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The external environment has deteriorated during the first half of 2019, and downside riskspredominate in the near-term. Global GDP growth is projected to decline to 2.6 percent in 2019 from 3 percent in 2018, reflecting broad-based weakness in advanced economies and major Emerging Market and Developing Economies. Reflecting slower growth and heightened policy uncertainty associated with protected trade tensions, global trade growth is protracted to weaken further from 4.1 percent in 2018 to 2.6 percent in 2019. Downside risks include a further escalation of trade disputes between the world's two largest trading nations, while a more pronounced downturn in global activity and increased volatility in financial flows. Amidst rising global headwinds, Vietnam's economic growth momentum has been slowing since the beginning of the year. Vietnam's real GDP growth has decelerated to a still robust 6.8 percent in the first quarter of 2019 from a vibrant 7.5 percent pace in the same period of 2018. Slower growth reflects several factors. Agricultural output decelerated due to the outbreak of African swine fever and a decline in international prices. Weaker external demand moderated growth of the export-oriented manufacturing sector as well as overall export performance, even though Vietnam seems to have benefitted from some trade diversion due to the ongoing trade tensions between China and the US. Domestic investment appears to be slowed resulting from subdued credit growth and continued consolidation in public investment. Other macroeconomic indicators, such as more sluggish credit growth, subdued inflation and slower import growth are further signs of a cyclical moderation in economic activity. In contrast, service sector activity continues relatively strong, signaling sustained buoyancy in private consumption. Despite a recent uptick in headline inflation, price pressures have remained subdued as credit growth moderated. The headline CPI rose by 2.9 percent (y/y) in May 2019, up slightly from 2.6 percent in January 2019, driven by hikes in administered prices (for electricity and fuel) and moderate food price increases. The State Bank of Vietnam maintained a prudent monetary policy stance to support its twin goals of sustaining macroeconomic stability and supporting overall economic growth. Credit growth is estimated to have slowed to about 13 percent (y/y) in March 2019 reflecting tighter credit policies.

Microenterprises --- Monetary Policy --- Public Debt

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Recent studies have suggested that women's business decisions are influenced by members of their household, especially their spouse, and that these intrahousehold dynamics contribute to gender gaps in entrepreneurship outcomes. This in-depth qualitative study among microentrepreneurs in urban Ghana sought to understand the connections between women's businesses and their households' management of economic resources. The findings show that women's business decisions are influenced by: (1) a desire to reinforce their partner's responsibilities as a primary provider, (2) attempts to fulfill normative expectations regarding daily provision of needs for the family, and (3) a need to prepare for long-term security. To reinforce their husband's responsibilities as a provider, women hid income and savings, and sometimes explicitly limited business growth. To ensure their ability to smooth household consumption and respond to emergencies, women prioritized savings over investment. And, to plan for their long-term security, women opted for cautious business investment, maintaining pressure on their partner to meet current needs and investing in children and property for the future. More broadly, the findings illustrate that interpersonal interactions concerning the management of economic resources are an integral part of how household members negotiate their rights and responsibilities in relation to each other.

Entrepreneurs --- Gender --- Household --- Intrahousehold Allocation --- Microenterprise --- Microenterprises --- Private Sector Development --- Women Entrepreneurs

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Entrepreneurs in developing countries report that unreliable electricity imposes a serious constraint, yet little evidence exists on how blackouts impact the micro firms that account for the majority of employment. This paper estimates the effects of outages on small firms using original firm-level panel data and finds evidence of differential effects by firm size. Firms without employees experience large reductions in revenues and profits. Outages have no measurable effect on the output of firms with employees, where worker hours increase, weekly wages paid decrease, and the analysis fails to reject that blackouts have no effect on (average firm-level) worker hourly wages.

Blackout --- Electric Power --- Electricity Access --- Energy --- Firm Size --- Infrastructure --- Microenterprises --- Private Sector Development --- Private Sector Economics

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Medicinal and aromatic plants (MAPs) offer opportunities for sustainable economic growth in Nepal.Nepal currently does not hold a significant share of global markets for MAPs, but MAPs are relatively more important in Nepal's export basket compared with other countries.Nepal currently does not hold a significant share of global markets for MAPs, but MAPs are relatively more important in Nepal's export basket compared with other countries.Market access is affected by non-tariff measures in this sector.Currently, Nepal primarily competes in the segment of raw and unbranded MAPs for the non-discerning user. This segment has minimal value addition and a high degree of global competition.This study identifies two segments where Nepal is well positioned to compete in the short to medium term: (i) lightly processed products for the discerning and conscientious consumer, specifically personal care products; and (ii) heavily processed, mass-produced products for non-discerning buyers, specifically Ayurvedic and traditional medicine products.Personal care products are an attractive market segment for individual Nepali entrepreneurs and micro, small and medium enterprises (MSMEs).Nepali firms have the potential to integrate into regional and global value chains for traditional herbal and Ayurvedic medicinal products.While Nepali firms have the potential to compete successfully in the two identified segments, they face many challenges that need to be addressed. Many of the constraints in the MAPs value chains in Nepal are similar to those across the broader agribusiness sector.These challenges include issues with land rental and aggregating land; lack of investment in physical infrastructure; lack of R and D; distortions in input markets (fertilizer and seeds); poor extension services; inadequate support for building firm capabilities; weak quality infrastructure (for testing and certification) that restricts access to foreign markets; poor logistics; insufficient investment in supply chains; and poor access to finance for smaller players in the sector.Sustainability of MAPs is a major concern, especially in higher elevation areas, and requires continued conservation efforts.The government should ease trade frictions for suppliers providing raw materials to domestic manufacturers.In the personal products segment, Nepali firms could benefit from a more conducive environment for e-commerce and skills development.The Ayurvedic and traditional medicine products segment in Nepal could benefit from protecting Nepal's cultural heritage and traditional medicine systems, implementing intellectual property rights (IPR) polices to support private sector growth and attract FDI, and research support to identify the intensity of specific MAPs in their most common final products.Global demand for MAPs, especially as inputs for more complex final goods, has been increasing steadily since the turn of the century. Nepal has the potential to tap into this demand and compete successfully in this market if the challenges faced by Nepali players in the MAPs value chains are addressed.

Export Competitiveness --- Gender --- Industrial and Market Data and Reporting --- Industry --- Microenterprises --- Pro-Poor Growth

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Micro, small, and medium enterprises (MSMEs), are the drivers of Kyrgyz economic growth and key contributors to sustainable gross domestic product (GDP). Since the country achieved independence from the Soviet Union in 1991, MSMEs became one of the prime supports of the economy as the number of industrial enterprises declined. Most MSMEs are engaged in the trade and trade-related sectors. These generate significant employment opportunities for skilled and unskilled labor alike. Despite their importance to economic development, however, the growth of the country's MSMEs has been hindered by their limited access to banking services, along with high tax rates, and inconsistent policies. Thus, government support programs and assistance from multilateral agencies and policy makers are essential to MSME growth. The Bank Advisory Services of IFC's Financial Institutions Group provides advisory services to banks in aid of strengthening their capacity and increasing their outreach to the MSME sector. This is achieved through capacity building, training, knowledge sharing, and dissemination of best practices in MSME banking and risk management. IFC's primary goal is to increase the number of banks that offer banking services to MSMEs in a profitable and sustainable manner. The organization is globally recognized as a market leader in MSME banking, through its various regional engagements. IFC is also recognized for its global expertise and knowledge in this area. In response to growing market demand, IFC has recently enhanced its advisory services to include Islamic financing. In this respect, the National Bank of Kyrgyz Republic has also expressed an interest in exploring this segment of the market. Indeed, the NBKR is already looking at the possibility of putting regulations for Islamic banking in place. The study reveals a funding potential of USD 342.2 to 456.3 million for Islamic financing to MSMEs, with a corresponding depository potential of USD 402.6-536.9 million over the next few years. This funding potential exists due to the new-to-bank' funding opportunity within the un-served and underserved MSME segments. These are either partially served by financial institutions or do not borrow at all for various reasons. Findings include new-to-bank' funding potential of USD 309.6-412.9 million, which is untapped as banks and other financial institutions lack adequate the strategic focus needed on this segment to offer Shariah-compliant products.

Finance and Financial Sector Development --- Financial Regulation & Supervision --- Islamic Finance --- Microenterprises --- Private Sector Development --- Small and Medium Size Enterprises