2908 Volume 1 ' ILY L i ' I--'<;= The World Bank Annual Report 2002 Volume 1 THE WORLD BANK Year in Review LQN@v d THE WORLD BANK MISSION TO FIGHT POVERTY WITH PASSION AND PROFESSIONALISM FOR LASTING RESULTS. TO HELP PEOPLE HELP THEMSELVES AND THEIR ENVIRONMENT BY PROVIDING RESOURCES, SHARING KNOWLEDGE, BUILDING CAPACITY, AND FORGING PARTNERSHIPS IN THE PUBLIC AND PRIVATE SECTORS. TO BE AN EXCELLENT INSTITUTION ABLE TO ATTRACT, EXCITE, AND NURTURE DIVERSE AND COMMITTED STAFF WITH EXCEPTIONAL SKILLS WHO KNOW HOW TO LISTEN AND LEARN. World Bank Headquarters in Washington, D C ~'E Contents Message from the Chairman 2 The Board of Executive Directors 5 The World Bank Group 8 Chapter 1 Meeting the Poverty Challenge: The World Bank's Goals and Strategies 11 | Chapter 2 Overview of World Bank Activities in Fiscal 2002 23 About the cover: Education shapes the Chapter 3 Development Effectiveness 43 future of people and nations. Yet 113 mil- lion children around the world-most of Chapter 4 Thematic Perspectives 59 them girls-do not go to school. In fiscal Addressing the Social, Institutional, and Economic 2002 the Education for All agenda gained Dimensions of Poverty 60 considerable momentum, with the World Investing in People 63 Bank at the forefront of global efforts to S Promoting Environmentally and Socially Sustainable give every girl and boy, by 2015, an oppor- Development tunity to complete a free primary school Supporting Private Sector Development and Infrastructure 70 Building Strong Financial Systems 74 education of good quality. Promoting the Rule of Law 77 Chapter 5 Regional Perspectives 81 Map of Country Offices and Borrower Eligibility 82 Note Africa 84 This is the first of two volumes that will be East Asia and Pacific 89 distributed as a set. The complete Manage- South Asia 93 ment's Discussion and Analysis, audited finan- Europe and Central Asia 98 cial statements of the International Bank for Er era Cntra asia e98 Reconstruction and Development, audited Latn America and the Carbbean 103 financial statements of the International De- Middle East and North Africa 108 velopment Association, and appendixes are published in a separate volume as The World Chapter 6 About the World Bank 115 Bank Annual Report 2002: Volume 2, Finan- cial Statements and Appendixes. This Annual Index 168 Report is also available on the Internet at List of Boxes, Figures, and Tables 170 www.worldbank.org. Select World Bank Publications 172 All dollar amounts used in this Annual Report List of Part I and Part II IDA Member Countries 173 are current U.S. dollars unless otherwise World Bank Web Sites 174 specified. Abbreviations and Acronyms 176 Message from the President of the World Bank and Chairman of the Board of Executive Directors _. ~ ~ ~ ~ ~~ r -n -- -A A~~~~~~~~~~~~ ~ I' wg n;t__|I I. It - -a L During hs vst to Kabu n May to reopen the Word Bank office, James D Wolfensohn meets worke and views progress on the Global Distance Learning Center which is being funded under the Emergency Education Rehabilitation and Development Project A NEW GLOBAL PARTNERSHIP FOR Developing countries recognize that they must DEVELOPMENT commit to good governance and sound policies, build- ing the conditions for investment and empowering As a result of the events of the past year, more people their people in the development process. They have than ever before have come to realize that no wall pledged to use aid funds to build human capacity, divides rich and poor nations. There are not two focusing on education and health programs. They have worlds. There is only one. And in this world, poverty pledged to fight the corruption that drains resources is our collective enemy. This has been a year of tremen- away from productive activities. They have taken the dous challenges. But it has also been a period of reach- initiative to identify priorities and generate their ing out, of standing together, a time of commitment to own development policies while representing all con- shared goals. stituencies, including women and the disadvantaged, The Millennium Development Goals (MDGs) rep- in the process. The development community is com- resent an expanded vision of development with essen- mitted to increasing the quantity and effectiveness tial objectives, including halving world poverty by of its support to developing countries as they move 2015. At the International Conference on Financing for forward in these areas. Development in Monterrey, Mexico, in March 2002, Developed countries acknowledge that they must the international community committed itself anew provide more and better aid, improve policy coherence, to achieving the goals. It formed a new global and, critically, move forward on trade policies in sup- partnership-the Monterrey Consensus-that marks port of development. In particular, it is essential to an important watershed in its aspirations to achieve address policies that limit markets for developing the MDGs. Both developing and developed countries countries'products. Without greater access to global will play important roles. markets and the growth in trade that follows, many 2 The World Bank Annual Report 2002 developing countries will be severely constrained, not this approach will increasingly broaden to embrace r ealizing their potential for investment, private sector national parliaments, civil society, and the private growth, job creation, and sustainably higher incomes. sector. Country-led comprehensive processes enable We in the developrnent community are all agreed clients to do an increasingly good job of setting clear that the essential conditions to foster successful devel- priorities for policies and actions needed to deliver opment include education and health programs that faster growth and poverty reduction. In each case, build human capacity; an effective system for infra- these priorities will need to reflect the country's unique structure provision; good and clean government; effec- circumstances and needs and will often go beyond tive legal and judicial systems; and well organized and political cycles. supervised financial systems. The Monterrey Consensus was a historic step for- FOCUS ON POVERTY REDUCTION AND ward. At last developing countries saw the promise of IMPROVEMENTS IN EDUCATION a turnaround in the access to trade and in the volume of aid, as an additional $12 billion was pledged by This year the Bank has played a leading role in reliev- donor countries over the next three years. The chal- ing poor countries of debt in order to increase their re- lenge before us now is to translate the new global sources for poverty reduction. Twenty-six countries are development partnership into action, redoubling our now benefiting from the Heavily Indebted Poor Coun- efforts on the part of developing countries and the tries (HIPC) Initiative, amounting to about $41 billion broader international community. from all creditors in nominal debt service relief over What matters most is results. Over the past decades, time. Five more countries will soon be receiving relief impressive gains have been made in many countries in under this program. Together with other forms of re- life expectancy, literacy, and poverty reduction. Because lief, HIPC cuts the total external debt in these countries of better policies in developing countries, together with by two-thirds. These countries can now spend between improved performance-based allocation in recent three and four times more per year on key social in- years, aid is more effective today at reducing poverty vestments, such as education and health, than on debt than ever before. But there is more to be done. With service requirements. good results, we can open the door to increased re- Education is at the heart of poverty reduction. At sources for fighting poverty. Both developing and de- its Spring Meetings this year, the Development Com- veloped countries are now in a position to take the next mittee of the World Bank Group specifically endorsed steps toward achieving the Millennium Development an Action Plan for accelerating progress toward Educa- Goals. tion for All (EFA), which aims to provide every girl and Essential to those steps is the need for developing boy with quality primary school education by 2015. countries to use the new resources committed at The case for faster progress toward this goal is clear: Monterrey effectively. Donors should harmonize their 113 million children of elementary school age in devel- lending policies and procedures, and untie aid, so that oping countries have either never set foot in a class- borrowing countries are not mired in unnecessary room or dropped out of school shortly after enrolling. requirements and reports, and can obtain resources The Bank has subsequently invited 18 countries to join more efficiently. Donors should also commit to helping an Education for AB Fast Track and is working with 5 developing countries build capacity in government, other countries to qualify them for the program. This is business, and communities, listening to their expressed an initiative designed to help developing countries priorities. meet the 2015 education goal. Many more countries The Monterrey Consensus is in line with the devel- are expected to benefit from this initiative in the opment strategy that the World Bank Group has been months and years to come. progressively pursuing in recent years. The Bank's We must continue to increase resources for poverty knowledge resources, based on more than fifty years reduction in the poorest countries, for which IDA re- of development experience, have played a vital role. mains the largest source of concessional financing. There is now a broad acceptance of the Comprehensive Its catalytic role can now be even greater with the Development Framework and Poverty Reduction Strat- 13th Replenishment of IDA (IDA13), which stresses egy Papers by low-income countries and our develop- working with other development partners and a strong ment partners. I believe that country ownership of focus on results. IDA 13 represents an 18 percent The World Bank Annual Report 2002 3 increase over IDA 12, and reconfirms the commitmenit Bank's considerable knowledge resources we can assist of IDA donors to addressing the goals highlighted in our development partners and client countries in iden- Monterrey. The increased grant funding within IDA is tifying successful poverty reductioni efforts and in c.ar- especially welcome and we are grateful to the donors rying them out on a wider scale. I am especiallv grate- for this new development. ful to the management and staff of our World Banik In the past year, the World Bank Group has devel- Group for their selfless efforts. oped and communicated its strategy, approach, and In a changed world, the new partnership of nations priorities, and established many of the procedures and can make the difference in the lives of poor people. The tools needed to translate those broad directions into time for action is now. The opportunity is here. We concrete actions that can be monitored. With our must stand firm in our fight against poverty and aim to strategy established, our focus will continue to be on achieve a drastic reduction of it in our lifetime, for the implementation. We will work to scale up our impact sake of our children. We must commit ourselves to a because of the scale and urgency of the global poverty poverty-free and inclusive world with renewed vigor. challenge. Where the Bank has been successful in the past, we know that country leadership and our strong partners in development have played importanit parts. We will continue to work with our partners to find more effective ways to help clients formiulate their poli- cies and build institutions. By sharing and applying the James D. Wolfensohn 4 The World Bank Annual Report 2002 The Board of Executive Directors .~~~~~~~~~~~~ From left to right (standing) Tom Scholar Luis Antonio Baduino, Neil Francis Hyden, Mohamed K Amr * Pieter Stek, Pierre Duquesne, Eckhardt Biskup, * Pietro Veghio, Finn Jonck, Mano Soto-Platero, Girmai Abraham, Yuzo Harada, Abdul Aziz Mohd Yaacob, Bassary Toure, Emin Dedeoglu, (seated) Zhu Guangyao, Yahya A M Alyahya, Carole Brookins, Balmiki Prasad Singh, Sharon Weber, * Helena Cordeiro, * Ahmed Sadoudi *Altemate (some directors or alternates were not available for this photograph) The Executive Directors are responsible for the conduct is played by the Operations Evaluation Department of the World Bank's general operations and perform (OED), which is accountable directly to the Board their duties under powers delegated by the Board of to perform evaluations as set out in OED's Board- Governors. As provided in the Articles of Agreement, approved policies, strategies, and work program. OED 5 of the 24 Executive Directors are appointed by the provides independent advice to the Board on the rele- member countries having the largest number of shares; vance, sustainability, efficiency, and effectiveness of the rest are elected by the other member countries, operations. During fiscal 2002 the Executive Directors which form constituencies in an election process con- regularly met at Bank headquarters to carry out their ducted every two years. responsbilities. Directors also serve on one or more Executive Directors consider and decide on IBRD of five standing committees: Audit, Budget, Develop- loan and guarantee proposals and IDA credit and guar- ment Effectiveness, Personnel, and Executive Directors' antee proposals made by the President, and they decide Administrative Matters. The committees help the on policies that guide the Bank's general operations. Board discharge its oversight responsibilities through They are also responsible for presenting to the Board in-depth examinations of policies and practices. of Governors, at the Annual Meetings, an audit of Executive Directors and Alternate Executive Direc- accounts, an administrative budget, and an annual tors also periodically visit borrowing countries to re- report (this report) on the Bank's operations and poli- view Bank assistance in progress. They meet a wide cies as well as other matters. In shaping Bank policy, range of people, including project managers, benefici- the Board of Executive Directors (the Board) takes into aries, and government officials, as well as nongovern- account the evolving perspectives of member countries mental organizations, the business community, other on the role of the Bank Group as well as the Bank's op- development partners, financial institutions, and erational experience. In this regard, an important role resident Bank staff. This year, Directors visited the The World Bank Annual Report 2002 5 European Union in Brussels, and also Algeria, the Arab nary, 3 Decision Point,' and 4 Completion Point2 doc- Republic of Egypt, and the Islamic Republic of Iran. uments) and considered a number of joint Bank-Fund Directors also play an active role in preparing the papers, including "HIPC Initiative: Status of Imple- agenda and issues papers for the semiannual meetings mentation"; "HIPC Initiative: Completion Point Con- of the joint World Bank-International Monetary Fund siderations"; "External Debt Management in HIPC (Bank-Fund) Development Committee. In fiscal 2002 Countries"; and "Actions to Strengthen the Tracking of the Development Committee addressed the World Poverty-Reducing Public Spending in HIPCs." The Bank's response to the events of September 11, 2001, Board's poverty reduction work was heavily influenced for low- and middle-income countries, the U.N. con- by the determination to spur progress in achieving the ference on Financing for Development, development Millennium Development Goals (MDGs), with the ob- effectiveness, education for dynamic economies, and a jective of halving world poverty levels by the year 2015. number of other issues including heavily indebted poor countries (HIPC), anti-money-laundering activi- Country Programs ties, and harmonization of multilateral development Country assistance strategies (CASs) remained the banks' (MDBs') operational policies and procedures. cornerstone of Bank Group work at the individual (See appendix 13 in volume 2 of this Annual Report.) client level, including the Comprehensive Development Framework (CDF) principles of ownership, partner- STRATEGIC ISSUES ship, and a focus on results. The Board reviewed 34 CASs and CAS products during the fiscal year. The major areas of Board emphasis during the fiscal Periodic meetings of the CDF Learning Group dealt year are highlighted below. with issues such as selectivity and alignment. The Board also participated in ongoing work on refining Strategic Framework and modernizing the Bank's lending and nonlending The Board's work during fiscal 2002 was based heavily instruments, and provided guidance on a number on the Strategic Framework and Strategic Directions of papers in this area, including design features for Papers discussed in fiscal 2001, and reflected recent the Deferred Drawdown Option for use with IBRD progress in aligning Bank Group strategies and policies adjustment loans for middle-income IBRD member with its core poverty reduction objective. Directors also countries. reviewed a Strategy Update Paper for fiscal 2003-05 focusing on implementation of the Bank's Strategic Global Programs and Partnerships Framework. Within this context they reviewed a num- The Bank Group continued to strengthen cooperation ber of Sector Strategy Papers designed to help define with the International Monetary Fund (the Fund, or the Bank's role in poverty reduction at the sector level, IMF), other MDBs, and the U.N. system, while increas- including strategies for the environment, gender, infor- ing its outreach to civil society. Directors also took an mation and communication technologies, and private active role in considering priorities in relationships sector development. with other development partners. Collaboration with the IMF was especially prominent in the work on The Bank Group's Role in Poverty Reduction PRSPs and the HIPC Initiative, as well as the work on The Board continued to closely monitor implemen- tation of the Bank's poverty reduction mandate. It considered seven Poverty Reduction Strategy Papers 1. Decisioni point: The point at which the international communLity (PRSPs) and nine interim PRSPs, and they reviewed agrees-for countries with unsustainable debt levels and a solid three PRSP Progress Reports, pointing out areas where record on econiomic reform and poverty reduction programs- on the amount of relief needed to reduce outstanding debt to a sus- further refinement would be useful. In addition, Direc- tainable level. Multilateral creditors, including IDA, begin provid- tors discussed a joint Bank-Fund comprehensive ing significant "interim assistance" beginning immediately at the Review of the Poverty Reduction Strategy Paper (PRSP) decision point. Approach. Meanwhile, the Board continued to focus 2. Completion point: The point at which all creditors provide, uncon- ditionally, the remainder of their share of debt relief agreed on at attention on the enhanced HIPC Initiative. They con- the decision point. The completion point is tied to implementation sidered 11 HIPC documents (comprising 4 Prelimi- of key reforms and policies outlined in a country's PRSP 6 The World Bank Annual Report 2002 debt sustainability and public sector management. This reimbursements, and included $176.9 million for the included a joint Bank-Fund paper on strengthening Development Grant Facility. The administrative budget Bank-Fund collaboration on country programs and represented a 4.6 percent real increase over the fiscal conditionality, and a paper on enhancing operational 2001 budget. In June 2002 the Executive Directors ap- coordination on financial sector issues. Work was also proved a total administrative budget, net of reimburse- carried out with other MDBs and bilateral aid agencies ments, of $1,672.6 million for fiscal 2003. on the harmonization of operational policies and pro- cedures culminating in a"Progress Report on the Har- INSPECTION PANEL monization of Policies, Procedures, and Practices." In addition, the Board approved key recommenda- The Board created an independent Inspection Panel tions in a review of the Bank's policy on information in 1993 to address more closely the concerns of people disclosure, which was drafted in close consultation affected by Bank projects and to ensure that the Bank with clients and civil society. Board members were adheres to its operational policies and procedures in heavily involved in preparations for the March 2002 the design, preparation, and implementation of proj- U.N. conference, Financing for Development, which ects. Any group of individuals who believe they may be addressed issues such as the role of the MDGs, harmed by a Bank-supported project may ask the Panel strengthening the conditions for investment and to investigate complaints that such harm stems from growth, promoting the integration of developing coun- the Bank's failure to abide by its policies and proce- tries into the international trading system, the dures. The Executive Directors decide, on the recom- importance of enhancing development assistance mendation of the Panel, whether an investigation will flows, and the challenge of cooperation and coor- take place. dination among donors to reduce the transaction In fiscal 2002 the Inspection Panel received three costs of aid. Directors also took an active interest in new Requests for Inspection relating to (a) the Uganda: progress on refining the Bank's knowledge strategy Third Power Project and the later approved Bujagali and establishment of the Development Gateway Hydropower Project, for which the Board approved an Foundation. investigation; (b) the Papua New Guinea: Governance Promotion Adjustment Loan, for which the Panel did OVERSIGHT AND FIDUCIARY RESPONSIBILITY not recommend an investigation; and (c) the Paraguay: Reform Project for the Water and Telecommunications The Board exercises oversight and fiduciary responsi- Sectors, and the Argentina: SEGBAV Power Distribu- bility on behalf of its shareholders, in part through tion Project, for which the Panel registered the Request its Audit Committee. The Committee reviewed its for Inspection. terms of reference to reflect the evolving scope and The Board considered the Panel Investigation Re- responsibilities of audit committees' roles in risk port and the Bank management recommendations on management. The Committee advises the Board on the Uganda Bujagali Project, and approved manage- financial management and other governance issues ment's recommendations to address the Panel's find- to facilitate Board decisions on financial policy and ings. In addition to the Uganda investigation, the Panel control issues. is conducting two other investigations, approved by the Board, which relate to Requests for Inspection received ADMINISTRATIVE BUDGET in fiscal 2001 concerning (a) the Chad Petroleum De- velopment and Pipeline Project, and (b) the India Coal The administrative budget for fiscal 2002, reviewed Sector Environmental and Social Mitigation Project. by the Budget Committee and approved by the Twenty-six requests have been filed since the establish- Executive Directors, was $1,589.7 million, net of ment of the Panel. The World Bank Annual Report 2002 7 The World Bank Group The World Bank Group, The International Bank for The International Development Reconstruction and Development Association with a missio'n to fight with a missior~i to fight Established 1945 * 183 memiibers Establishied 1960 * 162 members CuIMulative lending: S371 billion CuLImulative leInding: $135 billion poverty and improve Fiscal 2002 lendinlg: $1 1.5 billion for Fiscal 2002 lenidinig: $8.1 billioin for -.iving standards for 96 new operations in 40 countries 133 new operations in 62 countries people in the develop- ing world, is among the world's leading devel- - - opment institutions. It ____ _ _1 provides loans, policy advice, technical assis- ! d A .. tance, and knowledge- - - The Turkey Marmara Earthquake Emergency Re- IDA finances improvements in the quality of *sha ring services. I B RD construction (MEER) Project set a new standard and access to basic services in education, health for delivery of natural disaster intervention that care, clean water, and sanitation. This culvert is al n d I DA-to!g eth e r, the wbalances reconstruction and recovery activities being constructed under the IDA-funded feeder and..IDA-together, the ~with disaster risk mitigation and emergency road project in Zambia, preparedness efforts The MEER team received "Wo rld Bank "-are the 200 t President's Award for Excellence. owned by member IBRD aims to reduce poverty in Contributions to IDA enable the - middle-income and creditworthy World Bank to provide $7 billion to countries that carry poorer coulitries by promoting $8 billion per year in interest-free sustainiable development throuigh credits to the world's 79 poorest ultimate decision- loans, guarantees, and nonlenid- countries, home to 2.5 billion peo- ing-includinig analytical and advi- ple. This support is vital because making power. The sorv-services. IBRD does not these counitries have little or no ca- -maximize profit but has earned a pacity to borrow on market terms. -World Bank Group net income each year since 1948. In most of these countries, the vast Its incomile funds several develop- majoritv of people live on less than today consists of five menital activities and ensures finani- $2 a day, and 4 out of 10 people cial strength, which enables low- survive on less than $1 a day. closely associated cost borrowings in capital markets IDA is financed by a partner- and good terms for borrowing ship of donors who come together institutions. clients. every three years to agree on the IBRD's 24-member Board resources required to fuLid IDA's represents all 183 members and lendinig program and to determine is made up of 5 appointed and the policy objectives that guide 19 elected Executive Directors. IDA's activities. The World Bank Annual Report 2002 The International Finance The Multilateral Investment The International Centre for Corporation Guarantee Agency Settlement of Investment Disputes Established 1956 * 175 members Established 1988 U 157 members Committed portfolio: $21.6 billion (in- Cumulative guarantees issued: Established 1966 * 134 members cludes $6.5 billion in syndicated loans) $10.34 billion Total cases registered: 103 Fiscal 2002 commitmiients: $3.6 billion Fiscal 2002 guaranitees issued: Fiscal 2002 cases registered: 16 in 204 projects in 75 countries $1.36 billion' OW.:~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. IFC's Mekong Project Development Facility An employee of a MIGA-backed bottling com- A highway construction project in Morocco is assisted this locally owned small business in pany in Brazil weighs recyclables brought to being arbitrated at ICSID. Vietnam in developing strong management school by students. practices that are critical to its commercial success. lFC promotes economic develop- MIGA helps encourage foreign in- ICSID helps to encourage foreign ment through the private sector. vestment in developing countries investment by providing interna- Working with business partners, by providing guarantees to foreign tional facilities for conciliation and IFC invests in sustainable private investors against losses caused by arbitration of investment disputes, enterprises in developing countries noncommercial risks, such as ex- in this way helpilg to foster an without accepting government propriation, currency inconvertib- atmosphere of mutual confidence guarantees. It provides equity, long- ility and transfer restrictions, war between states and foreign in- term loans, loan guarantees, risk and civil disturbance, or breach of vestors. Many international agree- management products, and advi- contract. In addition, MIGA pro- ments concerning investment refer sory services to its clients. IFC seeks vides technical assistance to help to ICSID's arbitration facilities. to reach businesses in regions and countries disseminate information ICSID also has research and pub- countries that otherwise would on investment opportunities. The lishing activities in the areas of have limited access to capital. IFC agency also provides investment arbitration law and foreign invest- provides finance in markets dispute mediation services upon ment law. deemed too risky by commercial request. investors in the absence of IFC par- ticipation and adds value to the projects it finances through its cor- porate governance, environmental, 1. Includes $136 millioni leveraged through and social expertise. the Cooperative Underwriting Program. The World Bank Annual Report 2002 9 #S->-2 ~ ~ *S -*'* F@I.,, q< S %\ :; Chapter o l1lSW . Meeting the Poverty Challenge: The World Bank's Goals and Strategies boo mD& Ay AQ= OaOnO1j xaXC~~H~i~L3 0 $Fs~ ,~7IL & >~~ '0 S- 0 i ag~Q~J 4 b g&~~~~~~~~~~~~~~~~~~~ Chapter 1 Meeting the Poverty Challenge: The World Bank's Goals and Strategies Nearly halj of tile world's 6 billionr pcople live otn less This year in particular, world leaders recognized thiani $2 a day; one-fifti--1.2 billioni-live oni less than711 that such poverty must be addressed in the interests $1 a day. of the world comml1un_ity, wvorld peace, and security. The World Baank is an internationial organizationl Attacking poverty in poor coulitries is one of the of more than 180 member coulitries. Its missioni is to greatest challenges facing the global development fight global poverty, and it uses its resources and col- community as the world moves into the 21 st century. laborates with others to help client countries achieve sustainable and equitable growth. THE MILLENNIUM DEVELOPMENT GOALS Despite significant progrcss in the past few decades, far too many people in the developing world still In recognitioni of the enormous challenge of global subsist at income levels insufficient to meet basic poverty, the international development comimiunity human needs. The poor lack opportunity. They lack has, since 1990, adopted specific targets for poverty voice. They are vulnerable to sickness, violence, and reduction, nlow knowni as the Millenniumi) Develop- natural disasters. They lack such basic services as ment Goals (MDGs). TIhese goals, which have been education, primary health care, and access to drink- embraced by the World Bank and which provide a ing water. Their life expectancy is still a fraction of focus for its developmenit programils, are: that achieved by people in industrial countries decades ago. There are far too many children, par- Goal 1: Eradicate extreme poverty and hLlnger ticularly girls, not in school and thus facing a bleak Goal 2: Achieve universal primary education future. Goal 3: Promote gender equality and empower womIen GOAL 2 GOAL 3 GOAL 4 es¶w:.tsi; Achieve universal *ss0TIR .UEUS equality and mortality Goal 4: Reduce child mortality 1990s average of 1.8 percent. Under this scenario of Goal 5: Improve maternal health robust growth, the incidenice of those living on less Goal 6: Combat HIV/AIDS, malaria, and other diseases thani $1 a day could fall to 12 percent and their absolute Goal 7: Ensure environmliental sustainiability numbers could drop to about 750 million by 2015. Goal 8: Develop a global partnership for development Even then, many countries would still not reach the goal. In Africa, for example, the incidenice of poverty The Banik's store of development knowledge plays would only fall to 39 percent and the number of poor an importanit role as it expands its efforts to help would increase to 345 million, compared with 240 mil- couLntries achieve the MDGs. Informationi on suc- lion in 1990 and 300 million in 1999. cessful approaches and projects in low- and middle- Recent research has shown that aid works best when income countries is shared across the Bank and a coulntry's overall policy and expenditure framework with clients, and can lead to successful replication is appropriate, its institutions are strong, its private sec- elsewhere. tor is vibrant, and its government and people together Progress toward the M DGs is discussed in are strongly commllitted to reform. 'I'here is also a clear chapter 3. recognition of the multidimiienisionial nature of poverty and the interdependencies among the MDGs. The THE WORLD BANK'S PRIORITIES Bank recognizes that two important engines of eco- FOR POVERTY REDUCTION nomic groNvth that will benefit the poor are the private sector and poor people themselves. As a result the The trends in poverty indicators have challenged the Bank's strategic priorities are based on two pillars: Bank and the wider development community to reflect building the climate for investment, jobs, and sustain- on what has worked and what has not in the support of able growth; and investing in poor people and empow- developing countries' poverty reduction efforts. Devel- ering them to participate in development. In addition, oping countries need to grow rapidly in order to make the Bank recognizes that some of the most pressing de- a significant reduction in poverty and achieve the velopment concernis reach across country boundaries MDGs. The Bank's Global Ecotnioic Prospects 2002 and must be addressed on a worldwide scale through shows that the target of halving dire income poverty by internationally coordinated efforts. Dealing with the 2015 can be met only if the average per capita gross maniy urgent global priorities, such as the provision of domestic product growth rate for developing countries global public goods, will require better management can be sustained at 3.6 percent a year, or twice the and finanicing of cross-cutting issues. 0^£ GOAL 6 GOAL7 7 117-ItMlSiEl Combat HIV/AIDS, Ensure 6i.IT; 1 malaria, and environmental a. other diseases sustainability [ 1 I I Building the Climate for Investment, jobs, in global and regional trade negotiations. At the na- and Sustainable Growth tional level, activities are aimed at helping developing The Bank helps clients to enhance investor confidence countries harness trade by integratinig pro-poor re- and private investment, both domestic and foreign. It forms into their national development and poverty supports rural and urban development, the building of reductioni strategies. (See box 1.1, Globalization and effective infrastructure, financial sector reforms, regu- Irade.) Informiiationi and knowledge priorities include latory reforms, and competition policies. Financial sec- redressing the digital divide aild equipping countries tor reforms promote stability, transparency, access, and with the capacity to access knowledge, and promoting competition. In addition, the Bank supports measures the understaniding of development and poverty reduc- to improve public sector governance as a necessary tion. Financial architecture includes developing inter- condition to the engagement of the private sector in national standards, financial stability, and interniational economic growth. Improved governance focuses on the accouLnting and legal frameworks. rule of law and anticorruption efforts, public adminis- tration and civil service reform, and judicial reform. POVERTY REDUCTION AT THE COUNTRY LEVEL Investing in Poor People and Empowering Them The Bank's approach to poverty reduction is tailored to to Participate in Development each country's particular needs. The country busilless The Bank recognizes that the MDGs can be achieved model is centered on1 the country's vision, a good only through the empowerment of poor people as par- diagnosis of the policies proposed, a Bank program to ticipants in development. Engaging poor people in the support the vision, and a focus on results. It translates development process leads to more effective and vital into specific approaches to support low- and middle- poverty reduction efforts. Gender mainstreaming, civic income countries. engagement, and social risk management are priority In this regard, the Bank's corporate advocacy priori- areas. The Bank recognizes both education and health ties are critical enablers of poverty reduction, translat- programs as essential to empowerment efforts. Activi- ing the two pillars into action at the country level. The ties in education focus on access to education for all priorities include a focus on the investmiienit climate and on building human capacity for the knowledge anid public sector governance; empowermcnit, security, economy. Health activities focus on maternal and child and social inclusion; education; and health. The Bank health care, access to clean water, and sanitation. builds awareness of these priorities and shares kniowl- edge with clients, developmenit partners, and other GLOBAL PRIORITIES stakeholders. The Bank addresses global issues where common Low-Income Countries action can alleviate adverse conditions that all develop- The Bank's task of poverty reduction is particularly ing countries share. Five areas requiring specific atten- challenging in low-income countries, where the inci- tion are communicable diseases, the environment, dence of poverty is highest, the institutional constraints trade and integration, information and knowledge, and are most severe, the policy environment is most hostile international financial architecture. Communicable to private investment, and access to resources is most disease priorities include fighting human immunodefi- limited. Bank programs in these countries emphasize ciency virus/acquired immune deficiency syndrome country ownership of development priorities. (HIV/AIDS), tuberculosis, malaria, and childhood The Poverty Reduction Strategy Paper (PRSP) diseases, as well as promoting vaccines and drug approach is a major recent addition to the global effort development to combat major communicable diseases. to attack poverty based on nationally owned strategies Environmental priorities include addressing climate for poverty reduction that serve as a framework for de- change, access to water, protection of forests, biodiver- velopment assistance. The approach is founded on the sity, ozone depletion, and land degradation; and pro- principles underlying the Comprehensive Develop- moting agricultural research. Trade activities aspire to ment Framework-that is, PRSPs are to be country help make the world trading system more conducive to driven, results oriented, comprehensive, long-term in development by promoting market access by develop- perspective, and designed to foster strong domestic and ing countries and fostering their effective participation external partnerships. 14 The World Bank Annual Report 2002 Ownership means that PRSPs are prepared by the Poverty Reduction Support Credits have been intro- countries themselves, relying on broad-based participa- duced to provide targeted support in line with coun- tory processes and reflecting countries' unique circum- tries' strategic priorities for poverty reduction. Bilateral stances and needs. It is recognized, however, that many and other multilateral donors are increasingly support- poor countries need time to prepare full PRSPs; there- ing the concept of aligning their assistance programs fore, interim PRSPs, or I-PRSPs, with a relatively sim- with country-owned poverty reduction strategies. (See ple format, have been introduced to avoid holding up also Special Assistance in Fiscal 2002 in chapter 2.) the countries' access to concessional assistance (no- interest loans) and debt relief. Once prepared, PRSPs Low-Income Countries under Stress are expected to be living documents, revised every few The Bank has recognized the need to identify a more years in light of experience. Whenever an I-PRSP or effective approach to those low-income countries with full PRSP is prepared, the Executive Boards of the Bank chronically weak performance indicators, either where and the Fund review its suitability as a sound basis for it has had limited engagement in the last decade or concessional lending (and, where appropriate, debt where its traditional instruments have not been suc- relief), supported by a Joint Staff Assessment prepared cessful. In fiscal 2002 a task force set out to identify the by Bank and Fund staff. Poor countries have responded key distinguishing characteristics of these countries positively to the approach, recognizing that PRSPs and to propose a suitable combination of instruments are their documents expressing their priorities. (See for the Bank to use in support of their development chapter 4, box 4. 1.) priorities. BOX 1.1 GLOBALIZATION AND TRADE Globalization-the growing integration of economies general, these countries have seen negative growth and societies around the world resulting from in- and rising poverty. Clearly, helping countries that want creased flows of trade, capital, people, and ideas- to integrate with the global economy is an important remains one of the mbst debated issues of our time. task for the World Bank Group. The World Bank has made important contributions to the discussion of globalization in the areas of research Investment Climate and ideas. In fiscal 2002 the Bank published the Policy Two of the research findings from the Bank's work Research Report Globalization, Growth, and Poverty: on globalization have shed light on crucial tasks that Building an Inclusive World Economy The report sum- would enable more poor countries to participate in marized the findings of a large-scale Bank research and benefit from globalization. This has helped. program on the various dimensions of globalization. sharpen the institution's strategic focus. The first issuer The study found no evidence that there is growing is the improvement of the investment climate. Many inequality within the ,typical developing country that developing countries have carried out first-generation is opening up to the global economy. In fact, some of reforms, including liberalization of formal trade poli-.: the fastest-growing locations in the world are places cies. The locations that benefit the most from these re- in the developing world that were extremely poor forms are those that have reasonably good investment ,20 years ago but that have made serious efforts to inte- climates: a regulatory environment in which firms can grate with the world "market. Bangladesh, China, India, start up, increase productivity, and expand; efficient Uganda, and Vietnamri are all examples of globalizing public services, such as customs administration; and developing countries.that have experienced unprece- complementary infrastructure, such as power, ports, dented poverty reduction. On the other hand, many and telecommunications-services that can be provided low-income countries!are actually less integrated into by the private sector given a proper legal and regula- the world economy t%riay than 20 years ago, and in tory framework. (Box 1.1 continues on the following page.) BOX 1.1 (continued) Recognizing the importance of good investment from developing countries, though low, are four times environments, the Bank Group has started a large-scale those collected from industrial-countries. Subsidies and effort to help developing countries assess their invest- other support to agriculture in the high-income coun- ment climates and the impact of specific bottlenecks tries are now running roughly $1 billion a day, or more through surveys of private firms, and to analyze the than six times all development assistance worldwide. impact of different bottlenecks on productivity. The The Bank's research has highlighted the cost to Bank's Private Sector and Infrastructure Network and developing countries of Organisation for Economic its Development Economics Group have started a joint Co-operation and Development protection of textiles Investment Climate Unit to increase such support to and garments, and subsidies to agriculture. It also countries. points out the potential costs to developing countries from the TRIPS (Trade-Related Aspects of Intellectual Social Protection Property Rights) Agreement, which requires 20-year A second important issue that has been highlighted by patents on pharmaceutical products and imposes new the work on globalization concerns social services and legal and administrative costs on developing countries. social protection. Integration with the global economy The Bank has called for better market access by poor leads developing countries to grow faster because it countries and for reform of TRIPS implementation to creates a more dynamic environment in which there is ensure access of poor countries to essential drugs. greater competition and entry and exit of firms. But Protection is not an issue solely for high-income this dynamism has a clear social cost: there will be more countries, however. Developing countries have also turnover in the labor market, highlighting the need for placed high barriers on agricultural products, labor- good social protection. Furthermore, the jobs created intensive manufactured goods, and other products and in developing countries as a result of foreign trade and services. Developing-country tariffs in manufacturing investment will generally have higher skill.require- are, on average, four times higher for imports from ments than most existing jobs. This upgrading can be a developing countries than are tariffs in industrial powerful force for aggregate productivity growth, but countries on imports from developing countries. Also, it is crucially important that it be supported by a good restrictions on services trade are usually more common educational system and that the poor, in particular, in developing countries than in industrial countries. have good access to basic education. Global Economic Prospects 2002 makes a case for Thus, going forward in the globalization debate, reshaping the global architecture of world trade to the Bank has an important role to play in research and promote development and poverty reduction by focus- in building the twin pillars of a sound investment cli- ing on four policies: using the World Trade Organiza- mate and good social services with social protection. tion (WTO) ministerial to launch a development round of trade negotiations that would reduce global trade The Global Arcnitecture OT Trade barriers; engaging in global collective action to pro- An important role for the Bank is trade advocacy on mote trade outside the negotiating framework of the behalf of developing countries. While developed coun- WTO, including increasing multilateral aid-for-trade tries have low trade protection, on average, the areas assistance; adopting protrade development policies of where they maintain protection are exactly the sectors high-income countries unilaterally; and enacting new where poor countries are potentially competitive, namely trade reforms in developing countries. Some 2.8 billion agriculture and labor-intensive manufactures. These people live on less than $2 a day. The current projected sectors confront the greatest trade barriers, putting the baseline growth could reduce poverty by 600 million to world's poor at a particular disadvantage. According to 2.2 billion by 2015. The report argues that seizing the estimates in the Bank's Global Economic Prospects opportunity to reshape the global trade architecture 2002, the average poor person selling into globalized in this way would enable developing countries to grow markets confronts barriers that are roughly twice as at rates that could reduce such poverty to 1.9 billion high as those facing the typical nonpoor worker. In by 2015, effectively lifting an additional 300 million general, tariffs in high-income countries on imports people above the $2-a-day poverty line. Middle-Income Countries include bilateral aid agencies, the United Nations and A substantial proportion of the world's poor live in its various specialized organizationis, the IMF, other middle-income countries. The Bank has an essential multilateral developmenit banks, the Organisationi for role in helping these countries reduce poverty and Economic Co-operation and Development (OECD), advance toward becoming developed market econ- nongovernmiental organizations, and private founda- omies. These countries generally have access to the tions. Tnhese partnerships have led to a number of suc- international capital markets, although that access is cessful global initiatives dealing wvith global public limited and often volatile. For these countries the key goods. Two of the major global initiatives are higih- to developimient and poverty reduction lies in enhanc- lighted here. ing private investment and strengthening the invest- menit climate, and establishing efficient and equitable Consultative Group on Iiiternational social expenditure progranis geared toward building Agricultural Research humani capital and providing equality of access to The Consultative Group on Interinational Agricultural economic opportunity. Research (CGIAR) is fostered by a broad-based part- The crucial roles for the Bank are to help these nership comprising the Food and Agriculture Organi- countries with the cornplex structural, social, and zation of the United Nations, the International Fund institutional reforms that make them attractive to pri- for Agricultural Development, the U.N. Dcvelopment vate investment; stipport their restructuring and invest- Programme (UNDP), 22 developing and 21 indtIstrial ment needs while access to long-term capital is still countries, private foundations, and regional organiza- constrained; help them reduce the concentrations of tions. Since 1971 the Bank has provided strong support poverty that remain; assist them in reducing vuliera- for CGIAR-a network of 16 Future Harvest Centers bility to economic shocks and in mitigating the social that mobilize cutting-edge science to reduce huniger impact of crises; and support the country-level imple- and poverty in developing colintries, improve health, mentation of the global public goods agenda. and protect the environimiienit. One of the keys to rapid poverty reduction in CGIAR recognizes that agricultural growth, while middle-income countries lies in the growth of the feeding thc world's growinig population and reducing private sector. The Bank continues to help couLitries poverty, must be achieved through socially acceptable complete basic market-opening reforms while also and environmentally sustainable methods. Research is supporting the complex structural and social reforms a key meanis of providing newv crop and farminig tech- that generally follow. As reforms take hold, countries nologies. CGIAR research products are public goods become more attractive to private investors, both freely available to all. The benefits are far-reaching. For domestic and foreign. The Bank uses a number of in- example, CGIAR scientists developed quality protein strumenits to catalyze and leverage the private sector, maize that helps fight malnutrition, winninig the World including offering partial credit and partial risk guar- Food Prize. In West Africa's humid regions, NewN, Rices antees to mobilize private sector financing for individ- for Africa (NERICAs) are boosting rice prodtictioni; ual projects. Its support for financial sector develop- in Guinea, NERICAs are planted on 90,000 hectares, ment draws on the complementary roles of IBRD, saving $13 million in crippling imiport bills. IFC, and MIGA. Global Environment Facility POVERTY REDUCTION AT THE GLOBAL LEVEL The Bank has formed a strategic partnership with the Global Environment Facility (GEF), the only newv The scale and complexity of global poverty make it funding source to emerge from the 1992 Rio Earth imperative that the different development agencies- Summit. GEF, in partnership with the Bank, UNDP, governments, multilateral and bilateral organizations, and the U.N. Environment Programme, is a major the private sector, and civil society organizations-join catalyst for protecting the global environmenit. It fos- forces to work on the most important and difficult is- ters cooperation and finances actions to conserve bio- sties of development. The WVorld Bank has forged part- diversity, r educe risks of climate change, protect the nerships with a numliber of such organizationis over the ozone layer, clean up inter-national waters, stop land past few years around specific issties or programs of degradation, and eliminiate persistent organic pollu- global importance. The institutional partnerships tants. GEF is the designated financial mechanisimi for Chapter 1 Meeting the Poverty Challenge: The World Bank's Goals and Strategies 17 activities supplemented with a range of technology- based programs to enhance knowledge sharing; and - *6-.-, helping clients enhance their capacity to generate, access, and use knowledge from all sources. The Bank's global knowledge outreach initiatives < - . include the World Bank Institute (WBI) learninig programs, which broker and distill local and global -____ .. -' <.. knowledge; the Global Development Learning Network --____ - > -^~ A . -- -(GDLN); the Development Gateway; World Links; the t s _ ; ;- .* ~ - .Global Development Network; African Virtual Univer- N- ;, 1 K sity; and InfoDev. (See www.worldbank.org/ks/ r * ' initiatives.html.) The growing awareness that the efficient use of knowledge makes the Bank a more effective institution ' ~;- - has led to the mainstreaming of capacity building in its operational work. For example, a "knowledge economy assessment tool" is being used to help countries diag- As one of the three implementing agencies of the Global Environment niose their policy anid inivestmenit nieeds as they eniter Facility the Bank assists its member countrles to conserve and sustalnably the global economy. In fiscal 2002 knowledge assess- use their natural resources. ments were completed for China and the Republic of Korea, and they are under way in the Russian Federa- the conventions on biological diversity, climate change, tion and EU accession countries. and persistent organic pollutants. Capacity enhancement, especially in public sector The Bank's partnerslhip with GEF has been in- managemiienit, is also critical in order for low-inicome strumental in GEF's success. Through the Bank-GEF countries to implement their poverty reduction strate- Secretariat, the Bank plays a key role in managing gies and provide improved basic public services. In re- GEF-financed projects. sponse to increasinig country demanid, WBI leverages As one of the GEF implemenitinig agencies, the Bank its partnerships with other content providers and helps its client countries to prepare and supervise GEF donors to deliver, for example, courses for journalists, projects. More than 300 Bank-GEF projects, includinig seminiars for parliamentarians, and action-learniing some joint projects with other imiplemeintinig agencies, programs on anticorruptioni and legal and judicial re- are being carried out in 127 countries. The projects are form for government officials and policymakers. financed by $1.5 billion in GEF grants and more than As part of its rapid response to the crisis in $9 billion in additional funding from public and pri- Afghanistan, the Bank is btuilding a distance-learning vate partners. The Bank also serves as the trustee of the center under its GDLN in Kabul at the request of the GEF Trust Fund and provides administrative support government's Aid Coordination Agency. for the GEF Secretariat. (See www.gefweb.org or www.worldbank.org/gef.) FINANCING THE WORLD BANK'S POVERTY REDUCTION EFFORTS KNOWLEDGE PRODUCTS AND SERVICES I'he World Bank is a cooperative institution that Creating, sharing, and applying knowledge through its mobilizes financinig by means of outright contribu- analysis and advisory services has always been an im- tions from the richer member countries for IDA, and portant part of the Bank's role in assisting client coun- by borrowing from the international capital markets tries to promote growth and reduce poverty. In recent for IBRD. It channels these resotirces for the benefit years the Bank has begun to organize its knowledge of the poor in borrowing countries. activities in a systematic way. It focuses on three areas: The clients of IDA are the poorest countries, wvho making effective use of knowledge to support the qual- usually cannot afford to borrow on commercial terms. ity of its operations; sharing knowledge with its clients IDA offers concessional, no-interest loans (or credits) and partners, leading to participatory development to the poorest countries, repayable in 35 to 40 years 18 The World Bank Annual Report 2002 BOX 1.2 LENDING FOR POVERTY REDUCTION The Bank offers an array of customized services Both investment and adjustment loans are used through IBRD and IDA-including loans, technical flexibly to suit a range of purposes. assistance, and advice-to its developing and in- transition member countries. It uses two basic types How a Loan Is Made of lending instruments: investment loans and adjust- Lending is developed in several phases. On the basis ment loans. of economic and sector work, often supported by the Bank, the borrower identifies and prepares the project, Investment Loans and the Bank reviews its viability. During loan negotia- Investment loans finance goods, works, and services in tions the Bank and borrower agree on the develop- support of economic and social development projects ment objective, components, outputs, performance in-' in a broad range of sectors. The nature of-the Bank's dicators, an implementation plan, and a schedule for investment lending has evolved over time. Originally disbursing loan funds. Once the Bank approves the focused on hardware, engineering services, and bricks loan and it becomes effective, the borrower imple- and mortar, investment lending has come to focus ments the project or program according to terms more on institution building, social development, and agreed on with the Bank. the public policy infrastructure needed to facilitate All loans are governed by the World Bank's opera- private sector activity as the Bank's priorities have tional policies, which aim to ensure that Bank-financed changed. operations are economically, financially, socially, and environmentally sound. Fiduciary policies and proce- Adjustment Loans dures govern the use of project-related funds, particu- Adjustment loans provide quick-disbursing external larly for the procurement of goods and services. Safe- financing to support policy and institutional reforms. guard policies help to prevent unintended adverse Adjustment loans were originally designed to provide effects on third parties and the environment. short-term balance of payments support for macro- The Bank supervises the implementation of each economic policy reforms, including reforms in trade loan and evaluates its results. Three-fourths of out- policy. Over time they have evolved to focus more on standing loans are managed by country directors locat- medium-term structural and institutional reforms in ed away from the Bank's Washington, D.C., headquar- the financial sector, social policy, and public sector ters. Nearly 30 percent of Bank staff are based in nearly resource management. 100 countrv offices worldwide. after a 10-year grace period. In fiscal 2002 IDA pro- Through partnerships with other institutionis, cofi- vided $8.1 billion in financing for 133 projects in nancing and trust funds are also made available for 62 low-income countries. projects. The clients of IBRD, on the other hand, are gen- erally the middle-income countries and, because of The Role of IDA the limitation on IDA resources, some of the larger IDA is the world's largest source of concessional finan- low-income countries that are deemed creditworthy cial assistance for the poorest countries and invests in for borrowing. IBRD offers loans at near-market terms basic economic and human development projects. Eli- but with long maturities. In fiscal 2002 IBRD provided gibility for access to IDA resources is governed by two loans totaling $11.5 billion in support of 96 projects basic criteria: a country's relative poverty (as measured in 40 countries. by per capita income) and its lack of creditworthiness. Poverty reduction is at the core of lending from The operational income cutoff for IDA eligibility in both IDA and IBRD, through investments that support fiscal 2002 is a per capita gross national income of growth as well as investments in basic public services. $885. In order to receive IDA resources, countries must (Box 1.2 describes the Bank's lending instruments and also be pursuing sound policies to promote growth the process of loan approval.) See chapter 2 for details and reduce poverty; IDA assistance is allocated based of lending during the year. on annual assessments of countries' policies and Chapter 1 Meeting the Poverty Challenge: The World Bank's Goals and Strategies institutiois. In exceptional circumstances IDA extends 'rC eligibility to countries that are above the inicome cutoff , but are not fully creditworthy to borrow from IBRD. Stich exceptions have been made for small island econoliies. ' X, . IDA recipient countries face complex challenges in striving for progress toward the MDGs. IDA supports != counitries in their developmenit efforts by promoting I 9 sound policies to secure the basis for economilic growth '_ r and poverty reduction. Policv priorities include im- proving the quality of and access to basic educationr by the poor; strengthening the fight against the spread of comnllLinicable diseases, inciLiding HIV/AIDS; anld al-- r building a healthy investimieint climilate. IDA is a leader NCA;j-'; - amonig developmenit institutionis in targeting assistance - ; \ to countries that pursue sound policies, and it has re- fndits performance-based allocaition system1 to place The TreasuJry tradin g roomn isj the Bnerve rentelr th5et Bankgsn finidispronac-ased loainssei opae financial transactions. investing the Bank's liquJid assets, managing an even greater emphasis on good governance. balance sheet risks, and rrieeting bond investor needs are crucial to IDA is financed by a partnership of donors, who the Barik's ability to respond to clients financing needs. come together every three years to decide on the amounllat of new resources required to fund IDA's future Figure 1.1 IDA's Stepped-Up Effort in the Social lendinig program and to discuss lendinig policies and Sectors priorities.~~~~~~~~~~~ 297 projects ongoing (compared with priorities. 190 a decade ago) Fiscal 2002 marked the last year of the 1 2th1 Repleniishlimlenit of IDA, which finded coiTimitimienlts Number of projects for fiscal 2000 through 2002. Special drawing rights under implementationa (SDRs) of 8.7 billion were provided by donors, and 300 = Water Supply SDR 6.6 billion came from internal resotirces, incltid- 48 and Sanitation ing repaymen1ts of past credits, service charges, and 47 = Social Services IB3RI) net inicome. (See chapter 2 for an update on1 _ 67 Health, Nutrition, and Population IDA.) Figure 1.1 shows IDA's increased effort in the 200 52 l Education social sectors. 36 22 The Role of IBRD 806 Countries with a per capita income of less than $5,225 100 : -e that are not IDA-only borrowers are eligible to borrow - from IBRD. Countries with higher per capita incomiies 78 89 may borrow tinder special circumstances or as part of 0. - _ a graduation strategy. It is importanit to note, howevei', FY92 FY97 FY02 that the amoulilt that counltries cani borrow Iromii I BID) a. Includes projects in both IDA-only and blend countries. depenids onl their creditworthiniiess. TIItIS, couniitries IDA commitment value of ongoing social sector projects may be eiigible to borrow but may not have access to Fiscal 1992: $8.1 billion IBRD resources because of poor creditworthiness. In Fiscal 1997: $13.2 billion addition, IBRD loans outstandinig to any individual Fiscal 2002: $13.7 billion borrower, irrespective of its creditworthiness, may not exceed S13.5 billion. countries are eligible for IDA lendinig due to their low Seventy-five percent of people who live on1 less thani per capita incomiies, but they are also creditworthy for $1 per day live in countries that receive IBRD lending. some IBRD borrowving. These counltries are known IBRD borrowers are typicallv middle-incomile couLntries as blend borrowers. Eveni excluding IBRD loans to the that enjoy some access to private capital markets. Some blend countries, a full 25 percent of those who live on1 20 The World Bank Annual Report 2002 less thani $1 a day live in countries that are IBRD bor- grew to $5.34 billion. (See chapter 2 for more on trust rowers. IBRD provides important support for poverty funds.) reduction by facilitating access to capital in larger volumes, on good terms, with longer maturities, IMPROVING DEVELOPMENT EFFECTIVENESS: and in a more sustainiable manier than the market STRONGER FOCUS ON RESULTS provides. IBRI) is a AAA-rated finanicial institutioni-with Development experience over thc past 50 years has some unusual characteristics. Its shareholders are sov- highlighted the importance of focusinlg on outcom1les. ereign govermiients. Its member borrowers have Donors demand that funds provided by their taxpavers a voice in setting its policies. IBRD loans (and IDA achieve results. 'I'he citizens of developing countries are credits) are typically accompanied by nonlendinig scrv- impatient to see tangible improvemenits in their living ices to ensure more effective use of funds. Also, unlike conditions within a reasonable time frame. Both expect commercial banks, IBRD is driven by development the World Bank and other development agencies to be impact rathel than profit maximization. able to demonistrate the results of joint efforts. Devel- In fiscal 2002 IBRD raised $23 billion at medium- oping more accurate and timely data on social and eco- to long-term maturities in internationial capital mar- n1omiliC outcomiles and conductilig independent evalua- kets. The year's funding volume was above the $17 bil- tions of projects and country programs provide a basis lion raised in fiscal 2(001. Borrowinigs, along with share- for ensurinig accountability and, more importalitl',v holder equity, fund 113RD's loans and investments. Its learning from experience. (Figure 1.2 shows official financial strength is based on the support it receives development assistance by country.) from its shareholders and oin its financial policies and The Bank has, in the last few years, significanitly practices, which are designed to maintaini a high credit increased its focus on moniitoring the quality of standing in the inter-nationial markets. implemenitationi, sustainiability, and developmelit out- comes ofl the programs it finances. Its monitorinig and Cofinancing evaluation systems are being strengthened to more Cofinanicinig describes funds committed by official comprelhensively capture the poverty impact of its bilateral partners, muIltilateral partners, export credit policy-based and investmenit lending, as well as its agencies, or private sources to specific Bank-funded advisory services, and will enable it to more closely projects. Cofinanicinig enables the WAforld Bank to lever- track its progress toward meeting the MDGs. Evalua- age its resources with additional financinig, often at ino tions of completed projects by the Bank's Operations interest or as grants, to benefit the recipient country. Finanicinlg provided by multiple sources in support of individual projects also allows harmonization of Figure 1.2 Net Official Development Assistance as policies and procedures, thus reducing the administra- F NeOc ent asistance a Percentage of Gross National Income tive burden on the recipient country and improving effectivxeness. In fiscal 2002 IBRD and IDA financinig 0.8 of $19.5 billion wvas supplemented by $4.7 billion 0.7 from such sources. (See chapter 2 for more on 0.6 cofi nalnci ig.) 0.5 0.4 Trust Funds 0.3 A numilber of industrial countries, a few of the larger 0.2 _ developing countries, the private sector, and non- 0.1 goveriillental organizations maintain trust funds with 0.0 the World Bank that can be used to supplement Bank 1991 1996 2001 resources for specific agreed-on initiatives. The trust - United States - United Kingdom funds available cover areas that facilitate grant funding - Japan - Average for all DAC countries of highi-priority developmienit needs, includinig techni- - Germany - U.N. Target = 0.7% cal assistance and advisory services, debt relief, and Note: Data for 2001 are preliminary. postconflict transitioni. In fiscal 2002, trust fund assets Source: OECD's Development Assistance Committee. Chapter 1 Meeting the Poverty Challenge: The World Bank's Goals and Strategies 21 Evaluation Department (OED) indicate continuing The changes were approved in August 2001 after improvement, with 82 percent of the projects account- the Batik published its draft review of the policy and ing for 78 percent of financing rated as satisfactory. held extensive consultations to solicit the views of civil OED has also conducted over 55 country assistance society, industry groups, and governments in 21 coun- evaluations through fiscal 2002. Mechanisms are in tries around the world. The Bank also invited comn- place to monitor the quality of operations on an ments through its WAleb site. ongoing basis. Under the revised policy the Bank will release The World Bank periodically undertakes a broader more project-related documents, and provision of assessment of its major progranis, going beyond the as- Banik information and archives will be more system- sessmenits of individual operations. In fiscal 2002 an atic, timely, and user-friendly. The Bank also made evaluation was carried out on IBRD and IIDA lending plans that will, over time, substantially iniprove access going back 50 years. (See chapter 3 for a complete dis- to informationi through Bank offices in developing cussion of development effectiveness.) countries. Thirteen pilot programs across the Bank will enable Country Management Units to develop OPENNESS AND TRANSPARENCY and test ways of making even niore inforniation available, especially for consultations associated Informing and consultillg stakeholders has contributed with country strategy, lending preparation, and to effective and sustainable developmenit by stimulating implementationi. debate, broadeninig understanding, and strengthening Task forces have designed strategies for upgrad- country ownership of development activities. Building ing public inforniation services worldwide. (See on previous efforts to make more information publicly www.worldbank.org/operations/disclosure/ for the available, the Bank has revised its policy on informa- full text of the revised disclosure policy and updated tion disclosure. procedural guidanice on implenientation.) 22 The World Bank Annual Report 2002 -( -~~~-'rL -AAU L ~ \J t Chapter2 I1,inh; VXW,E17if lWh MOfU1 Overview of World:Bank'Activities in Fiscal 20O2 U **~~ I I - D I - e * v JIIJg4irqEei! FISCAL 2002 HIGHLIGHTS * IBRD and IDA lending commitments increased to * The Bank studied the past 50 years of develop- $19.5 billion, reflecting highest-ever lending levels ment assistance and recorded its findings in The by IDA, which reached $8.1 billion for 133 new Role and Effectiveness of Development Assistance: operations. IDA's strong lending program was Lessons from World Bank Experience. The study driven by record lending to Africa and South Asia, took a broad view of the relationship between which together accounted for $6.4 billion. development experience and official development * In fiscal 2002 Bank support to HIV/AIDS (human assistance over the past 50 years, with particular immunodeficiency virus/acquired immune defi- emphasis on the World Bank's experience in re- ciency syndrome) projects amounted to new com- cent decades. It found that progress in improving mitments of over $300 million. Lending operations well-being has been rapid, if uneven, and that- were approved in Benin, Burkina Faso, Burundi, notwithstanding some significant shortcomings Cape Verde, the Central African Republic, Jamaica, and failures-such assistance has often helped to Madagascar, Nigeria, Senegal, and Sierra Leone, underpin and support success. It also found that, and HIV/AIDS components were significant in a in large part because of lessons that donors and number of other new and ongoing projects. The governments have learned from both successes Bank supports HIV/AIDS work in over 64 countries. and failures, development assistance is becoming By far the greatest concentration of HIV/AIDS ac- more effective in supporting growth and poverty tivities supported by the Bank has been in Africa. reduction. To date, 16 Multicountry HIV/AIDS Programs * In March 2002 more than 50 heads of state gath- (MAPs) totaling commitments of over $550 million ered in Monterrey, Mexico, at the Financing for have been prepared in record time in Africa to Development Conference, where they adopted the match the emergency nature of the epidemic. Monterrey Consensus, which calls for freeing The MAP approach has involved extensive col- trade, increasing aid, and reducing external debt laboration with national governments, partners in to sustainable levels in order to provide countries the Joint U.N. Programme on HIV/AIDS, bilateral that follow sound policies and good governance donors, the International Partnership against AIDS with the means to obtain the Millennium Devel- in Africa, key nongovernmental organizations, opment Goals. An additional $12 billion in aid over persons living with HIV/AIDS, and other key the next three years was pledged by donor coun- stakeholders. tries at the conference. The Bank's Board of Executive Directors ap- * In April 2002 the Bank approved its first operation proved a second phase of the approach, known as in Afghanistan since 1979-a $10 million grant to MAP2, in February 2002, earmarking another assist the Afghanistan Interim Administration with $500 million. MAPs, such as a fiscal 2001 MAP in key public administration functions-to enable it the Caribbean, are channeling a substantial share to effectively use its public resources, including of resources (in most cases about 50 percent) millions of dollars in donor funding, for rebuilding directly to local communities to carry out HIV/AIDS and development. The Board of Executive Direc- activities of their own design. tors also endorsed the Transitional Support Strat- * The Poverty Reduction Strategy Paper (PRSP) egy, the Bank's plan for support to Afghanistan for approach, which stresses the centrality of country the following six to nine months. ownership based on broad participation for suc- In May the Bank opened its Afghanistan office cess in fighting poverty, received support from and launched the Afghanistan Reconstruction developing-country, donor, and civil society par- Trust Fund, to help the Afghanistan Interim Ad- ticipants at the joint World Bank-International ministration fund physical reconstruction projects Monetary Fund PRSP review conference in January and salaries for civil servants. The Bank provided a 2002. The approach gained momentum in fiscal total of $100 million in grant financing in fiscal 2002, when an additional nine countries complet- 2002 and has proposed a further $470 million ed interim PRSPs and seven countries completed for the lifespan of the transitional government their first full PRSPs. elected by the Loya Jirga in June. 24 The World Bank Annual Report 2002 Chapter 2 Overview of World Bank Activities in Fiscal 2002 In fiscal 2002 the World Bank underscored its efforts in of the events of September 2001. Greater uncertainty poverty reduction, forming new initiatives in response and slower world growth resulted. The developing to world events. It assessed the impact on poor coun- countries hardest hit were those dependent on com- tries of the events of September 11 and offered special modity exports-as many commodity prices reached assistance to countries experiencing particular eco- historical lows-and those with highly indebted nomic shocks. The Bank's operations were temporarily emerging economies-as private investors reduced affected this year as country teams adapted travel plans their exposure in emerging markets. Countries with and worked to focus country activities with fewer high-tech sectors were also hard hit, and tourism missions. industries suffered. Gross domestic product (GDP) Rich and poor nations fostered a new develop- growth for the developing and transition countries fell ment partnership when they came together to address from a record average of 5.4 percent in calendar 2000 the challenges faced by the global community at the to 2.8 percent in calendar 2001, and per capita growth Financing for Development Conference in Monterrey, declined to 1.4 percent. Mexico, in March 2002. The Bank, other multilateral All regions showed a decline in GDP growth in organizations, and many countries pledged additional calendar 2001, with the exception of South Asia, which financial and technical resources to fight poverty. grew at 4.3 percent, up from 4 percent in 2000. Growth in the East Asia and Pacific region slowed to 4.6 percent GLOBAL CONTEXT in 2001 from 7.4 percent the year before; it was affected by the collapse of global demand for high-tech com- The global economic slowdown that began in fiscal modities and the slowdown in tourism. Growth in 2001 was compounded by the economic aftermath the Middle East and North Africa region slowed to 3.1 percent in 2001 after above-average performance 1111iill :of 4.2 percent during 2000, largely due to falling oil prices. Africa grew by 2.6 percent, down from 3.1 per- cent the prior year. Europe and Central Asia grew by 2.2 percent, contrasted with 6.4 percent in 2000; it was .V Z -4 affected by a contraction in Turkish exports and a fall - in Russian growth. Latin America and the Caribbean ,mm ; 2 registered the lowest growth rate at 0.6 percent, down s;-&S F,- from 3.8 percent in 2000; this reflected adverse external --r i s conditions, a progressive worsening of the political and ineconomic situation in Argentina, and a steep decline in tourist bookings. Even excluding Argentina, GDP in Latin America and the Caribbean grew by only 1.3 per- "'>iiA:'*_ >sAs in every slowdown, poor people pay the highest _' ,;,vr:._-: - <{ 'W price. Without buffers or safety nets to rely on, their For poverty reduction, the Hank supports policies and projects to increase ability to satisfy basic needs is immediately at stake land access and productivity when their incomes decline. The Bank's ability to Chapter 2 Overview of World Bank Activities in Fiscal 2002 25 respond to the recent global shocks has proven the BOX 2.1 NEW CODING SYSTEM FOR overall soundness of its approach in such situations. Its BANK LENDING existing instruments and policies make available a wide variety of options for providing tailored financial assis- To better track the distribution of the Bank's work tance to its clients affected by the economic downturn. programs, a new two-dimensional coding system Civil conflict, terrorism, money laundering, and cor- was implemented in fiscal 2002. All lending data in ruption have increasingly become the focus of interna- this report will reflect the new coding system. Each tional concern. The combined effects of slower economic loan will be tracked by both theme and sector growth, the significant decline of private capital flows, codes. The theme codes correspond to the goals and growing populations in developing countries have and objectives of Bank activities, and the sector increased the need for official development assistance. codes indicate the parts of the economy that directly benefit from Bank support. THE WORLD BANK'S LENDING AND ADVISORY The new coding system enables the Bank to SERVICES IN FISCAL 2002 better manage its portfolio and monitor progress toward achieving its goals as defined by its corpo- The Bank's lending and advisory services focus on rate priorities and the MDGs, while maintaining a work at the country level and reflect the Bank's focus focus on economic segments. It allows for up to on the Millenium Development Goals (MDGs), its cor- five themes and five sectors per activity, recogniz- porate priorities, and its identified global public goods ing that many Bank projects are multifaceted. priorities. The Bank tailors its lending to the needs of The picture generated by the new coding sys- individual countries while keeping in mind its larger tem will differ in many respects from the picture overall goals. generated by the old system. In moving to a new system, and thereby establishing a new baseline, it The International Bank for Reconstruction is inevitable that significant shifts will appear to and Development have been made in the Bank's portfolio. At $11.5 billion, new lending by IBRD in fiscal 2002 For example, in the new system, all technical was $1 billion above the previous year's level. The assistance provided to government agencies is as- number of new operations approved was higher than signed uniformly to the public administration sec- last year, at 96. tor, while the goal of the technical assistance (such New IBRD lending to Europe and Central Asia as private sector development or environmental reached a record high of $4.9 billion, or 43 percent of protection) determines the selection of the the- total IBRD commitments, followed by Latin America matic code. Advisory services provided to a ministry and the Caribbean with $4.2 billion. The East Asia and of education, for example, are assigned to the pub- Pacific region was third with $1 billion. lic administration sector and an education category Public administration was by far the leading sector under the human development theme. This differ- for IBRD lending, receiving $3.6 billion, over 30 per- ence in coding rules explains the public administra- cent of the total. The significant amount of lending in tion sector's significantly higher share in the new the public administration sector reflects the Bank's coding system in comparison with the old one. focus on assisting its clients to improve development strategies, implement reform policies, and build insti- tutional capacities. Lending to the finance sector was second, representing $2.1 billion, about 18 percent of the total. (Box 2.1 describes the Bank's new coding system for lending.) The prevalent themes correlated to the sector lend- ing, with a major focus on strengthening the financial and private sector regulatory framework and improv- ing public sector governance. Human development, economic management, and urban development were also supported. 26 The World Bank Annual Report 2002 The share of adjustment lending by IBRD rose to a Figure 2.1 IBRD Lending by Region, Fiscal 2002 record high of 64 percent in fiscal 2002, compared with Share of total lending of $11.5 billion 38 percent in fiscal 2001, and with 47 percent and 63 percent during the East Asian crisis years of fiscal South - Africa < 1% Middle East & Ai % Es sa&Pcfc9 1998 and 1999, respectively. Argentina, Brazil, Jamaica, North Africa 40i f Tunisia, Turkey, and Ukraine are among the countries where Bank lending sought to alleviate the effects of / 7 ;;i falling export demand, commodity prices, and capital market access. Figures 2.1 through 2.3 show IBRD lending by region, theme, and sector in fiscal 2002. Europe & Latin America & Central Asia Table 2.1 shows the Bank's adjustment lending in the Caribbean 42% 2000-02. 37% The International Development Association IDA lending this fiscal year reached a record high of $8.1 billion for 133 operations, compared with Figure 2.2 IBRD Lending by Theme, Fiscal 2002 $6.8 billion for 134 operations last fiscal year. (An Share of total lending of $11.5 billion IDA guarantee for $115 million was also approved for Uganda in fiscal 2002. This guarantee was not effective Environmental & Natural as of June 30, 2002.) Resource Management 4% This robust lending program was driven by record Rural Development 5% Economic Management 9% lending to Africa and South Asia. Lending to Africa Development 8% constituted nearly one-half of total IDA lending this Public Sector Human ~~~~~~Governance year, with $3.8 billion financing 63 new operations. Development 24% The largest borrowers in this region included the Democratic Republic of Congo ($500 million), Social Nigeria ($427 million), and Tanzania ($402 million). Development Genlder Lending to South Asia totaled $2.6 billion or about Inclusule of Law one-third of total IDA lending. The largest borrowers Social Protection &1% in this region were India at $1.3 billion and Pakistan at Risk Management ' _ _ $800 million. 6% Financial & Private Sector Trade & Integration 2% Development 30% IDA's investment lending was strong at $5.6 billion, accounting for 70 percent of new commitments. This Note: See Table 2.2. includes $100 million in IDA grants to Afghanistan to support emergency reconstruction, education, public Figure 2.3 IBRD Lending by Sector, Fiscal 2002 administration, and community empowerment. Share of total lending of $11.5 billion A significant portion of IDA lending supported operations in the social sectors where $2 billion Water, Sanitation & Agriculture, Fishing & financed 44 projects in the areas of education, health, Flood Protectior 2% Forestry 5% social services, and water and sanitation. Lending in Transportation 13% the area of public sector administration was also Energy & Law & Justice & substantial this year at $1.6 billion for 34 operations, Mining 6% \gz' Public reflecting the focus on supporting IDA countries in Industry & Administration their effort to establish the efficient and accountable Trade 5% 31% public sector institutions needed for growth and Health &\ poverty reduction. This emphasis was also reflected Other Social Information & in the thematic breakdown, where lending in support Services 12% Communication of public sector governlance featured prominently, 1% along with lending in the area of financial and private Finance 18% Education 7% sector development. Figures 2.4 through 2.6 show IDA Note: See Table 2.2. Chapter 2 Overview of World Bank Activities in Fiscal 2002 27 Table 2.1 World Bank Adjustment Commitments, Fiscal 2000-02 Fiscal 2000 Fiscal 2001 Fiscal 2002 Millions Millions Millions of dollars Percent of dollars Percent of dollars Percent Adjustment commitments by region Africa 495 10 908 16 1,437 15 East Asia and Pacific 552 11 250 4 17 0 Europe and Central Asia 950 19 1,132 20 4,743 48 Latin America and the Caribbean 2,860 56 2,788 48 2,517 26 Middle East and North Africa 0 0 185 3 263 3 South Asia 251 5 500 9 850 9 IBRD and IDA adjustment commitments IBRD 4,426 87 3,937 68 7,383 75 IDA 682 13 1,826 32 2,443 25 Total adjustment loans 5,108 100 5,763 100 9,826 100 Total World Bank lending commitments IBRD 10,919 10,487 |11,452 IDA 4,358 6,764 1 8,068 Total IBRD + IDA 15,276 17,251 I19,519 Share of adjustment loans 33 33 I 50 Note: Numbers may not add to totals because of rounding lending by region, theme, and sector in fiscal 2002; broader, and faster initiative, providing more relief to table 2.2 shows overall IBRD and IDA lending by more couLntries more rapidly. theme and sector for 1993-2002; and figures 2.7 Fiscal 2002 saw contilued progress toward imple- through 2.9 show overall IBRI) and IDA lending by mentation of the HIPC Initiative, when four countries region, theme, and sector. completed the initiative and three more counltries qual- ified for assistance. Altogether, 26 countries are now SPECIAL ASSISTANCE IN FISCAL 2002 receiving HIPC debt service relief that, ulider the cur- rent framework, is expected to amoulit to $41 billion Accelerated Debt Relief from all creditors and to contribute to an overall re- Significant progress was made in fiscal 2002 in provid- ductioll in debt stock of nearly two-thlirds. ing increased debt relief to some of the world's poorest Notable progr-ess was achieved in extendinig these countries, many of them in Africa, under the Heavily benefits to countries emerging from conflict. Ethiopia Indebted Poor Countries (HIPC) Initiative, which wvas arid Sierra Leone received debt service relief, arid pre- proposed by the World Bank and Internationial Mone- liminary work was commenced for the Democratic tary Fund (IMF) arid agreed to by the interinationial Republic of Congo and the Republic of Congo. Work community in 1996. It was the first coniprehensive ap- continiues in this area, as most of the HIPCs yet to proach to reducing the external debt of the wvorld's qualify for relief are conflict affected. poorest, most heavily indebted countries, and repre- 'Work was also stepped up in HIPCs to help them sented a major advance by placing debt relief within arn address the challenges of maintaininig external debt overall framework of poverty reduction. sustainability over the long terni, particularly in light of Early promise established the basis for an even the weakened global economy arid the effects of declin- more dynamic approach, and in 1999 multilateral ing conimimodity prices. In addition to identifyinig the organizations, bilateral creditors, HIPC governments, potential costs of the economic slowdown, steps were and civil society worked together to create a deeper, taken to help strengthenl capacity in the public sector in 28 The World Bank Annual Report 2002 Figure 2.4 IDA Lending by Region, Fiscal 2002 areas such as debt management and the adminlistration Share of total lending of $8.1 billion of public expenditures. These are scen as critical to endinig the debt problem and establishing the founda- tion for successful poverty reduction strategies. South Asia 32% When fully implemented, the expanded FIIPC Initiative is expected to cancel more than $50 billion in Africa 47% the debt service of some 34 countries. Arguably more important, it has created a strong and transparent link Middle East &\ North Africa 1% _ between debt relief and poverty reduction by leading to the adoption of nationally owned Poverty Reduction Latin Amerib a 20/a Strategy Papers (PRSPs) as the basis of HIPC relief and the Ca ri bbea n 2% D _ / concessional lending. HIPC debt relief is shown in fig- Europe & Central Asia 8% East Asia & ure 2. 10. Trends in social spending before and after Pacific 10% HI PC relief are shown in figuire 2.1 1. Figure 2.5 IDA Lending by Theme, Fiscal 2002 Argentina Share of total lending of $8.1 billion 'I'he Bank will direct $100 million from undisbursed Environmental & Natural existing loans to meet Argentina's urgent social needs Resource Management 6% Economic Management 5% in health, education, and community development. Rural Development P S The funds will provide for primary health care and 13% \ / \Public Sector.. Governance 190/c essential medicines for mothers and infants, educa- tional supplies for public schools, and funds for social Development work, community kitchens, and work with non- 7% r L9'-* -- 1 --t Rule of Law governimlental organizations (NGOs) to administer 2% the program. Human 2 Developmen Afghanistan 11% \4 ^ / Private Sector Afghanistan Social Development, - Development The Bank approved a grant of $10 million in direct Gender & Inclusion 11% budget support to the Interim Adminiistration, and Social Proetn & Trade & Integration 2% comimaitted an additional $90 millioni in grant fi- Risk Management 5% nancing in fiscal 2002 for a series of reconstruction Note See Table 2.2. and capacity-building projects. It has proposed a further $470 million over two years beginniniig in fis- Figure 2.6 IDA Lending by Sector, Fiscal 2002 cal 2003. Share of total lending of $8.1 billion Water, Sanitation & KNOWLEDGE SHARING Flood Protection 5% Agriculture, Fishing & Forestry 8% In fiscal 2002 the Bank continued to make effective use Ta > spOratk of knowledge to support the quality of its operations. ,./ a Law & Justice & Thematic technical units are charged with capturing Public Administration 20% the information the Bank and other institutions have Energy & acquired in their areas of specialty, and with using that Mining Information & knowledge to support the Bank's operations in coun- 16% C - communication tries. Each thematic group has a Web site providing Education 8% access to important studies and information relevant Industry & to the topic, as well as specially commissioned best- Trade 10% _ / _ ' Finance 10% practice papers designed to distill the Bank's unique ex- Health & Other perience in supporting projects in different countries. Social Services 13% Knowledge sharing with the Bank's clients and Note: See Table 2.2. partners has led to participatory activities in which Chapter 2 Overview of World Bank Activities in Fiscal 2002 29 Table 2.2 World Bank Lending by Theme and Sector, Fiscal 1993-2002 (millions of dollars) 1993-97 1998_99a (annual (annual average) average) 2000 2001 2002 THEME Economic Management 1,057.9 1,952.7 799.6 895.3 1,408.0 Public Sector Governance 1566.9 2,552.4 2,142.5 2,053.7 4,247.2 Rule of Law 314.4 362.9 373.6 410.0 273.2 Financial and Private Sector Development 6,191.7 9,486.0 3,368.4 3,940.9 5,055.4 Trade and Integration 847.1 813.2 426.4 1,059.9 300.9 Social Protection and Risk Management 1,128.9 2,653.9 1,895.0 1,651.0 1,084.2 Social Development, Gender, and Inclusion 1,034.4 1,320.5 800.8 1,469.7 1,385.7 Human Development 1,900.4 2,484.8 1,190.3 1,134.7 1,756.1 Urban Development 2,112.6 2,403.3 1,036.6 1,458.6 1,482.4 Rural Development 2,390.7 2,746.4 1,413.7 1,822.3 1,602.2 Environmental and Natural Resource Management 2,965.4 2,018.6 1,829.4 1,354.6 924.0 Theme Total 21,510.5 28,794.8 15,276.2 17,250.6 19,519.4 SECTOR Agriculture, Fishing, and Forestry 1,699.2 2,097.1 837.5 695.5 1,247.9 Law and Justice and Public Administration 3,201.7 6,127.2 4,525.4 3,843.0 5,199.6 Information and Communication 261.8 179.4 273.8 216.9 153.2 Education 1,700.1 2,154.3 728.1 1,094.7 1,384.6 Finance 1,962.1 5,167.1 1,580.9 2,253.4 2,862.4 Health and Other Social Services 1,897.6 3,114.5 1,491.7 2,521.2 2,366.1 Industry and Trade 1,925.9 2,922.7 1,036.7 718.3 1,394.5 Energy and Mining 3,480.6 2,311.0 1,572.4 1,530.7 1,974.6 Transportation 3,439.1 3,511.3 1,717.2 3,105.2 2,390.1 Water, Sanitation, and Flood Protection 1,942.3 1,210.2 1,512.6 1,271.7 546.0 Sector Total 21,510.5 28,794.8 15,276.2 17,250.6 19,519.4 Of which IBRD 15,410.8 21,634.3 10,918.6 10,487.0 11,451.8 Of which IDA 6,099.7 7,160.5 4,357.6 6,763.6 8,067.6b Note: Lending is summarized in the 1I main theme categories and 10 main sector categories in the new thematic-sectoral coding system, which in- cludes 68 themes and 57 sectors. Numbers may not add to totals because of rounding. Please see appendix 11 in volume 2 for detailed IBRD and IDA lending by theme and country. a. Bank lending in fiscal 1998 and 1999 are presented together, the two being exceptional years due to the East Asian financial crisis. b Excludes HIPC grants government officials, NGO and private sector represen- Ultimately, the success of national development tatives, and donor government colleagues become part efforts depends on the trained human resources and of a team that builds programs with genuine owner- institutional arrangements available to carry them ship and commitment on the part of the client govern- out. Supporting client countries to enhance their ment. The Comprehensive Development Framework capacity to generate, access, and use knowledge from (CDF) and PRSPs are products of this new way of all sources is central to the Bank's mission of poverty working. reduction. 30 The World Bank Annual Report 2002 Figure 2.7 Total IBRD-IDA Lending by Region, The Bank's approach to creating, sharing, and ap- Fiscal 2002 plying knowledge helps it to leverage its IBRD and IDA Share of total lending of $19.5 billion lending activities for a greater impact on development. South Asia 18% 7 Africa 19% Traditional analytical and advisory services include economic and sector work (ESW) and nonlending Middle East & technical assistance. ESW, the Bank's main analytical North Africa 3% ' - - and advisory product line, provides the basis for the East Asia & Bank's policy dialogue with clients, the development of Pacific 9% country strategies, and the formulation and implemen- Latin Arnerica & tation of effective lending programs. Nonlending tech- the Caribbean nical assistance encompasses capacity-building efforts 22% conducted jointly with clients. As the main analytical -. Europe & Central and advisory tool, the ESW program is closely moni- Asia 29% tored by the Bank. Figure 2.8 Total IBRD-IDA Lending by Theme, In fiscal 2002, 457 products were delivered for Fiscal 2002 country clients, compared with 335 in fiscal 2001. Share of total lending of $19.5 billion Of these, about 90 were core diagnostic reports, such as poverty assessments, country economic memoranda Environmental & Natural and development policy reviews, public expenditure Resource Management 5% reviews, country financial accountability assessments, Rural Development 8% Economic Management 7% and country procurement assessments. These support Urban, - | / .d; ' 1 Communication sponsibility for some diagnostic ESW at the country Health & Y / 1% level, and to enable joint preparation and wider Other Social . 2 Education 7% dissemination of the diagnostic work. Particular em- Services 12% nance 15% phasis in fiscal 2002 was placed on trade, the invest- Note: See Table 2.2. ment climate, the MDGs, cross-country benchmarking, Chapter 2 Overview of World Bank Activities in Fiscal 2002 31 Figure 2.10 Heavily Indebted Poor Countries Debt The program aims to improve the resiliency of national Relief-Reduced Debt Stock and and interinational financial markets through in-depth Improving Debt Service Ratios assessments of the strengtlhs, risks, and vuLlnerabilities Billions of countries' financial systems. The Bank's contribution Percent of dollars focuses on the financial sector's instititional infra- 30 90 Debt service as structure and its ability to support broad-based inclu- percent of exports sive developmenit. $62 21% (left axis) Twenty-one coun1tries participated in the FSAP 5% 60 Debt service as in fiscal 2002. FSAP reports were delivered this year 15 (left axis) to 12 countries, and Financial Sector Assessments for 30 + Debt stock, billions seven countries were delivered to the Bank's Executive : 10%/o $27 of dollars net Directors. present value 0 _ '- _ | _ _ . _0 (right axis) A total of 55 countries wvill have participated in the Before HIPC After HIPC program between its launchi in May 1999 arid the end (1999) (2001-02) of fiscal 2002. Between the inceptioni of the program Source: World Bank. 2002. Status of Implementation. Washinqton, D.C. and the end of January 2002, over 190 standards assess- ments have been conducted, drawing on 157 experts Figure 2.11 Trends in Social Spending before and from 1 27 cooperating official institutions. after Assistance under the Heavily Indebted Poor Countries Initiative THE WORLD BANK'S RESOURCES Millions The Bank's resources in fiscal 2002 were drawni from of dollars Percent member country shareholder eqUity and funds raised 8,000 8% 8 CO Fin iiiterinationial capital markets. 7 o S sng The International Development Association 4,000 million of dollars Fiscal 2002 was the third year of the 1 2th Repleniish- 6 (left axis) ment of IDA (IDA 12). This replenishmenit provided 6% : Social spending, IDA with resources to funld credits comimlitted during .. . ~~~~~percent of GDP 0 5 (~~~~~~prcent ofxis) the period July 1, 1999, to Junie 30, 2002. Forty-onie Before HIPC After HIPC countries are now IDA donors. Historically, doiior con- (1999) (2001-02) tributionis have been determined based on countries' relative economiiic strengths and on their commitmiien1t and basic service delivery (to be examined in W\4orld to poor countries, and as such the major industrial na- Developmieit Report 2004). Joint programs are being tions have been the largest contributors to IDA. Never- carried out between the Private Sector Development theless, donor nations also include developing and and Infrastructure Network and the Development Eco- transition countries-some of them IlBRD borrowers nomics and Data Group (DECDG) on trade, the Hu- and former IDA borrowers-such as Argentina, Brazil, man Development Network and DECDG on the MDGs, Hungary, the Republic of Korea, the Russian Federa- and among the Poverty Reduction and Economic Man- tion, and Turkey. (For a complete list of IDA donors, agement Network, the World Bank Institute (WBI), see appendix 12 of the IBRD/IDA Appendixes in and DECDG on PRSPs and other cross-sectoral issues. World Ba7nk Aiinnual Report 2002: X/olunie 2, Fina(ntcial Statentents aind Appcndixes.) IDA's financial strength is FINANCIAL SECTOR ASSESSMENT PROGRAM based primarily on the strong and continiued support of its donors, as well as on repaymeiits of past credits. The IMF and World Bank have put in place the joint This year concluded the IDAI3 negotiations in which IMF-World Bank Financial Sector Assessment Pro- representatives froiii donor counltries agreed on a gram (FSAP) following the East Asian crisis of the late framewvork for the projected IDA 13 program anid asso- 1990s. The objective is to help countries strengthen ciated financing needs. IDA 13 will make possible the their financial systems and institutional infrastructure. comniitment of special drawving rights (SDRs) of 32 The World Bank Annual Report 2002 18 billion (about $23 billion) to poor IDA members serve-higher than the previous year, when $618 mni- over the next three years, including approximately SDR lion was retained-in keeping with IBRD's strategy to 10 billion (approximately $13 billion) from new donor preserve long-term financial strength and support oth- contributions. Within the IDA13 framework, donor er development needs. IBRD maintained adequate liq- representatives adopted a program for the increased uidity in fiscal 2002 to ensure sufficient cash flow to use of IDA grants to help address the special difficulties meet its obligations. As of June 30, 2002, the liquid as- faced by the poorest and most vulnerable countries. set portfolio was $25 billion. The framework also provides for the establishmnent of a results-based measurement system to link IDA pro- Managinig Retuirns to Maintaini Strengtlh. As a coopera- grams to countries' development outcomes. This year tive institution, IBRD does not seek to maximize profit the replenishment discussions were opened up to rep- but to earn a return on assets sufficienit to ensure its resentatives of borrowers and civil society, and back- financial strength and sustain its development activities ground documents were made publicly available on the on an ongoing basis. IBRI) achieves a net return on as- Bank's Web site. Figure 2.12 shows the sources of IDA's sets of about 1 percent per year. In fiscal 2002 the net funding over the last three replenishments. return on assets recovered to the 1 percent level after declining below 1 percent in fiscal 2001 as a result of The International Bank for Reconstruction an increase in the provision for loan loss. Figure 2.13 and Development shows the net return on assets for 1998-2002. As part of its regular financing operations IBRD raised $23 billion at mediumr- to long-term maturities in in- Managing Risk. Consistent with its development ternational capital markets in fiscal 2002. This funding mandate, IBRD's main financial risk is the credit risk volume was above the $17 billion raised in fiscal 2001. of its loan portfolio. This risk is closely managed. IBRD issued loans in 10 currencies, with a wide range IBRD keeps its exposure to market risk quite limited. of maturities and structures in fiscal 2002. Product Some market risk arises due to movements in market diversification helps IBRD to expand its investor base variables, such as interest rates and exchange rates. and to reduce lending rates on its loans. IBRD's finan- IBRD's equity-to-loans ratio is a summary measure of cial strength is based on the support it receives from its its risk-bearing capacity. The ratio is conservatively shareholders and on its array of financial policies and managed in light of IBRD's financial and risk outlook. practices. Figure 2.14 shows the equity-to-loans ratio as of June 30, 2002. IBRD Financial Strength. IBRD's operating income in fiscal 2002 was $1,924 million. IBRD retained $1,291 Achieving Efficient Inter,nediation. IBRD enjoys an million out of operating incomiie in its general re- exceptional franchiise in capital markets, reflectinig the Figure 2.12 Sources of IDA Funding Figure 2.13 Net Return on Assets (billions of dollars) (percent) 15.0 1.5 1.34 1.30 11.0 11.6 0.96 10 4.1 0.9 1280 09 0.0 0.7 IDA1O FY94-96 IDA11 FY97-99 IDA12 FYOO-02 FY98 FY99 FYOO FY01a FY02a m IDA Own Resourcesa .~l New Funding a. In fiscal 2001 IBRD adopted Statement of Financial Accounting Standard IDA O RsrsNNo. 133 and International Accounting Standard No. 39, which require that m IBRD Net Income Contribution derivative instruments be reported at fair value. The returns shown above for fiscal 2001 and 2002 are presented before the effects of these standards a. IDA Own Resources include principal repayments, service charges, in order to facilitate comparison with prior years. With the inclusion of and investment income. the effects of these standards, the ratios would be 0.87 and 1.87 for fiscal 2001 and 2002, respectively. Chapter 2 Overview of World Bank Activities in Fiscal 2002 33 Figure 2.14 Equity-to-Loans Ratio as of Figure 2.15 Borrowings and Investments as of June 30, 2002 June 30, 2002 (percent) (billions of dollars) 24 21.4 20.7 21.2 21.5 22.9 125 05.6 118.6 114 111.5 111.2 75 2524.8 30.1 24.3 24.4 25.1 25L_L_ _ _L 0 FY98 FY99 FY00 FY01 FY02 FY98 FY99 FY00 FY01 FY02 | Cash and liquid investments | Borrowings outstandinga capital commitments of its sovereign shareholders and a. Net of swaps. the preferred creditor status accorded by its borrowing members-which provide it a high credit rating (AAA) HIPC Trust Fund have amounted to a total of about and allow it to borrow for long maturities on favorable $890 million, averaging about 13 percent of annual terms. This is reflected in the relatively low cost basis IBRD net income. of its new lending; an average spread of about 34.6 IBRD's net income helps meet other development basis points (1 basis point equals 0.01 percent) below needs from time to time. It enables IBRD to respond to London InterBank Offered Rate (LIBOR) in fiscal unforeseen humanitarian crises and provide grants or 2002; and the high volumes it can intermediate other support for worthy causes. IBRD also regularly relative to its paid-in capital and retained earnings. shares income with its borrowing members through In fiscal 2002 the Bank's outstanding borrowings partial waivers of the interest and commitment fees it from capital markets was in excess of $110 billion, contractually charges on its loans. while its total disbursed and outstanding loans were Financial strength and standing in the markets $122 billion. This was about five times the size of its allow IBRD to leverage its equity by five times in the equity. Figure 2.15 shows the Bank's borrowings and international bond markets. This leverage increases investments as of June 30, 2002. Table 2.3 shows select IBRD's ability to lend for development activities. IBRD financial data for fiscal 2001 and 2002. Figure 2.16 shows the proposed allocation of the Bank's net operating income. DISTRIBUTION OF IBRD'S NET INCOME Figure 2.16 Proposed Allocation of Fiscal 2002 Net IBRD's net income serves several purposes related to Operating Income of $1.9 billion the Bank's mission. (millions of dollars) A portion of net income is retained annually to HIPC 240 ensure IBRD's financial integrity. The general reserve allows IBRD to assume credit risk in lending to coun- tries at the lowest funding costs-which in turn bene- IDA 300 fits borrowers. Income retention has enabled IBRD to maintain financial soundness through past periods of both deteriorating loan quality as well as surging loan demand. 7 Reservea 93 Support to IDA has consistently been a priority. General Reserve Over the last five years $1 .622 billion (or about ' / 24 percent of IBRD's net income) has been trans- ferred to IDA. Note: Proposal to the Board of Governors. ferred toIDA. a. Pension Reserve is used exclusively for the income derived from the Support for the HIPC Initiative has also been difference between actual funding of the Staff Retirement Plan and Over tepsfiyertrnthe accounting expense associated with it, required by Generally Accepted important. Over the past five years transfers to the Accounting Principles. These funds are not allocable. 34 The World Bank Annual Report 2002 Table 2.3 Select IBRD Financial Data (millions of dollars) For the fiscal year a Income from loans 8,143 Income from investments 1,540 Borrowing expenses ( (7,152) Administrative expenses (881) Other ____(506) Income, excludes FAS 133 adjustments 1,144 Loan commitments 10,487 Loan disbursements 11,784 At fiscal year enda Cash and liquid investments 24,407 Loans outstanding 118,866 Borrowings outstanding (t 1 1 482)b Equity ' r231)(29,570) a Excerpted from the audited financial statements presented in volume 2 of this Annual Report. b. Outstanding borrowings, net of swaps. WORLD BANK COFINANCING * The Colombia Structural Fiscal Adjustment The Bank's cofinancing partners include regional de- Loan-which was cofinanced by the IADB for velopment banks and public and private sector organi- $400 million. zations. The Bank's cofinancing figures reflect the com- * The Tunisia ECAL III Project, which was cofi- bination of the Bank's resources with those of other nanced by the African Development Bank for donors for projects in specific regions and sectors. $194 million and the European Commission, Cofinancing in fiscal 2002 amounted to $4.7 billion. through the EuropeAid Co-operation Office, for Major partners inclucled the Inter-American Develop- $72 million. ment Bank (IADB), the African Development Bank, the Global Environment Facility (GEF), and the Japan Figure 2.17 shows the ratio of total cofinancing to Bank for International Cooperation. World Bank lending. The Latin America and the Caribbean region ac- counted for the largest share of cofinancing in fiscal TRUST FUND HIGHLIGHTS 2002 ($2.3 billion), followed by the Africa region ($1.3 billion) and the Middle East and North Africa Trust funds, which are accounted for separately from region ($0.4 billion). the Bank's own resources, are financial and admini- strative arrangements with external donors that lead Examples of Cofinancing in Fiscal 2002 to grant funding of high-priority development needs, A total of 109 projects were cofinanced by the Bank including technical assistance and advisory services, and its partners in fiscal 2002. Examples of projects debt relief, postconflict transition, and cofinancing. with significant cofinancing include: Trust funds help the Bank leverage its poverty reduc- tion programs by funding key due diligence activities * The Ghana Road Sector Development Project, for development operations, promoting innovative which leveraged $745 million from 13 donor approaches for projects, forging partnerships, and agencies. expanding the scope of development collaboration. Chapter 2 Overview of World Bank Activities in Fiscal 2002 35 Figure 2.17 Ratio of Total Cofinancing to World Trust Fund ($50 million)-totaled $1.20 billion, or 62 Bank Lending percent of total disbursements. Of dollars Accounting Policy 40 The trust fund financial information provided in the L Total Bank :Lending, a]i TotalinankcLending preceding paragraph reflects contributions on an ac- 30 29 crual basis for the HIPC Trust Fund and on a cash basis for all other trust funds. Disbursements for all trust 20 17 19 funlds, including the HIPC Trust Fund, are reported on 15 a cash basis. 10 8 6 Major New Programs °F 1 - | '' ] | | - - F - Responding to the emerging challenges, the donor FY99 FY00 FY01 FY02 community agreed to establish several major new trust 28% 47% 35% 26% fund programs for Bank administration during fiscal Fiscal Year and Percent 2002. These included the Global Fund for AIDS, Tuber- Note Cofinancing ratio = fiscal year total cofinancing/fiscal year culosis, and Malaria; the Afghanistan ReconistrLuctioni total lending. Cofinancing figures as of end of fiscal 2002. Trust Fund; the Nile River Basin Trust Fund; The East- ern Greater Great Lakes Trust Fund; the Knowledge for Change Trust Fund; the TrLst Fund for Capacity BLuild- They enable the Bank to complement and strengtheni ing for Poverty Reduction Strategies in Low-Incomile investment activities by breaking new ground with Countries; and the Financial Sector Reform and research and accessing a broad internationial knowl- Strengthening Initiative. edge base. In fiscal 2002 management and the Board con- Donor Consultations on Policy Reforms ducted a review of the cost-effectiveness and risk impli- The Bank initiated a series of consultationis with the cations of managing a large and complex trust fund trust funid donors to review audit results, propose portfolio. Major new programs were funded, a series standardizing the terms of trust fund agreemenits, of focused audits and reviews were conducted, and and discuss policy reforms for ensuring the alignment reform initiatives for streamlining the channels of of priorities. The focus of the policy reforms is on assistance, prioritizing proposals, and enhancing the Consultant Trust Funds and Single-Purpose Trust control environment are well under way. These initia- Funds supporting Bank lending development and tives are expected to help ensure that the trust fund analytical work. program is well managed and closely aligned with the Bank's overall strategy. Trust Fund Reforms The trust fund program expanded in fiscal 2002. The Bank also initiated a series of internal reforms to Trust fund assets rose from $4.38 billion to $5.34 bil- improve the control environment and reporting. These lion (22 percent). The disbursements totaled $1.93 bil- reforms included organizational changes, such as the lion, an increase of $0.08 billion, or 5 percent. The con- strengthening of the donor-relations function and the tributions received from donors totaled $2.61 billion, a establishment of a separate compliance unit, as well as decrease of $0.11 billion, or 4 percent. The five largest complementary system enhancements for the financial donors were the United States ($640 million), Japan accounting and reporting on trust funds. ($316 million), the Netherlands ($268 million), the Another measure to enhance donor relations was World Bank Group ($222 million), and the United the establishment of a Web-based donor center that Kingdom ($187 millioni), accounting for 62 percent of provides access to trust fund information on a real- all contributions. Disbursements on five major pro- time basis. In addition, a trust fund awareness cam- grams-HIPC ($758 million), GEF ($225 million), the paign, reaching about 1,000 staff and managers, was Policy and Human Resource Development Fund ($85 implemented, and a Trust Fund Learninig and Accredi- million), the Consultative Group on International tation Program is being developed to ensure that staff Agricultural Research ($82 million), and the Ozone are trained in all aspects of trust fund management. 36 The World Bank Annual Report 2002 Figure 2.18 Contributions to Bank-Administered ment favors aid effectiveness and where the 13ank's Trust Funds, Fiscal 1998-2002 presence will have a high impact. To address the needs (millions of dollars) of countries with weak institutions and poor policy en- vironments where development assistance is urgently 3,000 | = Bank Group 2,719 2,613 needed but likely to have little impact, the Bank is 2,500 |= External ' 422 - 222 exploring ways to adapt its assistance instruments to 2,000 1769 .' ' countries' specific needs. Corporate advocacy priorities 1,544 1,568 - . . help the Bank to incorporate the twin pillars of its de- 1,500 ~~~200 _ 1, 1,5000 2,20 2 391 velopment strategy into its country level work. Selectiv- 1,000 H 2,297 . ity at the global level reflects the Bank's global public 500 1,153 1,368 1,359 goods priorities: communicable diseases, the environ- ment, trade and integration, information and knowl- 1998 1999 2000 2001 2002 edge, and international financial architecture. The Bank's Global Public Goods Incentive Fund, launched in 2001, helped to achieve a stronger link between global and country progranis. Box 2.2 describes the Figure 2.18 shows contributions to Bank-administered Bank's CDF. trust funds in fiscal 1998-2002. COUNTRY ASSISTANCE STRATEGIES A FRAMEWORK FOR THE WORLD BANK'S The World Bank prepares a GAS for each of its borrow- ASSISTANCEThWolBakpeaeaCAfoeahoItbrow ing members in consultation with the government, In fiscal 2002 the Bank moved to implement its Strate- civil society organizations such as private nonprofit or- gic Framework worldwide. In the past year the Bank ganizations, and other development agencies. The pur- has developed and communicated its strategy, ap- pose of the CAS is to set out a Bank Group program proach, and priorities, establishing many of the proce- of lending and advisory services linked to a country's dures and tools needed to translate those broad direc- development strategy. Where there is a PRSP, CDF, tions into concrete actions at the country and global or other country-led process in place, it provides the levels. The March 20(02 Strategy Update Paper for fiscal general framework for the Bank's CAS. Beginning in 2003-05 focused on the evolution from strategy devel- fiscal 2003, the Bank expects that all new CASs for opment to implementation and results. The corporate IDA-borrowing countries will normally be based on priorities can now be more accurately monitored be- a PRSP. To facilitate this alignment, the Bank has gen- cause of the new system of identifying and coding bank erally updated its strategy in a CAS progress report lending activities. pending the PRSP completion. In fiscal 2002 the Board discussed 34 CAS products, Selectivity and Alignment including the first regionally integrated assistance strat- The ongoing process of managing priorities is done egy for 15 countries in WAest Africa, and 5 transitional within the three-level framework for selectivity within support strategies for postconflict countries such as countries, across countries, and at the regional and Afghanistan, Burundi, and the former Yugoslav Repub- global level. Selectivity within countries combines a lic of Macedonia. In fiscal 2002, 18 CAS documents comprehensive analysis with a selective set of program were prepared jointly with IFC, underscoring the activities based on the client's priorities, the Bank's importance of private sector investment in these comparative advantage, and the comparative advantage countries' economies. of its partners. Sector Strategy Papers (SSPs) are linked Significant progress has been made on CAS disclo- closely to the PRSPs and CASs. They can further evolve sure. All fiscal 2002 CAS documents (except one, which into outcome documents with a strengthened focus is pending) have been or are in the process of being oni results. disclosed. (See www.worldbank.org/cas.) Also, in cal- The key criteria guiding the Bank's selectivity across endar 2002 disclosure was extended to include the countries are poverty and performance, focusing its Chairman's Concluding Remarks to Board discussions lending on countries where the overall policy environ- for CAS documents that are disclosed. The Bank is also Chapter 2 Overview of World Bank Activities in Fiscal 2002 37 BOX 2.2 STRENGTHENING THE COUNTRY BUSINESS MODEL: THE COMPREHENSIVE DEVELOPMENT FRAMEWORK The CDF is the approach the Bank has adopted for its The CDF principles form the basis for PRSPs. Nearly work at the country level. It fosters more effective and 50 low-income countries around the world are pursu- sustained poverty reduction by working according to ing the CDF approach explicitly through the PRSR Many four key interrelated principles: a long-term holistic de- middle-income countries have also embarked on the velopment agenda; broad-based country ownership, CDF approach. To support CDF implementation, staff at where countries identify priorities; a country-based the Bank, as well as other external partners, recognize partnership; and accountability for development re- country priorities and form partnerships to maximize suits. The CDF enables each country to take charge of the impact of the development effort. its development process in a manner that reflects a For the Bank's clients in the future, there are two broad national consensus, beyond government alone. particular challenges: to further improve participatory There is beginning to be a more inclusive role for civil approaches that ensure better engagement of key con- society in such policy discussions, and there is good stituencies, such as the poor, the sectoral ministries, the progress in engaging a wide range of external as well private sector, and parliaments; and to develop the as internal partners in a country's strategy formulation. national and institutional capacities to monitor and This approach has been widely accepted by devel- evaluate policy reforms and their impact in relation to oping countries and major development partners- country-specific targets, using the MDGs as a frame of the U.N. system, the multilateral development banks reference. Harmonizing external partners' strategies, (MDBs), the European Commission, and bilateral policies, and procedures, both at the institutional level donors. These key partners are taking concrete steps and the country level, is an additional challenge for all to achieve better alignment of their assistance strate- partners (see www.worldbank.org/cdf for more details gies with nationally owned country strategies. on the latest CDF progress report). piloting the disclosure of information on CASs that are under preparation. In fiscal 2002 a draft CAS retrospective study found - -. that their quality continues to improve, with noticeable ; progress in the treatment of poverty, gender, gover- =._ ' - nance, private sector, and financial sector issues. Never- E theless, some areas need strengthening. Developing practical performance monitoring and evaluation frameworks remains a major challenge. _ SUPPORT TO LOW-INCOME COUNTRIES The PRSP approach offers a new opportunity for de- - velopment strategy-and development assistance-to The Bank's rural enterprise project in Uzbekistan will support newly be grounded in a broad-based and country-owned created private sector farming initiatives and result in improved farm process. PRSCs are designed to support this approach productivity and profitability in countries with good policies and sound public institutions. PRSCs have been approved this year for implementation through improved harmonization of Albania and Burkina Faso. Recent discussions with donor policies. representatives from PRSP countries, development partners, and civil society organizations reinforced the SUPPORT TO MIDDLE-INCOME COUNTRIES importance of adapting PRSP processes to specific country circumstances, setting realistic priorities and Faced with a different set of development challenges, targets in country-owned PRSPs, and supporting their middle-income countries continue to seek Bank serv- 38 The World Bank Annual Report 2002 ices to enhance their debt/risk management flexibility tive funds involved, and the flow of managed funds and to improve their institutional capacity for design- through partnerships. In recognition of the potential ing and implementing economic and sector reforms. risks, the Bank established explicit criteria for partner- Following the recommendation of the 2001 middle- ships in fiscal 2001. In fiscal 2002 the Partnership income country task force, the Bank now emphasizes Approval and Tracking System was put in place to the complementary role of advisory services and has provide centralized information on the Bank's regional improved its lending instruments to meet the dynamic and global partnerships. The Bank's partnership with needs of middle-income countries. For example, a the Development Gateway Foundation is described in deferred drawdown option for adjustment loans was box 2.3. approved by the Board, and the corresponding instru- ment became available to clients during the fiscal year. World Bank Institute: A Partnership for Knowledge The Bank has also introduced new financial products, and Learning including variable-spread single currency loans, fixed- WBI, which supports the Bank's learning and knowl- spread loans, and local currency loans, which provide edge agenda, fosters a wide range of institutional part- more flexible options for both low- and middle- nerships, including 20 bilateral donors, over 100 train- income clients. ing and content partners, more than 40 private sector and foundation partners, and 16 international, region- SECTOR STRATEGY PAPERS al, and national institutions. In the past year WBI has expanded its partnerships SSPs help organize the Bank's work on global priorities with the IMF and the U.N. Development Programme such as disease eradication and the environment. They (UNDP). WBI worked with the IMF on PRSP learning are a launching point for promoting public action at events and on other programs at two regional insti- the global level, pulling together global programs and tutes: the Joint Africa Institute (Abidjan, C6te d'Ivoire) partnerships, and providing incentives for client coun- and the Joint Vienna Institute (Austria). WBI has tries to take action. More generally, SSPs help shape worked closely with UNDP to develop capacity- the Bank's approach and activities in a given sector building strategies and policies, and contributed or thematic area in order to enhance the impact on substantially to the UNDP publication Capacityfor growth and poverty reduction. SSPs also lay out strate- Development-New Solutions to Old Problems, a major gic options for sector and thematic areas, identifying book launched at the Financing for Development aspects of relatively weak country performance for Conference in Monterrey, Mexico, in March 2002. priority attention. They are developed with broad The Global Development Learning Network stakeholder consultation, and their implementation (GDLN), a rapidly expanding network of distance- is regularly monitored. learning centers, uses videoconferencing and other In fiscal 2002 the Bank reviewed four SSPs, cover- technologies to share learning activities worldwide. ing the areas of environment, gender, information Thirty-seven GDLN sites are now operating, and an and communications, and private sector development. additional 42 are under development. In China the The titles of the SSPs include "Making Sustainable distance-learning center hub in Beijing is linked with Commitments: An Environmental Strategy for the a regional center in Ningxia via a high-speed fiber World Bank Group"; "Integrating Gender into the network: the China Education and Research Network World Bank's Work-A Strategy for Action"; "Sector is creating a network of networks, reaching out to uni- Strategy Paper: Information and Communications versities throughout China. WBI's partnership with Technologies"; and "Private Sector Development TEC de Monterrey in Mexico also provides access to Strategies: Directions for the World Bank Group." more than 500 downlink points in Latin America and the Caribbean. PARTNERSHIPS FOR DEVELOPMENT Some WBI partnerships focus on specific topics. For example, the Clean Air Initiative, which advances Partnerships, as a way of doing the Bank's business, innovative ways of improving air quality in cities have grown dramatically over the past 10 years. The around the world, involves a wide range of partners Bank has recognized the importance of tracking the including city governments, automobile companies, number of partnerships, the amount of administra- and donors. A distance-learning course on clean air Chapter 2 Overview of World Bank Activities in Fiscal 2002 39 BOX 2.3 THE DEVELOPMENT GATEWAY diploma and degree programs by the end of calenidar FOUNDATION year 2002. Box 2.4 provides a list of knowledge sharing and partnership Web sites. The Bank has played a major role in launching the Development Gateway Foundation, an independ- United Nations ent, nonprofit organization that combines public The Bank's relationship with the United Nations has and private support for a variety of efforts geared advanced as a fundamental business partnership this toward addressing the digital divide. The core past year. The common ground, underpinned by a mission. of the Foundation is to reduce poverty comprehensive development agenda and the MDGs, and support sustainable development through evolved during 2001-02 as a consequence of the Inter- the use of information and communication national Conference on Financing for Development technologies (ICT). preparation process, complenmented by the work to In addition to the World Bank, Founding Merr,- link economic, social, and environmenital issues in the bers of the Foundation include the governments World Summit on Sustainable Development. These of Australia, China, Germany, India, Italy, Japan, solid building blocks have encouraged creation of the Republic of Korea, Mali (sponsored by the stronger platforms to support country efforts to cre- Netherlands), Pakistan, and Rwanda. Founding ate poverty reduction strategies, and to harmonize Members contribute at least $5 million (in cash or operational issues with the U.N. Development Group. in kind) over a three-year period. In addition, the two institutions are revitalizing their The Foundation is moving forward in four key joint work on conflict prevention and reconstruction, areas: the Development Gateway portal, an inter- two areas in which the Bank, the United Nations, and active portal facilitating access to information and other partners share a common challenge of helping knowledge on development and poverty reduc- countries that are faced with the special needs associ- tion; the Network of Research and Training Centers ated with conflict. withl hubs in the developing world, designed to ex- At the global level, inniovative efforts to work change ideas and test information and technology together are embedded in such initiatives as joint applications that will benefit the poor; an ICT De- work to address the challenges of commullicable velopment Forum for debate and knowledge shar- diseases (Global Fund to Combat AIDS, Malaria, and ing on key issues, and for promoting partnerships Tuberculosis, and the WA'orld Health Organization's between civil society and the public and private Commission on Macroeconomics and Health), joint sectors; and the Grants and Investments Program, exploration of linkages between economic develop- designed to support innovative projects and pro- ment and human rights, and joint efforts to accelerate grams that bridge the digital divide at the local, Education for All action. national, regional, and global levels. The Bank is involved in interagency groups includ- The Foundation held its inaugural meetings ing the Chief Executives Board of agency heads within in December 2001 and its second meeting in which issues of coherence, coordination, and strategy April 2002. (See www.dgfoundation.org.) have emerged as part of learning and working with the U.N. system as a whole. Management and staff continue to participate in in- tergovernmental processes and with agency governing was delivered through the Inter-American Educational bodies to build engaged, proactive, and forward- Television Network's 500 affiliates in Latin America. looking partnerships across the United Nations. Several partnerships are aimed specifically at enhancing the capacity of regional learning organi- Multilateral Development Banks zations. The African Virtual University (AVU), head- Collaboration with MDBs such as the African De- quartered in Nairobi, is one of these. In fiscal 2002 velopment Bank (see www.AfDB.org), the Asian AVU strengthened the information technology Development Bank (see www.ADB.org), the Inter- capabilities at its 31 partner universities throughout American Development Bank (see www.lADB.org), Africa and is preparing for the launch of accredited and the European Bank for Reconstruction and Devel- 40 The World Bank Annual Report 2002 opment (see www.EBRD.com) intensified significantly, BOX 2.4 WEB SITES: KNOWLEDGE SHARING particularly in the aftermath of September 11. AND PARTNERSHIPS The presidents of the MDBs had regular consulta- tions, leading to coordinated responses to the global Knowledge Sharing economic downturn and specific country issues and is- Attacking poverty: sued a joint statement on October 5, 2001. Building on www.worldbank.org/wbi/attackingpoverty established operational cooperation, now supported by Country Analytic Work: memoranda of understanding between the Bank and .www.countryanalyticwork.net most of the regional development banks, and on work Development Forum: done to harmonize operational policies and procedures, www.worldbank.org/devforum the MDBs embarked on a major new initiative-a col- Development Gateway (focus on poverty laboration on results-based management, including de- reduction): www.developmentgateway.org velopment of outcome indicators in country operations. Global Development Learning Network: A jointly hosted roundtable, "Measuring, Mon- www.gdln.org itoring, and Managing for Results," brought together Global Knowledge Partnership: developing- and industrial-country representatives, www.globalknowledge.org bilateral and multilateral institution representatives, Information for Development Program: and academics to discuss challenges in results-based - www.infodev.org approaches and next steps to be taken jointly. They is- Knowledge Sharing: www.worldbank.org/ks sued a joint statement on March 19, 2002, in Monter- World Links for Development (technology in rey. In joint reports, MDBs articulated their role on the education): www.worldbank.org/worldlinks provision of global public goods and analyzed global poverty and progress toward the MDGs, with a special Thematic Topic-Focused Partnerships focus on Africa. Work on harmonization of policies Clean Air Initiative: and procedures, involving MDBs and the Organisation www.worldbank.org/wbi/cleanair for Economic Co-operation and Development www.worldbank.org/wbi/airelimpio (OECD) Development Assistance Committee (DAC), www.worldbank.org/wbi/arlimpo progressed according to an agreed-on action plan Health Flagship: endorsed by the Bank's Development Committee. www.worldbank.org/wbi/healthflagship HIV/AIDS: www.worldbank.org/wbi/aidsleadership Organisation for Economic Co-operation World Business Council for Sustainable and Development Development Virtual University: www.wbcsd.ch The partnership with OECD has deepened and broad- ened considerably in recent years, with the objective of Regional Capacity-Building Partnerships maximizing complementary activities and synergies African Capacity Building Foundation: and minimizling duplication. Collaboration with the www.acbf-pact.org organization's DAC has been an especially important African Virtual University: www.avu.org focus of this partnership. DAC provides a forum for Joint Africa Institute: www.ima-jai.org OECD members to achieve, as bilateral donors, greater Joint Vienna Institute: www.jvi.org coherence and convergence in their development pro- Mediterranean Development Forum: grams. T he DAC Guidelines on Poverty Reduction www.worldbank.org/wbi/mdf have been the basis for the remarkable degree of con- vergence and consensus among the bilateral donors for the CDF-PRSP approach, who have expressed an inten- digital divide. A partnership of the OECD, 13ank, and tion to align aid programs within the PRSP framework IMF initiated the establishment of an International Tax and to untie their aid to least-developed countries. Be- Dialogue to facilitate discussions and experience shar- yond low-income countries, the Bank collaborates with ing among government officials responsible for tax the OECD on a broad agenda including trade, environ- policy and administration, to the benefit of developing ment, corporate governance, anticorruption, and the and industrial countries alike. Chapter 2 Overview of World Bank Activities in Fiscal 2002 41 International Monetary Fund institutions throughout the country program cycle Cooperation between the World Bank and IMF through early collaboration, clear delineation of re- intensified in fiscal 2002. The two institutions made sponsibilities by designating the lead agency, and trans- substantial progress in approving debt relief for heavily parent reporting in Board documents of each institu- indebted poor countries under the HIPC Initiative. tion's views. Nonetheless, each institution remains The executive boards approved debt reduction pack- ultimately accountable for its own lending decisions ages for 16 countries and discussed the poverty reduc- and for safeguarding its resources. Under the PRSP tion strategies of 29 countries. In the context of their framework for low-income countries supported by the cooperation, each organization is concentrating on its Fund's Poverty Reduction and Growth Facility, the area of comparative advantage: the IMF is responsible Bank and Fund are expected to work closely together for the dialogue with country authorities on macro- to support the implementation of a common country economic and related structural issues, while the World strategy while focusing their efforts on their respective Bank takes the lead on social and structural issues. areas of responsibility. For middle-income countries In August 2001 the Boards of the Bank and Fund there will be a need for greater flexibility to accommo- agreed to strengthen Bank-Fund collaboration on date variations in country circumstances, but benefits country programs and conditionality. The strategy is are expected from improved coordination and infor- intended to strengthen collaboration between the two mation sharing between the Bank and the Fund. 42 The World Bank Annual Report 2002 - ¢ ~~~~~~~~~~Chapter 3 -;0: _ Z , t ' . wf1 _ - %^ ? 1 * -~~ Development Effectiveness , - -| 00 { i 0 - ,e a> DXhSaL~~ 00 j .4S> i.Jo - 00 r 0:li 0 ^L ~~k~~~ll~S ^ ; >- zd -1 Chapter 3 Development Effectiveness The second half of the 20th century was a period of 15 percent in 1982 to about 7 percent in 1997. They unprecedented progress in living standards at the have worked to integrate more rapidly with the global global level. Better technology, policies, and institu- economy and have often seen benefits from doing so. tions not only spurred rapid growth in the advanced The two dozen developing countries that have inte- economies-they also made possible substantial grated most rapidly since 1980-which together have improvemiients in the lives of poor people throughout a population of about 3 billion people-have seen much of the developing world. In this context, many their annual growth rate of per capita gross domestic countries have made great strides in development, product (GDP) increase from less than 3 percent in but others are still mired in war, epidemic disease, or the t970s to 5 percent in the 1990s. communal and political collapse. External development assistance has contributed to In 2002 the World Bank published The Role anid this progress, and indeed has become more effective Fffectivetness of Developmenit Assistanicc: Lessonis fromz over time in lifting people out of poverty. In maniy World Batnk Experience, which examinied the develop- countries internationial aid and advice have helped cre- ment conmmunity's experience over the past 50 years. ate the conditions for social development and a flour- This study, prepared as a contribution to the March ishing private sector. As evidence has mounted that aid 2002 Financing for Development Conferenice in is most effective in countries with reasonably good Monterrey, found that where countries have developed policies, institutions, and governanice, the internationial rapidly, the most important factors have been the poli- community has improved its allocation of aid, and the cies, institutions, and governance of the countries estimated effectiveness of aid in poverty reductioni has themselves. Development assistance cannot substitute risen sharply. for domestic commitment, but where aid has sup- But not all developing cotLntries have enjoyed sLich ported countries committed to development, it has progress. For example, Africa as a region saw no in- contributed markedly to development progress. crease in its overall per capita income betweeni 1965 This development progress can be summarized in and 1999, despite significant improvemenits in certain some remarkable transformations. In the past four social indicators. And in Africa and elsewhere, too decades life expectancy in developing countries has in- many countries have suffered deteriorations in eco- creased by an unprecedented 20 years. In just the past noinic and social conditions over long periods. The three decades, adult illiteracy in the developing world challenges are not just economic and technical but also has been cut almost in half, from 47 to 25 percent. And political, social, institutionial, and financial. Even in in the past two decades the number of people living in nullmerous countries that have worked hard to reform abject poverty (defined as living on less than $1 a day) policies (for example, by achieving macroeconomic has finally begun to fall, by perhaps 200 million stability and increasing openness and competition), people-after rising through most of the 19th and 20th an unfiniished agenda in governance and institutional centLiries. (Figure 3.1 shows the proportion of people reform has hampered economic growth and limited living on1 less than $1 and $2 a day, by region.) poverty reduction. External factors such as Organisa- Developing countries themselves are largely respon- tion for Economic Co-operation and Development sible for this progress. They have taken many difficult (OECD) agricultural subsidies and trade barriers have steps to improve policies and institutions-for impeded developing countries' efforts to integrate example, by cutting their median inflation rate from and develop. Mistakes by the donor commilunity-such 44 The World Bank Annual Report 2002 Figure 3.1 Population Living below $1 and $2 a Day (percent) Africa East Asia and Pacific 50 50 50 47 .7 ---_4. 39.3 27.6 25 25 23.9 13.8 14.2 - - - ~~~2.8 1990 1999 2015 1990 1999 2015 South Asia Europe and Central Asia 50 44 50 25 * 25 19.3 22 96_ _ ___ 8.7 O 0 ~~1.6 36 _0^ 090 0 - …---0.6 1990 1999 2015 1990 1999 2015 Latin America and the Caribbean Middle East and North Africa 50 50 38.1 ------ ~ 33.1 --0. - - l - - - - 23.4 29.9 25 1 - 8 - -. 25 1* - 2.4 2.3 1.2 90 8.4 0 - 2 1990 1999 2015 1990 1999 2015 - Actual $1 a day poverty rate - Average path to $1 a day target - - - Projected path ($1 a day) - Actual $2 a day poverty rate -- Projected path ($2 a day) Note: The graphs for Africa, East Asia and Pacif ic, and South Asia do not include figures for $2 a day. Source: World Bank. 2002. World Development Indicators 2002. Washington, D.C. as politically motivated aid allocation during the Cold Millennium Development Goals (MDGs). The Bank War-have also impeded development in some coun- set out an analysis and an agenda for change in the tries. Evaluation and research are essential, so that the World Development Report 2000/200 1: Attacking Bank and the development community can learn from Poverty. In March 2002 the Poverty Reduction Group both the successes and failures of the past 50 years. reviewed progress in Poverty Reduction and the World Bank. The following observations are based on this PROGRESS ON THE MILLENNIUM work and the statistics published in the World DEVELOPMENT GOALS Development Inidicators 2002. It should be emphasized, however, that data are poor in many cases, a problemn As one indicator of development progress, the discussed at length in the fall 2001 edition of the World World Bank tracks country performance against the Bank Research Observer. Chapter 3 Development Effectiveness 45 Goal 1: Eradicate Extreme Poverty and Hunger The percentage of the world's population living on less than $1 per day fell from 29 percent in 1990 to 23 per- , A ' 'm ' cent in 1999. However, almost all of the reduction in , - the number of people living in extreme poverty was : i ! in East Asia and Pacific, where China has made rapid progress. In Europe and Central Asia the number and proportion living in extreme poverty have increased. .. ^ Elsewhere the poverty ratio has decreased, but the _ absolute number of people in dire poverty increased. , The result has been little change in the number of poor people in the world-about 1.2 billion. And the . e number of people living on less than $2 per day, a Goal 1: Eradicate extreme more realistic poverty line in many countries, poverty and hunger increased from 2.7 billion to 2.8 billion from 1990 to 1999. Figure 3.2 Prevalence of Child Malnutrition in The World Bank's Global Economic Prospects 2002 Low- and Middle-income Economies estimates that the proportion of the world's popula- Weight for age tion in extreme poverty could be halved by the MDG (percent of children under age 5) target date of 2015 if the growth rate of GDP per 50 capita in developing countries averages 3.6 percent - Actual progress a year for the next 15 years. This growth rate is twice 30.8 to meet goal the actual rate during the 1 990s. In Africa, where 28.2 growth is projected to be less than half the global 25 average, the number of people living in poverty will increase. Halving the proportion of undernourished and 0 malnourished people by 2015 will require concerted 1990 1998 2015 action by the affected countries and the international Note: Europe and Central Asia region is excluded. Source: World Bank. 2002. World Development indicators 2002. community. Many countries have made dramatic Washington, D.C. progress in reducing the proportion of underweight children-one measure of malnutrition-during the past three decades, but progress has slowed. In 2002 there are an estimated 150 million children under age five in developing countries who are malnourished. Approximately 80 developing countries have built a At current rates of improvement there will still be sufficient number of schools to place all of their 140 million underweight children in 2020. primary-school-age children, but only about 27 retain most of their students through to completion. Since Goal 2: Achieve Universal Primary Education 1990, 1 7 developing countries have seen completion The Education for All Conference, held in Jomtien, rates stagniate or decline. Thailand, in 1990, pledged to achieve universal pri- mary education by 2000. But in 1999 there were still Goal 3: Promote Gender Equality and 120 million primary-school-age children not in school, Empower Women three-quarters of whom live in South Asia or Africa. In most low-income countries girls are less likely to at- The MDGs set an ambitious target, for which there is a tend school than boys. Reflecting this difference, female strong commitment, of ensuring that all children can youth literacy rates are lower than male youth liter- enroll in and complete a full course of primary school- acy rates in all regions except Latin America and the ing by 2015. In many places schools fail to achieve Caribbean. The MDGs seek to eliminate the gender gap either objective. There can be large gaps between re- in primary and secondary education by 2005, and at all ported enrollment, attendance, and completion rates. levels of educationi by 2015. Although the gender gap 46 The World Bank Annual Report 2002 I-1 ITT:Tr;lTO . increased. At the end of the 20th century only 37 devel- ! I '' 1".................. . T . ' : , - .. oping countries were making fast enough progress to -P I _ ' T ' reduce under-five child mortality to one-third of its 1990 level by 2015. The World Health Organization (WHO) estimates that more than two-thirds of these _ . ^ '$ i .t,_ q.; - deaths are caused by a combination of malnutrition r ~ . x ' ( and diseases that are readily preventable in high- income countries. Vaccination is essential for reducing child mortality, but in some parts of the world vaccina- tion coverage has declined. In 1999, 55 countries had not attained 80 percent measles vaccination of children under one year of age; another 48 reported no data. primary educ ation Goal 5: Improve Maternal Health The goal is to reduce the maternal mortality ratio Figure 3.3 Primary Completion Rate by three-quarters between 1990 and 2015. Data on (percentage of all children who complete primary school) 100 __ __ __ __ __ __ 100 9086 9093 m1i99 19991 8 ~~87 86 80 ~78 63 60 49 * 44 45 40 * X 20 x C> x Sn S <- x > Gioal 3: Promote gender equality , _. E- S Oand empower women -~ Figure 3.4 Ratio of Girls to Boys in Primary and Source: Human Development Network Education Team. 2002. 'Achieving Secondary Education in Low- and Education for All by 2015: Simulation Results for 47 Low-income Countries." M World Bank, Washington, D.C. Middle-income Economies (percent) 100 |__ Actual progress | 95 - Progress needed narrowed in the 1990s, many countries in Africa and to meet goal South Asia will miss the first target date. 85 Goal 4: Reduce Child Mortality 80 The goal is to reduce under-five child deaths by two- thirds between 1990 and 2015. Deaths of infants and 1990 1998 2005 children decreased rapidly from 15 million per year Note: The break in series between 1997 and 1998 is due to the change in 1980 to about 11 million in 1990. Unfortunately from ISCED76 to ISCED97. Source: World Bank. 2002. World Development Indicators 2002. progress slowed almost everywhere in the 1990s, and Washington, D.C. in parts of Africa, infant and child mortality rates Chapter 3 Development Effectiveness 47 a ~ * ! - ^ --I incidence, by 2015. HIV/AIDS is having a devastating - j , s impact in developing countries, especially in Africa. s r - ' Major breakthroughs in prevention are needed in the next few years if there is to be any hope of stabilizing, [ 4 t* - s L 1-t , - .............. let alone reversing, the epidemic by 2015. Approxi- ,, .;,§i!jit and so far, about 20 million people have died from the - disease. Malaria is endemiiic in more than 100 countries and affects approximately 300 million people each year. -'uberculosis is the main cause of death from a single infectious agent among adults in developing countries. * -- '---- -- - Over the past decade its incidence has grown rapidly Goal 4: Reduce child mortality in several regions. Based on present trends there will be about 10 millioni new cases in 2005. The directly Figure 3.5 Mortality Rate in Low- and Middle- Income Economies Children under 5 years of age (number per thousand) I 100 88 84 - Actual progress - 80 - Progress needed to meet goal . 60 40 9 20 01990 1999 2008 2015 Source: World Bank. 2002. World Development Indicators 2002. Washington, D.C. Goal 5: Improve maternal health maternal mortality are in many instances unavailable or unreliable. In 1995 WHO estimated that more than 0.5 million women died from complications of preg- Figure 3.6 Births Attended by Skilled Health Staff nancy and childbirth, more than half of them in Africa. (percentage of total) In Rwanda, for example, the maternal mortality ratio 90 was 2,300 per 100,000 births. In high-incomile counitries 74 8 it is typically less than 10. Many actions are needed, including a reduction in the number of closely spaced 63 pregnancies, better nLtrition and care during preg- 49 49 nancy, and better availability of skilled birth attendants 44 and emergency facilities. 44 39 30 Goal 6: Combat HIV/AIDS, Malaria, and 1989 Other Diseases I-_Asia -Latin America & the Caribbean Other~~~~~~~~~~~~~~ Africae - ideEs &NrhArc The Millennium Declaration resolved to halt the Afrca Middle East & North Africa spread of human immunodeficiency virus/acquired Note. U.N. regions. Source: World Health Organization, U.N. Children's Fund, and immune deficiency syndromie(HIV/AIDS), malaria, U.N. Population Fund estimates. and other major diseases, and begin to reverse their 48 The World Bank Annual Report 2002 and well-being of poor people. It can also reduce the AUY80D"CAn GT - risk of natural disastcrs from storms and floods. Access to clean water is important for controllinig diarrheal diseases, and better drainage reduces malaria; both are major causes of child mortality. The World SuLmmit i ;. b!N! --, on Sustainable Development (WSSD) in August 2002 i -. ! 8 - 1 LF is expected to produce implemenitation frameworks anchored in the MDGs, reflecting time-bound ,-_. - AREF commllitments from governmllenits, the private sector, it - _ M~TKE CARE and civil society. Building on the accomplishmenlts of the Monterrey conference on Financing for Develop- ment, the WSSD is focused on applications in key areas relevant to the accomplishment of the MDGs- agricultural growth, sustainable energy, health and Goal 6: Combat HIV/AIDS, the environment, and sustainable managemiienit of nat- malaria, and other diseases ural resources. The World Developmiient Report 2003: Sulstainiable DevelopmIen1t in a Dynamic Vorl rd addresses Figure 3.7 Prevalence of HIV/AIDS among Young these issues. People Ages 15 to 24,1999 (percent) .L . 10 M 9.2 -, - -L-- 8 = Female 6 4.54 4 2 0.190.16 0. ' . 67-0.3 0 290r48 East Asia Europe & Latin South Africa & Pacific Central America & Asia Asia the Caribbean Note: No data for the Middle East and North Africa region or for females in the Europe and Central Asia region. Source: World Bank. 2002. Worfd Development Indicators 2002. Goa 0 7: Ensure environmental Washington, .. Gol7oc.r evrnm na sustainability Figure 3.8 Access to an Improved Water Source in Low- and Middle-Income observed treatmienit, short course (DOTS) protocol iEconomies has proven effective, but in 1999 less than half the (percentage of population with access) population in the 23 countries most affected had access to it. 100 A lg -Actual progress| - Progress needed Goal 7: Ensure Environmental Sustainability 90 to meet goal The MDGs call on the world to reverse the loss of envi- 86 ronmental resources, halve the proportion of people without access to safe drinking water, and achieve a sig- 80 nificant improvement in the lives of at least 100 million slumdwellers. Sustainable environmental policies are 7°1 90 1999 2008 2015 important because the environment provides goods Source: World Bank. 2002. World Development Indicators 2002. and resources needed for human development. Better Washington, D.C. natural resource management can increase the income Chapter 3 Development Effectiveness 49 regimes in developing countries. This is the essence of the Monterrey consensus: developing countries take re- sponsibility for their own development programs and set in place the policies that will put them on track to achieve the MDGs, and bilateral and multilateral agen- cies will work together to support them and create a -v3 ,,|rK ^ global environment conducive to poverty reduction and growth. ASSESSING DEVELOPMENT EFFECTIVENESS World Bank Impact When assessing the effectiveness of the Bank's work, - t '9iit is important to recognize that one of the most im- portant roles of the World Bank is to be an agent of , ' - - l I change, through analysis and advice, as well as lending. Goal 8: Develop a global In many countries the resource flows from the World partnership for development Bank-and even official development assistance (ODA) flows more broadly-are not large enough for Figure 3.9 Aid to Low- and Middle-income the money aloine to make a major difference relative Economies to the scale of the challenge. ODA totaled about (billions of dollars) $54 billion in 2000. This was only one-third as much as the private foreign direct investment flowing to devel- 40 oping countries, which in turn made up only about 30 = one-tenth of those countries' total investment of nearly 20 $1.5 trillion. Similarly, the Bank usually lends about 10 |- Low-income economies $1 billion per year in direct assistance to the education 10 - Middle-income economies sector (plus additional assistance through program- 1990 1995 2000 matic lending with education-related conditions), Note: In 1999 dollars. Includes both official development assistance and compared with annual public education spending in official aid. Amounts not specifically allocated to countries are distributed the developing world of more than $250 billion. There- proportionately to low- and middle-income totals. Source: World Bank. 2002. World Development Indicators 2002. fore when the international financial institutions and Washington, D.C. other donors have had major effects on development, it is because their assistance has gone beyond mere resource transfer and has helped countries to make fundamental changes-for example, through building Goal 8: Develop a Global Partnership institutions or through demonstration projects that for Development have been replicated widely. This goal is about the means to achieve the first seven These fundamental and wide-ranging changes are MDGs and calls on high-income countries to join with typically more difficult to trace to particular donor developing countries to ensure fair and open trading actions or projects than are traditional project out- and financial systems, better market access for the least comes, especially when governments are the prime developed countries, improved debt sustainability, movers behind reform. Nevertheless, the need to con- and increased development assistance. It is clear that tinue to improve results means that good evaluation business-as-usual will likely fail to achieve the MDGs and management for results are essential. The World by 2015. The World Bank has called for rich countries Bank recently launched an initiative to enhance the to provide increased aid, to open their markets, and to results orientation of its activities. Working with the cut their domestic agricultural subsidies. At the same other multilateral development banks (African Devel- time, the Bank has committed its support for improve- opment Bank, Asian Development Bank, European ments in weak policy, institutional, and governance Bank for Reconstruction and Development, and Inter- 50 The World Bank Annual Report 2002 American Development Bank) and in cooperation with mlent Effectiveness (ARDE). OED reports to the the Dcvelopmcnt Assistance Committee of the OECD, Board on the status of all evaluation activities the Bank cohosted an international Roundtable on across the Bank Group through the Annuial Rcport Better Measuring, Monitoring, and Managing for on Operations Evaluation, and tracks manage- Development Results on June 5-6, 2002. The Round- ment's responses to major evaluationi recommen- table explored the strategic context for results-based dations. It also supports evaluation capacity devel- development, the challenges of day-to-day manage- opment in client countries. ment for development results, and the role of inde- * The Bank's Quality Assurance Group (QAG) mon- pendent evaluation in institutional accountability and itors the quality of the Bank's activities during im- learning. It established a platform for follow-up by plementation to facilitate better management. It both the Bank and partner agencies. examines project quality for both loans (shortly The Bank has engaged partners more broadly in its after project approval by the Board) and advisory work on knowledge development, including experts services (after delivery to country clients). It also drawn from academic and research institutions, the monitors the quality of supervision of projects private sector, and nongovernmenital organizations and reports to the Board on the overall health of (see Drive to Partnerslhip: Aid Coordination and the the portfolio of ongoing projects through the World Bank, April 2001). 'T'he Bank holds workshops, "Annual Report on Portfolio Performance." QAG's conducts external reviews, and uses other mecha- work is in addition to that of the quality assurance nisms to draw upon the knowledge and experience teams maintained by the operational vice presi- of partners and staff to help it design its strategies and dencies. In 2002 QAG has two experimlental activities. assessments under way: a study to look at the Frank and open disclosure and dissemination of the relevance and coherence of entire programs of Bank's papers contributes substantially to the intellec- advisory and learning activities in a country, and tual resources of the development community. Recent a pilot study to examine the effectiveness of the reviews by the Evaluation Cooperation Group, com- work of the Bank's Sector Boards. The experience prising the heads of the evaluation offices of the major of these pilots will be used for a possible main- multilateral development banks, concluded that the streaming in fiscal 2003. World Bank is generally their exemplar of best prac- * The Internal Auditing Department assists Bank tices in evaluation. managemenit in establishing and maintaining Analysis and advice is a core business of the World sound risk management and internal controls. It Bank. This shows itself in the strong analytical capabili- achieves this through the delivery of an integrated ties of mainstream operational divisions. The couLntry audit service that provides an objective assurance economists and other professional staff, for example, to managemenit as to the adequacy and effective- play a vital analytic role, as do the specialists within the ness of the Bank's risk management and internal Bank thematic networks. There is an extensive research controls and any need for improvement, and ad- program, leading to publications such as the World vice on the identification, control, and manage- Developmuent Report and World Developnment Indicators. ment of risk, especially as it concerns issues related The Bank has also developed specialized units with to the design, implementation, and operation of responsibility for evaluation of effectiveness and risk internal control systems. The Department carries control, including the following: out an annual business risk analysis and prepares the detailed annual work program, which is part of * The Bank has an Operations Evaluation Depart- a three-year plan that covers high-risk areas. The ment (OED) that is independent of management, three-year plan is revised and approved by the reporting directly to the Board of Executive Bank's president and endorsed by the Audit Com- Directors. OED carries out four main types of mittee each year. The Department performs its evaluations: sector and thematic reviews, country work in accordance with the Standards for the assistance evaluations (CAEs), project reviews, Professional Practice of Internal Auditing of the and process reviews. Each year evidence from all Institute of Internal Auditors. these evaluations is marshaled to produce a * In fiscal 2001 the Bank established a Quality summary report, the Annu(al Review of Develop- Assurance and Compliance Unit in its Chapter 3 Development Effectiveness 51 Environmentally and Socially Sustainable Devel- nesses that required continuinig action. Every year the opment Vice Presidency to enisure the conisistenit SRM Vice Presidency produces a strategy uipdate that implemilenitationi of safeguard policies, such as the reviews progress against the Bank's objectives, priori- policy on indigenious people or the policy on in- ties, and commitmenits. voluntary resettlement, and to give advice on safe- guard issues in projects. Safeguard coordinators Independent Evaluation with dedicated fuLiding have been appointed in At the project level, each ICR is reviewed by OED. each region. In 2002 the safeguard policies are In addition, OED conducts field assessments for one- being updated. quarter of completed projects each year, and a small * In November 2000 the Corporate Committee on number of impact evaluations for projects completed Fraud and Corruptioll Policy was created to en- 5 to 10 years earlier. 'I'his work also provides the build- sure that the 13ank Group develops anticorruption ing blocks of project knowledge and performiaice that policies and strategies that contribute effectively to contribute to coulitry, sector, and thematic evaluations. its poverty reduction goals. Tlie B3ank's corruption OED presents to the lBoard an ARDE, which reviews and fraud investigationi unit is now knowvn as the the performanice of completed projects and discusses Department of Institutional Integrity (INT). INT development challenges faced by the Bank. The theme investigates any allegations of fraud and corrup- of the fiscal 2001 ARDE was the importance of select- tion within the Bank Group or in coniectioni with ing the right developmeint instrumilenit for a given COUn1- Bank-financed contracts, and any allegations of try situation and development objective. unethical behavior by Bank staff. In addition, the OED's CAEs concentrate on the developimienit effec- Ethics Office reports directly to the 13ank's Ilresi- tiveness of the Bank's enitire program of assistance to dent and is responsible for outreach and each country. They provide opportullities to assess comImlunlicationis oil ethics matters. lendinig and advisory services in the context of the country assistance strategy (CAS). In fiscal 2002 nine Self-Evaluation CAEs were under-taken. A major findinig from these 'I'he Bank relies on self-evaluation validated by inde- studies is that the overall impact of the B1ank's work in pendenit evaluationi. 'Task maniagers must produce an a country is often greater thani a simple aggregation of Implemilenitationi Completion Report (ICR) for each the results of individual projects. operation. These reports are the B3ank's maini self- OED sector and themilatic evaluations address issues evaluation and learning tool. The Balik also conducts that cut across Banik operations, such as the effective- Country Portfolio Performance Reviews. The regional ness of dialogue between borrowers and the Bank on managemilenit teams use these to engage borrowers in policies and on project selection, design, and imple- discussions about the periormanice of the whiole port- mentation. Many of these studies compare experiences folio of Bank operations in a country. These discus- across countries. sions address both the accountability issues that affect OED conducts special studies to review the Bank's the performance of individual operationis and those performance and experienice in an economilic sector that are systemic in nature. The performanice of the or thematic area over 5 to 1t) vears and reports on Bank's entire portfolio is assessed in the "Aninlual developmenit effectiveness and on complianice with Review of Portfolio Performanice." Banlk policy. To maximilze the impact of sector and the- The Bank has siginificantly increased self-evaluations matic evaluations, these studies are, to the exteilt possi- of its products and services in receint years. The Opera- ble, scheduled prior to a revisioil of the related Sector tions Policy and Country Services Vice Presidency, Strategy Paper (SSP). Sector and thenmatic evaluations working jointly withi other network vice presidencies, completed by OED in 2001 and 2002 included "'l'he periodically assesses select clieiit services aind products, Gender Dimensioni of Bank Assistance: An Evaluation aind assists the regions in iillplemilenitinig recoimnmeilda- of Results"; "Promoting Enviroililenital Sustainability tions for improvement. The Strategy and Resource in Developmenit: An Evaluation of the World Bank's Malagemient (SRM) Vice Presidency assesses the effec- Performance"; and "Social Funds: A Review of World tiveness of resotirce use. Its "Asscssment of the Strategic Baink Experience." Compact," completed in fiscal 2001, evaluated the The thematic evaluation titled "i'he Gender Diillen- achieveilenits tinder the Compact and identified weak- sion of Bank Assistance: Ani Evaluation of Results," 52 The World Bank Annual Report 2002 completed in fiscal 2002, examined Bank assistance in mental resources and often have delivered small-scale 12 counltries. Key findinigs were that Bank assistance projects in poor communiiities well (altlhouiglh project was satisfactory in the health and education sectors performance has varied considerably). The review also but weak in promoting the economic participation found that projects have been less successful in achiev- of women and in imlproving national institutional iig lasting imiprovemenits or in facilitating institutionial frameworks for gender equity. The study called for bet- development. It suggests better integrating social funds ter integration of gender considerations into the Bank's into poverty reduction strategies, paying more atten- CASs and into the design of Bank-supported projects tion to long-term implicationis, and having clearer cri- so that both men and women are able to access the teria for supporting such funds. The findinigs of this re- benefits equitably, especially in countries with high view are being incorporated into future project designs gender disparities. These lessons were incorporated and are among the inputs to the social developmenit into the SSP, "Integrating Gender into the World Bank's SSP, forthcoming in fiscal 2004. Work: A Strategy for Action." Among other interven- OED is carrying out an evaluation of global pro- tions, the strategy recommended the gradual rollout grams and policies, which address critical development of country gender assessments in all active Bank client problems that affect many counltries (such as environ- countries over the next few years, to underpin CASs mental degradation, the spread of commllullicable dis- and project work. eases, and the digital divide). To this end, OED and The study" Promotinig Environmental Sustainability B3ank partners convenied an internationial conference in Development: An Evaluation of the World Bank's on evaluation of global public policies and programris in Performance" found that the Bank has made valuable July 2000. A groundbreaking evaluation stLdy of global contributionis to environmiienital work. It has played a public policy was initiated at that conierenice and is leading role in addressing global issues, helped maniy currently under way. governments build environmental institutions and programs, mitigated the negative effects of its develop- OPERATIONS QUALITY ment interventions, produced high-quality policy analysis and economic and sector work (ESW), and In fiscal 2002 the fourth "Quality-at-Entry Assessmenlt" promoted awareness of the linkages between the envi- by the World Bank's QAC. rated 94 percent of opera- ronmenit and development. The evaluationi, however, tions as satisfactory or better. This is 12 percentage found that environmiienital sustainability has not fea- points higher than in the first annlual assessment. tured adequately in either the Bank's core objectives Six of eight quality dimensionis improved comiipar ed or in its country and sector strategies. The linkages with the previous year. Only two dimlensions-risk between macroeconomic policy, poverty alleviation, assessment and managemenit, and implementation and environmental sustainability have not been made arrangemiients-have yet to reach 85 percent satisf-ac- sufficiently explicit. In response to the recommenda- tory. Nevertheless, some inconsistencies in the design tions of this OED sector review, the Bank Group's new of operations were noted, as well as some rigidities in environmiiient SSP, "Making Sustainable Commitmiients," applying fiduciary rules and a tendency to shy away outlines a comprehensive institutional effort to main- from components that might trigger review under the stream environmental considerations in CASs. Bank's safeguard policies. Overall, there have been The second thematic evaluation was "Social Funds: robust gains in the quality of Bank operations. A Review of World Bank Experience." Social funds QAG also reports that both commitments-at-risk projects create autonomous iniplementing agencies to and projects-at-risk fell to about 12 percent of the finance small projects based on proposals submitted by portfolio in fiscal 2001, less than half the level five years local groups. Most social funds are set up temporarily ago. However the "Annual Review of Project Perfor- to channel resources to needy communities during a mance" warns that the current at-risk system may be crisis. However, virtLtally all Bank-supported social understating the true level of risk and that more candid funds are still in operation, have been supported by project supervision reports and ratings are needed. successive Bank loans and grants from other donors, QAG completed "Supervision Quality of Risky Proj- and have assumed longer-termii objectives. The evalua- ects" in April 2002, which states that supervision was tion found that the funds have responded effectively less than satisfactory for almost one-quarter of projects in emergencies. Thev have mobilized nongovern- that had been rated at risk, significantly wvorse than for Chapter 3 Development Effectiveness 53 the portfolio as a whole, and that routine ratings for the wvork of the Bank in partnership with its clients. projects at risk are not always realistic. The maniage- However, gains have been unleveni. For example, strate- ment is following up on1 the QAG recommllenidations to gic relevance is very strong at 97 percent satisfactory, help improve the supervision of risky projects. QAG is but the likely impact is weaker at 76 percent. Bank also working with the Banlk's regions to refine the cur- processes, at only 66 percent satisfactory, and peer rent portfolio iiidicators to improve realism of project review processes need strengtheninig. Coverage of ratings. (Figures 3.10 through 3.12 show the Bank's poverty reduction issues in ESW has improved, with currenit portfolio by region, theme, and sector.) 82 percent rating satisfactory. Having had four vears' The fourth annual report on the "Quality of Eco- experience in assessing the quality of ESW, QAG has nomic and Sector Work Fiscal 2001 " notes that overall recently conducted a review of its methodologies and quality was rated satisfactory, or better, for 91 percent the costs and benefits of its assessmenits. I'he review has of tasks, and that, while this excellent result partly suggested moving toward assessment of country and reflects the continuing cleanup of operationis in the thematic programs of analytical and advisory activities pipeline, it also shows a solid general improvemiient in by fiscal 2004. RESULTS Figure 3.10 Active Project Portfolio by Region as of June 30, 2002 The outcomes of Bank projects that were completed in Share of total lending of $102.1 billion fiscal 2001 are among the best recorded in two decades. The long-term trcnd shows a decline in performance South Asia 17% < tIca 15%from 1977 to 1989 and a strong rebound sincc. TIhe target of 75 percent of projects having satisfactory out- Middle East & comes, originlally set in the Bank's Strategic Compact North Africa 5% in 1995, has beeni met. In the first half of fiscal 200 1, 82 percent of projects reaching completion had satis- East Asia & factory outcomes, only slightly beloxv the peak of Pacific 25% Latin America & 84 percenit in 1999. Figure 3.13 shows satisfactory the Caribbean 22% a lY project outcomes from 1974 to 2001. The theme of the 2001 ARDE by OED states that Europe & Central the right combinationl and sequenicinig of activities in a Asia 16% Figure 3.11 Active Project Portfolio by Theme Figure 3.12 Active Project Portfolio by Sector as of June 30, 2002 as of June 30, 2002 Share of total lending of $102.1 billion Share of total lending of $102.1 billion Environmental & Economic Management 1 % Water, Sanitation & Agriculture, Fishing & Natural Resource Public Sector Governance 8% Flood Protection 10% Forestry 9% Management 15% ule of Law Law & Justice & Transportation . ' Administration Financial &2 5 Rural a ' - Private Sector Development - Development Information & 14% 19% Communication 1% Education 9% N y Trade & Energ Urban Integration Development 3% Mining 12% Finance 6% 13% Social Protection & Industry & Trade 5%/- Human Health & Other Development Risk Management 6% Social Services 13% 11 % Social Development, Gender & Inclusion 8% 54 The World Bank Annual Report 2002 Figure 3.13 Satisfactory Project Outcomes, Figure 3.14 Trends in Institutional Development 1974-2001 Impact (percent) (percent substantial or better) 100 70 80 60 - 50- 60 40 40 30 20 0F 20 -+- By projects F'Y{74 FY80 FY86 FY92 FY98 FY01 10 -- By disbursements Note: Includes only lending operations. FY90 FY95 FY00 FY01 Source: OED calculations. Note: Data refer to independent evaluation assessments by OED of projects that have completed their loan disbursement phase and have exited the Bank's active lending portfolio. Results for fiscal 2001, based on all currently available independent assessments, as reported in the Annual Report for Development Effectiveness 2001. given setting can make the difference between success and failure. Choice of instrument is complex because Figure 3.15 Trends in Sustainability of the diversity of member countries and objectives (percent likely or better) and because of the wide range of Bank instruments and possible partners. Being wisely selective is key. 80 With regard to institutional development impact, 70 - 52 percent of projects completed during fiscal 2001 60 S. achieved a rating of substantial or better, an improve- 50 ment of 15 percentage points over the fiscal 1996 to 40 1999 average. This result is the best on record, weighted 30 either by the number of projects or by size of disburse- 20 -4-_ By project-3-point scale ments. Figure 3.14 identifies the trends in institutional 10| -*- By project-4-point scale development impact. 0 Seventy-one percent of projects completed during fiscal 2001 were rated as likely or highly likely to be re- Note: Data refer to independent evaluation assessments by OED of projects that have completed their loan disbursement phase and have exited the Bank's silient to future risks using a recently introduced four- active lending portfolio. Results for fiscal 2001, based on all currently available point scale. However, the operating environmillent has independent assessments, as reported in the Annual Report for Deve/opment become more risky and there is some question whether gains will be durable. Figure 3.15 identifies trends in sustainability of projects. Project Performance, by Sector Transportation, education, and public sector manage- PROJECT AND LOAN PERFORMANCE ment are the best performing sectors for projects reaching completion in fiscal 2000-01, while the energy Project Performance, by Region sector continues to lag. T he high ratings for projects in Project outcomes in all regions continue to improve. the transportation sector are partially due to improved Projects in Africa show the largest improvement, up borrower financial resources, together with improved 19 percentage points since 1999 to 71 percent in fiscal budget allocations for maintenance. Figure 3.17 shows 2001. On the negative side, average outcomes ratings trends in project outcomes by sector. for projects in the Middle East and North Africa may deteriorate over the next few years, since QAG ratings Performance of Adjustment and Investment Loans of those projects currently under implementation show Satisfactory outcomes of adjustment operations higher-than-normal risk. Figure 3.16 shows trends in fell from 82 percent for fiscal 1996-99 exits to 79 per- project outcomes for Africa and other regions. cent for fiscal 2000-01 when weighted by nmLber of Chapter 3 Development Effectiveness 55 Figure 3.16 Trends in Outcomes for Africa and Figure 3.18 All Adjustment Lending Other Regions (percent satisfactory outcomes) (percent satisfactory by project) 100 100 90 90 80 6~~~~~~~~~~~~~~ ~80 70 70 50 5 40 40 30 20 30 20 Africa | 10 - Other regions 20 0 F-4- By projects FY96 FY97 FY98 FY99 FY00 FY01 10 4 By disbursements Note: Data refer to independent evaluation assessments by OED of projects 0 that have completed their loan disbursement phase and have exited the Bank's FY96 FY97 FY98 FY99 FY00 FY01 active lending portfolio Results for fiscal 2001, based on all currently available Note: Data refer to independent evaluation assessments by OED of projects independent assessments, as reported in the Annual Report for Development that have completed their loan disbursement phase and have exited the Bank's active lending portfolio. Results for fiscal 2001, based on all currently available independent assessments, as reported in the Annual Report for Development Effectiveness 2001 Figure 3.17 Trends in Outcomes by Sector, Select Sectors (percent) large loan coming to completioni. For example, the out- come of a $1 billion operation can make a difference of 100 WM FY96-99 0 FYOO-01 m Active up to 4 percentage points in the outcome for the whole 90 Bank in that year. In fiscal 2001 the unsatisfactory per- 80 formance of two adjustment loans to Russia signifi- 70 cantly dampenied the Bank's overall outcome rating. 60 This volatility is likelv to continue given the nuiber of 50 large adjustment loans in the active portfolio. As risk 40 lmanagemenlt in the Bank receives more attention, 30 limaniagers are considering additional quality assuranice 20 arrangements for such large projects. Figure 3.18 shows 10 performance of adjustmenit lending overall. 0 _ _ _at_After a static period of performianice scores in the .o ° 2< o o > s late 1990s, outcomres for investment projects have slowni signiificanit recen t i mprovemenits. The percent- < : c S = age of investment projects vith satisfactory outcomlies rose from 69 percent in fiscal 1999 to 78 percent in fis- cal 2001. Figure 3.19 shows performance of all invest- Note: Sectors in this table do not reflect the new coding system implemented in fiscal 2002. Data refer to independent evaluation assessments by OED Iimenlt lendinig. of projects that have completed their loan disbursement phase and have exited the Bank's active ending portfolio. Results for fiscal 2001, based on all currently available Independent assessments, as reported in the Annual Report for Development Effectiveness 2001. BANK SELECTIVITY BORROWER COMMITMENT, AND CAPACITY projects, and from 87 percent to 70 percent wvhen Experience suggests that borrowver capacitv and com- weighted by disbursemiienits. Performanice weighted by mitmiienit are critical for development effectiveness. disbursemlients xvas volatile. One should note that the Selectivity based on a countr-y's policy environmen1t outcome data, weighted by disbursemenits, can be and capacity is therefore an importanit considerationi strongly iilflueniced in a particular year by a single very in the Bank's decisions on wvhat type of support is most 56 The World Bank Annual Report 2002 Figure 3.19 All Investment Lending * A weak policy and institutional environment comn- (percent: satisfactory outcomes) promises the effectiveness of both lending and nonlendinig interventions, and calls for a nuanced 100 selection of instruments. The outcomes of projects 90 00 are closely correlated with the Bank's Country Pol- 80 - icy and Institutional Asscssment (CPIA) ratings, as is the success rate of individual instrumnents. In 0weak country environmiienlts, signified by low CPIA 60 ratings, simple project designs-or a series of sim- 50 ple interventions-provide better results than 40 complex, multifaceted undertakinigs. Even if lend- ing is constrained by poor performance, carefully 30 selected nonlending activities can be useful, espe- 20 ciallv in keeping the Bank prepared for possible 10_* By projects re-engagemienit. 1 0 _4-- By disbursements 0 FY96 FY97 FY98 FY99 FY00 FY01 MANAGEMENT IMPLICATIONS Note: Data refer to independent evaluation assessments by OED of projects that have completed their loan disbursement phase and have exited the Bank's In the continuing drive to enhanice the impact of dev- active lending portfolio. Results for fiscal 200t, based on all currently available independent assessments, as reported in the Annual Report for Development elopniienit assistanice on poverty reductioni atld growtlh, Effectiveness 2001. the 2001 ARDE nioted areas in which the Banik can improve by making the right choice of activity. The ARDE states that the Banik's best practice in appropriate. The Bank distitiguishes between couLntries regard to each instruLmient should be standardized to a that require and cani absorb high volumes of lendinig greater extent than in the past. TIhe otigoitig update oti asid those where a large lending program would be adjuistment lending, to be followed by a similar process counterproductive; in this latter group of countries, for investment lending, will offer a good opportLtiity capacity building ancl advisory services, along with to do this. well-targeted grants, are the primary intervention. The Bank is devoting rentived attention to achiev- Despite improvements over the past decade, there is ing better results in countries with poor policy and still scope for improving perfortiiatice through in- institutional etivironmenits, with a curretit focus on creased selectivity at all levels of Bank assistance: the nioillending support. The 2001 ARDE presents evalua- individual instrunient, the country assistanice program, tioil findings that are gertimaie to this difficult task. and the Banik's global, sectoral, and thematic priorities. Recognizing the significant performance differetitial The 2001 ARDE review of selectivity has identified across instruments is an imilportant first step. In addi- three themes conimon to the project, sector, and coun- tion, siiiiple projects are best when coutitry capacity is try levels of analysis. liniited. Nonfinancial activities and pilot projects may be useful in poorly performing countries even when * Good diagnosis, provided by high-quality ESW, is clients are not actively borrowiiig. critical in establishing realistic development objec- Implementation of sector strategies within coun- tives. CASs, sector strategies, and operational tries requires clarity about the country's developtiietit guidance all inifortii the matching of instruments objectives as well as a good understanding of the pre- with objectives in light of country and sector vailing conditions. Adjustmenit lending, supported as characteristics. necessary by capacity-building assistance, is more effec- * The choice of instrument should reflect not only tive when national ownership and consensus on sector the objectives of the individual operation but also reforms are strong, and wvhen monitoring and evalua- past perforiiiance in the country and sector con- tion arrangenients are in place. In sectors where these text. Appropriate sequencing atid tappitig of comn- prerequisites are lacking, progratiimatic investment plementarities among instrunients improve lending tiiay be preferable, supported by Learnitig atid outconies. Iitiovatioti Loans, and targeted to capacity building. Chapter 3 Development Effectiveness 57 On the other hand, implementation of the Bank's The magnitude of the challenge as articulated in cross-cutting, thematic objectives depends less on the the MDGs is daunting and will continue to grow as use of specific lending instruments than on genuine developing countries' populations grow by an esti- mainstreaming of these operational emphases across mated 2 billion over the next 30 years. A new interna- all instruments, on the strategic application of safe- tional commitment and increased understanding of guards, and on partnerships. development effectiveness means that the scale of re- In its Strategic Forum 2002, senior managers from sponse can rise to meet the challenge. The response, the Bank Group focused on six areas that are key. The as articulated in the Monterrey Consensus, involves Bank will therefore address them in the coining years. reforms in developing countries themselves as well as They include a sharp focus on the MDGs, assisting in the international economy, particularly in the areas clients to build good investment climates, finding ways of trade and aid. to assist low-income countries under stress, improving For external donor agencies such as the Bank, the knowledge services as a complement to lending, align- overriding importance of promoting change requires ing staff skills wvith Bank strategy, and improving the an increased focus on partnerships, along with policy measurement of results. analysis and financial support. 58 The World Bank Annual Report 2002 A 4-~ ?~~~~Y ~~~~~~ ~Chapter4 ftet mao i M . Thematic Perspectives- Addressing the Social, Institutional and Economic Dimensions of Poverty. '- 60>` Investing in People - 63 Z 2 = Ri(d bB Promoting Environmentally.' and Socially Sustainable Development 67 -Supporting Private Sector Development. and Infrastructure. - 70 0 I 0DA Building Strong Financial Systems 74 Promoting:the Rule of Law 77 Xg& ?'-y .Om- Addressing the Social, Institutional, -: and Economic Dimensions of Poverty In fiscal 2002 the World Bank intenisified its efforts to . - help countries address social, structural, and economic - ~ -' -- aspects of poverty, in particular by ensurinig that its --X : support for poverty reduction reflected the prior-ities of developing coulitries themselves and by workinig to sharpetn the impact of its own work on fighting poverty. STRATEGY Sustained economic growth remainis critical for _ , h poverty reductioll. Withotit it, poor people's prospects ,r for greater opportunity, empowerment, and security- essential elemenits of the strategy for poverty reduc- tion described in the WVorld Development Rcport 2000/2001-will be harder to rcalize. Thus growth is a necessary condition for attacking poverty-but it is Poverty is a call to action, a cail to change the world so that maniy more nlot a sufficienit one. Banik poverty reduction ..tivities may have enough to eat, adequate shelter access to education anid iotasuffkpoverty reduIction activitis health, protection from violence, and a voice in what happens in their therefore extend beyond supporting growthi in memilber communities countries to fostering poor coulitries' leadership in poverty reduction strategy makinlg, addressing gender inequalities, investing in poor people and empowering Other Bank work related to PRSPs in fiscal 2002 in- themii, supporting key aspects of good governance and cluded expansioni of a learninlg agenda for clients (in- institutionial reform, and helping cotintries participate volving large regional learninig events in Africa, Centr-al effectively in the global trading systemn. Highlights of Europe, and East Asia, complemiienited by individual in- activities in these areas during fiscal 2002 included country workshops) and for staff (including the first condticting (jointly with the Interniationial Monetary of a series of new courses on1 building and supportinig Ftind [IMF]) a comprehenisive review of the Poverty PRSPs, drawing on1 findinigs from the PRSP Review); RedLCtioll Strategy Paper (PPRSP) approach, launchiing completioni and publication of a two-volumne PRSP a strategy to integrate gender into the mainistream of Sottrcebook that provided practitioners with materials Bank lendinig and nonleniding work, and designing a covering macro, sectoral, and cross-cutting issues, framework for empowerment strategies. Meanwhile, along witlh core techniqties for PRSP preparation; and responding to the challenge of the World Trade Orga- thematic work with relevance for middle-inlcome as nization (WTO) miniisterial meeting in Doha, Qatar, well as PRSP couLntries, such as preparing a "User's the Bank stepped up its efforts to help developing Guide to Poverty and Social Impact Analysis," develop- countries benefit from the world trade system. ing indicators and monitorinig progress in poverty re- duction, workinig on pro-poor growth, and preparing POVERTY REDUCTION STRATEGY PAPERS gtiidance to staff on incorporatinig poverty reduction AND RELATED ACTIVITIES inito their work. The momenitunm of the PRSP approach continued dur- GENDER ing the year. An additional nine countries completed interim PIRSPs, and seven countries completed theii Also during the year the Bank launclhed a newv gender first full PRSPs. A major initiative undertakeni during mainistreaminlg strategy, "Integratinig Gender inlto the the year was a comprehenisive review of the first two World Bank's Work-A Strategy for Action," designed years' experience with the approach (see box 4. 1). to help foster couLntry-led, cotintry-specific efforts to 60 The World Bank Annual Report 2002 BOX 4.1 REVIEW OF THE POVERTY REDUCTION a community empowerment project in Fast Timor, STRATEGY PAPER APPROACH and a water and sanitation project in Ghana. The Bank's Development Marketplace has promoted The review covered tne Tirst two years' experience several innovative gender projects, such as support- with the PRSP approach. It was based on a broad ing an artisan enterprise institute in Peru, reducinig consultative process involving PRSP countries and female genital cutting in Africa, aiid helping poor multilateral, bilateral, 3nd nongovernmental part- women and girls in Egypt obtain identity cards and ners, and it culminated in an international confer- birth certificates to enable them to access microcredit ence in January 2002. The review evaluated ex- and basic services. perience with a wide range of features of the The Bank is also active in promoting gender equal- approach; while recommending no major changes, ity through nonlending activities, including wor-k on it included sets of gooa-practice suggestions for gender and human imimluniodeficienicy virus/acquired countries and develop,ment partners, including the immune deficiency syndrome and on emerging issues Bank and Fund. Its broad findings on the impact such as gender and the digital divide. A new initiative of the approach to date included the following: the on gender and macroeconomic policy will identify concept of country ownership had been and effective actions for integrating gender into country- remained crucial to su,cess; the approach had level analysis and policy dialogue. gained strong and widespread acceptance among low-income countries, had promoted enhanced EMPOWERMENT national dialogue, ana was helping to put poverty at the center of countries' development efforts; Empowernment is a key focus of the Bank's poverty PRSPs were also helping to promote better- reduction efforts. Empotvermien-t antd Poverty Reduction: informed decisionmaking and more effective use A Souircebook was produced in fiscal 2002 to improve of public resources; and development partners the Bank's understanding of empowerment anid its im- also widely endorsed the approach and were mov- plications for ongoing work. The report cites evidence ing toward better aligning their assistance with linking empowernment to improved project perform- country-owned PRSPs ance and governance and to growth that is more pro- The review also noted challenges and areas for poor. It is based on extensive consultationis within the improvement as the PKSP approach evolves. These Bank and with governmenit officials, other donor include the importance of arriving at realistic representatives, and civil society. growth projections, effectively prioritizing and Since institutional environnments vary with sequencing key strategic initiatives, institution- I location and context, there can be no single model alizing participatory processes with respect to for empowerment. 'I'he Souirccbook offers a frame- strategy implementation and monitoring as well work for the design of empowermenit strategies, rec- as strategy preparation, ensuring an appropriate ommending that they focus on four key elemncits: role for national parliaments in the PRSP process, information, inclusion and participation, account- and ensuring clear and close linkages between ability, and local organizational capacity. These PRSPs and countries' public expenditure programs elements can be linked to five priority areas of the and medium-term expenditure frameworks. Bank's work: access to basic services, improving national governance, improving local governance, pro-poor market development, and access to justice change gender patternis that adversely affect growth, and legal aid. The Peru Programmatic Social Reform poverty reduction, and human well-being. The strategy Loan, for example, includes many features that enable also calls on the Bank to ensure that gender assess- citizens to hold government accountable, including ments arc conducted in all borrowing countries, based mesas de concertaci6n-roundtables for dialogue and on inclusive consultations and analysis, in order to collaboration that include participants froni local identify and help countries to address critical issues commnuniities, civil society, local and national and priorities. governmiien1t, and the donor commii unLity-that are Bank-supported gender operations in fiscal 2002 charged with monitoring all public funds allocated to include a women1 and justice project in Argentina, poverty reduction. Chapter 4 Thematic Perspectives 61 GOVERNANCE AND PUBLIC SECTOR REFORM . BOX 4.2 INTEGRATING TRADE AND DEVELOPMENT The Bank has increasingly moved governance and pub- The Bank has continued to play a leading role in lic sector institutional reform to center stage in its as- conducting diagnostic trade integration studies sistance to client countries, recognizing that good gov- through the Integrated Framework for Trade- ernance and strong public institutions lie at the core of Related Technical Assistance to Least Developed achieving development and poverty reduction. Fiscal Countries (IF), a partnership with other multilateral 2002 has been a year of further deepening these efforts institutions and bilateral donors. Studies have been and of taking stock of what has been learned thus far. completed for three pilot countries-Cambodia, Many ongoing initiatives moved to a second phase I Madagascar, and Mauritania-and are being pre- this year. First, the Public Expenditure and Financial pared for. another four-Lesotho, Malawi, Senegal, Accountability (PEFA) Program-developed to coordi- and the Republic of Yemen. Work is being expand- nate and integrate PEFA efforts both within the Bank ed to select low-income countries not classified and across donors-was formalized. Second, a report, as least developed. The studies identify key con- "Actions to Strengthen the Tracking of Poverty- straints to a country's integration into the multilat- Reducing Public Spending in Heavily Indebted Poor eral trading system and the global economy, and Countries (HlPCs)," a follow-up to last year's HIPC the implications for policy reform and technical expenditure tracking study, was prepared by Bank assistance needs. The Bank and IF partners are and IMF staff. Finally, a joint proposal from the Bank, actively pursuing mobilization of trade-related IMF, and Organisation for Economic Co-operation assistance to poor countries as a follow-up to the and Development for the establishmenit of an Initerima- Doha declaration. tional Tax Dialogue was approved. ------- - -- ------------*- - - TRADE At the global level, work has focused on strengthen- While openness to trade can be an important spur to ing the developmenit aspects of the global trade agenda. growth, trade liberalization alone is insufficienit for For examliple, Global Ecoiionoic Prospects 2002, released generating widely shared incomile gains. The Bank's in November 2001, and the Policy Research Report trade-related activities seek to improve understanding Globalizatiotn, Growvthl anld Poverty: Butildinlg anl Inclusive of the conditions that lead from openiness to growth WVorld Economy have helped shape the global trade and poverty reduction, and to help integrate develop- debate and the agenda set at the WVTO ministerial ment considerations into international collective ac- meeting in Doha, Qatar. Trade work is based on a tions on trade-and trade into development strategies strengthenied program of technical research, focused on (see box 4.2). a better understanidinig of how institutionial and regula- At the country level the Bank seeks to help devel- tory reforms affect trade and investment liberalization; oping countries respond to new market opportLiuities. provision of an analytical framework to help develop- The challenge is to integrate trade reforms into na- ing countries set priorities for reform and multilateral tional development strategies that support growth trade negotiations; analysis of howv trade policy reforms and poverty reduction. The Bank also provides direct and domestic institutiolIs can together help to reduce advice and capacity building, includinig for WTO poverty; and work to make the global trading system accession negotiation. In June 2002 the Bank published more transparent and more attuned to the needs of Development, Trade, and the IAVTO: A Hanidbook, developing couLntries. 62 The World Bank Annual Report 2002 Investing in People The Millennium Development Goals (MDGs) commit the international community to a vision of develop- ment that vigorously promotes human development as r ! the key to sustaining social and economic progress in all countries. People living in poverty lack access to basic health care, education, and social safety nets. Each / year more than 13 million people lose their lives to human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS) and other communi- cable diseases such as tuberculosis (TB), leprosy, malar- ia, and acute respiratory infections. Other people have S little income or savings, and many are vulnerable to crisis. The World Bank stands by its commitment to scale up efforts to help countries achieve universal primary education, combat communicable diseases, reduce child mortality, improve maternal health, and Education: creating opportunities for life-long learning. protect the vulnerable from crisis. The World Bank remains the largest source of exter- nal financing for human development programs. New can help situate education within a country's overall lending commitments for education; health, nutrition, developmental activity; and increased resources re- and population (HNP); and social protection amount- leased through the Heavily Indebted Poor Countries ed to $4.26 billion in fiscal 2002. In addition to its lend- (HIPC) Initiative. A primary thrust of the Bank's edu- ing activities, the Bank's human development agenda cation work was to help countries achieve key EFA included analytical work, active involvement in country targets-set in 1990 and reaffirmed in 2000 as MDGs- poverty reduction strategies, and extensive outreach adopt primary education completion rates as the yard- and collaboration with partners to build strong al- stick of development success rather than the traditional liances to help developing countries achieve their Edu- means of measuring gross enrollments. This important cation for All (EFA) goal of getting every girl and boy shift is necessary to deliver the full development bene- into primary school by 2015 and having them com- fits of EFA. A second strategic thrust aims to help plete a primary education. Another such alliance has countries build the human capital needed to develop been to intensify the fight against communicable dis- competitive knowledge economies. Long-standing is- eases. Collaborative efforts were undertaken with gov- sues of access, equity, and quality need urgent atten- ernments, U.N. agencies, and other partners to create tion: 113 million children are out of school, two-thirds the Global Fund to Fight HIV/AIDS, TB, and Malaria, of them girls, and a billion adults are illiterate. Equally in recognition of the devastating impact of these dis- important are the 21 st century challenges posed by eases on education and health systems, and wider HIV/AIDS, armed conflicts, knowledge gaps, and the prospects for reducing poverty in many countries. digital divide (see box 4.3). In fiscal 2002 the Bank proposed, in consultation THE EDUCATION AGENDA: FOCUSING ON with partners, an Action Plan to accelerate progress UNIVERSAL PRIMARY EDUCATION on EFA. The Plan was adopted by the Bank's Develop- ment Committee in April 2002. It outlines measures to The Bank vigorously strengthened its support for close the data, policy, capacity, and financing gaps for education in fiscal 2002, building on a convergence of 88 countries not on track to achieve, by 2015, universal favorable developments, including increased global primary education. The Bank has subsequently invited commitment to the MDGs; growing adoption of 18 countries to join an EFA Fast Track and is working Poverty Reduction Strategy Papers (PRSPs), which with another 5 to qualify them for the program. This is Chapter 4 Thematic Perspectives 63 BOX 4.3 HELPING EDUCATION SYSTEMS COPE WITH HIV/AIDS Among the earliest to urge action against HIV/AIDS, the Bank is actively helping countries I deal with the epidemic's impact on education. c - The central message of Education and HIV/AIDS 4V A Window of Hope, published by the Bank in fiscal . 2002, is that educating children and youth merits i X the highest priority in an HIV/AIDS-afflicted world. - Education is both a proven means of HIV preven- - tion and a sector whose very existence is threat- ened by the epidemic. AIDS is eroding the supply and quality of education, weakening demand and 7- access, drying up human capital, and increasing sector costs. The paper calls for urgent and innovative action Health, Nutrition, and Population. protecting people from communicable diseases, ill health, and malnutrition to protect schoolchildren ages 5 to 14-the group least infected, and young people who are sexually active-often the highest risk group, accounting for some 60 percent of all new HIV infections. It l3ank lending for education in fiscal 2002 wvas urges countries to: $1.4 billion. Africa accounted for most of the projects, which supported primary education, distance learninig, * Establish education as an urgent national and higher education. A key focus was on the quality of priority education, as in Bangladesh's Second Female Secondary * Engage in systematic sector pianning School Assistance Project, wvhich builds on impressive * Ensure close collaboration with other sectors gains in access. Support to the Latin America and the * Develop policies that make schools safe for Caribbean region ($560.4 million) will also help raise children quality and expand basic education coverage to the * Strengthen delivery of prevention education poorest areas in Mexico, and provide "lifelong" learn- * Address the needs of girls and orphan children. ing for Linenilployed youth and poor people in Chile. EXPANDING EFFORTS TOWARD A HEALTHY GLOBAL POPULATION an initiative designed to help developing countries Health, Nutrition, and Population meet the 2015 education goal. Many more countries In fiscal 2002 Bank lending to help countries improve are expected to benefit from this initiative in the months HNP outcomes totaled $1.4 billion. The Bank con- and years to come. A first-ever database on primary ducted a review this year of its progress in achieving colimpletion rates helped project an EFA external the objectives outlined in the 1997 HNP Sector Strat- financing gap of about $2.5 billion to $5 billion. egy. While notinig some iilportant accomplishments- Achieving EFA wvill require sound macroeconiomic and for example, a sharper focus on health and poverty, education sector policies that emphasize efficiency and and modest beginninigs in financial protection against quality, such as reasonable teachers' salaries and school impoverishment from ill health-many challeinges constructioni costs, as well as adequate domestic-and remain. Helping countries achieve the MDGs has no1w external-resources. It will also require addressing bot- taken center stage, as has addressing inequities in access tlenecks that may reside outside the formal educationi to and the quality of health services, and the growing sector. In fiscal 2002 the Bank helped countries mobi- burden on poor people of noncolIlmunicable diseases. lize domestic resources for education through active For example, an adaptable program loan for nutrition support for the PRSP process. in Senegal was approved this year to help mothers 64 The World Bank Annual Report 2002 prevent, rather than treat, children's malnutrition. In of AIDS vaccines in developing countries, and the reproductive health, the prevention of sexually trans- Global Alliance for Vaccines and Immunizationi, a key mitted infections continued to figure prominently. pLiblic-private partnership that works toward improved Finally, emphasis on strengthening health systems as access to existing childhood vaccines and the develop- a cornerstone for improved HNP outcomes continued ment of new ones (see box 4.4). - to grow. Communicable Diseases PROTECTING THE MOST VULNERABLE Significant support was directed last year toward com- Natural or man-made crises can devastate poor fami- E bating HIV/AIDS, TB, malaria, and other communi- lies, robbing them of security, income, and productiv- cable diseases, amounting to $320 million. A second ity. Social protection, such as risk reductioni and miti- Multicountry HIV/AIDS Program (MAP) for Africa gation, and coping measures are essential to protecting was approved in fiscal 2002, earmarking another the vulnerable. Such measures seek to help individuals, p $500 million in IDA resources for projects that support households, and communities better manage risks, and the scaling up of national HIV/AIDS prevention and to provide support to the critically poor. In fiscal 2002 m care programs. In fiscal 2002 the Bank appointed its these measures helped countries build viable old-ageo first Global HIV/AIDS Advisor, who will be responsible for intensifying the Bank's operational work in the field and for representing the Bank in the global movement of governments, communities, private companies, development agencies, and civil society groups deter- -. _ mined to reverse the course of the epidemic. More than 30 countries are benefiting from Bank financing for the adoption and expansion of the TB control strategy known as DOTS-directly observed treatment, short course. More specifically, the second : TB Control Project in China builds on a previous oper- ation that demonstrated the successful application of #K DOTS on a massive scale. This project is also innova- tive: it involves cofinancing from the United Kingdom's Department for International Development to reduce the interest burden on the Chinese government. In addition, support for rolling back malaria through Bank operations includes some 45 active projects, and the Bank is helping to ensure malaria is a priority in its work through sectorwide approaches (SWAPs), PRSPs, the Comprehensive Development Framework, and HIPC.n , The Bank plays a key role in well-established com- municable disease partnerships-such as the Joint / United Nations Programme on HIV/AIDS (UNAIDS), , , Roll Back Malaria, and Stop TB-that have been essen- tial in keeping the world focused on these challenges. Other communicable disease partnerships remain a priority for the Bank, including collaboration with the World Health Organization (WHO), U.N. agencies such as UNAIDS, bilateral donors, and the private sec- - tor, including foundations. Through the Development Grant Facility the Bank is steadfast in its support to the International AIDS Vaccine Initiative (IAVI), which - "' has been instrumental in the development and testing Social Protection: reducing vulnerabiliry for the young and old. Chapter 4 Thematic Perspectives 65 - - - -! BOX 4.4 PARTNERSHIP AGAINST HIV/AIDS Only with concerted effort can the world hope to * The Bank is a founding member and supporter, win the fight against HIV/AIDS. While the unfinished through the Development Grant Facility, of IAVI. agenda is significant, there is reason for hope: IAVI is promoting the development of HIV/AIDS vaccines for developing countries. F : * More governments than ever before have con- * The Bank has worked with UNAIDS and the Inter- OF fronted HiV/AIDS publicly over the past year, dis- national Partnership against AIDS in Africa to sup- playing leadership, committing unprecedented port 16 African countries under the $1 billion MAR resources, and taking action. Another 15 countries are preparing programs for V * Global support has grown with the creation of funding. Similar support to Caribbean nations is the Global Fund to Fight AIDS, TB, and Malaria; benefiting from collaboration with UNAIDS, the new resource commitments by bilateral, multilat- Pan American Health Organization, the WHO, and eral, private, and philanthropic organizations; and other regional partners. The Bank has also worked the U.N. General Assembly and Security Council closely with the IMF and UNAIDS to help countries resolutions on HIV/AIDS. integrate HIV/AIDS support into HIPC and PRSP * The landmark U.N. General Assembly Special Ses- programs. sion on HIV/AIDS in June 2001 renewed the global * The International AIDS Economic Network-a part- commitment to cooperation amid a heightened nership of the Bank, UNAIDS, the U.S. Agency for awareness that funding from all sources needs to International Development, and the European increase substantially for the spread of HIV/AIDS Union-provides data, tools, and analysis to thou- to be halted by 2015. sands of researchers and practitioners worldwide * Following negotiations with UNAIDS cosponsors- for compassionate, cost-effective responses to the including the Bank-under the Accelerating Access epidemic. Initiative, several manufacturers of HIV/AIDS drugs have reduced their prices by 90 percent. protection mechanisms, develop equitable and incilu- undertaking social risk assessments in eight Latin sive labor markets, eliminate child labor, and provide American countries to determine the risks to which the social safety nets and social funds to reach vulnerable poor are exposed, the instruments they have available, groups. Lending for other social services and pensionis and the actions needed to reduce their vulnerability. was $1.44 billion. Lending has increased in Africa, Three specific vulnerable groups have been targeted: Latin America and the Caribbean, and Europe and working children, orphans and other vulnerable chil- Central Asia but has fallen in South Asia, the Middle dren, and the disabled. Work to help these vulnerable East and North Africa, and East Asia and Pacific. Iden- groups is already progressing in all three areas in other tifying how to provide more effective risk protection to regions, with pilot studies on child labor in Guatemala, households outside the formal economy is an impor- Morocco, and the Republic of Yemen; a workshop on tant part of our efforts. orphans, particularly those from Africa; and the estab- The Bank implemenited the social protection strat- lishment of the Norwegian Trust Fund for Disability egy that was adopted in September 2000. This included and Development. 66 The World Bank Annual Report 2002 Promoting Environmentally and Socially Sustainable Development During fiscal 2002 poverty reduction became, more than ever, associated with the prospects of peace and - stability in the world. Development in a sustainable . manner-through sustained growth, good governance, social inclusion, environmental responsibility, and cre- - - ation of opportunities for the poor-represents the -M 00k most effective path to ensuring long-term security. On the sustainable development path, the Bank i has focused over the past year on developing client- -MIT responsive sector strategies in environment, rural development, forests, water resources, and social de- velopment, while implementing the environment -_ strategy and scaling up conflict prevention and v postconflict reconstruction (www.worldbank.org/ s- ' > sustainabledevelopment). -; ' The Bank geared up for the World Summit on Sustainable Development (WSSD) held in Johannes- burg, South Africa, August 26 to September 4, 2002. Development is a long-term process that ultimately involves the transfor- Its flagship contribution to the Summit was the World mation of whole societies Sustainable development means not only Developttient Report 2003. The Millennium Develop- caring for today's world, but also trying to leave the planet a better place for our children and their children ment Goals (MDGs) provide a framework for collabo- ration on sustainable development and underpin the Bank's agenda at the WSSD (see box 4.5). quality of growth, and the quality of the global commons. It builds on the linkages between poverty ENVIRONMENTAL SUSTAINABILITY and environmient, stressing the areas of health, liveli- hoods, and vulnierability. The strategy is now being im- In fiscal 2002 the Bank launched a new environment plemented, and it includes tools to help integrate envi- strategy aimed at improving the quality of life, the ronment into development decisions such as country environmiental analyses, poverty-environmllenit analyses, and strategic environmental assessment. An enviroll- BOX 4.5 WORLD SUMMIT ON SUSTAINABLE mental mainstreaming fund supports regional activi- DEVELOPMENT ties applying this comprehensive approach (see www.worldbank.org/environmentstrategy). The World Bank, as the largest lender for sustain- The Environment Network focuses particularly on able development, is',fully committed to the goals the MDG of ensuring environmenital sustainability. of the WSSD, held in Johannesburg, South Africa, The Bank is exploring how countries can generate the August 26 to September 4, 2002. During fiscal 2002 resources they need through partnerships with the pri- the World Bank supported the preparatory process vate sector, government, donors, and local communi- of the Summit. Based on the common platform of ties. Work is also under way in critical countries on achieving the MDGs, the WSSD was a unique indicators such as water supply, sanitationi, forest man- opportunity to moveithe sustainable development agement, and infant mortality rates. agenda closer to implementation, adding coher- As an implementing agency for the Global Environ- ence to the gains corming out of the Financing for ment Facility and the Multilateral Fund of the Montre- Development conference in Monterrey, Mexico, al Protocol, the Bank has helped countries meet their and the Doha, Qatari conference on Trade and obligations under the global conventions on biodi- Development. versity, land degradation, ozone depletion, persistent organic pollutants, and climate change. The Bank Chapter 4 Thematic Perspectives 67 supports developing market mechanisms to reduce private foundations, and regional organizations. A far- greenhouse gas (GHG) emissions; the Prototype Car- reaching reformii program launched by the CGIAR in bon Fund is demonstrating how market-based carbon fiscal 2002 is increasing the relevance and inipact of emissions transactions can be implemented. The Bank its research through innovative programs and new is also helping countries identify potential carbon mechanisms to ensure that the quality of science meets nmarkets and other financing opportunities for GHG the highest internationial standards. Research at the offsets. CGIAR-supported Centers-Future Harvest Centers- is helping launch a rice revolution in West Africa K. FOCUS ON AGRICULTURAL GROWTH through the release of new rices for Africa, and a corn IL FOCUS ON AGRICULTURAL GROWTH variety bred for high-quality protein is being planted The Bank's future direction for rural development and on I million hectares in 20 countries. Per Pinstrup- poverty reduction was developed during fiscal 2002. Andersen, Director General of the International Food Agricultural growth was identified as a fundamental Policy Research Institute, a Future Harvest Center, won pathway out of poverty. The multidimensional nature the 2001 World Food Prize for efforts to improve food of activities and work across all rural sectors is rec- policies, a first for an agricultural economist. In a signal ognized as a key factor to achieving poverty reduction. of growing confidence in the system, the IFAD agreed The focus is on a more holistic, pro-poor, rural devel- to become a cosponsor of CGIAR. opment approach, enhancing returns to labor and land, and more effective agricultural investments. The SOCIAL DIMENSIONS OF SUSTAINABLE new emnphasis addresses the entire rural space, includ- DEVELOPMENT ing social, economic, and environmienital aspects of ru- ral development. It encourages broad-based stakehold- A range of participatory approaches to public expendi- er participation in project design and implementation, ture management has been developed to ensure greater moving away from working only with the central gov- accountability to citizens for public actions and out- ernment. A draft strategy that includes these issues will comes, including participatory budgeting, budget re- be presented for Board discussion in fiscal 2003. view and analysis, expenditure tracking, and perform- As a result of the crisis in the commodities market ance monitoring through the use of citizen report in fiscal 2002 that affected many developing countries, cards. With the advent of PRSPs, country clients and the Bank was called upon by client countries to con- Bank staff seek to better understand the distributional tinue development of new approaches and tools to deal impacts of policy reforms on the well-being of differ- with commodity risk management. The International ent stakeholders. In response, a "Guidance Manual" to Task Force on Commodity Risk Management, with help undertake poverty and social impact analysis its secretariat housed at the Bank, is exploring the of policy reforms was prepared during fiscal 2002 (see potential of market-based commodity price risk http://www.worldbank.org/poverty/). management-a type of price insurance that will Community-driven development, an approach that serve to mitigate exposure of developing-country pro- gives control of decisions and resources to community ducers to price shocks and the negative effects of price groups, is now an important priority in the Bank's volatility. In addition, the Bank is helping clients to business. increase competitiveness and build capacity to success- Bank staff began work on a social development fully engage in the WTO, and is advocating the reduc- strategy in fiscal 2002 aimed at reviewing and defining tion of Organisation for Economic Co-operation and the Bank's social development agenda, and at develop- Development agricultural subsidies. ing a program of action to help projects and programs The Bank also supports the Consultative Group better achieve poverty reduction. on International Agricultural Research (CGIAR) The events of September 11 put an increased focus (www.cgiar.org), a broad-based partnership com- on the Bank's work in conflict prevention and recon- prising the Food and Agriculture Organization of the struction, while demands for assistance for conflict- United Nations, the International Fund for Agricul- affected countries in the Bank's Europe and Central tural Development (IFAD), the U.N. Development Asia region and Africa region have continued to be Programme, 22 developing and 21 industrial countries, strong. In fiscal 2002 the Post-Conflict Fund approved 68 The World Bank Annual Report 2002 over $13 million, including funds to Afghanistan to People's Policy, and the Physical Cultural Resources support the reconstruction strategy, and to the Afghan Policy have been revised after extensive public consul- Interim Administration. tations and are expected to be presented to the Board of Directors in fiscal 2003 (see www.worldbank.org/ SAFEGUARD POLICIES safeguards). Safeguard policies, incorporating environmental prin- SCIENCE AND TECHNOLOGY ciples, are designed to protect the interests of third par- ties from adverse impacts of Bank-assisted projects. A Strategic Directions Paper "Science and Tech- They have become a cornerstone of the Bank's poverty nology in Development" was produced; it reviews reduction efforts. In fiscal 2002 the Bank continued to the main policy options for improving science and improve its safeguard systems with a number of new technology systems in developing countries, partic- initiatives. In December 2001 the Involuntary Resettle- ularly through greater coordination of existing ment Policy was revised and includes safeguards to programs. address and mitigate the impoverishment risks. Its an- The Bank was also active in internationial scientific nex describes the elements of a resettlement plan and assessments, such as the Intergovernmental Panel on a resettlement process framework. In addition to the Climate Change and the Millennium Ecosystems Resettlement Policy, the Forest Policy, the Indigenous Assessments. Chapter 4 Thematic Perspectives 69 Supporting Private Sector Development and Infrastructure Private initiative plays an important part in the quest ! for poverty reduction. While private capital flows to __ emerging markets remain vastly larger than official development assistance, there has been a downward e trend in net long-term private flows to developing i countries. This has been due in part to crises in emerg- T71 ing markets and to a general economic downturnii The World Bank promotes the development of pri- vate initiative through its Private Sector Development and Infrastructure Network (PSI), which supports the institutioni's commitmenit to the Millennium Develop- ment Goals (MDGs). The core of the network's activi- ties is consistent with the Bank Group's corporate strat- egy for achieving these goals. The activities rest on the - twin pillars of building the investment climate and em- n__ powering poor people. New too/s developed by the Bank, such as the private sector guarantees for IDA countries, are encouraginig private Investment PRIVATE SECTOR DEVELOPMENT STRATEGY- HARNESSING PRIVATE INITIATIVE responsibility for ensuring access to affordable basic Much of this approach is captured in the World Bank services such as health and education. Group's private sector developmenit strategy, designed to better harness private initiative for growth and SOME KEY INSTRUMENTS poverty reduction. In February 2002 Executive Direc- tors of the B3ank Group gave their support to the strat- Consistenit with the directions of the private sector de- egy, following a year of dialogue and consultation dur- velopment strategy, the Bank has been developing an ing which comments and feedback were elicited from a array of new instruments and programs to support its broad range of constituenicies. Poverty is reduced when objectives. Investmenit climate assessments are being investment climates are improved and the reach of carried out with the aimi of hav'ing a catalytic impact markets can be extended to provide greater job and on private flows and spurring greater private sector ini- income opportunities for poor people. tiative to benefit the poorest. An assessmenit has already The strategy acknowledges the centrality of infra- been completed for India and 15 more are currently structure to poverty reduction, and encourages con- under way. tinued private sector participation while fostering Other important instruments being pursued in- stronger regulatory regimes. Nearly 3,000 regulators clude output-based aid (OBA) pilots. OBA contracts from 115 countries have attended formal regulatory shift the responsibility for service delivery to private training programs supported by PSI, the World Bank operators by linking the disbursemenit of aid to actual Institute, and external partners. These efforts are con- provision of the service. The Bank has contributed to tributing to more effective regulation of infrastructure the design of OBA pilots in most regions and sectors, in client countries, with positive impacts on the flow of including a water project in Cambodia, an electricity private investment to improve essential infrastructure project in Mozambique, road projects in India, tele- services. The regulatory approaches beilg supported communications projects in Nepal, and rural multi- make an important contribution to the broader pover- sector projects in Bangladesh and Mauritania. ty and governance agenda. This also points to the criti- Internally, organizational inniovationis such as the cal role of the public sector in fostering an enabling establishment of a number of joint World Bank-lFC climate for private sector development, and to its departments or Global Product Groups are helping to 70 The World Bank Annual Report 2002 leverage the impact of World Bank Group operations VS 'T , j At' in sectors with heavy private sector involvement. These ; R - - joint departments cover oil, gas, and mining; infor- mation and communications technology; small and medium enterprises; and private sector advisory i. , services. An evaluationi of the joint model will soon b)e carried out. EMBEDDING NEW APPROACHES AT THE COUNTRY LEVEL Considerable attention is being given to embedding these new approaches in the Bank's country work through country assistance strategies (CASs) and Poverty Reduction Support Credits (PRSCs). Private i sector development and infrastructure issues have I'- - - been well positioned in cross-sector activities across -|1 the Bank. PSI staff are integrated into multisector m teams. In Uganda, for example, a PRSC covers roads and Young boy fetching water at a small town water Installation in Hetosa, water and sanitation along with health, education, and Ethiopia, public governance, underscoring a new broad-based or multisector project approach. What this and many other initiatives like it show is the direct link between The Energy Sector Management Assistance Pro- infrastructure initiatives and poverty reduction as gramme, a global technical program supported by the called for in the MDGs. Bank, the U.N. Development Programme, and others, A Business Primer Fund has also been set up to is helping to build consensus and provide policy advice spur work on cross-sector issues. PSI has established on sustainable energy development to governments. partnerships with different country teams to enhance The Water and Sanitation Program, an internation- its support for the preparation of Poverty Reduction al partnership to help poor people in developing coun- Strategy Papers. Such efforts are currently under way tries gain access to safe drinking water and sanitation with poverty reduction strategies for the Democratic services, is focusing its efforts on policy reforms and Republic of Congo, C6te d'lvoire, Ethiopia, and Nige- institutional change in the water supply and sanitation ria. The network is also coordinating upstream inter- sector. From a health perspective, its Global Initiative ventions in key CASs in China, Colombia, Mexico, for Public-Private Partnerships in Hand Washing is Pakistan, the Philippines, the Russian Federation, and catering to the huge unmet need for hand washing Thailand. with soap in poor communities in developing countries. Transportation remains central to many potential INFRASTRUCNURE gains: with roads, people have access to markets, schools, health facilities, and a host of other services. The MDGs do not specifically mention key areas In March 2002 the Bank approved $315 million to of infrastructure sucl as electricity, transportation, support physical and management improvements of and telecommunications, but infrastructure remains transportation networks in India. The Mizoram State central to achieving the goals. The provision of infra- Roads Project and the Kerala State Transport Project structure is also central to building the climate for will expand and rehabilitate transportation systems investment and to investing in poor people and and help strengthen the capacity of the respective state empowering them to participate in development. road agencies to manage and deliver quality road serv- The Bank is intensifying efforts in a wide range of ices. The government of India strongly supports the infrastructure initiatives. provision of basic infrastructure as a priority to help Chapter 4 Thematic Perspectives 71 boost the long-term economiiic growth needed to re- In fiscal 2002 the Bank adopted an information duce poverty and create opportunities and access for and communications technology strategy, which guides communities. And in Brazil a $209 million World Bank the formation of its telecommunications policy. In loan for the financing of the Sao Paulo Metro 4 Line December 2001 the Bank approved a $22.6 million Project, approved in January 2002, is supporting credit to the government of Nepal to help finance the Sao Paulo's urban poor. Telecommunications Sector Reform Project. The proj- ect specifically targets low-income, rural, and other Figure 4.1 Lending for Infrastructure by Theme, disadvantaged people, and will provide them with Fiscal 2002 telecommunications and information services, often Share of total new commitments of for the first time. This project strongly underscores the $5.7 billion use of OBA outlined above. Trade & \Vorld Bank guarantees are also playing a signifi- Integration 1% cant role in catalyzing private capital flows to several Human Rule of Law 1% large infrastructure projects in developing countries. Developm2n Sector Development 27% Supported by a partial risk guarantee, the Haripur Power Project in Bangladesh was commissioned in Management December 2001, adding 360 megawatts to the country's SociaA generating capacity. The total cost of the project was Protection & $176.5 million. By mitigating government performance Risk risk, the partial risk guaranitee allowed Bangladesh to Management catalyze more than $115.6 millioni of private financing Public Sector rban in this transaction, with a 14-year tenure. Governance 9% , \ Development Finally, the Bank continues to place much atten- Einn & v < ' "\ / 23% tion on the effectiveness of development assistance. Environmental & Natural Resource - Rural Its activities to provide people with access to financial Management 9% Development Social Development 11% & Gender 10% Figure 4.2 Lending for Infrastructure by Sector, Figure 4.3 Net Long-Term Resource Flows to Fiscal 2002 Developing Countries, 1992-2001 Share of total new commitments of (billions of dollars) $5.7 billion 200 Education 1%- Agriculture 1% Industry & Trade 7% Finance 1% 150 Foreign direct investment Health & Other Information & 100 Capital markets Social Services 3% Communication 1% 100 50 Sanitation X _ tTransportation cal ows Protection 8 _ %X 4 1992 1993 1994 1995 1996 1997 1998 1999 2000a 2001h Protecti on 8°/ . < ~~-50 Law & Justice & a. Preliminary. Net long-term resource flows are defined as net Public liability transactions or original maturity of greater than one year. Administration b. Estimate. Source: World Bank. 2002. Giobal Development Finance 2002. Washington, D.C. Energy & Mining 27% Note: Numbers do not add to 100 percent because of rounding. 72 The World Bank Annual Report 2002 services are a case in point. The Consultative Group donor-led peer reviews of the institutional policies, to Assist the Poorest (CGAP), a consortium of 29 bilat- practices, and processes of 17 multilateral and bilateral eral and multilateral donor agencies supporting micro- donor agencies to improve microfinance operations finance in developing countries, is currently facilitating and donor communications. The strategic reviews are an initiative on aid effectiveness using microfinance as expected to yield lessons on improving the effective- a test case. Over the next year CGAP will coordinate ness of all areas of development assistance. Chapter 4 Thematic Perspectives 73 Building Strong Financial Systems A robust finanicial system is a preconditioni for a sound , - investment climate, growth, and the reduction of Fi poverty. The loss of over $1 trillioni in developing-- countries as a result of banking crises in the 1980s and ( 1990s is equal to the total flow of official development assistance from 1950 to today. This underscores the priority of helping countries build stable financial systems fortified by compliance with international standards and diverse financial institutions and ._ iinstrumen ts. As the global economic downturn was accelerated l* by the events of September I I and their aftermath, x - capital flows to emerging markets fell sharply and only - - recovered following U.S.-led growth in early 2002. Slow x growth worldwide and the financial crisis in Argentina - have provided the impetus for many countries to take -- new steps toward improvinig their investmenit cliimiates, / _________________; _ restructuring the enterprise and bankiing sectors, and strengthening finanicial supervisory agencies. People lining up at Banco Postal, a joint venture between the Post Office and the largest private bank (Bradesco) in Brazil. The new entity has offered banking (and payment) services through postal branches in BANK PRIORITIES remote and poor areas of the country since March 2002. Where financial crisis has occurred in client countries, fiscal 2002, bringing the total to 55 assessments since the Bank has taken action: in response to lurkey's twin the program's inception in May 1999. An additional bankinig and currency crises, the Bank has continued to 24 countries are expected to participate in the program assist the governmllent in restructuring its banking sys- in fiscal 2003. These assessments provide a wealth of tem by strengthening the bank resolution framework; informationi, as well as recommendations for follow- improvinig the legal framework for creditor rights, up, to national authorities. As a result, countries in- bankruptcy, and corporate debt workouts; and imple- creasingly seek technical assistance for their financial imenting a comprehensive restructurinig and privatiza- sectors. (See www.worldbank.org/finance/html/ tion of state-owned banks. fsap.html.) The most important contribution of the Bank is The demanid for preparation aiid follow-up assis- on the developmental side of the financial sector: tance related to the FSAP and the Reports on the Ob- building the foundations to ensure not only a more servance of Standards and Codes (ROSCs) goes beyond stable system but also one that allocates credit to its the resources and the expertise that any single institu- best uses, thereby maximizing growth and poverty tion can provide. Recognizing this, the Bank, in part- alleviation. The Bank's programs also strive to broaden nership with the IMF, Canada, the Netherlands, access to finanicial services, for example, by small and Switzerland, and the United Kingdom, has launched mediumii enterprises. Through the Financial Sector As- the Finanicial Sector Reform and Strengthening Initia- sessment Program (FSAP), the World Bank and Inter- tive. This new effort, to which $51 million has been nationial Monetary Fund (IMF) diagnose vulnerabili- committed over four years, puts in place a systematic ties and identify developmental priorities in financial mechanismii for responding to countries' technical assis- sectors and assess the observance of several interna- tance, capacity-building, and information needs, and tional supervisory and regulatory standards and codes. provides a framework for the international community Twenty-one counltry assessmenits were undertaken in to coordinate more effectively. 74 The World Bank Annual Report 2002 Since the terrorist attacks of September I 1, the BOX 4.6 PAYMENT SYSTEM REFORM international communiity has placed increased importance on the fight against money laundering and The reform of payment systems (the mechanisms abuse of the financial system to support terrorism. for moving funds, payments, and money among Threats to financial system integrity pose developmen- financial institutions in countries) throughout Latin i . tal risks for client coulitries, since growth can occur America and the Caribbean has been taking place" only if financial systems serve the legitimate needs of over the last two years, driven by the Bank-led' the many rather than the corrupt needs of the few. Western Hemisphere Payments and Securities Clear- The Bank, working closely with the IMF, has signifi- ance and Settlement Initiative (WHI). WHI was cantly stepped up its efforts to help member countries launched in 1999 by the Bank in partnership with identify weaknesses in their legal and institutional the Centre for Latin American Monetary Studies capacity in this area and to address the problems following a request from the Western Hemisphere through technical assistance. The Bank has provided finance ministers. Its objective is to describe and assistance to over 20 countries in reviewing anti- assess the payment systems of the Western Hemi- money-laundering and counterterrorism laws and sphere for the purpose of improving their safety, - - regulations, and has helped establish the institutional efficiency, and integrity. capacity to carry out effective programs in these areas. The Initiative has uridertaken a number of ac- The Bank is also leading the development of an inter- tivities to strengthen the payments arrangements national technical assistance coordination mechanism in Latin America and the Caribbean, including that will contribute to more effective identification and the development of descriptive reports ("yellow delivery of technical assistance, working with the IMF, books") and a methodology for assessing payments Financial Action Task Force, the U[nited Nations, the systems and securities clearance and settlement sys- Egmont Group (an informal organization of financial tems at the same time; the delivery of recommen- intelligence units-the cornerstone of national anti- dations to country authorities; and the creation of money-launderinig programs), regional development a Web-based resource for all governments in the banks, and other partners. region (see www.ipho-whpi.org). The direct result of this work has been improved payments arrange- BUILDING THE CLIMATE FOR INVESTMENT ments in Argentina, Brazil, Chile, Colombia, and AND EMPOWERING POOR PEOPLE Peru, and major reform programs in The Bahamas, Barbados, El Salvador, Jamaica, and Trinidad and Financial systems that allocate credit to the private Tobago. sector efficiently can increase access of the poor to fi- .- _ e - - - _ nancial services. CouLntries that allocate their resources well will prosper. In Jordan the Bank helped establish a To help countries overcome the low interimiedia- secondary mortgage facility, resulting in impressive tion trap-where the formal financial system services growth and increases in the affordability of residential only large firms, leaving SMEs with little access to mortgages. A Bank credit to the Federal Republic of finanicial services-the Bank is tapping the potential Yugoslavia has helped the government begin liquida- of informiation technology. For example, the World tion of 60 percent of the banking system, including Bank and the Indian post office are collaborating to in- four of the largest banks. This restructuring will im- vestigate ways in which information technology can be prove the environment under which banks operate, used to help overcome poverty in remote, rural areas of thereby boosting financial intermediation, encouraging India by establishing public-private partnerships that domestic savings, and generating the necessary work- could use the vast infrastructure of the post office as a ing capital and investment finance needed for private conduit for the delivery of basic financial products and sector growth and job creation. In Colombia the Bank services: delivering niicrofinance services at lower costs, worked to establish an effective corporate debt restruc- providing SMEs with access to finance and markets, turing system, enabling the resolution of banking asset and helping the poor manage risk through offerling problems and laying the groundwork for an improved pension and insurance products. This platform is also investment climate (see box 4.6). expected to be extended to nonifinancial activities such Chapter 4 Thematic Perspectives 75 as the provision of pricing and other information, and strengthening financial supervision and the regulatory e-government-the use of information and communi- framework. In Brazil, for example, the Bank is helping cations technologies to improve efficiency, effective- the authorities improve the legal and incentive envi- ness, transparency, and accountability. ronment for financial services, focusing on strengthen- In addition to its FSAP and ROSC assessments, ing the central bank's functions and dealing with cor- the Bank works at the regional and country levels, porate governance and financial contract enforcement. 76 The World Bank Annual Report 2002 Promoting the Rule of Law The rule of law is essetntial to equitable economic de- T! '!!" .' . !!!il' I' '!!!! ' velopment and sustainable poverty reduction. Weak legal and judicial systems undermine the fight against poverty on many fronts: they divert investment to mar- 081 kets with more predictable rule-based environments, deprive important sectors of the use of productive as- sets, and mute the voice of citizens in the decisionmak- ing process. Vulnerable individuals, including women and children, are unprotected from violence and other forms of abuse that exacerbate economic inequalities. Ineffectual enforcement of laws engenders environ- mental degradation, corruption, money laundering, and other problems that burden people and economies 3 I . - i \ around the world. *7'' - The diversity of the world's cultures, traditions, and ; _ political systems does not allow for a single recipe for In July 2001 the Legal Vice Presidency sponsored its second global con fer- legal and judicial reform. The needs of each country ence on law andjustice in St Petersburg, Russia. Judges, lawyers, and other participants from over 75 countries discussed "Empowerment, must be assessed individually, involving key stake- Security, and Opportunity through Law and Justice." holders in the public and private sectors. With com- prehensive and appropriately tailored and sequenced reform initiatives, the Bank can succeed in assisting its institutions for a market economy. In countries includ- member countries to systematically strengthen their ing Georgia, Indonesia, Lithuania, the Philippines, Sri rule of law. Lanka, Tunisia, and Uganda, the Bank has helped to In the past year legal and judicial sector assessments improve financial and private sector capacity through were completed with Bank assistance in Mongolia, new central bank and commercial banking legislation, Romania, Vietnam, and the Federal Republic of capital markets initiatives, and corporate and commer- Yugoslavia. Several more assessments are presently in cial legislation; to facilitate the emergence and expan- progress or planned. Bank-financed legal and judicial sion of private sector firms and the efficient liquidation development projects continue to increase, supporting of irretrievably insolvent firms; and to ensure appro- activities such as law reform, court modernization, priate regulation of the private provision of public training for judges and court personnel, and legal edu- services. These activities are supported by the Bank's cation. Commercial mediation centers and pilot courts analytical work identifying the effect of legislation, have been established in countries including Argentina, regulatory arrangements, and institutional capacity Ecuador, Mongolia, and Sri Lanka. on the investment climate; and by the Bank's in-depth, New lending for stand-alone projects in legal and country-by-country, financial sector assessments, legal judicial reform in Colombia and Mongolia, financed and judicial sector assessments, insolvency and creditor by Learning and Innovation Loans, amounted to rights systems assessments, and corporate governance $10 million for fiscal 2002, with another $104 million and securities market assessments. in preparation for fiscal 2003 projects in Argentina, Fair and efficient legal mechanisms for debt resolu- Cambodia, El Salvador, Guinea, Peru, and the tion play a pivotal role in fostering commercial confi- Philippines. dence and enabling markets to more accurately price, manage, and resolve default risk, while encouraging IMPROVING THE LEGAL CLIMATE enterprise rehabilitation, job preservation, and transfer FOR INVESTMENT of assets to more efficient market users. Following the 1997-98 financial crises in emerging markets, the Improving a country's climate for investment re- Bank led an international coalition in developing the quires strengtheninig the legal regime and its related Principles and Guidelines for Effective Insolvency and Chapter 4 Thematic Perspectives 77 Creditors Rights Systems. These principles, finalized in Opportullity through Law and Justice." The Europe April 2001, are an important milestone in promoting and Central Asia Regional Forum focused on law and international consenisus on a uniform framework to as- justice issues specific to transition countries. In March sess the effectiveness of insolvency and creditor rights 2002 a regional conference in Marrakech, Morocco, systems and to guide system reform and benchmiiarkiing cosponsored by the Legal Vice Presidency and the in developing countries. In 2002 under the joint Bank- U.N. Development Programme, addressed the topic Fund program to develop ROSCs, the Bank completed "Strategies for Modernizinlg the Judicial Sector in the a series of pilot country assessmenits based on these Arab Countries." Most recently, in Washington, D.C., principles in Argentina, Brazil, the Czech Republic, the Bank convened a second meeting of the Inter- Lithuania, the Philippines, the Slovak Republic, South national Advisory Council on Law and Justice, a Africa, and Turkey. Assessments were also substantially couLncil of world-renowned legal experts and jurists completed in the Russian Federation and were initiated that advises the Bank on legal and judicial reform in Croatia, India, Morocco, Thailand, and Ukraine. strategy, including empowerment of the poor. (See www.worldbank.org/ljr/.) ENHANCING ACCESS TO JUSTICE FOR THE POOR USING LAW FOR SUSTAINABLE Access to justice is a key concern in the Bank's law and DEVELOPMENT justice efforts. Providing legal services for the poor is As a major mobilizer of resources to protect the global one way to help break down barriers to justice. In the commllonis, thc Bank continiues to innovate with new past year grants made uLnder the Bank-adminiistered legal instrumllents and to promote improved legislative Japan Social Development Fund finaniced legal aid and models and legal knowledge sharing for sustainable other services for poor woomen in Ecuador, Jordan, development (see box 4.7). and Sri Lanka. 'T'he Bank has led the way with innovative interna- Access to justice has also received significant atten- tional legal instruments under the Montreal and Kyoto tion at Banik-sponisored events over the past year. The Protocols. In 2002 the Montreal Protocol's Multilateral second global conferenice organized by the Legal Vice Fund began finanicinig the total phaseout of chloro- Presidency, held in St. Petersburg, Russia, in July 2001, fluorocarbon (CFC) production and consumption in addressed the theme "Empowermient, Security, and certain economiiies. The amoullt of $35.8 million was approved for the total phaseout of CFCs in The Bahamas, Malaysia, Thailand, and Turkey. A new voucher-based disbursemiienit mechaniism enables the W > i . ,A .i_i | Bank, as an implementing agency, to cost-effectively i make grants available for the smaller activities carried out uliider the new approach. 'I'he Prototype Carbon Fund (PCF) moved fully into its operational phase in 2002. The PCF aims to purchase certified emission reductions from projects = , ^~~~I0- _ that reduce greeinhoLuse gases; conitributors to the PCF -ij] _ T 1 hope to use the purchased emission reduction1s to off- -1 _ , set the targets agreed on under the Kyoto Protocol. In 2002 innovative purchase agreemiienits were signed with Chile and Uganda, countries eligible under the proto- col's Clean Developmenlt Mechanism. These purchase _ D ,-_ 7 < y a agreements are being used as a model by other organi- }zations and entities to address the requiremenits of the Kyoto Protocol. Legal clerks of the Galie District Court, Sri Lanka, are umplemieniting . . model court administrative reforms as part of the Legal and Judicial I[he sustainablity of fish stocks is a cause of i - Reforms Project. creasing internationial concern in the field of natural 78 The World Bank Annual Report 2002 BOX 4.7 LEGAL KNOWLEDGE SHARING ON THE WEB The Bank contributes to Knowledge sharing on sub- and deposit insurance laws for jurisdictions around.the stantive law and legal, developments through a number world. of Web resources. The Legal and Judicial Reform page on' the Bank's' The Global Insolvency Law Database (www. Web site (www.worldbank:org/Ijr/) features online' worldbank.org/gild) is'a seminal forum for comparative discussions of key legal and judicial reform therm'es, research and dialogue, on questions of corporate insol- information on Bank projects, a judicial indicator vency and creditor rights systems, primarily legislative database, a consultant database,.and guided links to, and regulatory reforn, relevant public institutional related sites. capacity building, and[ related policy issues. The Global Development Gateway (www. The Global Banking Law Database (GBLD) developmentgateway.org), an interactive Web portal (www.gbld.org), a joirhlt Bank-Fund project, is search- designed to serve as a virtual forum for krlowledge able by jurisdiction anid standard themes based on the sharing on major development topics, projects, and Basel Committee Core Principles of Effective Bank programs, receives substantial content and support Supervision. GBLD pr6vides the first electronically ac- from the Bank, including for the Gateway's pages on . cessible collection of commercial banking, central bank, Environmental Law and Judicial and Legal Reform. ., resources legislation. The Bank has developed a Justice, and Development series of moniographis handbook, Legislatingfor Suistainable Fisheries, in recently launched by the Legal Vice Presidency. collaboration with the U.N.'s Food and Agriculture In June the Bank's Legal Vice Presidency, together Organization. The handbook introduces the key aims with the U.N. Environiment Programme, cosponsored a and provisions of two major international conventions conference in Montreal, "Sustainable Justice 2002: lImple- that are aimed at prornoting sustainable fisheries, and menting International Sustainable Development Law." it provides a toolkit of drafting techniques that coun- The conference's recommendationis on sustainable de- tries may use to transform these provisions into na- velopment law issues will be presented at the World tional law. The handbook is the first in the new Law, Summit on Sustainable Development in Johannesburg. Chapter 4 Thematic Perspectives 79 '4 4 Chapter 5 Gross Domestic Product per Capita Index Regional Perspectives 1991-2001 Africa East Asia and Pacific Map of Country Offices 200 200 182 and Borrower Eligibility 82 150 150 ~ Africa 84 100 100 100 100 100 East Asia and Pacific 89 so 50 South Asia 93 0 0 0! 8, CD,-0 Europe and Central Asia 98 Latin America and the Caribbean 103 South Asia Europe and Central Asia 200 200 Middle East and North Africa 108 0so 142 150 100 1 - - 100 93 100 100 50 50 0 0 Latin America and the Caribbean Middle East and North Africa 200 200 150 150 1 0 ~~~~~~100 108 0114 100------- 50 50 Figures for the number of people with HlV/AlDS pre- sented in the Fast Facts boxes in this chapter repre- 0 0 sent UNAIDS estimates as of December 2001 and are 0 a, 0 ~~~~~~~~~~~based on UNAIDS regional definitions, which differ N - N ~~~~~~~~~~somewhat from those used by the World Bank. For Source: World Development indicators database, more details, visit www.unaids.org. (part of the East Asia &W~~~~~~~~~ad Paii r- m yegi W t LainA erica an b 2J F ,. oomm, 2 o I@+Pifoli 'oj 2 i o ox ~~~~~~~~~~~~~~~~~~~~~. .......t ....... C. J-/ d k N P .~~~~~~~~~ontis elgil fo BDud onl fJUJ Contie eligbl (partben of IBRD Eand IA fnsia** J dnd Pacific for , : only YlSlo .*wU " *** ~~Inative IaDA-ealigic2ble/ counrie ~~~~~~~~~~~fie of th Worl Bank4 otoloo rlcs$2. ilolt, ,4 ' Bai X~~ ~ ~~~~~~~~ Ofie with Conr Di.rectorpresent Wffiu°~~~~~~~~ ~~~~ ~ ~~~~~~~~~~~ Bonoo r R 4, '0 @( l % [l R B de Venezuela O. , 'Ž-fr. 3(fi)~~~~~~~~~~~~~~~~~~~~- ( Co nre e l i g iblea fo BD ud ol (pa Ofi e of the Eastd Asaank. RBd o- ffce-wih outr Diethe Caribbean Middle East and Europe and . IBRD 31937 North Africa Central Asia FY02 New Commitments FY02 New Commitments IBRD $451.8 million IBRD $4,894.7 million IDA $102.7 million IDA ' I$628.9 million Portfolio of Projects $5.4 billion n Portfolio of Projects $16 billion t 8--~~~~~~~~~~~~~~~~~~asa Fede-ac- 0~~~~~~~~~- ' \ , aF_rtk7 wa nt_ P. Ch re A * East Asia and m oc a1 g oS bt lan 9; bimis§ 0;R China Rlpl , Pacific S r Algelia 1 \ Alab Rept ~ <\ tPaRlsv O lPa-|latQscffi ) t t FY02 New Commitments f1y-rtX t \ rt Egypt \\ * f _\g ;ddsibt & / * IBRD $982.4 million Maurit$udLania moo ~_8 5ffi8-< 0j t 8 Ind, a IDA $791.2 million * 5. H~~~~ ~ ~~~~~~~~~~~~ana X 0 w; Guinea-His an Portfo Nigeri 0 * e Stares o Mlio ofronesi N0ge,9cts 25Ma snlli,olanu '+~~~~~~~~e aa a**t"Suhsa* i EMPOWERING POOR PEOPLE The Bank continLes to support efforts in Africa to a X- -- I >f1., 'Countries - . ~ ' A ; _ Eligible for w ^,,. ~~~~~~~~~~~~World Bank Borrowing: E as$t A s I a a n d Pa Cific " C and partnerships play a large role in the effec- tiveness of this approach. During the fiscal year the 1 The East Asia and Pacific region was hard hit by Bank supplemented policy advice and technical C the global economic downturn of 2001. Growth support with nearly $1.8 billion in new loans, cover- W fell from over 7 percent to less than 5 percent. But a ing about 27 projects. The strategic thrust of Bank 1 quicker and more robust regional recovery appeared assistance continues to focus on building the cli- b to be under way by early 2002, supported by a mate for investment, improving public sector gover- ZiTEII [b stronger-than-expected recovery in major export nance, investing in poor people and empowering = markets like the United States and solid local private them, and protecting the environment (see box 5.2). consumer spending. A more balanced recovery rest- ing on increased exports and domestic demand ___j seemed likely. Political stability improved as new governments in Indonesia, the Philippines, and BOX 5.2 POVERTY REDUCTION STRATEGIES Thailand strengthened their mandates and their IN EAST ASIA-REGIONAL, NATIONAL, credibility with the public. China's still-robust econ- AND LOCAL b omy was pulling in imports at a near-10 percent pace in the first several months of 2002 and contin- In Cambodia, East Timor, the Lao People's ued as a bright spot in the regional export and eco- Democratic Republic, Indonesia, Mongolia, and nomic picture, enhanced by the anticipated impact Vietnam, programs are under way to develop of China's entry into the World Trade Organization nationally owned Poverty Reduction Strategy (WTO), the increased pace of its institutional re- Papers (PRSPs). Governments have taken the form program, and its emergence as a key center lead on a comprehensive strategy that draws of regional trade and investment flows. on participatory poverty assessments, consulta- The impact of the 2001 downturn on poverty in tions with civil society, and coordination with East Asia and Pacific was muted because growth fell donor partners. PRSP teams from these coun- most in countries with low poverty. Robust growth tries recently met in Hanoi at a conference in China and other transition countries, which con- sponsored by the World Bank, Asian Develop- tain the large majority of the region's poor, helped ment Bank, and U.N. Development Programme offset any widening income disparities. Still, a sus- to learn from each other's experiences. A tained regional recovery is important to counter the follow-up session shared lessons on integrating long-term trend of slow poverty reduction since gender issues into poverty strategies. In Viet- the mid-1990s-and to ensure that countries in nam local governments and communities are East Asia remain on track to achieve the Millen- taking the lead in developing their own targets nium Development Goals (MDGs). and action plans to meet the MDGs with Bank and Department for International Develop- WORLD BANK ASSISTANCE ment (DfID) support. In Mongolia and the Lao People's Democratic Republic, the Bank is carry- One of the Bank's primary objectives is to support ing out reviews of public expenditure, financial poverty reduction in the client countries, using management, and procurement to help under- country assistance strategies that are focused on the pin an improved budgetary focus on the poor. countries' development needs. Strategic alliances Chapter 5 Regional Perspectives 89 East Asia and Pacific Fast Facts Total population: 1.8 billion Population growth: 1% Life expectancy at birth: 69 years Infant mortality per 1,000 births: 36 BUILDING THE CLIMATE FOR INVESTMENT Female youth illiteracy: 4% Domestic business revitalization and recovery in pri- 2001 GNI per capita: $900Doetcbsns etazto ndrovymp- Number of pers ivin wD 1 l vate capital flows call for more emphasis on strength- ening the investment climate. The Bank is preparing a Note: Life expectancy at birth, infant mortality rate per 1,000 births, and female legal reform loan in Mongolia and is undertaking legal youth illiteracy are for 2000, other indicators are for 2001, from the World Devel- needs assessments in a number of countries, including opment Indicators database. The term gross national income (GNI) is now used instead of gross national product (GNP). Vietnam. In China the Bank is providing technical assistance on financial sector reform, access by small T~jfl~' Total FY02 and medium enterprises to financial services, govern- inmm i,Wts Disbursements ment bond market development, and securities market ,In8~.4mil~r~ IBRD $2,846.4 million regulation-reforms made all the niore urgent by Chi- (lE.2El:Ii,0:rj IDA $745.1 million na's accession to the WTO. To help regional competitiveness and to meet high- ; M. l*l:9:f..1 :S [J3Ip4IIqsI:g;SIae tech challenges, the Bank is investing in information _uipc~sSsS~m'y~u~p.1iiic.1. infrastructure, technology innovationi and adaptation, and skills development. It is sponlsoring country -; .^ ^ , , - # ^ r gFNw R Inniovationi Days as part of the global Development lv- -. . . t @ , r Marketplace-a competition encouraging innovation and creative partnerships among nongovernmental . A - 3 | 1 i - organizationis, businesses, and government. In Thai- land it is funding 16 proposals to increase access to in- t formation services in rural communities in order to help bridge the urban-rural digital divide. A new report analyzes the Republic of Korea's experielice with firmn in;novationi and its imiplications for public policy. The Bank carried out assessmenits of transportation and logistics in Cambodia, and in lagging regions of China, the Lao People's Democratic Republic, Mongolia, and '_-~ ,; - ~ Vietnamii, to identify ways to improve access to markets ; $ for low-income areas. IMPROVING PUBLIC SERVICES - AND GOVERNANCE The Bank's governance work focuses on decentraliza- A schoolgirl stidying in Ningxia Province, China, at a school whose village is benefiting from the Qinba Mountains Poverty Project, which is helping non, bulding subnational capacity, icreasing public the Chinese government improve the quality of and access to basic sector transparency and accountability, and foster- education. ing stakeholder participation in project design and implementation. Public expenditure reviews at the The region's effectiveness is enhanced by basing local government level are taking place in China and nearly one-half of the staff and all country directors in Indonesia. In I'hailand the Country Developmenit Part- the field. T'he Bank also increasinigly emphasizes work nership in Governance supports government efforts to at the subnational level. This shift helps deepen the improve the delivery of public services, strengthen gov- reach of reforms at the nationial level and reflects an i1- ermnienit decisionm1aking, and promote accountability creasing trend of subnational responsibility for service and transparency. delivery and finanicing in the region. An estimiated In China the Bank is working with the govern- 40 percent of the Philippines expenditures, 35 percent menit to update the Ministry of Finance's coimpeti- in Thailand (by 2006), and 25 percent in Indonesia are tive bidding guidelines by introducinig fraud and being delivered in this wvay. anticorruption measures. It is also helping to improve 90 The World Bank Annual Report 2002 Figure 5.3 East Asia and Pacific: IBRD and IDA Figure 5.4 East Asia and Pacific: IBRD and IDA Lending by Theme, Fiscal 2002 Lending by Sector, Fiscal 2002 Share of total of $1.8 billion Share of total of $1.8 billion Economic Management <1% Agriculture, Fishing & Environmental & Natural Public Sector Water, SaiatiForestry Law & Justice & Resource Management 6% Governance 7% Flood Proteitction & Public Administration Rule of Law 1% _| t 6% Rural - Tnotion \ 3Information & Development' nCommunication 1 % /20%\ Financial & Education 8% Private Sector Urban l Development Development 29% F 12 4% Finance 12% Human - Development lE ' Trade & \ / 13% - Integration 2% Energy & Mning Health & Other Social Development, Soc ial Protection & Social Services 14% Gender & Inclusion 10% Risk Management 8% Industrv & Trade 1% transparency in procuirement by establishing safe- promote efficiency, transparency, and effectiveness. In guards for World Bank projects and setting up new China the Bank has embarked on a unique partnership procurement procedures governed by a new bidding with DfID, the British government aid arm, to finance law. Civil servants and project staff were trained on the a tuberculosis (TB) control project aimed at helping new procurement framework. The Bank carried out China meet its global TB targets by 2005 by expanding about 30 postprocurement reviews once the new directly observed treatment, short course (DOTS) to at guidelines were in place. It has also used the Global least 90 percent of the country's population and identi- Distance Learning Network to conduct workshops on fying and treating 2 million infections. anticorruption approaches in other parts of the region, The Bank has also been channeling support to areas involving government and civil society in Bangkok, of extreme poverty. In Indonesia, to improve road con- Jakarta, Manila, and Singapore. ditions in its lagging eastern region, a regional trans- East Timor's Community Empowerment and Local portation project will serve 15 provinces in the eastern Governance Project has set up 400 village development islands. In Vietnam the Rural Electrification Project councils and funds more than 800 smaller projects. In aims to bring electricity to 2 millioni people in 32 pro- Vietnam two IDA credit agreements were approved vinces and 671 communities, one-third of which are this year for decentralized, participatory projects to designated as the poorest. A Global Development help reduce poverty in 979 poor communities and help Learning Center has been opened in Ningxia to trains- 3.4 million poor people by making investments in rural fer knowledge to one of the poorest parts of China. roads and markets, irrigation and water supply, basic education and health, and community development Protecting the Environment budgets-all based on the expressed needs of poor The Bank is funding studies of the links between households and communities. poverty and the environment in Cambodia, the Lao People's Democratic Republic, and Vietnam. It is fund- Reducing Vulnerability and Ensuring That Poor ing a forest conservation project in Papua New Guinea People Benefit from Growth in partnership with the Global Environment Facility. Bank strategy has evolved from supporting safety nets With one-half of the population in the region's major and crisis assessment to focusing on a social policy countries living in cities, urban air and water pollution framework that helps households manage social risks is an extremely serious problem-which the Bank is and enables the poor to participate in the benefits addressing through investments in envirotnmental of growth. Social programs emphasize community infrastructure and policy advice. In the area of empowerment and demand-driven approaches to sanitation, the Bank has promoted the creation of Chapter 5 Regional Perspectives Table 5.2 World Bank Lending to Borrowers in East Asia and Pacific, by Theme and Sector, Fiscal 1993-2002 (millions of dollars) 1993-97 1998-99 (annual (annual average) average) 2000 2001 2002 THEME Economic Management 40.6 280.0 0.0 0.0 4.8 Public Sector Governance 239.9 543.1 556.2 65.1 127.4 Rule of Law 85.2 19.2 9.3 3.8 20.3 Financial and Private Sector Development 1,476.8 4,441.8 627.6 310.9 512.8 Trade and Integration 193.3 333.2 36.2 40.0 43.3 Social Protection and Risk Management 165.0 708.4 55.2 239.4 136.6 Social Development, Gender, and Inclusion 163.1 273.5 72.1 248.0 173.0 Human Development 420.9 406.1 81.1 52.6 226.4 Urban Development 702.9 900.8 230.6 433.1 63.6 Rural Development 851.6 855.6 430.3 341.6 363.1 Environmental and Natural Resource Management 1,177.6 932.4 880.4 399.3 102.3 Theme Total 5,516.8 9,694.2 2,979.1 2,133.8 1,773.6 SECTOR Agriculture, Fishing, and Forestry 472.4 803.8 118.4 109.7 151.2 Law and Justice and Public Administration 398.9 1,066.5 590.3 255.3 115.2 Information and Communication 150.9 51.9 20.0 12.5 11.1 Education 426.4 411.6 84.4 14.8 134.6 Finance 253.2 3,180.8 36.3 89.6 219.2 Health and Other Social Services 248.3 581.6 118.4 217.3 243.8 Industry and Trade 274.2 1,569.8 28.8 151.8 9.4 Energy and Mining 1,502.5 517.0 640.5 142.2 314.5 Transportation 1,162.8 1,133.3 584.4 729.7 540.2 Water, Sanitation, and Flood Protection 627.1 377.9 757.7 410.8 34.4 Sector Total 5,516.8 9,694.2 2,979.1 2,133.8 1,773.6 Of which IBRD 4,389.6 8,800.9 2,495.3 1,136.1 982.4 Of which IDA 1,127.3 893.3 483.8 997.7 791.2 Note Lending is summarized in the I 1 main theme categories and 10 main sector categores in the new thematic-sectoral coding system, wlhich in- cludes 68 themes and 57 sectors. See table 2 2, page 30. Numbers may not add to totals because of rounding. autonom11ous water and wastewater companies and the 'I'he Banik is also working on rural development and establishment of tariffs and pollutioll charges-both land manlagemiient. A land management project in to reduce emissionis and as a meanis of finanicinlg opera- Cambodia was approved in iscal 2002 and aims to tion and mainitenanice to guarantce long-ternm sIs- assist the government in developing relevant policies tainability. [he largest share of the Banik's pollution6 and regulations while establishing titling programs, abatemiten1t investment has beeni lor wvater pollutioll. ulider whichi about I millioni titles will be issued. 92 The World Bank Annual Report 2002 A- ~ ~ ~ ~ i w - t Countries Eligible for -t - _ 8 _5i,. -',, World Bank Borrowing: S o u t h A s i a more than 30 percenit in Bangladesh, Nepal, arid ID& Pakistan. However, there are indications, too, that [1 South Asia is a region of tremenidous political, reli- poverty might have stagnated or even risen in Nepal 9941Dgm gious, ethnic, and linguistic diversity. With a popu- and Pakistan over the past decade. Equally impor- lation of 1.4 billion, South Asia has the world's tant in the fight against poverty are indicators of largest concentration of poverty and some of the health and education, which continiue to be low in worst human development indicators, particularly South Asia, with womnen particularly disadvantaged. for women. The economic and social progress of this region is of significance to the entire world and to the achievement of the Millennium Developmenit Goals. W'hile the region's growth performance has BOX 5.3 REDUCING POVERTY continued to be respectable in the aggregate at around 5 to 6 percent for over a decade and 5.4 per- India accounts for one-third of the world's poor, cent for 2001, it is still below South Asia's potential. so reducing poverty in this nation of over 1 bil- The aggregate figure also masks large variations in lion people is a challenge of global significance. performialce among the eight South Asian coun- The current Bank country assistance strategy tries, all of which face common challenges of accel- (CAS) for India focuses on both strengthening erating growth and huliianl resource development the enabling environment for growth and on by making their economilies more competitive and pro-poor interventions such as health and edu- better integrated with the world economy, and cation, rural development, and the expansiori expanding the provision of health and education of access to economic opportunities for poor services, especially for poor people. people. Events in fiscal 2002 influenced South Asia A program of analytical work on poverty is dramatically, from the opening up of Afghanistan under way in support of the latter interventions, to increased tension between India and Pakistan including country and state level poverty assess- and renewed hope of peace in Sri Lanka with the ments, and technical assistance in monitoring expected commencement of a peace process. In both access to social services and changes in Bangladesh a national election brought a new poverty levels. In January 2002 the Indian Plan- government to power in a poll read widely as a ning Commission and the World Bank gathered resounding call for change and better government. national and international experts to discuss the In Nepal the escalating Maoist insurgency brushed measurement of poverty and ways in which ac- aside earlier hopes of a dialogue, and uncertainty curacy of information generated by household across the region has had a negative impact on surveys could be improved. The government foreign investment. has also requested that the Bank help develop Poverty in South Asia-and its measurement- a project to implement a wide range of recom- is the focus of an energetic debate in the region mendations made by the National Statistical (see box 5.3). Poverty has continued to decline Commission to modernize India's statistical from over 40 percent in the mid- I 980s to current system. estimates of arouLnd 25 percent in India and slightly .- Chapter 5 Regional Perspectives 93 Total population: 1.4 billion Population growth: 1.8% Life expectancy at birth: 62 years Bangladesh and Sri Lanka, policy dialogue was the Infant mortality per 1,000 births: 73 focus of the Bank's program. Female youth illiteracy: 40% Afghanista"i's rapid transition from the status of a Num r of perss pivi w 0 .6 country in conflict to one of full re-engagement with Number of persons living with HIV/AIDS- 5.6 millionthBakasdmneanitnefoufrmak the Bank has demanded an intense focus from Bank Note: Life expectancy at birth, infant mortality rate per 1,000 births, and female staff (see box 5.4). youth illiteracy are for 2000, other indicators are for 2001, from the World Devel- opment Indicators database. The term gross national income (GNI) is now used Lendinig in Inidia is guided in every sector by ana- instead of gross national product (GNP). lytical work; in fiscal 2002 the Bank delivered both transportation and health sector reports, which were Total FY02 Total FY02 discussed with national and state authorities. A review New Commitments Disbursements of power sector reforms, where progress continues to IBRD $893 million IBRD $908.7 million be a challenge, drew on the experience of Orissa and IDA $2,615.4 million IDA $2,483.6 million other states, as well as international experience. _________ -- - ---~=-. Pakistan is in the third year of a comprehensive - .l r az] : ]t:| tr ~ ~-- i lX | program of reform designed to turn around deteriorat- U S iI ll 11- - - ing economic performance and restore the integrity of the country's institutions. BUILDING THE CLIMATE FOR INVESTMENT Building a healthy investmiienit climate has been an im- ;hw t ,/ W rQ . - / / portant Bank priority across the region. In India and 9 . e - O W _ t t JJ Pakistan, firms were surveyed in reviews of the invest- I - ^ > < .= >s 2bk m~~~~~~~~iient enivironment that helped identify the minc- ^ m j fstraints to private investment, as seen by investors themselves. Adjustmiienit lending in Pakistan, and at the state level in India (in Karnataka and Andhra Pradesh), explicitly supported policy reforms that seek to restore /{{/ y y ie 5 1 ~~~~~fiscal sustainiability, reform public expenditure m-an- agement, and improve the overall fuLnctioninig of governments to increase efficiency in the use of public resources and delivery of social services. -The provision of roads is a critical componienit of Approved in June 2002, the Emergency Education Rehabilitation and the Bank's poverty focus, improving the productivity Development Project in Afghanistan focuses on a countrywiide plan for of the economy and opening up market access anid learning and skill development, delivery of basic services to the poor. Infrastructure WORLD BANK ASSISTANCE projects in India and Nepal sought to provide much- needed investments that will help reduce transporta- The Bank's focus in South Asia has continiued to be tion and telecommunication costs. These include three on supporting sustainable reforms: fiscal consolida- projects in India: the Kerala State Transport Project tion, privatization, trade liberalization, and bankinig (IBRD $255 million); the Mizoram State Road Trans- reform; establishing transparenicy, effectiveness, and port Project (IDA $60 million); and the Mumbai accountability of public institutions; and supporting Urban Transport Project (IBRD $463 million and the expansion of services to the poor. Bank lending IDA $79 million); and in Nepal, a Telecommunication is based on an extensive program of analytical work Sector Reform Project ($22.6 million). In India the in the form of reports, workshops, policy notes, and transportation sector report complements the Bank's ongoing policy dialogue. ongoing support for highways and looks ahead to Lending for fiscal 2002 was $3.5 billion, concen- next steps. trated on support for reforn and investments in Power reform is particularly important in South agriculture, health, education, and infrastructure. In Asia. In virtually every country, but particularly in 94 The World Bank Annual Report 2002 Bangladesh, India, and Pakistan, large subsidies for BOX 5.4 AFGHANISTAN IN TRANSITION power have become the single largest source of fiscal imbalances. Reduction of these subsidies is an essen- Since the collapse of the Taliban and the installa- tial step to restoring national and subnational fiscal tion of the U.N.-brokered Afghanistan Interim balances and to freeing resources for much-needed Administration, the most urgent need has been the investnmenits in infrastructure and social services. In i creation of sustainable security and the urgent addition, availability of reliable power is a key con- I opening up of opportunities to bring Afghan straint to private sector investments and activities, and women and men into the process of restarting the reduces opportunities for rural employment and country's economic and social development. growth. ,In November 2001 a conference on preparing In Pakistan a newly expanding Bank program has for Afghanistan's reconstruction was hosted in supported institutional reforms through analytical Islarmabad by the Bank with its partners, the'U.N. work, advisory services, dialogue, and lending of Development Programme and the Asian Devielop-' $800 million for fiscal 2002, including a banking sector ment Bank. This set the stage for the rapid delivery credit of $300 million. Institutional reforms have fo- of ajoint preliminary needs assessment in prepara- cused on financial management, decentralization, tax tior for an international donor conference in reform, reorganization of the central bank, and corrmp- I Tokyo, at which over $4.5 billion was pledged by all'.- tion, all captured in the CAS presented to the Board in doniors to rebuild the war-ravaged country. Since June 2002 and designed to support the implementationi then, and faithful to the guiding principle that of Pakistan's poverty reduction strategy for the next Afghanistan's recovery has to be led first and fore-- three years. most by Afghans themselves, the Bank's Board has approved four emergency projects with an empha- EMPOWERING POOR PEOPLE i sis on supporting the administration of incoming funds with transparency and accountability, and a The empowermiient of poor people is a central objective series of efforts designed to provide quick delivery in South Asia, again pursued through both analytical in aireas such as education, infrastructure, and com- and advisory services and lending. Poverty assessments mufiity participation. in Bangladesh, India, and Pakistan are increasing the 'A total of $100 million has been delivered in'' understanding of recent poverty trends and the reasons grant support from IDA. The Bank's re-engagement . behind them. In India the findings of the health report is guided by a Transitional Support Strategy that will guide future Bank engagement, starting with a was approved by the Board on April 4, 2002. The Health Systems Development Project being prepared Bank is also administering the Afghanistan Recon- - -: for Rajasthan. struction Fund. In April, and under the chairman- Tro help organize communities, increase economic ship of Afghanistan's Ministry of Finance, donors opportunities to the poor, and increase access by the and international agencies met in Kabul to dis- poor to social services and infrastructure, the Bank cuss the administration's National Development has financed community-based projects in India with Framework and fiscal 2002 recurrent budget the Karnataka Tank Management (IDA $99 million), requirements. . - - Rajasthan (IDA $140 million), and Uttar Pradesh (IDA L $149.2 million) Water Sector Restructuring Projects, and the Second Karnataka Rural Water Supply and Sanitation Project (IDA $151.6 million). In education a successful stipend program is In Pakistan the Poverty Assessment and the gov- helping to improve school enrollment of girls in ernment's interim Poverty Reduction Strategy Paper 13angladesh through the second phase of an IDA (I-PRSP) represented the first substantive focus on $120.9 million loan approved in March. Addition- strategic priorities for poverty reduction in Pakistan in ally, in Afghanistan, a $15 million grant is supporting over five years. The Poverty Assessmenit presents a deep skills development for women and girls with a special understandinig of poverty trends throughout the 1990s, focus on underserved groups such as war widows and and the I-PRSP was hailed by the Bank's Board as one illiterate young women. of the finest examples of poverty reduction planning. Chapter 5 Regional Perspectives 95 GLOBAL PRIORITY: COMMUNICABLE DISEASES ^.. With 4.2 millioni people infected in South Asia, , - ,,, , - **(; --<;-' <:~ - -4;^-t huLiman imimlunodeficienicy virIs/acquired imimlunie - deficiency synidrome (HIV/AIDS) in the region is a v picture of lowt prevalence but high risk. Governments __ , ,.;Frs,: . Jr ~ z ;t2F5| in the region have recognized the effectiveness of early it u ^ -*F y--, r responses-beginning wvith India in 1992-and are Q ;-. ___ - shaping public health policies with a focus on preven- ' t~~ ~ ' w=, ; - -_* ^@>- - F ._, ~~tioni, health promiotioii in high-risk populationis, miiti- - - -n - . ; gation, and somewhat hesitantly, treatment. The Bank has supported this process through advisory atnd ana- _vtical assistance and lending which, for HIV/AIDS, an mouLits to $326.7 million for existing projects, with ~~~~- - ~~~~~~~~~~~~newv projects proposed for Pakistani anid Sri Lanka. All .-i ~ countries now have strong nationial programs, except Nepal, where implementation of the national program is weak and poorly financed, and Afghanistanl, where thecsituationi nleeds to be assessed. Bank-supported ; $V>. , .. i, HIV/AIDS projects are under implementationi in India, hwhcrc the $191 million Second National HIV/AIDS Control Project is ongoinig, and in Bangladesh with the HIV/AIDS Preventioni Project funded by $40 millioin ,. . 8 @ *>4U ,.q't 'g_ I from IDA and $10 million from the United Kingdom's Department for Interinationial Development. ,, ;4*S§,14 72't > Jnss ~In 1Pakistan the goveriiillent has been implenmelit- c - t v t!gi ;gu 1y! rA|~~~ ing a mlodest National AIDS C.ontrol Progranm since 1989 with sonic support from the Bank. Aware of the growing challenge, the government has now sought In India, water-related diseases are a major health problem. For women t xadti rga ae nteNtoa and children, fetching water remains an arduous and time-consuming expand this program based on the National daily task Four projects totalmng over S450 million in interest-free HIV/AIDS Strategic Framestwork. With Bank analyti- IDA support have been provided to India's water sector in the current cal support, a project has been under preparation in fiscalyear fiscal 2002.The Sri Lankan government is developing a program along similar lines. Figure 5.5 South Asia: IBRD and IDA Lending by Theme, ofitotal of$350 ilio Figure 5.6 South Asia: IBRD ancl IDA Lending by Share of total of $3.5 billionSector, Fiscal 2002 Environmental & Natural Economic Management Share of total of $3.5 billion Resource Management 8% 7% Rural ,< ~ ~ Public Sector Water, Sanitation & Agriculture, Fishing & Development / / \ Governance Flood Protection 4% Forestry 9% 12% / 3 / G 19% on Law & Justice & Transportation Public Administration / 0 / > / f~~~~~~~~~22 8% Information & / Rule of Law 2% Communication < i Risk Management 5% HHea lth & Other Social Dev elopment, Industry & Social Services 8% Gender & Inclusion 12% Trade 13% 96 The World Bank Annual Report 2002 Table 5.3 World Bank Lending to Borrowers in South Asia, by Theme and Sector, Fiscal 1993-2002 (millions of dollars) 1993-97 1998-99 (annual (annual average) average) 2000 2001 2002 THEME i Economic Management 45.2 85.3 35.2 47.4 232.5 Public Sector Governance 40.0 254.9 212.7 261.0 678.0 Rule of Law 33.5 89.1 56.5 36.1 1 59.3 Financial and Private Sector Development 735.4 639.2 265.4 865.9 381.6 Trade and Integration 25.6 84.5 29.4 398.3 70.0. Social Protection and Risk Management 166.1 162.8 168.0 118.4 164.0 Social Development, Gender, and Inclusion 360.1 328.9 261.5 240.5 -414.2. Human Development 385.3 627.5 276.2 124.8 '30.2 Urban Development 181.6 297.1 300.7 186.8 766.2 Rural Development 354.6 377.0 426.1 379.5 417.2 Environmental and Natural Resource Management 419.7 266.8 80.8 587.8 295.2 Theme Total 2,747.2 3,213.2 2,112.4 3,246.6 3,508.4 SECTOR Agriculture, Fishing, and Forestry 305.2 534.4 65.0 116.1 328.1 Law and Justice and Public Administration 247.9 436.3 407.0 377.4 632.5 Information and Communication 4.7 35.3 54.6 17.7 12.4 Education 280.8 385.1 171.4 206.4 95.9 Finance 205.3 168.2 46.0 209.7 310.0- Health and Other Social Services 489.5 589.3 393.3 188.1 '278.7,. Industry and Trade 173.1 68.3 85.3 34.0 443.1 Energy and Mining 482.5 545.9 277.8 746.2 504.8. Transportation 269.4 354.1 590.6 1,294.3 758l.1 Water, Sanitation, and Flood Protection 288.9 96.4 21.4 56.8 144.9 Sector Total 2,747.2 3,213.3 2,112.4 3,246.5 | 3,508.4 Of which IBRD 998.4 1,034.0 934.3 2,035.0 893 0 Of whichlIDA 1,748.8 2,179.3 1,178.1 1,211.5 2,61,5.4 Note: Lending is summarized in the 11 main theme categories and 1O main sector categories in the new thematic-sectoral coding system, which in- cludes 68 themes and 57 sectors. See table 2.2, page 30. Numbers may not add to totals because of rounding. Chapter 5 Regional Perspectives 97 A- -4V* : I -- V'.~~~~~~~~~~ - Voridank w . i __r'owng _,_ __ - _ _____ VE110-n Europe and Central posed Framiiework for World Banik GrouIp Support to EU Accessionl Candidate Countries of Centr-al A sia anid Eastern Euirope. In Southeast Europe there gionial strategy continued to evolve from post- ~~~~ ~~All economies in Euirope anid Ceniti-al Asia-except coniflict stabilization anid reconstrulCtionl to struIC- * . ~~~Turkey and the formier Yugoslav Repuiblic of tLural reformn anid institutional developmienit. The * ~~~~Macedonia-grew duirinig 2001. 1 'he RuLssiani Feder- Federal Republic oftYugoslavia's eligibility, tor Banik ation anid Ukrainie, the last econiomies to emerge leniding wvas restored, anid a major programi of fromi the unecxpectedly long "t ranisformiationi reces- adjustm-rent anid investment lenidinig was SUCCeSSfUlly sion," grew at 5 percent anld 9.1 percenit, respectively, launichecd. Th'le Banik's postconflict program of assis- -. * * ~Overall, the Commonwealth of Inidependenit States tanice to Kosovo continulLed. The seven IDA-eligible * ~~~~(CIS) grewv at 6.6 percenit. In Central anid Easterni CIS COL1ntries-Armenctia, Azerbaijan, Georgia, the * . . ~~Europe growth averaiged 3.5 percenlt. In 'I urkcy, Kyrgyz Republic, Moldova, Tajikistan, anid Uzbek- howvever, markets responided somewhat miore slowly istan, kniowni as thie CIS-7-aloing with bilateral ** than expected to reformis, reSuIltinlg in an oLItput doniors, nieighiborinig COunitries, anid four inlterna- * ~~~~declinie of 6.5 percenit. tionial finlancial inlStituItions (inicludinig the WAorld Notwithstanidinlg this broad-based growth, Banik, Initerniational Monietary Fund, ELuropeani Banik Euirope and Cenitral Asia remiainis hiighly diverse, for ReconistruICtionl aiid Development [EBRD], and * 1)0~~bth in termis of per caipita inicomie anid global inlte- Asiani Developmniit Bank) launichied a collaborative grationl. Per capita incomie raniges fromi $10,0)70 in international effort to accelerate growvth anid povcr- * * ~~Slovenia to $1 70 in Tajikistain. Poverty prevalenice- ty reduictioni throuigh initensified developmencit anid although now genierally decliniing as a result of thie reformi efforts anid the strenigthenled Involvement of' * * ~~~region's continuling growth-ranges fromi unider the initerniationial commUnity,. Anid finially, the deep- . . ~~~~5 percent to over 50 percenit of the popLulation. eninig of reforms in the regioni's larger economiies, - 0 0 ~~While mnany countries, especially those in Cenltral while inicreasinig the nieed for Bank f-inanicial assis- Europe anid the Baltics, are firmily headed toward tanice in Turkey anid Ukrainie, is shiiftinig the demiand( ELiropean anid global integration anid graduiationi for Banik services towvard anialytic and advisory, fromi Bank borrowing, others still struggle wvith activities in Russia. long-simimerinig tenisionis and the conistraints of Tfhe Banik's Etirope and Cenitral Asia reg'ion op- geography. erationis durinig fiscal 2002 conitiniued to emiphiasize inivestmenits, policy reformis, anid inlStituItionlal devel- WORLD BANK ASSISTANCE opmient needed to .underpin Suistained growth anid poverty reduICtionl in tranisitionl anid postcoinflict ELurope anid Central Asia's diversity is reflected in COunitries, anid anl accelerated struICtural reformii pro- the evolution of the Banik's assistanice programi. Tfo grami in crisis-stricken Tuirkey (see box 5.5). Lenid- accommiiodate a rapidly chaniginig relationship with inig during the year (iniclusive of four special finainc- the advaniced EU accessioni counitries, the regioni de- iing operationis) reachied $5.5 billion (of which veloped a partniership framework for phiasinlg anid $0.6 billioni were IDA and $4.9 billion wvere IBRD). prioritizinig support to these counitries, the Pr-o- Significanlt additionis wvere miade to the region's 0_0 ~~The World Bank Annual Report 2002 Total population: 0.5 billion Population growth 0.1% Global Environmental Facility (GEF) portfolio with Life expectancy at birth: 69 years Infant mortality per 1,000 births: 20 seven new pro)ects totaling $31 million. On the non- I m ortaliter 1% lending front, several major activities were completed, F a2001 GNI it 196 including a retrospective report on the transition expe- N p Number of persons living with HIV/AIDS: 1 million rience in Europe and Central Asia, a regionwide survey of the gender impacts of transition, and an analysis of Note. Life expectancy at birth, infant mortality rate per 1,000 births, and female t youth illiteracy are for 2000, other indicators are for 2001, from the World Devel- the potential fiscal Impacts of EU accession on EU l opment Indicators database The term gross national income (GNI) is now used accession candidate countries. instead of gross national product (GNP) BUILDING THE CLIMATE FOR INVESTMENT Total FY02 Total FY02 New Commitments Disbursements Most countries in Europe and Central Asia are rela- IBRD $4,894.7 million IBRD $3,393.9 million tively well endowed, for their income levels, with phys- IDA $628.9 million IDA $429.8 million ical and human capital. The most serious constraints - on growth and poverty reduction lie in policies and lor;, u - r 1. .A i institutions that distort the framework for economic Do 4 X gO.' ic jli6 , ; decisionmaking. This is reflected in comparative rat- U ings of business environments, in which countries in Europe and Central Asia typically fare poorly. The Bank is tackling the underlying policy and institu- . * . t which include maintaining macroeconomic stability, t2N legal reform, and improved corporate governance; sec- toral reforms such as utility regulation and pricing, and : i- better functioning labor and financial markets; and se- .-. _ t ;r.-v , . ' . frt' lective investments in industrial restructuring and in- -,,,v'. I frastructure. To focus on achieving results in the field, - v- ,,-' ' the Bank has been financing systematic enterprise sur- -- P-'r veys that track changes in the business environment ;'-ti - both at the country level (in Bosnia, Moldova, Russia, .- and Ukraine) and at the regional level, together with .-.- X , - , * - EBRD, with the Business Environment and Enterprise * . * ' " Performance Survey. A rural enterpnse support project in Uzbekistan Is providing better quality farm extension services to Uzbek women such as these who rely on agn- IMPROVING PUBLIC SECTOR GOVERNANCE culture for their livelihoods Countries in Europe and Central Asia, particularly the CIS, also fare relatively poorly on governance indica- tors. To improve public sector performance, the Bank It has promoted the adoption of new technologies with has supported reforms to encourage voice, transparen- support to e-government (applying information and cy, and accountability through decentralization in Rus- communications technologies to improve government sia, Ukraine, Central Europe, and Southeast Europe. It functioning) efforts in Russia and Ukraine. Finally, it has supported reforms to enhance participation and has supported anticorruption programs in Armenia, competition in public service delivery and to marshal Bosnia and Herzegovina, Kazakhstan, the Kyrgyz the power of data to monitor outcomes with expenditure- Republic, Romania, and the Slovak Republic. tracking surveys in Albania and Macedonia. It has sup- ported the strengthening of government institutions EMPOWERING POOR PEOPLE through tax and customs reforms in Kazakhstan, Rus- sia, and Ukraine, and through country financial Empowerment presents a special challenge in much of accountability assessments in Albania and Azerbaijan. the Europe and Central Asia region, where traditions Chapter 5 Regional Perspectives 99 BOX 5.5 HELPING THE POOR WEATHER ECONOMIC prepared I-PRSPs or full PRSPs (see http://poverty. CRISIS-TURKEY'S SOCIAL RISK MITIGATION worldbank.org). The Bank is supporting PRSP imiple- PROJECT inentation using a mixture of country-specific instru- ments. Direct poverty reductioll lending focused on With the support of the $100 million rapid re- improvinig the risk maniagement capability of the poor sponse component of a $500 million hybrid loan in postconflict countries such as Bosnia and Herze- from the Bank, in the 2001 calendar year Turkey govina and the Federal Republic of Yugoslavia, and in was able to reach 1.6 million poor people who economiiic crisis situations such as in Turkey. Many new have been hurt by the economic crisis of February operations will use communiity-driveni development 2001. Cash and in-kind assistance, valued at about approaches to confront economic and social risks in a $35 per person, was provided to over 1 million participatory manniier, including multisectoral social poor schoolchildren. The money was used for out- funds in Bulgaria, the former Yugoslav Republic of of-pocket expenses such as clothing, textbooks, and Macedonia, Romania, Tajikistan, and Ukraine. These stationery-with the objective of supporting poor operations increasingly target persistent poverty families and, more importantly, preventing the among the long-term unemployed and ethnic schoolchildren from dropping out of school. This minorities. support helped prevent about 100,000 school dropouts. GLOBAL PRIORITIES Food assistance was made available during the religious festival season to 400,000 poor house- Fighting Communicable Diseases holds suffering from the economic downturn. The numiiber of people living wvith human immiiuniode- Given the depth of the crisis, most beneficiaries ficiency virus/acquired imnmunie deficiency syndrome require continued support throughout the year (HIV/AIDS) in Europe and Central Asia has dramati- and prefer cash to in-kind assistance. cally increased to I millioni over the past decade, with A further 200,000 very poor households re- one-quarter of infections occurring in the past three ceived cash and in-kind assistance for coal heating years. Tuberculosis (TB) is also on the rise, with ap- to provide warmth over the severe winter. proximately 250,000 new cases each year, maniy of These activities provided lessons that clarified which are multidrug-resistant. Due to the links be- the priorities for strengthening and improving the tween the two diseases, the Bank is providing technical social safety net in Turkey. Of key importance are and finanicial support for the developmenit of stand- conditional cash transfers to help meet basic needs alone projects in Europe and Central Asia that aim to and cash for social assistance to the poorest 8 per- tackle the epidemics in Belarms, Moldova, Russia, and cent of the population, with the requirement that Ukraine. The Banik will also provide support to TB and the beneficiaries keep their children in school and AIDS activities in the context of health sector projects take their preschool children regularly to health in other countries in the region. clinics: Protecting the Environihent Ozone-depleting substance phaseout wvork was coill- and institutions of voice and accountability generally pleted in Russia under a GEF operation that began are still nascent. The Bank's support for improving the in the late 1990s. Projects in Croatia, Romania, and investmiienit climiate and its support for imlproving pub- Ukraine were added to the Bank's GEF portfolio, and lic sector governance both have strong empowerment implemeintation of a forestry project commenced in dimensions. The Bank is also promoting empower- Russia. Support wvas provided to establish effective ment through emphasizing broad participation in public-private partnerships for improved environmiiieni- the preparation of Poverty Reduction Strategy Papers tal performanice in Bulgaria; to deal with inherited (PRSPs). Three countries completed their interim environimiiental problems in Albania and Turkey; to PRSPs (I-PRSPs) during fiscal 2002: Azerbaijan, Bosnia use economic instrumiients and manage public finances and Herzegovina, and the Kyrgyz Republic. In addition, for enhanced environmental protection in the Republic Albania completed a full PRSP, the first in the Europe of Serbia, Federal Republic of Yugoslavia, and Ukraine; and Central Asia region. In total, nine countries have and to help EU accession candidates to identify cost- 100 The World Bank Annual Report 2002 Figure 5.7 Europe and Central Asia: IBRD and IDA Figure 5.8 Europe and Central Asia: IBRD and IDA Lending by Theme, Fiscal 2002 Lending by Sector, Fiscal 2002 Share of total of $5.5 billion Share of total of $5.5 billion Urban Development 1% - Rural Development 6% Water, Sanitation & Human Development 3% Environmental & Natural Flood Protection 2% Resource Management 3% Transportation 1% Agriculture, Fishing & Social Development, Economic Eeg iig4 oety9 Gender & Inclusion 3% Management 12% Energy & Mining 4% Forestry 9% Social Protection & Industry & Risk Management Trade 10% 7% Public Health & / Trade PiSector OtherSocialal Integration Services 9 Governance S Law & Justice & 1% 24% Public Administration 39% Rule of Law 2% Finance 2 / Financial & Private Sector Development Information & 40% Education 2% Communication <1% effective investment strategies to comply with EU throughout the region. The Bank has also begun to environmental standards. implement a broad-based program for the establish- ment of a Global Development Learning Network Supporting Trade and Integration (GDLN). In addition to the distance learning center es- There are substantial untapped opportunities for tablished in Ukraine last year, four additional centers cooperation in many of Europe and Central Asia's became affiliated with the GDLN in fiscal 2002: two in subregions. Together with the European Commission, Turkey and one each in Russia and the Federal Europe and Central Asia programs provide support Republic of Yugoslavia. Work has also commenced on to EU accession candidates on numerous subregional the establishment of an additional 10 to 12 centers in activities, including transportation, environment, ener- eight countries in the region. gy, and knowledge economy strategies. Analytical work on trade issues has also been undertaken for the coun- International Financial Architecture tries of Southeast Europe that are not EU accession The Bank was an active participant in the Financial candidates, includinig five country studies, a regional Sector Assessment Program, wvith assessments com- report in progress, and technical assistance. In the pleted during the fiscal year in Croatia, Georgia, and CIS-7, studies of trade, transportation, and telecom- Latvia, and six additional assessments initiated for munications have been carried out. Bank support for completion in fiscal 2003 and 2004 in Bulgaria, the trade integration in Russia and Ukraine is focusing on Kyrgyz Republic, Lithuania, Russia, the Slovak Repub- technical assistance for WTO accession. lic, and Ukraine. As part of the review of standards and codes incorporated in these assessments, evaluations of Improving Information and Knowledge the legal and institutional framework for dealing with The Bank has initiated a dialogue with EU accession money laundering and terrorist financing are now candidates to help the countries develop strategies to being incorporated in the analyses. The Bank has also increase their international competitiveness through hosted, with the World Bank Institute, the first regional more effective use of knowledge and technology in dialogue-involving five countries in the region-on both the public and private sectors. Approaches taken issues related to combating money laundering and ter- in these countries could provide lessons and experience rorist financing. Chapter 5 Regional Perspectives 101 Table 5.4 World Bank Lending to Borrowers in Europe and Central Asia, by Theme and Sector, Fiscal 1993-2002 (millions of dollars) 1993-97 1998-99 (annual (annual average) average) 2000 2001 2002 THEME Economic Management 328.5 723.2 98.6 127.4 636.1 Public Sector Governance 384.8 547.7 227.8 95.6 1,313.7 Rule of Law 67.5 80.1 160.2 77.4 106.6 Financial and Private Sector Development 1,769.1 1,908.0 890.7 1,074.0 2,210.8 Trade and Integration 319.9 91.6 143.5 138.4 32.5 Social Protection and Risk Management 247.1 575.6 530.1 381.2 363.9 Social Development, Gender, and Inclusion 42.9 126.9 43.6 65.1 188.8 Human Development 177.9 217.6 278.9 51.1 138.3 Urban Development 287.8 248.9 153.6 383.9 65.4 Rural Development 269.7 331.5 213.4 137.6 309.9 Environmental and Natural Resource Management 374.9 404.3 301.7 161.3 157.5 Theme Total 4,270.2 5,255.1 3,042.2 2,693.1 5,523.6 SECTOR Agriculture, Fishing, and Forestry 237.5 114.5 317.8 139.0 470.4 Law and Justice and Public Administration 774.8 1,568.5 796.4 445.2 2,170.9 Information and Communication 55.3 4.5 151.9 8.7 9.6 Education 70.7 299.2 22.7 62.5 83.2 Finance 461.7 484.0 176.6 803.6 1,295.9 Health and Other Social Services 306.9 359.7 277.8 281.9 524.7 Industry and Trade 835.7 817.4 604.7 296.5 552.1 Energy and Mining 889.6 849.2 398.6 336.6 218.0 Transportation 496.2 533.1 207.1 118.3 67.1 Water, Sanitation, and Flood Protection 141.6 225.0 88.5 200.7 131.7 Sector Total 4,270.2 5,255.2 3,042.1 2,693.1 5,523.6 Of which IBRD 3,907.6 4,406.3 2,733.0 2,154.0 4,894.7 Of which IDA 362.6 848.9 309.1 539.0 628.9 Note: Lending is summarized in the 11 main theme categories and t 0 main sector categories in the new thematic-sectoral coding system, which in- cludes 68 themes and 57 sectors. See table 2 2, page 30 Numbers may not add to totals because of rounding. 102 The World Bank Annual Report 2002 }~~~~ - * - - mEE i. iK .1~- Countries Eligible for World Bank _3 Borrowing: L a t i n A mn e r i ca a n d most pronounced in Argentina and neighborinlg couLntries affected by its crisis. ID the Caribbean WORLD BANK ASSISTANCE While the economy of Latin America and the O Caribbean recovered from the shocks triggered by In fiscal 2002 the Bank's strategy in Latin America the 1998-99 crises in Asia and Russia, the recovery and the Caribbean remained focused on fightinig was short lived. After increasinig from 0. 1 percent poverty while including adjustments to respond in 1999 to 3.9 percent: in 2000, the region's annual quickly to urgent social needs prompted by events gross domestic product (GDP) growth declined to such as the economic crisis in Argentina, a slump 0.4 percent in 2001. It is expected to decline slightly in Caribbean tourism, and reconstrctioll in in 2002 as a result of a weak global economy, a El Salvador after two earthquakes in early 2001. In sharp contraction in Argentina, and drought in lamaica and the Organization of Eastern Caribbean C Brazil and Central America. States, where airline tourist visits dropped following A decline in the growth of world trade and drops the terrorist attacks, the Bank provided $75 million1 in export commodity prices reduced Latin America and $20.9 million, respectively, to protect social _____ and the Caribbean's cxport revenue growth to programs and to strengthen airport security. The o14v0fi 1.4 percent in 2001, after a 19 percent rise in 2000. Bank's new assistance strategy for El Salvador coini- & Fm l The trade surpluses of oil exporters decreased, but cided with the reconstruction effort there and in- fh3 trade balances increased in other countries in the cluded a $142.6 million loan to help restore health V 3 region as they imiported less due to slower GDP services undermined by the 2001 earthquakes that growth. Overall, the iegioni's trade surplus increased severely damaged hospitals and healtlh facilities. by $17 billion, while the current account deficit The Bank's commitment to fighting communicable widened by $5 billion as a result of lower receipts diseases was underscored in Latin America and the from tourism and remittanices. Caribbean, too, with support for acquired immune Evidence of progress toward achieving the Mil- deficiency syndrome (AIDS) prevention and treat- lennium Development Goals in Latin America and ment in Barbados, Brazil, the Dominican Republic, the Caribbean surfaced in 1999 data showing that and Jamaica. the proportion of people living on less than $1 a day In Argentina, as economic conditions deteriorat- had declined from 16.8 percent in 1990 to 15.1 per- ed during 2001, the Bank provided a $400 million cent. Some of these gainis were likely lost in 2001 structural adjustment loan to bolster the govern- due to a decline in per capita GDP growth, especial- ment's efforts to reverse increasing market pes- ly in Central America and the Caribbean, which was simism. By year's end, however, a serious economic hit by drought, low coffee prices, a drop in tourist and political crisis triggered an abrupt change in traffic after September 11, and a decline in foreign government and economic policies. The Bank re- remittanices stemming from the U.S. economic sponded with advice and technlical support in key slowdown. Given expected trends in per capita GDP, areas such as the bankinig sector, corporate debt re- poverty will likely rise in 2002 and perhaps decline structuring, renegotiationis of public utility tariffs, modestly in 2003. Increases in poverty levels will be and provincial finanices, while also redirectinig Chapter 5 Regional Perspectives 103 - =SW T 7r.11I h I ITfli tI 4 Total population: 0.5 billion Population growth: 1.5% Life expectancy at birth: 70 years Lifant moptality pera1,000 birth s:70 29banks, public health care, human immunodeficiency Infant mortality per 1,000 births: 29 virus (H IV) AIDS medicines, food kitchens, and edu- Female youth illiteracy: 6% cational supplies for high-risk schools. Work also be- 2001 GNI per capita: $3,560 Number of personsaiving w3.19 l gan on another social protection program-to provide Number of persons living with HIV/AIDS: 1.9 million iioesplinnst h ieilydwt eed income supplements to the unemployed with depend- Note: Life expectancy at birth, infant mortality rate per 1,000 births, and female ents, and to respond to the needs of a growing number youth illiteracy are for 2000, other indicators are for 2001, from the World Devel- of f l i opment Indicators database. The term gross national income (GNI) is now used of famlies liviiig In poverty. instead ofgross national product (GNP). With about 170 million of the region's 510 million _____________ ____________ - ------ - ---people living on less than $2 a day, of whom 70 million - To01P02 Total FY02 live on less than $1 a day, the Bank's loans and ana- Neva .ognmitments Disbursements lytical work seek to improve the investment climate IBRD$5&188.1 million IBRD $3,505.1 million while also supporting local efforts to empower people, IDA.177 8 million IDA $272.5 million communities, and governments. Specifically, the Bank's priorities in the region are education, strength- t;w1 i >rO-g K -fVkwcm@ lw Wmi"2 - -. ening the financial sector, social protection, institu- 1t yINC C857 IBIlu .-~f tional reform and governance, empowerment and inclusion of excluded groups, and environmental sustainability. In fiscal 2002 the Bank approved financing to stim- - - - ulate and improve productivity in rural comiunLities . r-,. t' , ....... ZR1. ,.- > ...by supporting small businesses, farming inputs, and - 1 ~- ; - ~~ -}''~'J/3' A. rs n ; land management. Support was also provided to ex- ------I ,J pand basic health and education services to low- income communities, and to assist governments seek- ing to maintain fiscal balances as they undertook policy reforms and investments in infrastructure. i4 . ; SBUILDING THE CLIMATE FOR INVESTMENT Investment is essential to stimulating economic 6x .t? ir, - t growth. The Latin America and the Caribbean region A. -V! needs about $70 billion a year over the next five K< ;- - = . jri \ -1 - . - ,,,! p years-equivalent to its total foreign direct investment IZ-e- e - - . | 1-- j - $/ in 2000-to build and upgrade water, sewerage, roads, :X'- ," ,:. '__ -', '-. i ,h;3 power, and transportation systems. These infrastruc- ture needs are expanding in concert with the regions | rapid populationi growth, inicluding large niumbers of JJ - " - poor in the mushrooming cities, nlow home to 75 per- cent of the region's people. The Bank is responding to di-. '' - ,' 'this demand with 82 infrastructure projects worth over * .; 1 .E; ,-,N,,, ;-, ,.- < $8 billion that are currently under way. Private sector v- a - -t 9 -fiS< v > Information & Development, Other Social / Communication Gender & \ i / \/ Services 15% \1% Inclusion 6% ule of Law ducation 13% Social Protection & <1 Finance 17% Risk Management 7% Financial & Private Tracdle & Sector Development 22% Integration 2% 106 The World Bank Annual Report 2002 Table 5.5 World Bank Lending to Borrowers in Latin America and the Caribbean, by Theme and Sector, Fiscal 1993-2002 (millions of dollars) 1993-97 1998-99 (annual (annual average) average) 2000 2001 2002 THEME Economic Management 437.3 694.0 587.6 570.1 391.0 ~ Public Sector Governance 505.2 825.2 519.9 1,099.7 '1, 182.81 Rule of Law 70.0 94.1 111.7 202.2 15.5 Financial and Private Sector Development 1,295.4 1,626.9 1,056.1 985.4 965.41 Trade and Integration 121.7 144.6 160.7 218.3 , 3.9 Social Protection and Risk Management 415.2 1,002.4 901.2 530.0 310o.41, Social Development, Gender, and Inclusion 253.4 359.1 141.5 371.7 248.91 Human Development 565.9 786.9 157.7 471.2 560.4 Urban Development 480.3 576.9 53.3 202.0 251.91~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~803 7.9533 20. Rural Development 462.6 613.3 103.0 580.8 168.3 Environmental and Natural Resource Management 588.1 164.8 270.8 68.8 187.4I Theme Total 5,195.2 6,888.3 4,063.5 5,300.1 4,365.8j SECTOR Agriculture, Fishing, and Forestry 285.3 326.4 104.1 72.3 85 .0~ Law and Justice and Public Administration 1,101.3 2,208.9 1,787.8 1,722.9 1,299.5 Information and Communication 20.6 17.2 28.7 97.8 65 Education 601.4 659.8 62.8 529.1 ~560.4,1 Finance 708.2 1,089.5 1,195.1 950.5 i734:1 Health and Other Social Services 514.6 1,150.5 360.2 904.7 j660 5~: Industry and Trade 154.9 204.2 165.3 38.3 51 4.' Energy and Mining 254.5 98.1 79.3 107.6 445.6 I Transportation 988.1 875.6 11.6 650.3 463.11 Water, Sanitation, and Flood Protection 566.3 258.0 268.7 226.6 49.8- Sector Total 5,195.2 6,888.3 4,063.5 5,300.1 A4,365.8 Of which IBRD 4,897.2 6,406.4 3,898.1 4,806.7 4,188.11-~ Of which IDA 297.9 481.9 165.4 493.4 17~7.8., Nore: Lending is summarizedi in the I1I main theme categories and 1 0 main sector categories in the new thematic-sectoral coding systemn, which in- cludes 68 themes and 57 sectors. See table 2.2, page 30. Numbers mnay not add to totals because of rounding. in fiscal 2002 $1 5 million in new BIRD commitments were approved for a project in Jamaica under the Multicountry HIflWAIDS Prevention and Control Project for the Caribbean ($155 million was earmarked in fiscal 2001). Chapter 5 Regional Perspectives 107 -r A- Z" 5~~~~~~~ - ai!;- A l |o r :1 0 M id dle East a nd private sector developmient becominiig a primie -. ki or4 h A~~~~~~~~~~ * ~souirce of job creation, the Bank has wvorked * ~ ~ ~~ N rt Africa extensively to improve the inivestm-enit climiate in the regioni. Projects anid advisory services to * *' ~~The Mliddle East anid Northi Africa regioni Nvas strengtheni finiaicial sectors in Algeria and the * * .0~~~~~~~~~~~~ stronlgly impacted by the aftermiath of evenits of Republic of Yemen; trade anid competitivenecss in MSeptembr 11 ith sharp declines in exports to Tunisia; private sector developmlienot in Algeria; NEurope, the Middle East and North Africa's main and information technology in the West Bank and otrading partner. In addition, 0cotinUed violence in Gaza, Tuvisia, and the Republic of Yemen are good the Middle East nas worsened ifvestors' periception exaples. The weight of the public sector and - . of risks anld is slowing downi already limiited foreigni governanice issues also conStituItes a serious imped- direct inlvestm-enit in the regioni. In 2001 economiic imienit to more rapid growthi. Work in fiscal 2002 growth had slowed to 3.1t percent (down from has focused of improvieg public expenditure S42 percent the previous year), hith sharp decliines efficiency and puiblic sector managemenit in Algeria, aumoig oil' exporters (fromn 3.6 percet to 2.5 per- Djibouti, Jordan, atnd Morocco, and decentralization cent), and i ore Imoderate declines amioeng the in Algeria, Jordan, Tisia, ad the Republic of diversified exporters (0.5 percentage poinits). Yemieni. IThe lack of hiigher anid suistainecd growth throughout the Middle East ahnd North Africa hias iomade the region's greatest challenge-finding suffi- dciret employmenit opportuinities for the reapidly BOX 5.7 WEST BANK AND GAZA-SUPPORT IN * *~~~, growing labor force-substanitially mor-e difficuLlt. A CONFLICT-AFFECrED AREA Althouglh onlye 2.3 percenct of the popuilaftioni is liv- 4i.g on less than $1 a day, poverty remains a prine In the West Bank and Gaza the Emergency Ser- congicerne, with some 30 perctt Of the Population vices Support Project addresses the deterioration living on less than $2 a day. of education, health, and social welfare services in the face of increasing inability of central insti- WORLD BANK ASSISTANCE tutions to meet nonsalary operating costs. The project targets key social service delivery agen- The Banik's overarching objectives in the rgion cies and municipalities, enabling them to help are to streigthenl the 2 omentti for building a cli- the segments of the population hardest hit by igate for ivestaent, job creationr, and sustainable the ongoing conflict. The recently completed growth; anid to eomepower the poor to become assets Emergency Response Program addressed rising in the developmeniit process. During fiscal 2002 the unemployment and poverty by offering work T Bank has worked to better identify the key sources opportunities to the most needy through and impedimilenits to growth, particularlN in Algeria, community-based, labor-intensive microprojects. the Arab Republic of Egypt, the Islamic Republic of Both programs leveraged considerable donor Iran, Jordan, Lebanoni, the Syrian Arab Republic, funds. and in the West Bank and Gaza (see box 5.7). With The World Bank Annual Report 2002 U LiVA rSr sI rTr iErM1 7 4 Total population: 0.3 billion Population growth: 2% Poverty assessments for Djibouti, Egypt, the Islamic Life expectancy at birth: 68 years Republic of Iran, and the Republic of Yemen, and social Infanlt mortality per 1,000 births: 43 protection analyses for Lebanon, Morocco, and the re- 2001 GNI per capita: $2,000 gion as a whole, have conitribLuted to a better under- 20:GIprcpt:$,0 gtaionias af whole,t have scntibutedcion a ssbete Under- Number of persons living with HIV/AIDS: 0.5 million standinlg of poverty and social exclusion Issues. Under process-oriented economic anid sector work, engage- Note: Life expectancy at birth, infant mortality rate per 1,000 births, and female youth illiteracy are for 2000, other indicators are for 2001, from the World Devel- ment with civil society actors in Morocco is giving over opment Indicators database. The term gross national income (GNI) is now used 200 civil society organizations a voice in identifying instead ofgross national product (GNP).' and addressing the challenges they face in participating in the development process. Ongoing work to strength- V WM Total FY02 en education and health systems in Djibouti, Egypt, the mB Disbursements Islamic Republic of Iran, Jordan, Lebanon, Morocco, 0(3 WA OU@e IBRD $514.6 million the Republic of Yemen, and the regioi as a whole also Om lM U W ;a. IDA $117.0 million includes key elements to protect the poor. Finally, the region has launclhed a series of studies to analyze and Portfolio of projects under implementation as of advise on the various aspects of regional and global June 30, 2002: $5.4 billion integrationi.- To achieve its objectives in the region, the Middle East and North Africa region is intensifyinig its partnership-building, knowledge-sharing, and out- A - reach efforts at the strategy and implementation levels. At the regional level there is coordination with the ;__________ African Development Bank and the Islamic Develop- > X ment Bank. The Luxembourg Process ensures semi- annual coordination mneetinigs among the European -i. Union, the European Investmiient Bank, the Interna- tional Monetary Fund, and the Middle East and North - - - Africa. In the West Bank and Gaza, where donor part- Pr nership is critical, 13 bilateral and multilateral agencies collaborated with the Bank and Palestinian technical specialists to prepare a comprehensive Emergency Assessment; the Bank-administered Palestinian Eco- nomic Assistanice and Cooperation Expansion Facility has leveraged $26 million from five donors for an emergency employment program. At the thematic lev- A group of Yemeni women in a focus group meeting in a rural area in the Republic of Yemen with a Social Fund member during a subproject el, partnerships such as the Mediterranean Environ- identification. menital Technical Assistance Program, the Regional Water Initiative, and Cultural Heritage are leveraging outcomes. The new instruLmlent will entail activities the Bank's work on sustainable development (see box such as diagnostic pieces, traininlg, and peer learninig. It 5.8). The jointly funded European Union-World Bank responds to the countries' need for vehicles other than Program on Private Participation in Mediterranean In- lendinig to deliver sustained engagemiienit by the Bank frastructure, based in Brussels, helps promote key pri- on issues facing them. The Global Developmenit Learn- vate sector and infrastructure reforms in client coun- ing Network has now expanded from two distance- tries. Public sector management is fostered through the learning centers in Ammaln, Jordan, and Cairo, Egypt, MaghrebI Public Procurement Modernization Initiative to partners in Saudi Arabia and Kuwait. \WVork is ongo- (see www.worldbank.org/mena). ing to establish new partnerships in Bahrain, the Islam- In its knowledge-sharing activities the Middle East ic Republic of Iran, Omani, the United Arab Emirates. and North Africa region is piloting a nonlendinig, pro- and the Republic of Yemen. Work is also ongoinig on grammatic instrumenit to support the region's coun- the Development Gateway for sites in Jordan, Morocco, tries on the basis of mutually agreed-on medium-term and the West Bank and Gaza. Chapter 5 Regional Perspectives 109 BOX 5.8 ENVIRONMENT PARTNERSHIP AND annual Technical Cooperation Program work as wvel. LEARNING-A TALE OF THE COMMONS Here, the Bank is advising on the investment climate, employment generation, private sector participation, Under the Regional Initiative for Dryland Manage- and infrastructure sector reform, among others. ment, the Bank supports the partners-Egypt, Israel, Jordan,.the Palestinian Authority, and BUILDING THE CLIMATE FOR INVESTMENT Tunisia-in developing technical cooperation and sharing of know-how on sustainable management Strengthening the climate for investment, jobs, and of natural resources in order to increase productiv- sustainable growth remains a major focus. Most coun- ity and improve living standards in marginal areas. tries in the Middle East and North Africa have made In the Gabes Governorate in Tunisia, the Initiative substantial progress in implementing macroeconomic encourages young farmers to settle in the Dissa policies to support the investment climate. But signifi- perimeter and start irrigated farming using the cant challenges remain on issues such as reducing ex- treated wastewater of the Gabes plant, thereby cessive regulation and bureaucratic red tape; improving creating jobs and, at the same time, conserving the the tax, customs, and investor regimes; ensuring the natural resource base. In Jordan (Wadi Mujib area), efficient functioning of financial and labor markets; new water harvest structures have weathered a se- and widening access to high-quality and affordable vere three-year drought, and plans are under way infrastructure, particularly for small and medium en- to scale up this technology to other areas. Earthen terprises (SMEs). banks used for water harvesting have been re- In Morocco an Investment Climate Assessment inforced by planting cactus-a technology intro- highlighted measures to encourage the growth and en- duced from Tunisia. The cactus, in turn, is harvested try of new firms. In Tunisia a joint Bank-government by farmers as feed for their livestock and as a program, Fonds d'Acces aux Marches d'Exportation source of income. In Egypt, in the northeast Wadi (FAMEX), is providing assistance to private compa- Um Ashtan catchment, an intensive seed collection nies in areas such as export marketing. In 2001 alone program for adapted forage and feed species con- the program attracted more than 100 new export firms. ducted with local Bedouins was combined with To support SME access to markets and information, maintenance of simple water-harvesting techniques the Bank recently launched an SME Exchange Program to literally transform the area from a bare, sterile in Algeria (in addition to Morocco and Tunisia), link- zone receiving only an annual average of 150 mil- ing chambers of commerce from both shores of the limeters of rainfall to a productive one. Mediterranean. Jordan currently is host to the most successful privatization program in the region, generat- ing revenues so far of nearly 12 percent of gross do- mestic product (GDP), creating more than 6,000 jobs, The above-mentioned objectives are also being met and providing benefits to consumers in the form of de- through a demand-driven process under the region's clining telecommunications rates, shorter waits for Reimbursable Technical Assistance Program. These telephone lines, and, in the transportation sector, high- nonlending services, part of a long-standing technical er numbers of available buses leading to higher levels assistance partnership with countries in the region not of ridership. This is a partnership under which the eligible for World Bank lending, have included work on World Bank Group manages a substantial trust fund diversification, human resource development, private for the U.S. Agency for International Development that sector development, and public sector reform, among supports the Jordan Privatization Program. others. Technical assistance has taken the form of tech- nical and policy advice, capacity building, project EMPOWERING POOR PEOPLE design and implementation, and consensus building. While in most cases this work has been done on an During fiscal 2002 numerous World Bank-supported ad hoc basis, there has been a shift toward a compre- initiatives have contributed to the empowerment of hensive and country-owned technical assistance frame- poor and vulnerable people. Most prominent among work. Saudi Arabia has a long-standing fixed program these are the Social Fund Programs. In Algeria, in the with the Bank, and Kuwait has just initiated its fixed worst of the bidonvilles (shantytowns in high-risk secu- 110 The World Bank Annual Report 2002 _ ^ 1 1 t- 2 paigns, combined with support for more than 22,000 disadvantaged childrcn. NGOs, community leaders (in- cluding women), and religious leaders are playing a key - ;1 ~>role in convincing parents to send their children, and t especially their daughters, to school. The recent Health > ~ . a L6 e 9 | Support Project to the Republic of Yemen illustrates the Bank's multipronged approach to health sector is- --I /^$ 1 7 sues in the region. The project will strengthen health --_4N_ j - services delivery by providing a package of integrated maternal and child health services in eight districts serving close to 1.5 million Yemeni; it will enhance the public health program to combat endemic diseases -< ' -' such as malaria; and it will improve health system - ~ water h,rvest,ng I management for more effective allocation anid efficient t , - ; --! -use of limited resources. Traditional water harvesting in the Republic of Yemen through community contracting. GLOBAL PRIORITIES Communicable Diseases In Egypt a Bank project has supported the expansion rity zones where no social services were provided), of the National Schistosomiasis Control Program a program to develop 28 social services centers has (NSCP) and provided technical assistance to strength- brought the communities a large array of services, en capacity in scientific research and public health including psychological, psychiatric, and physical reha- programming. Today the NSCP covers the entire rural bilitation for victims of terrorism; outreach to school population of Egypt, about 35 million. In Morocco the dropouts; parent health and education awareness Bank, under the Basic Health Project, has supported programs; social rights information; immunizations; the Tuberculosis (TB) Control and Expanded Immu- youth sports; and cultural programs. nization Programs leading to increased capacity and In the Republic of Yemen and in Egypt, social funds decentralizationi. For TB, both case detection and ther- are creating a culture of community participation by apeutic rates have reached 90 percent, with the treat- establishing effective partnerships and building capac- ment failure rate at less than I percent. Coverage rates ity amonig local communiities, governmenit ministries, for DPT3 (the final dose of diphtheria, pertussis, and and nongovernmienital organizations (NGOs). Empow- tetanus immllunizationi) and measles vaccinies in chil- erment is embodied in community structures such as dren less than 1 year old are 92 percent and 90 percent, parent councils, health communities, and water-user respectively, with nonsignificant differentials between associations. Subprojects encompass education and urban and rural areas. Under the same project the health services, innovative water-harvesting projects, Bank supported the elaboration of Morocco's national environlmiiental activities, microfinance, employment human immunodeficiency virus/acquired immune de- creation, and cultural heritage activities having a direct ficiency syndrome (HIV/AIDS) action plan, which was impact on tourism, with direct income going to com- validated by the government during a national work- munLities. In the Republic of Yemen 4.6 million people shop in the fall of 2001. have benefited directly, and about I million indirectly, Countries in the Middle East and North Africa from these activities. In Egypt, increasing girls' en- devote over 5 percent of their GDP to their health rollment in basic education is a major goal of Bank- systems. Health outcomes, however, are often disap- supported education and social fund programs. Under pointing because health systems face serious organiza- the Egypt Education Enhancement Project (EEP), new tional, quality, and efficiency problems. The Bank is schools were built in isolated, deprived communities, assisting the countries through projects and advisory increasing enrollmiienit and reducing overcrowding. The services focusing on broader systemic reforms in EEP also raised parental demand for girl's education Egypt, the Islamic Republic of Iran, Jordan, Morocco, through more than 200 community awareness cam- and Tunisia. Chapter 5 Regional Perspectives Figure 5.11 Middle East and North Africa: IBRD and Figure 5.12 Middle East and North Africa: IBRD and IDA Lending by Theme, Fiscal 2002 IDA Lending by Sector, Fiscal 2002 Share of total of $0.6 billion Share of total of $0.6 billion Environmental & Natural Agriculture, Fishing & Forestry 1% Resource Management 4% Law & Justice & Rural Development 3% Economic Management 1% Water, Sanitation & Public Administration 13% Urban Development Public Sector Flood Protection 13% 10%/ -X | | \Governance 17% Information & Communication Human - ~~~~~~~~~~~Transportation '. Human 3 %X \ 3/ .;\ Development 13 i 11% 4 > Rule of Law <- 11%~~~~~~9 SocialEnergy & Education 7% Social _ _1 ~~~~~~~~~Mining <1% \Y. Development, M <1% Gender & w i Ei_ _¢ IndustryS Inclusion 2% | ll 11 - - wF Trade 13% Social Protection & Health & Other L Finance 20% Risk Management 2% Financial & Private Social Services 8% Trade & Integration 4% Sector Development 37% Trade and Integration port Duty Free Shops, and the Jordan Flight Catering Recognizinig the slow pace of global integration in Company, bringing in foreign investmenit and resulting Middle East and North Africa countries, the Bank ac- in clear benefits to customers. In Morocco the Bank's tively supports global integration through lending and Policy Reform Loan initiated a major customs reform nonlenidinig services. Benefits of these programs are under its public sector reform component. This has now observable in the field in Jordan, Morocco, and reduced the average wait for customs clearance from Tunisia as customs procedures have become simpler. two days to less than one day. Under an Economiiic Competitiveness Adjustment Loan, Tunisiani exporters have obtained reimburse- International Financial Architecture ments for tax credits in 30 days instead of up to six In fiscal 2002, Bank efforts to enhance the interna- monlths. Jordanian authorities opened the Aqaba Spe- tional financial infrastructure included Financial Sector cial Economic Zone in May 2001, providing a "first Assessment Papers, under way in Morocco and com- world business environmlent" for enterprises, mainly pleted in Tunisia; the Country Financial Accountability export-oriented enterprises, to which the Bank con- Assessment in Egypt; and accounting and auditing tributed resources under an Economic Restructuring Reports on1 the Observance of Standards and Codes and Development Loan. Assisted in part by Bank tech- (ROSC), Linder way in Egypt and Morocco. In addi- nical expertise, Jordan has accelerated its privatization tion, a ROSC on corporate governance was completed programs since January 2000 with Jordan Telecom, Air- in Morocco. 112 The World Bank Annual Report 2002 Table 5.6 World Bank Lending to Borrowers in Middle East and North Africa, by Theme and Sector, Fiscal 1993-2002 (millions of dollars) 1993-97 1998-99 (annual (annual average) average) 2000 2001 2002 THEME : Economic Management 50.5 5.2 0.0 11.9 5 0 Public Sector Governance 79.5 89.8 130.6 102.6 | 93.3 A Rule of Law 16.1 59.5 9.3 56.5 49.1i Financial and Private Sector Development 350.4 361.1 61.8 78.8 204.1 Trade and Integration 28.3 38.8 3.0 3.4 [ 24.8 Social Protection and Risk Management 68.3 87.4 100.0 5.6 1:1.01 Social Development, Gender, and Inclusion 69.0 64.5 71.6 52.5 13.4. Human Development 94.0 179.0 187.9 35.7 61.9 Urban Development 140.8 125.9 143.5 46.7 55;8 Rural Development 214.3 175.3 89.2 86.4 14.51 Environmental and Natural Resource Management 204.1 94.2 123.3 27.5 21 7il Theme Total 1,305.2 1,280.8 920.0 507.5 554.51 SECTOR . Agriculture, Fishing, and Forestry 234.8 147.9 120.6 46.5 : 2.9.. Law and Justice and Public Administration 127.4 236.0 108.9 161.5 74.7 Information and Communication 11.0 33.8 1.3 59.2 .69.9 | Education 97.2 94.2 197.1 72.3 38.06 Finance 161.8 190.8 5.3 0.0 1105 Health and Other Social Services 98.2 159.8 158.9 39.3 41.7 Industry and Trade 170.9 168.6 47.9 27.0 7.137'j Energy and Mining 82.2 56.8 0.0 0.0 .1.3.1 Transportation 146.5 81.7 59.6 82.8 V 70.9 j Water, Sanitation, and Flood Protection 175.3 110.9 220.5 19.0 73.1 Sector Total 1,305.2 1,280.8 920.0 507.5 554.5-| Of which IBRD 1,155.7 955.5 760.3 355.2 1 451.8 Of which IDA 149.5 325.3 159.8 152.3 { 102.7'1 Note. Lending is summarized in the 1 1 main theme categories and 10 main sector categories in the new thematic-sectoral coding system, which in- cludes 68 themes and 57 sectors. See table 2.2, page 30. Numbers may not add to totals because of rounding. Chapter 5 Regional Perspectives 113 , r L --=- L. Chapter 6 L Tables About the World Bank TABLE 6.1 Country Eligibility for Borrowing from the World Bank 131 Organizational Information TABLE 6.2 World Bank Commitments, Governors and Alternates 116 Disbursements, and Net Transfers in Africa, - Executive Directors and Alternates' Fiscal 1997-2002 133 and Their Voting Power 120 TABLE 6.3 World Bank Dmmitments, Officers 122 Disbursements, and Net Transfers in Office Locations, ; 123 East Asia and Pacific, Fiscal 1997-2002 133 TABLE 6.4 World Bank Commitments, Disbursements, and Net Transfers in South Asia, Fiscal 1997-2002 134 . TABLE 6.5 World Bank Commitments, Disbursements, and Net Transfers in Europe and Central Asia, Fiscal 1997-2002 134 TABLE 6.6 World Bank Commitments, Disbursements, and Net Transfers in Latin America and the Caribbean, Fiscal 1997-2002 135 TABLE 6.7 World Bank Commitments, Disbursements, and Net Transfers in Middle East and North Africa, Fiscal 1997-2002 135 TABLE 6.8 Summaries of Operations Approved during Fiscal 2002, Africa 136 TABLE 6.9 Summaries of Operations Approved during Fiscal 2002, East Asia and Pacific 144 TABLE 6.10 Summaries of Operations Approved during Fiscal 2002, South Asia 148 TABLE 6.11 Summaries of Operations Approved during Fiscal 2002, Europe and Central Asia 151 TABLE 6.12 Summaries of Operations Approved during Fiscal 2002, Latin America and the Caribbean 157 TABLE 6.13 Summaries of Operations Approved during Fiscal 2002, Middle East and North Africa 164 TABLE 6.14 World Bank Adjustment Operations, Fiscal 2002 166 Organizational Information Governors and Alternates June 30, 2002 Ike-r'- Go%ernor Alternate Afghanistan Hedayat Amin-Arsala (vacant) Albania Kastriot Islami Fatos Ibrahimi Algeria Mohamed Terbeche Omar Bougara Angola Ana Dias Lourenco Job Graca Antigua and Barbuda + Lester B. Bird Asot A. Michael Argentina Roberto Lavagna Mario Blejer Armenia Vahram Nercissiantz Karen Chshmarityan Australia Peter Costello Chris Gallus Austria Karl-Heinz Grasser Thomas Wieser Azerbaijan Elman Siradjogly Rustamov Jahangir Fevzi Hajiyev Bahamas, The + William C. Allen Ruth R. Millar Bahrain + Abdulla Hassan Saif Zakaria Ahmed Hejres Banigladesh M. Saifur Rahman Anisul Huq Chowdhury Barbados Reginald Farley GrantleyW. Smith Belarus + Andrei V. Kobyakov Vladimir N. Shimov Belgium Didier Reynders Guy Quaden Belize Ralph Fonseca Sydney Campbell Benin Bruno Amoussou Lazare Sehoueto Bhutan Yeshey Zimiba (vacant) Bolivia Jacques Trigo Loubiere Bernardo Requena Blanco Bosnia and Herzegovina Azra Hadziahmetovic Mladen Ivanic Botswvana Baledzi Gaolathe Serwalo S.G. Tumelo Brazil Pedro Sampaio Malan Arminio Fraga Neto Brunei Darussalam + Haji Hassanal 13olkiah Yakub Abu Bakar Bulgaria + Milen Veltchev Martin Mihaylov Zaimov Burkina Faso Jean Baptiste Compaore Etienne Yamneogo Burundi Edouard Kadigiri Dieudonne Nintunze Cambodia Keat Chhon Ouk Rabun Cameroon Martin Okouda Daniel Njankouo Lamere Canada John Manley Leonard M. Good Cape Verde Carlos Augusto Duarte Burgo (vacant) Central African Republic Alexis Ngomba Clemenit Eregani Chad Mahamat Ali Hassan Maina Touka Sahanaye Chile Nicolas Eyzaguirre Mario Marcel China Xiang Huaicheng Jin Liqun Colombia Juan Manuel Santos Calderon Juan Carlos Echeverry Comoros Djaffar Mmadi Moindjie Saadi Congo, Democratic Republic of Matungulu Mbuyamu Ilankir Jean-Claude Masangu Mulongo Congo, Republic of Mathias Dzon Clement Mierassa Costa Rica Jorge WValter Bolanos Rojas Eduardo Lizano Fait C6te d'lvoire Affi N'Guessan Bouabre Bohoun Croatia Mato Crkvenac Josip Kulisic Cyprus Takis Klerides Andreas Tryfonides Czech Republic Jiri Rusnok Oldrich Dedek Denmark Per Stig Moller Carsten Staur Djibouti Yacin Elmi Bouh Nouh Omnar Miguil Dominica Swinburne Lestrade Ambrose M. J. Sylvester Dominican Republic Francisco M. Guerrero Prats-R. Luis Manuel Piantini Ecuador Carlos Julio Emanuel Julio Ponce Arteta Egypt, Arab Republic of Medhat Hassaneiii Faiza Abulnaga 116 The World Bank Annual Report 2002 -~~~~ ~6 over.noUr .-:. Aiene El Salvador Juan Jose Daboub Rafael Barraza Equatorial Guinea Fortunato Ofa Mbo Melchor Esono Edjo Eritrea Berhane Abrehe Kibrom Dafla Estonia + Harri Ounapuu Renaldo Mandimiets Ethiopia Sufian Ahmed Mekonnen Manyazewal Fiji Jone Yavala Kubuabola Solomone S. Kotobalavu Finland Sauli Niinisto Satu Hlassi France Francis Mer Jean-Pierre Jouyet Gabon Casimir Oye-Mba Claude Ayo Iguendha Gambia, The Famnara L. Jatta Dodou B. Jagne Georgia Mirian Gogiashvili Giorgi Gachechiladze Germany Heidemarie Wieczorek-Zeul Caio K. Koch-Weser Ghana Yaw Osafo-Maafo Grace Coleman Greece Nikolaos Christodoulakis Vasilis Rapanos Grenada Anthony Boatswain Swinburne Lestrade Guatemala Eduardo Humberto Weymann Fuentes Lizardo Arturo Sosa Lopez Guinea Cheick Ahmadou Camara Cellou Dalein Diallo Guinea-Bissau Rui Duarte Barros Verissimo Paulino Nancassa Guyana Bharrat Jagdeo Saisnarine Kowlessar Haiti Faubert Gustave Venel Joseph Honduras Arturo Alvarado Maria Elena Mondragon de Villar Hungary Csaba Laszlo Peter Adamecz Iceland Halldor Asgrimsson Geir Hilmar Haarde India Yashwant Sinha Chander Mohan Vasudev Indonesia Boediono Achjar lljas Iran, Islamic Republic of Thahmaseb Mazaheri-Khorzani Mohammad Khazaee-Torshizi Iraq Issam Rashid Hwaish Hashim Ali Obaid Ireland Charlie McCreevy Tom Considine Israel David Klein Ohad Marani Italy Antonio Fazio Lorenzo Bini Smaghi Jamaica + Omar Lloyd Davies Wesley George Hughes Japan Masajuro Shiokawa Masaru Hayami Jordan Bassem I. Awadallah Hala Bsaiso Lattouf Kazakhstani Alexander Sergeyevich Pavlov Mazhit T. Yessenbayev Kenya Christopher Mogere Obure Mwaghazi W. Mwachofi Kiribati Beniamina Tinga Tebwe letaake Korea, Republic of Yun-Churl Jeon Seung Park Kuwait Yousef Hamad Al-Ebraheem Bader Meshari Al-Humaidhi Kyrgyz Republic Temirbek Akmataliev Kubat Abduldaevich Kanimetov Lao People's Democratic Republic Soukanh Mahalath Phouphet Khamphounvong Latvia Roberts Zile Aigars Kalvitis Lebanon Fuad A.B. Siniora Basil R. Fuleihan Lesotho Mohlabi Kenneth Tsekoa T. J. Ramotsoari Liberia Amelia A. Ward M. Nathaniel Barnes Libya Alojeli Abdel Salam Breeni Ali Ramadan Shnebsh Lithuania + Dalia Grybauskaite Arvydas Kregzde Luxembourg Luc Frieden Jean Guill Macedonia, former Yugoslav Republic of Nikola Gruevski Vanco Kargov Madagascar Pierrot J. Rajaonarivelo Simon Constant Horace (continued next page) Chapter 6 About the World Bank 117 Governors and Alternates (continued) [Member Governor Alternate Malawi Friday Jumbe Zaki Chalira Malaysia Mahathir Mohamad Samsudini Hitam Maldives Fathulla jamecl Adam Maniku Mali Ousnmanie Issoufi Maiga Toure Alimata lraore Malta + John Dalli Joseph Scicluna Marshall Islands Michael Konelios Smith Michael Mauritania Mohamed Ould Nainy Abdallah Ould Hormtallah Mauritius Khushhal Chanid Khushiram Philippe Ong Seng Mexico Francisco Gil Diaz Agustin Carstens Micronesia, Federated States of John Ehsa Sebastian L. Anefal Moldova Zinaida Grecianii Dumitru Ursu Mongolia Chultem Ulaan Ochirbat Chuluunibat Morocco Fathallah Oualalou Ahmed Lahlirni Mozambiquc Adriano Afonso Maleiane Manuel Chang Mvanmar Khin Maung Thein Soe liii Namibia + Saara Kuugongelwa Usutuaije Maarnberua Nepal Ram Sharan Mahat Biimal P. Koirala Netherlands Gerrit ZalIm Eveli ne Herflkeiis New Zealand Michael Cullen Alan Bollard Nicaragua Eduardo Montealegre Rivas Mario Alonso Icabalceta Niger Ali Badjo Gamatie Maliki Barhouni Nigeria Adamu Ciroma Thelma Amata Iremiren Norwvav Hilde Frafjord Johinsoni Olav Kjorven Oman Ahmed Macki Mohamimled bin Nasser Al-Khasibi Pakistan Shaukat Aziz Nawid Ahsan Palau Casmir Remeingesau Lawrence Alan Goddard Panama Norberto Delgado Durani Dominigo Latorraca Papua New Guinea Mekere Morauta Koiari Tarata Paraguay James Spalding Jose Ernesto Buttner Peru Pedro Pablo Kuczynski Richard Webb Philippines lose Isidro N. Camaclio Rafael B. Buenavenitura Poland Leszek Balcerowicz Andrzej S. Bratkowski Portugal Manuela Ferreira Leite Miguel Frasquilho Qatar + Yousef Hussain Kamal Abdullah Bin Khalid Al-Attiyah Romania + Mihai Nicolae ranasescu Emil Iota Ghizari Russian Federation Viktor Khristenko German 0. Gref Rwanda Donald Kaberuka Jean Marie Karekezi St. Kitts and Nevis Denzil Douglas Wendell Everton Lawrcice St. Lucia Kenny D. Anthoniy Bernard La Corbiniere St. Vincent and the Grenadines Ralph E. Gonsalves Laura Antlhoniy-Brownie Samoa Misa Telefoni Retzlaff Hiinauri Petana San Marino + Fiorenzo Stolfi Clelio Galassi Sao Tome and Principe Adelino Santiago Castelo David Angela M. da Graca Viegas Sanitiago Saudi Arabia Ibrahim A. Al-Assaf Hamad AI-Sayari Senegal Abdoulaye Diop Cheikh Hadjibou Souniare Seychelles + Jereniie Boninelame Alain Butler-Payette Sierra Leone Peter J. Kuyenibeh Samura Kamara Singapore + Lee Hsien Loong Limii Siong GLian Slovak Republic Ivan Miklos Marian Jusko Slovenia Anton Rop Irena Sodin 118 The World Bank Annual Report 2002 rN a 19br N II 0M,j,ove r. n or WE --A. ra Solomon Islands Laurie Chan Shadrach Fanega Somalia (vacant) (vacant) South Africa Trevor Andrew Manuel Mandisi Bongani Mpahlwa Spain Rodrigo de Rato Figaredo Juan Costa Climent Sri Lanka Kairshasp Nariman Choksy Charitha Ratwatte Sudan Abdul Rahim Hamdi Sabir Mohamed Hassan Suriname + Humphrey S. Hildenberg Stanley B. Ramsaran Swaziland Guduza Dlamini Musa D. Fakudze Sweden Bosse Ringholm Jan 0. Karlsson Switzerland Pascal Couchepin Joseph Deiss Syrian Arab Republic Muhammad Al-Atrash Mohamad Bittar Tajikistan Safarali Najmuddinov Maruf N. Sayfiev Tanzania Abdallah Omar Kigoda Peter J. Ngumbullu Thailand Somkid Jatusripitak Somchainuk Engtrakul Togo Simfeitcheou Pre Kossi Assimaidou Tonga Siosiua T. T. 'Utoikamanu 'Aisake V. Eke Trinidad and Tobago Patrick Manning Conrad Enill Tunisia Fethi Merdassi Abdelhamid Triki Turkey Faik Oztrak Aydin Karaoz Turkmenistan + Ymamdurdy Gandymov (vacant) Uganda Gerald M. Ssendaula C. M. Kassami Ukraine + Vasyl Rohovyi Alexander Shlapak United Arab Emirates Hamdan bin Rashid Al-Maktoum Mohammed Khalfan Bin Khirbash United Kingdom Clare Short Gordon Brown United States Paul H. O'Neill Alan P. Larson Uruguay + Alberto Bension Ariel Davrieux Uzbekistan Rustam S. Azimov (vacant) Vanuatu Sela Molisa Jeffery Wilfred Venezuela, Republica Bolivariana de + Felipe Perez Tobias Nobrega Suarez Vietnam Le Duc Thuy Duong Thu Huong Yemen, Republic of Ahmed Mohamed Sofan Anwar Rizq Al-Harazi Yugoslavia, Federal Republic of Miroljub Labus Jovan Rankovic Zambia Boniface Nonde Likolo Ndalamei Zimbabwe Simba Herbert Stanley Makoni Leonard Ladislas Tsumba Not a member of IDA. Chapter 6 About the World Bank 119 Organizational Information Executive Directors and Alternates and Their Voting Power June 30, 2002 11 JA1 Percent Percent Total of Total of Executive Director Alternate Casting votes of votes total votes total Appointed Carole Brookins Robert B. Holland, Ill United States 265,219 16.45 1,913,640 14.52 Yuzo Harada Masanori Yoshida Japan 127,250 7.89 1,461,212 11.09 Eckhard Deutscher Eckhardt Biskup Germany 72,649 4.51 940,076 7.13 Tom Scholar Rosemarv B. Stevenson United Kingdom 69,647 4.32 658,718 5.00 Pierre Duquesne Emimianuel Moulii France 69,647 4.32 579,342 4.40 Elected Philippe M. Peeters Emini Dedeoglu Austria, Belarus,' Belgium, Czech 77,669 4.82 592,203 4.49 (Belgium) (Turkey) Republic, Hungary, Kazakhstan, Luxembourg, Slovak Republic, Slovenia, Turkey Moises Pineda Josc H. Machillanda Costa Rica, El Salvador, Guatemala, 72,786 4.51 291,969 2.22 (Mexico) (Rep. Bol. de VeczuIela) Honduras, Mexico, Nicaragua, Spain, Venezuela (Republica Bolivariana de)' Pieter Stek Taniara Solyanvk Arimieniia, Bosnia and Herzegovina, 72,208 4.48 478,024 3.63 (Netherlands) (Ukraiine) Bulgaria,' Croatia, Cyprus, Georgia, Israel, Macedonia (former Yugoslav Republic of), Moldova, Netherlands, Romania,' Ukraine' Terrie O'Leary Sharon\ Wleber Antigua and Barbuda,' The Bahamas,' 62,217 3.86 560,547 4.25 (Canada) (Jamaica) Barbados, Belize, Canada, Dominica, Grenada, Guyana, Ireland, Jamaica,' St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines Jaime Ruiz l.uisAntonio Balduinio Brazil, Colombia, Dominican Republic, 58,124 3.61 392,696 2.98 (Colombia) (Brazil) Ecuador, Haiti, Panama, Philippines, Suriname,' Trinidad and Tobago Franco Passacantando l-lelena Cordeiro Albania, Greece, Italy, Malta,' Portugal, 55,938 3.47 517,721 3.93 (Italy) (I'ortugal) San Marinoa Neil F. Hyden Dong-Soo Chin Australia, Cambodia, Kiribati, Korea 55,800 3.46 396,886 3.01 (Australia) (Rep. of Korea) (Republic of), Marshall Islands, Micronesia (Federated States of), Mongolia, New Zealand, Palau, Papua New Guinea, Samoa, Solomon Islands, Vanuatu Balmiki Prasad Singhb Akbar Ali Khani Bangladesh, Bhutan, India, Sri Lanka 54,945 3.41 546,804 4.15 (India) (Bangladesh) Ahmed Sadoudi Inaamiul lIaquec Algeria, Ghana, Iran (Islamic Republic 54,052 3.35 253,710 1.93 (Algeria) (Pakistan) of), Iraq, Morocco, Pakistan, Tunisia Finn Jonck Inkeri Hirvensalo Denmark, Estonia,' Finland, Iceland, 54,039 3.35 652,246 4.95 (Denmark) (Finlanid) Latvia, Lithuania,a Norway, Sweden Girmai Abraham Richard H. Kaijuka Angola, Botswana, Burundi, Eritrea, 53,962 3.35 476,109 3.61 (Eritrea) (Uganda) The Gambia, Kenya, Lesotho, Liberia, Malawi, Mozambique, Namibia,' Nigeria, Seychelles,' Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe 120 The World Bank Annual Report 2002 Percent Percent Total of Total of Executive Director Alternate Casting votes of votes total votes total Pietro Veglio Jerzy Hylewski Azerbaijan, Kyrgyz Republic, Poland, 46,096 2.86 467,821 3.55 (Switzerland) (Poland) Switzerland, Tajikistan, Turkmenistan,' Uzbekistan Zhu Guangyao Chen Huand China 45,049 2.79 247,345 1.88 (China) (China) YahyaAbdullaM. Abdulrahman M. Saudi Arabia 45,045 2.79 471,464 3.58 Alyahya Almofadhi (Saudi Arabia) (Saudi Arabia) (Vacant)' Eugene Miagkov Russian Federation 45,045 2.79 35,991 0.27 (Russian Federation) (Russian Fcderationi) Mahdy Ismail Aljazzaf Mohaincd Kamel Amr Bahrain,' Egypt (Arab Republic of), 43,984 2.73 283,980 2.16 (Kuwait) (Arab Republic of Egypt) Jordan, Kuwait, Lebanon, Libya, Maldives, Oman, Qatar,' Syrian Arab Republic, United Arab Emirates, Yemen (Republic of) Abdul Aziz Mohd. Nguyen Doail Hung Brunei Darussalam,' Fij, .._onesia, 41,096 2.55 345,372 2.62 Yaacob (Vietnamii) Lao People's Democratic Republic, (Malaysia) Malaysia, Myanm1ar, Nepal, Singapore,' Thailand, Tonga, Vietnam Mario Soto-Platero Roberto Garcia-Lopez Argentina, Bolivia, Chile, Paraguay, 37,499 2.33 237,131 1.80 (Uruguay) (Argentina) Peru, Uruguay' Bassary Toure Paulo F. Gomes Benin, Burkina Faso, Cameroon, Cape 32,252 2.00 374,898 2.85 (Mali) (Guinea-Bissau) Verde, Central African Republic, Chad, Comoros, Congo (Democratic Republic of), Congo (Republic of), C6te d'lvoire, Djibouti, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Madagascar, Mali, Mauritania, Mauritius, Niger, Rwanda, Sao Tome and Principe, Senegal, Togo In additioni to the Executive Directors and alternates showni in the foregoing list, the followin1g also served after Junle 30, 2001: Executive director End of period of service Alternate End of period of service Khalid M.AI-Saad (Kuwait) October 31,2001 AnnaM. Brandt (Sweden) July 31,2001 Andrei 13ugrov (Russian Federation) March 31, 2002 Lewis D. Holden (New Zealand) July 6, 2)01 NMatthias Meyer (Switzerland) March 31, 2002 Mahbub Kabir (Banigladesh) September 21, 2001 lean-Claude Milleron (France) August 1, 2001 Stephen Pickford (United Kingdom1) December 16, 2001 Jan Piercy (United States) August 19, 2001 Flelmut Schaffer (Germany) lune 15, 2002 Note: Afghanistan (550 votes in IBRD and 13,557 votes in IDA), Ethiopia (1228 votes in IBRD and 23,053 votes in IDA), and Somalia (802 votes in IBRD and 1 0,506 votes in IDA) did not participate in the 2000 Regular Election of Executive Directors. The Federal Republic of Yugoslavia (1,847 votes in IBRD and 25.109 votes in IDA) became a member after that election. a. Member of IBRD only b To be succeeded by C M. Vasudev (India) effective August 1, 2002. c: To be succeeded by Tanwir Ali Agha (Pakistan) effective July 1, 2002. d To be succeeded by Wu Jinkang (China) effective July 1 5, 2002. e. To be su.cceeded by Alexey G. Kvasov (Russian Federation) effective July 1, 2002 Chapter 6 About the World Bank 121 Organizational Information Officers June 30, 2002 President James D. Wolfensohn Managing Director Shengman Zhang Managing Director Jeffrey A. Goldstein Managing Director Mamphela Ramphele Managing D)irector Peter Woicke Senior Vice President and Chief Financial Officer Gary Perlin Senior Vice President, Development Economics, and Chief Economist Nicholas Stern Vice President and Network Head, Operations Policy and Country Services James W. Adams Vice President, Financial Sector Cesare Calari Vice President and Controller Fayezul H. Choudhury Vice President, Latin America and the Caribbean David de Ferranti Vice President and Corporate Secretary Cheikh Ibrahima Fall Vice President and Network Head, Environmllentally and Sociallyv Sustainable Developmenit Ian Johnson Vice President, External Affairs and U.N. Affairs Mats Karisson Vice President, East Asia and Pacific Jemal-ud-din Kassum Vice President, Resource Mobilization and Cofinanicing Motoo Kusakabe Vice President, World Bank Institute Frannie Leautier Vice President, Europe and Central Asia Johannes Linn Vice President, Africa Callisto Madavo Vice lIresident and Chief Information Officer Mohamed Muhsin Vice President and Network Head, Poverty Reduction and Economic Mianagemiienlt Gobind Nankani Vice lPresideent, South Asia Mieko Nishimizu Vice President, External Affairs, Europe Jean-Francois Rischard Vice President and Network Head, Human Development Jo Ritzen Vice President, Middle East and North Africa Jean-Louis Sarbib Vice President, Private Sector Development and Infrastructure and Network Head, Private Sector and Infrastructure Nemat Shafik Vice President, Human Resources Katherine Sierra Vice President, Strategy and Resource Managemiienit Anil Sood Vice President and General CouLnsel Ko-Yung Tung Vice President and Ireasurer Graeme Wheeler Director-General, Operations Evaluationi Robert Picciotto 122 The World Bank Annual Report 2002 Organizational Informatio Office Locations June 30, 2002 Headquarters Geneva Albania 1818 H Street N.W. Mr. Alfredo Sfeir-Younis Mr. Eugen Scanteie Washington, D.C. 20433, U.S.A. The World Bank The World Bank Tel: (202) 473-1000 3, chemin Louis-Dunant Deshmoret e 4 Shkurtit, No. 34 Fax: (202) 477-6391 Case Postale 66 Tirana, Albania E-mail: feedback@worldbank.org 1211 Geneva 20, Switzerland Tel: (355-4) 230 017 Web: www.worldbank.org Tel: (41-22) 748 1000 Fax: (355-4) 240 590 Fax: (41-22) 748 1030 E-mail: Escanteie@worldbank.org New York Office Mr. Eduardo A. Doryan London Algeria The World Bank, Office of the Special The World Bank Mr. Djamal Mostefai Representative to the U.N. New Zealand House The World Bank Liaison Office 809 United Nations Plaza, Suite 900 15th Floor, Haymarket c/o Hotel Sheraton New York, N.Y. 10017, U.S.A. London SW I Y4TE, England Staoueli, Algiers, Algeria E-mail: edoryan@worldbank.org Tel: (44-20) 7930-8511 Tel: (213-21) 37-66-13 Fax: (44-20) 7930-8515 Fax: (213-21) 37-66-14 New Address effective 8/15/02 E-mail: Dmostefai@worldbank.org I Dag Hammarskjold Plaza Rm 885 2nd Avenue, 26th Floor Rome New York, N.Y. 10017, U.S.A. Ms Susana Esteban Berrocal Ms. Olinda M. Vieira Dias Fax: (212) 355-4523 Via Labicana 110 The World Bank Liaison Office 00184 Rome, Italy Rua Alfredo Troni (Edificio BPC) Europe Tel: (39-06) 77 7101 No. 15,14 Andar (14th Floor) Eur.opean-Fran~ois RischardFax: (39-06) 70 96 046 Luanda, Angola Mr. iean-Franeois Rischard Web: www.worldbank.org/europe (postal address: Caixa Postal 1331) Vice President Tel: (244-2) 394-877 66anque Mondiale Tokyo Fax: (244-2) 394-784 66 avenue d'lena Mr. Yukio Yoshimura E-mail: Otorresvieiradia@a'worldbank.org 75116 Paris, France Vice President Tel: (33-1) 40 69 30 00 The World Bank *Argentina Fax: (33-v1) 40 69 30 64 10th Floor, Fukoku Seimei Building Ms. Myrna L. Alexander 2-2-2 Uchisaiwai-cho, Chiyoda-ku Banco Mundial Tokyo 100-0011 Japan Edificio Bouchard Brussels Tel: (81-3) 3597-6650 Bouchard 547, 3er Piso Mr. Andrew Rogerson Fax: (81-3) 3597-6695 C 106ABG Buenos Aires, Argentina 3anque Mondiale E-mail: Yyoshimural@worldbank.org Tel: (54-11) 4316-9700 10 rue M sontoyer E-mail: Ptokyo@worldbank.org Fax: (54-11) 4313-1233 B-1000 Brussels, Belgium Web: http://%,ww.worldbank.or.jp/ E-mail: Mlalexander@worldbank.org Fax: (32-2) 552 00 25 Afghanistan Armenia E-mail: Arogerson@worldbank.org Mr. William Byrd Mr. Owaise Saadat (through 7/31/02) Web: www.worldbank.org/eu The World Bank Mr. Roger Robinson (effective 8/1/02) Street No. 15, House No. 19 The World Bank Frankfurt Wazir Akbar Khan Republic Square Mr. Oltmann G. Siemens Kabul, Afghanistan 9 V. Sargsyan Street The World Bank Tel: 0093 7207 9192 Yerevan 375010, Armenia Bockenheimer Lamdstrasse 109 E-mail: Wbyrd@worldbank.org Tel: (374-1) 527888 60325 Frankfurt am Main, Germany Fax: (374-1) 521787 Tel: (49-69) 743-48230 E-mail: Osaadat@worldbank.org E-mail: Rrobinson@worldbank.org *Country Directors are located in the country office See the Map of Country Offices and Borrower Eligibility in Chapter 5. Note: Web sites for Bank regions appear on pages 174 and 1 75. Chapter 6 About the World Bank 123 *Australia Benin Brazil, Recife Mr. Klaus Rohland Ms. Diarietou Gaye Mr. Tulio Barbosa The Vorld Bank Banque Mondialc Ban)co Mundial Level 19, CMI Building Zone R1sidentielle de la Radio Edificio SUDENE, Sala 13S-021 14 Martin Place Cotonou, B5nin Cidade Universitaria Sydney NSW 2000, Australia (postal address: B.P. 03-21 12) 50670-900 Recife, PE, Brazil Tel: (61-2) 9235-6522 Tel: (229) 312124 'Tel: (55-81) 3453-1644 Fax: (61-2) 9223-9903 Fax: (229) 312751, 315839 Fax: (55-81) 3453-4624 E-mail: Krohland@worldbank.org E-mail: Dgaye@worldbank.org E-mail: Tbarbosa@worldbank.org Azerbaijan Bolivia Bulgaria Mr. Akbar Noman Mr. John Newmana Mr. Oscar de Bruyn Kops The World Bank Banco Mundial The World Bank 91-95 Mirza Mansur Street Edificio Victor, piso 9 World Trade Ceniter-Interpred Icheri Sheher Calle Fernando Guachalla #342- 36 D)ragan Tsankov Blvd. Baku, 370004, Azerbaijan Sopocachi 1040 Sofia, Bulgaria Tel: (994-12) 922586 La Paz, Bolivia 'Icl: (359-2) 96 97 229 Fax: (994-12) 921479 (postal address: Casilla 8692) Fax: (359-2) 971 20 45 E-mail: Anoman@worldbank.org Tel: (591-2) 244-3555 E-mail: Odebruynkops@x'worldbalnk.org Fax: (591-2) 212-988(0 Web: http://wNwv.worldbank.bg/ *Bangladesh E-mail: lnewmanCi@worldbank.org Mr. Frederick Thomas Temple Burkina Faso The 'Aorld Bank Bosnia and Herzegovina Mr. Jean Mazurelle 3A, Paribagh Mr. Joscph K. Ingram Banquc Mondiale Dhaka 1000, Banigladesh The World Bank ImmILeuble BICIA, 36me ctage (postal address: G.P.O. Box 97) Hamdijc Kresevljakovica 19/5 Ouagadougou, Burkinia Faso 'Tel: (880-2) 861-1056 71000 Sarajevo (postal addrcss: B.P. 622) Fax: (880-2) 861-3220 Bosnia and l-lerzegovinia 'Tel: (226) 306237 E-mail: Ftemple@worldbank.org Tel: (387-33) 440 293 Fax: (226) 308649 Fax: (387-33) 440 108 E-mail: Jmazurelle@worldbank.org Belarus E-nma il: lingram@xworldbank.org Mr. Sergiy Kulyk Web: http://wvwv.worldbanik.org.ba/ Burundi The World Bank Mr. Mathuritn Gbetibouo 2A Gertsen Street, 2nd Floor *Brazil Banque Mondialc tvlinsk, 220)0)30) Mr. Vinod Thomas avenuc du 18 septemilbre Republic of Belarus Banco Mulidial Bujumbura, Burundi Tel: (375-17) 226-5284 Setor Comercial Norte Quadra (12 (postal address: B.P. 2637) Fax: (375-17) 211-0314 Lote A-Edificio Tel: (257) 222443, 223269 E-mail: Skulyk@worldbank.org Corporate Financial Center Fax: (257-2) 26005 Conjunitos 303/304, 603 F-mail: Mgbetibouo@H)worldbank.org Belgium Brasilia, DF 70712-900, Brazil Ms. Margret C. Thalwitz Tel: (55-61) 329-1000 Cambodia Banque Mondiale Fax: (55-61) 329- 1010 Mr. Bonaventure Mbida-Essama Rue Montoyer E-mail: Vthomas@worldbank.org The World Bank 17-19, 1st Floor 13 Norodom Boulevard 1040 Brussels, Belgium Brazil, Fortaleza Phniomil Penh, Cambodia Tel: (32-2) 504 09 90 Mr. Viinod ''homas (postal address: P.O. Box 877) Fax: (32-2) 504 09 99 The World Bank liaison Office Tel: (855-23) 213538, 213639 E-mail: Mthalwitz@worldbank.org Rua Oswaldo Cruz, No. 01 Fax: (855-23) 210504, 210373 Edificio Beira Mar 'Trade Center, E-mail: Bmbidaessamiia@worldbank.org Sala 1710, 60125-150 - Fortaleza, Ceari, Brazil Tel: (55-85) 242-7200 Fax: (55-85) 242-7177 *Country Directors are located in the country office. See the Map of Country Offices and Borrower Eligibility in Chapter 5. Note: Web sites for Bank regions appear on pages 174 and 175 124 The World Bank Annual Report 2002 Cameroon Congo, Democratic Republic of East Timor Mr. Madani M. Tall Mr. Onno Ruhl Ms. Sarah F. Cliffe Banque Mondiale The World Bank The World Bank rue 1. 792, No. 186 avenue Wagenia, no. 4847 Rua Dos Direitos Humanos Yaounde, Cameroon Kinshasa-Gombe Dili, East Timor (postal address: B.P. 1128) Democratic Republic of Congo (postal address: World Bank Mission, 'Tel: (237) 221 68 75 Tel: (243) 99 49015 East 1'imor, GPO Box 3548, Fax: (237) 221 07 22 Fax: (243) 880-7817 Darwin, NT08t)1,Australia) E-mail: N1tall@worldbank.org E-mail: Oruhl@worldbank.org Tel: (670-390) 312-367/324-649 Fax: (670-390) 321-178 Central African Republic Congo, Republic of (from Australia only) Mr. Madani M. Tall Mr. Alassanc Diawara E-mail: Scliffe@worldbank.org Banque Mondiale The World Bank rLIe des Missions Immeuble BDEAC, 2e etage Ecuador Bangui, Republique Centrafricainie Boulevard de la Rcvolution Mr. McDoniald P. Benjamin (postal address: B.P. 819) P.O. Box 14536 Banco Mundial Tel: (236) 616 138 Brazzaville, Republic of Congo Calle 12 de Octubre 1830 y Cordero Fax: (236) 616087 Tel: (242) 81 33 30 World Trade Center E-mail: MNtallI)worldbank.org Fax: (242) 81 53 16 Torre B, Piso 13 E-mail: Adiawara@worldbank.org Quito, Ecuador Chad Tel: (593-2) 222 0204 Mr. Gregor Hans Binker t *C6te d'lvoire Fax: (593-2) 222 0205 Banque Mondiale Mr. Mamadou Dia E-mail: Mbenjaminl(worldbank.org avenue Charles de Gaulle Banque Mondiale et avenue du Commanidanit L.amy Corner of Booker Washington and *Egypt, Arab Republic of Quartier Bololo Jacques Aka Streets, Cocody, Mr. Mahmood A. Ayub N'D)jamena, Chad Abidjan 01, C6te d'lvoire The World Bank (postal address: B.P. 146) (postal address: B.P. 1850) WVorld Trade Center Tel: (235-52) 3247, 3360 Tel: (225) 22 4( 04 00 1191 Corniche El-Nil, 15th Floor Fax: (235-52) 4484 Fax: (225) 22 40 04 61 Boulaq E-mail: Gbinkert@worldbank.org E-mail: MdiaBiworldbank.org Cairo, Arab Republic of Egypt, 1221 'Tel: (20-2) 574-1670 *China *Croatia Fax: (20-2) 574-1676 Mr. Yukoni Huang Mr. Andrew Vorkink, Coulitry Director E-mail: Mayvub@worldbank.org The World Bank Ms. Indira Konjhodzic, Country 9th Floor, Building A, Fuhua Mansion Manager Eritrea No. 8, Chaoyangmen Beidajie The World Bank Mr. Emmanuel Y. Ablo Dongcheng District, Trg J.F: Keninedya 6b/111 The World Bank Beijing 100027, China HR-I0000 Zagreb, Croatia 15/17,Tscgai Adig Street (postal address: P.O. Box 100600-9086) Tel: (385-1) 2357-222 Zone 03, Subzone 01 Tel: (86-10) 6554-3361 Fax: (385-1) 2357-200 Asmara, Eritrea Fax: (86-1(1) 6554-1686 E-mail: Avorkink@%worldbank.org Tel: (291-1) 12 43 02 E-mail: Yhuang2@worldbank.org E-mail: Ikonjhodzic@worldbank.org Fax: (291-1) 12 43 09 WN'eb: http://www.worldbank.org.cn/ Web: http://www.worldbank.hr/ E-mail: Eablo@worldbank.org Colombia Dominican Republic *Ethiopia Mr. Alberto Chueca Mora Mr. Marco Mantovanelli Mr. Ishac Diwan Banco Mundial Banco Mundial The World Bank Carrera 7 No. 71-21 Calle Virgilio Diaz Ordofiez #36 Africa Avenue Torre A, piso 16 esq. Gustavo Mejia Ricart Bole Road Apartado 10229 Edificio Mezzo Tempo, Suite 401 Addis Ababa, Ethiopia Bogota, Colombia 4ta. Planta, Santo Domingo, R.D. (postal address: P.O. Box 5515) 'fel: (57-1) 326-3600 Tel: (809) 566-6815 Tel: (251-1) 62 77 00 Fax: (57-1) 326-3480 Fax: (809) 566-7746, 566-7189 Fax: (251-1) 62 77 17 E-mail: Achuecamora@worldbank.org E-mail: Mrmantovanelli(worldbank.org E-mail: Idiwan@0worldbank.org *Country Directors are located in the country office. See the Map of Country Offices and Borrower Eligibility in Chapter 5. Note. Web sites for Bank regions appear on pages 174 and 175. Chapter 6 About the World Bank 125 Gabon Guyana *Indonesia Banque Mondiale Mr. James Droop Mr. Mark Baird Quartier Palais de Justice The World Bank Liaison Office (through 8/31/02) Section RG UNDP Building Mr. Andrew Steer (effective 9/1/02) Parcelle No. 222 42 Brickdam and UN Place The World Bank Libreville, Gabon Stabroek Jakarta Stock Exchange Building Tel: (241) 73 81 71 Georgetown, Guyana Tower 2, 13th Floor Fax: (241) 73 81 69 Tel: (592) 223-5036 Sudirman Central Business Fax: (592) 225-1384 District (SCBD) Georgia E-mail: Jdroop@worldbank.org Ji. Jendral Sudirman Kav. 52-53 Mr. Tevfik Mehmet Yaprak Jakarta 12190, Indonesia The World Bank Haiti (postal address: P.O. Box 324/IKT) 5A, 1st Drive, Chavchavadze Avenue Mr. Marco Mantovanelli Tel: (62-21) 5299-3000 Tbilisi, 380079 Georgia Banque Mondiale Fax: (62-21) 5299-3111 Tel: (995-32) 91-30-96 c/o IDB, 389 Route de Bourdon E-mail: Mbaird@worldbank.org Fax: (995-32) 91-23-71 Port-au-Prince, Ha'ti (through 8/31/02) E-mail: Tyaprak@worldbank.org Tel: (509) 510-3797 E-mail: Asteer@worldbank.org Fax: (509) 512-5895 \ (809) 566-7746 (effective 9/1/02) *Ghana E-mail: M mantovanelli@worldbank.org Weeb: http://www.worldbank.or.id Mr. Mats Karlsson (effective 11/1/02) The World Bank Honduras Jamaica 69 Dr. Isert Road Mr. Joseph Owen Mr. Errol G. Graham North Ridge Residential Area Banco Mundial The World Bank Liaison Office Accra, Ghana Centro Financiero BANEXPO, 4to Piso Island Life Ccnter (postal address: P.O. Box M. 27) Boulevard San Juan 13osco 6 St. Lucia Avenue Tel: (233-21) 229681 Colonia Payaqui Third Floor Fax: (233-21) 227887 Apartado Postal 3591, Kingston 5, Jamaica Tegucigalpa, Honduras Tel: (876) 960-0459 Guatemala Tel: (504) 239-4551 Fax: (876) 960-0463 Mr. Eduardo Someinsatto Fax: (504) 239-4555 E-mail: Egraham@worldbank.org Banco Mundial E-mail: Jowen@worldbank.org 13 Calle 3-40 *Kazakhstan Zona 10, Edificio Atlantis, Piso 14 *India Mr. Dennis N. de Tray Guatemala City, Guatemala Mr. Edwin R. Lim 'I'he WAorld Bank Almatv Office Tel: (502) 366-2044 Mr. Michael Carter (effective 9/1/02) 41/A Kazybek bi Street, Fax: (502) 366-1936 The World Bank 4th Floor, 480100 Almaty, E-mail: Esomensatto@worldbanlk.org 70 Lodi Estate Republic of Kazakhstan New Delhi 110 003, India Tel: (7-3272) 980-580 Guinea (postal address: P.O. Box 416, Fax: (7-3272) 980-581 Mr. Jan Aime E. Weetjcns New Delhi 110 001) E-mail: Ddetray@worldbank.org Banque Mondiale lel: (91-11) 461 7241 Web: http://www.worldbanik.org.kz/ Immeuble de l'Archev&he Fax: (91-11) 461 9393 Face Baie des Anges E-mail: Elim@worldbank.org The World Bank Astana Ofihce Conakry, Guinee Web: http://www.worldbank.org.in1/ Samal Microdistrit, 14th Floor (postal address: B.P. 1420) Astana Towers Tel: (224) 412-770 473000 Astana, Republic of Kazakhstan Fax: (224) 415-094 Tel: (7-3172) 580-5555 E-mail: Jweetjens@worldbank.org Fax: (7-3172) 58-03-42 *Country Directors are located in the country office. See the Map of Country Offices and Borrower Eligibility in Chapter 5. Note: Web sites for Bank regions appear on pages 174 and 175. 126 The World Bank Annual Report 2002 *Kenya Lebanon Malawi Mr. Makhtar Diop The World Bank Mr. Dunstan M. Wai The World Bank U.N.-House The World Banik Hill Park Building 6th Floor Development House Upper Hill Riad El Solh Capital City Nairobi, Kenya Beirut 1107 2270, Lebanon Lilongwe 3, Malawi (postal acidress: P.O. Box 30577) (postal address: P.O. Box 11-8577) (postal address: P.O. Box 30557) Tel: (254-2) 260 300 Tel: (961-1) 987 800 Tel: (265-1) 770 611 Fax: (254-2) 260 380 Fax: (961-1) 986 800 Fax: (265-1) 771 158 / 773 908 E-mail: Mcdiop2@worldbank.org E-mail: Dwai@worldbank.org Lesotho Kosovo Mr. Fayez S. Omar Mali Mr. Sidi Boubacar The World Bank Liaison Office Ms. Judith Press The World Bank Liaison Office U.N. House Banque Mondiale Rruga Tirana No. 35 United Nations Road Immeuble SOGEFIH, 38000 Pristina, Kosovo Maseru, Lesotho Centre Commercial Rute 32 Federal Republic of Yugoslavia Tel: (266) 321-480 Quartier du Fleuve, Bamako, Mali (Serbia and Montenegro) Fax: (266) 310-619 (postal address: B. P. 1864) Tel: (381-38) 249 459 Tel: (223) 222 22 83 Fax: (381-38) 249 780 Lithuania Fax: (223) 222 66 82 E-mail: Sboubacar@worldbank.org Mr. Mantas Nocius E-mail: Jpress@worldbank.org The World Bank Kyrgyz Republic Jogailos Str. 4, 5th Floor Mauritania Mr. Mohinder S. Mudahar 2001 Vilnius, Lithuania Mr. Yves Duvivier The World Bank Tel: (370-5) 210 7680 Banque Mondiale 214 Moskovskaya Str. Fax: (370-5) 210 7681 Villa No. 30, Lot A Bishkek 720010, Kyrgyz Republic E-mail: Mnocius@worldbank.org Quartier Socogim Tel: (996-312) 61 06 50 Web: http://www.worldbank.lt/ Nouakchott, Mauritanie Fax: (996-312) 61 03 56 (postal address: B. P. 667) E-mail: M\mudahar@worldbank.org Macedonia, former Yugoslav Tel: (222) 525 1017 Republic of Fax: (222) 525 1334 Lao People's Democratic Republic Ms. Marie-H. P. Bricknell E-mail: Yduvivier@worldbank.org Mr. Enrique 0. Crousillat The World Bank The World Bank 34 Leninova Street *Mexico Pathou Xay - Nehru Road 91000 Skopje, Republic of Macedonia Mr. Olivier Lafourcade Vientiane, Lao PDR Tel: (389-2) 117-159 Banco Mundial (postal address: P.O. Box 345 Fax: (389-2) 117-627 Insurgentes Sur 1605, Piso 24 code 01004) E-mail: Mbricknell@worldbank.org San Jose Insurgentes Tel: (856-21) 414-209,450-010 Web: http//www.worldbank.org.mk/ 03900 Mexico, D. F., Mexico Fax: (856-21) 414-210 Tel: (52-5) 5480-4200 E-mail: Lschneider@worldbank.org *Madagascar Fax: (52-5) 5480-4222 Mr. Hafez Ghanem Latvia Banque Mondiale Moldova Mrs. Inguna Dobraja Rue Andriamifidy L. Mr. Carlos Elbirt The World Bank Razafimanantsoa, Anosy (pres du T he World Bank Smilsu Street 8,5th Floor Minist&e des Affaires Etrangeres) Sciusev str., 76/6, MD 2012 Riga, LV 1162, Latvia Antananarivo 101, Madagascar Chisinau, Republic of Moldova Tel: (371-7) 220-744 (postal address: B. P. 4140) Tel: (373-2) 237-065 Fax: (371-7) 814-245 Tel: (261-20) 2256000 Fax: (373-2) 237-053 E-mail: Idobraja@worldbank.org Fax: (261-20) 2233338 E-mail: Celbirt@worldbank.org Web: http://www.worldbank.org.lv/ E-mail: Hghanem@worldbank.org *Country Directors are located in the country office. See the Map of Country Offices and Borrower Eligibility in Chapter 5. Note: Web sites for Bank regions appear on pages 174 and 175. Chapter 6 About the World Bank 127 Mongolia Niger *Peru Mr. Saha Dhevan Meyanathanl Mr. Geoffrey Bergen Ms. Isabel M. Guerrero The World Bank Banque Mondiale Banco Mundial 11 -A Peace Avenue 42 rue des Dallols Avenida Alvarez Calderon 185 Ulaanbaatar 210648, Mongolia Niamey, Niger Piso 7, San Isidro Tel: (976-11) 312-647 (postal address: B. P. 12402) Lima, Peru Fax: (976-11) 312-645 Tel: (227) 72 50 09 Tel: (51-1) 215-0660 E-mail: Smeyanathan@worldbank.org Fax: (227) 73 55 06 Fax: (51-1) 421-7241 WNteb: http://www.worldbank.org.mn E-mail: Gbergen@worldbank.org E-mail: Iguerrero@worldbank.org Morocco *Nigeria *Philippines Mr. Olivier P. Godron Mr. Mark D. Tomlinson Mr. Robert V. Pulley The World Bank The World Bank The World Banik 7, rue Larbi Ben Abdellah Plot 433 Yakubu Gowon Crescent 23/F, The Taipan Place Building Rabat-Souissi, Morocco Opposite ECOWAS Secretariat Emerald Avenue, Ortigas Center Tel: (212-3) 763.60.50 Asokoro District Pasig City, Metro Manila, Philippines Fax: (212-3) 763.60.51 Abuja, Nigeria 'Tel: (63-2) 637-5855 E-mail: Ogodron@worldbank.org (postal address: P.O. Box 2826, Garki) Fax: (63-2) 637-5870 Tel: (234-9) 314-5269 E-mail: Rpulley@worldbank.org *Mozambique Fax: (234-9) 314-5267 Mr. Darius Mans E-mail: Mtomlinson@worldbank.org *Poland The World Bank Mr. Michael F. Carter Avenue Kenneth Kaunda, 1224 *Pakistan The W\orld Bank Maputo, Mozambiquc Mr. John W. Wall 53. Emilii Plater St. (postal address: Caixa Postal 4053) Thle World Bank Warsaw Financial Center, 9th Floor Tel: (258-1) 49 28 41 20 A Shahrah-e-Jamhuriyat, Ramna 5, 00-113 WVarsaw, Poland Fax: (258-1) 49 28 93 G-5/1, Islamabad, Pakistan Tel: (48-22) 520 8000 E-mail: Dmans0aworldbank.org (postal address: PO. Box 1025) Fax: (48-22) 52(0 8001 'Tel: (92-51) 2279641 E-mail: Mcarterl@ 'worldbank.org *Nepal Fax: (92-51) 2279648 WNAeb: http:/wwxw.worldbank.org.pl/ Mr. Kenichi Ohashi E-mail: Jwall@'worldbank.org The World Bank Romania Yak & Yeti Hotel Complex, Lal Durbar, Papua New Guinea Mr. M. Ziad Alahdad Kathmandu, Nepal Mr. Mahesh Sharima 'I'he W'orld Bank (postal address: P.O. Box 798) The World Bank Liaison Office Boulevard Dacia 83, Sector 2, T'el: (977-1) 226793 c/o Holiday Inn Bucharest, Romania Fax: (977-1) 225112 Suite 102 Tel: (40-1) 210-1804 E-mail: Kohashi@worldbank.org P.O. Box 1981 Fax: (40-1) 210-2021 Boroko, Port Moresby E-mail: Malahdad@l'worldbank.org Nicaragua Papua New Guinea Web: http://www.worldbank.org.ro/ Mr. Ulrich Lichler Tel: (675) 323-1366 Banco Mundial Fax: (675) 323-1526 *Russian Federation De la Rotonda de ia Mr. Juliai F. Schweitzer Centroamerica, 400 mts. abajo Paraguay The World Bank Segundo Piso Edificio SYSCOM Mr. Peter M. Hansen Sadovaya-Kudrinskaya No. 3 Managua, Nicaragua Banco Mundial Moscow 123242, Russian Federation Tel: (505) 270-0000 Edificio Naciones Unidas Tel: (7-095) 745-7000 Fax: (505) 270-0077 Av. Mcal. Lopez y Saravi Fax: (7-095) 254-8368 E-mail: Ulachler@worldbank.org Asuncion, Paraguay E-mail: Jschweitzer@worldbank.org 'Tel: (595-21) 664-000 Web: http://www.worldbank.org.ru/eng/ Fax: (595-21) 664-002 E-mail: Phansen I @worldbank.org *Country Directors are located in the country office. See the Map of Country Offices and Borrower Eligibility in Chapter 5. Note. Web sites for Bank regions appear on pages 174 and 175. 128 The World Bank Annual Report 2002 Rwanda *South Africa Togo Mr. Edward K. Brown Mr. Fayez S. Omar Mr. Jean-Michel Happi The World Bank The World Bank Banque Mondiale Blvd. de la Revolution First Floor, Pro Equity Court 169 Boulevard du 13 Janvier SORAS Building 1250 Pretorius Street Immeuble B'CI, 8me etage Kigali, Rwanda Hatfield, Pretoria 0083 Lome, Tbgo (postal address: P.O. Box 609) Republic of South Africa (postal address: Boite Postale 3915) Tel: (250) 572204 (postal address: P.O. Box 12629, Tel: (228) 221.55.69 Fax: (250) 576385 Hatfield 0028, Pretoria) Fax: (228) 221.78.56 E-mail: Ebrown I @worldbank.org Tel: (27-12) 431-3100 E-mail: Jhappi@worldbank.org Fax: (27-12) 431-3134 Saudi Arabia E-mail: Fomar@worldbank.org Tunisia Mr. Edgar Saravia Ms. Fatma Felah The World Bank *Sri Lanka The World Bank Liaison Office UNDP Building, Diplomatic Quarter Mr. Peter C. Harrold 61, Boulevard Bab Benat (beside American Embassy) The World Bank 1035 Tunis, Tunisia Riyadh, Saudi Arabia Ist Floor, DFCC Building Tel: (216-71) 563-265 (postal address: I'O. Box 5900, 73/5, Galle Road Fax: (216-71) 436-475 Riyadh 11432, Saudi Arabia) Colombo 3, Sri Lanka E-mail: Ffelah@worldbank.org Tel: (966-1) 483-4956 (postal address: P.O. Box 1761) Fax: (966-1) 488-5311 Tel: (94-1) 448070/1 *Turkey E-mail: Esaravia@worldbank.org Fax: (94-1) 440357 Mr. Ajay Chhibber E-mail: Pharrold@worldbank.org The World Bank *Senegal Ugur Mumcu Caddesi 88 Mr. John McIntire Tajikistan Kat: 2, 06700 Gaziosmanpasa Banque Mondiale Mr. Mustapha Rouis Ankara, Turkey 3, place de l'independance The World Bank Tel: (90-312) 446 38 24 Immeuble SDIH 5eme 6tage Rudaki Avenue 105 Fax: (90-312) 446 24 42 Dakar, Senegal Dushanbe, Tajikistan E-mail: Achhibber@worldbank.org (postal address: B. P. 3296) Tel: (992-372) 21-07-56 Web: http://www.worldbank.org.tr/ Tel: (221) 849-50-00 Fax: (992-372) 51-00-42 Fax: (221) 849-50-27 E-mail: Mrouis@worldbank.org Turkmenistan E-mail: Jmcintire@worldbank.org Mrs. Guljahan Kurbanova Tanzania The WAVorld Bank Liaison Office Sierra Leone Mr. Benio J. Ndulu United Nations Building Mr. Richard Lynn Ground The World Bank Atabaev Street, 40 The World Bank 50 Mirambo Street Ashgabat 744000 Africanus House Dar-es-Salaam, Tanzania Turkmenistan 13A Howe Street (postal address: P.O. Box 2054) Tel: (993-12) 350477 Freetown, Sierra Leone Tel: (255-22) 2114575 Fax: (993-12) 351693 Tel: (232-22) 227555 Fax: (255-22) 2113039 E-mail: Gkurbanova@worldbank.org Fax: (232-22) 228555 E-mail: Bndulu@worldbank.org E-mail: Rground@worldbank.org Uganda *Thailand Mr. Robert Blake Singapore Mr. Ian C. Porter The World Bank Mr. Peter L. Stephens The World Bank I Lumumba Avenue The World Bank Liaison Office Diethelm Towers, Tower A Rwenzori House, 4th Floor #15-08, MAS Building 14th Floor, 93/1 Wireless Road Kampala, Uganda 10 Shenton Way Lumpini, Pathumwan (postal address: P.O. Box 4463) Singapore, 079117 Bangkok 10330, Thailand Tel: (256-41) 230-094 Tel: (65) 6324-4612 Tel: (66-2) 256-7792 Fax: (256-41) 230-092 Fax: (65) 6324-4615 Fax: (66-2) 256-7794/5 E-mail: Rblake@worldbank.org E-mail: Pstephensl@worldbank.org E-mail: Iporter@worldbank.org Web: http://www.worldbank.or.th *Country Directors are located in the country office. See the Map of Country Offices and Borrower Eligibility in Chapter 5. Note: Web sites for Bank regions appear on pages 174 and 175. Chapter 6 About the World Bank 129 Ukraine *Vietnam Yugoslavia, Federal Republic of Mr. Gregory T. Jedrzejczak Mr. Andrew D. Steer Mr. Rory O'Sullivan The World Bank (through Aug. 31, 2002) The World Bank 2 Lysenko Street The World Bank Bulevar Kralja Aleksandra 86-90 Kyiv 01034, Ukraine 63 Ly Thai To Street, 8th Floor Belgrade, Federal Republic Tel: (380-44) 490 6671 Hanoi, Vietnam of Yugoslavia Fax: (380-44) 490 6670 Tel: (84-4) 934-6600 Tel: (381-11) 3023-700 E-mail: Gjedrzejczak@worldbank.org Fax: (84-4) 934-6597 Fax: (381-11) 3023-732 Web: http://www.worldbank.org.ua/ E-mail: hha@worldbank.org E-mail: Rosullivan@worldbank.org (External Affairs contact's e-mail) Uzbekistan Web: http://www.worldbank.org/vn Zambia Mr. David Pearce Mr. Laurence C. Clarke The World Bank *West Bank and Gaza The World Bank 43 Academician Suleimanova Street Mr. Nigel Roberts Anglo American Building Tashkent, Uzbekistan 700017 The World Bank 74 Independence Avenue, 3rd Floor Tel: (998-71) 1335002 P.O. Box 54842 Lusaka, Zambia 10101 Fax: (998-71) 1206215 Jerusalem (postal address: P.O. Box 35410) E-mail: Dpearce@worldbank.org Al-Ram Tel: (972-2) 2366500 Tel: (260-1) 252-811 Al-Ram Fax: (972-2) 2366543 Fax: (260-1) 254-283 Venezuela, Republica Gaza Tel: (972-8) 2823422 E-mail: Lclarke@worldbank.org Bolivariana de Gaza Fax: (972-8) 2824296 Mr. Felipe Saez Zimbabwe Banco Mundial Yemen, Republic of Mr. Ohene Owusu Nyanin Av. Francisco de Miranda Mr. Robert E. Hindle The World Bank con Av. del Parque The World Bank, Hadda Street No. 40 Old Lonrho Building Torre Edicampo, Piso 10, off Damascus Road 88 Nelson Mandela Avenue Campo Alegre Sana'a, Republic of Yemen Harare, Zimbabwe Caracas, Republica Bolivariana (postal address: P.O. Box 18152) (postal address: P.O. Box 2960) deVenezuela Tel: (967-1) 413 708 Tel: (263-4) 729-611 Tel: (58-212) 267-9943 Fax: (967-1) 413 709 Fax: (263-4) 708-659 Fax: (58-212) 267-9828 E-mail: RhindleBworldbank.org E-mail: Onyanin@worldbank.org E-mail: Fsaez@worldbank.org Web: http://www.worldbank.org.zw/ *Country Directors are located in the country office. See the Map of Country Offices and Borrower Eligibility in Chapter S. Note: Web sites for Bank regions appear on pages 174 and 175. 130 The World Bank Annual Report 2002 Table 6.1 Country Eligibility for Borrowing from the World Bank (as of July 1, 2002) Income g~pup ~ .~.OiGNI Incomegroup 2001 GNI 2 ' - - ,.- pjercapita6 and couniry percapila! Countries eligible for IBRD funds only Per capita income over $5,185 Dominican Republic 2,230 Slovenia 9,780 Marshall Islands 2,190 Korea, Republic of 9,400 Micronesia, Federated States of 2,150 Antigua and Barbuda 9,070 Fiji 2,130 Argentina 6,960 Tunisia 2,070 St. Kitts and Nevis 6,880 El Salvador 2,050 Palau 6,730 Peru 2,000 Uruguay 5,670 Thailand 1,970 Mexico 5,540 Namibia 1,960 Trinidad and Tobago 5,540 Colombia 1,910 Czech Republic 5,270 Iran, Islamic Republic of 1,750 Seychelles - Jordan 1,750 Russian Federation 1,750 Per capita income $2,976-$5,185 Romania 1,710 Hungary 4,800 Macedonia, forner Yugoslav Republic of 1,690 Venezuela, Republica Bolivariana de 4,760 Suriname 1,690 Croatia 4,550 Guatemala 1,670 Chile 4,350 Algeria 1,630 Poland 4,240 Bulgaria 1,560 Lebanon 4,010 Egypt, Arab Republic of 1,530 Costa Rica 3,930 Mauritius 3,830 Per capita income $746-$1,435 Estonia 3,810 Kazakhstan 1,360 Slovak Republic 3,720 Paraguay 1,300 Malaysia 3,640 Swaziland 1,300 Botswana 3,630 Ecuador 1,240 Panama 3,290 Belarus 1,200 Latvia 3,260 Morocco 1,180 Gabon 3,160 Philippines 1,050 Lithuania 3,080 Syrian Arab Republicb 1,000 Brazil 3,070 Turkmenistan 950 China 890 Per capita income $1,436-$2,975 Iraq' Belize 2,910 South Africa 2,900 Per capita income less than $746 Jamaica 2,700 Ukraine 710 Turkey 2,530 Equatorial Guinea 700 Countries eligible for a blend of IBRD and IDA fundsd Per capita income $2,976-$5,185 Per capita income less than $746 St. Lucia' 3,970 Indonesia 680 Grenadae 3,720 Azerbaijan 650 Dominica' 3,060 Papua New Guinea 580 Uzbekistan 560 Per capita income $1,436-$2,975 Zimbabwe' 480 St. Vincent and the Grenadinese 2,690 India 460 Per capita income $746-$ 1,435 Pakistan 420 Bosnia and Herzegovina 1,270 Nigeria 290 Bolivia 940 Yugoslavia, Federal Republic of' - (continued next page) Chapter 6 About the World Bank 131 Table 6.1 Country Eligibility for Borrowing from the World Bank (continued) i2ndome grc,uj%.y;E - , ..:22od;cN1 ,. - iStt~nc gr - 2001CNI .~~~~~~~~~~~~~~~~~~~~~~ PL N 0- t ry. O~*- er capita' and couii:it; Y$ - .prcpia= ; *.Manvd?cun Countries eligible for IDA funds onlyd Per capita income $1,436-$2,975 Mauritania 350 Maldives' 2,040 Kenya 340 ibngac 1,530 Gambia, The 330 SamoaC 1,520 Sudan' 330 Zambia 320 Per capita income $746-$1,435 Lao People's Democratic Republic 310 Cape Verde' 1,310 Ghana 290 Albania 1,230 Kyrgyz Republic 280 Vanuatu' 1,050 S3o Tom6 and Principe 280 Djibouti 890 Tanzania 280 Honduras 890 Uganda 280 Guyana 840 Central African Republic' 270 Kiribati 830 Cambodia 270 Sri Lanka 830 Togo' 270 Madagascar 260 Per capita income less than $746 Nepal 240 Congo, Republic of 700 Rwanda 220 Bhutani 640 Burkina Faso 210 CGte dIvoire 630 Mali 210 Solomon Islands' 580 Mozambique 210 Cameroon 570 Chad 200 Georgia 570 Eritrea 190 Armenia 560 Malawi 170 Lesotho 550 Niger 170 Angola 500 Guinea-Bissau 160 Haiti' 480 Tajikistan 160 Senegal 480 Sierra Leone 140 Yemen, Republic of 460 Burundi 100 Vietnam 410 Ethiopia 100 Guinea 400 Afghanistan' Mongolia 400 Congo, Democratic Republic of' Moldova 390 Liberia' Comoros 380 MyanmarC Bangladesh 370 Nicaragua Beniii 360 Somalia' - Precise figures are not available. a. World Bank Atlas methodology. per capita GNI (gross national income, formerly GNP) figures are in 2001 U S dollars b. Loans/credits in nonaccrual status as of June 30, 2002. c. Loans/credits in nonaccrual status as of July 1, 2002. d Countries are eligible for IDA on the basis of (a) relat ve poverty and (b) lack of creditwonthiness. The operational cutoff for IDA eligibility for fiscal 2003 is a 2001 GNI per capita of $875, using Atlas methodology. To rece ve IDA resources, countries also meet tests of performance. In exceptional circumstances, IDA extends eligibility temporarily to countries that are above the operational cutoff and are undertaking major adjustment efforts but are not creditworthy for IBRD lending. An exception has been made for small island economies (see footnote e) e An exception to the GNI per capita operational cutoff for IDA eligibility ($875 for fiscal 2003) has been made for some small island economies, which otherwise would have little or no access to Bank Group assistance because they lack creditworthiness. For such countries, IDA funding is considered case by case for the financing of projects and adjustmernt programs designed to strengthen creditworth ness. 132 The World Bank Annual Report 2002 Tables Table 6.2 World Bank Commitments, Disbursements, and Net Transfers in Africa, Fiscal 1997-2002 (millions of dollars) Ethiopia Uganda Nigeria Total region Item 2002 1997-2002a 2002 1997-2002a 2002 1997-2002a 2002 1997-2002a IBRD and IDA commitments 210 1,646 296 1,275 427 682 3,794 16,021 Undisbursed balance 1,170 1,170 666 666 261 261 8,363 8,363 Gross disbursements 437 1,097 256 1,064 26 832 2,651 14,232 Repayments 22 114 21 253 196 1,749 792 6,525 Net disbursements 415 982 235 811 (169) (917) 1,859 7,707 Interest and charges 16 76 16 88 80 831 417 3,054 Net transfer 399 907 219 724 (249) (1,748) 1,442 4,653 Note: The table shows the three countries with the largest lending comm tments in the region over the past two fiscal years (2001 and 2002) Numbers have been rounded a. During fiscal 2002 the Bank delivered approximately $227.63 million In debt service relief under the HIPC Initiative to 22 countries in the Africa region, including $41 25 million to Tanzania and j19 35 m Ilion to Zambia. Table 6.3 World Bank Commitments, Disbursements, and Net Transfers in East Asia and Pacific, Fiscal 1997-2002 (millions of dollars) China Vietnam Indonesia Total region Item 2002 1997-2002 2002 1997-2002 2002 1997-2002 2002 1997-2002 IBRD and IDA commitments 563 10,551 593 2,561 303 5,288 1,774 31,141 Undisbursed balance 8,427 8,427 1,760 1,760 2,110 2,110 14,339 14,339 Gross disbursements 2,015 11,911 332 1,338 507 5,895 3,591 32,029 Repayments 1,532 4,108 2 8 956 5,574 3,435 15,607 Net disbursements 483 7,803 330 1,330 (449) 322 156 16,422 Interest and charges 725 4,102 9 37 911 5,031 2,457 14,446 Net transfer (242) 3,702 321 1,294 (1,360) (4,709) (2,301) 1,976 Note: The tabie shows the three countries with the largest lending commitments in the region over the past two fiscal years (2001 and 2002). Numbers have been rounded. Chapter 6 About the World Bank 133 Tables Table 6.4 World Bank Commitments, Disbursements, and Net Transfers in South Asia, Fiscal 1997-2002 (millions of dollars) India Pakistan Bangladesh Total region Item 2002 1997-2002 2002 1997-2002 2002 1997-2002 2002 1997-2002 IBRD and IDA commitments 2,190 11,271 800 2,507 321 2,761 3,508 17,205 Undisbursed balance 8,026 8,026 585 585 1,367 1,367 10,395 10,395 Gross disbursements 2,089 9,806 869 3,756 321 2,088 3,392 16,392 Repayments 1,467 7,451 310 1,653 104 470 1,934 9,793 Net disbursements 622 2,355 559 2,103 217 1,618 1,459 6,599 Interest and charges 504 3,857 170 1,252 49 283 745 5,527 Net transfer 118 (1,502) 389 851 168 1,334 714 1,072 Note The table shows the three countr es with tne argest ending commitments in the region over the past two f sca years (2001 and 2002). Numbers have been rounded. Table 6.5 World Bank Commitments, Disbursements, and Net Transfers in Europe and Central Asia, Fiscal 1997-2002 (millions of dollars) Yugoslavia, Russian Turkey Fed. Rep. of Federation Total region Item 2002 1997-2002 2002 1997-2002 2002 1997-2002 2002 1997-2002 IBRD and IDA commitments 3,550 7,498 172 2,039 351 6,113 5,524 28,606 Undisbursed balance 2,541 2,541 0 0 1,751 1,751 8,497 8,497 Gross disbursements 1,679 4,293 70 70 376 6,351 3,824 22,429 Repayments 427 3,578 0 0 448 1,080 1,640 9,673 Net disbursements 1,253 715 70 70 (71) 5,271 2,184 12,757 Interest and charges 290 1,580 18 18 298 1,853 1,179 7,174 Net transfer 963 (865) 52 52 (370) 3,418 1,005 5,582 Note. The table shows the three countries with the largest lending commitments in the region over the past two fiscal years (2001 and 2002) Numbers have been rounded. 134 The World Bank Annual Report 2002 Tables Table 6.6 World Bank Commitments, Disbursements, and Net Transfers in Latin America and the Caribbean, Fiscal 1997-2002 (millions of dollars) Brazil Mexico Argentina Total region Item 2002 1997-2002 2002 1997-2002 2002 1997-2002 2002 1997-2002 IBRD and IDA commitments 1,566 8,615 660 7,013 735 7,266 4,366 31,289 Undisbursed balance 2,646 2,646 1,597 1,597 2,438 2,438 9,698 9,698 Gross disbursements 497 8,643 813 6,857 1,190 7,654 3,777 31,968 Repayments 807 5,668 1,304 7,868 1,363 3,485 4,588 24,177 Net disbursements (310) 2,975 (490) (1,011) (173) 4,168 (811) 7,791 Interest and charges 489 2,642 794 5,025 613 3,118 2,555 15,025 Net transfer (799) 333 (1,284) (6,036) (786) 1,051 (3,366) (7,234) Note: The table shows the three countries with the largest lending commitments in the region over the past two fiscal years (2001 and 2002). Numbers have been rounded. Table 6.7 World Bank Commitments, Disbursements, and Net Transfers in Middle East and North Africa, Fiscal 1997-2002 (millions of dollars) Yemen, Tunisia Republic of Lebanon Total region Item 2002 1997-2002 2002 1997-2002 2002 1997-2002 2002 1997-2002 IBRD and IDA commitments 253 1,188 78 741 109 519 554 5,465 Undisbursed balance 303 303 394 394 241 241 2,760 2,760 Gross disbursements 227 1,093 69 638 48 270 632 5,656 Repayments 150 991 18 78 26 86 891 6,095 Net disbursements 77 102 51 560 22 184 (259) (439) Interest and charges 80 540 9 48 14 74 561 3,758 Net transfer (3) (438) 42 512 8 111 (821) (4,196) Note: The table shows the three countries with the largest lending commitments in the region over the past two fiscal years (2001 and 2002) Numbers have been rounded Chapter 6 About the World Bank 135 Tables Table 6.8 Summaries of Operations Approved during Fiscal 2002, Africa Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb usS BENIN IDA Cotton Sector Reform Investment Credit will RD 1/22/02 2012/2041 14.1 18.0 improve economic returns in the sector and allow farmers greater participation in the design and implementation of sector policies by giving local communities greater responsibility in the decentralization process. Total cost: $24.2 million. IDA Multisectoral HIV/AIDS Investment Credit aims HD 1/4/02 2012/2041 17.8 23.0 to curb the spread of the HIV/AIDS epidemic and to mitigate its impact. Assistance will be provided in HIV/AIDS prevention and treatment, and social support systems will be established for HIV-stricken families, caregivers, and HIV/AIDS orphans. Total cost: $25.4 million. BURKINA FASO - IDA Urban Environment Supplemental Credit will help UD 3/28/02 2012/2041 17.7 22.0 build 18 kilometers of roads, 58 decentralized waste-transfer stations, and 4 kilometers of channeling of the Wemtinga gully and landfill facilities to improve the quality of life for the urban poor. Total cost: $23.1 million. O IDA Basic Education Sector Investment Credit will HD 1/22/02 2012/2041 25.6 32.6 enable 380,000 children to receive primary education and an additional 60,000-80,000 women to enroll in literacy classes, improving education for girls through literary programs delivered by NGOs. Total cost: $96.2 million. <> IDA Poverty Reduction Support Credit aims to maintain PSG 8/23/01 2011/2041 36.0 45.0 macroeconomic stability and accelerated growth. The population as a whole will benefit from improved availability and efficient use of public resources for basic public services by improved accountability and transparency in budget management. Total cost: $45 million. IDA HIV/AIDS Disaster Response Investment Credit HD 7/6/01 2011/2041 17.3 22.0 aims to improve preventive activities and strengthen capacity by providing care and treatment to benefit the vulnerable groups, slowing the spread of HIV/AIDS and alleviating the burden on individuals and households. Total cost: $23.5 million. BURUNDI O IDA Multisectoral HIV/AIDS Control and Orphans HD 6/27/02 2012/2042 29.1 36.0 Investment Credit will benefit orphans, women, and the rural poor by improving access to prevention services and treatment of opportunistic infections. The project also provides sustained nutritional supplements for people living with HIWAIDS. Total cost: $36.7 million. CAMEROON IDA SACIII-Fifth Dimension Credit-IDA Reflow FPSD 6/24/02 2008/2038 4.2 5.5 CAPE VERDE O> IDA HIV/AIDS Investment Credit will reduce the spread HD 3/28/02 2012/2042 7.3 9.0 of HIV/AIDS and extend the productive life of people living with AIDS through improved diagnosis, treatment, and care for orphans and HIV-stricken families. Total cost: $9.6 million. 136 The World Bank Annual Report 2002 Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb US$ IDA Structural Adjustment Credit will benefit the PSG 12/13/01 2012/2042 11.6 15.0 population as a whole by providing budget support to protect social expenditures and support the government's stabilization program for private sector development. Total cost: $31.6 million. CENTRAL AFRICAN REPUBLIC O IDA Multisectoral HIV/AIDS Investment Credit will HD 12/14/01 2011/2041 13.3 17.0 benefit over 260,000 people who are HIV-infected or living with AIDS and curtail the spread of the epidemic among vulnerable groups through access to voluntary testing, behavioral changes, counseling and treatment, and the provision of care and assistance. Total cost: $18 million. CHAD O IDA Fourth Structural Adjustment Credit will benefit PSG 12/18/01 2012/2042 31.4 40.0 the population as a whole and aims to reduce poverty through enhanced transparency in the use of public resources, procurement, and the budget cycle, and sustainable growth through reform of the cotton sector. Total cost: $48.9 million. O IDA Second Population and AIDS Investment Credit HD 7/12/01 2011/2041 19.6 24.6 will reduce the spread of HIV/AIDS and extend the productive life of people living with AIDS by improving diagnosis, treatment, and care for orphans and HIV-stricken families. Total cost: $33.1 million. COMOROS O IDA Emergency Economic Recovery Credit will provide EM 8/2/01 2011/2041 4.8 6.0 funding for urgent public expenditures needed to alleviate distress among the poor and support the country's national reconciliation process. Total cost: $6 million. DEMOCRATIC REPUBLIC OF CONGO O IDA Economic Recovery Credit will support the PSG 6/13/02 2012/2042 360.4 450.0 government's efforts to foster private sector development and increase the supply of public services. These reforms center on improving public sector financial management and restructuring public sector enterprises. Total cost: $450 million. O IDA Emergency Early Recovery Grant aims to strengthen PSG 7/31/01 n.a. 40.0 50.0 public institutions to create and strengthen the capacity of the Congolese people to implement donor-assisted projects and provide assistance for the formulation of a strategic framework for recovery. Total cost: $50 million. REPUBLIC OF CONGO O' IDA Emergency Reconstruction, Rehabilitation, and UD 5/2/02 2012/2042 32.2 40.0 Living Conditions Improvement Credit focuses on priority areas, including roads, railways, and social infrastructure, to support the revival of the economy of the Congo. It will address immediate economic and social needs of the poor through the creation of income-generating activities. Total cost: $40 million. O IDA Transparency and Governance Capacity Building PSG 2/7/02 2012/2042 5.6 7.0 Credit will increase efficiency, strengthening the capacity of government agencies through new management techniques. Resources will increase public investments in the social and economic sectors. Total cost: $10.8 million. (continued next page) Chapter 6 About the World Bank 137 Table 6.8 Summaries of Operations Approved during Fiscal 2002, Africa (continued) Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb uss <, IDA Emergency Demobilization and Reintegration SPRM 7/31/01 2011/2041 4.0 5.0 Credit will benefit approximately 10,000 excombatants by providing access to income-generating activities and boosting local economies through investment in the social and economic sectors. Total cost: $5 million. i> IDA Post-Conflict Economic Rehabilitation Credit will PSG 7/31/01 2011/2041 30.0 37.7 help restore transparency and better governance in the management of public funds. Both domestic and foreign private investments will be increased to revive and stabilize the economy. Total cost: $37.5 million. COTE D'IVOIRE IDA Economic Recovery Investment Credit will benefit RD 6/11/02 2012/2041 160.2 200.0 rural communities by increasing incomes and employment opportunities, strengthening the private sector, and ensuring access to primary education and health services while strengthening local community participation in the delivery of such services. Total cost: $200 million. IDA Transport Sector Investment Credit-IDA Reflow FPSD 1/10/02 2008/2038 9.2 12.0 ERITREA e- IDA Emergency Demobilization and Reintegration SPRM 5/16/02 2012/2042 48.1 60.0 Credit will help consolidate peace and contribute to the economic recovery of the country by supporting the country's demobilization and reinsertion program for up to 200,000 soldiers. It aims to improve the efficiency and effectiveness of services delivery to demobilized soldiers. Total cost: $60 million. .y IDA Cultural Assets Rehabilitation Learning and SDGI 7/6/01 2011/2041 4.0 5.0 Innovation Credit will help local communities revitalize their economic and cultural life through conservation and strengthening of management of public records. Total cost: $5.4 million. ETHIOPIA IDA Structural Adjustment Credit aims at improving PSG 6/18/02 2012/2042 96.2 120.0 the business environment and attracting foreign investors by lowering transaction costs for private investors and exporters. The reforms it supports are aimed at strengthening the efficiency of the public sector and improving the delivery of key public services. Total cost: $120 million. K4 IDA Food Security Credit aims at improving the RD 5/30/02 2012/2042 68.1 85.0 production and management of crops and livestock, through soil and water conservation, increasing off-farm employment and income opportunities for households, and providing improved nutrition for children and pregnant and lactating mothers. Total cost: $110.2 million. Ž IDA Cultural Heritage Learning and Innovation Credit FPSD 4/17/02 2012/2041 4.1 5.0 will preserve ancient craft traditions and reestablish craft making as a vital part of community and national economic life. Assistance will be provided to improve links between artisan producers and retailers, exporters, and shippers to increase local craft sales opportunities and to support the export trade. Total cost: $5.7 million. 138 The World Bank Annual Report 2002 Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb USs THE GAMBIA IDA Gateway Adaptable Program Credit aims to TI 2/28/02 2011/2041 12.4 16.0 expand private investment export-oriented production and employment through the establishment of a self-sustaining investment promotion that will attract foreign direct jobs, thus transferring technology to the local population in the Banjul area. Total cost: $18.1 million. O IDA Capacity Building for Economic Management EM 7/26/01 2011/2041 12.0 15.0 Investment Credit will help the government maintain macroeconomic stability by implementing economic policy and better tax systems, and allocating public funds to priority areas. Total cost: $16.5 million. GHANA IDA Third Economic Reform Support Credit-IDA Reflow FPSD 12/11/01 2011/2041 0.4 0.5 o IDA Third Economic Reform Support Operation Credit FPSD 7/26/01 2011/2041 87.7 110.0 will improve the share of producer prices for cocoa, the main income for 1 million rural families, and the government's ability to restore macroeconomic stability by reducing the debt burden and strengthening the management and control of public expenditures. Total cost: $110 million. 4 IDA Road Sector Development Investment Credit will FPSD 7/26/01 2011/2041 175.3 220.0 benefit both commercial and social road users by giving improved all-weather access to markets and services, while reducing road construction and maintenance operations. Total cost: $1.2 billion. GUINEA IDA Third Water and Sanitation Supplemental Credit ENRM 8/23/01 2011/2041 20.0 25.0 will improve sanitation and reduce water-borne diseases among children. By reducing pollution it will protect the marine ecosystem and restore beaches and the urban coastline. Total cost: $27.5 million. 4 IDA Education for All Adaptable Program Credit will benefit HD 7/24/01 2012/2041 55.7 70.0 children aged 3-6 by providing increased access to primary schooling in rural areas and by increasing resources for basic education and literacy training. Total cost: $420.1 million. O IDA Proposed Fourth Structural Adjustment Credit PSG 7/24/01 2012/2041 39.3 50.0 will help reinforce the government's capacity to improve public service delivery by strengthening governance and contributing to restoring credibility to public finances. Total cost: $50 million. GUINEA-BISSAU IDA Private Sector Rehabilitation and Development FPSD 3/26/02 2012/2041 21.0 26.0 Investment Credit will provide better services and public utilities to the poor. Increased foreign investment and higher export revenues will improve the government's balance of payments. Total cost: $31.4 million. KENYA IDA Economic and Sector Reform Credit-IDA Reflow FPSD 6/24/02 2010/2040 1.2 1.5 & IDA Public Sector Management Technical Assistance PSG 7/31/01 2011/2041 11.9 15.0 Credit will allow better targeting of public services and implementation of policies. New systems and human resources capacity will allow greater fiduciary responsibility and reduce corruption in public service. Total cost: $20.5 million. (continued next page) Chapter 6 About the World Bank 139 Table 6.8 Summaries of Operations Approved during Fiscal 2002, Africa (continued) Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb uss MADAGASCAR O IDA Multisectoral STI/HIV/AIDS Prevention Investment HD 12/13/01 2012/2041 15.7 20.0 Credit aims to reduce the spread of STI/HIV/AIDS, extend the life of people living with AIDS through the improvement of diagnosis, treatment, and care for HIV-stricken families and orphans. Total cost: $96.3 million. IDA Second Private Sector Development Credit aims to FPSD 8/28/01 2012/2041 19.0 23.8 improve access, reliability, and affordability of key utilities such as transport, through private sector development. An increased private sector role will improve services for the poor by improving efficiency of the companies and creating opportunities for new private entry and investment. Total cost: $29.6 million. MALI IDA Third Structural Adjustment Credit will benefit PSG 12/11/01 2012/2041 55.0 70.0 rural populations by reforming the cotton sector, reviving growth, and improving living standards. It will support the government's reforms and improve the balance of payments. Total cost: $70 million. K IDA Agricultural Services and Producer Organizations RD 12/11/01 2012/2041 34.2 43.5 Adaptable Program Credit will increase incomes for rural women by strengthening producer organizations, and will improve household food security and well-being. Total cost: $53.4 million. MAURITANIA O IDA Global Distance Learning and Innovation Credit HD 11/21/01 2012/2041 2.7 3.3 will help Mauritania cross the digital divide and help the public and private sector to better integrate into the global economy by facilitating electronic transactions and improving communications. Total cost: $5 million. O> IDA Education Sector Development Adaptable HD 10/25/01 2012/2041 39.1 49.2 Program Credit aims to provide better quality education and will benefit 1 million primary, secondary, and higher education students, providing better school facilities along with improved learning materials and teaching methods. Total cost: $323.7 million. O> IDA Urban Development Adaptable Program Credit UD 10/25/01 2011/2041 55.8 70.0 will benefit at least 541,600 people in urban areas. It aims to improve living conditions through increased employment opportunities and urban and land-management reform. Total cost: $99.1 million. MAURITIUS IBRD Public Expenditure Reform Loan will assist PSG 5/7/02 2007/2017 n.a. 40.0 government to implement activities under its economic agenda. Activities will concentrate on improving competitiveness, social development and social cohesion, and protecting the environment. Total cost: $40 million. IBRD Financial Sector Supervisory Authority FPSD 12/4/01 -/2016 n.a. 1.8 Investment Credit will benefit consumers, operators, and the international community by assisting the government to form a financial sector commission and a stable internationally competitive financial sector. Total cost: $2.3 million. 140 The World Bank Annual Report 2002 Primary Date of Principal amount (millions) Country/project name themea approval Maturities SDRb usS MOZAMBIQUE * IDA Higher Education Sector Investment and HD 3/7/02 2012/2042 47.1 60.0 Maintenance Credit aims to expand graduate output and will benefit approximately 15,000 students who will be enrolled by the year 2006, through funding of higher education and access to preuniversity training and financial support. Total cost: $71.1 million. O IDA Communication Sector Reform Technical FPSD 11/27/01 2012/2041 11.6 14.9 Assistance Credit will benefit small- and medium-size enterprises by providing access to modern telecommunications, postal, and air transport services, and reduced-cost communication services. Total cost: $15.4 million. IDA Roads and Bridges Management and Maintenance RD 7/19/01 2011/2041 127.4 162.0 Adjustable Program Credit, by linking rural areas with the national road network, will allow rural populations better access to markets, health and education facilities, and other basic services. Total cost: $703.6 million. o IDA Municipal Development Investment Credit will UD 7/19/01 2011/2041 26.7 33.6 benefit households, businesses, and the urban poor. It aims to strengthen the capacity of municipal governments in the areas of management and finance by providing infrastructure and services in five cities and employment for local workers. Total cost: $42.1 million. NIGER - IDA Private Irrigation Promotion Investment Credit will RD 3/19/02 2012/2041 31.3 38.7 benefit smallholder farmers by providing improved irrigation systems, thus increasing agricultural capacity, rural employment, farm income, and profitability. Total cost: $48.4 million. < IDA Public Expenditure Adjustment Credit will foster PSG 11/20/01 2011/2041 54.5 70.0 macroeconomic and financial stability and improve management of public resources, benefiting poor communities through better channeling of resources. Total cost: $70 million. NIGERIA o' IDA Community-Based Urban Development Credit will UD 6/06/02 2012/2037 88.1 110.0 benefit inhabitants of poor urban areas. By strengthening the capacity of local government to use resources more efficiently, it will provide improved health and security, enhanced mobility, and reduced flooding for local communities. Total cost: $137.5 million. O IDA Health Systems Development Investment Credit HD 6/06/02 2012/2037 101.8 127.0 will benefit people in rural areas, especially women and children, by expanding access to improved basic health services. The project also supports institutional reforms in the health sector. Total cost: $153.2 million. O IDA Transmission Development Investment Credit FPSD 3/19/02 2012/2036 78.6 100.0 will benefit energy consumers and aims to ease the power supply constraint on economic growth by restructuring the power sector generating resources and improving power supply in the country. Total cost: $113.5 million. (continued next page) Chapter 6 About the World Bank 141 Table 6.8 Summaries of Operations Approved during Fiscal 2002, Africa (continued) Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb USS O IDA HIV/AIDS Program Development Credit aims to HD 7/6/01 2011/2036 71.0 90.3 reduce the spread of HIV/AIDS and extend the life of people living with AIDS by improving diagnosis, treatment, and care for HIV-stricken families and orphans. Total cost: $96.3 million. RWANDA o> IDA Demobilization and Reintegration Credit will SDGI 4/25/02 2012/2042 20.0 25.0 help consolidate peace in the Great Lakes region and foster reconciliation within Rwanda. It will help demobilize an estimated 45,000 excombatants and support their transition to civilian life by providing access to income-generating activities and assisting their social and economic reintegration. Total cost: $25 million. SENEGAL O IDA Nutrition Enhancement Adaptable Program HD 3/14/02 2012/2042 11.8 14.7 Credit will allow approximately 170,000 children under three and 50,000 pregnant women to have access to better nutrition, sanitation, and food security through delivery of nutrition services by NGOs and other local organizations. Total cost: $20.2 million. O IDA HIV/AIDS Prevention and Control Investment HD 2/7/02 2012/2041 23.6 30.0 Credit aims to prevent the spread of HIV/AIDS transmission among high-risk groups by supporting civil society and community initiatives. The credit will provide improved access to prevention and treatment programs. Total cost: $32.2 million. SIERRA LEONE o> IDA HIV/AIDS Response Investment Credit aims to HD 3/26/02 2012/2041 12.1 15.0 reduce HIV/AIDS prevalence and mitigate the impact of persons infected or affected by HIV/AIDS by facilitating activities among public and private organizations and communities. The credit will provide improved care for people living with HIV/AIDS. Total cost: $15.3 million. + IDA Second Economic Rehabilitation and Recovery FPSD 12/13/01 2012/2041 39.4 50.0 Credit will help sustain peace and security in the country, benefiting the population as a whole by providing government resources to finance priority public expenditures, and reforms to attract private investment. Total cost: $50 million. TANZANIA * IDA Forest Conservation and Management Investment ENRM 6/26/02 2012/2041 24.6 31.1 Credit will benefit rural households and jobseekers who depend on woodlands and forests. It will establish a framework for sustainable management and protection of forests with private sector involvement in plantation management and development. Total cost: $40 million. O IDA Rural Water Supply and Sanitation Credit will RD 3/26/02 2012/2042 20.8 26.0 benefit approximately 650,000 people living in 250 rural communities by providing access to improved water supply and sanitation services. Total cost: $27.7 million. IDA Programmatic Structural Adjustment PSG 2/12/02 2012/2040 0.5 0.6 Credit-IDA Reflow 142 The World Bank Annual Report 2002 Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb uss -O IDA Lake Victoria Environmental Management ENRM 12/13/01 2012/2041 4.0 5.0 Supplemental Credit will maintain raw water supply for the lake, providing suitable quality for domestic use and animal watering while reducing the extent and severity of water hyacinth infestation. Total cost: $5.1 million. O IDA Songo Songo Gas Development and Power FPSD 10/9/01 2011/2041 145.7 183.0 Generation Investment Credit will benefit 25 villages along the pipeline route through provision of access to electricity and clean water for inhabitants of Songo Songo island. Total cost: $295.2 million. <> IDA Primary Education Development Adjustment HD 10/9/01 2011/2041 119.1 150.0 Credit will benefit children, providing improved access to schools and higher quality of education for teachers through better working conditions and professional development opportunities. Total cost: $150 million. 4- IDA Lower Kihansi Environmental Management ENRM 7/3/01 2011/2041 5.0 6.3 Technical Assistance Credit will support conservation and management of the Kihansi Gorge ecosystem and develop a coordinated and consistent legal and institutional framework for environmental and water resources management. Total cost: $6.3 million. UGANDA OŽ IDA Energy for Rural Transformation Adaptable RD 12/13/01 2012/2041 38.3 49.1 Program Credit will benefit rural households by providing increased access to a reliable electricity supply, increasing productivity and income. Total cost: $123.3 million. O IDA A Makerere University Training Pilot Learning HD 3/26/02 2012/2041 4.0 5.0 and Innovation Credit will improve the teaching-learning environment by contributing to stronger local government capacity and improved public service delivery in Uganda. Total cost: $11 million. O~ IDA Fourth Power Investment Credit will provide FPSD 7/3/01 2011/2041 48.0 62.0 consumers in Uganda access to improved electricity supply. The privatization of the power sector will assist the government's poverty eradication program. Total cost: $89.3 million. O IDA Second Phase of the Road Development RD 7/3/01 2011/2041 50.9 64.5 Adaptable Program Credit will decrease travel time and transport costs for road users in rural areas. Paving and strengthening of roads will provide savings in vehicle operating and infrastructure maintenance costs. Total cost: $97 million. ZAMBIA IDA Fiscal Sustainability 5th Dimension-IDA Reflow PSG 5/16/02 2010/2041 5.3 6.7 Total 2,981.5 3,793.5 n.a Not applicable. -Not available. > Denotes various levels of civil society involvement in Bank-supported projects, from design to monitoring and evaluation of results. Note. Numbers have been rounded. a EM = economic management; ENRM = environment and natural resource management, FPSD = financial and private sector development; HD = human development, PSG = public sector governance; RD = rural development; RL = rule of law; SDGI = social deve opment, gender, and iniclusion, SPRM = social protection and risk management, TI = trade and integration; OD = urban development. See box 2.1. b IDA funds are committed in SDRs (special drawing rights). In fiscal 2002 the exchange rate for SDRs was 1 SDR = $1.265. Chapter 6 About the World Bank 143 iaDies Table 6.9 Summaries of Operations Approved during Fiscal 2002, East Asia and Pacific Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb US$ CAMBODIA IDA Economic and Public Sector Capacity Building PSG 6/25/02 2012/2042 4.4 5.5 Technical Assistance Credit will aim to provide public services to benefit the population. Capacity building for select government officials will enable them to carry out essential development tasks, including the establishment of a global development learning network center. Total cost: $5.8 million. O~ IDA Land Management and Administration ENRM 2/26/02 2012/2042 19.3 24.3 Investment Credit will issue secure land titles to approximately 5 million people in 10 provinces and Phnom Penh Municipality. Total cost: $33.9 million. + IDA Demobilization and Reintegration Investment PSG 8/23/01 2012/2041 14.7 18.4 Credit will assist the government's demobilization of 30,000 soldiers, helping their successful reintegration into civilian life by providing socioeconomic assets, health care assistance, and training opportunities. Total cost: $42 million. CHINA O IBRD Hubei Hydropower Development in Poor Areas FPSD 6/25/02 2008/2022 n.a. 105.0 Investment Loan will benefit four poor counties through development of four small and medium hydropower plants for sale to the provincial grid, facilitating economic growth and improving the electricity sector. Total cost: $222.4 million. * IBRD Inner Mongolia Highway Investment Loan aims FPSD 6/6/02 2008/2022 n.a. 100.0 to accelerate economic growth and improve living standards for the low-income population by improving cost-effectiveness and safety of transport infrastructure and supporting the social and economic development of the region. Total cost: $268.7 million. O IBRD Sustainable Forestry Development Investment ENRM 4/16/02 2009/2018 n.a. 93.9 Loan aims to benefit about 2.75 million persons, mostly women and minority groups, by promoting a viable, participatory, and locally managed system for conservation management and the sustainable use and development of forests. Natural forests and biodiversity will be protected. Total cost: $230.6 million. O~. IBRD Tuberculosis Control Investment Loan will HD 3/21/02 2010/2022 n.a. 104.0 benefit 688 million people in 16 provinces by reducing tuberculosis mortality through a national tuberculosis control program providing free diagnosis to all and free treatment to the infectious patients. Total cost: $242.3 million. * IBRD National Railway Investment Loan will widen FPSD 1/29/02 2007/2022 n.a. 160.0 an existing railway line between Baoji and Lanzhou in northwest China and support the reform of China Railways, benefiting some of the poorest communities in China. Total cost: $1.3 billion. 144 The World Bank Annual Report 2002 Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb usS INDONESIA O IBRD Global Development Network Learning and HD 6/28/02 2008/2022 n.a. 2.7 Innovation Loan will test the effectiveness and sustainability of global development learning. Distance learning and communications technologies will expand access to development information and university programs in four centers. Total cost: $3.6 million. O IBRD/IDA Second Urban Poverty Investment UD 6/11/02 2008/2022 n.a. 29.5 Loan/Credit' aims to improve financial, social, and 6/11/02 2012/2037 55.7 70.5 infrastructure services to the urban poor through increased cooperation between government and community organizations and giving the poor a voice in public decisionmaking. Total cost: $126.9 million. 4 IBRD Eastern Indonesia Region Transport Investment FPSD 12/11/01 2007/2021 n.a. 200.0 Loan will allow 22 million people to benefit from economic growth and improved social welfare through preservation of roads, improved traffic safety, and decentralization planning. Total cost: $264 million. LAO PEOPLE'S DEMOCRATIC REPUBLIC IDA Financial Management Adjustment Credit will FPSD 6/25/02 2012/2042 13.5 17.0 benefit the financial sector through improved public expenditure management, and state-owned enterprise reform and development. The credit complements and supports the Financial Management Capacity Building Investment Credit. Total cost: $17 million. IDA Financial Management Capacity Building FPSD 6/25/02 2012/2042 6.8 8.5 Investment Credit will assist the government's implementation of reform in the financial sector by providing improved public expenditure management, and state-owned enterprise reform and development. The credit complements and supports the Financial Management Adjustment Credit. Total cost: $9.5 million. ,' IDA Poverty Reduction Fund Investment Credit will SPRM 6/25/02 2012/2042 15.3 19.3 benefit communities in approximately 22 targeted poor districts through the development of community public infrastructure, improved access to services, and empowerment in decisionmaking processes. Total cost: $21.7 million. MONGOLIA IDA Financial Capacity Development Investment FPSD 6/11/02 2012/2041 4.0 5.0 Credit will benefit the banking sector and aims to enhance financial intermediation through credit risk management of private banks, modernization of payment systems, and a controlled process of savings bank resolution. Total cost: $5.5 million. 4 IDA Sustainable Livelihoods Adaptable Program RD 6/11/02 2012/2042 15.0 18.7 Credit aims to benefit poor and vulnerable households nationwide by supporting the shift in the national antipoverty strategy and investing in pastoral risk management, microfinance outreach, local initiatives, and program management. Total cost: $22.1 million. (contmiued next page) Chapter 6 About the World Bank 145 Table 6.9 Summaries of Operations Approved during Fiscal 2002, East Asia and Pacific (continued) Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb usS O IDA Legal and Judicial Reform Investment Credit RL 12/21/01 2012/2041 4.0 5.0 aims to promote a transparent and effective legal and judicial system through the design and testing of new tools giving better access to information, the creation of specialized courts, and improved legal education. Total cost $5.6 million. PAPUA NEW GUINEA IBRD Road Maintenance and Rehabilitation FPSD 6/6/02 2008/2022 n.a. 40.0 Investment Loan will benefit approximately 1.3 million people by providing improved transport services through maintenance of roads, rehabilitation of roads, and replacement and rehabilitation of bridges. Total cost: $59.2 million. , IBRD Forestry and Conservation Investment Loan ENRM 12/18/01 2010/2021 n.a. 17.4 will benefit forest landowners, local people, and government by enabling conservation of Papua New Guinea's forest resources through biodiversity protection and carbon sequestration. Total cost: $39.3 million. PHILIPPINES * IBRD Second Social Expenditure Management PSG 6/4/02 2010/2019 n.a. 100.0 Investment Loan aims to promote transparent governance in the three social sector departments-education, health, and social welfare-with the oversight and support of the department of budget and management providing inputs to such services. Total cost: $115.4 million. '0 IBRD Local Government Unit Urban Water and FPSD 10/18/02 2010/2021 n.a. 30.0 Sanitation Adaptable Program Loan is the second phase of an adaptable program loan to assist government and privately managed water utilities to operate commercial water and sanitation services to 250 towns and cities. Total cost: $30 million. TONGA IDA Renewable Energy for Rural Economic RD 6/20/02 2012/2042 59.3 75.0 Development Investment Credit will improve the quality of rural life. Private power generation, using renewable energy resources, will provide direct electricity access to 100,000 households and 1,000 rural small and medium enterprises and public institutions. Total cost: $133.7 million. Total 2,082.3 3,508.5 n a Not applicable. .0 Denotes var ous eves of civil society involvement in Bank-supported projects, from des gn to monitoring and evaluation of results. Note, Numbers have been rounded a. EM = economic management, ENRM = environment and natural resource management; FPSD = financial and private sector development; HD = human development, PS(. = public sector governance, RD = rural development; RL = rule of law, SDGI = social development, gender, and inclusion; SPRM = social protection and risk management; TI = trade and integration; UD = urban development. See box 2 1. b IDA funds are committed in SDRs (special drawing rights). In fiscal 2002 the exchange rate for SDRs was 1 SDR = $1 265 c 'Blend" loan/credit 150 The World Bank Annual Report 2002 Tables Table 6.11 Summaries of Operations Approved during Fiscal 2002, Europe and Central Asia Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb USS ALBANIA IDA Road Maintenance Investment Credit will benefit RD 6/27/02 2012/2042 13.5 17.0 the poor and aims to reduce transport costs, reduce accident rates, and provide better accessibility to rural areas and essential social services through improved efficiency in the management and maintenance of the rural road network. Total cost: $20.9 million. IDA Financial Sector Adjustment Credit supports the FPSD 6/20/02 2012/2042 12.0 15.0 government's financial sector reform program. It consists of three broad components: continued reform of the banking sector; enhancement of bankruptcy and debt resolution framework; and reform of the nonbank sector. Total cost: $15 million. IDA Poverty Reduction Support Credit will support SPRM 6/20/02 2012/2042 16.0 20.0 the government's growth and poverty reduction strategy. It supports a package of innovative cross-cutting public sector reforms, as well as priority measures to improve service delivery and social safety net effectiveness. Total cost: $20 million. IDA Power Sector Rehabilitation and Restructuring FPSD 6/20/02 2012/2042 24.0 29.9 Investment Credit aims to achieve significant improvement in the operational effectiveness of the power sector through electricity loss reduction, billing enforcement, and price rationalization measures, benefiting low-income families in both rural and urban areas. Total cost: $35.1 million. O' IDA Pilot Fishery Development Investment Credit RD 2/28/02 2012/2041 4.4 5.6 will increase the economic and environmental sustainability of marine and lake fisheries through improved sector management, benefiting nearly 6,500 fishermen, their families, and suppliers by enforcing co-management of local fisheries. Total cost: $6.7 million. ARMENIA O IDA Natural Resources Management and Poverty ENRM 6/4/02 2012/2042 6.7 8.3 Reduction Investment Credit aims to promote adoption of sustainable resource management practices and alleviation of rural poverty in the Tavoush and Gegharkunik districts of Northern Armenia, benefiting about 273,000 people in 100 villages. Total cost: $13.4 million. IDA Foreign Investment and Export Facilitation TI 4/16/02 2012/2042 0.8 1.0 Learning and Innovation Credit aims at testing the responsiveness for prospective investment and exports through the establishment of a lead agency that would streamline transaction processing and implement a promotion strategy. Total cost: $1.3 million. IDA Enterprise Incubator Learning and Innovation FPSD 11/29/01 2012/2041 3.9 5.0 Credit aims to reduce poverty and improve economic growth by unlocking the institutional rigidities that hinder the development of Armenia's human capital, particularly as it relates to the business environment. Total cost: $7.6 million. (continued next page) Chapter 6 About the World Bank 151 Table 6.11 Summaries of Operations Approved during Fiscal 2002, Europe and Central Asia (continued) Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb USS O' IDA Irrigation Development Investment Credit RD 8/30/01 2011/2041 19.8 24.9 will enhance profitability and sustainability of irrigated agriculture for 30,000 private farming households through incentives for stakeholders and institutional reforms. Total cost: $30.8 million. AZERBAIJAN IDA Second Institution Building Technical Assistance PSG 6/18/02 2012/2037 7.5 9.5 Credit will benefit taxpayers and citizens by providing technical assistance focusing on transparency and accountability in public financial management, and strengthening the tracking of poverty-reducing public expenditures and their impacts. Total cost: $13.4 million IDA Second Structural Adjustment Credit aims to PSG 3/12/02 2012/2037 48.4 60.0 bolster the government's intensification of reform efforts over the past two years to stimulate balanced economic growth, job creation, and poverty reduction. Total cost: $60 million. BOSNIA AND HERZEGOVINA o IDA Solid Waste Management Investment Credit will ENRM 6/20/02 2012/2037 14.3 18.0 benefit more than 800,000 people by improving access to environmentally sustainable and cost-effective solid waste management services. Total cost: $21 million. IDA Business Environment Adjustment Credit will FPSD 5/30/02 2012/2037 35.3 44.0 support the government's reforms to improve the investment climate, attract domestic and foreign investment, and remove barriers to business entry, operation, and exit, resulting in a more dynamic private sector, job creation, and improved living standards. Total cost: $44 million. IDA Road Management and Safety Investment FPSD 3/28/02 2012/2036 24.2 30.0 Credit will benefit all road users by improving traffic flow and reducing accidents through the rehabilitation of poor quality roads and support of private sector growth and employment. Total cost: $41.5 million. IDA Private Sector Credit Financial intermediary FPSD 2/28/02 2012/2036 8.0 10.0 Loan will promote the development of the private sector by improving access to bank loans and other finances, benefiting private enterprises and banks. Total cost: $16 million. CROATIA o IBRD Structural Adjustment Loan aims to improve the SPRM 12/4/01 2007/2016 n.a. 202.0 competitiveness of the economy through managed policy, fiscal discipline, strengthened market institutions, a flexible labor market and strengthened social protection. Total cost: $202 million. GEORGIA IDA Health Project Supplemental Credit will benefit HD 8/28/01 2011/2041 2.2 2.7 women and children, and aims to improve access to and quality of health care for the population through quality care and regulation of public and private workers. Total cost: $2.8 million. 152 The World Bank Annual Report 2002 Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb USS KYRGYZ REPUBLIC O IDA Rural Water Supply and Sanitation Investment Credit RD 12/4/01 2012/2041 12.0 15.0 will improve hygiene and sanitation for approximately 350,000 people in the Issyk-Kul, Naryn, and Talas Oblasts by increasing access to potable water. Total cost: $24.6 million. LATVIA O IBRD Housing Project Learning and Innovation Loan FPSD 4/25/02 2007/2019 n.a. 2.0 aims to introduce households, housing associations, and financial institutions to financing mechanisms, to determine whether those qualified will use the new mechanisms to finance high return investments not currently funded by private lenders. Total cost: $2.8 million. LITHUANIA IBRD Education Improvement Investment Loan aims to HD 6/20/02 2007/2019 n.a. 25.4 improve the quality of teaching and learning in grades 5 through 10, by making efficient use of the financial, human, and physical resources allocated to education, benefiting around 600,000 students in grades 1 through 12. Total cost: $45.4 million. O IBRD Vilnius District Heating Investment Loan will UD 8/23/01 -/2018 n.a. 17.1 benefit local communities through government efforts to improve the quality of heating supply, focusing on lower costs, reliability, and building level temperature control. Total cost: $64.5 million. MACEDONIA, FORMER YUGOSLAV REPUBLIC OF O IDA Community Development Investment Credit SDGI 5/30/02 2012/2022 4.1 5.0 supports the government's postconflict development efforts and aims to pilot small community-based initiatives. Local and regional communities will benefit from reduced social tensions and improved local social capital. Total cost: $9.6 million. IDA Public Sector Management Adjustment Credit aims PSG 4/9/02 2012/2036 12.1 15.0 to boost sustained economic growth and improved service delivery by strengthening key institutions, and accountability, transparency, and efficiency in the use of public resources. Total cost: $15 million. IDA Emergency Economic Recovery Investment Credit EM 12/13/01 2012/2021 11.6 15.0 will help restore economic activity disrupted by the civil conflict by providing better access to critical imports by the private sector. Total cost: $15 million. MOLDOVA IDA Rural Investment and Services Adaptable RD 6/20/02 2012/2042 8.3 10.5 Program Credit aims to increase rural incomes and living standards by promoting rural entrepreneurship, economic diversity, and trade in the rural areas. It will improve access for private farmers and rural businesses to legal ownership, knowledge, and finance. Total cost: $19.7 million. (continued nex.t page) Chapter 6 About the World Bank 153 Table 6.11 Summaries of Operations Approved during Fiscal 2002, Europe and Central Asia (continued) Primary Date of Principal amount (millions) Country/project name themea approval Maturities SDRb uss IDA Third Structural Adjustment Investment Credit PSG 6/20/02 2012/2042 24.1 30.0 will help the government set the basis for sustained economic growth by focusing on better monitoring and evaluation of poverty reduction measures as well as improved performance in education and health care to benefit the country's population as a whole. Total cost: $30 million. O> IDA Structural Adjustment Credit-IDA Reflow FPSD 11/20/01 2009/2034 4.0 5.0 POLAND O IBRD Second Hard Coal Sector Adjustment Loan will FPSD 8/2/01 2011/2011 n.a. 100.0 benefit miners by transforming the coal industry into a competitive and profitable sector by assisting workers leaving the industry to find employment, removing industry payment of taxes, preparing the industry for privatization, and improving environmental performance. Total cost: $100 million. ROMANIA O IBRD Rural Development Adaptable Program Loan RD 3/19/02 2006/2019 n.a. 40.0 aims to strengthen local governance by improving community groups' handling of public investments and increasing the availability of sustainable infrastructure in poor rural areas. Total cost: $53.4 million. O' IBRD Second Social Development Fund Adaptable SDGI 12/20/01 2006/2018 n.a. 20.0 Program Loan aims to increase the social capital and civic engagement of the rural poor in 250 communities through implementation of social development projects. Total cost: $28.7 million. RUSSIAN FEDERATION IBRD Treasury Modernization Adaptable Program PSG 6/6/02 2008/2019 n.a. 231.0 Loan aims to assist the government in establishing a fully functioning treasury, enabling better cash management and ensuring budget expenditures are in accordance with the approved budget to benefit the public as a whole. Total cost: $663 million. IBRD Fiscal Federalism and Regional Fiscal Reform PSG 1/29/02 2007/2018 n. a. 120.0 Adjustment Loan will support fiscal reform benefiting the poor through effective targeting of social expenditures and assistance. Total cost: $120 million. SLOVAK REPUBLIC IBRD Social Benefits Reform Administration SPRM 2/21/02 2006/2016 n.a. 23.5 Investment Loan aims to establish a cost effective and efficient social protection system by improving management, impacting approximately 3.5 million workers and social assistance recipients. Total cost: $40.3 million. IBRD Enterprise and Financial Sector Adjustment FPSD 8/2/01 2007/2015 n.a. 177.3 Loan will support bank and enterprise reforms such as restructuring of the banking system and substantial improvements in the legal frameworks for bankruptcy and corporate governance. Total cost: $177.3 million. 154 The World Bank Annual Report 2002 Primary Date of Principal amount (millic. Country/project name theme' approval Maturities SDRb usS TAJIKISTAN IDA Pamir Private Power Credit will benefit consumers FPSD 6/27/02 2012/2042 7.9 10.0 by ensuring a reliable supply of electricity in the Gorno Badakshan Autonomous Oblast region of Tajikistan, in a financially, environmentally, and socially sustainable manner through private sector involvement. Total cost: $26.4 million. IDA Dushanbe Water Supply Investment and UD 6/18/02 2012/2042 13.5 17.0 Maintenance Credit will improve the safety, reliability, efficiency, and financial viability of the water supply services to the people of Dushanbe through rehabilitation of existing facilities and institutional and financial strengthening using improved financial and commercial management practices. Total cost: $19.4 million. ' IDA Second Poverty Alleviation Investment Credit SPRM 5/21/02 2012/2042 11.1 13.8 seeks to improve the living standards of the vulnerable and the extreme poor. Between 400,000 and 700,000 people will benefit from microprojects, microfinance services, and community empowerment. Total cost: $18.3 million. TURKEY o IBRD Second Programmatic Financial and Public Sector FPSD 4/16/02 2007/2017 n.a. 550.0 Adjustment Loan aims to help Turkey implement the next 4/16/02 2005/2007 n.a. 800.0 phase of its reform program and ensure that social programs are adequately funded while supporting the government's macroeconomic policy framework to create conditions for financial stability and sustained growth. Total cost: $1.4 billion. * IBRD Social Risk Mitigation Sector Adjustment Loan HD 9/13/01 2007/2016 n.a. 500.0 will help strengthen Turkey's social safety net through investment to build social services and adjustment to provide immediate support to the poorest populations affected by the recent economic crisis. Total cost: $635.5 million. O IBRD Programmatic Financial and Public Sector FPSD 7/12/01 2006/2018 n.a. 700.0 Adjustment Loan will support reforms aimed at restoring 7/12/01 2004/2006 n.a. 400.0 confidence in the banking system, preparing the sector for European Union accession, and supporting urgent fiscal measures to protect social spending. Total cost: $1.1 billion. O IBRD Agricultural Reform Implementation RD 7/12/01 2006/2018 n.a. 600.0 Investment Loan will implement agricultural reform which should benefit farmers through restructuring of sales cooperatives. It should also reduce government subsidies and marketing expenses, and finance payments to redundant workers. Total cost: $662 million. UKRAINE O IBRD Private Sector Development Adaptable FPSD 3/28/02 2010/2021 n.a. 30.0 Program Loan will encourage private sector development by supporting the government in improving the regulatory environment and providing training to business managers that supports enterprise restructuring. Total cost: $38 million. (continued next page) Chapter 6 About the World Bank 155 Table 6.11 Summaries of Operations Approved during Fiscal 2002, Europe and Central Asia (continued) Primary Date of Principal amount (millions) Country/project name themea approval Maturities SDRb uss '+ IBRD Social Investment Fund Loan will develop social SPRM 12/4/01 2007/2022 n.a. 50.2 and communal services to improve the living conditions for poor communities and disadvantaged groups who have suffered from economic and social transition. Total cost: $70.1 million. IBRD First Programmatic Adjustment Loan will support PSG 9/20/01 2007/2021 n.a. 250.0 the government's economic development and reform program for sustained economic growth, poverty reduction, and improved environmental protection. Total cost: $250 million. UZBEKISTAN IBRD/IDA Bukhara and Samarkand Water Supply and UD 3/19/02 2007/2022 n.a. 20.0 Sanitation Investment Loan/Credit' aims to improve 3/19/02 2012/2037 15.9 20.0 the quality and financial sustainability of potable water to about 650,000 people through rehabilitation of facilities and institutional strengthening. Total cost: $62 million. IBRD Rural Enterprise Support Investment Loan will RD 12/20/01 2007/2021 n.a. 36.1 assist approximately 400,000 people to restructure collective farms by supporting newly created private sector initiatives, resulting in improved farm productivity and profitability. Total cost: $43.5 million. YUGOSLAVIA, FEDERAL REPUBLIC OF IDA Trade and Transport Facilitation in South East TI 6/4/02 2012/2022 5.5 6.8 Europe Investment Credit aims to meet two development objectives. People in the trade industry and consumers and producers will benefit from the reduction of nontariff costs to trade and transport as well as the reduction of smuggling and corruption at the border crossings. Total cost: $11 million. IDA Private and Financial Sector Adjustment Credit FPSD 5/23/02 2012/2022 68.1 85.0 aims to develop a sound financial system by supporting the government in its goal to accelerate and strengthen private sector growth and thereby improving the investment climate. Total cost: $85 million. 4 IDA Education Improvement Investment Credit HD 5/2/02 2012/2022 8.0 10.0 supports the government of Serbia's education reform agenda. Half of the IDA funding will be in direct resource transfers to children and teachers in about 650 primary schools, directly benefiting approximately 25,000 teachers and 300,000 students. Total cost: $12.2 million. CJ IDA Structural Adjustment Credit aims to promote PSG 1/29/02 2012/2021 55.5 70.0 reforms to ensure fiscal sustainability and provide financing to bolster external reserves, to reduce poverty, and to promote sustainable growth. Total cost: $70 million. Total 502.7 5,523.6 n a Not applicable -Not available. D Denotes various levels of civil society involvement in Bank-supported projects, from design to mon toring and evaluation of results. Note. Numbers have been rounded. a. EM = economic managemenr; ENRM = env ronmenrt and natural resource management: FPSD = financial and private sector developnrent. HD = human developmentr PSG = public sector governance, RD = rural developmentr RL = rule of law, SDGI = social development, gender, and inclusion; SPRM = social protection and risk marnagement, TI = trade and integration; UD = urban developmrent See box 2 1 b IDA fLInds are commritted in SDRs (special drawing rights). In fiscal 2002 the exchange rate for SDRs was 1 SDR = $1.265 c. "Blend" loan/credit 156 The World Bank Annual Report 2002 Tables Table 6.12 Summaries of Operations Approved during Fiscal 2002, Latin America and the Caribbean Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb US$ ARGENTINA o0 IBRD Family Strengthening and Social Capital Promotion SDGI 11/8/01 2007/2016 n.a. 5.0 Learning and Innovation Loan aims to promote active family participation as members of their communities, in the labor market, and in Argentine society, by supporting community organizations' and NGOs' subprojects. Total cost: $6.7 million. O4 IBRD Structural Adjustment Loan aims to improve the PSG 8/28/01 2005/2016 n.a. 400.0 quality of life for the poor and vulnerable by supporting reforms in health insurance regulation, tax administration, and fiscal management, while maintaining vital social services. Total cost: $400 million. O' IBRD Santa Fe Provincial Reform Adjustment Loan is PSG 7/19/01 2007/2016 n.a. 330.0 designed to support poverty alleviation and promote reforms in public finance, health, education, and private sector development in Santa Fe province, benefiting low-income families and children. Total cost: $330 million. BOLIVIA Ot~ IDA Road Rehabilitation and Maintenance Investment FPSD 4/16/02 2012/2037 62.0 77.0 Credit will rehabilitate and maintain major and secondary roads. Smallholder farmers will benefit from increased trade between towns and access to markets, and reduced travel times and fewer accidents. Total cost: $284 million. IDA National Land Administration Supplemental ENRM 9/18/01 2011/2036 4.8 6.0 Credit will benefit smallholder farmers by regularizing land titles and allowing the government to complete titling for about 3 million hectares in rural areas. Total cost: $10.8 million. BRAZIL o IBRD Rural Poverty Reduction Investment Loan will RD 6/27/02 2007/2017 n.a. 22.5 benefit about 80,000 rural families and aims to reduce poverty through the provision of matching grants to support community projects in water supply, electrification, local road rehabilitation, health posts, and schools. Total cost: $30 million. IBRD Energy Sector Reform Investment Loan will benefit FPSD 6/13/02 2012/2012 n.a. 454.6 the population by improving the investment climate and promoting economic growth by supporting reforms such as power tariffs, regulatory changes, and expansion of access to power. Total cost: $454.6 million. IBRD Second Programmatic Financial Sector Adjustment FPSD 6/13/02 2012/2012 n.a. 404.0 Loan will benefit the poor by providing access to financial services and supporting Brazil's initiative to strengthen its financial system. Total cost: $404 million. O IBRD Fundescola IIIA (Third School Improvement) HD 6/13/02 2007/2014 n.a. 160.0 Adaptable Program Loan will benefit thousands of students by helping to improve the quality of Brazil's public school education, focusing assistance in the poorest regions, namely the Northeast, North, and Central West. Total cost: $320 million. (continued next page) Chapter 6 About the World Bank 157 Table 6.12 Summaries of Operations Approved during Fiscal 2002, Latin America and the Caribbean (continued) Primary Date of Principal amount (millions) Country/project name theme' approval Maturities SDRb usS 4 IBRD Natural Resource Management and Rural Poverty ENRM 4/25/02 2007/2017 n.a. 62.8 Reduction Loan will benefit about 105,000 farmers and 5,000 indigenous people by awarding matching grants to pilot new technologies, innovate farming systems, and promote environmentally friendly practices. Total cost: $107.5 million. O' IBRD Family Health Extension Adaptable Program Loan HD 3/14/02 2007/2017 n.a. 68.0 expands publicly financed health services in 40 cities, strengthening the capacity of the health sector to evaluate family-based services, thereby improving health in low-income households. Total cost: $136 million. O~' IBRD Sergipe Rural Poverty Reduction Investment Loan RD 1/29/02 2007/2017 n.a. 20.8 aims to improve the quality of life of 52,000 rural families in the northeastern state of Sergipe through provision of improved access to water, electricity, and other basic services. Total cost: $28 million. O IBRD Sao Paulo Metro Line Investment Loan will help UD 1/22/02 2007/2017 n.a. 209.0 finance Line 4 of the So Paulo Metro, providing safe, reliable transport for low-income people in the S5o Paulo Metropolitan Region. Total cost: $934 million. -0' IBRD Fortaleza Metropolitan Transport Investment Loan UD 12/4/01 2007/2011 n.a. 85.0 will benefit the low-income population through the support of development of an urban transport system, rehabilitating existing commuter rail-lines and transfer stations to provide efficient transport services. Total Cost: $193.8 million. IBRD Financial Sector Technical Assistance Loan aims to FPSD 9/4/01 2007/2016 n.a. 14.5 strengthen the financial sector by supporting diagnostic studies, training, and systems installations to implement financial sector reforms that enhance the stability of Brazil's financial system. Total cost: $18.1 million. page 38, Curt Carnemark page 99, Curt Carnemark ISSN 0252-2942 page 43, Ray Witlin page 104, Pedro Campos Verde ISBN 0-8213-5157-5 page 46, Curt Carnemark page 105, Cecilia I. R Aleman page 47, Curt Carnemark page 109, Yemen Social Fund Send comments on the World Bank Annual Report 2002 page 47, Pickerell page 111, Yemen Social Fund to areditor@worldbank.org. page 48, Curt Carnemark page 115, Deborah Campos THE WORLD BANK 1818 H Street, NW157 Washington, DC 20433 USA Telephone: 202 473 100097821357 Facsimle: 202 477 6391 9L 8 1 3557 Internet: www.worldbank.org E-mail: feedback@worldbank.org ISBN 0-8213-5157-5