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World
Bank Programs
hrough its loans, policy advice and technical assistance, the World Bank
supports a broad range of programs aimed at reducing poverty and improving
living standards in the developing world. Effective poverty reduction strategies
and poverty-focused lending are central to achieving these objectives.
Bank programs give high priority to sustainable, social and human development
and strengthened economic management, with a growing emphasis on inclusion,
governance and institution-building.
Contents:
Investing
in People
Protecting
the Environment
Stimulating
Private Sector Growth
Promoting
Economic Reform
Fighting
Corruption
Assisting
Countries Affected by Conflict
Leveraging
Investment
Investing
in People
No country will grow economically
and reduce poverty while its people cannot read or write, or while its
people struggle with malnourishment and sickness. As we enter the new millennium,
hundreds of millions of people lack the minimally acceptable levels of
education, health, and nutrition that so many in the industrialized world
take for granted. This is not just a moral issue, it is a global economic
travesty and a major impediment to the reduction of poverty.
Accordingly, the Bank targets
much of its assistance where the impact is greatest - on basic social services
such as reproductive and maternal health care, nutrition, early childhood
development programs, primary education, and programs that target the rural
poor and women. As the single largest investor in social sectors, the Bank
has provided loans totaling over $40 billion for more than 500 projects
for human development in 100 countries.
The Bank also helps client
governments restructure social security and pension systems and establish
social safety nets to protect those most at risk from being hurt by the
effects of economic restructuring. In addition to lending money, the Bank
provides technical assistance and policy advice through services such as
in-depth country assessments of poverty, country assistance strategies,
and public expenditure reviews, so governments can set sound, long-term
strategies for pursuing economic growth.
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A Country that Educates
its Girls, Educates the Whole Nation
An educated, skilled, and
socially cohesive society is critical to sustainable development. Yet in
the Bank's client countries, hundreds of millions of adults are illiterate:
More than 130 million children do not go to primary school - and 80 percent
of them are girls. Many governments are now making extra efforts to educate
their young girls because of the proven benefits such targeting brings:
Educated women are less likely to die in childbirth, are more likely to
have fewer children, and to raise children who are well-nourished, nurtured,
educated, and immunized. Simply being able to read a label on a bottle
of medicine can make a world of difference.
The Balochistan Province
in Pakistan sets an example of what can be done. Girls' schools are being
established in many rural villages and special efforts are being made to
ensure girls enroll by hiring female teachers and providing separate toilet
facilities for girls. Local people help secure teaching facilities, hire
female teachers, and monitor school attendance. In two years alone, 198
new rural schools for girls were established and enrollment of girls from
villages with the new schools increased to 87 percent, compared to 15 percent
in the province as a whole. |
Protecting
the Environment
Poverty reduction is intrinsically
linked to environmental and social sustainability. Sustainability means
a number of things, but first and foremost it means that resources, including
human resources, are enhanced or protected rather than damaged or depleted
as part of the development process. Developing countries are, in most instances,
much more vulnerable to environmental degradation than industrial countries.
Problems such as air and water pollution, climate change, loss of biological
diversity, desertification, and deforestation are threatening their ability
to meet the basic human needs of their people: adequate food, clean water,
safe shelter, and a healthy environment.
The Bank goes to great lengths
to ensure that its projects do not harm the natural environment. All projects
are screened to determine whether they pose environmental risks. Environmental
assessments are undertaken on projects that may be harmful and the Bank
includes special measures in such projects to avoid environmental damage.
Environmental concerns have been mainstreamed into all Bank activities,
because experience has shown that it is more cost effective to prevent
environmental damage than to clean it up later.
To enhance these efforts,
the Bank works in partnership with other development agencies, NGOs, and
community groups to gain the benefit of their knowledge and experience.
The Bank works with IUCN, the Nature Conservancy, the World Wildlife Fund,
the Worldwide Fund for Nature, and many other organizations to help facilitate
programs to protect rivers, forests, and coastal areas. The Bank is also
one of the implementing agencies of the Global Environment Facility, the
organization which is playing a key role in addressing global environmental
priorities such as: biodiversity, climate change, ozone depletion, and
pollution of international waters.
Stimulating
Private Sector Growth
The private sector is the
engine of long-term growth. A stable and open business climate with access
to credit and sound financial systems is essential for private entrepreneurs
to emerge, for business to flourish, and for local people and investors
from abroad to find the confidence to invest, and create wealth, income,
and jobs. The World Bank is helping client governments throughout the developing
world create the necessary conditions for the revival and expansion of
private sector investment. These include:
-
Putting in place the basic
laws, regulations, and local institutions that private investors need to
ensure clear enforcement of contractural obligations
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Building the physical infrastructure
(such as transportation, water, energy, telecommunications, etc.) and developing
the critical technological and information base necessary for countries
to compete in the global marketplace
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Developing local capital markets
and banking systems.
In addition to its loans and
technical assistance, the World Bank also offers guarantees to encourage
private investment; these guarantees are designed to mitigate investment
risks, especially for long-term debt financing. They are particularly important
for encouraging private financing of infrastructure - where more than $250
billion a year in investment is needed to meet World Bank client country
needs for the next decade. These guarantees are intended to supplement
reform programs and complement the risk mitigation benefits offered to
the private sector by IFC and MIGA.
Since its inception, the
Bank's private sector affiliate, the International Finance Corporation
(IFC), has supported some 2,000 companies in 129 countries through more
than $21 billion in financing from its own account and $15 billion arranged
through syndications and underwriting. The IFC also helps countries establish
capital markets and provides advisory services for privatization of state-owned
enterprises.
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Replicating success
at low cost
One way to reduce poverty
is to increase poor people's access to capital for investment in small
businesses. Building on the demonstrated success of the Grameen Bank in
Bangladesh, the World Bank, in partnership with other donors, is helping
expand the resources available for microfinance to the very poor. The Consultative
Group for Assisting the Poorest supports financial institutions that make
loans, often as small as $50 to $100, and often to women, to help them
to begin small businesses such as clothing production, handicrafts or dairy
production. |
MIGA's political risk guarantees
also support private sector growth by giving investors confidence to invest
in endeavors that might otherwise look too risky . The agency has insured
investments worth almost $5 billion a year in more than 24 client countries.
MIGA also serves investors and client countries by providing information
about investment opportunities in those countries.
Promoting
Economic Reform
As economic distortions
exacerbate poverty, the Bank helps its client governments improve their
economic and social policies so as to increase efficiency and transparency,
promote stability, and bring about equitable economic growth. The Bank
provides funding, policy advice and technical assistance in support of
reform efforts to cut budget deficits, reduce inflation, liberalize trade
and investment, privatize state-owned enterprises, establish sound financial
systems, strengthen judicial systems, and ensure property rights. These
reforms help attract foreign private capital, generate domestic savings
and investment, and enable governments to provide effective social services.
However, because reform
measures can lead to unemployment as unproductive enterprises are closed,
and to increased prices when inefficient government subsidies are cut,
reforms can adversely affect poor and vulnerable people in the short term.
To address these concerns, Bank support for reform often includes funding
for safety net programs to help protect the poor or to keep vulnerable
people from slipping into poverty.
High levels of debt - owed
mostly to governments in developed countries - have been increasingly recognized
as a severe constraint on the ability of poor countries to undertake fundamental
reforms. To help ensure that economic reform efforts are not put at risk
by high debt and debt service burdens, in 1996 the Bank and the International
Monetary Fund launched the Highly Indebted Poor Countries Initiative (HIPC).
The initiative represents a commitment by the international community,
including all creditors, to act together in a coordinated and concerted
fashion to reduce the debt of very poor countries to sustainable levels.
To qualify for HIPC debt relief a country must be eligible for IDA credits,
face an unsustainable debt burden, and demonstrate a commitment to economic
reform. Debt relief granted under the initiative is based on a country's
ability to service its debt in a context of economic growth and poverty
reduction. Thus far some ten countries have qualified for debt relief of
approximately $8.5 billion.
Fighting
Corruption
For governments to be effective,
they must have the trust and confidence of the people they serve. Corruption
has a devastating economic and social impact. It undermines trust in government
and diminishes the effectiveness of public policy. It impedes investor
confidence and has a negative impact on foreign investment. Corruption
also reduces the effectiveness of aid and threatens both political and
grassroots support for donor assistance.
While citizens and governments
must themselves lead the fight against corruption, the Bank has been assisting
a number of countries with their anti-corruption efforts. The Bank has
conducted surveys to diagnose the extent and character of corruption in
a given country. It has also organized workshops, courses and training
for government officials and members of civil society. But most far-reaching,
perhaps, are the efforts the Bank is making to help countries identify
and implement the policy and institutional reforms which can minimize opportunities
for corruption; these reforms include better financial regulation, supervision
and disclosure; greater transparency in public sector decision-making;
and greater accountability in the private sector through the confirmation
of shareholder and creditor rights.
Assisting
Countries Affected by Conflict
Conflict and violence are
among the world's most pressing development problems, affecting many of
the world's poorest countries. The Bank's comparative advantage in this
area lies in facilitating the transition from dependence on relief to sustainable
economic growth, and improving the coordination of post-conflict reconstruction
and recovery assistance. The Bank's post-conflict assistance has focused
not only on rebuilding infrastructure, but also on programs to promote
economic adjustment and recovery, address social sector needs, and build
institutional capacity. Projects are also being designed to assist in demining,
demobilization and reintegration of ex-soldiers, and reintegration of displaced
populations. The Bank is working around the globe - in places as diverse
as the Balkans, Burundi, Cambodia, Sierra Leone, and Haiti - and with a
wide range of partners to held rebuild economies and bring stability and
a better future to the people whose lives have been affected by conflict.
Leveraging
Investment
The World Bank's unique
partnership with its client governments, and its role in helping them shape
their plans and priorities, equip it to play a strong coordinating role
in leveraging funds for development.
IBRD and IDA loans and credits
typically cover less than half of the total investment costs of a project.
The remainder is provided by client governments themselves or by cofinanciers.
In this fashion, the resources that the Bank raises from bondholders and
shareholders are multiplied in both scope and effectiveness.
Cofinancing arrangements
with other donors are an extremely effective means not only of mobilizing
additional resources, but also of facilitating coordination among development
agencies. Cofinanciers include other development banks, the European Union,
national aid programs, and export credit agencies. Cofinanciers provide
an additional $7 to $8 billion, or another one-third beyond the Bank's
own funding, for development each year. The Bank chairs consultative group
meetings for many of its client countries, at which officials from donor
countries meet with chief policymakers from the borrowing country to discuss
overall economic priorities and strategies and to pledge support. |
