Exhibition of Globes

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“Doing Business”: Business Environment One of the biggest roadblocks to economic growth and poverty reduction is excessive business regulation that makes setting up a company and doing business very difficult. The IFC/World Bank Doing Business report ranks countries each year according to how easy or difficult it is to do business (www.doingbusiness.org). The rankings help policymakers compare regulatory performance across countries and prioritize reforms. Among the 155 economies measured in 2005/2006, it is easiest to do business in New Zealand and most difficult in the Democratic Republic of Congo. On the globe, the top 25 performers in terms of the ease of doing business have no “red tape.” Countries ranked 26 through 50 are marked by one line of red tape, those ranked 51 through 80 have two lines, and those ranked 81 through 145 have three. The bottom 10 countries are covered in red lines – with the exception of Laos, these countries are all in Africa. Countries not measured in the report are marked by a black line.
“Doing Business”: Cost and Capital Required to Start a Business In many countries the cost of procedures and the minimum capital required to start a business are so high that setting up a firm legally is all but impossible for most entrepreneurs. In Angola, for instance, the cost of starting a business is almost 450 percent of income per capita, and the minimum capital required is close to 500 percent. The cost of procedures and capital required to start a business are part of the IFC/World Doing Business ranking (www.doingbusiness.org). On the globe, countries are removed from their actual geographic location and positioned on a grid. Along the black longitude line, countries are arranged according to the cost required to start a business; the cost, as a percentage of income per capita, increases from north to south. Along the red latitude line, countries are arranged according to the capital required to start a business; the capital, as a percentage of income per capita, increases from west to east. (For some very large countries, the exact position on the grid is indicated by a bright dot.) The farther north and west a country appears on the grid, the more affordable it is to start a business.
“Doing Business”: Signatures Required for Export Every country requires official approval before exporters can ship their products abroad. However, requiring many approvals increases the risk of corruption and delays. While the world average is around 11 signatures required for export, countries in Sub-Saharan Africa require nearly double that number, and some require four times as many.  In contrast, OECD countries require an average of only about three signatures. “Signatures required for export” is a sub-indicator of the IFC/World Bank’s “Doing Business” ranking (www.doingbusiness.org). On the globe, each check mark represents five signatures required (check marks are sized to fit the available space).
Relative Distribution of IFC’s Investments in Client Countries IFC’s mission is to stimulate investment and create conditions that are conducive to investment flows into developing countries. As investments in emerging markets have risen substantially in recent years, IFC has increasingly focused on difficult markets where capital still does not flow easily, allocating a higher share if its investments to poorer and riskier countries and regions. Hence IFC’s investments are now significantly more concentrated in those parts of the world than those by other investors. A comparison between IFC investments (red circles) and foreign direct investment (FDI —yellow circles) shows that IFC allocates about three times as much of its overall investments to South Asia as other investors. Specifically, IFC clients in this region received 8.4 percent of IFC’s investments, whereas it received only 2.7 percent of FDI. Similarly, IFC’s investments were about twice as concentrated as FDI in the Middle East and North Africa, and about 1.7 times as much in Sub-Saharan Africa. These three regions feature a relative higher concentration of poorer and riskier countries, and are therefore a priority for IFC.
Population Below Poverty Line Countries where more than 50 percent of the population lives below the poverty line are blacked out (CIA World Factbook, July 28, 2005/NationMaster.com). IFC Development Impact IFC helps many of the poorest countries by expanding access to the financial sector, especially through microfinance, which can reach the smallest businesses and the lowest-income groups. For instance, IFC has provided technical assistance and equity investments to help a Cambodian nongovernmental organization transform itself into a first-tier commercial bank. IFC’s financing has helped ACLEDA Bank Plc expand its lending to microenterprises, increase its product offerings, and extend its geographic reach into the most remote parts of Cambodia. Nearly two-thirds of ACLEDA’s clients are women.
South-South Investments Cross-border trade is a key element in private sector development. Trade between emerging market countries, also called South-South trade, more than tripled between 1995 and 2003, rising from $15 billion to $46 billion. Trade from the South to the North also grew substantially, reaching $7 billion in 2003 (World Bank estimates). IFC Development Impact IFC’s Global Trade Finance Program aims to increase the developing countries’ share of worldwide trade. Under this $500 million initiative, IFC provides guarantees for non-payment risks in cross-border trades. From its launch in October 2005 through June 2006, the program issued $266 million in guarantees. More than half of the guarantees supported South-South trade, and most involved transactions of less than $1 million, an indication that small and medium enterprises are benefiting from the program (http://www.ifc.org/gtfp).
Life Expectancy Life expectancy is a core indicator in the UN’s human development index.  Japan has the highest life expectancy at 82 years. More than 30 of the countries with the lowest life expectancy are in Sub-Saharan Africa: here life expectancy averages 46 years. IFC Development Impact IFC’s objective is to use public-private partnerships to expand the availability and quality of health care for the poor. IFC has advised Romania’s Ministry of Health on such partnerships in public hospitals, helping improve care for public patients and reduce the government’s financial burden. The initial transactions focused on modernizing the radiology and laboratory services in a major public hospital. Today private health care providers are furnishing quality service at a lower cost than before; in radiology, for example, costs are 35 percent lower.
Moody’s Debt Ratings Moody's Investors Service rates countries’ creditworthiness.  Most institutional investors do not invest in government bonds issued by countries with a low, speculation-grade rating. Only blue-chip (Aaa = bright light) and high-to-medium grade countries (Aa-Baa3 = dimmed light) are considered investment grade.  For all other countries, low ratings (Ba1 to C) keep them from appearing on investors’ radar screens (data March 2006). IFC Development Impact In Brazil, IFC financed the Bovespa Corporate Sustainability Index, the first index of its kind, which tracks the economic, financial, corporate governance, environmental, and social performance of leading companies listed on the São Paulo Stock Exchange. The index, launched last year, provides investors with a reliable and objective benchmark of the best corporate sustainability practices in the country. Among the 40 companies listed on the index are aircraft manufacturer Embraer and power utility Eletrobras.
Foreign Aid Thicker lines drawn from capital to capital indicate aid flow in excess of $66 million per year. Thinner lines represent the $20 million to $66 million bracket. Smaller amounts have generally been ignored unless they represent a significant portion of the donor country’s budget (OECD November 2004). IFC Development Impact IFC’s mission focuses on private investment flows to developing countries: no longer just a complement to foreign aid, today these are at least four times larger than official development assistance on a global scale. In Bhutan, the Foreign Investment Advisory Service, a joint IFC-World Bank initiative, worked with the government to establish policies and regulations that enable foreign direct investment in the country. IFC and its partners then sponsored one of the first investments under the new rules—a resort development that fits with the government’s goal to expand tourism while minimizing the impact on the country’s environmental, social, and cultural fabric.
People Power The superimposed scale of regions reflects their relative population size. Numbers printed on the regions denote their percentage of world population (World Bank World Development Indicators 2003). IFC Development Impact With rapid population growth in many of IFC’s client countries, it is increasingly urgent to upgrade and expand critical infrastructure, so that goods and services can reach the people who need them. Hence IFC is working with governments to introduce private sector participation in infrastructure. In Madagascar, IFC advised the government on a public-private partnership to operate the port of Toamasina, which handles some 90 percent of the country’s container traffic. IFC helped structure a highly competitive and transparent bidding process, identify qualified bidders, and establish criteria for a final selection. The winning firm, International Container Terminal Services Inc. of the Philippines, was awarded a 20-year concession for operation and development of the port through a public-private partnership with the government.
Access to Drinking Water In countries marked by water waves, at least 80 percent of the population has access to improved drinking water (UN 2002 data). IFC Development Impact The Manila Water Company, an IFC client, was awarded a concession in 1997 to supply water and wastewater services to the eastern half of metropolitan Manila, as part of a program to privatize the city's water utility services. Within seven years, it raised the number households with access to drinking water from only 26 percent to almost 90 percent. Most impressively, with IFC’s help the company has taken a responsible approach to serving informal urban settlements. Manila Water managed to connect 800,000 previously unserved residents of such settlements to water services—at rates seven times less than what residents had previously paid street vendors for bottled water.
Company versus Country The annual gross income of major corporations is equivalent to the gross domestic product of the countries that their names are printed on (World Bank World Development Indicators, July 2005). IFC Development Impact Whichever type of company IFC supports—from a small family business to a large corporation—it is our goal to improve business practices and reduce poverty. IFC’s small and medium enterprise linkages program trains local firms in Peru to position themselves as suppliers of goods and services to the Yanacocha gold mine. And IFC supports Western companies when they operate in developing countries and need help in riskier markets or advice on social and environmental issues.
Money Geography The superimposed size of regions and countries represents their respective gross domestic product (2004 data). IFC Development Impact IFC plays an important role, along with other institutions of the World Bank Group, in helping client countries grow their economies and raise living standards. In the late 1980s and early 1990s, eight Central European countries joined IFC. During that time, we invested $2 billion in 265 projects in the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia. Many of these projects supported processes critical to their accession to the European Union: privatization of state-owned companies, strengthening of financial institutions and products, and increases in firms’ productivity.
How IFC Helps Reduce Poverty IFC contributes to poverty reduction through financing the growth of sustainable private enterprises and providing advice to companies and governments for enhancing the quality and flow of private sector investment. Through its demonstration effect by supporting sustainable private enterprises, and by using technical assistance and advisory services aimed at improving the business climate, IFC can help create the conditions for attracting more private investment. This is a prerequisite for strengthening economic growth, which is a necessary condition for poverty reduction and the improvement of living standards.
The Poorest Countries The UN’s human development index measures progress towards the Millennium Development Goals. Life expectancy, education, health care, income, child mortality, access to clean water, and many other factors determine the ranking. This globe shows the ranking of the 36 least developed countries at the beginning of the MDGs project (Human Development Report 2004). IFC Development Impact IFC’s Gender Entrepreneurship Markets program aims to alleviate poverty by leveraging the potential of women in emerging markets. In June 2006, IFC provided a $15 million loan to Nigeria’s Access Bank, which will use the money to extend loans to women entrepreneurs. With this loan, Access Bank is becoming one of the first African banks to dedicate lines of credit to finance women-owned businesses.