World Bank unveils data drive to spur private investment in developing nations

World Bank data disclosure: The World Bank is set to unveil a sweeping initiative aimed at enticing greater private sector investment into developing countries, with plans to disclose more of its proprietary data, including insights on debt defaults, beginning next week, announced World Bank President Ajay Banga.

Speaking at the China Development Forum on Sunday, Banga revealed the World Bank Group's achievement of mobilising $41 billion of private capital for emerging markets and securing an additional $42 billion from the private sector for bond issuance in the previous year, with expectations of surpassing these figures in the current year.

Despite these significant strides, Banga emphasised the need for further advancement, citing the deceleration of economic growth in developing nations to just 4 per cent from 6 per cent over the past two decades. He underscored the dire consequences of each percentage point lost, leading to the impoverishment of 100 million people, alongside escalating debt levels.

Highlighting the formidable challenge of job creation in the face of a burgeoning youth population, Banga emphasised the World Bank's concerted efforts to address barriers hindering private sector investment in developing economies. To this end, the bank convened a focus group comprising 15 chief executives from asset management firms, banks, and operators, who identified concerns such as regulatory uncertainty, political risk insurance, and foreign exchange volatility.

Building upon recent reforms aimed at streamlining its loan and investment guarantee structure, the World Bank will triple its annual guarantees to $20 billion by 2030. Moreover, commencing next week, the bank, in collaboration with a consortium of development institutions, will begin disseminating private sector recovery data categorised by country income level, aimed at bolstering investor confidence.

Banga further disclosed plans to release comprehensive data on private sector defaults categorised by credit rating, as well as sovereign default and recovery rates dating back to 1985. These transparency measures, he asserted, align with the overarching objective of mobilising greater private sector capital into developing economies to stimulate impactful growth and job creation.

Banga also outlined the bank's initiative to establish a securitisation platform to facilitate the flow of institutional investments into emerging markets. This platform aims to streamline the investment process for pension funds and other institutional investors, aggregating large standardised investments into cohesive packages to incentivise substantial investment at scale.

Banga concluded by commending China's remarkable socio-economic progress over the past five decades, lauding its achievements in job creation, poverty reduction, and environmental sustainability. 

(With Reuters inputs.)