Private Sector Development Forum

Presentations for the late afternoon sessions if available are posted by speaker - click on their name. If not, please request a copy by writing to ESaintfort@ifc.org.

WHAT MAKES ASIAN FIRMS INNOVATIVE?

Successful Asian firms are cost competitive and innovative. The two are increasingly intertwined with the capacity for innovation decisively influencing the management of costs. While product innovation often captures the headlines, in the majority of cases the bottom line is more likely to be affected by myriad, often small innovations in the production process, in the organization of work, in logistics, and in the use of IT services. Wal-Mart and Toyota are among the best known examples of companies which have become the leaders in their respective sectors through inspired innovation in areas such as, warehousing, inventory management, quality assurance and production line practices. In Asia, such forms of innovation are and will remain critical to the long term profitability of firms. However, as global market integration increases the tempo of competition, the leading firms will also have to emphasize innovation in design as Samsung is doing; introduce new products that sweep the market such as the iPod; combine products with services in ways which appeal to customers as Apple has done with music downloads; or offer business solutions which assist major retail chains such as those provided by Asian product integrators. Innovation flourishes in certain kinds of socially dynamic urban milieu with attractive amenities and efficient services. It is fed by a steady supply of creative and skilled people. These people must be backed by business spending on innovation and motivated by attractive incentives. There are big questions for the leading Asian firms and for firms seeking to make their mark in the business world. Key questions addressed included:   How to continuously upgrade the quality of the workforce and maximize productivity not just on the shop floor but also in the generating of ideas with commercial potential? How to frame and implement a strategy of innovation which cost effectively addresses the principal activities of the firm, fully harnesses internal resources and is open to ideas and options available through market and public sector channels? How can one maximize the benefits of an urban location? Japan's Policy and Human Resources Development (PHRD) Fund provided assistance in developing this session.

Panelists:

Victor Fung, Group Chairman, Li & Fung Group, Hong Kong (China) Kwon Ping Ho, Executive Chairman, Banyan Tree Group, Singapore Takatoshi Ito, Professor, Faculty of Economics, University of Tokyo, Japan Tat Wai Tan, Group Managing Director, Southern Steel Berhad, Malaysia

Moderator:

Vikram Khanna, Associate Editor, The Business Times, Singapore

Organizers:

Shahid Yusuf, Development Economics Research Department, World Bank Group; and Masahisa Fujita, Institute of Developing Economies (IDE), Kyoto University, Japan

USING CAPITAL MARKETS TO INCREASE ACCESS TO HOUSING, EDUCATION AND SOCIAL SERVICES: MYTH OR REALITY?

Improving the efficiency of capital markets helps increase access to finance for housing and other social sectors such as health and education, which helps lower the cost of finance, helps distribute risk, and creates deeper capital markets to support long-term growth in the real economy of developing nations. While starting from a low base, the financing of social sectors is one of the fastest growing segments in development finance. It is also one of the most complex and least understood aspects of development finance. The objective of this session was to explain the powerful developmental role that local currency financing, partial credit guarantees, securitization, mortgage finance, and other capital market-based initiatives can have on supporting long-term development in social sectors. Key questions addressed included: What regulatory framework and private sector infrastructure is needed to successfully bring capital market-based development initiatives to social sectors? What lessons can be drawn from selected IFC projects to date? How can successful existing capital markets programs be reframed to reach broader markets, especially those in African nations and other frontier markets? Which countries or sectors represent opportunities for significantly scaling up? What is the role of technical assistance?

Panelists:

Guillermo Babatz, Director General de Estrategia Institucional y Desarrollo de Mercados, Sociedad Hipotecaria Federal, México Gregory Kabance, Managing Director, Fitch Ratings, United States Michael Klowden, President and Chief Executive Officer of the Milken Institute, United States Catherine Reynolds, Chairman and Chief Executive Officer, Catherine B. Reynolds Foundation, United States

Moderator:

Nina Shapiro, Vice President of Finance and Treasurer, International Finance Corporation, World Bank Group

Organizer:

Ann Pasco, Corporate Relations, IFC, World Bank Group

ASSET MANAGEMENT: FROM MONEY MARKETS TO HEDGE FUNDS: HOW DO WE ADDRESS THE CHANGING NEEDS OF INVESTORS?

The line between traditional asset management and hedge funds or other alternative investment vehicles and styles is increasingly blurred. As more risk is being transferred to the household sector, an increasingly greater responsibility to manage financial assets is falling to the household sector and their institutional asset managers. Similarly, large institutional investors, such as pension funds and insurance companies, are increasingly looking to new asset management strategies to meet their objectives. In the midst of these changes, the traditional mutual fund model has also come under greater scrutiny, both regarding performance and governance. With demographic trends and pension reforms globally, there is a growing role for investment funds to develop new investment vehicles to address the wealth-management needs of the household sector and asset-liability management strategies of institutional investors. These developments and trends are occurring at different speeds and in different ways around the world, with each region facing broadly similar challenges yet different starting points. Panelists discussed the different investment vehicles and platforms, and the factors influencing asset allocation decisions among major institutions, including hedge funds. They examined how these developments may affect capital flows across national borders and sectors as well as the stability of global, regional, or national markets.   Key questions addressed included: What are the key factors influencing the development of investment vehicles and the bahavior of asset managers? How may supervisors and regulators augment their traditional investor-protection role with enhanced market surveillance to understand better the often-complex investment strategies employed by current diverse family of investment funds and vehicles? What is the  potential impact on Asian financial markets, including the importance of ensuring the depth of markets and the diversity of market participants to enhance financial stability?

Panelists:

Marc Faber, Managing Director, Marc Faber Limited, Hong Kong (China) Patrick Fauchier, Chairman, Fauchier Partners Group, United Kingdom Philipp Hildebrand, Governor, Swiss National Bank, Switzerland Chow Kiat Lim, Chief Investment Officer, Global Fixed Income, Government of Singapore Investment Corporation Pte Ltd. (GIC), Singapore

Moderator:

Jaime Caruana, Counselor and Director, Monetary and Capital Markets Department, International Monetary Fund

Organizer:

Todd Groome, International Capital Markets Department, International Monetary Fund

THE AFRICAN--ASIAN TRADE AND INVESTMENT CONNECTION: WHAT DO THE TWO CONTINENTS BRING TO THE TABLE FOR EACH OTHER?

The economic distance between the African and Asian continents is shrinking rapidly. Trade and investment flows between the two have been intensifying dramatically in the past few years, with exports from Africa to Asia rising at an annual rate of 10%, faster than the growth of African exports to all other areas of the world. The most notable feature of these tightening economic links is the explosion of African investment and trade with China and India relative to the rest of Asia. Oil and traditional agricultural products remain major African exports to China and India, but the growing expansion of Chinese and Indian manufacturing sectors and consumer purchasing power is creating new complementarities between demand in China and India and supply from Africa. While much of the Chinese and Indian Foreign Direct Investment (FDI) in Africa has been concentrated in natural resources and textiles, greater diversification is increasingly evident, with investments being made in mining, tourism, retail ventures, fishing, construction and telecommunications. There is significant - and rapidly growing - interest among policy makers, development partners and businesses about the intensification of Africa-Asian trade and investment relations and their implications for growth, development and poverty alleviation. Key questions addressed included:   What pragmatic lessons can African policy makers and businesses learn from Asian experiences in building export competitiveness? As Asian countries work to further improve their investment climate and access to their markets, what can they learn from Africa and what can African governments do to foster the export competitiveness of their domestic private sectors? How do global multinational corporations view the prospects and constraints on African-Asian trade and investment, and how can African countries, like their Asian counterparts, participate in global networktrade and diversify away from traditional exports? How can political leaders for African and Asian countries respond to the greater trade and investment flows to enhance growth of the two regions?

Panelists:

Alieu Conteh, Chairman of Vodacom Congo SPRL, Democratic Republic of the Congo Benjamin William Mkapa, former President, United Republic of Tanzania Kamal Nath, Minister of Commerce and Industry, India Kate Qui-yi Zhang, Executive Board Member, Holley Worldwide Holdings, China

Moderator:

Hilary Bowker, Principal, Bowker Media and Communications, United Kingdom

Organizers:

Harry Broadman, Africa Region, World Bank Group; and Albert Zeufack, East Asia and Pacific Region, World Bank Group

PARTNERSHIPS TO COMBAT CORRUPTION: RISING TO THE CHALLENGE

Introductory Remarks:  Paul Wolfowitz, President, World Bank Group In the effort to combat corruption, governments, parliaments, and civil society organizations cannot reduce corruption alone - businesses play a key role in the process. In fact, engaging business and civil society is a necessity, and partnerships represent a critical link in capacity-building for sustainable solutions to the challenges facing national economies, including corruption. Partnerships can create efficiencies, pool resources, and enhance the likelihood that interventions, such as anti-corruption regimes, will work. However, some core challenges are inevitable by the very nature of a private-public sector partnership to combat both corporate and government corruption. All too obvious, but too often overlooked, is the fact that the union of public-private sector partnerships brings together some very familiar bedfellows - the two parties most directly responsible for corruption. The session reviewed how to move beyond platitudes to craft concrete actions against corruption, drawing on examples from different regions and sectors. Key questions provided by Frannie Leautier and Michael Klein included:   Should we greet multisectoral partnerships to fight corruption with unbridled enthusiasm? How do we define the shared responsibilities of actors within both developed and developing countries? How can tripartite initiatives to fight corruption minimize the risks of complicity and capture? How can business and government help craft third-party partnerships to keep the foxes out of the hen house?

Panelists:

John Githongo, Senior Associate Member, St. Anthony’s College, United Kingdom Mohamed Ibrahim, Chairman, Celtel International B.V., The Netherlands Huguette Labelle, Chairwoman, Transparency International, Germany Nuhu Ribadu, Executive Chairman, The Economic and Financial Crimes Commission (EFCC), Nigeria Paul Volcker, Chairman, Board of Trustees, The Group of Thirty Consultative Group, United States

Moderator:

Dele Olojede, Executive Chairman, Timbuktu Media, Plc, South Africa

Organizers:

Frannie Léautier, World Bank Institute, World Bank Group; Djordjija Petkoski, World Bank Institute, World Bank Group; and Michael Klein, IFC, World Bank Group