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The World Bank


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The World Bank

  1. 1. Ishpreet Singh – 12P139Karan Jaidka – 12P141Lucky Sharma – 12P145Prabhat Singh– 12P154Vignesh Patil – 12P177Viswanath Kuppa – 12P180PGPM – Section C – Group 9 1
  2. 2. Partners Where does History money come from ? World Bank Where doesLessons of money go ?experience Role of Help to World India Bank 2
  3. 3. • Founded in 1944,at Bretton Woods, New Hampshire • First loan to France in 1947 of $250 million • 1947 - Incorporation into UN SystemHistory • 1979 - Lending for the fiscal year crosses the $10 billion mark for the first time • 1995 – James D. Wolfensohn becomes Bank president • One of the world’s largest sources of development What is assistance (FY 2001 provided more than US$17 World billion in loans) Bank ? • IBRD has 183 members, IDA has 161, the IFC has 174, MIGA has 154 and ICSID has 133 3
  4. 4. IBRDICSID World IDA Bank Group MIGA IFC 4
  5. 5. Partners International Organizations (EU,IMF,UN,WTO) Affiliates (CGIAR,CGAP, Development Gateway, GEF) NGO’s and Civil Society Business and the Private Sector Donors & Co-financing Students and the Academic Community 5
  6. 6. What is IBRD?• One of five institutions that make up the World Bank Group, the IBRD is structured something like a cooperative owned and operated for the benefit of its member countries• Founded in 1944, it is the part of the World Bank that works with middle- income and creditworthy poorer countries to – promote sustainable, equitable and job-creating growth; – reduce poverty; and – address issues of regional and global concern• IBRDs 24-member Board is made up of 5 appointed and 19 elected Executive Directors who represent its 187 member countries 6
  7. 7. What does IBRD do?• Supports long-term human and social development needs that private creditors do not finance;• Preserves borrowers financial strength by providing support in crisis periods, which is when poor people are most adversely affected;• Uses the leverage of financing to promote key policy and institutional reforms (such as safety net or anticorruption reforms);• Creates a favourable investment climate in order to catalyze the provision of private capital;• Provides financial support (in the form of grants made available from the IBRDs net income) in areas that are critical to the well-being of poor people in all countries.• IBRD helps members achieve results by delivering financial products, knowledge and technical services and strategic advice• It uses its capacity to call members together to discuss ways to further their specific development objectives• It works closely with International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Monetary Fund (IMF) 7
  8. 8. How IBRD is financed?• IBRD gets its money from the capital markets• Investors see IBRD bonds as a safe and profitable place to put their money and their cash finances projects in middle-income countries• IBRD enjoys its high credit rating of AAA because it is backed by the capital commitments of its 186 shareholder governments• Annual funding volumes vary from year to year, and are currently around $10-15 billion• IBRD earns an income every year from the return on its equity and from the small margin it makes on lending• This pays for IBRDs operating expenses, goes into reserves to strengthen the balance sheet and also provides an annual transfer to the International Development Association (IDA)• IBRD clients are middle-income and credit-worthy lower income countries 8
  9. 9. Criteria for membership• Middle-income countries are defined as having a per capita income of between around US$1,000 and US$10,000, which may qualify them to borrow from IBRD• Low-income countries with a per capita income of less than $1,000 usually do not qualify for IBRD loans unless they are creditworthy• India, Indonesia and Pakistan are examples of creditworthy low-income countries which are eligible for a blend of financial assistance from both IBRD and IDA 9
  10. 10. What is IDA?• The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries• IDA aims to reduce poverty by providing loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions• IBRD and IDA share the same staff and headquarters and evaluate projects with the same rigorous standards• IDA charges little or no interest and repayments are stretched over 25 to 40 years, including a 5- to 10-year grace period• IDA also provides grants to countries at risk of debt distress• IDA is one of the largest sources of assistance for the world’s 81 poorest countries, 39 of which are in Africa, and is the single largest source of donor funds for basic social services in these countries• IDA-financed operations deliver positive change for 2.5 billion people, the majority of whom survive on less than $2 a day 10
  11. 11. IDA Fund Allocation (1/2)• IDA funds are allocated to the recipient countries in relation to their income levels and record of success in managing their economies and their ongoing IDA projects• The lending terms are determined with reference to – recipient countries risk of debt distress, – the level of GNI per capita, and – creditworthiness for the IBRD borrowing• Recipients with a – high risk of debt distress receive 100 percent of their financial assistance – medium risk of debt distress receive 50 percent in the form of grants and – Other recipients receive IDA credits on regular or blend and hard- terms with 40-year and 25-year maturities respectively 11
  12. 12. IDA Fund Allocation (2/2)• IDA-financed operations address – primary education, – basic health services, – clean water and sanitation, – environmental safeguards, – business climate improvements, – infrastructure and institutional reforms• These projects pave the way toward economic growth, job creation, higher incomes and better living conditions 12
  13. 13. World Bank – Project Monitoring and Evaluation (M&E) Cost-Benefit and Cost-Effective Analysis Performance Logical Framework Theory based Indicators Approach Evaluation• Tools for • Measures of • Helps to clarify • In-depth assessing inputs, processes objectives understanding of whether or not , outputs and the “program • Aids in the costs of an impacts on theory” or identification of activity can be projects and “program logic the “program justified by the strategies logic”, • Provides early outcomes and • Used to set outcomes and feedback about impacts targets, track impact what is or is not• Used to identify progress, identif working, and projects that ying problems why offer the highest early rate of return on investment. 13
  14. 14. World Bank – Project Monitoring and Evaluation (M&E) Rapid Appraisal Public Expenditure Formal Surveys Participatory Methods Models Tracking Surveys• Used to collect • Quick, low-cost ways • Provides active • Track the flow of standardized to gather the views involvement in public funds and information from a and feedback of decision-making for determine the extent carefully selected beneficiaries and those with a stake in to which resources sample of people or other stakeholders, in a project actually reach target households order to respond to • Helps in identifying groups• Providing baseline decision-makers’ problems and • The surveys examine data against which needs for information trouble-shooting the the performance of • Helps in providing problems during manner, quantity, and the rapid information for implementation and timing of releases of strategy, program, or management in learning about resources to different project can be decision-making local conditions levels of government compared 14
  15. 15. World Bank IMFSize and Structure: Slightly complex, 2 major Size and Structure: No affiliates or subsidiaries; aboutorganizations (IBRD and IDA); associated with IFC, 2,300 staff membersICSID, MGA; about 7,000 staff membersSource of Funding: Acquires most of its financial Source of Funding: Draws its financial resourcesresources by borrowing on the international bond principally from the quota subscriptions of its membermarket countriesType of Institution: An investment bank, Type of Institution: not a bank and does notintermediating between investors and recipients, intermediate between investors and recipients. Theborrowing from the one and lending to the others IMF is more like a credit union whose members have access to a common pool of resources to assist them in times of needRecipients of Funding: Developing countries whose Recipients of Funding: All member nations, bothper capita GNP exceeds $1,305 may borrow from the wealthy and poor, have the right to financialIBRD. The IDA lends only to governments of very poor assistance from the IMFdeveloping nations whose per capita GNP is below$1,305 (interest free, maturity = 35-40 years)Operations: encourage poor countries to develop by Operations: the IMF continues to urge its members toproviding them with technical assistance and funding allow their national currencies to be exchangedfor projects and policies that will realize the countries without restriction for the currencies of othereconomic potential member countries; provides short- and medium-term financial assistance to member nations that run into temporary balance of payments difficulties 15
  16. 16. World Bank – IMF co-operation• Focusing on structural reform in recent years has resulted in considerable convergence in the efforts of the Bank and IMF and has led them to greater reliance on each others special expertise.• The regular and frequent interaction of economists and loan officers who work on the same country.• The Bank and the IMF have distinct mandates that allow them to contribute, each in its own way, to the stability of the international monetary and financial system and to the fostering of balanced economic growth throughout the entire membership 16
  17. 17. Perspective about India• World Bank lending to India is organized around the following key challenges: – achieving rapid and inclusive growth, – building strong partnerships with low-income states, – agricultural and rural development, and – enhancing infrastructure 17
  18. 18. Current Projects in Execution 18
  19. 19. 19
  20. 20. Education and the World Bank in India Summary• Primary education is a fundamental right in India, and at the international level an important Millennium Development Goal to which India and the Bank are totally committed.• GOI and States increasingly recognize education as a critical input for human capital development, employment/ jobs, and economic growth, and are putting major financial and technical resources into this effort.• Nevertheless, demand for education far exceeds supply, in terms of both access and quality, at all levels. 20
  21. 21. Where does money come from?WB raises money (IBRD) by lending to developing countries is primarilyfinanced by selling AAA-rated bonds in the worlds financial marketsIBRD bonds are purchased by a wide range of private and institutional investors inNorth America, Europe, and Asia.While IBRD earns a small margin on this lending, the greater proportion of incomecomes from lending out their own capital.WB also has US$178 billion in what is known as "callable capital," which could bedrawn from their shareholders as backing, should it ever be needed to meet IBRDobligations for borrowings (bonds) or guarantees 21
  22. 22. World Bank: Strategy and Support• IDA Lending: 0%, 35 years to repay with first 10 years “grace” (no repayment)• Since FY00: over US$ 1 Billion (Rupees 40 billion) committed to sector.• Over last 10 years: eight State-level District Primary Education Projects• US$ 280 M for VET: support 400 Industrial Training Institutes, for improved quality and relevance (June 2007)• US$ 250 M for Technical Education and Engineering: reforms in 128 competitively selected engineering institutions in 13 states to address skills shortages• US$ 70 M for polytechnics in six remote states (possible $300 M additional)• State education reforms in Orissa and AP• US$ 500 M for SSA I; Additional US$500 M in November 2007 for SSA II – Increased focus on quality in SSA II – Partner with European Commission and UK DFID – Still a small player: Bank $ is less than 10% of GOI $ 22
  23. 23. Collaboration with Civil Society• Over 7,000 NGOs participating as partners in SSA – Alternative education programs: “bridge courses” – Monitoring of quality – Capacity-building of VECs – Reference Groups advising States, Districts and Blocs – Contracting (e.g. MP with Pratham)• Not surprisingly, varies greatly by State 23
  24. 24. World Bank Research• Elementary Education – Impact evaluation regarding: • Incentive payments and schooling inputs on student learning • Dissemination of education information on school governance and student outcomes • School characteristics and student outcomes • Instructional time on task survey• Early Childhood Development – focus on integrated (health/nutrition/education) approaches – Will feed into US$ 450 M Integrated Child Development Services Project• Secondary Education – major analytical study related to expanding access, particularly for girls and marginalized groups, and to role of private sector• Higher Education – contribute to debate regarding how India can address skills shortages among HE graduates, linked to economic growth opportunities. 24
  25. 25. World Bank’s Limitations• Engagement in Indian education is largely through centrally-sponsored schemes, while most implementation happens at the State level. Need to find ways to foster dialogue and technical assistance with States, and increase exchanges with civil society on substantive policy issues. Additional Issues for Discussion • Access versus quality tradeoffs • Role of public and private sectors in education financing and provision • Prioritization of education levels (basic, secondary, VET, higher) • Role of civil society in policy debates and project implementation 25
  26. 26. Country Program Strategy (CPS)• The World Bank prepares a CPS to set out the priority areas of its support to the country’s development strategy (eg. India’s Five Year Plan) – It serves as an indicative business plan in support of a country’s development goals. – Oriented toward results, the CPS is developed in consultation with country authorities, civil society organizations, development partners, and other stakeholders. – It identifies the key areas where the Banks assistance can have the biggest impact on poverty reduction.• From this assessment, the level and composition of Bank Group’s financial, advisory, and technical support to the country is determined. Consultations with civil society are key to identifying the internal and external challenges facing countries in its fight against poverty.• Through consultations, the World Bank Group is able to tap into a broad range of perspectives from those involved or affected by development programs. It aims to integrate comments and new ideas into its operations, policies and final documents.• Consultations help capture the experience and knowledge of multiple audiences―government, NGOs, academia and think tanks, media and the private sector― to enable greater participation of partners and stakeholders in operations supported by the Bank 26
  27. 27. Focus areas of support identified for CPS 2008-12• Pillar 1: Rapid and Inclusive growth • Infrastructure building • Enhancing agriculture productivity • Increasing access to finance, for the poor • Leveraging private investments• Pillar 2: Sustainable development  Supporting implementation of the GoI’s low carbon strategy  Cleaner Coal  Renewable energy sources - hydel, solar, wind  Integrated coastal zone management and biodiversity conservation  Strengthening disaster management (flood management in Bihar)• Pillar 3: Service delivery improvement  Promoting universalization of primary and secondary education; Strengthening public Health delivery systems (NRHM)  Strengthening implementation and effectiveness to national development programs  Enhancing delivery of public services, such as water  Promoting rural road connectivity, road safety and asset management 27
  28. 28. CPS 2008-2012 : Implementation Highlights1. Scaling up of WBG engagement in India  IBRD/IDA and IFC lending doubled:  New areas of engagement:  Moving from projects to country-wide programs:  Knowledge and Technical Assistance (TA)2a. Aiming for growth with inclusion Agriculture productivity and sustainability Transport Sector : Financial and private sector development2b. GoI’s Growth with Inclusion agenda Poverty alleviation and social inclusion Engaging in low income states3 Sustainable development initiatives 28
  29. 29. Planning the next CPS: current context• India sustaining growth, though at lower levels – While India’s growth rate in FY11/12 fell under 7%, it still is the second fastest growing economy. – From 1.7% of world GDP in 1980 to 5.5% in 2010 (4th largest) – An increasing contribution to the international agenda - role within G20, ASEAN, BRICS initiative etc. – Falling corporate investment from 14% of GDP before crisis to 10%• Global economic developments could pose serious challenges, given India’s limited fiscal space• Challenged by unequal benefit distribution –regional, caste, gender, income categories, rural-urban, etc.• Governance in focus:  RTI Act, Women political empowerment, decentralization, E-service delivery and Corporate governance 29
  30. 30. India Country Partnership Strategy 2013-16The consultation process for CPS 2013-16• Preparation on draft presentation on CPS – Consultations with Ministry of Finance and line ministries at the Centre – Consultations with state government officials across six states including Karnataka, Chhattisgarh, Assam, and Uttar Pradesh – Civil society Consultations in Delhi and five state capitals – Bangalore, Raipur, Guwahati, Lucknow and Mumbai• Preparation of CPS – Sharing of next CPS through website and email updates for further feedback – A separate section on the issues discussed during consultations with civil society will be prepared 30
  31. 31. Planning the CPS : India 12th Plan highlights 1st pillar: rapid & inclusive growth  Investment rate of 38.5%; Jobs; Manufacturing, especially in SMEs; Agri growth, improving Business climate, Domestic market integration  One trillion in Infrastructure; Energy 2nd pillar: sustainable development  Improving the management of natural resources • Strengthening land acquisition and R&R processes, rationalizing land use in urban areas, promoting land titling/leasing • Towards “ a credible and fair system of exploitation of mineral resources” • Promoting green development: water & energy efficient, low carbon development  Strengthening natural disaster management/resilience 3rd pillar: enhanced effectiveness of service delivery  Reforming the health system  Improving quality of (universal) primary education  Universalizing access to secondary education by 2017  Enrolling 10 million additional students in higher education (Increasing present gross enrollment rate of 18% to 25%) 31
  32. 32. CPS 2013-16 : Strategic Objectives under Consideration Catalyzing infrastructure investment and creating bankable projects  Financial engineering, PPP, asset management,  Strengthening risk management  Regional integration (energy, water resources, transport facilitation)  Strengthening project management Promoting human development  Managing demographic growth  Job creation  Urbanization  Universalizing access to quality health services  Education & skill development  Fighting poverty alleviation & promoting social inclusion:  Livelihood (rural & urban)  Gender, equality of opportunity 32
  33. 33. CPS 2013-16 : Strategic Objectives under Consideration Supporting/informing key structural reforms  Natural resources management (water, land, mineral)  Energy security  Agricultural productivity & food security  Integration & performance of domestic markets  Governance reforms Scaling up and bringing to fruition  GoI’s urban agenda – service delivery such as transport, water, etc.  Use of country systems for fiduciary controls and safeguards:  Scaling up knowledge Accompanying India’s transition to a MIC  Infrastructure regulatory framework, investment climate, domestic market integration, governance, social/financial/legal inclusion, public finance management, social and environmental safeguards  Leveraging India’s development experience on behalf of other developing countries: India as a funder and the main provider of knowledge and experience within the South-South experience exchange Managing Finance Constraints 33
  34. 34. 34 IBRD and IDA Lending by IBRD and IDA Lending by Region │ Fiscal 2012 Theme │ Fiscal 2012 Share of Total Lending of $43 Billion Share of Total Lending of $43 Billion Economic Environmental South Asia Africa and Natural Management 24% 16% Trade and Urban Resources 2% Integration Development Management 6% 10% 14% Social Protection and Risk Management Financial andMiddle East 13% Private Sectorand North East Asia Development Africa Social and Pacific 19% 5% Development, 19% Human Gender, and Development Inclusion 10% 2% Latin Rural America Development Public Sector and the Europe and 13% Rule of Law Governance Caribbean Central Asia <1% 11% 22% 14%
  35. 35. 35 IBRD and IDA Lending by Sector │ Fiscal 2012 SOUTH ASIA Share of Total Lending of $43 Billion Total IBRD and IDA Lending │ Fiscal 2006–12 Agriculture, Fi millions of dollars Water, Sanitati shing, and Education on, and Flood Forestry 4% 12,000 Protection 5% Energy and 11% Mining 10,000 14%Transportatio 8,000 n 20% Finance 2% 6,000 Health and 4,000 Other Social Services 16% 2,000 Public Industry andAdministratio Information Trade and 5% - n, Law, and Justice Communicati FY06 FY07 FY08 FY09 FY10 FY11 22% ons <1%
  36. 36. 36IBRD Top 10 Borrowers │Fiscal 2012 IDA Top 10 Borrowers │Fiscal 2012millions of dollars millions of dollars 4.0 2,500 3.5 2,000 3.0 2.5 1,500 2.0 1,000 1.5 1.0 500 0.5 - 0
  37. 37. 37 South Asia Regional SnapshotTotal population 1.7 billionPopulation growth 1.4%Life expectancy at birth 65 yearsInfant mortality per 1,000 births 52Female youth literacy 73%Number of people living with HIV/AIDS 2.7 million2010 GNI per capita $1,305GDP per capita index (2000=100) 172Note: Data for life expectancy at birth, infant mortality rate per 1,000 live births, female youth literacy, and people living withHIV/AIDS are for 2012; other indicators are for 2010 from the World Development Indicators database. HIV/AIDS data are fromUNAIDS Report on the Global AIDS Epidemic 2012.Total Fiscal 2012 Total Fiscal 2012New Commitments DisbursementsIBRD $1,158 million IBRD $1, 037 millionIDA $5, 288 million IDA $2, 904 million Portfolio of projects under implementation as of June 30, 2012: $37.8 billion
  38. 38. 38South Asia South AsiaIBRD and IDA Lending by Theme │ Fiscal 2012 IBRD and IDA Lending by Sector │ Fiscal 2012Share of Total Lending of $10.1 Billion Share of Total Lending of $10.1 Billion Agriculture, Fishing, and Education Urban Economic Energy and Trade and Development Forestry 5% Management Mining Integration 4% 1% 4% 7% 6% Environmenta Water, Sanit Finance l and Natural ation, and <1% Social Resources Protection Management Flood Health and and Risk 12% Protection Other Social Social Management 11% ServicesDevelopment, 13% Financial and 13%Gender, and Private Sector Inclusion Development 26% Transportati Industry 2% on and Trade 39% 4% Information Human and Rural Development Public CommunicaDevelopment 8% Administrati tions 22% on, Law, an 2% Public Sector d Justice Rule of law Governance 15% <1% 7%
  39. 39. World Bank to lend $5 bn to India for poverty eradication – TOI dated 14th March 2013 Visiting World Bank President Jim Yong Kim told a press conference that the multi- lateral agency will deepen its engagement with India for alleviating poverty World Bank on 13th March 2013 said it would give $3-5 billion to India in the next four years to push development projects and poverty eradication programmes There are more than 200 million people in Uttar Pradesh, of which 70 million people are below the poverty line. Eight per cent of the world’s poor are in Uttar Pradesh. If they want to end poverty, they have to end poverty in Uttar Pradesh and in other states Kim, who had earlier, pegged India’s economic growth at six per cent for the next financial year, said the economy could expand at a higher pace than this rate. 39
  40. 40. Basic Education• Two decades of focused programs in basic education have reduced out-of- school youth to about 10 M (down from 25 M in 2003), most from marginalized social groups. Net enrollment rate is 85%, with social disparities.• Key challenge is to finish the “access agenda” and dramatically increase focus on quality, with more attention to classroom processes, basic reading skills in early grades, teacher quality and accountability, community/parent oversight, evaluation/assessment. Secondary Education• Access and Quality remain big challenges.• Gross enrollment rate of 40%, with significant gaps between genders, social groups, urban/rural, such that most secondary students are urban boys from wealthier population groups.• Private aided and unaided schools = 60% of all secondary schools, and growing.• Overloaded curriculum, poor teaching practices and low primary level quality affect secondary quality. 40
  41. 41. Vocational Education and Training (VET)• VET system is small, and not responding of needs of labor market; <40% of graduates find employment quickly.• Insufficient involvement of industry and employers in VET system management, internships.• Lack of incentives of public training institutions to improve performance. Technical and Higher Education • Numerically huge: 330 universities and 18,000 colleges • Substantial private provision in professional education. • But just 11% of youth 18-23 are enrolled. • Problems of capacity, quality, relevance, and public funding. Hard to retain qualified faculty. Limited research. • Several world-class institutions. 41
  42. 42. GOI Education Strategy• Unprecedented priority to universal elementary education.• Sarva Shiksha Abhiyan: aims to universalize elementary education by 2014, and improve learning outcomes.• Education cess of 3% on income tax, corporation tax, excise and customs duties generates necessary resources• Cost-Share: was 50/50 (2007), moving to 65/35 Center/State• Estimate: 11th Plan: ’07-’12: 60,000-70,000 crores (US$17 billion)• Increased focus on quality and upper primary in phase II.• National Mission for Skills is being set up, looking at both VET and secondary education• New centrally sponsored scheme to update all industrial training institutes (ITIs)• Significant investments in higher education (including reforms and expansion) are expected 42
  43. 43. Millennium Development Goals 43
  44. 44. 44