A Global Coalition for the Poorest:
Delivering Development Results
Mary Mulusa, World Bank
1
The World Bank Group
• The International Bank for Reconstruction and Development (IBRD) lends to governments of middle‐income and creditworthy low‐income countries.
• The International Development Association (IDA) provides—
credits— and grants to governments of the poorest countries.
• The International Finance Corporation (IFC) provides loans, equity and technical assistance to stimulate private sector investment in developing countries.
• The Multilateral Investment Guarantee Agency (MIGA) provides guarantees against losses caused by non‐commercial risks to investors in developing countries.
• The International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.
2
The International Development Association (IDA) The World Bank’s Fund for the Poorest Countries •Supports 81 of the least developed countries –
1/2 of them in Africa • Provided on average financing of $15 bn a year in the last two years with over 50 percent to Africa
•One of the world’s largest sources of financing for health, education, infrastructure, agriculture, economic and institutional development
•IDA is actively supporting our partner countries to achieve the MDGs
3
IDA’s Eligibility Criteria
•
Eligibility for IDA support depends on:
•
•
•
A country’s relative poverty, defined as GNI per capita below US$1,175 for
FY12
Lack of creditworthiness for IBRD
Ability to effectively use IDA resources
•
Some countries, such as India and Pakistan, are IDA‐eligible based on per capita income levels, but are also creditworthy for some IBRD borrowing. They are referred to as “blend” countries
•
Lastly, IDA also supports some countries, including small island economies, which are above the operational cutoff but lack the creditworthiness needed to borrow from IBRD.
4
IDA’s Lending Terms
• IDA resources are provided to countries on terms that are differentiated based on economic capacity and risk of debt distress
• Blend term are for IBRD creditworthy countries and/or those with higher GNI per capita. o
25 year maturities (with 5‐year grace period), 0.75% service charge & 1.25% interest
• Regular IDA terms: For IDA‐only countries below the operational cut‐off of US$1,175 per capita GNI
o
40 year maturities (with 10‐year grace period), 0.75% service charge and no interest • Grant terms: IDA allocates grants on the basis of countries’
risk of debt distress.
o
high risk of debt distress ‐ all assistance in the form of grants
o
medium risk of debt distress ‐ combination of credits and grants.
o
low risk of debt distress ‐ regular IDA credits
5
Sources of IDA Funding
• Donors meet every three years to replenish IDA funds
• IDA’s request for funding from donors outlines:
– A proposed 3‐year program based on an assessment of country needs and capacity to implement
– Strategies, policies and special commitments for its implementation
• IDA is funded largely by contributions from the governments of its richer member countries. (IBRD raises most of its funds on the world's financial markets)
• Additional funds come from IBRD's and IFC’s income and from borrowers' repayments of earlier IDA credits.
6
The most recent replenishment (IDA16) was a record • Despite challenging environment, support for
IDA16 was strong.
– Record replenishment total of $49.3 billion for next
three years (18% increase in $ terms over IDA15)
• Approximately 50% expected to go to Sub-Saharan Africa
– Contributions from 52 donor countries, of which 7 are
new to IDA, reflect growth and strength of global
coalition.
– Most donor resources come from G-7 (68%); but
emerging and new donors are becoming increasingly
important.
IDA16 Replenishment: Donor contributions; Internal Resources and World Bank Group Transfers
World Bank Group transfers $3.0
6%
IDA16
Internal resources $14.6
30%
IDA16 Donor Pledges + $31.7
64%
8
Allocation of IDA Resources Among Recipient Countries
• Each Replenishment covers three years ‐ IDA16 covers the fiscal years 2012‐2014.
• Country Allocations are based on the IDA Performance‐Based Allocation System which takes into account need and performance: Country Policy and Institutional Assessment
Portfolio performance
Population Income Per Capita
Grant eligibility assessments based on country Debt Sustainability Analysis o 32 countries are receiving MDRI debt relief.
o
o
o
o
o
• An indicative envelope is provided for each country at the start of the 3‐yr cycle with a firm allocation for the first year. Allocations
for subsequent years are confirmed each FY.
9
IDA’s Strategic Goals Concerted effort to reduce poverty and achieve the MDGs through:
• Investment in people – education, health, social protection • Fostering broad‐based, sustainable growth, including:
– Sound economic policies, rural development, conducive private sector environment and sustainable environmental practices
• Expansion of government capacity to provide basic services and ensure accountability for public resources
• Recovery from civil strife, armed conflict and natural disaster
• Promotion of regional cooperation and integration
10
Regional and Sector Strategies Outline IDA Priorities for each operational region
• Operational Regions of the Bank/IDA prepare long‐
term assistance strategies based on country development programs:
o
o
o
o
o
o
Africa
South Asia
Latin America and the Caribbean
Middle East and Northern Africa
East Asia and Pacific
Eastern Europe and Central Asia
• Sector and Sub‐Sector strategies provide technical guidance in developing support for individual countries in the context of sector developments at the regional and global levels.
11
Example: World Bank Group Sector Strategy for Health, Nutrition and Population Strategic Directions
•
Renew Bank focus on HNP results
•
Increase Bank contributions to client‐country efforts to strengthen health systems for HNP results
•
Ensure synergy between health system strengthening and priority programs and interventions, particularly in Low Income Countries
•
Strengthen Bank capacity to advise client countries on multi‐sectoral approaches to HNP results
•
Increase selectivity, improve strategic engagement, and reach agreement with global partners on collaborative division of labor for the benefit of client countries
IDA’s Country‐based Model
IDA support for each country based on:
• nationally‐owned development strategies (e.g. Poverty Reduction Strategy Papers (PRSPs), development plans)
• donor alignment around country‐driven goals, with increased use of country systems wherever feasible and efforts to increase aid predictability ‐‐in line with the Paris Declaration of Aid Effectiveness and the Accra Agenda for Action.
• mechanisms of mutual accountability by both donors and governments in recipient countries. 13
IDA customizes to countries through a Country Assistance Strategy. • The CAS ‐ framework of assistance for the whole WBG, including IFC and MIGA, during a period of 3 to 5 years • Rolling plan – supports long‐term engagement
• CAS outline:
o diagnosis of a country’s development challenges, its development vision and development results to be achieved through IDA assistance
o IDA’s resource envelope ‐ an indicative program to be supported  Selective based on IDA’s comparative advantage
 Takes account of Government funding and other donors/partners support
 Indicating the instruments of assistance:
o Results focus –each CAS has a Results Monitoring Framework o Partnership arrangements with donors and other stakeholders
• The CAS is reviewed by the Executive Board of IDA.
14
The Country Assistance/Partnership Strategy
• Each CAS is made up of ongoing and new lending, technical assistance and knowledge products
o Investment lending (projects)
o policy lending/budget support e.g. Poverty Reduction Support Credits/grants, education sector support credit/grants
o knowledge products/Analytic and Advisory Work (Economic and Sector Work and Technical Assistance)
• Each individual new lending activity funded through the CAS has to be approved by the Board
• IDA is flexible and activities within the CAS can be changed in response to changing circumstances: e.g. emergencies, new funding from other partners, change in costs, scaling up of successful projects etc.
• Joint CASs (IDA/Donors) in some countries
15
Example: CAS Strategic Objectives and Outcomes
16
Example: Proposed IDA Financing FY11‐FY13
17
Example: Proposed Analytical and Advisory Activities, FY10‐FY13
18
Development of Individual IDA Operations and Activities
• IDA operations are prepared by a Bank team working closely with the recipient country.
• They draw on analytic work, from ongoing macro‐level and/or sector policy dialogue and experience with similar projects within the Country and other countries.
• IDA usually makes a direct contribution to the operation
• Many projects are co‐financed by donors or may be part of a Sector‐wide program
19
The IDA Project Cycle
6. Project Implementa
tion
20
IDA Delivers
Improving people’s lives
Over the last decade, IDA has worked with countries to achieve…
• 113mn people with increased access to water
• 105mn children with access to new or
rehabilitated classrooms
• 47mn people with access to basic package of
health, nutrition and population services
• 310 mn children were immunized
• 5.8 mn provided with access to improved sanitation facilities
IDA Delivers
However, IDA is about more than numbers:
IDA also supports:
• Strengthening accountability and institutions
• Strengthening service delivery
• Improving procurement and financial management And provides
• Knowledge sharing (increasingly South‐South)
• Policy advice and analysis
• Technical assistance
IDA’s Core Strengths
•
•
•
•
•
•
•
•
•
•
•
Platform role ‐ supports government led efforts and strengthening country systems
Engages with countries over the long‐term
Predictable financial resources of significant scale Un‐earmarked resources which allow flexibility to adapt to country circumstances Global knowledge base from the World Bank Group ‐ transfer knowledge from IBRD countries and across IDA countries
Multi‐sectoral perspective
Convening power at national, regional and global levels
Local presence in most of the IDA countries
Financial leverage for development resources and for generating private sector flows
Important role in global partnerships seeking solutions to development challenges and leveraging and managing funds from other sources
Ranked highly in its effectiveness in delivering aid by independent reviews 23
Thank You.
24
25