The World Bank's private sector arm said on Monday it hiked investments in the Middle East and Africa by 80 percent in the year that ended in June due to higher demand in those regions and it aims to do more in 2007. We are refocusing on these countries, International Finance Corp. executive vice president Lars Thunell said during the World Bank's annual meeting in Singapore.
The IFC's 2006 annual report showed investments in high-risk and low-income countries were up 20 percent and a record $9.5 billion in investments was made. Thunell, who took the helm of the IFC this year, said he wanted the lending and advisory agency to concentrate on frontier markets that include underdeveloped countries and regions in Africa, the Middle East and western China.
He told reporters that Singapore was a perfect example of what the private sector can do. Forty years ago the tropical city-state was poorer than Brazil. Now it is one of the richest countries in the world, a top official at Standard and Poor's credit rating agency said.
IFC investments last year in the oil and gas sector, by far the most scrutinised and criticised of its activities by non-governmental organisations, spurred $1.8 billion in purchases from local suppliers and created 50,000 jobs, Thunell said.
NGOs have said the IFC and its parent agency, the World Bank, should get out of subsidising fossil fuel industries while emerging market governments like South Korea argue the lenders lack the expertice to blaze the trail on renewable energy.
The biggest opportunity around is actually in energy efficiency, Thunell said. We work with a bank and a gas distribution company (in China) where we help the two work together, the financial institution and the gas customers, to finance new equipment that is energy efficient. Last week the IFC announced plans to spend $2.6 million to explore private health care opportunities in Africa along with the Bill & Melinda Gates Foundation.
Last year 2.4 million people received health services in part thanks to the IFC, Thunell said. It turns out that the poorer the country, the more it relies on private health care.