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Michael Stopford
Phone: (202) 458-4698
Fax: (202) 974-4384

The Private Sector and Development: Five Case Studies Analyzes Selected Projects in Argentina, Benin, Bolivia, Indonesia and Madagascar

WASHINGTON, D.C., Mar. 5—Today the International Finance Corporation issued a new publication entitled: “The Private Sector and Development: Five case studies.” This is the first of a series devoted to “Results on the Ground,” through which IFC will make information available to the public on the impact of the Corporation’s activities in enhancing economic development.

Together these case studies provide a clear picture of how innovative private projects, when structured appropriately, can contribute measurably to the growth and well-being of their host countries. The private sector development projects supported by IFC can have a wide range of beneficial impacts, including employment generation and training, technology transfer, enhanced competition, infrastructure and upstream or downstream business generation and environmental improvements. In the capital markets sector, these positive effects include the overall functioning, growth and maturity of local capital markets, the promotion of sustainable financial institutions and introduction of new products and services, improvement in financial sector standards and practices and changes in the sector’s regulatory framework—as well as increased financial services to small and medium-sized enterprises. Each study illustrates various aspects of project contributions to development and, occasionally, some of the residual pro

blems that will be the subject of future work.

The five projects selected for analysis are:

Argentina: Aguas Argentinas, the privatization of the Buenos Aires water and sewerage systems, currently the world’s largest privately operated water concession. The company now supplies high-quality water and sewerage services to the residents of Buenos Aires at competitive rates.
Benin: Bank of Africa-Benin, the largest commercial bank in Benin and a major engine of the country’s economic growth, which has had a beneficial impact on mobilizing savings and building and diversifying other financial institutions, while supporting the government’s privatization efforts.
Bolivia: Banco Industrial, S.A., a crucial source of financing for private enterprise in Bolivia—increasingly to small and medium enterprises—and of support for the development of microenterprise financial services. The project has made an important contribution to the broadening and deepening of Bolivian financial markets.
Indonesia: P.T. South Pacific Viscose, a foreign-owned company which has successfully captured the value-added component of viscose production that would otherwise be lost to imports. The company has played an important part in the local region’s industrialization and employment growth.
Madagascar: Aquaculture de la Mahajamba, a shrimp production and processing company in a remote area of the country where the only other economic activity is subsistence agriculture. Most of the production is exported to Western Europe and Japan, generating significant foreign exchange earnings. The project has had a substantial impact on the national and regional economy.
Through such assessments, IFC aims to gauge the impact of its activities in promoting development by encouraging the growth of productive private enterprises and by creating efficient capital markets. These studies form part of a comprehensive review of development effectiveness carried out by IFC’s Economics Department, including an annual analysis of several projects to determine their development contributions.

IFC is a member of the World Bank Group and is the leading multilateral source of equity and loan finance for private sector projects in the developing world.

You may view this report on-line. Copies of the report may be obtained from the World Bank Bookstore (tel. (202) 473-2941). Press copies can be obtained by calling the IFC hotline at (202) 473-7711.