Good Corporate Citizenry, No Longer a Choice But a Necessity

Posted on August 18, 2017 by Michael Czinkota

By Victoria Galeano & Jerry Haar

When queried at a 1909 business meeting about the choice of colors available for his automobiles, Henry Ford replied that customers could have any color they wanted as long as it is black. Fast forward to the late 20th and early 21st centuries and consumers today are now in the driver’s seat (no pun intended). Publications such as Consumer Reports, CNET, and a myriad of other independent professional and consumer reviews of goods and services empower buyers, dictating to producers the style, features, and price ranges that consumers seek.

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World Bank: poverty could reach 44% in Argentina

Posted on September 22, 2014 by Michael Czinkota

World Bank claims that more than one-third of Argentina’s population could be hit by economic shocks

Approximately 33 percent of the country’s population — or those living on between US$4 and US$10 per day — is vulnerable to falling into poverty if faced with adverse economic conditions, the World Bank said in its 2015-2018 Country Partnership Strategy (CPS) report for Argentina.

The multilateral organization estimates there is a poverty rate of about 11 percent in the country, but has highlighted that Argentina should “focus on the need to sustain social gains achieved in recent years and expand social inclusion in an efficient and sustainable manner.”

The World Bank report, published for internal use in August of this year thus echoes warnings made by the United Nations Development Program (UNDP) about stalling social progress in the region.

Vulnerable populations, for the purposes of social policy, are those who have made it out of poverty but do not enjoy economic security like the middle class does. They live on an average US$4 to US$10 a day and risk being clawed back under the poverty line by economic turmoil, recession or volatility.

The UNDP recently warned that that up to one-third of Latin America is at risk of being clawed back in to poverty as the region’s economies face slowing growth rates.

The report praises the country’s recent economic policies, noting that “economic growth during 2003-2013 made Argentina one of the top two Latin America and Caribbean performers in terms of poverty reduction and improvements in shared prosperity.” But it also adds that the country’s most vulnerable populations have historically stemmed from the “economy’s exposure to adverse economic shocks, which reduces employment and earnings and limits the ability to finance social programmes supporting the poor.”

The very same report adds that economic activity rallied in 2010-11 but has since slowed, fiscal accounts are under pressure as a result of expenditures outpacing revenues and that a worsening trade balance has lead to a deterioration of external accounts.

Despite action by the government to tighten monetary policy and restrict some spending, a low debt-to-GDP ratio, the World Bank is anticipating that in that the short-term a “prolonged slowdown is more likely than a deep economic rift” as a result of sluggish economic performance, continued inflation, dropping international reserves and continued uncertainty over the holdout debt saga and reduced economic growth in China and Brazil.

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Image from Reuters

World Bank: THE SMALL ENTREPRENEUR IN FRAGILE AND CONFLICT-AFFECTED SITUATIONS

Posted on September 4, 2014 by Michael Czinkota

The new report by World Bank is part of a broader effort by the World Bank Group to understand the motives and challenges of small entrepreneurs in fragile and conflict-affected situations (FCS). The report’s key finding is that, compared to entrepreneurs elsewhere, entrepreneurs in FCS have different characteristics, face significantly different challenges, and thus may be subject to different incentives and have different motives.

Therefore, it is recommended that both the current analytical approach and the operational strategy of the World Bank be informed by the findings that follow. The publication is organized in the following manner: (i)

Overview of the Entrepreneur’s Challenges in FCS; (ii) Observations of FCS Firms, Sectors, and Business

Environments; (iii) Implications of findings; and (iv) Conclusions and Recommendations. Included are also appendices, boxes, figures, and tables.

FCS Firm Characteristics

The report summarizes findings of recent World Bank Enterprise Surveys (ES) conducted across Sub-Saharan Africa (SSA), Asia, and the Eastern Europe and Central Asia (ECA) Region as well as Doing Business indicators and additional World Bank Group studies and field observations. The report finds that the majority of entrepreneurs in FCS countries are small, informal, and concentrated in the trade/services sectors. According to the ES, and after controlling for the level of development (that is, GDP per capita),

1. The average FCS firm in SSA and the ECA Region2 produces less output than non-FCS firms.

2. The average FCS firm in ECA is by 20 percent less likely to innovate (that is, to introduce/upgrade new products and services) than its non-FCS counterpart.

3. FCS firms start smaller and grow significantly more slowly, or even shrink (in the number of employees) over time, compared to non-FCS firms in the Regions analyzed.

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A Critical New Role for the World Bank

Posted on August 19, 2014 by Michael Czinkota

By THE EDITORIAL BOARD, New York Times

Opening arguments were last Thursday, but the case is already reverberating through the banking industry — and not in ways that would make the world a better place.

As The Times recently reported, bank lawyers say that developments in the case could reinforce an unfortunate trend: the departure of several banks from the business of arranging remittances for immigrant workers, on the ground that the legal risk of inadvertently handling dirty money has become too high.

That would threaten years of progress, spearheaded by the World Bank, to lower the fees on hundreds of billions of dollars in remittances from migrant workers in rich countries to their families in poor countries.

It is crucial for the World Bank not to let that happen. The answer is not to require that banks stay in the game, enduring tighter scrutiny; it is for the World Bank itself to step in and become a remittance center.

Other efforts to foster remittances are helpful, including a recent law signed by President Obama to streamline the regulation of nonbank money transfer businesses. But only the World Bank can broadly transform remittances.

It should do so quickly. Throughout its history, the World Bank has changed along with development challenges. It has gone from making loans to governments to investing in private-sector projects, and from offering loans to making grants and providing insurance. The bank should now rise to the challenges posed by remittances — a critical tool in the fight against world poverty.

World Bank forums see youth as global changemakers

Posted on August 18, 2014 by Michael Czinkota

By Michael Marshall for UPI.com

An international group of young professionals, entrepreneurs, social activists, and student leaders showcased the role of youth in global development through forums at the World Bank forums on youth service and entrepreneurship.

“Without the involvement of young people in areas that affect them it will be difficult for countries to move forward,” said Evans Musonde from Zambia. He represented the Africa Peace Service Corps that is working to integrate the societies on east and southern Africa through cross-border youth service exchanges.

Karen Scheuerer of the U.S. Peace Corps said, “We see youth as change makers.” She noted the Peace Corps efforts to promote youth entrepreneurship. About three-quarters of the people the Peace Corps works with are youth.

H.E. Olive Wonekha, Uganda’s ambassador to the U.S., said that countries like hers needed a shift from donor aid to more international trade and investment. Uganda needed to develop a core of young entrepreneurs to facilitate this development.

Speakers also stressed the importance of international exchanges and fellowships in developing the skills of young entrepreneurs and leaders in the developing world.

The forums are part of the 4th International Young Leaders Assembly that brings together 800 young leaders from over 60 countries for programs in Washington, DC, Philadelphia, and New York at the U.N. from August 11-20.