World Bank to share more data to attract private investors in developing countries -March 24, 2024 at 03:00

The World Bank will release more proprietary data, including on defaults, starting next week, as part of an initiative to attract more private sector investment to developing countries, Ajay Banga said , president of the World Bank.

Banga, speaking at the China Development Forum early Sunday Chinese time, said the World Bank Group had mobilized $41 billion in private capital for emerging markets and raised $42 billion additional dollars from the private sector for bond issuance last year, with both totals expected to be eclipsed this year.

But he added that further progress was needed and that the Bank was taking action on a number of fronts to overcome the obstacles holding back private sector investment in developing economies.

Economic growth has slowed in developing countries, falling from 6 percent in two decades to just 4 percent, Mr. Banga said, noting that every percentage point lost pushes 100 million people into poverty, while debt levels were increasing.

Mr Banga stressed that developing countries also faced an “unimaginable” gap between the 1.1 billion young people expected to enter the job market over the next decade and the 325 million jobs expected. be created.

To better understand these issues, the bank convened a focus group of 15 chief executives from asset management companies, banks and operators who identified concerns such as regulatory certainty, risk insurance policy and currency risk, he said.

Last month, the bank already announced reforms aimed at consolidating its loan and investment guarantee structure and tripling its annual guarantees to $20 billion by 2030.

Starting next week, Banga said, the bank and a consortium of development institutions will also begin publishing private sector recovery data by county income level, to inspire investor confidence .

The World Bank will also publish data on private sector defaults, broken down by credit rating, as well as statistics on sovereign defaults and recovery rates since 1985.

“All of this work works towards one goal: attracting more private sector capital to developing economies to drive impact and create jobs,” Mr Banga said.

The former Mastercard CEO said the bank is also working on a longer-term effort to build a securitization platform that will make it easier for pension funds and other institutional investors to bring their $70 trillion to the markets emerging.

Bringing together large, standardized investments into one package would encourage meaningful investments at scale, overcoming the current patchwork of small, bespoke loans that each have their own documents, risks and prices, he said.

China's “remarkable journey” over the past five decades is a testament to what is possible, Banga said, noting that China has created hundreds of millions of jobs, sharply reduced poverty and reduced poverty. greenhouse gas emissions. Once a major borrower of the World Bank, China is now one of the Bank's largest donors, he added. (Reporting by Andrea Shalal, Editing by Alistair Bell)

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