East Asia and Pacific, and Latin America and the Caribbean (with FIAS support accessibility to government services. implementation. This work leverages the between the protective and safeguarding to an additional 5 countries). PMR data has been applied to sector-specific private sector as a partner in regulatory goal of regulation and the sometimes performance and wider economic policy strategy in Armenia, Kenya, Namibia, Building on the sector focus of the and sector-level standards delivery, burdensome regulations placed on Romania, and Tunisia. It has also been the basis for concrete reform impact FY12–16 Strategy, FIAS supports a for example, through the use of self- businesses. Regulatory reform can protect in Honduras, Kenya, Mexico, and Tunisia. In the case of Kenya, the removal of growing range of solutions in the field inspections and third-party audits. This is society and stimulate business activity restrictive product market regulations in service sectors, such as professional of sector regulations and procedures. a common practice in developed markets by focusing not just on simplification, but services and telecommunications, would increase GDP growth by at least 0.39 This line of work seeks to reduce where the risk to brand reputation and on consistent, transparent, and effective percentage points, equivalent to $218 million in the first year. or eliminate cumbersome licensing, business revenue create much higher delivery—while also ensuring proper registration, investment approval, and incentives for consumer protection than Expansion of the range of FIAS partnerships would build on experience gained protections for the public. sector-specific policies. The work extends publically-driven regulatory oversight. The in the first FIAS partnership with a private philanthropic organization, the Bill & to the redesign of processes at the aim is to define clearly areas for self- The hallmark of FIAS work in this area Melinda Gates Foundation. This joint effort, established in FY15, seeks to design sector level to reduce compliance costs, regulation and complementary activities centers on good regulatory practice, and deliver a pilot reform program targeting the livestock sector in three countries. undue regulatory discretion, and market for public sector oversight so as to encompassing efforts to streamline FIAS is engaging with emerging donors to gain from their firsthand experience distortions. Established expertise in the regulatory processes to reduce compliance improve overall regulatory predictability with development endeavors. In the multilateral sphere, FIAS could replicate areas of agribusiness and tourism is costs and discretion. At the same time, while reducing implementation costs, initiatives such as the OECD partnership to generate data on product market FIAS is encouraging good regulatory design now complemented with support for variability and discretion. regulation for developing countries to better inform competition diagnostics and and delivery through impact assessments, manufacturing and export services, such reforms. 24 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 25 CHAPTER 3: WHAT FIAS WILL DO The work under Pillar 2 entails New approaches streamlining FDI entry and defining under this pillar focus on Box 6: Pillar 1—FIAS-Supported Business Environment Work performance-based investment encouraging equal market opportunities An FY15 pilot program for good regulatory practice in Morocco is working to increase the quality and predictability of reform implementation. The program represents the next generation of FIAS-supported regulatory reform, with its dual focus on incentives, strengthening investment for women and minorities, in particular. reducing compliance costs while making regulation more transparent and predictable. Limiting discretion on the part of promotion and protection frameworks For instance, FDI in extractive industries individual regulators, officials, and inspectors helps not only to ease the burdens on firms, but also lowers public expenditures and strategies, and improving is one of the main sources of investment on oversight while reducing avenues for unofficial transaction costs. outreach to promote both in resource-rich developing countries. Bosnia and Herzegovina managed to implement critical business reforms benefiting more than 17,000 companies, domestic and foreign investment For sustainable local development, the entrepreneurs, and sole traders—despite severe floods, civil unrest, and political instability in 2013. Working in close in key sectors. collaboration with the World Bank Group, the government effort has generated an estimated $9.2 million in new investments challenge lies in linking this type of and resulted in verified direct savings to local firms of over $6 million. foreign investment with In Kenya, FIAS-supported teams have implemented online services for business licensing in the Mombasa and Nyeri counties, locally-owned and managed as well as an online system for construction permit administration in Mombasa and Nairobi. Architects and developers can businesses. submit their building plans and track the review process online through a computer or mobile phone. FIAS support is helping expand deployment of the online system to other countries, including Iraq, Lesotho, Rwanda, and Uganda. FIAS-supported agribusiness-related reforms and food safety work in the Europe and Central Asia (ECA) Region exemplify inception in the mid-1980s. This work has regulations that encourage or support the expanding portfolio of sector-related reform work. Efforts begun in Ukraine to streamline complex food safety regimes that provide little consumer protection and impede exports have been expanded to Armenia, Azerbaijan, the Kyrgyz Republic, expanded substantially during the most anticompetitive businesses. Moldova, and Uzbekistan. The result has been millions in cost savings, new local and foreign investments, and improved links recent strategy period in both sector- specific and competition policy projects. Opening markets to competition is key to competition agencies, and coaching with the European market. Through investment promotion support, creating sustainable market opportunities support for stakeholders to advocate for Similarly, in the tourism sector, regulatory and procedural streamlining in Sri Lanka is helping to grow opportunities for small FIAS has exceeded the target of $1 billion and encouraging efficient investment. competition reforms. and medium enterprises in areas most affected by that country’s recently concluded civil war. The effort produced a more in new investments for the FY12–16 cycle. Regulatory risks for businesses are predictable and professional regulatory regime and provided support to small and medium enterprises in meeting regional and reduced by promoting and implementing New approaches under this pillar international hospitality, service, and accommodation standards. The work also entails streamlining FDI pro-competition rules in key sectors, include facilitating market linkages and entry and defining performance-based removing discretionary and discriminatory inclusiveness, and improving access to investment incentives, strengthening rules that favor incumbents, deterring supporting infrastructure and services. investment promotion and protection anticompetitive business practices, The aim of FIAS work is to leverage FDI Strategic Pillar 2: expand into new markets and encounter and large investment projects to support frameworks and strategies, and improving and minimizing distortive government Expand Market Opportunities regulatory regimes supported by market linkages, spillovers, and upgrading outreach to promote both domestic and interventions in markets. This work Barriers to entering or reaching markets incumbent firms or established business foreign investment in key sectors. The addresses price-fixing cartels and abuse within local firms. The work focuses on constitute some of the main constraints practices favoring entrenched interests. commitment to effective and sustainable of dominance that increase input costs for encouraging equal market opportunities to inclusive private sector growth in Firms that are protected from competition implementation also includes a strong firms, reduce consumer welfare, and erect for women and minorities, in particular. developing countries. These barriers through regulatory barriers have a lower Helping countries and monitoring of investors’ operational barriers to access markets or key inputs. For instance, FDI in extractive industries can come in the form of constraints incentive to expand to new markets, regions attract and retain experiences to address obstacles and is one of the main sources of investment to new overseas investment, dominant innovate, and became more productive. investment is one of the most market power of a limited number of Ultimately, these market constraints encourage reinvestment. The work of FIAS in this area helps to in resource-rich developing countries. important ways of enabling dismantle undue regulatory obstacles For sustainable local development, the public and private players, or challenges extract a measureable price in terms of Countries with sector-specific market at the national and sub-national levels challenge lies in linking this type of clients to expand market for businesses to reach wholesalers productivity, foregone investment, and an access restrictions require prior to foster business entry and generate foreign investment with locally-owned opportunities. and consumers. The ill-effects are not associated lack of job growth. intervention before an investment incentives for firms to improve their and managed businesses. The work in confined to specific businesses, but generation project can deliver results. infrastructure and services supports Helping countries and regions attract performance and effectively compete. have a damaging impact on the ability These engagements help expand market the development and enhancement of and retain investment is one of the most Technical capacity building and PPD of countries to link both vertically and opportunities by curtailing sector-specific special economic zones, growth poles, important ways of enabling clients to mechanisms are essential tools used horizontally across value chains. At the restrictions on foreign investment, and strategies for competitive cities. It expand market opportunities. FIAS has to facilitate and sustain reforms in this same time, access to inputs and end including constraints to licensing, also employs PPD for improved vertical an extensive track record of addressing area. This capacity building also extends markets can be a particularly common franchising, and contract manufacturing. integration of businesses in special zones these challenges with the work it supports to problem-solving training courses on constraint for women- and minority- They also help to open sector-specific or spatial clusters (see Box 7). on FDI regimes dating to the program’s antitrust and competition policies, high- owned businesses that struggle to markets to competition and reduce level knowledge exchanges among newer 26 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 27 CHAPTER 3: WHAT FIAS WILL DO Strategic Pillar 3: businesses in key sectors by developing Improvements by firms in resource Strengthen Firm Competitiveness new approaches to connect them to the efficiency, quality, business upgrading, and FIAS support Box 7: Pillar 2—FIAS Projects to Expand Market Opportunities More productive and competitive firms can knowledge, markets, networks, and capital skills are the foundation for increased for fostering business Active engagement with government and the private sector in Rajasthan, seize opportunities in local, regional and needed to advance their enterprises. participation in global value chains India, has led to significant new foreign direct investment in sectors as upgrading accelerates the global markets and drive economic growth. (GVCs). Developing countries that can varied as solar energy, manufacturing, and services. Economy-wide, market-level reforms work best Skills development for firm connect to GVCs produce more and growth of pioneering businesses when complemented with policies that help competitiveness helps identify and directly better jobs, greater opportunities for in key sectors by developing new businesses invest in improved products, use enhance skills available to businesses in domestic suppliers, increased exports, approaches to connect them IN FY14, THIS INVESTMENT-GENERATION climate-efficient technologies, and modernize those sectors with the highest potential and higher productivity (see Box 8). to the knowledge, markets, for growth and innovation. One of the WORK LED TO $340 MILLION IN NEW FDI production processes. Job opportunities primary reasons businesses fail to reach A developing country, or one of its networks, and capital $340m will follow if labor markets can supply the industrial sectors or firms, need not necessary skills and are open to a broader their full potential is their inability to establish an entire vertical industry, such needed to advance their slate of candidates. Effective interventions access the full range of skills required for as automobile production, from beginning enterprises. can enhance private returns, internalize social expansion. Results of this work include a to end. Rather, it can participate in just externalities, and promote firm survival and better understanding of the private sector one or two links in the value chain. Thus, demand for new skills (an identified gap FY17–21 growth. Therefore, projects will entail significant GVCs enable developing countries to in the current World Bank Group offering); strategy cycle. They build and new areas of work in an effort to increase participate in sophisticated manufacturing increased opportunities for private expand on areas of solid FIAS the ability of businesses to improve resource and services endeavors at lower up- expertise, leveraging experienced efficiency, value addition, and productivity. sector provision of training, technical front costs. FIAS-supported engagement gained during the FY12–16 strategy, education, and targeted skills; and encourages GVC participation by removing and doing so in a way that can be FIAS-supported work in climate competitive improved links between skills programs binding constraints to global value chain linked to measureable outcomes industries helps to improve manufacturing and new employment opportunities. This entry and upgrading, thereby building and impacts. Moreover, throughout The effort began by identifying the potential for new investment in competitiveness through the establishment support also increases the availability on a country’s comparative advantages the project cycle—from diagnostics particular geographic areas and industrial sectors, and then developing an and implementation of private sector-oriented of information about the quality and in key sectors to enable private sector to post-implementation—measuring outreach strategy to bring government and private sector parties together in a common framework driven by reforms and a sustainable path to resource efficiency laws, regulations, standards, performance of skills and training investment. results in these pillars serves to growth. and financing to promote green and low-carbon providers to address market failures in the integrate and mainstream the special growth. This can also entail support for climate- provision of specialized higher education These strategic pillars account for the FIAS themes described in the next A market access project has reduced restrictions to investment in efficient machinery, systems, and standards. services. majority of FIAS interventions for the section. Myanmar, helping to open a range of previously prohibited sectors to foreign investment—and leading to a four-fold increase in related FDI. Quality national infrastructure and capacity A competition policy project in Kenya has supported the development and support helps firms successfully compete in implementation of pro-competition regulations and anti-cartel policies national and international markets. Advisory in services and agriculture. The effort addressed the role of a public assistance seeks to define and implement sector commodity board that was drastically hindering Kenya’s export quality standards required for internal and competitiveness in the global market for naturally derived chemicals used Box 8: Pillar 3—Multi-Layered FIAS Effort to Strengthen Mauritania’s Seafood Sector external market growth, encompassing the in pharmaceuticals, repellents, and cosmetics. FIAS is supporting improvements in the sustainability and competitiveness of the seafood sector in Mauritania. The technical, laboratory, institutional, hardware, and An assessment of four selected pro-competition actions shows that they system requirements. This helps to strengthen government has designated the Nouadhibou Free Zone (NFZ) as a core element of its national growth strategy. Nouadhibou, have generated $5 million per year in consumer savings and increased sector standards and related regulatory and the country’s main fisheries center, holds 80 percent of the national market. Yet the sector’s competitiveness is suffering due income for farmers. inspections systems to lower the burden of to problems with firm productivity and resource use, resulting in fish product losses and high operational costs. In Guinea in FY15, FIAS support has helped to create a framework for regulation for businesses, increase consumer Support for the sector combines several initiatives including a $47 million program involving the Bank Group’s Environment linkages and inclusiveness between local businesses and FDI in extractive protection, and raise firm competitiveness. This Global Practice and the Global Environment Facility (GEF) program, supporting sustainability of the fish stock; a T&C-GEF industries by expanding inclusive platforms for dialogue with government FIAS-supported effort also helps establish lending operation to develop trade infrastructure and enhance the competitiveness of the NFZ; and a FIAS-supported and improving integration of local SMEs into sector value chains. systems by which private sector firms can advisory services initiative. Finally, FIAS support in Burundi has led to improving access to supporting provide testing and quality control services for infrastructure and services through a joint lending and advisory project regulatory agencies. The FIAS advisory effort aims to: (1) integrate sustainability into the NFZ development strategy; (2) establish a PPD platform focusing on the overlap between publicly-managed spatial development to prioritize eco-efficiency measures within Nouadhibou’s fisheries cluster; and (3) generate clean technology investments and the growth of private enterprise. FIAS support for fostering business upgrading through zone- and sector-level technical and operational improvements with at least three pilot firms, thereby saving 5,000 accelerates the growth of pioneering megawatt-hours per year and generating more than $2 million in clean technology investments. 28 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 29 CHAPTER 3: WHAT FIAS WILL DO FIAS PROGRAMMATIC THEMES • Replication and scaling up of successful For the FY17–21 cycle, FIAS-supported way for the private sector to contribute to expands on the focus on frontier regions As part of its continued commitment project experiences—with support from activities encourage equal market global development goals, and to reach the from the previous strategy. First, FIAS will to broaden the range of impacts and publications and case studies. opportunities for women by reform of 4.5 billion people who live on less than $8 refine its diagnostic approach to ensure deepen the reach of its programs, the discriminatory legislation and regulation, per day—that is, the people who comprise the inclusion of disadvantaged regions. three strategic pillars guiding the FY17–21 • Creating and testing project models and as well as support for improving the path the base of the economic pyramid (BoP). Second, it will look to apply sector lenses, FIAS strategy cycle are reinforced execution methods for effectiveness and to regulatory compliance for women- Inclusive business goes beyond corporate such as agribusiness and tourism, and potential to deliver results. ECONOMIES CANNOT by four programmatic themes: gender owned businesses. Projects seek to social responsibility and philanthropy enabling environment accelerators, such and inclusion; transparency; green foster the development of private sector- to deliver a direct development impact as SEZs, to improve growth prospects THRIVE IF THEY competitiveness; and the targeting of high- Gender and Inclusion driven labor skills geared especially to in a financially sustainable manner. in these regions. Third, FIAS will support Economies cannot thrive if they exclude EXCLUDE WHOLE growth businesses. whole segments of the population from women (see Box 9). Project design and Inclusive businesses are providing people improvements in PPD and M&E to reach implementation will promote women’s at the BoP with affordable, quality and then track outcomes and impacts that SEGMENTS OF THE The broad applicability of these themes participating in business development, participation in PPD and other reform products and services as well as valuable have a bearing on these geographic areas. innovation, and opportunities for growth. POPULATION FROM highlights their relevance across all three Eliminating extreme poverty and boosting advocacy mechanisms. Teams will work employment and training opportunities. pillars. In a similar way to competition with clients to go beyond regulations However, relatively little is known about T&C will rigorously collect and track PARTICIPATING policy, PPD, and work in conflict-affected shared prosperity requires the economic and leverage policy instruments so as the effectiveness and sequencing of results and indicators in the gender and participation of both men and women, IN BUSINESS countries in the FY12–16 strategy cycle majority and minority ethnic groups, and to enable and facilitate development and various policy instruments available to inclusion space, for example, examining (all of which continue as priorities under policymakers in support of inclusive the geographic diversity of results, the DEVELOPMENT, the new strategy), the intent here is to communities within both urban and rural growth of inclusive businesses. Overall, the FIAS approach aligns with and contributes business. Filling this knowledge gap and inclusive reach of reforms, the number environments. This theme focuses on INNOVATION, AND embed and mainstream the themes into three main areas that will expand over the to the T&C Gender Strategy focused implementing identified solutions in pilot of women entrepreneurs reached by FIAS-supported diagnostic, knowledge, and a project or reform, the number of OPPORTUNITIES operational work. To ensure FIAS delivers strategy cycle: (1) reducing the barriers to on regulatory reform, entrepreneurship projects is one of the focal areas of this predominantly women-owned businesses success for women-owned businesses; (2) and skills development, and community theme in the FY17–21 strategy. FOR GROWTH. on these priority themes, stewardship promoting inclusive business models; and engagement. that benefit from reformed registration for each one is to be anchored with a Improving the opportunities in geographic requirements, and the number of jobs ELIMINATING specialized team leader working closely (3) improving the geographic diversification Meeting this challenge requires new areas that do not typically see growth created or improved in lagging regions, EXTREME POVERTY with T&C cross-cutting topic areas of economic growth. approaches. Promoting inclusive from the private sector is another area of including women and youth. focused on green competitiveness, businesses is a fundamentally different thematic support. This carries over and AND BOOSTING connecting people and firms to markets, Reducing barriers to success for women- owned businesses is based on the premise SHARED PROSPERITY and global value chains. Furthermore, each that an estimated one billion women are Box 9: Experience with FIAS-Supported Thematic Work in Gender and Inclusion REQUIRES THE theme complements the main monitoring and evaluation framework with a few constrained from contributing more fully Amendments to the family law in Côte d’Ivoire passed in FY14 marked a victory for working women. With the help of the Bank Group’s to their economies. The vast majority—800 ECONOMIC additional indicators to ensure consistent million of these women—live in developing Women, Business and the Law Program, women no longer pay a higher tax rate, thereby eliminating a disincentive for women to enter the formalized work force. The revised law affords both spouses a role in choosing the family domicile and pursuing their career of PARTICIPATION OF tracking and monitoring of results and countries. During the FY12–16 strategy choice, taking into account the interests of the family. The reforms eliminated provisions that limited childcare benefits to men as heads integration. Thematic work extends beyond cycle, the Investment Climate Department BOTH MEN AND individual FIAS-supported projects to undertook to develop and strengthen of households. In addition, married women no longer need to provide their marriage certificates to obtain passports. An initial estimate shows that the reform has resulted in a 3 percent increase in revenue to women-led businesses. Bank Group teams, with FIAS WOMEN, MAJORITY include publications and learning events, work oriented toward economic support, helped organize a series of consultation and training events bringing together civil society, religious leaders, and journalists to the identification of priority countries, AND MINORITY leveraging external partnerships, and inclusiveness for women, smallholder farmers, indigenous peoples, and other disseminate and promote the family law amendment. In Bangladesh, a pilot project to modernize special economic zones (SEZs) includes an initiative to test regulatory frameworks and ETHNIC GROUPS, expanding connections with other World disadvantaged populations. FIAS funding programs that directly address issues faced by female workers within the SEZ context. The objective of the project is to implement Bank Group units. AND COMMUNITIES has been instrumental in supporting at least five gender-inclusive initiatives, policies, procedures, or practices and to develop a good practice framework based on global reforms to address gender disparities in research and lessons learned from the pilot project. WITHIN BOTH The approach to inclusion across the three pillars—and the knowledge and projects the business environment. These efforts In Honduras, competition policy reforms are opening inclusive business opportunities for smallholder farmers by improving their access URBAN AND RURAL they support—is as follows: gained additional momentum when gender to cost-effective inputs. Reform of the import requirements for these inputs not only lowered costs, but expanded the range of inputs issues were highlighted in the FIAS that small farmers could access. ENVIRONMENTS. • Systematic diagnosis of constraints Midterm Evaluation. T&C has continued Highly successful reform and investment-generation projects in Brazil and India exemplify the merits of the geographic approach related to the themes during project that process and actively implemented a to stimulating private sector investment. In both cases, FIAS supported a focus on regions with high economic potential that lagged preparation and design. strengthened gender and inclusiveness behind other provinces in terms of FDI and reported significantly higher levels of poverty. program for the remainder of the FY12–16 • Integration of theme specialists A sector-driven approach can be seen in the Sri Lanka tourism work highlighted above, and in a new effort to define and support strategy cycle. The experience gained and approaches during project agri-zones that leverage production and processing in zones that may be removed from traditional processing centers. has contributed to further improvements implementation and execution. designed into the new FIAS strategy. 30 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 31 CHAPTER 3: WHAT FIAS WILL DO Transparency, Political Economy, and in a global marketplace that increasingly transparency in investment climate-related Green Competitiveness promoting innovation, enabling better use well-established procedures for measuring Sustainability of Reforms demands transparency as a feature of policies, regulations, and administrative Governments face the challenge of a of energy and water, and supporting more greenhouse gas emissions and their FIAS-supported reforms contribute to global trade. In the FY17–21 cycle, T&C will practices, FIAS funding is helping to global environment in which climate efficient management of waste (see Box 11). reduction in terms of metric tons released greater transparency and better economic ensure that the FIAS-supported project develop transparency check-lists for variability coupled with increased resource per year as a result of project efforts. governance in many ways. They simplify portfolio includes a range of activities relevant investment climate products. demand and price volatility threaten the In the FY17–21 cycle, FIAS-supported Green growth and the increasing use designed to promote transparency A literature review of the impact of teams work with clients to: leverage of climate-efficient technology can also cumbersome and ineffective regulations; competitiveness of economies. Industries and enhance the sustainability of transparency on the investment climate investment incentives to foster green be measured in terms of expected cost they require higher levels of information and their supply chains are key drivers growth; design and enhance adoption disclosure; they help harness new reforms, including: leveraging PPD and will serve as the basis for focusing of economic development and significant savings. These activities build on the of climate-efficient technologies and technologies that improve the quality other mechanisms to increase the on the most relevant products. FIAS contributors to climate change. Energy- momentum of project successes in the practices; and support adoption of green and accessibility of information and transparency and legitimacy of reform is also supporting the development saving technologies are increasingly FY12–16 cycle. standards and certifications, such as increase the transparency of government initiatives; strengthening the capacity of tools to increase transparency and available, as are business opportunities in building construction. This thematic services; and they enable clients to of governments to carry out sustainable disclosure requirements in key areas for entrepreneurs with innovative ideas approach goes beyond the focus on firm meet more stringent international reform and reduce implementation gaps; of the investment climate. T&C teams for achieving green growth. A potential competitiveness in Pillar 3, and extends norms pertaining to transparency and improving government and regulatory will continue to tailor and develop new market of $1.6 trillion in clean technology green competitiveness approaches to The green accountability. Transparency means service delivery; and increasing investor indicators to better monitor and track sales is accessible to small and medium a variety of sectors, from agribusiness competitiveness thematic greater citizen and private sector confidence by systematically addressing whether government accountability and enterprises in developing countries over engagement and buy-in with regard grievances. These activities build on the responsiveness are increased, whether the next decade. However, there are to tourism to manufacturing. It also approach encompasses contemplates a reform filter that examines a variety of sectors, from to economic development initiatives. extensive experience of T&C teams in more stakeholders are able to participate knowledge gaps in developing countries. the way economy-wide regulations Transparency also promotes fairness working with clients on transparency and in setting priorities, and whether the FIAS support can help governments agribusiness to tourism to affect resource use and emissions where and competitiveness in the economy. In the sustainability of reforms (see Box 10). transparency of information available to and industries maximize green growth manufacturing. appropriate. addition, it helps developing countries stakeholders improves. along supply chains, and enhance participate on a more level playing field To help clients assess the degree of competitiveness. It can also minimize the Progress in promoting green negative effects on climate change by competitiveness can be assessed through Box 10: FIAS Experience in Transparency, Political Economy, Sustainability of Reforms Box 11: Replicating the Success of Reducing Emissions from EPZs in Bangladesh In Jordan, innovative use of information and communication technology is providing a feedback mechanism for businesses. Acting on climate change through climate-efficient industries under a FIAS-funded project, the World Bank Group has helped Bangladesh become the first low-income country to adopt a road map for reducing carbon emissions from export processing In Bosnia and Herzegovina, a tracking system for investor grievances helps local and federal governments in addressing zones (EPZs). The FIAS-supported effort focused on one such zone in Chittagong, and is now poised to be replicated political risk concerns of foreign businesses. throughout all of the country’s export zones. At the beginning of FY14, Bangladesh began implementing the low-carbon zone guidelines contained in the road map, helping companies in Chittagong to improve energy efficiency while still remaining A public service delivery quality project in Morocco aims to increase the predictability of public services provided to businesses competitive. Short-term steps have already generated savings of $844,000, and have reduced carbon emissions by 9,000 by helping several government agencies improve the measurement of regulatory performance and increase transparency metric tons per year—the equivalent of the emissions produced by the fuel in 119 gasoline tanker trucks. and disclosure of key indicators. The project is supporting government agencies in three areas: procurement payment delays; value-added tax reimbursement delays; and construction permits. It aims to strengthen government accountability and Welcoming the green drive, Nasir Uddin, chairman of Pacific Jeans, an exporter of blue jeans and denim from Bangladesh, said: eventually provide better implementation of regulations. “At Pacific, we have already started environment-friendly production procedures. Once the green production idea is adopted by all, we hope Bangladesh can stand as an example.” Lessons from Morocco have been applied in Guinea and Nepal, where investment climate teams are working with government agencies on the publication of reform outcome data. This is another element in providing transparency in implementing In a spinoff of the EPZ effort, the project—with support from FIAS, IFC, the Korea Energy Agency, the European Union, and the investment climate reforms. United Kingdom—has generated more than $170 million in private investment in an energy efficient power plant, a project that addresses acute power shortage issues. In FY13, work began on two transparency check-lists. One, concerning business regulation, covered items such as entry into business. The second covered construction permitting as well as investment policy, including policy incentives for investment. First drafts of these check-lists have been completed and those on construction and investment incentives have been piloted in Morocco to test their relevance. 32 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 33 CHAPTER 3: WHAT FIAS WILL DO Targeting High-Growth Businesses developing country businesses into discourage foreign firms from high-growth businesses to achieve their inputs, personnel, innovations, modes of investment, most commonly Targeting high-growth businesses begins increasingly competitive global markets. sourcing through local suppliers. potential. Specific activities focus on: processes, or products. franchising. However, local and foreign with the challenging task of identifying The FIAS-supported program seeks to partners still face challenges in franchising sectors and firms that have exceptional better integrate high-growth businesses • Creating an enabling regime for local • Streamlining business registration • Providing access to finance to or other non-equity arrangements. The potential to grow and create jobs and into value chains through growth poles, businesses to enter into contractual processes and facilitating access to encourage formalization and scale- process for remittances of technical fees then supporting them through a variety of economic zones, and linkages. It also helps arrangements with foreign firms business support services. These up of high-growth enterprises. and royalties is a significant obstacle interventions. Empirical evidence suggests clients remove policies and barriers that (such as contract manufacturing, interventions, coupled with providing This includes targeted financing for investors. Obtaining work permits that in a typical economy, usually only thwart participation in value chains by outsourcing, or franchising), thus information on access to credit and and financial sector infrastructure also poses challenges, particularly for between 5 and 10 percent of businesses high-growth businesses, including the benefiting from their value chains. tax compliance requirements, have reforms, such as strengthening highly skilled professionals and technical make a disproportionately large sourcing of goods and services from these been shown to catalyze business secured transactions, improving experts. In addition, import duties are Strengthening the internal capability of formalization. Reform assistance payment systems, and enhancing contribution to new job creation, income businesses. a problem in both the healthcare and companies—such as through enhanced comprises process mapping and credit reporting mechanisms. enhancement, and significant productivity fast food sectors. The World Bank Group Participation in GVCs offers competitive managerial capacity and a skilled simplification, enhancing institutional growth. These high-growth firms expand is therefore working to address these firms in developing countries new work force—is a key contributor to set-up for individual procedures, and • Carrying out empirical research and rapidly and many become medium-sized barriers through: improving the regulatory opportunities to enhance their growth productivity growth in many countries. leveraging of risk assessment tools. impact studies on characteristics of or large firms within a few years. In many framework for non-equity modes of potential through upgrading operations, At the same time, acquiring the right businesses that choose to formalize, industries high-growth firms generate new investment; developing clear guidelines and accessing new markets, and adopting talent is a challenge for many businesses • Supporting the establishment of factors and policies underlying their ideas and innovations. ICT-solutions for streamlining investment- new technologies. Targeting high-growth in developing countries where skills business clusters to extend the choice, and their post-formalization related procedures; and supporting Of the many start-ups and small firms businesses enhances companies’ access are scarce and expensive. T&C helps benefits of formalization to high- performance. consistent and transparent implementation in developing economies, which ones to new markets and to the value chains governments create effective regimes for growth firms that are connected In both the healthcare and fast food of the reforms on the ground (see Box 12). will achieve robust growth? The World of lead firms. Further, it encourages enhanced managerial and business skills through common or complementary through: sectors, companies are using non-equity Bank Group has been working with client knowledge diffusion and technology governments to identify the sectors and spillovers by: • Improving visa and work permit firms with the greatest growth potential, systems to attract high-skilled design appropriate policy instruments, • Facilitating linkages and match- and determine their prioritization and making between multinational foreign workers and facilitate transfer of know-how and managerial The World Bank Group is working to improve the regulatory framework for companies and domestic firms sequencing to support such high-growth firms. through: targeted investment capabilities to local firms. non-equity modes of investment (NEMs) such as franchising. promotion to connect anchor FDI • Increasing the effectiveness of FIAS support helps the Bank Group to high-growth local businesses; investment incentives—such as to further engage with developing customizing business registries to matching grants or direct financial countries in targeting sectors, regions, create databases of competitive assistance—for management training, and businesses with high-growth local suppliers; and leveraging PPD Box 12: Models for Success in Promoting High-Growth Businesses work-based learning, and retention potential. Interventions are targeted at mechanisms, such as industry of highly qualified staff. This involves In Nepal, FIAS-supported work is strengthening franchising, contracting, and licensing investments aimed at benefitting local the key stages of the business lifecycle: councils, to help high-growth analyzing incentive designs to foster businesses through technology and managerial spillovers. at inception (for example, by facilitating businesses form strategic alliances capacity upgrading in a specific business start-up or formalization); during with lead firms. In West Africa, streamlined business entry processes facilitate business formalization, thus unlocking the latent growth potential country or industry context. upgrading their operations (for example, of competitive firms. by strengthening their internal capabilities • Supporting businesses that have high • Fostering specific types of non- through enhanced management skills); potential to connect to GVCs through Franchising, licensing, contract manufacturing, and other non-equity modes of investment are rapidly expanding in Bangladesh, equity modes of investment (NEMs) and in the business scale-up phase (for incubation and acceleration services, driven to a large extent by the country’s market size and the growing middle class. For example, demand for health services —such as management contracts or example, by connecting them to lead firms’ and assistance with complying with from hospitals and wellness centers is rising. India’s Apollo Hospital is expanding its presence beyond Dhaka, and the Imperial contract manufacturing—as tools for value chains). quality standards and obtaining Hospital is commencing operations in Bangladesh. Demand for international food chains is also growing in Dhaka and other transferring cutting-edge business necessary certifications. cities of Bangladesh, as evidenced by the ambitious expansion plans of existing chains over the next two to five years. models and management practices to FIAS also supports work to strengthen local businesses. firms and their sectors, thereby enabling • Revising policies that may hinder The strategy will compile results and indicators about FIAS-supported work promoting high-growth businesses through a them to comply with international inclusion of local businesses in variety of means, including tracking the number of high-growth businesses benefiting from new linkages with large firms and World Bank Group interventions continue certifications and standards. These GVCs. These may include local from improved business procedures, as well as the number of jobs created by high-growth businesses. to address business informality as one steps are essential to fully integrating content policies or poorly-designed of the binding constraints for latent investment incentives that may 34 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 35 Chapter 4 FIAS HAS MADE SIGNIFICANT MEASURING SUCCESS: OUTCOMES, ADVANCES IN MEASURING IMPACTS, AND TARGETS IMPACT THROUGH CONSIDERABLE In the FY17–21 cycle, the emphasis shifts from a focus on quantity of reforms to achieving and measuring the benefits of reforms, technical assistance, and financial INVESTMENT IN MEASUREMENT engagement. FIAS has excelled at meeting and surpassing targets for reforms, business savings, and investment generation. In addition, in the years leading into TOOLS AND TECHNIQUES IN the new strategy, FIAS has made significant advances in measuring impact through considerable investment in measurement tools and techniques in three areas: THREE AREAS: • Refining the log frame of standard levels, moving from initial reform-specific Implementation of this principle in the indicators to better articulate the benefits to intermediate and finally gender space will be done in a phased and 1} expected theory of change. broader, more aggregated economic pragmatic manner, with data collection benefits. focusing initially on clearly identified REFINING THE LOG FRAME OF STANDARD • Developing and tracking impact indicators as committed to in the At the level of intermediate outcomes, project types and then widening gradually to a broader array of projects, and with INDICATORS TO BETTER ARTICULATE THE FIAS strategy. the framework encompasses a number of benchmarks, including: the adoption due consideration to cost implications. EXPECTED THEORY OF CHANGE; • Developing an impact program to fill critical knowledge gaps and learn of innovative and improved products The World Bank Group Gender Strategy and processes; the introduction of commits to the collection of gender- from operational experience. new products, processes, or services disaggregated data across the entire to national and international markets; Bank Group portfolio. The approach in In concert with a broader World Bank 2} increased approval of patents on process FIAS-supported projects mirrors what Group effort, the measurement of the or product innovation; and decreased the institution has identified as critically effectiveness, results, and impact of DEVELOPING AND TRACKING IMPACT time, cost, and complexity of procedures important. Gathering this data deepens the FIAS strategy is extending in much required to do business. Impact our diagnostic and analytical capabilities greater depth into impact indicator areas INDICATORS AS COMMITTED TO IN THE including jobs, productivity, and incomes. The Bank Group is developing a “number measurement comprises data about job creation, productivity improvement, and around the issues concerning the economic empowerment of women, as well FIAS STRATEGY; AND of jobs created” indicator as part of this investment catalyzed by FIAS-supported work. Indicators to be developed at as the interventions that work best to their benefit. endeavor. the FIAS FY17–21 midpoint will cover SCORECARD FOR TRACKING TARGETS RESULTS FRAMEWORK TO ACHIEVE productivity, participation in value FIAS AND T&C GOALS For the FY17–21 cycle, FIAS is establishing chains, quality of regulation through The three FIAS strategic pillars—improve targets for results, impact, and priority measurement of the implementation gap, 3} the business environment, expand market geographic focus. These targets are and transparency. opportunities, and strengthen firm incorporated into a detailed scorecard DEVELOPING AN IMPACT PROGRAM TO FILL competitiveness—are designed to mobilize global engagement, employ reform The overarching principle for gathering data on gender and other priority that tracks progress on achieving these targets (see Table 1). The scorecard CRITICAL KNOWLEDGE GAPS AND LEARN diagnostics, and leverage partnerships in benchmarks will remain consistent measures results against targets as in the previous strategy cycle. It also includes throughout the strategy cycle: data is FROM OPERATIONAL EXPERIENCE. pursuit of intermediate and final outcomes that produce significant beneficial impacts. collected unless there is a compelling a new target measuring the extent to T&C’s integrated results framework reason as to why collection is not possible which IFC and IBRD lending operations captures key measurements at cascading or is irrelevant to project objectives. are leveraged by FIAS. In addition, the 36 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 37 CHAPTER 4: MEASURING SUCCESS: OUTCOMES, IMPACTS, AND TARGETS scorecard will be updated to incorporate this regard, it has committed 70 • Measuring impact, such as direct T&C, which implements the FIAS entrepreneurship). The framework is the FIAS-supported projects are integral targets for new World Bank Group percent of client-facing project compliance cost savings, investment program, relies on an integrated results main foundation of results management to the T&C offering and adopt the T&C indicators in jobs and productivity once implementation spending in IDA generated by facilitation of FDI framework that builds on development in T&C and is supported by detailed results chain illustrated below (see Figure these have been developed and rolled out. countries, 25 percent in FCS, and 50 in priority sectors, job creation, challenges, solutions, and theories of definitions of indicators. The T&C results 4). The FIAS scorecard aids in tracking percent in Sub-Saharan Africa. and productivity. Job creation and change under each of its thematic areas framework applies to projects and tasks progress and results against the set The scorecard tracks results organized by productivity indicators are being (investment climate, trade and competition, across all instruments, including to IFC targets. five themes: • Delivering significant business developed and systematized at the competitive sectors, and innovation and Advisory Services projects. results, covering the number of World Bank Group level, and FIAS • Focus on priority clients, covering investment climate reforms by targets will be set and included in the the share of client-facing project priority clients. In addition to tracking scorecard once these are finalized. implementation spending in the number of reforms in IDA T&C will make the necessary efforts IDA, fragile and conflict-affected situations (FCS), and Sub-Saharan countries, the scorecard will also monitor the reform count in IDA and to disaggregate data and capture the FIAS-supported projects are integral to the T&C offering and adopt the T&C gender impact of FIAS work. Africa. FIAS continues its emphasis on delivering results in countries FCS countries. results chain. • Leverage, covering IBRD and IFC where investment climate reform • Client satisfaction and development investment operations informed and can bring the greatest impact. In effectiveness, covering T&C projects. enabled by FIAS. Table 1: Targets, Geographic Focus, and Themes Tracked in FY17–21 Scorecard Figure 4: The T&C Results Chain Trade Investment Climate Competitive Sectors Innovation & Entrepreneurship FY12-16 FY17-21 Strategic Cumulative Strategy Strategy Theme Indicator FY12-15 Target Target Trade Policy & Integration Business Environment Agribusiness Innovation & Technology Policy Core Global Themes Trade Facilitation & Investment Policy and Manufacturing Entrepreneurship & SME % of FIAS client-facing project implementation spend in IDA countries 78% 70% 70% Logistics  Promotion Services Development Focus on Competition Policy Indicator Based Reform Spatial Growth Solutions Priority Clients % of FIAS client-facing project implementation spend in FCS countries 28% 25-30% 25% % of FIAS client-facing project implementation spend in Sub-Saharan Africa 59% 50% 50% Country Operations | Knowledge | Global Voice Number of reforms supported by FIAS 263 250 275 Delivering Significant % of reforms supported by FIAS in IDA countries 72% 60% 70% Reduced Effective Strengthened Increased Enhanced Business Investment Competition Public Sector More Value Addition of Innovation % of reforms supported by FIAS in FCS countries 31% None 25% Restrictions Policies Institutional Integrated Local Suppliers Policies & Systems Results % of reforms supported by FIAS in Sub-Saharan Africa Illustrative Capacities Economies 66% None 50% Intermediate Reduced Improved Support Outcomes Services for Client Overall client satisfaction (results from IFC Client Survey—satisfied) 91% None 90% Business, Satisfaction and Investment, and Enhanced Public- Innovative SMEs & Development Development effectiveness (% of FIAS projects rated satisfactory) 89% None 80% Trading Costs Private Dialogue Entrepreneurship Effectiveness Improved More Competitive G2B Service Sectors & Spillovers Improved (e.g., infra) from Agglomeration Skills Match Direct compliance cost savings $193M $350M $250M Measuring Investment generated via facilitation of FDI in priority sectors* $1.36B $1B $1B Impact Outcomes Improved Firm Productivity | Increased Investment | Improved Trade Performance | Enhanced Innovation Productivity—new impact indicator for FY17–21** TBD Jobs—new impact indicator for FY17–21** TBD Impacts Growth | Aggregate Productivity | Jobs | Rising Incomes Leverage IBRD and IFC investment operations informed and enabled by FIAS** TBD *The $1 billion target for investment generated is derived using an improved methodology. Using the previous methodology, the comparable investment generated Twin Goals Ending extreme poverty | Boosting shared prosperity target would be $2 billion for FY17–21, or double the target for the previous cycle. **Methodology for setting targets for these indicators will be developed during FY17–21 cycle. Note: BL=Business Line; FCS= fragile and conflict states; FDI= foreign direct investment; FIAS=Facility for Investment Climate Advisory Services; FY= fiscal year; IBRD= International Bank for Reconstruction and Development; IC= investment climate; IDA= International Development Association; IFC= International Finance Corporation; TBD= to be determined. 37 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 38 Chapter 5 FIAS-SUPPORTED TEAMS WORK WITH OPERATING PRINCIPLES THE PRIVATE SECTOR, REGIONAL Governments and the private sector around the world are actively seeking ORGANIZATIONS, AND GOVERNMENTS more effective ways of boosting the volume and value of trade, enhancing the investment climate, improving sectoral competitiveness, and fostering innovation TO HELP LINK FIRMS TO INVESTMENT and entrepreneurship—all elements of successful economic growth strategies. The OPPORTUNITIES WHILE BUILDING creation of the Global Practice structure, including the joint Trade & Competitiveness Global Practice, signals the World Bank Group’s commitment to systematically CAPACITY AND ADVOCATING FOR REFORM strengthening its engagement in these issues. THROUGH BUSINESS ASSOCIATIONS FIAS STAKEHOLDERS good practice, establish and enhance global AND PUBLIC-PRIVATE DIALOGUE (PPD). T&C administers the FIAS program with FIAS stakeholders as part of the World thought leadership, and implement joint projects and diagnostics through work T&C administers the FIAS program with A KEY GOAL OF THIS WORK IS TO ENSURE Bank Group, consisting of the World with organizations such as the OECD, the Bank (IBRD and IDA), IFC, the Multilateral Food and Agriculture Organization of the FIAS stakeholders as Investment Guarantee Agency (MIGA), United Nations (FAO), the World Trade THAT THE PRIVATE SECTOR PERSPECTIVE and the Bank Group’s Global Practices. Organization (WTO), and the UN Industrial part of the World Bank Stakeholders include client governments, Development Organization (UNIDO). Group, consisting of IS REPRESENTED IN PUBLIC REFORM donor partners, high-income countries, civil society, international organizations, FIAS-supported teams work with the private sector, regional organizations, the World Bank (IBRD and IDA), IFC, the EFFORTS. academia, regional organizations, and the private sector. and governments to help link firms to Multilateral Investment investment opportunities while building Guarantee Agency T&C IMPLEMENTS THE FIAS STRATEGY FIAS works with client governments to partner with sub-national entities on local capacity and advocating for reform through business associations and PPD. A (MIGA), and the Bank Group’s Global Practices. WITH SPECIALIZED TEAMS THAT reform, engage national governments key goal of this work is to ensure that the for high-level impact, and assist in private sector perspective is represented Stakeholders include in public reform efforts. Regional projects TOGETHER INCLUDE CLOSE TO ... implementing reforms. FIAS engagement contributes to the global development encompassing multiple countries help FIAS client governments, agenda, establishes communities of leverage maximum results. Examples of donor partners, high- practice, leverages examples and shared such high-impact efforts include FIAS- income countries, civil 500 80 experience, improves feedback loops supported reform work with the Common between reform input and implementation, Market for Eastern and Southern Africa society, international shapes reputation and perception, and (COMESA), the Economic Community of organizations, academia, creates and increases developing country West African States (ECOWAS), and the regional organizations, demand for reforms. Organization for the Harmonization of Business Law in Africa (OHADA), as well and the private sector. WORKING International organizations and academia as collaboration on trans-border reform IN partner with FIAS to share and replicate agendas.6 STAFF COUNTRIES OHADA, the French acronym for the Organization for the Harmonization of Business Law in Africa, a 17-nation league of 6 countries in West and Central Africa; ECOWAS is the Economic Community of West African States, a 15-nation economic integration organization. 40 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 41 CHAPTER 5: OPERATING PRINCIPLES WITH FIAS SUPPORT, T&C IS FIAS theory of change. Together, these World Bank Group financing tools to the POSITIONED TO PROVIDE GLOBAL T&C delivers its support through an systems, publications, and programs create a feedback loop linking project strong foundation of advisory, technical assistance, and knowledge leadership. THOUGHT LEADERSHIP AND integrated platform that draws on the full array of World Bank implementation, results, product design, and global thought leadership. IBRD lending and IFC investment present opportunities to combine advisory and STRATEGIC PARTNERSHIPS WHICH Group instruments: advisory Bank Group financing mechanisms in FIAS TO SERVE T&C’S INTEGRATED services and non-lending technical a coordinated fashion. It also helps to DELIVERY PLATFORM assistance; Bank financial mobilize additional capital for development GENERATE FLAGSHIP PUBLICATIONS instruments (that is, lending and guarantees); and convening T&C delivers its support through an integrated platform that draws on impact (see Box 13). AND KNOWLEDGE-SHARING EVENTS IN the full array of World Bank Group FIAS monitors and reports IBRD lending services. instruments: advisory services and and IFC investment that have been non-lending technical assistance; Bank CONJUNCTION WITH INTERNATIONAL informed and enabled by FIAS-funded financial instruments (that is, lending projects, for example: and guarantees); and convening services. AGENCIES, DEVELOPMENT PARTNERS, from experience. Such partnerships also FIAS contributes to the T&C platform • Restructuring government provide the opportunity to transfer lessons by supporting advisory services that agencies; investment in ICT and and proven solutions to IDA, and to THE PRIVATE SECTOR, AND CLIENTS. deliver thought leadership and client- implementation systems; capacity leverage South-South investment. facing programs with attributable and building and skills development in The FIAS commitment to results measurable outcomes and impacts. Over the public sector and through public measurement, impact evaluation, and time, advisory services will also leverage extension services. knowledge and learning includes the programs more systematically to originate, • Infrastructure investment to increase proactive communication of results and influence, and add value to World Bank sector competitiveness. impact through publications, newsletters, financial instruments, IFC investments, and product launches, speeches, social media, MIGA guarantees. • Private sector investments to create and other communications channels. jobs and business opportunities for SCALING UP IMPACT THROUGH The foundation of this commitment is local firms and suppliers. HOW FIAS SERVES ITS CLIENTS guidance is complemented by FIAS FIAS supports the use of PPD with clients, LEVERAGE support for quality control, monitoring partners, and the private sector in pursuit a cutting-edge results measurement T&C implements the FIAS strategy with A powerful new dynamic in the FIAS and evaluation, and impact measurement of business development and sustainable and knowledge-management program specialized teams that together include program for FY17–21 is the addition of throughout the project cycle for client- growth opportunities. This convening backed by impact evaluation and the close to 500 staff operating in over 80 countries. These FIAS-supported facing projects. The result is a portfolio of authority can be used to incubate new teams deliver results through a cycle FIAS-supported knowledge programs and ideas, develop pilots, apply analytical of support for clients beginning with client-facing projects that deliver locally, outputs, and sustain implementation analysis, product development, incubation while supporting cross-regional learning, support—all in partnership with clients. Box 13: Combining Advisory Services with Lending Instruments to Leverage Results and innovation, and leading to new and and foster a results-centered culture improved operational projects based within T&C, the World Bank Group, and With FIAS support, T&C is positioned to When taken together, IBRD lending, IFC investment, public financing, and private investment are informed and enabled by FIAS- on global economic trends, domestic client counterpart teams. Such efforts provide global thought leadership and funded projects that deliver impact based on the results framework. Successful examples on which FIAS will build include: and international market opportunities, also help foster a results-centered culture strategic partnerships which generate flagship publications and knowledge- In Tanzania, advisory and IBRD lending have combined to increase economic sustainability. The advisory services program is and client development challenges. This within T&C, the World Bank Group, and sharing events in conjunction with providing technical assistance to support the government’s implementation of policy actions, with $50 million in financing from approach sets the stage for a project client counterpart teams. T&C continues international agencies, development an IBRD Development Policy Operation. The combination will improve capacity to implement reform, enhance the quality of implementation phase in which funding the practice of maintaining a dynamic partners, the private sector, and reform, and encourage private sector compliance. The resulting $150 million-plus pipeline of IBRD lending aims to strengthen support is often sourced at the regional database of programs and projects that clients. FIAS-supported work, including entrepreneurship support and help establish a supplier development program for a new liquid natural gas export terminal. or country level. When FIAS funding specify the level and form of FIAS support. comes during project execution, it centers publications and events, leads to In India and Nepal, tourism along the Buddhist Circuit is attracting private investment and creating jobs. Advisory services have on additional support for high-impact The design and implementation of the development and dissemination helped build a branding strategy, prioritized public and private investment, upgraded quality and services, and improved PPD. projects, or the piloting of innovative investment climate reforms are informed of solutions at the global, regional, Among the results are $16 million in IFC Investment projects with the Marriott and Hyatt hotel chains. The effort is expected to ideas or new project components that by technical and strategic advice and country, industry sector, and firm levels. create more than 2,700 direct and indirect jobs, with additional supplier linkages for local businesses. enhance results. The focus on innovation, by follow-through to ensure that Partnerships with high- and middle- excellence in design, and implementation implementation is effective and sustained. income countries generate lessons learned 42 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 43 Chapter 6: FIAS IS MANAGED BY THE WORLD BANK INSTITUTIONAL SET-UP GROUP’S TRADE & COMPETITIVENESS AND FUNDING GLOBAL PRACTICE, A JOINT FIAS is managed by the World Bank Group’s Trade & Competitiveness Global ORGANIZATION OF IFC AND THE WORLD Practice, a joint department of IFC and the World Bank. T&C has enriched its suite of offerings and organized them under four core competencies: trade and competition, BANK. T&C HAS ENRICHED ITS SUITE investment climate, competitive sectors, and innovation and entrepreneurship. OF OFFERINGS AND ORGANIZED THEM Delivery on the wide array of activities offered under these four T&C areas of activity can be strengthened by accessing FIAS funding. Some of the client-facing technical UNDER FOUR CORE COMPETENCIES: assistance implemented by T&C and funded by FIAS receives additional support from other sources. T&C also manages other activities that do not fall under the scope of FIAS, but are fully funded separately. FIAS is not an operational unit or separate consists of the two IFC Vice Presidents Committee of Donors meeting, held during legal entity. Rather, it is a global funding for Global Client Services and the Bank the yearly T&C Development Partners vehicle administered by IFC on behalf Group’s Vice President for Equitable Forum. The meeting includes a review of of the Bank Group and donor partners. Growth, Finance, & Institutions (EFI). past activities and progress achieved, as FIAS is categorized as IFC Donor-Funded The overall objective of the Steering well as a discussion of upcoming priorities Operations, signifying that the FIAS Committee is to enable Bank Group senior and strategic matters related to the overall Trust Fund is IFC-administered, and that management to oversee the two joint direction of FIAS. FIAS-related donor and client agreements Bank Group Global Practices—T&C and TRADE AND INVESTMENT COMPETITIVE INNOVATION AND are signed by IFC on behalf of the Bank F&M—and report on results achieved, T&C will continue to report on the COMPETITION CLIMATE SECTORS ENTREPRENEURSHIP Group. T&C operates across Bank Group as well as discuss operational and other implementation of FIAS via the FIAS institutional borders. The FIAS Trust issues to ensure effective delivery. Annual Review. This comprehensive report Fund is managed in accordance with on FIAS-funded activities of the previous the policies, administrative processes, The agenda of the Steering Committee, fiscal year provides an overview of the and systems of IFC Advisory Services, which meets at least on a quarterly basis programs and activities co-financed DELIVERY ON THE WIDE ARRAY OF including those for project approval, and discusses FIAS twice a year, includes through FIAS. It highlights the results reporting, and trust fund and financial joint IFC-IBRD initiatives. Among other achieved as well as key developments responsibilities, the Committee serves as during the reporting period. The Annual ACTIVITIES OFFERED UNDER THESE management. As a funding platform, it is accessible to all T&C staff, serving as a the forum for review and approval of the Review also serves as a key input for the means to enable and leverage all types FIAS annual budget and provides guidance FIAS Consultative Committee of Donors FOUR T&C AREAS OF ACTIVITY CAN BE of Bank Group instruments including additional advisory services, analytics, on strategic matters. The composition and mandate of the Committee provides meetings. In line with past practice—and to assess STRENGTHENED BY ACCESSING FIAS lending, and investments. assurance that FIAS-funded activities are implemented in close coordination with the progress achieved and review and GOVERNANCE, REPORTING, AND revalidate the strategic directions—a FUNDING rest of the Bank Group’s private sector MIDTERM EVALUATION development activities. midterm evaluation will be commissioned The formal internal oversight of FIAS to an external consulting firm in FY19, operations rests with the Joint Global FIAS donors provide general guidance and midway through the FY17–21 operational Practices Steering Committee, which oversight via the Annual FIAS Consultative cycle. 44 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 45 CHAPTER 6: INSTITUTIONAL SET-UP AND FUNDING 28% FY12-16 FIVE YEAR FUNDING RAISED Table 2: FIAS Fundraising Results and Expenditures, FY12–16 $180 MILLION Share of FY12 FY13 FY14 FY15 FY16 FY12-16 Average FY12-16 (projected) TOTAL per year TOTAL ($50 million of the WBG - Core 8,163 8,000 7,000 6,700 6,700 37,163 7,433 21% $180 million) from IFCb 4,063 4,000 4,500 5,100 5,100 22,763 4,553 13% IFC, MIGA, and the IFC IC Business Line 12,900 7% World Bank. These $130.5 MILLION MIGA 2,500 2,400 1,500 - - 6,400 1,280 4% fundraising figures World Bank 1,600 1,600 1,600 1,600 1,600 8,000 1,600 4% include contributions Donors - Core 5,730 5,532 21,241 7,872 7,848 48,223 9,645 27% Donors - Programmatic 6,203 5,447 15,410 16,522 10,404 53,986 10,797 30% to the Trade Donors - Project 9,457 5,456 5,933 4,666 2,103 27,615 5,523 15% Facilitation Support OF THE $180M was contributed by donor partners Client Contributions (cash) 484 90 75 50 - 699 140 0% Program (TFSP) Total 30,037 24,525 50,259 35,810 27,055 180,586 36,117 100% Expenditures 28,679 30,355 25,582 25,011 30,000 139,627 27,925 FY17-21 FIVE YEAR FUNDING GOAL Note: FY= fiscal year; IC= investment climate; IFC= International Finance Corporation; WBG= World Bank Group. $200 MILLION a FY16: Projections as of December 31, 2015. b IFC’s contribution outlined in the table includes direct contribution to the FIAS core trust fund and the IFC Advisory Services administrative budget to cover staff costs of a number of mainstreamed positions related to FIAS. This represents a c Table includes supplemental allocation from IFC under the annual global Investment Climate Business Line (ICBL) envelope in the amount of $12.9 million. 10.8 percent increase over actual FY12–16 fundraising and reflects both increasing client demand for FIAS-supported cycle, which includes funding for TFSP, tax for the knowledge management (KM) fund architecture in a way that ensures FUNDING TARGETS FOR FY17–21 and systems with the WTO Trade Facilitation simplification and transparency, and debt and product development agenda, as that donor priorities continue to be met. projects and the expanded scope The FIAS strategy for FY12–16 set a funding Agreement. TFSP will be supported through resolution. This represents a 10.8 percent well as overall program management of the FY17–21 strategy cycle The World Bank Group and T&C target of $155 million for the five-year a separate funding stream during the increase over actual FY12–16 fundraising expenses. In addition, the FIAS core trust program. management are grateful for the support cycle and actually raised approximately FY17–21 FIAS strategy cycle. (including the IFC Investment Climate fund supported regional client-facing $180 million in funding for the entire cycle, Business Line supplemental contribution) technical assistance implemented by during the FY12–16 cycle of 19 FIAS or about $36 million per year. Roughly On the basis of the successful FY12–16 and reflects both increasing client demand the Bank Group regions. To facilitate the development partners: Australia, Austria, 73 percent of this amount ($130.5 million) mobilization results, estimated fundraising for FIAS-supported projects and the administration of donor funding earmarked Canada, European Union, France, Ireland, was contributed by donor partners, and targets for FY17–21 are set at $200 million expanded scope of the FY17–21 strategy for specific activities of interest to our Japan, Republic of Korea, Luxembourg, 28 percent ($50 million) from IFC, MIGA, for the five-year cycle to support new cycle program. donors, program- and project-specific the Netherlands, Norway, Spain, Sweden, and the World Bank. These fundraising activities and continued evolution and trust funds were established on a case- Switzerland, United Kingdom, United expansion of the program. The baseline Average annual expenditures from FIAS States, Bill & Melinda Gates Foundation, figures include contributions to the Trade by-case basis. As a result, the number used for the FY17–21 funding estimate trust funds during FY12–16 are about $27.9 Ewing Marion Kauffman Foundation, Facilitation Support Program (TFSP), a of trust funds managed under FIAS was calculated on the basis of the average million per year. Average annual spending TradeMark East Africa. special initiative to support client countries has complicated financial management annual funding secured during the FY12–16 targets for the FY17–21 cycle are expected in aligning their trade facilitation practices significantly and led to high transaction to be in the range of $35-40 million. costs. Moreover, the option of earmarking ADMINISTRATION OF DONOR FUNDS funding for specific programs and projects During the FY12–16 cycle, FIAS was a has meant fewer untied core funds, The World Bank Group and T&C management are grateful for the support collection of trust funds aligned with limiting the program’s flexibility and its strategy. The platform embedded a undermining FIAS’ business model. FIAS during the FY12–16 cycle of 19 FIAS development partners. core trust fund to support the agendas is in the process of streamlining the trust 46 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 47 125 PROJECTS REVIEWED ANNEX 1 The FIAS Midterm Evaluation and Management Response FOR EACH OF THE 125 PROJECTS WITHIN Excerpts from the Executive Summary of the FIAS Midterm Evaluation by the THE FIAS PORTFOLIO REVIEWED BY THE independent consultant7 INDEPENDENT CONSULTANT IN TERMS OF FINDINGS—STRENGTHS STRATEGIC RELEVANCE THE PROJECTS FIAS has been fully compliant with facilitating reforms in developing countries and on the basis that the current trajectory can be maintained, having already supported around 175 reforms just beyond the mid-point of the strategy cycle, the headline outcome level SCORE ‘AS EXPECTED’ AND ‘BEYOND target is most likely to be exceeded. This performance is highly commendable. Efficiency and Effectiveness: FIAS achieved a high efficiency rate when compared with the technical assistance / advisory support EXPECTATIONS’ service rate globally with delivery modes, from Independent Consultant’s research, appearing to be more effective and impactful when clients make financial contributions. The independent consultant also witnessed solid performance in terms of mainstreaming and maximizing synergies and complementarities across the product range. FIAS has thrived in the result-oriented environment courtesy of a robust and evolving M&E matrix. Slashing overheads from 17% of the total FIAS budget breakdown to 7% in three years was an excellent achievement. 7 % Strategic Relevance: For each of the 125 projects within the FIAS portfolio reviewed by the independent consultant in terms of SLASHING OVERHEADS FROM 17% OF THE TOTAL strategic relevance the projects score “as expected” and “beyond expectations”. Results: In addition to almost 200 supported reforms just beyond the mid-point of the strategy cycle, investment facilitation in priority FIAS BUDGET BREAKDOWN TO 7% IN THREE sectors is also well above the target trajectory. … With an average client facing expenditure in FY12 and FY13 of 26% (32% of FIAS projects) in fragile and conflict-affected states (FCS), this is entirely consistent with strategic goals. YEARS WAS AN EXCELLENT ACHIEVEMENT. RECOMMENDATIONS—ADDRESSING WEAKNESSES / BUILDING ON STRENGTHS The independent consultant sees integration of CIC and the FIAS program into the Trade The & Competitiveness Global Practice from a position of strength with a well-honed product independent consultant range—very impressive results pipeline—strong brand equity—deep-rooted M&E impact sees integration of CIC and oriented culture—with the vast majority of programmes optimally placed to make a FIAS HAS BEEN FULLY the FIAS program into the Trade & direct and significant contribution to the WBG twin goals. That said, adjustments and Competitiveness Global Practice from realignments are needed and should be commenced in FY14—otherwise the relevance a position of strength with a well-honed COMPLIANT WITH of the FIAS strategy will have a shorter “shelf-life” which will be unhelpful from both a Management agrees donor and T&C GP senior management perspective. product range—very impressive results pipeline—strong brand equity—deep- that measurement beyond rooted M&E impact oriented culture— FACILITATING Monitoring and Evaluation key recommendations: The independent consultant noted that with the vast majority of programmes reforms is critical and has several key impact indicators, such as jobs, productivity and incomes were not part of the FIAS strategy and strongly recommends that impact must be measured at a higher optimally placed to make a direct and REFORMS IN made and continues to make aggregate level than at the level that the FIAS strategy cycle initially started from. significant contribution to the WBG twin goals. significant progress over the Cross-cutting dimension recommendations: Gender Approach: Compared to other CIC product DEVELOPING last two years in moving toward measurement of line and initiatives where, generally, the independent consultant has witnessed stellar performance, there is so much scope for improvement in this area that a rethink is needed whereby alignments should feature in the remainder of the strategy cycle. The independent consultant notes that this has been acknowledged by FIAS COUNTRIES impacts. management which should manifest in a new gender initiative being launched within the second half of the strategy cycle. Trade & Competitiveness Global Practice recommendations: Political Economy: In project design, devote more time to identifying non- business stakeholders impacted by regulatory reforms. Engage both business and non-business stakeholders in the public-private dialogues and capitalize on the expertise within T&CGP. 7 David Brown, Paul Wymenga, Richard Liebrechts, David Regeczi, Midterm Independent Evaluation of FIAS 2012–2016 Strategy and Program, ECORYS (The Netherlands), Nov. 10, 2014, See full report at: https://www.wbginvestmentclimate.org/donor-partners/upload/FIAS-Midterm-Evaluation-11-Nov-2014.pdf. 48 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 49 ANNEX 2 Knowledge Management recommendations: The independent consultant recommends that knowledge management be aligned with strategic objective of Trade and Competitiveness Global Practice. … In summary, what is missing currently from the KM is, first, a sense of ownership in which an individual or small unit takes the time to re-synthesize those lessons learned into specific problem solutions that address problems being faced in the field. FIAS FY12–16 Reform Totals (through FY15) Excerpts from Trade & Competitiveness Management Response:8 FY12 FY13 FY14 FY15 FY16 TOTAL Efficiency and Effectiveness: Management appreciates the independent consultant’s overall ratings on efficiency and effectiveness. GRAND TOTAL 46 75 76 68 - 265 It notes that the positive assessment is a function of continuous improvements that began in earlier strategy cycles and took on East Asia and the Pacific 0 1 2 1 - 4 additional momentum with refinements in the advisory approach of the past three years. Philippines 0 0 1 1 - 2 Political Economy: Management agrees that more can be done on political economy analysis (PEA) and in a more consistent manner. Timor-Leste 0 1 0 0 - 1 Political economy analysis (PEA) is an integral part of project design. It is important to understand the relationship between the Vietnam 0 0 1 0 - 1 economy and the state, including power dynamics and triggers of conflict. Europe and Central Asia 13 10 8 14 - 45 Results Monitoring and Evaluation: Management agrees with the assessment on strategic relevance and notes that it has been an area Albania 1 0 2 3 - 6 of particular focus in this strategy period. Armenia 1 3 0 1 - 5 Belarus 1 1 0 0 - 2 Management agrees that measurement beyond reforms is critical and has made and continues to make significant progress over the last two years in moving toward measurement of impacts. On this FIAS has excelled, surpassing investment-generated targets before Bosnia and Herzegovina 0 0 0 3 - 3 the closure of the cycle. It is also making substantial progress on other impact targets. Georgia 1 0 2 0 - 3 Kazakhstan 1 0 0 0 - 1 Cross-Cutting: Management agrees that the approach to gender can be improved under FIAS. Prior to the FIAS midterm evaluation, an effort was launched to develop a gender strategy for investment climate. It was approved by the management team in FY2014. Kosovo 2 3 0 1 - 6 The action plan on gender is based on the FIAS FY12–16 strategy that focused on engaging on gender when client demand and Kyrgyz Republic 0 0 0 2 - 2 commitment is strong. Macedonia, FYR 0 0 0 1 - 1 Moldova 3 2 0 0 - 5 Product Line and Embedded tools Contribution to FIAS Objectives: Montenegro 1 0 0 1 - 2 Public Private Dialogue: Management agrees on the challenges faced in implementing and measuring the impact of public-private Russian Federation 1 0 3 0 - 4 dialogue (PPD). Management also agrees that an evaluation of the PPD activities, whether standalone or embedded in projects, can be very beneficial to understanding how and where PPD works best—in addition to developing better measures of its impact. Tajikistan 1 0 1 1 - 3 Ukraine 0 1 0 1 - 2 Sector Specific: Management is indeed ramping up work in agribusiness which accounts for the majority of the industry portfolio. The Latin America and Caribbean 11 14 4 7 - 36 value chain approach is integral to how we design and implement our work programs, integrated across FIAS, and across sector units of the IFC and World Bank. Colombia 1 2 1 1 - 5 Costa Rica 3 2 0 1 - 6 Overall, however, Management disagrees with the findings regarding the sector focus. Based on agreements with donors in developing Dominican Republic 0 0 0 1 - 1 the FIAS strategy, one of the three key pillars of the FY12–16 FIAS Strategy is “Unlocking Sustainable Investments in Key Sectors” to ensure a sector approach to reform which would complement the economy-wide reforms of FIAS. The real sector was acknowledged El Salvador 0 1 0 0 - 1 as a priority and was agreed to be an area of focus. However, agribusiness and tourism were specifically identified as sectors which Guatemala 1 2 0 1 - 4 would receive increased attention in this FIAS cycle, with more sectors to follow. They were the first choices given their potential Haiti 0 1 0 0 - 1 impact on growth, poverty reduction and as source for significant employment generation. Honduras 0 1 2 1 - 4 Knowledge Management: Management acknowledges that while there have been significant advances in knowledge management, with Jamaica 0 1 1 1 - 3 a dedicated knowledge management team in place since the beginning of the strategy period, more progress can be made in this area. Mexico 1 0 0 0 - 1 Nicaragua 0 1 0 0 - 1 Panama 2 2 0 0 - 4 Peru 2 0 0 1 - 3 Trinidad and Tobago 0 1 0 0 - 1 Uruguay 1 0 0 0 - 1 Middle East and North Africa 2 0 0 0 - 2 Algeria 1 0 0 0 - 1 Morocco 1 0 0 0 - 1 8 World Bank Group, Trade & Competitiveness Global Practice (T&C), 2014. T&C Management Response to FIAS Midterm Review, Nov. 11. At At https://www.wbginvestmentclimate.org/ South Asia 1 1 0 1 - 3 donor-partners/upload/FIAS-Midterm-Review-Findings-and-Recommendation-with-Management-Response-11-11-2014.pdf. Bangladesh 1 1 0 1 - 3 50 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 51 ANNEX 2: FAIS FY12–16 REFORM TOTALS (THROUGH FY15) ANNEX 3 Results Highlights, FY11–15 FY12 FY13 FY14 FY15 FY16 TOTAL Sub-Saharan Africa 19 49 62 45 - 175 Africa Region—Common Market for Eastern and Southern Africa 0 0 0 1 - 1 (COMESA) FIAS Strategy Cycle Metrics through FY15 Angola 0 0 0 2 - 2 With four years of the five-year FY12–16 strategy cycle completed, the numbers indicate that steady-state expenditures are Benin 0 2 4 3 - 9 yielding more projects and reforms. FIAS-supported teams are now working in more than half of FCS states and generating % of respondents Burkina Faso 0 2 2 0 - 4 more reforms in more countries. (Figures for FY11 are shown to provide a pre-strategy cycle baseline.). Burundi 3 6 0 0 - 9 Total FIAS-Supported Reforms Implemented Reforms Recorded in Doing Business Cameroon 0 1 3 0 - 4 100 Central African Republic 0 0 1 0 - 1 75 76 76% 75% 74% Chad 0 1 1 0 - 2 80 68 69% Comoros 0 2 1 0 - 3 63% 60 Congo, Dem. Rep. 0 1 5 3 - 9 46 42 41 39 40 40 Congo, Rep. 2 0 1 0 - 3 30 27 Côte d’Ivoire 0 4 5 4 - 13 20 Djibouti 0 1 1 0 - 2 0 Equatorial Guinea 0 0 1 0 - 1 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Gabon 0 2 1 1 - 4 Reforms Countries Yearly reform target: 50 Ghana 0 0 1 0 - 1 Guinea 0 2 3 1 - 6 Reforms in IDA Countries Implemented Reforms Recorded Guinea-Bissau 0 1 1 0 - 2 in Sub-Saharan African Countries Kenya 0 0 2 1 - 3 100 Lesotho 2 0 0 0 - 2 76% 83% 82% 80 Liberia 0 1 1 0 - 2 65% 66% 61% 63% 55% Madagascar 0 0 0 4 - 4 60 45% Malawi 1 1 1 1 - 4 41% 40 Mali 3 0 1 2 - 6 20 Mauritania 0 1 2 0 - 3 Mauritius 0 0 0 1 - 1 0 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Mozambique 0 3 0 0 - 3 Cycle target: 60% Namibia 0 0 0 1 - 1 Niger 0 2 1 0 - 3 Rwanda 3 7 4 5 - 19 Share of FIAS-Supported Reforms Achieved in FCS Countries, FIAS-Supported FCS Projects and Reforms São Tomé and Príncipe 0 1 2 0 - 3 Countries in Fragile and Conflict-A ected Situations 100 Senegal 0 1 5 1 - 7 Seychelles 0 0 0 1 - 1 80 Sierra Leone 2 0 1 0 - 3 60 Sudan 0 0 0 1 - 1 33% 34% 40 33 33 35 36 33 Swaziland 0 2 1 1 - 4 32% 30% 24% 24 23 23 Tanzania 1 0 2 1 - 4 20 14 18 17 19 21 7 11 Togo 1 1 4 2 - 8 0 Uganda 1 2 2 2 - 7 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Zambia 0 2 2 3 - 7 Total FCS Countries FCS Countries with Active FIAS Projects Zimbabwe 0 0 0 3 - 3 Note: Goal indicates goal per year for the FY12–16 strategy cycle. Number of Reforms 52 l FIAS STRATEGY FY17–21 FIAS STRATEGY FY17–21 l 53 Acknowledgments: Editorial The This report was written by a working group of the World Bank Group’s Trade & Competitiveness Global Practice: Damien Shiels and Wendy Jo Werner, team leaders; John Diamond, editor; Tania Priscilla Begazo Gomez, Peter Kusek, Lorenzo Nelli-Feroci, and Justin Yap, World Bank Group and team members; with support from Boyan Stanoev. T&C management are Design Partner grateful for the support Corporate Visions, Inc. during the FY12–16 cycle Printer of 19 FIAS development District Creative Printing, Inc. partners: For more information, visit www.worldbank.org/trade and www.worldbank.org/competitiveness GLOBAL PARTNERSHIPS INVESTMENT INNOVATION JOB CREATION HIGHER PRODUCTIVITY 54 l FIAS STRATEGY FY17–21