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Private sector development in low-income countries
In response to a request by the Deputies of the International Development Association, this report assesses the progress of private sector development in low-income countries, particularly in sub-Saharan Africa during IDA 9 and 10 periods. It identifies causes of uneven performance and outlines the...
In response to a request by the Deputies of the International Development Association, this report assesses the progress of private sector development in low-income countries, particularly in sub-Saharan Africa during IDA 9 and 10 periods. It identifies causes of uneven performance and outlines the main elements of a strategy - led by the private sector - for accelerated and shared growth to reduce poverty. Private sector development contributes to poverty reduction in two ways. First, it enhances competitive forces and competitiveness, which produce growth and jobs. Second, through divestiture of activities that the private sector can do as well or better, it allows governments to reduce waste and gain the fiscal space needed for greater investments in the social sectors and infrastructure. Those investments are " income equalizers " that provide skills and services required by the private to compete in today ' s skill-based global economy. This report argues that for private sector development to promote accelerated growth, progress on the macroeconomic front has to be buttressed with structural and institutional reforms to: improve business environments that remain harsh; reduce the drain of public enterprises; build robust financial systems; and increase the supply and quality of human resources and physical infrastructure.
