G8 Sea Island Action Plan: Applying the Power of Entrepreneurship to the Eradication of Poverty

Sectors : Economic governance and public finance management, Financial Institutions, markets, services and microfinance, Water and Sanitation, Investment
Organisation : G8
Date made: 
2004

Commitments in: Governance - Economic governance and public finance management

“The G8 will work with developing countries to develop pilot projects and support actions to:...

...14. Support the work of international bodies, such as the World Bank and African Development Bank, in promoting macroeconomic, legal and regulatory reforms to establish an efficient and transparent business climate appropriate to the unique challenges faced by poorer countries.”

Scope: 
International

“The G8 will work with developing countries to develop pilot projects and support actions to:...

...17. Promote good corporate governance, including through cooperation with the OECD/World Bank Global Corporate Governance Forum, and through technical assistance to develop or improve financial regulatory bodies.

18. Promote adoption of measures to improve transparency in fiscal policy and public procurement, to improve the climate for investment and responsible use of government resources.”

Scope: 
International

Commitments in: Private Sector development and financial services for the poor - Financial Institutions, markets, services and microfinance

“The G8 will work with developing countries to develop pilot projects and support actions to:...

...20. Promote credit bureaus that enable responsible borrowers to improve access to credit and other financial services.”

Scope: 
International

“Providing Housing and Clean Water by Supporting the Development of Local Financial Markets...

...This year, the G8 will concentrate on two aspects of financial market development by carrying out pilot projects to meet the needs of people for housing and clean water. Specifically, we will:

21. Work with the MDBs and other organizations to facilitate the establishment of the fundamental components of mortgage markets, including property rights, title transfer, credit risk management, legal and regulatory frameworks, funding sources, and the operational capacity of mortgage lenders.

22. Seek to provide opportunities for recipients of remittance inflows to utilize that income efficiently in domestic financial markets, including for building and improving their homes.

23. Help develop sub-sovereign bond markets to provide water and sanitation by building on relevant commitments in the G8 Evian water action plan, including technical assistance to design instruments and the legal and institutional frameworks necessary for market acceptance. We welcome the ongoing work of the World Bank on this issue.

24. Provide assistance for selected viable sub-sovereign bond issues for water projects by utilizing and expanding existing programs.

25. Promote the development of pooled funds, backed by homeowner associations, to pay for local water projects.”

Scope: 
International

“Expanding Access to Microfinance for Entrepreneurs
...In anticipation of the UN-designated international year of micro-credit in 2005, G8 countries will work with the World Bank-based Consultative Group to Assist the Poor (CGAP) to launch a global market-based microfinance initiative. To assess the status and effectiveness of current microfinance programs, G8 countries will work with CGAP to promote best practices in microfinance for developing countries. We endorse the Key Principles of Microfinance, compiled by CGAP and its members and will work with CGAP on ways to implement these key ideas with microfinance donors and practitioners. G8 countries will also launch pilot projects to increase the number, scale and effectiveness of microfinance institutions in selected countries. These pilots will:

26. Focus on institutional best practices for expanding and mainstreaming sustainable microfinance.

27. Develop a microfinance institution code of conduct based on CGAPs efforts to identify key principles for microfinance lending.

28. Reduce barriers for growing microfinance institutions to gain access to domestic and international capital markets.

29. Encourage, where needed, the establishment and expansion of self-sustaining microfinance investment funds.

30. Assist developing countries to improve their legal and institutional frameworks for microfinance so it can become sustainable and more widely available.

31. Enable growing microenterprises to continue to access capital by reducing barriers for bank lending, promoting innovative bank-microfinance institutions (MFIs) linkages, and removing disincentives to business formalization."

Scope: 
International

Commitments in: Private Sector development and financial services for the poor - Investment

“...G8 countries will work to ensure that bilateral and multilateral assistance help to mobilize capital and expertise to accelerate growth and free up resources for productive use by people in developing countries...

...To highlight and disseminate best practices in this private-sector approach to development, the G8, together with relevant international organizations, will sponsor a conference in the fall of 2004 involving private sector representatives and developing and developed country governments...

...Improving the Business Climate for Entrepreneurs and Investors...

...G8 countries endorse and will seek to supplement the good work that the UN and its Commission on the Private Sector and Development, the World Bank, IDB, IFC, the OECD, and other institutions have been doing to improve the climate for enterprise and investment in the developing world. In particular, we support the work of the World Bank to identify quantitative indicators for the costs and benefits of business regulations across countries.

G8 countries will work with the multilateral development banks (MDBs), UNDP, and other UN agencies and international organizations to:

7. Support coordinated, country-specific MDB action plans to address key impediments to the business environment. The action plans should have timetables to achieve measurable results.

8. Encourage the MDBs to incorporate these action plans into their country strategies and budgets, and report annually on the progress made in conducting investment climate assessments and action plans.

9. Encourage the MDBs to enhance their lending and technical assistance programs for small and medium-sized enterprises (SMEs) over the next three years with clear, results-based objectives, and to develop these plans by September. For example, the EBRD has introduced a successful small business program, combining technical assistance and capital, which has resulted in five hundred thousand loans to SMEs over the last ten years.

The G8 will work with developing countries to develop pilot projects and support actions to:

10. Assist committed countries to launch comprehensive programs and reforms to improve their business and investment climates, working with the MDBs and other international bodies such as the OECD.

11. Help drive down the cost and time to start businesses in developing countries.

12. Support efforts highlighted in the UN Commission on the Private Sector and Development to assist the evolution of informal businesses into the formal sector.

13. Help promote investment compacts, similar to OECD work in the Balkans, in which countries commit to implement structural policy reform in order to help attract increased private investment.”

Scope: 
International

“The G8 will work with developing countries to develop pilot projects and support actions to:...

...15. Help develop business-to-business links to promote commercially viable projects and to match investors, exporters, and service providers through entrepreneurial conferences and smaller sectoral meetings.

16. Support developing countries ability to attract knowledge-based investment and promote innovation by working with them to curb piracy and counterfeiting, which increasingly damage domestic as well as international business.”

Scope: 
International

“The G8 will work with developing countries to develop pilot projects and support actions to:...

...19. Promote and facilitate investment opportunities in developing countries, including through the negotiation and implementation of investment treaties.”

Scope: 
International

Commitments in: Other

“Facilitating Remittances to Help Families and Small Businesses

G8 countries will work with the World Bank, IMF, and other bodies to improve data on remittance flows and to develop standards for data collection in both sending and receiving countries.

To accomplish this, we will take actions, including through pilot partnerships and programs, with developing countries on remittances. The G8 programs...will:

1. Make it easier for people in sending and receiving countries to engage in financial transactions through formal financial systems, including by providing access to financial literacy programs, where appropriate, and by working with the private sector to extend the range and reach of these services.

2. Reduce the cost of remittance services through the promotion of competition, the use of innovative payment instruments, and by enhancing access to formal financial systems in sending and receiving countries. In some cases, remittance costs between sending and receiving countries have been reduced by up to 50 percent or more. G8 countries believe that similar reductions of high costs could be realized in the case of other countries.

3. Promote better coherence and coordination of international organizations that are working to enhance remittance services and heighten the developmental impact of remittance receipts in developing countries.

4. Encourage cooperation between remittance service providers and local financial institutions, including microfinance entities and credit unions, in ways that strengthen local financial markets and improve access by recipients to financial services.

5. Encourage the creation, where appropriate, of market-oriented local development funds and credit unions that give remittance-receiving families more options and incentives for productively investing remittance flows.

6. Support dialogue with governments, civil society, and the private sector to address specific infrastructure and regulatory impediments. For example, governments should ensure non-discriminatory access to payment systems for the private sector, consistent with strong supervisory standards, and work together to modernize overall financial infrastructure.”

Scope: 
International