Sample Essay Paper on International Finance Corporation

Academic Journal

  • International Finance Corporation
  1. Summary
  2. Background of the Organization

The International Finance Corporation (IFC) was established in the year 1956. It started as a private sector by the World Bank Group. Its mandate was to advance economic developments through investing in order to lower the poverty level and promote development (International Finance Corporation annual report 2013, 3).

Currently, IFC is a branch of the World Bank, with its headquarters located in Washington. It plays a significant role in most developing countries. It is responsible for fostering sustainable economic growth. It finances the private sector investments as well as some government-owned projects, in which the private sector has some participation. In such cases, the projects have to be operated on a commercial basis. It is owned by more than 184 countries globally.

  1. Summary of the Events

This presentation was divided into four main sections. The first section talked about the relationship between the IFC and the World Bank Groups. Here, we were introduced to the “Twin Goals of the World Bank Group.” These were to end extreme poverty and boost shared prosperity. The presentation showed us how IFC majors in the private sector while working in line with the other World Bank Groups to achieve the ‘twin goals.’ The other groups are majoring in providing other services including loans, grants, and other forms of support to other sectors of the economy.

In the second section, the presentation introduced us to the International Finance Corporation. To begin with, the presenter talked about the vision of the corporation. The corporation aimed at giving people an opportunity of escaping poverty and improve their lives. The presenter also talked about the objectives of the organization. Some of them included promoting competition as well as opening markets within the developing nations and supporting the private sector partners and companies in case gaps exist. In addition, IFC aims at catalyzing and mobilizing other finance sources in order to develop the private sector. Moreover, the corporation aims at generating productive jobs as well as delivering important services to the underserved.

The presenter also talked about the priority areas of focus of the IFC. These areas include the local financial markets, long-term relationships among the clients within the emerging markets, climate change, as well as environmental and social responsibility, among others. The core values of the corporation include excellence, commitment, teamwork, integrity, and diversity. This section also talked about the networking of the IFC and explained how the corporation was a valuable partner.

In the third section, the presentation majored in discussing how the IFC creates opportunities. It collaborates for innovation purposes. This is through linking the private sector, governments, and civil societies in order to help the poor. IFC also plays a role in partnering for the purpose of influencing. It shapes the private sector’s development activities. In addition, IFC partners for the purpose of demonstrating. It sets up a good example by challenging markets. It creates job opportunities, makes business cases, and demonstrates rewards. Moreover, IFC partners for impact. This includes leveraging the role played by the private sector in development. Lastly, IFC partners for the poor. It focuses on the poor regardless of their location.

The last section of the presentation discussed the business activities of the IFC, the results, and its reach. IFC has three businesses; it offers investment services such as loans, risk management, equity, among others. It also offers advisory services such as access to finance, the investment climate among others. Moreover, IFC acts as an asset management company.

  1. Analysis

ICF is an affiliate member of the World Bank Groups, which commits up to $52.6 Billion in order to achieve its goal. The ICF operates on a global basis. It has about 109 countries as well as regional offices in different parts of the world. It has 4,015 staff with 57 % based outside Washington DC. The investment services have created 2.7 million jobs, provided electric power to about 52.2 million people, and helped 3.1 million farmers among other investment activities. The advisory services have helped to implement about 76 investment climate reforms in 43 governments (International Finance Corporation annual report 2013, 6). It has also helped in the environment pollution services, among other achievements.

Africa as a continent is blessed with numerous resources. Despite this, it is the poorest continent in the world. In fact, according to the latest statistics by the World Food Organization (WFP), approximately 33 % of Africans do not have adequate food due to poverty. The governments of most African countries have been trying to fight this enemy. However, the private sector is achieving much success as far as the fight against poverty is concerned. In fact, it accounts for about 90 % of employment opportunities in most developing countries. It is responsible for providing investments, generating tax revenues, creating job opportunities, among other activities of economic benefit. Therefore, by working with the private sector, IFC has helped to address the problems affecting the poor. This has brought about improved living standards for such a population, especially in Africa. Generally, IFC has implemented many developments within the private sector in Africa. This has helped most African countries to achieve development (Evaluation of the International Finance Corporation’s global trade finance program, 32).

  • Growthpoint Properties Limited
  1. Summary
  2. Background of the Organization

Growthpoint Properties Ltd refers to a real estate or property company, which operates globally. It is the largest among the listed companies in this industry within South Africa. It has a diversified portfolio with around 480 properties across South Africa as well as Australia (Shahar, 74). The company offers its services in four main areas in South Africa. These include entrepreneurial development, education and skills development, bricks and mortar projects, as well as staff involvement project.

  1. Summary of Events

This presentation had two main objectives, however, the presenter started by introducing us to the general information about the company. The presenter talked about the company’s asset value. The company has more than R59, 8 billion. The presenter also talked about their market capitalization, annual distribution growth for the past five years, the company’s listing in South Africa’s real estate industry, and the key milestones of the company. For a better understanding of the company in the South Africa context, the presenter talked about the Broad-Based Black Economic Empowerment (BBBEE) Act 53 of 2003. The issues mentioned included the seven pillars of that Act, the target of the Act, and the pitfalls of the Act. These pitfalls included its failure to produce a social impact that is measurable, failure to initiate innovation in the economy of South Africa, focusing on individual development rather than applying the broad-based approach, among others.

It was during the next part of the presentation that the presenter talked about the main objectives of that presentation. The first main objective was exploring the direct link between enterprise development and procurement. The presentation showed that the aim of this was to show how the operational gaps within the SME business model could be closed. This has to be done in order to make the market opportunities easily accessible by the SME. To begin with, the presenter made us understand the problem encountered in most enterprise development programs. The problem was illustrated using a real situation in South Africa. The presenter went ahead and talked about some of the corporate barriers affecting the entry of SMEs as well as the challenges that affect supplier development.

The second objective of the presentation stood out clearly during the last part of the presentation. Here, the presenter demonstrated the importance of integrating procurement as well as supplier diversity programs in the development initiatives of an enterprise. The presenter showed that these could be achieved through the creation of an integrated support practice focus that could encourage sustainability, enable the SMEs to access new economic sectors, and improve the competitiveness of the SMEs. This was demonstrated practically using a Property Point model as a case study.

The case study began by giving a brief background of the model. The objective of the model was to unlock the direct procurement opportunities within the Growthpoint as well as the entire industry. The presenter then talked about the approach used in the application of this model. The program involves designing and implementing a business development map that is highly customized. The presentation also addressed the role played by the procurement department in this program as well as the benefits of the program. The outcome of the program was to close the gap between procurement and SMEs; therefore, it has brought many benefits.

  1. Analysis

The SMEs contribute a greater percentage to the development of the economy of South Africa (Tan, 107). Despite this, the sector is not well developed due to a number of challenges. One of the challenges affecting SMEs is accessibility to the market, which is due to procurement issues. Most of the SMEs fail to access opportunities because they employ the wrong procurement models. A gap exists between SMEs and the individuals procuring the services of these SMEs. This gap arises because most corporations are not willing to run the risks, which are associated with the integration of new entrants within their chains of supply. They are always unwilling to diversify their supply chains (Tan, 88). Therefore, the procurement methods used to end up providing theories to the SMEs and not the needed market access opportunities.

However, Growthpoint Property Limited has a solution to the above problem through the use of the Property Point program. This program helps in unlocking direct procurement opportunities. The program is used to facilitate SME development by practical training, supplier relationships, experiential learning, among other methods. The Growthpoint plays a significant part in the program. Therefore, the program addresses the needs of the SMEs as well as those of the procurement division, among other benefits.

Generally, this method helps to close the gap that has always existed between the procurement departments and the SME suppliers. Therefore, it has increased the ability of SMEs to compete for various contracts. It has also empowered them with the ability to find new methods of adding value, among other positive outcomes. This has contributed greatly to the growth and expansion of SMEs in South Africa.

  • South African Reserve Bank
  1. Summary
  2. Background of the Organization

The South African Reserve Bank (SARB) is the central bank of the Republic of South Africa. The bank has the primary responsibility of achieving as well as maintaining the stability of prices in South Africa (Smit, 306). This is done in order to ensure that the country has balanced as well as sustainable economic growth. The bank works in cooperation with other banks and institutions within the country in order to ensure there is financial stability in South Africa.

  1. Summary of Events

The presentation started by mentioning the main problem facing the economy of South Africa. This problem is unemployment with the country having 4.6 million people being unemployed out of 18.6 million people that are economically active. This figure implies that 25 % of the economically active citizens of South Africa are being unemployed.

  • The presentation was then divided into three main sections. The first section talked about the economic development initiatives of South Africa. These were mainly the historic development initiatives in the country from the year 1994 to 2011. They included;
  • The Reconstruction and Development Program (RDP) of the year 1994
  • The Growth, Employment, and Redistribution (GEAR) of the year 1996
  • The Accelerated and Shared Growth Initiative of South Africa (ASGISA) of the year 2006
  • The New Growth Path (NGP) of the year 2010

The presentation also talked about the National Development Plan (NDP) of the year 2011, commonly referred to as the Vision 2030. The presentation said that Vision 2030 aimed at creating job or employment opportunities, uniting the nation of South Africa, and transforming the urban as well as the rural areas. In addition, it includes expanding the infrastructure, fighting out corruption as well as enhancing accountability in South Africa. Moreover, Vision 2030 includes providing quality healthcare services to the citizens of South Africa, improving the education as well training levels in the country, among other objectives.

The next part of the presentation talked about the economic developments, which have been experienced in South Africa recently. One of the areas addressed was the GDP of the country. According to the presentation, the GDP of the world has been recently increasing. However, the presenter pointed out that the real growth of the GDP was sluggish in South Africa during the year 2013. Different charts were used to discuss the various developments achieved in various sectors of the South African economy. The presenter discussed the role of real house consumption as well as capital formation in the country’s development using graphs. He showed the trend from 1990 up to the present. Graphs were also used to discuss the fixed investment, and the domestic expenditure as related to the imports as well as exports and the performance of South Africa in the international trade.

The last section of the presentation talked about the monetary as well as the fiscal policy of South Africa. The presenter discussed the general framework of the monetary policy of South Africa. He pointed out the monetary policy of the country is exceptionally easy right now. He used graphs to explain this situation. He illustrated the inflation framework of the country, which was adopted in 2000. He said that the inflation targeting is being applied flexibly in South Africa, but the target ranges from 3 % to 6 % per annum. On the fiscal policy, the presenter showed how the stability within the South African budget is due to the three-year rolling budget system, which is being used in the country.

  1. Analysis

South Africa has the largest economy in Africa. It accounts for 24 % of its GDP as far as purchasing power is concerned (Smit, 238). This is according to statistics from the World Bank. In fact, the World Bank ranks this economy as an upper-middle. One major problem facing this economy is the high rate of unemployment. In fact, this country has the highest unemployment rate in the world of 25 %.

If you compare the current GDP of South Africa with that of 1994, you notice that has tripled. This is due to the economic development initiatives, which have been employed in the country since 1994. However, despite the fact the current global GDP has been on the rise, South Africa has had a sluggish GDP in 2013. The gross domestic expenditure, as well as the imports of the country, has been increasing since 2009. The country’s exports are less compared to the imports. This has resulted in a deficit within the balance of payments account. The deficit has been financed from abroad, resulting in increased foreign debt. Despite this, the economy of the country has been growing due to the fixed investment drive.

Briefly, South Africa’s economy is performing well especially within the monetary and fiscal policy. However, some areas need to be addressed such as unemployment.

Works Cited

Evaluation of the International Finance Corporation’s global trade finance program. Washington, DC: World Bank, 2013. Print.

International Finance Corporation annual report 2013. Washington, D.C.: World Bank, 2014. Print.

Shahar, Danny. Mortgage markets worldwide. Chichester, U.K.: Blackwell Pub., 2008. Print.

Smit, P. C.. Economics: a southern African perspective. Kenwyn: Juta, 2013. Print.

Tan, Felix B.. International enterprises and global information technologies advancing management practices. Hershey, PA: Information Science Reference, 2011. Print