Private sector key in global growth

THE private sector is more important now than ever in helping the global economy kick- start growth as countries worldwide emerge from Covid-19, International Finance Corporation (IFC) Chief Operating Officer, Stephanie von Friedeburg.

Ms Friedeburg stressed that there was limited fiscal space in the countries of operation and especially in the poorest countries in the world, hence the critical role for the private sector.

The IFC is a member of the World Bank Group that offers investment, advisory, and asset- management services to encourage private-sector development in less developed countries.

Ms Friedeburg said in a special year end edition of ‘The Development Podcast’ that Governments did not have the capacity to continue to create the economic growth and that the jobs that were needed for the citizens in those countries.

“And so the private sector can and must play a super important role. But even before the crisis, we knew that in those poorest countries, finding ways for the private sector to intervene was extremely difficult. And there was a lack of bankable projects.

“So we created IFC 3.0, which today, as we build a more resilient recovery, is far more important than it was when we created it four years ago, because it is really designed to say, "How can we, IFC, partner with our World Bank colleagues?” Ms Friedeburg said.

Ms Friedeburg added : “But in essence saying if the private sector can invest and can build something out, use the private sector to do that and use your limited fiscal space as a government only in those places where the private sector cannot play.”

World Bank Group President, David Malpass, on his hopes for 2021 said Covid-19 had been a big setback, particularly for the poorest countries, but quickly mentioned that there were some opportunities that could be built on into the future.

Mr Malpass observed the need to set up the contract structures that were attractive, then to bring private sector capital in to mobilise not only IFC money, but then private investors' money into something that was a worthwhile profitable project.

He also said one of the things the group talked about was as it tried to help countries find a resilient recovery process, it was going to take investment and quality investment in the areas of their economies that can grow into the future.

“So we expect it to be a very different kind of economy than what it was in the past. So one of the things we hope can happen is the countries find new sources of growth and new target destinations for good investment,” Mr Malpass said.