By John Burgess
February 15, 2000
The two-day gathering in the atrium of the World Bank headquarters last week was a lot like a venture-capital fair, with more than 300 eager entrepreneurs coming together to vie for that crucial first funding for Big Ideas. But what unusual ideas these were: build low-cost wheelchairs in Gaza, combat female genital mutilation in Africa, put a Cambodian library on the Internet, turn former boy soldiers of African civil wars into seed dealers.
This "Development Marketplace," along with a program announced in Tokyo over the weekend to fund Internet start-up companies in developing countries, are new evidence of change at the World Bank. It is slowly diversifying beyond its roots as distant bankroller of mega-projects such as steel mills and hydroelectric dams.
The sum up for grabs at the marketplace--$5 million--is a pittance compared with the $20 billion that the bank lends each year. But the bank's officials, and some of its critics, praised the marketplace as a significant step in the direction of creative thinking. It also broke new ground in channeling money directly to community groups, rather than taking the traditional route through governments.
The fair was "extremely innovative and it fosters competition around the concept of what is development," said Lisa Jordan, executive director of the Bank Information Center. Her Washington group monitors World Bank activities and frequently faults them as unresponsive or harmful to borrowing countries; nonetheless, she was invited as a juror. Still, she wonders, "Why is the bank not doing these things in general?"
James Wolfensohn, the former Wall Street financier who heads the bank, said the fair was a chance to inject some private-sector vitality into the institution. The goal is to ensure "that people didn't feel their ideas were being battened down by bureaucratic superstructure," he said, "so we said to people, 'If you've got ideas, why don't you show them to us?' "
The bank's stated mission is to foster development through long-term lending. The 44 project winners from the marketplace were awarded bank grants that don't have to be paid back--ranging from $27,350 to $380,000. The hope is that many will eventually prove workable on a larger scale. If they do, they could become the target of big-scale lending.
In recent years, the bank has backed off from emphasis on building things; it now commonly lends for such purposes as teaching new farming methods. Still, change comes slowly, and many officials see the marketplace approach as leading into new and long-taboo areas. Some of the winning projects, picked by a "jury" of bank employees and outsiders and not carrying the official stamp of the bank's board, directly address sensitive subjects of types the bank has long avoided, such as the plan to combat female genital mutilation, a common cultural practice in parts of Africa.
Some of the younger bank employees who took part in the fair chafe over old-line bank policies that emphasize big-ticket lending. In the jury room the selection of the mutilation project as a winner was greeted with applause, Jordan said. During the two-day marketplace, many members of the multinational staff teamed up with groups from their countries of origin. Sophal Ear, a young Cambodian American at the bank, helped a project seeking to fund Internet access at Cambodia's national library, while Lina Annab, an International Monetary Fund official who grew up in Jordan, was working with a project that wanted to teach people in Gaza and the West Bank to build low-cost wheelchairs.
"The only drawback is there is so little time to interest the jury members," said Gabriel Rugalema, manning a booth for a project to put "youth ex-combatants"--development jargon for former boy soldiers--in Liberia and Sierra Leone to work peddling seeds to farmers who are replanting after civil war. "If you stumble once, you don't get another chance."
The Cambodia, Gaza and Sierra Leone projects didn't win bank funding or take any of 20 other prizes awarded. Another step in a shift in bank policy--trying to harness the Internet as a weapon against world poverty--was announced half a world away over the weekend. The International Finance Corp. (IFC), a World Bank affiliate that invests in private-sector projects, said it would put a total of $82.5 million into a $520 million venture-capital pool whose other backer is the Japanese technology conglomerate Softbank.
Bank officials say they want to work globally to close the "digital divide" that keeps poor people from gaining access to the increasingly important online world. The idea is to offer venture capital and technical aid to "incubate" start-up companies in developing countries; plans call for the first investment to be announced in May. Wolfensohn uses this example of the type of impact he's looking for with the IFC project: An entrepreneur in Ethiopia, he says, uses the World Wide Web to contact Ethiopian taxi drivers in the United States and sell them goats, which are delivered to their relatives in Ethiopia. Ownership of goats is a traditional form of saving there; the drivers are in effect transferring earnings home through contacts on the Web.
Bank officials acknowledge that there are big challenges in creating Internet access for people who may earn only a few hundred dollars a year and who lack electric power. But they foresee a day in which community Internet centers might allow farmers to get the latest on seed technology or check prices and sales outlets abroad. Rather than being captive to traditional middlemen, the farmers could tap directly into global marketplaces and spur the prosperity of their home communities.
"It will change the rules of the game," predicted Mohsen Khalil, the IFC's director of telecommunications and informatics, who said the Internet can "realize the potential of human capital across the world, regardless of its origin."
Winning Funding:
Here are some of the winners of the World Bank's Development Marketplace Innovation Competition:
Roundabout Outdoor HIV/AIDS Initiative
Ending female genital cutting
Low-cost household water disinfection for developing nations
Niger delta oil spill response
African digital library
Pilot training center for disadvantaged youth
Social integration of disabled children FAIR USE NOTICE: This page contains copyrighted
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Winner
Amount
(merry-go-round type "roundabouts" on playgrounds are altered to use children's energy to pump water; AIDS awareness messages to be displayed on the roundabout)
Trevor Field, South Africa
$165,000
(teaching people who perform operations to develop small-business skills as an alternative to cutting)
Tshiya Su, Washington, D.C.
$150,000
Lloyd Connelly, Berkeley, Calif.
$100,500
Uzo Egbuche, Nigeria
$99,750
(to be accessed via the Web for academic or business use)
Paul G. West, South Africa
$90,000
Kali Azzi, Jerusalem
$88,000
Ion Balteanu, Moldova
$87,611
More Information on the World Bank
