Some new directions for financiers
The various types of international financial institutions are not easy to define. Although all are funded by taxpayers of several nations, their structures are complex, said Krystyna Milewska, liason officer for the Polish office of the World Bank, which is owned by 178 member countries.
"Voting power on investments depends on the number of shares a country has. Our investments seek to generate profits through low interest rate credits to countries with a relatively low GDP," Milewska said.
Major infrastructure projects, such as energy, telecoms and environment, are sectors most often targeted by financial institutions.
But the IMF does not deal with the private sector at all, rather with sovereign governments. Its interest in privatization is subordinate to its emphasis on sound fiscal policy. "Our one purpose is to help the nation balance its payments," said Sierhej. "Our role will diminish if all goes well. (Finance Minister Grzegorz) Kolodko recently said that he does not see a reason to renew the current agreement between Poland and the IMF."
The other international financial institutions on this week's list play a role in the private sector and certainly have more interesting investments than the IMF.
The World Bank deals with investment on all levels and is working to finance large infrastructure projects through cooperation with the Polish government. Like the IMF, the World Bank will eventually work itself out of a job if all goes well, said one representative. Indeed the World Bank has "graduated" from several countries.
The International Finance Corporation (IFC), the arm of the World Bank Group responsible for private sector investment, announced last week that it will target more investment in the retail and distribution sectors, with its recent commitments to invest $10 million in the Globi retailing chain and $2 million in Nesky automotive parts distributor.
"Efficient distribution is an area under the old command economy that was neglected," said Hugh Stevenson, IFC resident representative. "It's an important sector for development of a market economy."
Given large minimum investments often exceeding $5 million, the IFC, with the EBRD and other large international financial institutions, has been working with intermediaries - banks, equity funds and venture capital firms - to channel funds to small- and medium-sized businesses.
The Nesky project represents a break from that tradition, Stevenson says. The multi-phase project with an initial $2 million IFC investment could grow to a more than a $60 million project with 25% IFC involvement. The strategy, Stevenson says, is to start small, get familiar with the company and help build it.
"It's nice because you go in small and ramp up over time," he said.
"Voting power on investments depends on the number of shares a country has. Our investments seek to generate profits through low interest rate credits to countries with a relatively low GDP," Milewska said.
Major infrastructure projects, such as energy, telecoms and environment, are sectors most often targeted by financial institutions.
But the IMF does not deal with the private sector at all, rather with sovereign governments. Its interest in privatization is subordinate to its emphasis on sound fiscal policy. "Our one purpose is to help the nation balance its payments," said Sierhej. "Our role will diminish if all goes well. (Finance Minister Grzegorz) Kolodko recently said that he does not see a reason to renew the current agreement between Poland and the IMF."
The other international financial institutions on this week's list play a role in the private sector and certainly have more interesting investments than the IMF.
The World Bank deals with investment on all levels and is working to finance large infrastructure projects through cooperation with the Polish government. Like the IMF, the World Bank will eventually work itself out of a job if all goes well, said one representative. Indeed the World Bank has "graduated" from several countries.
The International Finance Corporation (IFC), the arm of the World Bank Group responsible for private sector investment, announced last week that it will target more investment in the retail and distribution sectors, with its recent commitments to invest $10 million in the Globi retailing chain and $2 million in Nesky automotive parts distributor.
"Efficient distribution is an area under the old command economy that was neglected," said Hugh Stevenson, IFC resident representative. "It's an important sector for development of a market economy."
Given large minimum investments often exceeding $5 million, the IFC, with the EBRD and other large international financial institutions, has been working with intermediaries - banks, equity funds and venture capital firms - to channel funds to small- and medium-sized businesses.
The Nesky project represents a break from that tradition, Stevenson says. The multi-phase project with an initial $2 million IFC investment could grow to a more than a $60 million project with 25% IFC involvement. The strategy, Stevenson says, is to start small, get familiar with the company and help build it.
"It's nice because you go in small and ramp up over time," he said.
