58640 - Interview with Yves Rovani, Director-General, VOL 5 I NO 12 DECEMBER 1986 Operations Evaluation In this issue: Articles 2 All ...... lED. An Interview with Yves R ovani, Director-General, All about OED Operations Evaluation, on OED's by Leandro V. Coronel work and how it draws valuable lessons for the Bank. • AnII....... Ia.rd ... . , ...... A he mandate of the Operations tant papers, for example OED's recent new term for the Board has begun, with ten new E xecutive Directors in T Evaluation Department (OED) is to provide a systematic, comprehen­ paper on structural adjustment lend­ ing [SAL], and, of course, the work place. A look at what the EDs do. sive, and independent review of the program and budget, and our annual 7 A......'s W ..o" If tile •••'s Bank 's development experience. To review and annual report. .e.rd, including bios of new members. find out how OED goes about eval­ There is close interaction with man­ uating the Bank's work, The Bank's agers and staff at all appropriate 1. Strategic PI•••III Sill till S.... World talked to Yves Rovani, stages. Comments are invited on every fer tile Fltare. Nagy Hannatells how more and more organizations Director-General, Operations Evalua­ paper. We review the comments with usethis top management tool to be tion. care and take them into account to better prepared for thefuture. ensure accuracy and objectivity. Inter­ *** action continues after papers are is­ 19 AFa.. fer tile uHely F••II,." A contribution from Ramona P. R etiro Q: What is the role of OED? sued as the feedback process develops who remembers her mothers A: Essentially, it is one of account­ within Operations. special way of celebrating St. ability and lesson-learning. We assess Joseph's feast day in the whether the Bank 's operational pro­ Philippines. Q: On the organizational structure, you grams and activities produce the ex­ have a dotted-line relationship with the pected results. We also help ensure Board and with management. Does this Departments that the Bank learns from its successes mean you have a high degree of inde­ 12 O ...e RICIftI: Ernest Stern's and mistakes, and ascertain that the pendence? statement at the DAC meeting in Bank's self-evaluation processes are A: Yes. This independence allows us to Paris; Parvez Hasan on D omestic functioning satisfactorily. In addition, be original in our thinking, to address Adjustment Policies and E xternal we encourage member countries to any issue of concern to the Board, to Economic Shocks. develop and build their own self-eval­ member countries and to staff, and to 20 ArH.dt......k uation capability and we trade experi­ report frankly on our findings. It 21 Letters to tile Edltlr ences with evaluation staff in other therefore helps enhance the credibility agencies. of the Bank's performance. Credibility 22 S.... Clla.... is particularly important at this time 24 As We 10 to Press Q: What is your relationship with man­ when development resources are agemement, and with the Board? scarce, administrative budgets tight A: I report to the Board and have an and the effectiveness of aid is ques­ administrative link with the President. tioned. But let me stress that indepen­ Every evaluation report produced by dence does not mean isolation. OED OED is circulated to the Executive staff are expected to interact with Op­ Directors and to the President. Within erational staff to keep abreast of is­ the Board, the Joint Audit Committee sues and to help ensure that lessons (JAC) exercises oversight over Opera­ learned are fed back into operations. tions Evaluation , and we work closely This is even more apparent in IFC. with it. The JAC reviews the work I have the same formal relationship programs, the outline of studies and with IFC as with the Ba nk. My over­ all major output of OED and IFC's sight supports the independence of COVER: Holiday G reetings from the children at the Bank's Child Care Center. Operations Evaluation Unit. The thinking of the Operations Evaluation Photos by William Spidle Board discusses only the most impor­ Unit even though the unit is located 'This independence allows us to be original in our thinking, to address any issue of concern to the Board, to member countries and to staff, and to report frankly on our findings.' Yves Rovani Photo by Giuseppe Franchini within IFC-in its Development De­ and to the President as the final eval­ number of them in the past. Finally, partment-to facilitate its familiarity uative document. the Project Completion Report is a with issues and enhance feedback. Let For the other 50%, we conduct an building block, not only for our inde­ me say also that independence re­ independent evaluation-reviewing pendent evaluations but also for our quires responsibility and objectivity not only the PCR, but also appraisal subsequent special studies and for the which, in turn, must be supported by documents, reports and files. We also annual review in which we synthesize good analysis. interview staff and review project ex­ the results of all completed operations perience in the field. I then send the of the previous year. Q: Can you briefly describe the evalua­ audit report to the Board, together tion process? with the PCR and comments received Q: What are special studies? A: The cornerstone of the evaluation from the borrowers and cofinanciers. A: Special studies are a major dimen­ process is the Project Completion Re­ The Project Completion Report is an sion of OED's work. They give us an port [PCR] prepared by Operational important step in the project cycle opportunity to draw lessons from the staff shortly after a project is complet­ because the findings from one oper­ Bank's experience, using aggregates ed. We review all PCRs and seek the ation will be used for subsequent rather than individual project experi­ views and comments of borrowers and operations. Preparing PCRs is also ences. educational for staff. I speak from ..l • co financiers. In 50% of cases, I send We do several types of special stud­ the PCR to the Executive Directors experience as I myself have done a ies: impact or sustainability studies, THE BANK'S WORLD I DECEMBER 1986 3 · }' sector reviews, policy and procedural ducting independent evaluations for to articulate the lessons in actionable reviews, country reviews and policy­ only about half the number of com­ terms, which is not easy, and to sup­ based lending reviews. Impact evalua­ pleted projects, compared to 100% in port the dissemination process. We are tions involve revisiting projects several 1982. That helped release resources trying to help further by responding to years after they have been completed, for special studies and other work. We requests from Operations Policy Staff looking at project viability and social have also been increasing the efficien­ and the Regions to participate in sem­ impact and at the sustainability of the cy of our evaluations by grouping op­ inars or discussions. institutions involved. A second group erations reviewed. For example, OED of studies deals wi th the experience of evaluated five irrigation projects in Q: What about external dissemination Bank operations in specific sub sectors Indonesia during one mission and will of your findings? while a third group reviews Bank op­ produce only one report. A: We have contacts with other agen­ erational policies. The fourth group cies and donors, and we trade experi­ are country reviews which evaluate Q: Who are the people who go out to ences and share information with Bank-borrower interaction in a given review projects, and have they had any them. We also participate in country country over time. Two have been previous connection with the projects seminars and are considering publish­ issued, on Pakistan and Sri Lanka. they review? ing more reports provided we can see More recently, OED started a new A: The people who do this work have a particularly valuable message, a sig­ series of studies on policy-based lend­ broad experience and are recruited nificant impact and an important au­ ing, such as the first review of SAL from within the Bank. Our ru~es dience. We want to be more systematic experience. prevent OED staff from evaluating and remain cautious about our prior­ The lesson-learning value of special projects with which they have been ities and objectivity. studies cannot be emphasized enough. directly associated. They also require They shed light on issues such as so­ disclosure of any other relevant past Q: Are the best lessons learned from cial impact, balance of programs, aid association with work in the country successful projects or from failed ones? coordination, the quality of country or sector which might impair their A: We make a point oflooking at economic and sector work, and the judgment. successes as well as failures. For exam­ factors affecting success or failure of ple we completed an impact evalua­ lending in a given sector that no single Q: What do you do with OED's find­ tion of three successful settlement project evaluation could capture. ings? projects in Malaysia, and an OED Q: How many projects does OED re­ A: Let me point out first that it is not mission recently returned from West view in one year? so much what we do with OED find­ Africa where it looked at the success­ A: In FY86, we've reviewed 218 proj­ ings but rather what others do with ful impact of cotton-based rural devel­ them that matters. The Regions are opment projects. In both cases, very ects. We expect to look at about 250 responsible for the quality of their valuable lessons have emerged. projects annually in the next few operations. It is; therefore, also their years-compared to 122 in FY82. responsibility to ensure that lessons Q: Has the Bank been listening to Thus, in about five years, the number from experience Bank-wide are re­ OED's advice? of projects reviewed by OED has dou­ flected in new lending. OPS and its A: Yes, the Bank responds to OED bled. sector departments, in particuiar, play findings although OED's impact Q: How are you coping with this in­ a leading role through many processes would be difficult to measure. We crease? to ensure that lessons learned are dis­ have very good interaction with Oper­ A: As I said earlier, OED is now con­ seminated across the Bank. Our job is ations. For example, we are now invit­ 4 THE BANK'S WORLD I DECEMBER 1986 'Something would be wrong with the Bank i'f it experienced no failures. After all, the develo'pment business involves ed to comment on policy formulation taking risks. The financing of recurring costs and in some of the sector departments in maintenance, have also become OPS. We have"also been pleased to see most important thing sources of major concern, affecting the active participation of Operational many sectors and countries. staffin the lAC and the initiatives taken within Operations to discuss the is not to make the Q: What are your findings so far on the country reviews, the SAL paper, some new type of policy-based lending such of the sector studies and, of course, same mistake twice.' as structural adjustment? the ann ual review. A: We've just completed a paper for the Board, our first SAL review­ Q: How has OED influenced work in these projects were implemented dur­ covering 15 SALs. The findings show the implementation of Bank projects? ing a period of substantial economic the results to have been mixed: Out of A: Let me give you two examples. I upheaval, these results can be consid­ ten countries, four largely achieved think the systematic attention now ered generally satisfactory. Also, their objectives; in four others the re­ given to sustainability in operational something would be wrong with the sults have been less satisfactory; while work may be traced to OED's initial Bank ifit experienced no failures. Af­ in two countries the operations failed. work on the subject. The increased use ter all, the development business in­ But SALs are rather difficult to of sociological expertise in the design volves taking risks. The most impor­ evaluate because structural adjust­ of projects may be another example. tant thing is not to make the same ment involves the interaction of many mistake twice. variables about which we still have Q: How do you define a successful much to fearn. The first SALs were project? Q: Can you tell us briefly about the implemented in a very difficult world A: A successful project is one which 20% that had unsatisfactory outcomes? economic environment. SALs were a achieved the major objectives intend­ A: Perhaps the most significant fea­ rapidly evolving product and their ed at appraisal. PCRs and eval uations ture is that the less successful projects evaluation was like focusing on a rigorously compare results with ex­ tend to be the smaller ones. Thus, if moving target. For us, the SAL review pectations. Of course, whenever an you assess success in terms of invest­ is an interim evaluation, and we plan economic rate of return could be cal­ ments rather than number of projects, to go back to do another one as soon culated at the outset, it is reestimated you will find that the success rate is as enough new individual evaluations on the basis of data available after the actually close to 90%. are available. project is completed. I have already mentioned newer So, looking at the positive side, style projects which, being experimen­ these operations have improved the Q: Based on these basic criteria, how is tal, involved more risks. Also the re­ policy formulation process within the the Bank doing with its projects? sults of agriculture and rural develop­ countries concerned and helped better A: Eighty percent of the projects re­ ment projects in Sub-Saharan Africa integrate country economic and sector viewed in calendar year 1985 were continue to be poor. Looking at ad­ work into lending. What must be said judged to be successful. Considering verse factors, project design-behind also is that SALs are one of several that we are presently evaluating more which looms the impact of exogenous lending instruments of the Bank. How complex and risky projects approved factors such as droughts, commodity SALs, sector and project loans are in the mid '70s and reflecting new prices-remains the major concern. integrated and mutually support each t . policy ini tiatives such as poverty alle­ More recently, country budgeting other in coherent country programs is viation, and considering also that constraints, affecting project funding, the main challenge of the day. Iil THE BANK'S WORLD I DECEMBER 1986 5 Ten New Executive Directors Take Their Seats Around the oard Room Table by Marjorie Messiter he first Tuesday morning in No­ school this late in the year than it is for In this partnership, the EDs' views T vember. At 10 a.m. sharp the Board of Executive Directors gathers you or me." Shortly after the new term begins, touch nearly every aspect of the Bank's work. Is there a staff member in Room A-II 00 for the beginning of the Secretary's Department arranges who doesn't know the significance of its new two-year term. The room fills an introductory program tailored to "It's going to the Board tomorrow"? quickly, and amid hearty greetings the EDs' particular interests. It in­ Everyone is aware that the Board and introductions, there's a bit of seat cludes a series of briefings by senior approves all lending and borrowing shuffling as the new members find managers on major policy issues. operations, but poticy matters have their appointed places around the The Board now has 22 Executive always been its primary focus and are massive, polished Board table. In the Directors representing 151 member increasingly so as financial and devel­ lounge next door, staff members chat nations. They meet every Tuesday opment issues facing the membership and flip through their papers as they morning-and frequently more often. and the institution become more com­ wait to be called on to introduce the At the regular sessions, they review plex. The EDs also devote consider­ various lending proposals. and approve lending and borrowing able attention to budget and staff mat­ The agenda-devoted to IFC busi­ operations, administrative and oper­ ters. ness on this particular day- promises ating budgets, and policy recommen­ In Addition to Regular Sessions a fairly typical meeting. Except on this dations made by the President of the In addition to the regular sessions, day, eight of the new Executive Direc­ Bank who serves as Chairman of the the Board meets in Commi ttees of the tors joined the Board (five are new to Board. They also approve staff salary Whole (when the entire Board meets the Board; three are former Alternate proposals by the President. for special discussions without taking Directors). In addition, seven new Al­ Governors Delegate Authority formal decisions), informal meetings ternate Directors, appointed by their The Governors of the Bank (pri­ and seminars. The EDs also serve on respective EDs, have taken their seats. marily the Finance Ministers of mem­ various Board committees, such as the Bank President Barber Conable ber governments) have delegated most Joint Audit Committee, the Commit­ welcomes them in a brief and gracious of their authority to the Executive tee on Directors' Administrative statement introducing each ED. And Directors. Certain powers, such as ad­ Matters, the Committee on Staff so without mueh ado, another term is mitting new members, increasing or Compensation Issues, and the newly off to a brisk beginning. decreasing the Bank's capital stock, established Committee on Cost Effec­ allocating the Bank's net income, and tiveness and Budget Processes. And, Pace Doesn't Slacken amending the Articles of Agreement, from time to time, they serve on ad The pace doesn't slacken because are reserved for the Governors alone. hoc committees such as the Joint there is a new Board, and a period of Even then the Governors decide these Bank/Fund Committee of Executive adjustment is a luxury a new member issues on the basis of recommenda­ Directors on Staff Compensation. doesn't have, though not all need it. tions by the EDs, and the Secretary But the EDs' work involves more Some EDs are experienced in Wash­ conducts the voting process by mail than Board and committee meetings. ington's and the Bank's ways, but except during the Annual Meetings. Each year, the Bank and IFC issue those who are completely new in town "The most impo.rtant thing to re­ hundreds of documents- many are face the same tangle of details in set­ member about the Executive Direc­ important policy papers on complex tling down as any staff member. tors is that they are the policy makers issues- which require review. The re­ "They are just like all of us," says a for the World Bank and the IFC," says view often necessitates seeking clarifi­ staff member in the Secretary's De­ Timothy T. Thahane, Vice President cations from management and staff partment who helps them with person­ and Secretary. "Their relationship and extensive consultations with their al matters. "For one thing, take the with the President and all Senior Man­ authorities. For an ED who repre­ problem of schools-it isn't any easier agers is one of partnership and collab­ sents a group of countries, estab­ for the EDs to get their children into oration." lishing common positions can be 6 THE BANK'S WORLD / DECEMBER 1986 especially time-consuming and ence in the Bank differs from the cor­ countries for a two-year term. troublesome. porate world where company direc­ The number of countries each of Actually, consensus building is not tors jet in from far-flung places for these 17 Directors represents varies limited to constituencies within coun­ quarterly meetings or in times of man­ widely. Jobarah E. Suraisry, who try groups only. Most Board decisions agement crises. moved over from the IMF where he are arrived at by consensus and with­ This presence in Washington, which was the Saudi Alternate Director, re­ out formally casting votes. (The num­ was stipulated by the founders in the presents only Saudi Arabia which ac­ ber of votes a country has is deter­ Articles of Agreement, requires the quired its own seat on the Board this mined by its share subscriptions.) But, Executive Directors to function in year; Mr. Xu represen ts China alone. rarely has the Board taken decisions continuous session at the principal of­ But, Andre Milongo speaks for 24 by a formal roll call. fice of the Bank and meet as often as Francophone African countries, and Of course, part of the complexity of the business of the Bank requires. It is Mitiku Jembere for 20 mainly the EDs' role is that they have a dual this resident nature of the Board that English-speaking African coun tries. function: They represent their govern­ makes it unique compared to a com­ All the country groups are more or ments in the Bank. And equally im­ mercial corporation. less formed along geographic lines portant, they represent the Bank to Of the 22 Directors, five are ap­ with some poli tical and cultural fac­ their governments, acting as interlocu­ pointed by the five ~argest sharehold­ tors playing a part in how they are tors. They are also officers of the in­ ers. They serve for as long as their constituted. stitution. Each ED has many different governments wish. They are the Direc­ Last year, The Bank's World pub­ audiences and constituencies to ad­ tors for the United States, Japan, the lished photographs and short biogra­ dress. Report writing, and sending Federal Republic of Germany, the phies of the entire Board (see Decem­ cables and telephone calls are an inte­ United Kingdom and France. ber 1985 issue). Here again is the gral part of their office routine but are The other 17 Directors are elected entire Board with biographies of the no substitute for frequent visits to biennially at the Annual Meetings by 10 Executive Directors who joined this their capitals. "It isn't enough to sit in the Governors of their consti tuen t year. Washington. They have to travel to their capitals a great deal to consult their authorities on major issues to be decided by the Board," says Ossi J. The Bank's Board: A Who's Who Rahkonen, Assistant Secretary for Pho tos by Mic hele lannacc i Board Operations. • PAUL ARLMAN, a national of the Held High Posts in Governments Netherlands, is Executive Director for Nearly all the new EDs, like their Cyprus, Israel, the Netherlands, Ro­ colleagues, have held high posts in mania and Yugoslavia. After receiving their governments. Some have taught degrees in law from Rotterdam Eco­ economics; others are prolific authors nomic University, and international on economics and international af­ relations from the European Institute, fairs. Mr. Rahkonen reflects the feel­ University of Nice, France, Mr. Arl­ ings of many in the Secretary's De­ manjoined the Dutch Ministry ofFi­ partment who know the Board best: nance in 1970. From 1974 to 1978, he "My personal impression is that all of was Financial Attache at the Dutch them are dedicated to the institution Embassy, Washington, D.C., and be­ and its continued growth, and they tween 1975 and 1977, served simul­ work hard to ensure their govern­ taneously as an Executive Director's ments' support for the institution. Assistant at the World Bank. He re­ Staff members may not be aware of turned to the Netherlands in 1978 to the time pressures on them. It's not a become Division Chief, International relaxed atmosphere here, as some peo­ Institutions in the Ministry of Fi­ ple may think." nance, and from 1981 to 1986, was Some of the Board's responsibili­ Deputy Director, Foreign Financial ties, such as submitting an annual re­ Relations, Ministry of Finance, serv­ port to shareholders, and overseeing ing as the Deputy for IDA VI and VII, Executive Board of the European In­ finances and audits of accounts, are and as a member of the Task Force on vestment Bank from June 1981 until J . similar to those of corporate boards of Non-Concessional Flows. November 1986. directors. But their day-to-day pres­ Mr. Arlman was a member of the continued next page THE BANK 'S WORLD I DECEMBER 1986 7 1 • FELIX ALBERTO CAMARASA, • MITIKU lEMBERE is an Ethiopi­ • ROBERT B. KEATING has been a national of Argentina, is Executive an national. He is Executive Director Executive Director for the United Director for Argentina, Bolivia, Chile, for Botswana, Burundi, Ethiopia, The States since August 1986. Mr. Keating Paraguay, Peru and Uruguay. Mr. Ca­ Gambia, Guinea, Kenya, Lesotho, is a graduate of the United States marasa has a master of laws degree Liberia, Malawi, Mozambique, Niger­ Naval Academy and has a master's from the U niversi ty of Buenos Aires ia, Seychelles, Sierra Leone, Sudan, degree in systems engineering from and a master's degree in government Swaziland, Tanzania, Trinidad & To­ George Washington University. For from the University of Essex, Eng­ bago, Uganda, Zambia and Zim­ most of his career, he has been a con­ land. He also did graduate work at the babwe. After completing his studies in sultant to private and public institu­ University of Buenos Aires, at the economics at University College of tions on economic development in London School of Economics and at Addis Ababa, he earned a master's Third World countries. From 1964 to the Institute for Development Studies degree in economics from Syracuse 1967, he served as Director of the of the University of Sussex in political University, New York. Mr. lembere Chile-California Program of Techni­ economy, international economics joined his country's Economic and cal Cooperation, Santiago, Chile. and government. From 1965 to 1976, Technical Assistance Board in 1961 From 1967 to 1969, he was Senior he was in private legal practice. In and in 1966 became its Director-Gen­ Adviser for Transport and Infrastruc­ 1967, he joined as an economic and eral. Since 1964, he has participated in ture Projects, the Inter-American De­ legal adviser the Confederacion Gen­ various international and bilateral ne­ velopment Bank, Washington, D.C. In eral Economica, a national associa­ gotiations and conferences. From 1970, he was a senior consultant to tion of industrial entrepreneurs. He 1966 to 1970, he also held the position the Council for International Cooper­ served as Vice President and President of Head, Loans, Credits and Invest­ ation and Development, Taipei, Tai­ of Editorial Universitaria de Buenos ment Department of the Ministry of wan. From 1970 to 1973, he served as Aires from 1973 to 1974. In 1973, he Finance. In 1970, he became Manager, Director-General of the Bureau of became an Associate Professor of Po­ Ministry of Planning and Develop­ Roads, Ministry of Public Works, litical Economy at the University of ment, and in 1972, Deputy Minister, Kinshasa, Zaire. From 1973 to 1979, Buenos Aires, and in 1976, an Asso­ Ministry of Planning and Develop­ he was a self-employed consultant on ciate Professor at Universidad del Sal­ ment. From 1978 to 1984, he was mining and industry projects in Afri­ vador. He served as an Executive Di­ Head, Credit and Investment Depart­ ca, Latin America and Southeast Asia, rector's Assistant and as an Alternate ment, Ministry of Finance and Na­ and was Vice President, Pure Water Executive Director at the World Bank tional Authorizing Officer for Euro­ Systems, Inc., from 1979 to 1981. In from 1981 to 1986. pean Development Fund (EDF) oper­ 1962, he served as a U.S. delegate to ations. Mr. lembere served as Alter­ the U. N. Conference on Science and nate Executive Director, the World Technology for Developing Countries, Bank, from 1984 to 1986. Geneva, and from 1981 to 1982, he served as a U.S. delegate to the U.N. Conference on the Law of the Sea 8 THE BANK'S WORLD / DECEMBER 1986 Treaty. From 1983 to 1986, he was Center on Transnational Corpora­ Minister, from 1974 to 1976. Between U.S. Ambassador to the Democratic tions, and was Director, General 1976 and 1982, he was Executive Di­ Republic of Madagascar and the Fed­ Analysis and Policies Division/ rector, African Development Bank, eral Islamic Republic of the Comoros. DRPA, Department of International and was Alternate Executive Director Between 1983 and 1985, he also served Economics and Social Affairs, United at the World Bank from 1983 to 1986. as Chairman of President Reagan's Nations, New York, from 1984 to Third World Hunger Commission 1986. He has also served as President, (author of the "Food for Progress" Institute of Economists of Rio de initiative). Prior to becoming an Exec­ Janeiro and as Coordinator, Advisory utive Director, he was a consultant on Committee for Social Science of the international affairs at the United Brazilian "Conselho Nacional de Pes­ States Treasury Department. He has quisas" (National Research Council). received awards for outstanding pub­ lic service from Zaire, Madagascar, and the Comoros. • HELENE PLOIX has been Execu­ tive Director for France since Febru­ ary 1986. She is also an Executive Director in the IMF. Mme Ploix earned degrees in public service at the Institut d'Etudes Politiques, Paris, and in law and liberal arts at the Sorbonne, Paris; a master of arts in public admin­ ANDRE MILONGO, a national of istration at the University of Califor­ the People's Republic of the Congo, is nia, Berkeley; and an M.B.A. from Executive Director for Benin, Burkina the Institut Europeen d'Administra­ Faso, Cameroon, Cape Verde, Central tion des Affaires, Fontainebleau, PEDRO S. MALAN, a national of African Republic, Chad, Comoros, France. From 1968 to 1978, she was a Brazil, is Executive Director for Bra­ People's Republic of the Congo, Cote management consultant at McKinsey zil, Colombia, Dominican Republic, d'Ivoire, Djibouti, Equatorial Guinea, and Company, Paris, and during Ecuador, Haiti and the Philippines. Gabon, Guinea-Bissau, Madagascar, 1977-1978 she served as Special Assis­ Mr. Malan has a Ph.D. in economics Mali, Mauritania, Mauritius, Niger, tant in the Cabinet of the Secretary of from the University of California, Rwanda, Sao Tome & Principe, Sene­ State for Consumer Affairs. She was Berkeley, and was a Visiting Scholar gal, Somalia, Togo and Zaire. Mr. Director, Compagnie Europeene de at Cambridge University, England, in Milongo has a degree in public law Publication from 1978 to 1982, then 1980. From 1973 to 1983, he was Se­ from the Faculte de Droit et Sciences President-Managing Director, Banque nior Research Member, Institute of Economiques, Nancy, France, and Industrielle et Mobiliere Privee, from Applied Economic Research, Ministry studied at the Ecole Nationale d' Ad­ 1982 to 1984. During this period, in of Planning, Brazil. He was Professor ministration, Paris. From 1964 to 1983 and 1984, she was a Member of of Economics, Catholic University of 1969, he served as Treasurer-General the Board of the Commission des Op­ Rio de Janeiro, from 1978 to 1983. In of the Congo. He was Director of erations de Bourse. From 1984 to 1983, he went to New York to serve as Investments, Ministry of Planning, 1986, she was Adviser for Economic Director, Policy Analysis and Re­ from 1969 to 1974, and Economic and and Financial Affairs to the Prime search Division, United Nations' Financial Adviser, Office of the Prime Minister. THE BANK'S WORLD I DECEMBER 1986 9 • RAMLI WAJIB, a national ofMa­ • MERCEDES RUBIO, a Spanish • JOBARAH E. SURAISRY is Exec­ laysia, is Executive Director for Bur­ national, is Executive Director for utive Director for Saudi Arabia. Mr. ma, Fiji, Indonesia, Lao People's Costa Rica, El Salvador, Guatemala, Suraisry has a degree in economics Democratic Republic, Malaysia, Ne­ Honduras, Mexico, Nicaragua, Pana­ and political science from King Saud pal, Singapore, Thailand, Tonga, and ma, Spain, Suriname and Venezuela. University, a master's degree in eco­ Viet Nam. Mr. Ramli earned his un­ After receiving her master's degree in nomics from the University of Denver, dergraduate degree in economics at economics from the University of and a Ph.D. in economics from the Exeter University, and his graduate Madrid, Mrs. Rubio became Assistant University of Colorado. From 1979 to degrees at Oxford and Harvard uni­ Professor of Public Finance at the 1982 he was Professor of Economics versities. From 1964 to 1986 he served University and, at the same time, was at King Saud University, and served in various capacities in his country's Technical Assistant to the Vice Presi­ from 1980 to 1982 as Adviser to the Ministry of Finance. He was Assis­ dent for Export Credit, Banco Exter­ Minister of Finance and National tant Secretary, Finance Division, ior de Espana. She has been a member Economy. From 1982 to 1986 Mr. from 1964 to 1968; Principal Assistant of the Corps of Economists and Trade Suraisry was Alternate Executive Di­ Secretary, Tax Division, from 1969 to Counselors of Spain since 1975. She rector in the IMF. 1972; Deputy Secretary, Tax Division, served as Alternate Executive Direc­ from 1972 to 1975; and Deputy Secre­ tor of the Inter-American Develop­ tary, Economics Division, from 1977 ment Bank from 1978 until 1980, to 1978. He served as U nder-Secre­ representing Austria, France, Israel, tary, Economics Division, from 1979 Japan, Spain, Switzerland and Yugo­ to 1984, and Under-Secretary, Fi­ slavia. She returned to Spain in 1980 nance Division, from 1985 to 1986. He to serve as Division Chief, Agricultur­ is currently also Executive Director of al Imports, Ministry of Economy; and the Islamic Development Bank, Jed­ from 1982 to 1986 was Commercial dah, Saudi Arabia. Counselor of Spain in Chicago, Illi­ nois. 10 THE BANK'S WORLD / DECEMBER 1986 Fawzl Hamad AI-Sultan: Bahrain, Arab Re­ public of Egypt, Iraq, Jordan, Kuwait, Leba­ non, Maldives, Oman, Pakistan, Qatar, Syrian Arab Republic, United Arab Emlrates,Yemen Arab Republic Mourad Benachenhou: Afghanistan, Alger­ Ia, Ghana, Iran, Libya, Morocco, Tunisia, People's Democratic Republic of Yemen Gerhard Boehmer: Federal Republic of Ger­ many Jacques de Groote: Austria, Belgium, Hun­ gary, Luxembourg, Turkey Ronald H. Dean: Australia, Kiribati, Republic of Korea, New Zealand, Papua New Guinea, Solomon Islands, Vanuatu, Western Samoa Mario Draghi: Greece, Italy, Malta, Portugal C. Ulrik Haxthausen: Denmark, Finland, Ice­ land, Norway, Sweden Timothy P. Lankester: United Kingdom N. F. PoHer: Antigua and Barbuda, The Baha­ mas, Barbados, Belize, Canada, Dominica, Grenada, Guyana, Ireland, Jamaica, SI. Christopher and Nevis, SI. Lucia, SI. Vincent and the Grenadines C. R. Krlshnaswamy Rao Sahib: Bangladesh, Bhutan, India, Sri Lanka Xu NaiJiong: China .l . Kenji Yamaguchi: Japan THE BANK 'S WORLD I DECEMBER 1986 11 Adjustment Efforts in Developing Countries Ernest Stern Ernest Stern, Senior Vice President, Operations, participated Of the 13 countries [Burundi, the Central African Repub­ in the DAC (Development Assistance Committee) High­ lic, The Gambia, Ghana, Madagascar, Malawi, Mauritania, Level Meeting in Paris earlier this rnonth. Here are excerpts Niger Sierra Leone, Senegal, Tanzania, Zaire and Zambia] from his remarks: for which projections are available on a consistent basis, three-Niger, Sierra Leone and Zambia-will face GDP The spread of adjustment programs, the persistence of policy makers in their implementation and the depth of growth ofless than 3%, i.e., growth rates below the popu­ lation growth level for at least two of the four years 1986­ the reforms being undertaken is a major achievement of 1989, based on currently known resource availability. But African governments. more alarming is the decline in the per capita consumption Senegal is now discussing a third SAL [Structural Adjus­ level which has already been declining in many of these ment Loan] to deepen its reforms, especially in the areas of countries for a number of years. the parapublic sector and industrial, trade and financial We certainly do not advocate growth in consumption at policy. Ghana has a sectoral adjustment program in indus­ all costs. In fact, many of Africa's past problems have been try and soon will also have an adjustment program to due to inappropriate consumption , reflecting distorted eco­ reorient the education sector into priority areas. nomic policies and poor economic management. But the Madagascar is implementing major reforms in its agricul­ ability of any country to persist in its adju tment efforts ture sector, and is now discussing far-reaching industrial over an extended period hinges on achieving some tangible sector and trade policy reforms. Of the 20 IDA-eligible results, however modest, in the medium term. Yet, for all countries identified as having major programs of structural but one (Ghana) of the 13 countries, per capita consump­ or sectoral reform already u nder way or in sight in January tion for the next three years will be stagnant; in Niger, 1985 when we negotiated tbe Special Facility for Africa, Senegal, Sierra Leone and Zambia, it will decline. only two-Liberia and Uganda-have been unable to for­ The decline in per capita consumption for these coun­ mulate such programs to date. Moreover, four countries not tries, despite per capita production increases, reflects the fo reseen in January 1985 have begun this process-Chad need to increase exports to meet growing debt service the Central African Republic, The Gambia and Equatorial payments which, even after reschedulings, are expected to Guinea. Each of these reform programs strikes at the heart increase from $1.8 billion in 1984 to an average of some $2.5 of the protected centrally administered, interventionist billion in 1987-1989. culture on which political power and patronage and the The relationship between investment or imports and support of the forceful urban elites have been based. growth is not linear, and we are aU familiar with the The Costs of Adjustment managerial and human resource constraints in the low­ None of these reforms is cost free. Governments under­ income countries. But there can be no doubt that additional taking major reforms have required vision, courage and resources within an appropriate time frame, and in an extensive encouragement in order to persist with these appropriate form, would provide critical support to the measures which inevitably initially attract forceful opposi­ difficult and complex adjustment efforts already under way, tion. While there is no doubt that "managed adjustment" is and improve the li mited prospects for growth. preferable to letting distortions persist and facing forced Fast-disbursing aid is required to finance imports essen­ unplanned adjustments, the growth, consumption and im­ tial to capitalize on the adjustment programs, e.g., fertilizer port prospects of those countries undertaking reform pro­ seeds, fuel, spare parts, and to finance projects to rehabili­ grams are far from encouraging. tate infrastructure, improve the efficiency of social services, 12 THE BANK'S WORLD I DECEM BER 1986 and support activities which can alleviate the transitional of which about $660 million are debt service and repur­ social costs of the adjustment process. chases from the IMF. An estimated average of$230 million In general , adjustment programs are more likely to have per year could be rescheduled if Zambia is accorded similar a positive income distribution effect by correcting d iscrimi­ rescheduling terms as it has recently. nation agains t the rural sector, which hurts those already But even assuming favorable rescheduling terms and a relatively poor. In most cases, income transfers under ad­ 50% increase in exports between 1985 and 1990, Zambia justment programs-from urban consumers to farmers­ will face external fi nancing requirements of about $650 and shifts in public expenditures-from capital intensive million a year for 1987-1989. If all indicative future com­ investments in large-sca le urban-based projects to low-cost mitments and disbursements materialize, Zambia will still programs reachi ng a large number of people-improve require at least an ad ditional $150 million per year beyond income dis tribution and strengthen the poverty focus of all flows currently in sight t o prevent a continuing decline gover nment programs. in per capita consumption from its 1986 level. But funds are essential to finance the transitio nal costs of This declining level of consumption gives rise to increas­ the adjustment process for these urban poor and redundant ing political and social strains, and a strong risk of derailing public sector employees, as has been done in Senegal and the reform program. Moreover, the basis for assuming that Ghana. For example, in Senegal, the Bank helped finance a donor pledges will, in fact, materialize in Zambia, has been special line of credit for "start-up" investments for those weakened by recent experience. Of the $150 million pledged workers laid off under the government's retrenchment pro­ in direct support for Zambia's foreign exchange auction gram. Similarly, the Ghana Education Sector Adjustment system last December, almost half-$70 million-was not loan is designed to ensure that essential programs are disbursed in the time frame indicated. strengthened in spjte of the limitations on the government's Based on a similar analysis to that outlined above for budget. Zambia, we estimate that to avoid the declines in per capita And fast-disbursing funds are also required to finance consumption currently projected, Zaire would require over trade liberalization and exchange reform programs, such as $200 million a year above the ($570 million) level of financ­ those in Zambia and Madagascar, which are central to the ing already in sight for 1987-1989. Senegal would need more market-oriented strategies these countries are pursu­ about $220 million a year beyond disbursements currently ing. An underfunded auction gives rise to some of the most in sight; Niger would require about $40 million; Madagas­ damaging effects of inadequate financing since the ex­ car about $45 million; and Tanzania an additional $50 change rate will depreciate unacceptably and precipitate mjllion. intervention, undermining the present and future credibility To prevent real per capita consumption from declining in of the market. In this connection, it is especiaJly troubling 1987-1989, an annual average of about $700 million would that some donors remain unwj)(ing to direct their funds be required for these six countries alone, over and above all through auction systems, which have been esta blished in foreseen aid flows. several countries (Zaire, Ghana, Zambia) to correct major foreign exchange rate distortions and to provide a market Aid Budgets Must Be Increased and/or Refocused mechanism to determine future foreign exchange pricing. To the extent that aid budgets are fLXed, a consistent approach to supporting adjustment programs would re­ The Financing of Adjustment Programs quire that donors switch resource allocations to countries As a group, in 1985 the 22 countries in Sub-Saharan implementing adjustment programs and to fast-disbursing Africa with adjustment programs under way or in sight funds. have seen a modest 8% increase over 1984 in their net aid This is not a new suggestion. but progress in this regard flows from DAC members. We estimate that net DAC flows has been extremely limited. Surely, we must ask why the to these countries in 1986, excluding food aid, may increase political and administrative considerations which constrain by about $800 million or some 24%-a major achievement. donors from providing effective aid have proven insoluble Of the estimated increase, about $240 million is due to the even though developing countries have made d'ramatic start of disbursements from the Special Facility for Sub­ progress in resolving the political constraints which limited Saharan Africa . their adjustment prospects in the past. Despite this, resources remain inadequate to achieve Looking ahead, while the Special Facility for Sub-Saha­ basic growth objectives in several countries. In Zambia, we ran Africa has now been allocated, the Bank sta nds ready estimate that to barely maintain per capita consumption to help donors in their efforts to increase fast-disbu rsing levels for the medium term (1987-1989), G OP would have financing in support of adjustment programs. Donor com­ to grow at 3% to 4% per year and require a 5% increase mitments can be woven into adjustment packages, not only of imports in real terms. During this period, total financing for direct support of adjustment programs, but also for requirements are estimated at around $880 million per year, other operations-for example, in the human resource area, THE BANK'S WORLD I DECEMBER 1986 13 in agriculture research and to finance priority infrastructu r­ all--{;ountries have adjusted to the profound social and al investments. economic implications of this. As a consequence, popula­ The report prepared by the World Bank last April and tion pressures on the environment are increasing, threaten­ endorsed by the Development Committee, Financing Ad­ ing perhaps irreparable degradation-not only in Africa. justment with Growth in S ub-Saharan A/rica from 1987­ Savings, domestic and foreign, are needed in increasing 1990, proposed that at a minimum there should be no net volumes merely to maintain inadequate incomes. negative flows from any country which is undertaking a Clearly the implementation of effective strategies to assist satisfactory program of structural reforms. in health service delivery, family planning and education is Currently, DAC data are inadequate to determine to essential. This requires not only funds but analysis, techni­ what extent this principle, which was endorsed by member cal assistance and institutional support. But funding, espe­ countries, has been adhered to, and I suggest that monitor­ cially of recurrent costs, is a major impediment. ing this criterion is an area on which the DAC focus. Environmental degradation requires urgent attention But additional resources are also required to strengthen with major financi ng implications for forestry and soil donor action to address long-term development constraints. conservation requirements . The increased resource level to which I referred earlier And we already know that even the inadequate transport would only imply a ''"business as usual." or a ' steady state" infrastructure in many African countries is rapidly reaching approach to the most daunting and most critical of Africa's the end of its effective life. Financing requirements for problems-the long-term problems. rehabilitation, reconstruction and expansion will be mas­ Developing and applying appropriate agricultural research: sive. But without improved infrastructure production ori­ While the Special Program for African Agricultural Re­ ented strategies cannot succeed. search (SPAAR) is a good beginning, the resource implica­ A lot has been achieved in terms of awareness and actions tions of implementing the adaptation of new technology go in the past few years but, to date, the efforts of donors far beyond the resources currently being allocated for this continue to lag behind both the long-term development purpose. And. to date, some donors have indicated that challenge in the low-income countries and the support they may have difficulty providing information to SPAAR needed if recurrent adjustment programs are to be sustained on donor projects under consideration. and lead to accelerated growth. The efforts which these Implementing effective populaTion and health strategies: It countries have started are far-reaching; they are difficult; is more than 30 years since the changes in medicine and and they have long been advocated by all of us here. We health delivery technology dramatically changed popula­ cannot afford to cite the impossibility of change as a reason tion dynamics. Since that time, many-but by no means for an inadequate response. III Domestic Adjustment Policies and External Economic Shocks Parvez Hasan Parvez Hasan , Director, Operations Policy. Operations Poli~ Unfortunately, one observes an asymmetry in reactions c} Staff. recently spoke at the annual meeting o/the Italian to external shocks. Positive external shocks are often seen Association/or Comparative Systems. in Florence. Italy. as permanent. while negative shocks are generally expected, Here are excepts from his remarks: or hoped to be, transient. Actually, countries that have handled positive shocks well were those that treat the gains B y definition, external shocks cannot be predicted. But once a shock materializes, the reaction of governments to its duration becomes critically important. Is the shock essentially as windfalls, and not as a permanent change in economic circumstances. For those countries that have suffered negative shocks, seen to be lasting or temporary? the opposite has been true. The very few oil-importing 14 THE BANK'S WORLD I DECEMBER 1986 countries that decisively dealt with the first oil shocks, crises of 1973 and 1979, acted not only decisively but notably Korea and India, were in a much better position to quickly. Again in 1982, when stabilization was in danger of deal with the second round of shocks after 1979. A large over-correcting the balance of payments and the sharp drop number of countries basically neglected adjustment because in inflation threatened a very steep rise in real interest rates, they did not face up to the logical consequences of a monetary and fi scal policies were adjusted to allow for fundamental change in the real price of oil. reasonable economic expansion. In designing a policy response to external shock, first and Indonesian policies in the early 1980s provide another foremost, the change must be taken seriously, and at least good example of quick policy response. It is often the case conceptually dealt with in the context of a medi um- and that, as sensible economic policies work, the confidence of long-tenn framework. But even in countries where the the policy-makers in their own effectiveness increases, and planning process is well established, and macroeconomic they are more willing to take risks attendant on policy management is stressed, this cannot be expected to take changes and are less and less wedded to the status quo. In place automatically, especially as political constraints often economic refonn , as in other things, the first steps are often tend to limit the ability to adjust consumption and invest­ the most difficult. ment and change relative prices. But if short-term adjust­ Large oil and interest ra te shocks after 1979 found most ment is approached in the context of the medi um term, oil-importing countries ill-prepared to deal with adjustment some of the short-term conflicts can be minimized, especial­ issues because shocks were very large and adjustment had ly if foreign borrowing is available. generally been neglected after the first oil price increase in 1973. Adjustment was forced on a number of countries in Essential Meaning of Flexibility the period after 1980. But the turnaround in international The essential meani ng offlexibility is that countries economic circumstances was too sudden and drastic for should be willing to review the assumptions of their devel­ many countries to cope with in an orderly fashion. opment strategy and planning framework. In the case of Nonetheless, three major corrections to the course charted Korea, a considered response to the first oil price increase by developing countries in the 19705 appeared to be under was both an acceptance of the need for domestic energy way. p rice adjustments and a further stepping up of export Less Preoccupation with Level of Investment efforts and a drive to make full use of construction contract First, there is much less preoccupation with the level of opportunities that opened up in the Middle East. In India, investment and much more attention to quality of invest­ the emphasis was placed on energy price adjustments; ment, its composition and effectiveness. By the same token, domestic savings and import substitu tion. But in both cases, the importance of policy framework and institutional capa­ adjustment was given a high priority. bilities are being stressed much more than the size of In man y other countries, emphasis was placed on sustain­ investment programs as factors in economic growth. Sec­ ing aggregate demand or stimula ting investment without a ond, there is a general shift from inward-oriented strategies clear view of the long-term consequences of the high bor­ to outward-looking growth policies. Third, a much needed rowing strategy for the balance of payments. For instance, reappraisal is going on in a large number of countries on in Turkey during 1973 to 1980, the risks inherent in the the role of the public sector, especially public sector indus­ continuation of its import substitution strategy were appar­ try, in economic growth. ently never seriously questioned though the country em­ As a result of these corrections, economic policy in barked on a massive expansion of external debt in 1973. In developing countries is likely to emerge stronger, and long­ Thailand, also, the external debt was allowed to expand term growth will become more viable provided growth in from a very low level without articulating a medium-term industrial countries recovers from the sluggish level of the debt management framework, and domestic adjustments fust half of tbe 1980s, access of developing countries to were consequently delayed. markets in developed countries is not fur ther restricted, and Flexibility also involves a relatively quick policy response the international monetary system is able to deal satisfac­ to changing economic circumstances. Korea, facing the torily with the problem of the debt overhang. THE BANK 'S WORLD I DECEMBER 1986 15 Top Management Tool Can Help Organizations in Many Ways Strategic anning Se s the Stage for the uture by Ellen Tillier trategic planning, corporate plan­ Q. How would you define strategic Q. What, in fact, is a strategy? S ning, institutional planning. Management experts use these terms planning? A. A strategy is a way to capitalize on the organization's comparative ad­ A. Its meaning has changed over time. almost interchangeably to describe an When strategic planning was intro­ vantage- its strengths and weakness­ overall planning capability more and duced as a management tool, it was es-so it can satisfy its different client more organizations are putting into viewed as a specialized activity. Plan­ groups better than its competitors. place to be in a better position to ners were supposed to predict an or­ It's about doing the right things, not anticipate the needs of their clients ganization's future by projecting the merely doing things righ t. This needs and to maintain maximum flexibility demand for an organization's prod­ a thorough understanding of the key to adapt to change fast. In his memos ucts or services, and then designing forces at work in the external environ­ explaining the organizational review detailed investment plans and budgets ment, of the evolution of the business, to staff, Bank President Barber Con­ to meet this demand. The turbulence of competitors' as well as collabora­ able referred to the need to emphasize of the '70s and the resulting climate of tors' strengths and weaknesses, and of this area, which differs from the fam­ uncertainty that is still with us the clients' true needs. iliar type of functional or detailed op­ changed the emphasis and broadened Q. Doesn't that involve market studies? erational planning. Strategic planning the function. Planners began to deal A. It involves a lot of market under­ can take many forms , and to find out with defining an organization's mis­ standing, market analysis and interac­ more about how and why it is used in sion-its long-term vision of how its tion with customers. In creative ways, other organizations, The Bank 's work should evolve. Strategic plan­ strategic planning tries to distinguish World talked to Nagy K. Hanna, Act­ ning then began to be used to devise among the needs of various client ing Chief, Institutional Planning Divi­ guiding concepts on what business an groups and then devise strategies, or­ sion, Planning and Budgeting Depart­ organization should head towards , ganizational structures, and incentives ment, Financial Policy, Planning and and to design strategies to fulfill its within the organization to cater to Budgeting. miSSIOn. each group. 'A strategy is a way to capitalize on the organization's comparative advantage-its strengths and weaknesses-so it can satisfy its different client groups better than its competitors. It's about doing the right things, not merely doing things right.' Nagy K. Hanna Pho to by Giuseppe Fran chini Q. Can you say strategic planning is a the development of detailed blueprint for the strategic planners? way of making sure that an organiza­ plans. It has to do with cultivating a A. Professional planners should be tion is,at the forefront of progress? shared understanding of the nature working more to help line and top A. It's a way of making sure an orga­ and purpose of the organization, and management do their own planning. nization is always effective and re­ translating this vision into specific ac­ They have become facilitators, cata­ sponsive to the changes in the environ­ tion programs and broad frameworks lysts, counselors, stimulators for man­ ment and to the needs of its clients. to guide day-to-day decisions. Plan­ agement. Also, they are custodians of ning and implementation are closely the process; their role is to develop the Q. Does this mean strategic planning is linked, which is why successful plan­ planning process within the organiza­ more relevant to market-oriented econ­ ning depends heavily on manage­ tion over time. They also make sure omies? ment's commitment and involvement that strategies are negotiated among A. It's a necessary tool for managing in the planning function. Planning is various levels of management, that in competitive and uncertain environ­ seen as an iterative learning process changes in the basic assumptions ments. that uses experimentation and pilot about the environment and feedback Q. Why is it that many corporations efforts so that you learn and adapt from implementation are given on a formulated sound strategies but failed strategies as 'you proceed. timely basis, and that the gut issues to implement them? Q. How should an organization handle are flagged for top management's at­ A. When strategic planning first be­ the planning function? tention. They also can playa useful came a management tool) an army of A. The broad purpose of planning, as role in providing tools, frameworks, corporate strategy specialists came it is practiced in more and more com­ and strategic analyses that can stimu­ into being. Unfortunately, these spe­ panies, is to develop a steering me­ late strategic thinking at different lev­ cialists took planning out of the hands chanism for managers to make sure els of the organization, and promote of top and line managers to make it a their organization remains effective, interaction and dialogue on strategies specialized centralized activity. The responsive and adaptive in a fast and relevant issues among these levels. planners were isolated from the doers. changing environment. Planning pro­ Q. Is it possible to predict the future Armed with allegedly superior con­ cesses are now designed to promote when so many changes are sure to cepts, data and techniques, the plan­ creative and strategic thinking at all come? ners were to impose rational plans on levels of an organization. Rather than A. Not really, but in thinking about their organization, but since top and following rigid procedures and de­ the future, the main concern is to high­ line management had no understand­ tailed documentation, it's more im­ light what is probable, and to pinpoint ing, ownership of, or commitment to, portant to translate planning into a what is uncertain. The object is to the plans, many strategies remained way of life. Moreoever, managers have increase management awareness buried in thick documents and were to learn to take the human factor into about possible futures and the key never implemented. account-to consider the incentives, issues each scenatio would pr·esent so Q. What is the status of strategic plan­ the culture, the skills and the power that management can master the ning today? structure. An organization'S ability to probable and cope with the uncertain. A. More recently, strategic planning behave strategically no longer depends Strategic planning is about rehearsing became a basic responsibility of line on just pure technical analysis. If all different futures and positioning the management and began to be linked these aspects are combined , manage­ organization to respond effectively to to other management functions, not ment will better steer the organization a range of scenarios, as well as moni­ just strategic analysis. It's now used into an uncertain and difficult envi­ toring some of the key early signals interchangeably with the term "stra­ ronment, and strategies will have a that can provide timely adjustment as tegic management." Past errors have much greater chance of being imple­ one of these futures unfolds. Building taught us that planning processes mented. this foresight capability in organiza­ must be led and owned by manage­ Q. But if line managers are involved in tions creates a qualitatively different ment. Strategic planning is not about leading the planning process, what's left perspective on the future, one that is THE BANK 'S WORLD I DECEMBER 1986 17 'Ultimately, strategic planning is about changing institutional and individual behavior patterns. One of the most effective ways of making sure a culture is supportive is to hold all managers accountable for agreed-upon strategies-in addition to meeting their operational targets.' more proactive and responsive. ganizations work with management public enterprises and government Q. Can you name companies that use consultants to diagnose their culture agencies to recognize the need for in­ strategic planning? and to help shape some of the core stitutional renewal, adjustment and A. The list is long because the practice values and beliefs in ways that will planning. As in the private sector, is spreading, particularly in industrial­ make them more compatible with public organizations also have to com­ ized countries. Examples of well­ strategic behavior and with the new pete for resources and, unless they can known corporations with effective environment. Top management can convince their authorities or society at strategic planning are General Elec­ then agree to modify the organiza­ large to support them, they also can tric, Citicorp, Shell, Volvo, IBM, To­ tion's core values and make sure they risk extinction. They, too, have to shiba and Hewlett-Packard. But are communicated within the organi­ learn to restructure themselves and many less-known and smaller com­ zation and rewarded accordingly. adapt, at a fairly low cost, in order to panies also practice their own style of Management can promote the shap­ be able to survive in a fast moving and strategic planning to increase their ing of the new culture through sym­ competitive environment. competitiveness, if not their chances bolic acts, ceremonies, and public rec­ Q. What would be the main benefits the of survival. ognition for those who adopt this new Bank would gain from instituting stron­ behavior, in addition to management ger strategic planning? Q. How does an organization acquire development programs, changes in A. As in other healthy and responsive effective strategic planning? management style, open communica­ organizations, strategic planning can A . By building the right culture to tion and altering the management pro­ be used as a framework for developing support it. Ultimately, strategic plan­ cess at the top. long-term visions and clarifying the ning is about changing institutional Bank's mission and priorities. It can and individual behavior patterns. One Q. SO strategic planning and the orga­ be used to adapt the organizational of the most effective ways of making nizational culture must be in tune, structures and processes and to tailor sure a culture is supportive is to hold mustn't they? various managerial systems to meet all managers accountable for agreed­ A. Strategic planning has to fit within the increasingly different needs, capa­ upon strategies-in addition to meet­ the culture, and, if the culture is un­ bilities and operating environments of ing their operational targets. Other suitable for the new strategies, then our diverse clients. Management re­ ways to develop a culture is through either you have to modify the strategy structuring that is led by a vision is education and training, which can be so it can be implementable, or change usually more sustainable than used to enhance strategic thinking the culture itself, which is a more dif­ problem-led restructuring. skills throughout an organization. ficult process, but one that sometimes Strategic planning can also be used can't be avoided. Q. What kind of organizational culture to allocate organizational resources­ should be encouraged? Q. Is strategic planning being used in including staff-based on strategic A. One that fosters openness so that developing countries? and future-oriented criteria; to make managers feel secure to address the A. Unfortunately, only slightly at the institution's various capabilities gut issues and free to learn by discuss­ present, particularly compared to its more flexible; and to promote innova­ ing their strategies with each other. potential. But interest is increasing in tion, organizational learning and ac­ Various forums can be devised to sow a growing number of large enterprises, countability for long-term objectives. the seeds for this type of culture. Out­ especially where the market is being The benefits for the Bank would de­ siders can be called in to act as facili­ deregulated, and where local econo­ pend on what style of planning would tators or even devil's advocates. This mies are being integrated into the be emphasized, and what benefits the kind of creative approach that uses global economy and subjected to Bank would like to derive from it. As brainstorming can raise awareness global competition . Even in the public I said, strategic planning is a top man­ about some unconscious assumptions sector of developing countries, the un­ agement tool that can be used for and unforeseen possibilities. Some or­ certain environment is causing both different purposes. EI 18 THE BANK'S WORLD I DECEMBER 1986 A Feast for the "Holy amily" by Ramona P. Retiro any petition they pray for. My mother During the meal, everyone would celebrated St. Joseph's feast day, remain quiet as the rest of the family which is March 19, every year in a very and guests stood around the table. special way. One could hardly hear the noise made by the contact of the knife with the Offer Them a Special Meal plate when I cut the meat. While we On the feast day, my mother would spoon fed them, the "Holy Family" recreate the Holy Family (Jesus, Mary would sit solemnly with their hands in and Joseph) and offer them a special their laps. It was during this time that meal to atone for the poverty and my mother, as she quietly spoonfed hunger that the Holy Family had suf­ Joseph, would softly cry while a cous­ fered. To find her Joseph, my mother in standing beside her would pat with would go to the church and choose an a handkerchief the tears that rolled old man from among the poor begging down her cheeks. I never thought to for alms by the church doors. She ask my mother what she was thinking would bring the old man to the house, of that always made her cry when she have him washed and offer him new served Joseph. And I will never know clothes. For her Mary, my mother what it was since she passed away would choose from among the girls in early this year. their teens within the family or from Ramona P. Retiro the neighborhood. For Jesus, she Say a Short Prayer Again would choose boys under 10 years old, After the meal, my mother would also from within the family or from say a short prayer again. Then, we Last Septemher, The Bank's World in­ the neighborhood. would go around washing the "Holy vited staffto participate in the Decem­ The "Holy Family" would be served Family's" right hands again. This ber issue hy descrihing any traditional their meals, with Joseph at the head of time, however, we would put some or religious celehration observed during the table, Mary on his right and Jesus money into their hands after kissing the year having a special meaning. We on his left. This festivity was usually them. After everyone had kissed the think y ou will enjoy this contribution held at noon. Before food was served, "Holy Family's" hands, the solemnity j;·0111 Ramona P. Retiro, a Disburse­ my mother would say a short prayer. of the occasion would end as everyone ment Assistant in the Loan Depart­ Afterwards, with my mother holding then started talking. The "Holy Fam­ ment. a water pitcher and a towel on her ily" would move to the living room arm, and me holding a basin, we while the rest of our family and guests ate our meals. However, Joseph, Mary I grew up in a Catholic family where devotions to saints (canonized by the Roman Catholic Church) as inter­ would kneel at Joseph's right side. My mother would wash Joseph's right and Jesus would eat again with the guests as they would always say that hand, wipe it with the towel and kiss cessors to God are especially strong. it. they could not eat enough when they We pray to saints when sick, when we Then she would stand up and move were being served at the table. lose loved ones, for jobs, and practi­ to Mary's side. I would in turn take Since my mother celebrated St. Jo­ cally everything. In Catholic churches Joseph's right hand and kiss it, and the seph's feast day every year, the beg­ in the Phjlippines, one finds several rest of the family and guests would gars at the church began to look for­ statues of different saints, and candles follow . We would do the same thing ward to March of every year when my are lit at the foot of the statues in the with Mary's and Jesus' right hands. mother would come and choose one belief that the light will carry one's Then, my mother would stand by Jo­ from among them to portray her St. prayers to heaven. seph's side, I would stand by Mary's Joseph. Ever since I can remember, my side, and my sister would stand by Now that my mother has passed mother was always devoted to St. Jo­ Jesus' side. The food would be away, those poor old men at the seph, the father of Jesus Christ. Dev­ brought to the table, one dish at a church will miss her coming every otees ofSt. Joseph believe in his pow­ time, and my mother, my sister and I March, just as I miss her and this erful intercession with God for almost would spoonfeed the "Holy Family." special family tradition. a THE BANK'S WORLD / DECEMBER 1986 19 Around the Bank CoHs Elected IFMA President Entertainment from India David G. Cotts, Chief, Building The Eugene Black auditorium was Maintenance and Repair, Informa­ packed to capacity on the evening of tion, Technology and Facilities De­ November 21 as Bank/IMF staff and partment, has been elected 1986-87 their families and friends enjoyed President of the International Facility 2-1/2 hours of entertainment from In­ Management Association (IFMA). dia. The program was organized by Mr. Cotts served as IFMA Secretary the World Bank/IMF India Club in for 1985-86, and has also served as the collaboration with the Community Association's Vice President for the Relations Office to celebrate the Northeast Region. IFMA is a profes­ Club's first anniversary. Over 700 peo­ sional society dedicated to supporting ple attended. facility management through career Guests of honor included World development, education, research, in­ Bank President Barber Conable and formation and other activities. III Mrs. Conable, and C.R. Krishnaswa­ my Rao Sahib, Executive Director. K.Y. Kumar of Transportation Divi­ Snow Days sion 2, Western Africa Projects De­ Shveta Murthy, a young Indian performer, dances the Bharatanatyam. Photo by K. Nagaraj partment, the Club's president, noted "The North wind doth blow and we that all the hard work had been worth shall have snow ... " says the old poem, while. the performers were volunteers from and its prophecy is likely to occur. The show included colorful and ex­ various Indian associations in the What are Bank staff supposed to do otic dances, songs and musicals. All Washington area . II when ice and snow create hazardous conditions and getting to work be­ comes a major feat? Bank policy states that if the weath­ er has become treacherous before the start of the work day and the news media announce that U.S. federal gov­ ernment offices in Washington, D.C., will be closed, Bank staff are generally not required to report for work. So, if you wake up one morning to find snow or icy conditions, be sure to listen to the radio to find out if federal employees are being granted the day off, in which case you may stay home too-unless you are one of those indi­ viduals designated by your manager as performing essential services (such as building engineers, cable and tele­ phone operators, members of the se­ Heigh-Ho, They Came to the Fair curity force or certain computer em­ The WBVS International Arts and Crafts Fair last month, organized by Carla Scearce, was · a stunning success. Here, three of the volunteers prepare for the throng of eager shoppers. Left ployees). B abs Knox, Sukriye Karaosmanoglu and Hefziye Zinclr, who is wearing her national to right: I If the bad weather is widespread, costume from northeastern Turkey. Mmes. Knox and Karaosmanoglu are cochairmen of the but not sufficiently serious to close Margaret McNamara IM emorlal Fund, which netted about $21,000 from the event. Photo by Michele la nnacc i Headquarters offices, it is still possi­ ble that some individuals, particularly those living out of town, may find it circumstances. when permission has been granted for difficult to get to work on time, or at When the bad weather develops af­ all but essential staff to leave early. all. Managers may grant up to one­ ter the opening of business, managers Managers are informed through their half day administrative leave in such will advise staff as quickly as possible Vice Presidents' offices. II 20 THE BANK'S WORLD / DECEMBER 1986 An Ex-Smoker's Lament Jjet~~ ""f" .··I~ ~,~~... t4~ •••• . ........ ~ ~ 04." " ~. ~ .. , .,...... ... 1\ ••• • Ii ~ Following last month's Great American Smokeout, this ~ ,to ~ seemed a good time to print a poem written by a staff .. .. , ......• : ". '&'; '" ..'-. ~ member who prefers to remain anonymous. Brigitte and ~ Dianne referred to in the poem were involved in the smok­ 4 '\ • ~-. , ~" 4~ ~ ing cessation program sponsored by MED. Anyone who / • has quit smoking will empathize with our contributor. ". • " . .."": ..... fa" ...•• ~ • A" ...... _ ........ ., On Quitting • '. . .. .. , " ,! . .•. . ... . ..4 , . ..~ ,. •• ~ - " . Brigitte! Dianne! I came to you No cigarette with morning tea, , .... ~ And found my life began anew. No filter kings are found on me. .. .. ~ ~ . T'was just a scant two weeks ago No smoke to make my colleagues frown, ". \, ~ That my resolve began to show. No coughing as I drive to town. ....- ..... ~ ~.. ~ I'd like to say I feel just great, The white sticks filled my mind so much. I'd like to say it's worth the wait. For me, they were an awful crutch. But oh, it's hard to change o'ernight Did I say "were?" The tense is wrong, Dianne, so poised and so together From smoking fags to living right. But now my common sense is strong. I can't imagine your smoking ever. Brigitte, your talk to me was great If only I could see right now Perhaps next week I'll sleep O.K. It helped a lot to ease the weight. The wrinkles gone, the smoother brow. And please God, soon I need to say To quit is hard, this much is true. If only I could feel just fine, And mean with all my healthier heart, But one thing that has helped me through It sure would help me train my mind "A cigarette? I take no part Was making friends with others here On pushing on, deep breaths and all, In smoking. What a shame Who struggled, and who persevere. To reach my self-determined goal That people still can be insane, To make the final break for health And fill their lungs with dreadful stuff. If others quit, then so can 1. For heart and lungs, for life and breath. I did smoke once, but that's enough." Let no one say I didn't try. II Letters to the Editor At last! I read the whole "On the in the use of COM PASS way back came into the picture to work with Record" in your November issue­ when), I wanted to sharpen the focus Nancy Pinto on training and the pro­ probably the first time ever. of your article in the November issue duction of manuals. The usual economic generalities on a key area, namely, the composi­ Pat Bielsaski were replaced by serious social issues tion of the think/work tank which pro­ LCP and sdf-assessment. duced COMPASS. *** Congratulations on this new direc­ Nancy Pinto worked closely with Thank you for the article on amateur tion. I am looking forward to more in Gordon Temple in the design and test­ radio. Some comments follow. this vein in coming issues. ing of COSTAB, the first module of When describing hams, "helpful" is Duncan S. Campbell COMPASS, which evolved from quite an understatement. When our CON CBDisplay. They, in turn, coordinat­ son Kevin (then 'age 11) decided to try ed closely with Gordon Temple's amateur radio, we drove around the *** It is easy for anyone describing the counterpart in CAD (Computing Ac­ neighborhood and he rang the bell evolution of COMPASS, a process tivities Department, later IRMD and where we saw ham-like antennas. And which involved many staff members now ITF), Vikas Sahasrabudhe, and a help he did get indeed! Rob Peterson now dispersed throughout the Bank, team of programmers consisting of G. (KA3DJV), a college student, coached to miss some people, particularly if Balakrishnan, Troy Klein (no longer Kevin in code and electronics. Dennis their participation harks back to the with the Bank), Ed Lee, Nitin Parekh DuVall (WA3XYU), an army engi­ relatively remote "beginnings" stage. and Efren Ramiscal, as well as Bryan neer, lent him a receiver and sling-shot But, as a direct beneficiary of the Christianson, who has returned to his a 140' wire antenna over the trees. The blood, sweat and tears of one of those native New Zealand. Rev. John Miller (W3QF) adminis­ involved in the core group, Nancy Once the program was ready for the tered the code and theory examination Pinto (who painstakingly initiated me "user connection," Jane Distelhorst continued on back cover THE BANK'S WORLD I DECEMBER 1986 21 Country Programs Department I, Division D, as Loan Senior Staff Appointments Officer for Peru, and in January 1976, he was promoted to Senior Loan Officer. Mr. Mendoza transferred as Senior · l" AMIR AL-KHAFAJI was appointed Loan Officer for the Cote d'Ivoire in May 1978, to West Chief, Technical Assistance and Spe­ Africa Country Programs Department II, Division 2A. cial Studies (TASS) Division, Europe, Since 1985 he has been Senior Loan Officer for Morocco, Middle East and North Africa Re­ EMENA Country Programs Department II. gion, succeeding Abdallah EI Maa­ GUILLERMO SCHULTZ has been roufi, effective December 1. Mr. AI­ promoted to the position of Director, Khafaji, a U.S. national, joined the IFC Department of Investments, Bank in 1971 as a Sanitary Engineer, Latin America and Caribbean II, suc­ in the then Public Utilities Projects ceeding Daniel F. Adams, effective Department. In 1972, he transferred January 1. Mr. Schultz, a Mexican to the Europe, Middle East and North Africa Projects national, joined the Corporation's Department, where he was promoted to Senior Sanitary Department of Investments, South Engineer in 1976, and to Deputy Chiefin 1978. In 1980, he America, as an Investment Officer in was promoted to Chief, Water Supply Division, Western 1976. He was promoted to Senior In­ Africa Projects Department. vestment Officer in 1979 and, later that year, was appointed Divisional Manager, Argentina-West Coast, LAC II De­ SIDNEY E. CHERNICK, a Canadi­ partment. In 1983, he transferred to the Bank's Latin an national, was appointed to the America and the Caribbean Projects Department as Chief, position of Adviser, Senior Policy Industrial Development and Finance Division 2. Seminars, Economic Development In­ stitute, effective November 1. Mr. VINOD THOMAS, an Indian nation­ Chernick joined the Bank in 1969 as al, has been appointed Chief, Country an Economist, Western Hemisphere Analysis and Projections Division, Department. In 1970, he was pro­ Economic Analysis and Projections moted to Senior Economist, and in Department, effective January 1, July 1972, he transferred to the Eco­ 1987. After teaching economics at nomic Program Department. In November 1972, he was Vassar College for a year, Mr. Thomas assigned to the Policy Planning and Program Review De­ joined the Bank in 1976 as a Young partment where, in 1973, he was promoted to Chief, Pro­ Professional. The following year, he gram Review Division. In 1976, he was appointed Senior transferred as an Economist to the Adviser and moved to the Office of the Director. While on South Asia Department, Bangladesh Programs Division. this assignment, Mr. Chernick went on Study Leave during From 1980 to 1981, while on sabbatical, he taught eco­ the first half of 1980. After the Development PolicyjCentral nomics at the Fundacao Instituto de Pesquisas Economicas Projects Staff reorganization in 1982, he was appointed (FIPE), Sao Paulo, Brazil. On his return to the Bank, he Assistant Director of the newly created Country Policy joined the South Asia Country Programs Department. In Department. Since 1984, Mr. Chernick has been serving as 1982, he transferred to the Latin America and Caribbean Senior Economist, South Asia Country Programs Depart­ Country Programs Department II, Colombia Division, ment. where he was promoted to Senior Economist in 1983. ULRICH THUMM, a German na­ FERNANDO MENDOZA, a Span­ tional, was appointed Chief, Colom­ ish national, was appointed the Bank's bia Division, Latin America and the Resident Representative in La Paz, Caribbean, Country Programs De­ Bolivia, effective October 16. Mr. partment II, effective October 15. Mr. Mendoza joined the Bank through th.e Thumm joined the Bank in 1977 as an Young Professionals Program in 1966. Economist, Latin America and the After he graduated from the Program Caribbean Programs Department I, in 1968, he was assigned as Opera­ Division C (Dominican Republic, tions Officer, Europe, Middle East Haiti, Panama). In 1980, he trans­ and North Africa Department. In ferred to Division D (Peru, Chile, Ecuador), where he was 1972, he was assigned to EMENA Country Programs II, subsequently promoted to Senior Economist. Mr. Thumm Division 2C, as Loan Officer for Greece, Israel and Tunisia. had served as the Bank's Resident Representative in Peru In 1973, he transferred to Latin America and the Caribbean since 1983. 22 THE BANK·S WORLD / DECEMBER 1986 Retirees New Staff Members Anwar Cbaudry-Shah AnnaS. Kim HANS A. ADLER, Senior Adviser, Pakistan United States Projects Policy Department, Policy Economist/DRD/II/24 Expense Clerk/ACT/I 1/3 and Review Unit, retired November Valerie M. Chisholm Thomas Knoblauch 30, after 25-1/2 years in the Bank. He United States United States Secretary/IND/II/17 Systems Analyst/EPD/II/4 had served as Senior Transport Econ­ Ahmed Ould Daddah Bernardo Kugler omist in the old Transportation De­ Mauritania Colombia partment; Deputy Director, Economic Sr. Economic Adviser/WA2/11/18 Education Economist/LCP/ II / 17 Development Institute; Assistant Di­ 1beresa Dyer Wu Shaung Mih rector, Agriculture Department; and United States United States Secretary/EDS/ II /24 Secretary/AEP/II/24 Assistant Director, and later, Director, Clovis Fantinelli TrungQ.Ngo Eastern Africa Projects Department. Mr. Adler, a U.S. Brazil Canada national, will remain in the Washington area and work as a Communications Asst./GSD/II/24 Economist/WA2/11/3 part-time consultant to the Bank. Karin Fry Luis .V. Olivares Germany Mexico Secretary/EAP/ II /3 Recruitment Officer/PM 0/ 11/3 Yasuhisa Fujita Sanjay Pradhan JAMES B. HENDRY, who has been Japan India the Ombudsman since 1983, retired Investment OfTcr./IFC/II/3 Young Professional/YPP/I l/I O November 30, after nearly 21 years in Hamelmal Gabre-Maskal John D. PoDner Ethiopia United States · the Bank. For most of his career, he Secretary/WA2/l1/24 Financial Info. Analyst/LOA/ worked on Agriculture projects; his Mohammad R. Ghasimi 11/24 longest assignment was as Assistant Iran Cesar A. Queiroz Director, East Africa Projects Depart­ Exec. Director's Asst./EDS/II/3 Brazil JohnN. Gibb Highway Engineer/WAP/ l 1/6 ment, with responsibility for Agricul­ United Kingdom Jean-Jacques Raoul ture and Education. Mr. Hendry, a Exec. Director's Asst./EDS/II/5 France U .S. national, will remain in the Maureen P. Graham Highway Engineer/EAP/ II /24 Washington area and continue to participate as a Board Jamaica Ines M . Garzon de Romero Member in the Corporate Ombudsman Association. Secretary/GSD/ll j3 Argentina Margaret P. Hanson Secretary/IND/II/IO United States Patricio L. Rubianes Financial Analyst/ AEP/ II / 13 Ecuador Timoteo Harris Exec. Director's Asst./EDS/ II /3 EDWARD G. ECHEVERRIA, Se­ Mexico Samen Solomon nior U rban Planner/Engineer, Urban Exec. Director's Asst./EDS/II/IO Cameroon Division, Latin America and the Car­ EUzabeth A. Hintz Young Professional/YPP/II /20 ibbean Projects Department, retired United States Chitra Venkateswaran October 31. Mr. Echeverriajoined the Admin. Asst./VPA/ II / 17 India Ida HoUomon-Williams Publications Clerk/PUB/ I 1/17 Bank in 1975 and worked on tourism United States Eloy E. Vidal projects. In 1979, he transferred to the Secretary/EPD/II/3 Costa Rica Latin America and the Caribbean Sridhar S. Iyer Telecom EngineerfIND/ II/5 Projects Department, Urban Divi­ India Pierre C. VieiUeschzes sion. For the past year, he has worked Systems Analyst/EMF/II /25 France Mahesh K. Karki Cofinancing Adviser/VPCAU/ on the Mexico City urban reconstruction project. Mr. 11/17 Nepal Echeverria, a U.S . national, will remain in the Washington Exec. Director's Asst.jEDS/1 1/17 area and work as a consultant for the Bank-supervising the Mexico City reconstruction project and doing an ap­ praisal for an urban reconstruction project in EI Salvador. .,1 • THE BANK'S WORLD I DECEMBER 1986 23 Letters to the Editor continued/rom page 2 J required for a novice. And more. are a high-tech flea-market delight, what it was all about. No longer the Getting into amateur radio in the where you can buy from top-of-the­ only nor the cheapest way to equip a 'r U.S. can be quite inexpensive. Vintage line new or used stations to parts, station, it still is the most fun. gear still capable of respectable per­ spares, old magazines ... and plain One last bit. Amateur radio may formance can be bought from as little junk. not be used to substitute telephone as $40 for a small code-only transmit­ And if you are technically inclined, calls. So, even where "phone patch­ ter and $80 for a good receiver (all you will enjoy and take pride in build­ ing" is allowed, your long distance bill modes). "Hamfests" (several major ing at least part of the stuff yourself­ should not decrease. ones are held each year in the Wash­ from kits, published designs, or your Bjorn Wellenius ington metro area from spring to fall) own ideas. In the beginning, that is INDD4 As we go to presS. .. IDA-8 REPLENISHMENT EXCEEDS TARGET: us to achieve this breakthrough. Deputies from the 31 IDA donor countries at " ••• More than ever before, IDA's their final meeting in Rome, agreed to resources are being matched to the most provide $12.4 billion in lending resources compelling needs of the poorest countries. for the three-year period starting July 1, The donors have stressed that IDA must 1987. respond to the tremendous problems facing Commenting on the IDA-8 agreement, the countries of Sub-Saharan Africa, which Moeen Qureshi, Senior Vice President, will receive 45% to 50% of IDA-8 credits, Finance, and Chairman of the IDA while at the same time, the needs of IDA's negotiations, said: "This is a breakthrough other recipient countries will be for the poorest developing countries and is addressed. There will be a strong emphasis especially significant in light of the on economic performance of borrowers, with severe budget constraints of the industrial special assistance to be provided in sup­ country donors and the economic difficul­ port of programs of adjustment to restore ties being faced by the developing country economic growth and raise the living stan­ donors, which have, nevertheless, managed dards of the poorest members of society." to maintain their shares. "This would not have been possible *** PAKISTAN RATIFIES MIGA CONVENTION: Pakistan without the generosity, cooperative spirit is the sixth country to ratify the Conven­ and strong commitment to IDA that has been tion establishing the Multilateral Invest­ shown by all the Deputies. I should ment Guarantee Agency (MIGA). Other coun­ especially mention those countries that tries that have ratified the Convention are have made special efforts to achieve this Saudi Arabia, Ecuador, Indonesia, Barbados high total replenishment figure. Our host and Bahrain. Fifty countries have signed government, Italy, has increased its basic the Convention, representing more than 63% share of IDA, and has provided a special of MIGA's authorized capital subscription. additional contribution. Japan and the MIGA's operations will begin as soon as United States have given the replenishment five industrial and 15 developing countries a major boost by agreeing to an increased ratify the Convention and subscribe at shareholding for Japan in the IBRD, thus least one-third of the share capital. enabling the latter to make a very large special contribution to IDA. The *** BAHAMAS JOINS IFC: The Bahamas became the Netherlands, France and Germany have all 130th member of the International Finance made sizeable extra commitments to enable Corporation. The Bank's World, Voli. 5, No, 12, Publlsned monthly in Washington, D,C" by the Information and Public Affairs Department of The World Bank for all employees and retiree s of The World Bank / International Finance Corporation, 1818 H St" NW, Room 0-839, Washington, D,C. 20433. Ellen Tillier, Editor; Leandro V Coronel, Associate Editor; Marjorie Messiter and Jill 'Roessner, Assistant Editors; Mora1 1lina George, Editorial Assistant; Bill Fraser, Designer,