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The Financial Times exposes the hype over trade and poverty in the context of all the rhetoric we’ve heard regarding the failure of the Doha round.  The last series of WTO meetings ground to a halt, largely over the ‘developed’ world’s refusal to significantly cut agricultural tariffs and farm subsidies.  

While I am personally against the unwillingness of countries like the US to make real attempts at opening their economy to goods from developing country farmers, I am not particularly surprised.  It is also unsurprising, however, that such unrealistic expectations would be placed on the ability of trade liberalization reforms to directly impact the world’s poorest producers.  

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Uganda and India have further institutionalized the growing political popularity of microfinance by attempting to regulate it.  A closer look shows how government intervention can facilitate or hinder the growth of these programs.  

Uganda’s government has chosen to simply limit the interest rate creditors can charge to keep up with inflation.  This effectively kills any profit motive that might have existed in a financial sector where it is already difficult to convince lenders to give out loans with high fixed costs and low yields.  

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September is an exciting month for country ranking enthusiasts. World Bank’s 2007 Doing Business Report, and Cato/Fraser Institute’s 2006 Economic Freedom Report were released back-to-back, Sep 6 and Sep 7, respectively, begging for some compare-and-contract action. First, what are the purposes of these rankings?

It seems the DB rankings are more like athlete rankings more than anything—they serve as benchmarks for comparison and goals for improvement. Every year, policymakers look at the Doing Business rankings and set about to advance their position compared with the other 175 countries in the running. Mauritius, for example, aims to make the top-10 list in Doing Business by 2009. Doing Business measures 10 aspects of the business environment, oftentimes in terms of how many steps and how much time are involved in completing each of the following processes: starting a business, dealing with licenses, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

Continue reading past the break for my comparative analysis of countries from both reports.

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In its excellent “Have Your Say” section of the site, BBC News recently wrapped up an open debate on the prospects of Africa’s enterprising youth and the obstacles that may prevent them from realizing their full creative and productive potential. The primarily African respondents had some fascinating insights, and aside from the few that criticized a lack of initiative on the part of young people in the region, most hammered at governmental issues including corruption, bureaucratic hassles and a lack of social programs.

One Zambian contributor had this to say: “Youths have the skills but there are no jobs and no money to start small business. Skill alone is meaning less. Let the Governments start providing loans/ grants and create jobs for youths otherwise the near future will be affected. On the other hand there are few insinuations which are offering skills to youths more especially orphans who have no one to pay for their fees. Hoping the international conference taking place in Nairobi will tackle the above issues and find lasting solutions. other it will just be another rhetoric which just befits participants with allowances and other stuff.”

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This month's issue of Development Outreach – a World Bank Institute magazine – focuses on the private sector's role in stemming corruption. Articles range from general overviews of related issues to academic discussions of corruption measurement to specific reports from the field, such as this article by Celtel founder Mo Ibrahim. An excerpt:

Celtel’s rigorous stance against corruption is not drawn from a purely moral motive—it is also good business practice. For corruption, like blackmail, is insidious. Once started it is very difficult to stop paying. Far better to pass up, as Celtel has done, a few business opportunities which, while superficially attractive, involve partners or governments about whom one has major doubts.

I enjoyed this issue of Development Outreach because it explicitly connects good governance – a public good – to economic growth and poverty reduction. Not only that, but it identifies private sector engagement as a key lever in reducing corruption and creating enabling environments for business. It is a nice follow-up to the Doing Business report, which came out last week and about which we wrote here.

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A Special on small and medium sized enterprises (SMEs) by the South Asia based Financial Express explores various angles of the evolving SME development movement from the very heart of the original microfinance revolution: Bangladesh. Once you start really paying attention to development trends, it’s amazing to see how one new focus can receive little to no attention and then within a span of years, emerge out of the dust as the next ‘big thing’- all of a sudden 2005 is the year of microfinance. In researching an upcoming overview on SMEs and their role in sustainable development for the Earthtrends project, I have observed something similar happening with the small business sector (not to be confused with microenterprise).

If you begin to research reports and policy papers on these businesses, which are generally defined as having between 5 and 100 employees, you see a burst of new information from the very late 1990s onward. It appears from this Financial Express spread that the government of Bangladesh is moving from policy proposals to real action- just on the heels of the Grameen Bank and other initiatives in earlier years.

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"Some people think I'm crazy."

These were the words of Alexandre Wainberg as quoted by The Estado de Sao Paulo last Sunday (Article in Portuguese - Subscription required). In an excellent piece detailing the environmental damage and social issues surrounding the aquaculture sector in Brazil, the Estado focuses on Wainberg as a lone and oftentimes beleaguered advocate of sustainable practices. What was most fascinating in reading this was seeing the pure passion and entrepreneurial drive of someone willing to essentially defy an entire local industry; the question that kept popping into my head was: where is the government support?

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You can only change what you measure. Doing Business 2007, just released, offers good evidence of the wisdom of this epigram. Whatever issues you might have with the way the World Bank Group does its work, it would be hard to quarrel with the value they are bringing to business climate reforms - at least as I see it. The report itself mentions the dynamic, noting "When the government succeeds in these early reforms, citizens start seeing benefits - more jobs, more resources for health and education. The appetite for reform grows."

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