Transcript International Bank for Reconstruction and Development (IBRD)

ECSPF, the World Bank and the IMF
presentation by:
Dr. Khaled F. Sherif,
Sector Manager
Europe and Central Asia
Private and Financial Sector Development Unit
The World Bank
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An Overview of the World Bank Group
Founded in 1944, the World Bank Group consists of five
closely associated institutions. They are:
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International Bank for Reconstruction and Development (IBRD),
International Development Association (IDA),
International Finance Corporation (IFC),
Multilateral Investment Guarantee Agency (MIGA), and
International Center for the Settlement on Investment Disputes
(ICSID)
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World Bank at a Glance
 Seeks to promote the economic development of the world’s
poorer countries
 Assists developing countries through long-term financing of
development projects and programs
 Provides to the poorest developing countries whose per capita
GNP is less than $400 a year special financial assistance through
the International Development Association (IDA)
 Encourages private enterprises in developing countries through
its affiliate, the International Finance Corporation (IFC)
 Acquires most of its financial resources by borrowing on the
international bond market
 Has an authorized capital of $95 billion, of which members pay
in about 9 percent
 Has a staff of 6,500 from over 100 member countries
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International Bank for
Reconstruction and Development
(IBRD)
 provides loans and development assistance to middle-income
countries and creditworthy poorer countries.
 voting power is linked to members' capital subscriptions, which
in turn are based on each country's relative economic strength.
 not a profit-maximizing organization but has earned a net
income every year since 1948.
 established in 1945
 181 member countries (shares allocated to each member reflect
its quota in the IMF, i.e. the country’s relative economic
strength in the world economy)
 Source of funds: paid-in capital, capital market borrowings,
repayments on earlier loans, retained earnings.
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International Development
Association (IDA)
 provides long-term loans at zero interest to the poorest of the
developing countries.
 supports efficient and effective programs to reduce poverty and
improve the quality of life in its poorest member countries.
 helps build the human capital, policies, institutions, and physical
infrastructure needed to bring about equitable and sustainable
growth.
 IDA's goal is to reduce the disparities across and within
countries, to bring more people into the mainstream, and to
promote equitable access to the benefits of development.
 established in 1960, includes 160 member
 Source of funds: Contributions from governments, transfers from
IBRD profits, repayments on earlier IDA credits.
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International Finance
Corporation (IFC)
 IFC shares the primary objective of all Bank Group institutions:
to improve the quality of the lives of people in its developing
member countries.
 finances and provides advice for private sector ventures and
projects in developing countries in partnership with private
investors and, through its advisory work, helps governments
create conditions that stimulate the flow of both domestic and
foreign private savings and investment.
 promotes economic development by encouraging the growth of
productive enterprise and efficient capital markets in its member
countries.
 established in 1956, includes 174 members
 Source of Funds: Member capital, borrowings from capital
markets (80%) and IBRD (20%)
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Multilateral Investment Guarantee
Agency (MIGA)
 encourages the flow of foreign direct investment to its developing
member countries.
 facilitates investment primarily by providing investment
guarantees against noncommercial risks (currency transfer,
expropriation, and war, for example).
 provides technical assistance to help countries disseminate
information on investment opportunities, and to build capacity for
investment promotion.
 MIGA has its own operating and legal staff and is legally and
financially a separate entity from the World Bank, on which it
draws, however, for certain services.
 established in 1988, has 149 members
 Source of Funds: Member capital
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International Center for the
Settlement on Investment Disputes
(ICSID)
 provides facilities for the settlement, by conciliation or arbitration, of
investment disputes between member countries and nationals of
other member countries.
 provisions referring to arbitration under the auspices of ICSID are a
common feature of international investment contracts, investment
laws, and bilateral and multilateral investment treaties.
 an autonomous international organization with close links with the
World Bank. All of its members are also members of the Bank.
Unless a government makes a contrary designation, its Governor for
the Bank sits ex officio on ICSID's Administrative Council.
Established in 1966, has 131 members.
 The expenses of the ICSID Secretariat are financed out of the
Bank's budget, although the costs of individual proceedings are
borne by the parties involved.
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WB’s Development Assistance Strategy
Process
 The Comprehensive Development Framework (CDF)
Principles:
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helps countries think about the priorities for development and how to
get there;
helps countries build “a holistic vision” and strategy for development
that relies on partnership and the activities of many different players.
comprehensive focus on the relations between macro, structural,
social and institutional elements of poverty reduction
emphasis on institutional change for long-term success, process
rather than a product, focus on programs and policies and not on
projects
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WB’s Development Assistance Strategy
Process (cont’d)
 The Country Assistance Strategy (CAS):
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vehicle for Board review of the Bank’s assistance strategy for IDA
and IBRD borrowers.
describes the Bank’s strategy based on an assessment of priorities in
the country,
indicates the level and composition of assistance to be provided
based on the strategy and the country’s portfolio performance.
prepared with the government in a participatory way; its key
elements are discussed with the government prior to Board
consideration.
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Lending Products
 Different forms of lending products are:
 Adjustment Operations – SAL, PSAL, FSAL, PAL
 Investment Operations -- TAs, general development
projects
 Learning and Innovation Loans (LILs) – Gateway,
information development projects
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Project Cycle
 A typical World Bank project goes through the following
5 project cycles
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IDENTIFICATION
APPRAISAL
NEGOTIATIONS
BOARD APPROVAL
SUPERVISION
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Europe and Central Asia Private and
Financial Development Unit (ECSPF)
 assists its clients to reduce poverty on a sustainable basis
through growth led by the development of their private and
financial sectors.
 formed on July 1, 1997.
 serves Europe and Central Asia region, covering 28 countries:
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FSU: Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan,
Kyrgyz Republic, Latvia, Lithuania, Moldova, Russian Federation,
Tajikistan, Turkmenistan, Ukraine, Uzbekistan
Central and Eastern Europe: Albania, Bosnia-Herzegovina,
Bulgaria, Croatia, Czech Republic, Hungary, FYR Macedonia,
Poland, Romania, Slovak Republic, Slovenia, Turkey, FR
Yugoslavia
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Example of ECSPF’s projects
 Albania
 Financial Sector Adjustment Credit
 continued reform of the banking sector including the privatization of
the Savings Bank and further strengthening of the banking regulation
and supervision,
 enhancement of the bankruptcy and debt resolution framework,
 reform of the nonbank financial sector, including further development
of the regulatory and supervisory framework for the insurance sector
and the privatization of the Insurance Institute of Albania (INSIG).
 The credit (US$15 million) to be released in 2 tranches subject to the
Government's achievement of specific benchmarks necessary for the
successful implementation of the program:
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privatization of the Savings Bank and the INSIG;
strengthening of the regulatory framework for banks and the insurance
sector;
strengthening the bankruptcy, secured transactions and debt workout
frameworks;
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further improvement in the financial sector infrastructure.
Example of ECSPF’s projects
 Ukraine
 Private Sector Development (PSD)
 Enterprise Restructuring (market adjustment) to support and help
accelerate Government's reform effort by:
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providing advisory services through the implementing agency, the
Ukrainian Center for Enterprise Restructuring and Private Sector
Development (UCER) aimed at improving the profitability, productivity,
and general operational, financial and managerial efficiency of private and
privatized enterprises;
supporting and facilitating development of a highly qualified domestic
consulting industry which thoroughly understands the unique local
business and political climate in the process of economic development
and transition;
 To strengthen constituency for reform at the oblast level consisting of
entrepreneurs, managers, local academia, consultants and other
stakeholders benefiting from enterprise restructuring and marketfriendly business environment.
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Example of ECSPF’s projects
 FR of Yugoslavia
 Privatization and Restructuring of Banks and Enterprises
 launching the restructuring and privatization (R&P) process of some
of the most problematic large SOEs in Serbia
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establish a consistent approach and methodology for the R&P process of
large SOEs that cannot be sold “as is”
support the R&P of a number of large loss-making enterprises by funding
expert “restructuring agents”
 supporting the implementation of a comprehensive bank resolution
strategy aimed at the creation of viable financial sector.
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support the restructuring or liquidation of insolvent banks under the
control of Bank Rehabilitation Agency (BRA) and the privatization of all
state-majority owned banks
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Example of ECSPF’s projects
 Turkey
 Export Finance Intermediation Loan (EFIL)
 provide, through the management of Turkish Eximbank and by
utilizing the Participating Financial Institutions (PFIs), short and
medium term working capital and investment finance to private
exporting enterprises to assist the Turkish exporting sector.
 enable a strategic dialogue and close interaction with the major
banks and the Bankers Association in Turkey, through setting up of
stricter and upgraded prudential eligibility criteria and banking
standards for capital adequacy, foreign exchange exposure,
connected and insider lending and risk management systems.
 facilitate further efficiency gains and other institutional development
of Turk Eximbank itself.
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The International Monetary Fund
at a Glance
 Oversees the international monetary system
 Promotes exchange stability and orderly exchange relations among
its member countries
 Assists all members -both industrial and developing countries- that
find themselves in temporary balance of payments difficulties, by
providing short-to medium - term credits
 Supplements the currency reserves of its members through the
allocation of SDRs (special drawing rights); to date 21.4 billion SDRs
have been issued to member countries in proportion to their quotas
 Draws its financial resources principally from the quota subscriptions
of its member countries
 Has at its disposal fully paid-in quotas now totaling SDR 90 billion
(more than $120 billion)
 Has a staff of 1,700 from over 100 member countries
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