Jobs. Innovation. Opportunity. The private sector drives them all.
In developing countries, it fuels the economic growth and entrepreneurship that improve living standards and give people a shot at a better life. It is a vital source of tax revenues, providing governments with essential funding for health, education, and infrastructure. And it is especially important in uncertain times, when the world increasingly looks to emerging markets to power more economic growth.
IFC is uniquely positioned to catalyze the power of the private sector to create growth that benefits the poor. We account for almost a third of all development financing provided to the private sector by international finance institutions, and we provide leading-edge advisory services to improve the investment climate and make businesses more sustainable. We work with clients and policymakers to promote environmental, social, and governance standards and risk-management practices that make markets stronger, more transparent, and more attractive to investors.
As a central element in the World Bank Group’s drive to leverage the private sector for robust and sustained growth, we have identified a number of areas where we can make a difference, areas where the needs are too great to be satisfied by public resources alone.
To bolster telecommunications, ports, power generation, land transport, and water and sanitation, we support public-private partnerships in infrastructure. Without the private sector, vital infrastructure projects would go unfunded—developing countries need an estimated $1.1 trillion in annual expenditures to satisfy demand for infrastructure services. Much of it will come from private sector sources.
We’re also working to create a better investment climate in developing countries, because businesses can’t thrive and create jobs when red tape and unnecessary regulations thwart entrepreneurs. Our work with other members of the World Bank Group helps governments implement a legal, regulatory, and institutional environment conducive to job creation and growth.
In financial markets, our projects are aimed at giving small and medium enterprises better access to financial services, and strengthening local-currency bond markets. Our work also enhances access to trade, which is responsible for half of global economic output and a crucial bulwark against economic crises. IFC’s trade and supply-chain finance programs help companies in emerging markets access much-needed financing, assuring growth and employment.
Leading global policymaking institutions seek us out for our broad experience in private sector development. We’re working with the Group of 20 major economies to foster innovative inclusive-business models. The G-20 Challenge on Inclusive Business Innovation, which IFC managed in FY12, recognized 15 companies that have found creative ways to improve the lives of millions of people at the base of the economic pyramid.