The report "International Finance Institutions and Development Through the Private Sector" (2011) was commissioned jointly by 31 multilateral and bilateral development banks.
It answers the following questions:
- Do the investments of the International Financial Institutions (IFIs) actually help the people in emerging markets and developing countries?
- What measurable results are there?
Sucessful supplement to development work
Investments in the private sector of developing countries generate effects not offered by other forms of development work. When international backers invest in private companies, they pay attention to how these companies work and assist them in the development of their standards. Investments in private companies are a critical addition to traditional development work and investments in the public sector.
Investment volume consistently increasing
The report shows that the IFIs provided 40 billion dollars in 2010, 5% of the total flow of capital to emerging markets and developing countries. It was only 10 billion in 2002. Every dollar invested by IFIs in the private sector of such countries generates up to 12 additional dollars in available capital. IFIs contribute significantly to the growth of the private sector in developing countries and emerging markets.
Great significance of development banks for jobs in emerging markets
Between 2006 and 2008, the 15 European Development Finance Institutions (EDFI) invested EUR 5 billion in private sector projects. This has created 81,000 new jobs annually; the value creation chain and micro-borrowers created an additional 1.3 million jobs. This in turn generated an additional 1.7 billion euros in revenue for the governments.
Beyond financing, development banks also support innovations and the development of business expertise. The report also shows improvements in environmental and social standards as well as the transparent management of companies in emerging markets.