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