World Bank

A PROJECTS REPORT ON

“STUDY OF COMPLETE OPERATION WITH INTRODUCTION”

OF

WORLD BANK
(For the fulfillment of class assignment)

Presented to

Prof. Shegorika
Presented by

Section-FN5

Sunil Patel(66) Anand

Aggrewal(06)

Rahul Garg(46) Ruchi

kharab(52)

Anamika Handique(05) Nidhi

Pandey(39)

Sourabh Khurana(62)

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SATBURI CAMPUS, CHHATARPUR

NEW-DELHI
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INDEX

Topics
Pg no

World Bank History

5

World Bank Introduction

6

World Bank Focus

7

World Bank Mission

8

World Bank Management

9

World Bank Area of Operation

10

World Bank Strategies

11-13

World Bank In india

14-15

World Bank Projects N Operations

16-28

World Bank other services

29-32

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World Bank Current Projects

33-41

World Bank Criticism

42-43

World Bank

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President:

Robert B. Zoellick

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Membership:

185 countries represented by Boards of Directors

World Bank

International Bank for Reconstruction and Development (IBRD)

International Development Association (IDA)

Affiliates

International Finance Corporation (IFC)

Multilateral Investment Guarantee Agency (MIGA)

International Centre for Settlement of Investment Disputes (ICSID)

Headquarters

Washington, DC, and more than 100 country offices

Staff

More than 10,000 employees worldwide

Established: July 1, 1944

During a conference of 44 countries in Bretton Woods, New Hampshire.

World bank history:

The World Bank is an international financial institution that provides

financial and technical assistance to developing countries for development

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programs (e.g. bridges, roads, schools, etc.) with the stated goal of reducing
poverty.

The World Bank differs from the World Bank Group, in that the World Bank
comprises only two institutions:

• International Bank for Reconstruction and Development (IBRD)

• International Development Association (IDA)

Whereas the latter incorporates these two in addition to three more:[3]

• International Finance Corporation (IFC)

• Multilateral Investment Guarantee Agency (MIGA)
• International Centre for Settlement of Investment Disputes (ICSID)

The World Bank was created following the ratification of the United Nations
Monetary and Financial Conference of the Bretton Woods agreement. The
concept was originally conceived in July 1944 at the United Nations Monetary
and Financial Conference. Two years later, the Bank issued its first loan:
US$250 million to France for post-war reconstruction, the main focus of the
Bank's work in the early post-World War II years. Over time, the
"development" side of the Bank's work has assumed a larger share of its
lending, although it is still involved in post-conflict reconstruction, together
with reconstruction after natural disasters, response to humanitarian
emergencies and post-conflict rehabilitation needs affecting developing and
transition economies. There were criticisms of the results of the World Bank's
"development schemes" leading to corruption and widespread exploitation
by the corporations who are given monopolies of developing nations'
resources.

The World Bank is one of the two Bretton Woods Institutions which were
created in 1944 to rebuild a war-torn Europe after World War II. Later, largely
due to the contributions of the Marshall Plan, the World Bank was forced to
find a new area in which to focus its efforts. Subsequently, it began
attempting to rebuild the infrastructure of Europe's former colonies. Since
then it has made a variety of changes regarding its focus and goals. From
1968-1981 it focused largely on poverty alleviation. In the 1980s and 1990s
its main focus was both debt management and structural adjustment.

World bank Introduction:

The World Bank is a vital source of financial and technical assistance to

developing countries around the world. We are not a bank in the common

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sense. We are made up of two unique development institutions owned by

185 member countries—the International Bank for Reconstruction and
Development (IBRD) and the International Development Association (IDA).

Each institution plays a different but collaborative role to advance the vision
of an inclusive and sustainable globalization. The IBRD focuses on middle
income and creditworthy poor countries, while IDA focuses on the poorest
countries in the world. Together we provide low-interest loans, interest-free
credits and grants to developing countries for a wide array of purposes that
include investments in education, health, public administration,
infrastructure, financial and private sector development, agriculture, and
environmental and natural resource management.

World Bank focus:

A World Free of Poverty

The World Bank’s projects and operations are designed to support low-
income and middle-income countries’ poverty reduction strategies. Countries
develop strategies around a range of reforms and investments likely to
improve people’s lives from universal education to passable roads, from
quality health care to improved governance and inclusive economic growth.
In parallel, the Bank strives to align its assistance with the country’s
priorities and harmonize its aid program with other agencies to boost aid
effectiveness.

The World Bank also strives to tackle global challenges from international
trade to climate change and debt relief. It does so within each country’s
specific socio-economic context, adapting programs to country capacity and
needs.

Millennium Development Goals

The World Bank's current focus is on the achievement of the Millennium

Development Goals (MDGs), lending primarily to "middle-income countries"
at interest rates which reflect a small mark-up over its own (AAA-rated)
borrowings from capital markets; while the IDA provides low or no interest
loans and grants to low income countries with little or no access to
international credit markets. The IBRD is a market based non-profit
organization, using its high credit rating to make up for the relatively low
interest rate on its loans, while the IDA is funded primarily by periodic
"replenishments" (grants) voted to the institution by its more affluent
member countries.

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World Bank Mission:

The Bank’s mission is to aid developing countries and their inhabitants to

achieve development and the reduction of poverty, including achievement of
the MDGs, by helping countries develop an environment for investment, jobs
and sustainable growth, thus promoting economic growth through
investment and enabling the poor to share the fruits of economic growth.
The World Bank sees the five key factors necessary for economic growth and
the creation of an enabling business environment as:

1. Build capacity: Strengthening governments and educating government

officials.
2. Infrastructure creation: implementation of legal and judicial systems
for the encouragement of business, the protection of individual and
property rights and the honoring of contracts.
3. Development of Financial Systems: the establishment of strong
systems capable of supporting endeavors from micro credit to the
financing of larger corporate ventures.
4. Combating corruption: Support for countries' efforts at eradicating
corruption.
5. Research, Consultancy and Training: the World Bank provides platform
for research on development issues, consultancy and conduct training
programs (web based, on line, tele-/ video conferencing and class room
based) open for those who are interested from academia, students,
government and non-governmental organization (NGO) officers etc.

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The Bank obtains funding for its operations primarily through the IBRD’s sale
of AAA-rated bonds in the world’s financial markets. The IBRD’s income is
generated from its lending activities, with its borrowings leveraging its own
paid-in capital, plus the investment of its "float". The IDA obtains the majority
of its funds from forty donor countries who replenish the bank’s funds every
three years, and from loan repayments, which then become available for re-
lending. –

World bank Management:

The President of the Bank, currently Robert B. Zoellick, is responsible for

chairing the meetings of the Boards of Directors and for overall management
of the Bank. Traditionally, the Bank President has always been a U.S. citizen
nominated by the President of the United States, the largest shareholder in
the bank. The nominee is subject to confirmation by the Board of Governors,
to serve for a five-year, renewable term.[4]

The Executive Directors make up the Board of Directors, usually meeting

twice a week to oversee activities such as the approval of loans and
guarantees, new policies, the administrative budget, country assistance
strategies and borrowing and financing decisions.

The Vice Presidents of the Bank are its principal managers, in charge of
regions, sectors, networks and functions. There are 24 Vice-Presidents, 3
Senior Vice Presidents and 2 Executive Vice Presidents.

World bank Area of operations:

The World Bank is active in the following areas [7]

• Agriculture and Rural Development • Law and Justice

• Conflict and Development • Macroeconomic and
• Development Operations and Economic Growth
Activities • Mining
• Economic Policy • Poverty Reduction
• Education • Poverty
• Energy • Private Sector
• Environment • Public Sector Governance
• Financial Sector • Rural Development

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• Gender • Social Development

• Governance • Social Protection
• Health, Nutrition and Population • Trade
• Industry • Transport
• Information and Communication • Urban Development
Technologies • Water Resources
• Information, Computing and
Telecommunications • Water Supply and Sanitation
• International Economics and Trade

• Labor and Social Protections

World bank strategies:

Poverty Reduction Strategies:

The Poverty Reduction Strategy Paper (PRSPs) describes a country's long

term vision. The paper is prepared by low-income country governments in
consultation with various stakeholders such as civil society and the private
sector. The paper sets out macroeconomic, structural, and social policy
goals.

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The paper also lays out a country's external financing needs for meeting
those goals, such as loans and grants from the World Bank and other donors,
that are meant to promote economic growth and reduce poverty.

The Bank and other donor agencies line up their assistance with these
countries' priorities and targets.

Countries have used PRSPs to address their investment climate and

prescribe measures to foster private sector development, or to chart plans to
improve governance and reduce corruption. Many concentrate on issues
facing the agricultural sector and rural areas, and stress the need for
investment in key basic services, particularly health and education in
implementing their strategies.

The World Bank provides training and technical and financial assistance to
support the design and of national poverty-reduction strategies. For example,
it helps countries improve their poverty analysis, public expenditure
management, and service evaluation. It also offers Poverty Reduction
Support Credits (PRSCs), annual programmatic loans, to support the
implementation of these strategies.

Both the World Bank' International Development Association (IDA) and the
International Monetary Fund (IMF) require a Poverty Reduction Strategy Paper
in order for low-income countries to receive lower cost financial assistance
from the Bank (through IDA) and the IMF (through its Poverty Reduction and
Growth Facility).

Country Assistance Strategies

The Country Assistance Strategy (CAS) - also called in some cases Country
Partnership Strategy or Joint Assistance Strategy - lays out a selective
program of World Bank Group support for a particular country. This strategy
is developed by Bank staff in meetings with government officials, in
consultation with country authorities, civil society organizations,
development partners and other stakeholders. It takes as a starting point the
country's own long-term vision for development and takes into account the
Bank Group's comparative advantages in the context of other donor
activities. The strategy is designed to promote collaboration and coordination
among development partners in a country.

The CAS includes a comprehensive diagnosis-drawing on analytical work by

the Bank, the government, and/or other partners-of the development
challenges facing the country, including the incidence, trends, and causes of

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poverty. The CAS identifies the key areas where the Bank Group's assistance
can have the biggest impact on poverty reduction. In its diagnosis, the CAS
takes into account the performance of the Bank's portfolio in the country, the
country's creditworthiness, state of institutional development,
implementation capacity, governance, and other sectoral and cross-cutting
issues. From this assessment, the level and composition of Bank Group
financial, advisory, and/or technical support to the country is determined.

To track implementation of the CAS program, the CAS is increasingly results-

focused. It includes a framework of clear targets and indicators to monitor
Bank Group and country performance in achieving stated outcomes.

Investment and development policy operations

Investment operations focus on the long-term (5 to 10 years) and finance

goods, works and services that support economic and social development
projects. These investment projects encompass a broad range of sectors -
from agriculture to urban development, rural infrastructure, education and
health.

Development policy operations typically run from one to three years, and
provide quick-disbursing external financing to support government policy
and institutional reforms. Originally designed to provide support for
macroeconomic policy reforms, development policy loans, credits and grants
now focus more on structural, financial sector and social policy reforms -
improving, for example, the management of public resources, the functioning
of the judiciary or promoting good governance.

In all the projects it finances, the World Bank takes its responsibility to
shareholders, donors and investors seriously. The Bank works diligently to
make sure that procurement for projects is conducted appropriately, so that
loan and other funds are used for their intended purposes.

World bank in India:

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The World Bank is one of the world’s largest sources of funding and
knowledge for developing countries. India is one of our oldest members,
having joined the institution at its inception in 1944.

In India, the World Bank works in close partnership with the Central and
State Governments. It also works with other development partners: bilateral
and multilateral donor organizations, nongovernmental organizations
(NGOs), the private sector, and the general public—including academics,
scientists, economists, journalists, teachers, and local people involved in
development projects.

The world bank’s plan of action in india

The World Bank's work plan in India is spelt out in its Country Strategy (CAS).
The Country Strategy for India is closely aligned with India's own
development priorities and describes what kind of support and how much
can be provided to the country over a period of around four years.

The Country Strategy for India for 2009-2012 is aligned with the
government's Eleventh Five Year Plan. It focuses on helping the country to
fast-track the development of much-needed infrastructure, support the
seven poorest states, and respond to the financial crisis.
.
The strategy was arrived at after a series of consultations with a broad range
of stakeholders, including members of the government and civil society.
.
The strategy envisages total proposed lending of US$14 billion for 2009 -
2012. As private financing dries up in the wake of the global financial
crisis, the Bank has agreed to provide an additional US$ 3 billion as part of
the total financing envelope of US$ 14 billion.
The strategy is implemented through lending, dialogue, analytical work,
engagement with the private sector, and capacity building exercises.
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The Bank’s previous four-year Country Strategy for 2005-2008 focused on

lending for infrastructure, human development, and improving rural live.

World bank’s Projects and operations:

The Bank’s method of operation is not to implement “World Bank projects,”

but to provide financing and advice for projects which are owned and
supported by the Indian government and the people and form part of their
overall development agenda.

Various financing options are available based upon the type of assistance
needed. It is important to note that the implementation of projects is
managed by the government itself. The government designates an office,
referred to as the Project Implementing Agency (PIU), which is responsible for

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aspects such as procurement and selection of consultants and day-to-day

work, monitoring, and evaluation.

The Bank’s operational policies set guidelines to ensure that projects meet
its own criteria such as social and environmental standards. Projects are
evaluated to capture and share lessons for similar projects in future.

lending

At the end of June 2008, the World Bank group had 60 active projects in the
country. The net commitment for these projects was about US$ 13.8 billion.
New lending in FY08 (1 July 2007- 30 June 2008) amounted to US$2.7
billion.
Studies and Reports
The World Bank also produces studies and reports based upon its own
analysis of a given issue. Topics of research come from the Bank's Country
Strategy. This research is intended to provide an unbiased perspective on a
range of specific development challenges faced by the country.

Additional studies include reviews of economic policies (Country Economic

Memoranda), fiscal spending (Public Expenditure Reviews), environmental
reviews (Environmental Action Plans), and other specific topics.

Further discussion of development issues is promoted through workshops

and other events. These events bring together groups such as government,
media, and civil society organizations to discuss how best to move forward
on a given issue.

Loans

The Bank offers two basic types of loans: investment loans and development
policy loans. The former are made for the support of economic and social
development projects, whereas the latter provide quick disbursing finance to
support countries’ policy and institutional reforms. While the IBRD provides
loans with a relatively low interest rate, the IDA’s "credits" are interest free.
The project proposals of borrowers are evaluated for their economical,
financial, social and environmental aspects prior to their approval. But not all
of this is true, somtimes its different.

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Grants

The Bank also distributes grants for the facilitation of development projects
through the encouragement of innovation, cooperation between
organizations and the participation of local stakeholders in projects. IDA
grants are predominantly used for:

• Debt burden relief in the most indebted and poverty struck countries
• Amelioration of sanitation and water supply
• Support of vaccination and immunization programs for the reduction of
communicable diseases such as malaria
• Combating the HIV/AIDS pandemic
• Support civil society organizations
• Creating initiatives for the reduction of greenhouse gases
• Taking to the forests and helping thive in the rainforests.

Treasury’s Approach

Treasury’s approach to providing banking products and services for IBRD is to

customize engagements according to individual borrowers’ needs, combining
training and capacity building with a broad menu of banking and risk

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management tools.

The World Bank Treasury offers services in four key areas:

• Banking products
• Public debt management
• Asset management
• Capital markets and risk management

Public Debt Management

The Treasury's team of public debt management experts is drawn from

senior positions in sovereign debt offices world-wide. The team is available to
help soverign borrowers to identify and act on opportunities for better
organization and performance in managing public debt portfolios, based on
best practices in industrial and emerging-market countries. Areas of focus
include:

• Debt office organization and management

• Legal frameworks and authorizing environments for public debt
management
• Staff training and continuing professional development
• Portfolio-based approaches to determining the appropriate liability
structure for public debt portfolios, reflecting the country’s ongoing
financing needs, level of market development and risk tolerance
• Establishing appropriate targets and measuring performance

Asset Management

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In the area of asset management, Treasury offers governments both capacity

building programs, as well as direct management of assets. For governments
building their asset management capacity, Treasury offers intensive one-on-
one programs of technical advisory assistance, delivered by its strategists
and portfolio, risk and IT managers. These programs cover all aspects of
asset management:

• Governance
• Strategic asset allocation
• Implementation of index, enhanced index and active portfolios
• Managing outside asset managers
• Measuring, monitoring

Treasury directly manages high-grade fixed income investments for central

bank and similar official sector reserves. It also offers direct management of
allocations to this asset class in the portfolios of officially sponsored pension,
endowment and stabilization funds. The World Bank Treasury currently
manages approximately USD 65bn in global high-grade fixed income
portfolios and USD 15bn in broad public and private asset classes for both
the World Bank Group and other official institutions. Its asset managers
specialize in highly disciplined strategies that emphasize benchmark
selection to reflect clients’ risk tolerances. Portfolios may be fully indexed to
these benchmarks or participate in enhanced indexing strategies where
actively managed portfolios seek superior returns from small and closely
monitored deviations from specified benchmarks.

Capital Markets and Risk Management

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For sovereign entities seeking funding or executing hedging strategies in

international bond markets, Treasury's experts offer advice on all aspects of
the process:

• Funding program strategy

• Investor relations and rating agency relationships
• Establishing and managing relationships with bankers
• Setting up issuance platforms for frequent borrowings
• Designing, selecting and executing transactions – ranging from global
bonds to private placements
• Evaluating and executing structured financing proposals and other
uses of derivatives as part of a sovereign liability portfolio

Treasury may be engaged at any stage of the funding process, from the
development of the overall market access strategy to the execution of
individual transactions. As Treasury does not manage or underwrite
transactions, its advice is useful for clients wanting an independent but
highly experienced and successful source of information on these topics.

Risk Management Strategy & Implementation

For sovereign entities seeking to execute derivatives transactions and build

capacity, Treasury offers advice on all aspects of the process:

• Analyzing Balance Sheet dynamics and assessing potential material

risks to the assets and liabilities
• Formulating an ALM strategy, risk guidelines and thresholds
• Researching derivatives markets, assessing its limitations and
identifying instruments available for risk management
• Developing processes and procedures for the use of derivatives,
including legal, systems, accounting, and risk management oversight
• Modeling and valuation of hedging transactions for benchmarking the
market
• Structuring, negotiating and executing derivatives transactions
• Establishing and managing relationships with local and international
bankers

Treasury may be engaged at any stage of the derivatives execution process,

from the development of the overall ALM strategy to the execution of
individual market transactions. Treasury's team provides highly experienced
advice based on managing risk exposures on IBRD’s balance sheet of more
than USD 120 billion. Treasury's advice is useful for member countries who
want an independent and reliable source of information on these topics.

Banking products:
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World bank’s current projects:

Tajikistan: Programmatic Development Policy Operation

WASHINGTON, March 26, 2009 - The World Bank’s Board of Executive
Directors today approved the following project:

IDA Grant: US$20 Million

Project Description: This Programmatic Development Policy Grant

for Tajikistan is the third and final operation supporting the Government of
Tajikistan’s reform program. It aims to improve the environment for private
sector development, and to improve overall functioning of the public sector
and the delivery of key public services.

Pakistan: Poverty Reduction and Economic Support Operation

(PRESO)
WASHINGTON, March 26, 2009 - The World Bank’s Board of Executive
Directors today approved the following project:

IDA Credit: US$500 Million

Terms: Maturity = 35 years ; Grace period = 10 years

Project Description: The Poverty Reduction and Economic Support

Operation for Pakistan is designed to support Government of Pakistan’s
policy measures that promote macroeconomic stability. It seeks to
strengthen Pakistan’s competitiveness by bolstering the financial sector and
cutting barriers to business entry and exit. The operation also supports
measures to ensure that poor and vulnerable people are shielded from major
adverse impacts of the stabilization process. This entails improving the
targeting of the government’s cash transfer programs, focusing especially on
the Benazir Income Support Program.

Niger: Agro-Sylvo-Pastoral Exports and Markets Development

Project

Philippines - Transport for growth : an institutional assessment of

transport infrastructure
Infrastructure needs in the Philippines must be addressed to ensure long
term economic growth. After several years of fiscal pressure, the Philippines
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is now in a position to address these needs. Despite the current international

financial situation, the country is now in a position to commit resources to
improve transport infrastructure. To this effect, it is necessary to: i) make
resource allocation more effective; and ii) improve governance in the
coordinating departments and in implementation agencies. The suggested
actions that follow address these two fundamental needs within four groups
of recommendations. First, focus should be on improving infrastructure
quality and service delivery. While the quantity of transport infrastructure in
the Philippines in network and facility density compares well with other
countries in the region, its capacity and quality does not. Some critical
transport costs are higher in the Philippines than in its neighboring and
competing countries. Second, the processes for allocating public resources
could be improved. With additional public resources available, project
preparation, planning and budget processes need to ensure that
expenditures are well focused on areas that offer the best value for money in
improving service quality. The government has taken important initiatives to
achieve this end. But much remains to be done. The quality of multiyear
planning and the quality of project preparation and selection in the annual
budgetary process

WASHINGTON, March 26, 2009 - The World Bank’s Board of Executive

Directors today approved the following project:

IDA Credit: US$40 Million

Terms: Maturity = 40 years; Grace period = 10 years

Project Description: The Agro-Pastoral Export and Market

Development Project for Republic of Niger's aims to increase the value
of selected products marketed by project-supported producers. Components
of the project are: (1) improvement of supply chains coordination and
marketing conditions; (2) development of financing instruments; (3) securing
irrigation potential, through construction or rehabilitation of community
works in irrigation perimeters and protection of irrigated perimeters; and (4)
project coordination, management, monitoring, and evaluation.

Niger - Food security and safety nets

Niger is a very poor country that faces serious problems of poverty and
household food insecurity. With a per capita gross national income (GNI) of

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US$240 and an estimated 62 percent of the population living below the

poverty line, Niger is one of the lowest-ranked countries on the United
Nations' human development index. Reducing vulnerability and ensuring
food and nutrition security is an overarching priority for the Government.
Maintaining food security at the national and household level is an important
priority for developing countries in general, both for the welfare of the poor
and for political stability. In order to ensure food security, governments have
adopted various strategies, including efforts to increase staple food crop
production, market interventions, and a variety of safety net programs,
especially during emergencies. In Niger, where profound vulnerabilities
combined with a high level of population growth have resulted in endemic
food insecurity, the Government is faced with a serious challenge. In this
context, the purpose of this study is to contribute to the existing strategy
and assist the Government in developing a holistic, multi-sectoral, and
institutional approach to reducing the population's vulnerability to food
insecurity. This report adds value to the ongoing policy discussions in two
ways: first, it presents new empirical analysis of: i) food insecurity and
vulnerability of households during the period of food crises as well as during
normal period,

Cape Verde - Enhancing planning and control to increase efficiency

of public spending : public expenditure review (Vol. 1 of 2) :
Synthesis
A Public Expenditure Review (PER) update was conducted in 2006 which
highlighted: (i) the large and increasing weight of non-discretionary
expenditures in the total budget; (ii) the importance of improving
coordination among the various planning instruments; (iii) the need to
strengthen public finance management; (iv) the fiscal risks that emerge from
the energy sector; and (v) the need to further progress with the pension
reform. During 2006-07 the Government implemented several of the 2006
PER update recommendations. Building on the findings of the 2006 PER
update, in mid 2007 the Government and the World Bank decided to prepare
jointly an updated PER that would inform the preparation of the second
Growth and Poverty Reduction Strategy Paper (GPRSP-2) and the Country
Assistance Strategy (CAS). The objectives of the PER were to: (i) examine
recent macro and fiscal developments (chapter one and two); (ii) provide an
update of the strengths and shortcomings of the public finance management
system, the recent reforms implemented in this area and the new emerging
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challenges (chapter three); (iii) conduct an analysis of the fiscal

decentralization issues, with particular emphasis on the municipalities'
resources, expenditures, budget processes, capacity and systems, and
accountability to the citizens (chapter four); and (iv) examine public
expenditure issues in infrastructure, focusing on issues of adequacy,
allocation and efficiency of spending in electricity, water, roads, air
transportation, and ports

Low Income Countries

Low income countries are the world's poorest economies, with annual gross
national incomes (GNI) of less than $905 per person (in 2007). Because of
the degree and extent of their poverty, low-income countries receive
financial assistance on "concessional terms" from the World Bank through
the International Development Association (IDA). This means that IDA credits
have no or very little interest charge and repayments are stretched over 35
to 40 years, including a 10-year grace period. IDA also provides grants to
countries at risk of debt distress.

IDA-financed operations support broad-based growth, job creation and better

living conditions for the poor. Projects include: Investment in infrastructure,
agriculture and rural development

• Adoption of sustainable environmental practices

• Investment in people, in education and health, especially in the
struggle against HIV/AIDS, malaria and TB
• Expansion of their capacity to provide basic services and ensure
accountability for public resources
• Recovery from civil strife, armed conflict and natural disaster
• Promotion of trade and regional integration

• Learn more about IDA

• Global Challenge: Overcome Poverty and Spur Sustainable Growth

Middle Income Countries

A third of the world's poor, defined as people who earn less than $2 per day,
live in middle-income countries. Unlike the widespread poverty one finds in
low-income countries, absolute poverty in middle-income countries tends to
be more localized in particular regions or among specific ethnic groups.
Middle-income countries are generally creditworthy and have access to

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financial markets. These countries borrow from the World Bank's Group
International Bank for Reconstruction and Development. (Low-income
countries like India and Pakistan which also borrow from IBRD are known by
the Bank as "blend" countries.)

Middle-income countries are increasingly important in terms of providing

global public goods such as clean energy, trade integration, environmental
protection, international financial stability, and the fight against
communicable diseases. Many of these countries face constraints in
mobilizing the funds needed to invest in infrastructure, health, education,
and the reform of policies and institutions essential to improving the
investment climate. Middle-income countries are also vulnerable to economic
shocks, which can have a major impact on those living in poverty.

Finding successful approaches to support the development objectives of

middle-income countries is high on the World Bank's global development
agenda.

conflict-Affected Countries

Fragile States contain a significant number of the world's poor. Their state
policies and institutions are weak, and the countries often face risks of
conflict and political instability. They also share a range of bleak economic
indicators-from GDP per capita levels that are typically half that of other low-
income countries to child mortality rates that are twice as high. Weak state
policies and institutions undermine the country's capacity to deliver services
to citizens, control corruption, or provide for sufficient voice and
accountability. Also, fragile states can and do create negative spillovers for
their neighbors, such as social and political instability caused by refugee
flows.

Small states

Small states are not easily defined - some are quite wealthy, some very poor.
Some are islands or groups of islands. Others are land locked. All have
populations of 1.5 million or less. Small states are especially vulnerable to
external events, including natural disasters. Many small states suffer from
limited capacity in the public and private sectors. Others are facing an
uncertain and difficult economic transition to a changing world trade regime.

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Several characteristics define the development challenges and vulnerabilities

that many small states face: remoteness and isolation; openness and
vulnerability to world markets; susceptibility to natural disasters and
environmental change; limited variety in what they produce and export;
slightly higher poverty levels; insufficient institutional capacity; income
volatility; and less access to external capital.

International development partners, including the World Bank, made an

active commitment in the Paris Declaration on Aid Effectiveness (2005) to
share the responsibility to improve the management of international aid so
that better and faster development results can be achieved.

The declaration calls for action on both sides of the aid relationship-by aid
donors and by aid recipients. It contains five key principles: country
ownership (where country partners set the agenda), harmonization,
alignment, managing for results and mutual accountability.

Harmonization
Harmonization entails working to coordinate our financial aid and capacity
building activities with that of other donors operating in a developing
country. It also commits donors and countries to work in unison on regional
and global programs, and it encourages stronger partnerships with borrower
governments and among donors in undertaking research and analysis. The
idea is to benefit from each others' knowledge and areas of expertise and
avoid duplication of cost and effort. Reducing the transaction costs of aid for
recipient countries and eliminating multiple, burdensome requirements also
helps boost overall aid effectiveness. The World Bank is taking steps to
promote harmonization by:

• simplifying and streamlining Bank policies, procedures and practices;

• standardizing our procurement documents with those of other donors;
• establishing a better division of labor between ourselves and other
donors within countries;
• working through other donors and being flexible to accept their
procedures (delegated cooperation); and
• increasing our reliance on the country's reporting and monitoring
systems.

Alignment
Alignment means that our and other donors' development assistance is in
line with our partner country's national development strategies, priorities
and systems. The aim is to increase country capacity for development
through our coordinated technical assistance and to achieve better

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development results by building and using country systems for financial

management, procurement, environmental assessment, project
management, results measurement and other related areas. The process
focuses on country ownership and government leadership to:

• determine the country's needs and priorities;

• successfully implement the project; and
• measure its outcomes and/or results.

Aid Effectiveness Review

Results-based national development strategies are the foundations for more

effective aid. With better results management, domestic accountability and
government credibility are strengthened, leading to deepened country
ownership of the national development strategy. Several reviews conducted
in 2005 and 2006 assessed the status of country efforts to develop and
implement operational development strategies and results-oriented
frameworks for policymaking. Such frameworks and strategies are the
foundations for more effective aid. The reviews identified best practices and
pending challenges.

Vietnam receives close to US$3 billion a year from more than 30 bilateral and
multilateral donor institutions. The World Bank serves as the coordinator and,
often, a catalyst for foreign aid to Vietnam not only because of the funds it
mobilizes but also because of its recognized technical expertise.

It co-chairs consultative group meetings with the government, leads the

poverty reduction support process, and increasingly fosters multi-donor
credits and initiatives in areas such as education, public financial
management modernization and forestry for example. Vietnam is now seen
as a model for aid harmonization.

In Ghana, the Bank's over-arching goal is to support the country's growth and
poverty reduction objectives. The CAS approved in May 2007 lays out objectives,
baselines, targets, government actions and partner contributions. For example, the
Bank proposes to help Ghana sustain economic growth of a t least 6% per year;
surpass the 2015 Millennium Development Goal of halving poverty; and start to
reduce inequalities.

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World bank Criticism:

Some critics of the World Bank believe that the institution was not started in
order to reduce poverty but rather to support United States' business
interests, and argue that the bank has actually increased poverty and been
detrimental to the environment, public health, and cultural diversity.[10] Some
critics also claim that the World Bank has consistently pushed a neoliberal
agenda, imposing policies on developing countries which have been
damaging, destructive and anti-developmental.[11][12] Some intellectuals in
developing countries have argued that the World Bank is deeply implicated
in contemporary modes of donor and NGO driven imperialism and that its
intellectual output functions to blame the poor for their condition.

The World Bank supported from the beginning the Brazilian Castello Branco’s
authoritarian-rightist government, supplying it with a $80 million loan for
power projects.

It has also been suggested that the World Bank is an instrument for the
promotion of U.S. or Western interests in certain regions of the world.
Consequently, seven South American nations have established the Bank of
the South in order to minimize U.S. influence in the region.[15] Criticisms of
the structure of the World Bank refer to the fact that the President of the
Bank is always a citizen of the United States, nominated by the President of
the United States (though subject to the approval of the other member
countries). There have been accusations that the decision-making structure
is undemocratic, as the U.S. effectively has a veto on some constitutional
decisions with just over 16% of the shares in the bank; [16] moreover,
decisions can only be passed with votes from countries whose shares total
more than 85% of the bank's shares. A further criticism concerns internal
governance and the manner in which the World Bank is alleged to lack
transparency to external publics.

In 2008, a World Bank report which found that biofuels had driven food prices
up 75% was not published. Officials confided that they believed it was
withheld from publication to avoid embarrassing the President of the United
States, George W. Bush.

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The World Bank also plays an important role in many conspiracy theories
such as the New World Order, where it is accused to be a catalyst for the
growing global social disparity aiming at the financial enslavement of the
western world, matching conditions with the third world, through the control
of global monetary policies.

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