Investment Rating - The report does not explicitly provide an investment rating for the industry under review. Core Insights - The primary obstacles faced by firms in the EU27 are an "inadequately educated workforce" and "tax rates," with the former cited in 99 out of 186 NUTS2 regions and the latter in 51 regions, indicating that nearly 74% of regions identify one of these two issues as their top concern [21][23][28] - Economic disparities within the EU27 are more pronounced at the sub-national level than at the country level, with the highest-income NUTS2 regions earning 2.7 times more than the lowest-income regions, compared to a 2.4 times difference at the country level [2][3] - The European Union has implemented targeted funds to promote regional convergence, but the success of these initiatives has been uneven, and the pace of convergence has slowed in recent years [4][8] Summary by Sections Business Environment Assessment - The World Bank Enterprise Surveys (WBES) provide a comprehensive view of the business environment across the EU27, with nearly 19,000 interviews conducted with business leaders from 2018 to 2022 [11][13] - The surveys reveal that firms' perceptions of obstacles are critical for understanding the business environment, with a focus on the top obstacles identified by firms [21][22] Regional Disparities - The report highlights significant income disparities among sub-national regions, with poorer regions more likely to cite tax rates as their primary obstacle, while wealthier regions focus on workforce education [28][31] - The analysis indicates that country-level factors play a more significant role in determining firms' perceptions of obstacles than regional characteristics [31][32] Firm-Level Analysis - More productive firms are less likely to report workforce education or tax rates as their top obstacles, suggesting that productivity may mitigate the impact of these issues [37][39] - Larger firms tend to report an inadequately educated workforce as a top obstacle but are less likely to cite tax rates, indicating a complex relationship between firm size, productivity, and perceived obstacles [37][40] Future Research Directions - The report sets the stage for future briefs that will delve deeper into the relationship between firm performance, management practices, and the broader business environment in the EU27 [41][42]

Investment Rating - The report does not explicitly provide an investment rating for the electricity distribution industry Core Insights - The operations concession model is presented as a viable alternative to full privatization, allowing for private sector efficiencies while retaining government ownership of assets [22][25] - The report emphasizes the importance of private sector participation (PSP) in improving operational performance and addressing challenges faced by state-owned utilities [15][20] - Case studies from Côte d'Ivoire and India illustrate the successful implementation of operations concessions, highlighting the model's adaptability to local contexts [58] Summary by Sections 1. Introduction - The report discusses the historical context of power sector reforms initiated in the 1990s, aimed at creating commercially viable utilities through restructuring and private sector involvement [13][14] 2. The Operations Concession Model in Electricity Distribution - The operations concession model allows a private concessionaire to manage electricity distribution while the public utility retains ownership and responsibility for power procurement [27] - A comparison of various private sector participation models indicates that operations concessions provide a balanced risk allocation between public and private sectors [40][41] 3. Case Studies: Existing Operations Concessions - Côte d'Ivoire's concession model evolved from a public utility to a private operator, demonstrating the effectiveness of the operations concession in managing electricity distribution [59][60] - India’s input-based distribution franchises serve as another example of successful operations concessions, showcasing the model's flexibility [58] 4. Structuring Options and Parameters for Operations Concessions - Key parameters for structuring operations concessions include setting performance targets, treatment of assets, and regulatory oversight [4][38] - The remuneration model for concessionaires typically includes compensation for operations and maintenance costs, with performance incentives linked to operational improvements [38][72] 5. Limitations and Extensions - The report notes that while operations concessions can improve efficiency, they should be part of a broader reform strategy to address systemic issues in the electricity sector [52][53]

Investment Rating - The report does not explicitly provide an investment rating for the agricultural sector in Bahia Core Insights - The agricultural sector in Bahia has shown significant growth and resilience, particularly during the COVID-19 pandemic, contributing to food security and economic stability [29][36][76] - The report emphasizes the need for policies that enhance competitiveness, sustainability, and inclusivity in the agrifood sector [29][86] Economic Performance of the Agricultural Sector - Brazil's GDP growth has slowed, with a recorded GDP of 7.6 trillion reais in 2020, reflecting a 3.0% annual growth rate, down from 12.6% in 2011 [33] - The agricultural sector's value added has been dynamic, with a 39.9% annual variation in 2020, contributing 5.7% to Brazil's total GDP [36][38] - Bahia's GDP growth decreased from 7.9% in 2011 to 4.1% in 2020, with the agricultural sector increasing its contribution to the state's economy from 6.9% to 9.2% during the same period [73][79] Evaluation of Support for Agriculture in Bahia (2017-2021) - The report utilizes OECD methodology to assess monetary transfers to agriculture, focusing on Producer Support Estimates (PSE), Consumer Support Estimates (CSE), Total Support Estimates (TSE), and General Service Support Estimates (GSSE) [86][90] - The PSE for Bahia is based on market price support and budget support, with a focus on key products like cocoa, cotton, and soybeans, which represent 47% of the state's agricultural production value [100][109] Summary and Recommendations - The report concludes with recommendations for repurposing public policies to foster a competitive, green, and resilient agricultural sector in Bahia, addressing the impacts of past policies and external factors [29][86]

Investment Rating - The report does not explicitly provide an investment rating for the agricultural sector in Brazil or Santa Catarina Core Insights - The agricultural sector in Brazil has shown resilience during economic downturns, contributing significantly to GDP and food security, particularly during the COVID-19 pandemic [28][36] - Santa Catarina's agricultural sector has experienced dynamic growth, with a notable increase in agricultural exports and contributions to the state's economy [75][56] - The report emphasizes the need for public policy reforms to enhance competitiveness, sustainability, and inclusivity in the agrifood sector [31][75] Summary by Sections Economic Performance of the Agricultural Sector - Brazil's GDP growth has slowed, with a recorded GDP of 7.6 trillion reais in 2020, reflecting a 3.0% annual growth rate, down from 12.6% in 2011 [33][34] - The agricultural sector's value added grew by 39.9% in 2020, significantly outperforming other sectors, and contributed 5.7% to the total GDP [36][40] - Santa Catarina contributed 4.6% to Brazil's GDP in 2020, showing an increase from 4.0% in 2011 [44] Evaluation of Support for Agriculture in Santa Catarina - The report evaluates monetary transfers to agriculture in Santa Catarina from 2017 to 2021, using OECD methodologies to estimate Producer Support Estimates (PSE), Consumer Support Estimates (CSE), and Total Support Estimates (TSE) [82][84] - The PSE for Santa Catarina reflects the annual monetary value of transfers to agricultural producers, while the CSE indicates the impact of policies on consumers [85][86] - The TSE quantifies all gross transfers resulting from agricultural support policies, providing insights into the overall support landscape for the sector [88][89] Recommendations - The report suggests reforms aimed at fostering a competitive, green, and resilient agricultural sector in Santa Catarina, highlighting the importance of adapting public policies to current economic realities [31][75]

Investment Rating - The report does not explicitly provide an investment rating for the agricultural sector in Brazil and São Paulo Core Insights - The agricultural sector in Brazil has shown resilience and growth, contributing significantly to GDP despite overall economic slowdowns, with a Compound Annual Growth Rate (CAGR) of 8.6% from 2011 to 2020 [35] - Agricultural exports increased by 35.6% in 2022 compared to the previous year, highlighting the sector's importance in the economy [54] - The report emphasizes the need for policies that enhance competitiveness, sustainability, and inclusivity in the agrifood sector [27] Economic Performance of the Agricultural Sector - Brazil's GDP was recorded at 7.6 trillion reais in 2020, with a growth rate of 3.0%, a significant decrease from 12.6% in 2011 [31] - The agricultural sector's value added grew by 39.9% in 2020, indicating its dynamic role in the economy [35] - In 2020, the agricultural sector contributed 5.7% to Brazil's total GDP, an increase of 1.6 percentage points over ten years [37] Evaluation of Agricultural Support in São Paulo (2017-2021) - The report utilizes OECD methodology to assess monetary transfers to agriculture in São Paulo, focusing on Producer Support Estimates (PSE), Consumer Support Estimates (CSE), Total Support Estimates (TSE), and General Service Support Estimates (GSSE) [79] - The analysis covers the impact of state government agricultural policies on producers and consumers, excluding national policies [79] - The PSE for São Paulo includes market price support and budget support, with a focus on key products like orange, soybeans, sugar, beef, and pork [100]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report introduces the concept of Massive Modular Ecosystems (MMEs) as a framework for understanding the complexity of digital industries, emphasizing the interplay between modular and non-modular governance structures [4][17][49] - It highlights the mobile phone industry as a case study, illustrating how MMEs enable distributed innovation and rapid scaling across interconnected sub-ecosystems [4][19][49] - The report discusses the implications of MMEs for market structure, technological innovation, and global economic geography, noting the risks associated with aggressive policy interventions and the challenges of building self-sufficient domestic industries [4][18][49] Summary by Sections 1. Introduction - The global economy is transforming due to digitization and modularization, leading to interconnected industries that challenge traditional governance models [17][18] 2. Literature Review - The literature on modularity, global value chains (GVCs), and business ecosystems is reviewed, identifying gaps in understanding the complexity of modern industries [22][41] 3. Toward an Integrated Governance Framework - A unified analytical framework is proposed to capture the layered and nested nature of MMEs, emphasizing the importance of both modular and non-modular governance structures [48][49] 4. The Mobile Phone Industry as a Massive Modular Ecosystem - The mobile phone industry is analyzed to demonstrate the dynamics of MMEs, focusing on subsystem design, production, and distribution [4][19][58] 5. Technology and Innovation, Market Structure, and Geographic Outcomes - The report discusses how MMEs influence technological innovation, market structure, and geographic clustering, highlighting the interdependencies created by modular governance [5][18][20] 6. Discussion - The implications for theory, strategic management, and policy are explored, emphasizing the need for a nuanced understanding of governance structures in complex industries [6][21][30] 7. Conclusion - The report concludes by reiterating the significance of MMEs in navigating the complexities of digital industries and the importance of understanding governance dynamics [21][30]

Investment Rating - The report indicates a positive investment outlook for infrastructure, particularly in developed markets, with a notable rebound in greenfield investments and a projected recovery in secondary market activities as interest rates decline [9][11][84]. Core Insights - Global private investment in infrastructure projects increased by 10 percent in 2023, primarily driven by developed markets, while low- and middle-income countries (LMICs) saw a slight decline [9][10]. - Infrastructure fundraising faced significant challenges in 2023, with total capital raised dropping to $94.9 billion, nearly half of 2022 levels, but is expected to stabilize in 2024 [18][84]. - Infrastructure debt remains attractive to investors due to its reliable cash flows and historically lower default rates compared to non-financial corporate debt, with a debt-to-equity ratio of 77 percent in 2023 [25][84]. - Renewable energy and transport sectors dominate infrastructure investment, accounting for two-thirds of total activity, with a significant surge in private investment in hydrogen projects [31][36]. - The report highlights a growing divergence in investment levels between high-income countries (HICs) and LMICs, with HICs experiencing a 15 percent increase in infrastructure investment in primary markets [45][46]. Summary by Sections Greenfield Investment - Greenfield investment in developed markets continues to rebound, while growth in emerging markets lags, with investment levels significantly higher than the five-year average [9][10]. Rising Interest Rates - Rising interest rates have tempered return expectations across most infrastructure fund types, leading to a significant decline in fundraising [17][18]. Infrastructure Resilience - Despite macroeconomic uncertainty, private infrastructure financing has maintained a stable debt-to-equity ratio, with infrastructure debt demonstrating lower default rates [25][84]. Policy and Incentives - Policy changes have influenced investor strategies, with renewable energy and transport consistently dominating investment, while digital infrastructure has gained importance [31][32]. Investment Gaps - There is a widening investment gap between HICs and LMICs, with LMICs representing less than 20 percent of overall volumes compared to 30 percent a decade ago [46][47]. Regulatory Frameworks - Strengthening regulatory frameworks is essential for attracting private capital in emerging markets, with improvements potentially increasing investment by approximately $500 million [54][58]. Development Institutions - Development institutions play a critical role in mobilizing private capital in LMICs, providing co-financing for 30 percent of total private investment [61][62]. Blended Finance - Blended finance and guarantees are effective tools for bridging investment gaps, with evidence showing that projects backed by guarantees have higher private commercial debt participation [65][67]. Local Currency Financing - Local currency financing for private investment in infrastructure projects in LMICs decreased to 37 percent in 2023, highlighting the need for stronger local markets [72][73]. Capital Markets - There is a growing shift towards leveraging domestic and international capital markets to mobilize long-term funding for infrastructure projects [78][79]. Conclusion - The report concludes that while private investment in infrastructure has faced volatility, it has shown resilience, particularly in the context of rising interest rates and macroeconomic uncertainty [83][84].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Understanding the heterogeneity of poor households in Pakistan is crucial for identifying pathways out of poverty through targeted policy actions [4][12] - The analysis categorizes the bottom 40th consumption percentile of households (B40) into five distinct groups using non-parametric hierarchical cluster analysis [4][16] - The findings indicate that poverty is not uniform and varies significantly across different groups, necessitating differentiated policy interventions [12][16] Summary by Sections Introduction - Between 2001 and 2018, Pakistan experienced a 60% growth in household real consumption, leading to a decline in poverty from 64.3% to 21.9% [7] - Despite the overall decline in poverty, significant disparities remain across provinces and between urban and rural areas [8][10] Data and Methodology - The analysis utilizes data from the Household Integrated Economic Survey (HIES) 2018-19, covering 24,809 households [20][22] - A hierarchical clustering method is employed to identify distinct groups within the B40 based on various household characteristics [14][55] Results - Five meaningful clusters among the B40 households are identified: 1. Ultra-poor rural households relying on unskilled sharecropping and public safety nets [16][57] 2. Poor rural households engaged in agriculture as owner-cultivators [16][64] 3. Households in transition between agriculture and service provision [16][64] 4. Urban households with higher education and semi-skilled jobs in industry and services [16][64] 5. Poor households engaged in unskilled daily wage labor in construction and services [16][64] - The asset framework of shared prosperity is used to analyze the characteristics and constraints of each group [62][65] Group Characteristics - Group 1 consists of remote, rural, shock-prone households with low education and asset ownership [73][82] - Group 2 includes rural households involved in on-farm activities, showing better asset ownership and human capital compared to Group 1 [85][92] - Group 3 represents remittance-receiving households with low employment, often missing a working member who has migrated [93][95] - Group 4 comprises urban households with higher education and asset ownership, performing better than the national average [96]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The economy continues to recover, with growth, fiscal balances, and external buffers exceeding expectations in 2024. However, household incomes, employment, and non-monetary welfare remain well below pre-crisis levels [20] - Medium-term growth is expected to remain modest due to the scarring effects of the crisis, structural impediments to growth, and significant global economic uncertainties [20] - Continued macroeconomic stability and successful implementation of structural reforms are crucial for medium-term growth and poverty reduction [20] Context - The Sri Lankan economy is emerging from its worst post-independence economic crisis, characterized by a sharp economic contraction, high inflation, currency depreciation, and a rapid fall in international reserves [21] - The government implemented a series of reforms to restore macroeconomic stability, including cost-reflective utility pricing, new revenue measures, and prudent monetary policy [23] - Following these reforms, the economy began to stabilize from mid-2023, with positive quarterly GDP growth, easing inflation, and improved public debt-to-GDP ratios [24] Recent Developments - The economy grew by 5 percent in 2024, surpassing the previous projection of 4.4 percent [30] - Growth was driven by a rebound in industry (11 percent y-o-y) and a strong performance in tourism-related services (2.4 percent y-o-y) [32] - Inflation dropped significantly, reaching -4.2 percent y-o-y in February 2025, driven by adjustments in energy prices and subdued household demand [38] Fiscal Performance - The primary balance recorded a surplus of 2.2 percent of GDP, surpassing expectations [73] - Tax revenues increased from 9.9 to 12.4 percent of GDP between 2023 and 2024, primarily driven by VAT collections [77] - The fiscal deficit is estimated to have fallen to 6.8 percent of GDP, limited by a high interest bill amounting to 9 percent of GDP [79] Debt Indicators - The stock of public and publicly guaranteed (PPG) debt is estimated to have fallen from 111.7 percent of GDP at end-2023 to 102.4 percent at end-2024 [85] - Debt restructuring has made significant progress, with bilateral agreements being finalized to restructure US$10 billion of official and Exim Bank of China debt [90] Poverty and Vulnerability - The poverty rate was 24.5 percent in 2024, nearly double what it was in 2019, with household incomes remaining below pre-crisis levels [93] - Malnutrition increased, raising concerns over long-term impacts on human capital formation [94] - Employment and real wages remain below pre-crisis levels, contributing to increased emigration [98] Outlook - Medium-term growth is expected to be modest at around 3.1 percent, with the current account projected to revert to a modest deficit in 2025 [103] - Poverty is expected to decline to 22.7 percent in 2025, but the economic crisis is anticipated to have reversed a decade of poverty reduction [104] - Continued macro stability and successful implementation of structural reforms are critical for growth and poverty reduction [111]

Investment Rating - The report does not explicitly provide an investment rating for the Maldives industry Core Insights - Economic growth in the Maldives remained robust in 2024, with real GDP growth estimated at 5.5 percent, driven primarily by a strong tourism sector [18][34] - Tourist arrivals reached an all-time high of 2.05 million in 2024, marking an increase of 8.9 percent compared to 2023 [18][35] - Headline inflation surged in late 2024, with food inflation averaging 6.6 percent, up from 5.9 percent in 2023 [19][42] - The fiscal deficit widened to MVR 12.7 billion (US$822.4 million or 11.7 percent of GDP) in 2024, driven by rising expenditures [20][52] - The current account deficit (CAD) remained elevated at US$1.4 billion (20.5 percent of GDP) in 2024, with a widening trade deficit [21][68] - Foreign exchange reserves fell to critically low levels, reaching US$371.2 million in September 2024, before recovering to US$832.1 million by February 2025 [22][69] - Public and publicly guaranteed debt rose to US$9.4 billion (134.2 percent of GDP) in 2024, with external debt servicing costs increasing significantly [25][60] Economic Update - Growth remained robust, supported by tourism, with a 7.1 percent increase in the tourism sector in the first three quarters of 2024 [34] - The fiscal deficit continued to increase, with total expenditure rising to 41.3 percent of GDP [20] - The current account deficit remained elevated, financed by foreign direct investment [21][68] Outlook and Risks - Growth is projected to moderate slightly, with real GDP growth expected at 5.7 percent in 2025 [26] - Inflation is anticipated to rise, potentially increasing poverty rates if targeted cash transfers are not implemented [27] - The fiscal deficit is likely to remain elevated, with public debt projected to rise further [28] - Risks to the outlook are significantly on the downside due to global trade uncertainties and high external debt service payments [29]