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Promoting Job Creation in BSEC and CA Countries:

Promoting Job Creation in BSEC and CA Countries:. What Role for the Private Sector?. Karin C. Millett, Head FIAS Investment Generation-Vienna Bucharest, June 23, 2008.

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Promoting Job Creation in BSEC and CA Countries:

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  1. Promoting Job Creation in BSEC and CA Countries: What Role for the Private Sector? Karin C. Millett, Head FIAS Investment Generation-ViennaBucharest, June 23, 2008

  2. ‘It is absolutely crucial to recognize that all economic growth takes place at the level of the productive enterprise – otherwise it is impossible to have a clear understanding of the growth process.’ (Arnold Harberger, December 2005) Not all productive enterprises are private, but the majority will be. Economic Growth

  3. Significant structural changes have taken place since the transition to market economies, though the pace of job destruction has often outpaced that of job creation. In a market economy, it is clear that the private sector is the primary creator of jobs. However, job creation by private sector highly dependent on whether the policy environment obstructs or enables private enterprises to form, operate and exit business. While important reforms enacted by countries represented here, evidence suggests much still to be done in many countries to create a conducive environment for private sector development. Private Sector as the Engine

  4. Doing Business Indicators (1)

  5. Doing Business Indicators (2)

  6. Two general approaches to increasing productivity, ‘yeast’ and ‘mushrooms’ (Arnold Harberger) Yeast makes everything rise uniformly, e.g., knowledge, education, ICT Mushrooms which ‘pop up’ in unpredictable places and happen in an industry at the level of the firm, which is the locus of growth, leading to real cost reduction (TFP) A third approach is to reduce the ‘friction’ in the economic machine: working on the institutional milieu. This offers opportunity for a public-private dialogue to improve that milieu, through identifying ‘where the shoe pinches’ for the private sector. A key question is productivity

  7. Towards a more competitive private sector Competitiveness Labor Cost Corruption Red Tape Poor Productivity Costly and unreliable Utilities Logistics. 7

  8. Good policies and regulations matter Learning about good practice Capacity building Reform management Source: WDR05. 8

  9. Builds momentum for business environment reforms Helps prioritize binding constraints Ensure that reform design fits local needs and capacity Smoothen/accelerate implementation of policy reforms Promotes accountability, transparency, good governance Builds trust and restore confidence in post conflict/crisis env. Public Private Dialogue as a Tool PPD reforms Workable reforms Reforms that work 9

  10. The Key Stakeholders and Processes in PPD Define project brief Investment climate constraints (Existing benchmarks and surveys) Stakeholder investigation (Field interviews and focus groups) Private sector Intermediaries Public authorities Civil Society Most significant reforms (Field interviews and focus groups) Stakeholder analysis Design decision 10

  11. Turkey— Coordination Council for Improvement of Investment Climate led to new framework of laws to facilitate FDI and dramatically simplify procedure of registering a new company. Bosnia— Bulldozer initiative yielded many reforms, incl. slashing statutory capital requirements when registering a LLC. Examples of reforms resulting from PPD

  12. Ireland’s Social Partnership (started in early 1970s, became a real force in 1980s, as economy hit a crisis) - Government, private sector, labor unions, farmers, and NGOs—chaired by Prime Minister’s Office Identifying key competitiveness issues and addressing social equity. - Important factor in transition from a high- inflation, volatile economy to a low inflation, stable and competitive economy Expert Group on Future Skills Needs Example of long-term successful PPD

  13. Benefits and Outputs from PPD Focusing on this will bring the others 13

  14. FIAS/WBG can provide advice and assistance, drawing on experiences of over 40 countries around the globe. Manuals, guidelines and success stories are featured on line for those who want to learn more. Embarking on a PPD Process

  15. www.publicprivatedialogue.org Charter of Good Practice Lessons learned Tools for practitioners Case studies Online partnerships PPD Workshop 15

  16. THANK YOU! Karin Millett kmillett@worldbank.org www.fias.net

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