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RESILIENCE, RESULTS, REFORMSAddressing the Crisis and Beyond

Robert B. ZoellickPresident, The World Bank Group

Plenary Session

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1. THE CRISIS TWO YEARS ON

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GLOBAL GROWTH HAS RETURNEDbut not strong enough to cut deeply into unemployment

10World High-income Middle-income Low-income

Real GDP growth rates in percent

g g p y p y

6

8

2

4

0

2

-4

-2

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012f f

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

4

OUTPUT HAS NOT RECOVEREDto pre-crisis levels in high-income countries and ECA

140 Most recent value, June 2010127

to pre crisis levels in high income countries and ECA

120

127

101

80

100

Chi

1019188

60

80 ChinaHigh IncomeECA

40

Jan-05 Nov-05 Sep-06 Jul-07 May-08 Mar-09 Jan-10

Other Developing

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FDI AND BONDS IN EMERGING MARKETS HAVE REBOUNDED,

In percentNet capital flows, $billions

REBOUNDED, but bank lending remains weak to the detriment of LICs

8

9

10

1000

1200p

Portfolio equity

Private debt

Net capital flows, $billions

6

7

8

600

800FDI

Total flows (% of GDP) [right axis]

3

4

5

200

400

0

1

2

200

0

e f 0-200

1995 1997 1999 2001 2003 2005 2007 2009 2011

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MULTIPLE POLES OF GROWTH ARE EMERGING h d i l b l d dthat can drive global demand

5-year average growth rate

Map of GDP growth (5-year averages)

2006-2010

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DEVELOPING COUNTRIES ARE INCREASINGLYan engine of global growthan engine of global growth

5Contributions to GDP growth

Contributions to global merchandise import growth (12 months ending July)

4

5

10

12p g ( g y)

3

6

8

1

24

6

0

1

2000 20100

2

2000 2010

8

2000 2010Developing countriesHigh-income countries

Natural Disaster Hotspots along with other environmental and social stress factorsBut countries face uncertainty given volatility and disastersNatural Disaster Hotspots along with other environmental and social stress factorsdisasters

Hunger Demographic stressCrop declineWater stress Recent History of

Conflict

9Coastal risk

VOLATILITY IN FOOD PRICES CONTINUES

350Price, January 2007=100

CONTINUESand is a vulnerability for many countries

250

300 Wheat Rice Maize

200

250

100

150

0

50

Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

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2. THE WORLD BANK GROUP’S RESPONSE

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WORLD BANK GROUP’s COMMITMENTSand disbursements are at record levelsand disbursements are at record levels

WBG Commitments ($ bn) WBG Disbursements ($ bn)

140

24 9

3.1

38.2 58.8 72.9 137.4Total

9013.3

27.3 33.4 47.1 87.9Total

80

100

120

29.2

12.7

24.9

1 4

1.5

50

60

70

80

21.9

6 7

20

40

60

13.5

32.944.2

80.3

11.2

14.0

14.5

11.4

10.5

.7

2.1

1.4

10

20

30

40

18.628.9

52.7

9.2

9.2

11.5

7.7

5.6

6.7

0FY08 FY09 FY10 Cumulative

(FY09 - Sept. 17, FY11)

3 5

0

10

FY08 FY09 FY10 Cumulative (FY09-FY11

YTD)

10.5

IBRD IDA IFC ( t)IBRD IDA IFC (own account) MIGA IBRD IDA IFC (own account)

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Fast Response, Flexibility, Client Focus

$1.5 bn through IDA Fast Track - 50 countries benefited $1.6 billion through the Pilot Crisis Response Window$1.5 billion through the Global Food Crisis Response

RAPIDRESPONSE

Program

$6 bn in support for crisis response initiativesIFC $6 bn in support for crisis response initiatives Global Trade Finance / LiquidityMicrofinance, Infrastructure, Bank capitalRenewable energy

IFCSUPPORTING

PRIVATESECTOR

MIGA:Financial Sector Initiative delivered US $1.5 billion in guarantees

MIGA:FLEXIBILITY

& NEW PRODUCTS

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Sharing “Know How” and Spreading InnovationInnovation

Conditional Cash Transfer Systems

Social Safety Nets

Infrastructure

Public Finance, Procurement, Transparency and Accountability

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Disaster Risk Management

Global PrioritiesAgriculture and Food Security• Scaling up financial support: $6.2 - $8.3bn annually• Global Food Crisis Response Program (GFRP)p g ( )• Global Agricultural and Food Security Program (GAFSP)• Strengthening the value chain • CGIAR reform

Climate Change• Supporting climate change activities in 133 countries• $6.4 billion in Climate Investment Funds leverages climate smart

investments in 44 countries• Supporting UNFCCC – Building blocks

ADAPTATION FAST START FINANCE CARBON MARKET REFORM

15REDD+ SMALL ISLAND STATES SOIL CARBON TECHNOLOGY

Global PrioritiesGovernance & Anti CorruptionGovernance & Anti-Corruption• Volcker recommendations implemented – new Prevention Unit• 306 cases completed in FY10• GAC Strategy intensive programs in 17 countriesGAC Strategy intensive programs in 17 countries• MDB agreement on cross debarment /StAR

Gender• Gender Action Plan• Gender Action Plan • Adolescent Girls Initiative in 8 countries• WDR 2012 on Gender• Theme for IDA 16

Fragile States: Mixture of Governance, Development, and Security• Use of Multi-donor Trust Funds: Aceh, Afghanistan, Haiti, South Sudan• Theme for IDA16Theme for IDA16 • WDR 2011 on Conflict, Security and Development

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3. REFORMS TO LEVERAGE

EFFECTIVENESEFFECTIVENESS

EFFECTIVENES

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Reforms of Voice and GovernanceIncreased voting power of DTCs

• IBRD to 47.2 percent, up 4.6 percentage pointsIBRD to 47.2 percent, up 4.6 percentage points since 2008

• IDA to 46 percent, up about 6 percentage points• IFC to 39.5 percent, up by 6 percentage points

New Chair for Sub-Saharan Africa November 1st

Increasing diversity in management

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Implementation of Financial Package

Projected gap in capital backing loans Spring package

General and Selective Capital Increases

Target Risk Coverage Range23%

27%

Reform of loan maturity terms

Existing national currency paid-inCapital % Existing national currency paid-in

capital

Budget discipline

Gap

Budget discipline10% FY10 FY15 FY19

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Agility, Flexibility, and ResponsivenessInterconnected reforms to improve Results Focus

M d i iM d i i EnhancingEnhancing StrengtheningStrengthening

p

Modernizing Client Services

Modernizing Client Services

Fi i lFi i l

Enhancing Service Delivery

Enhancing Service Delivery

MatrixMatrix

Strengthening Enabling Systems

Strengthening Enabling Systems

ITITFinancialFinancial

KnowledgeKnowledge

MatrixMatrix

DecentralizationDecentralization

HRHR THE NEW KnowledgeKnowledge DecentralizationDecentralization

BudgetBudget

Maintaining StandardsMaintaining Standards Achieving ResultsAchieving Results

BANK

Results MonitoringResults Monitoring

Risk ManagementRisk Management

TransparencyTransparency

AccountabilityAccountability

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Introduction of Corporate Scorecard to measure and monitor

Open Data, Open Knowledge, Open SolutionsSolutions

Open Data• Over 4,000 development indicators

ffree

Open KnowledgeO t l t P lN t• Open to analysts -- PovcalNet; AdePT; Isimulate

Open Forump• Join the development conversation

Applications for Development pp pCompetition

• Solve development problems

Mapping for ResultsMapping for Results• Find project locations and see results

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4. LOOKING AHEAD

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IDA: the WBG’s Fund for the PoorestIDA: the WBG s Fund for the PoorestIDA helps the 79 poorest countries (39 in Africa) to reach the MDGs

Unique strengths: • Demand driven, country-based model• Help countries coordinate and target aid• Multi-sectoral approachMulti sectoral approach• Support for capacity building• Knowledge sharing and policy advice

IDA has developed dynamically:IDA has developed dynamically: • 27 countries have graduated• IDA donors increased from 17 to 45

Focus on results:Focus on results: • First MDB to adopt systematic results measurement system• Pilot innovative results monitoring approaches

Key themes: Gender, Fragile Situations, Climate Change, Crisis Response

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IDA16: Building a Global Coalition for an Ambitious Replenishment

TRADITIONALDONORS

IDAGRADUATES

IDA BLENDCOUNTRIES

EMERGINGDONORS

WORLD BANK GROUP

•Increase in donor contributions reflects fiscal constraints

•Acceleration of credit repayments

•Hardening oflending terms

•Contributionincreased toreflect

economic

•Transfers to IDA•Ongoing internal

reforms•Focus on

IDA B fi i i

weight•New Donors

operationaland organizationaleffectiveness

IDA Beneficiaries

Results Agenda24

Challenges and Opportunities:Slow recovery, continued high unemployment

• Social pressures• Demographic challengesg p g• Risk of trade tensions• Budget pressures

Need to rebuild buffers used in crisisNeed to rebuild buffers used in crisis

Special attention to:• Budget consolidation with protection for most vulnerableBudget consolidation with protection for most vulnerable• Investment in infrastructure for further growth• Tools to better manage risks of natural disasters and external crises

F d i l tilitFood price volatility• Global food security reforms• Agricultural productivity and production

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Challenges and Opportunities:Developing countries as sources of growth

• Promote private sector investment• Use of IFC Asset Management Company; new Equity Fund g p y; q y

for SSA/LAC

G-20 & G-187• G-20 can help improve cooperation among major developedG 20 can help improve cooperation among major developed

economies and emerging economies• Needed for sustainable recovery; adjustments for balanced

growth; global economic challengesB t iti it f G 20 t i• But sensitivity of non G-20 countries

• Special attention to interest of poorer and smaller developing countries

• Role for WBG & IFIs: expertise; resources; policyRole for WBG & IFIs: expertise; resources; policy innovations; connected to all shareholders

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On the horizon

Debt management

Bond market bubble?

Issues arising from search for yield?

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Possible Questions for the Development Committee

Resilience• Is our assessment of the external environment generally correct? Are there

additional risks or opportunities we should be considering?• What are developing countries’ expectations for their external financing• What are developing countries expectations for their external financing

needs over the next 3 years – from securities markets, banks, FDI, & the IFIs, including the WBG?

• How can the WBG best assist in reducing the risks to growth and increasingHow can the WBG best assist in reducing the risks to growth and increasing prospects for a sustainable recovery?

Results• Is IDA’s experience with tracking and reporting on development results a p g p g p

sound starting point for further work on measuring results?

Reforms• Would you adjust or qualify our principal areas of policy priority?Would you adjust or qualify our principal areas of policy priority?

• What other steps or initiatives should we be considering to attract more private investment to developing countries and build their private sectors?

• What other advice might our shareholders offer on internal reforms and onWhat other advice might our shareholders offer on internal reforms and on governance agenda?

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Possible Questions for the Development C ittCommittee

Looking forward

• What other steps should we – and possibly donors – take to achieve a successful IDA16 replenishment?

• What suggestions do G-20 and non G-20 members have for our effective support of that group and non-members?

• Do shareholders have recommendations regarding additional work the Bank should be pursuing on Agriculture and Food Security?

• What role would our shareholders like the WBG to be playing to support climate change financing in developing countries and to assist the UNFCCC process?countries and to assist the UNFCCC process?

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Annex 1: IDA resultsFor IDA 12-15:• 13 million lives saved through IDA• 310 million children immunized310 million children immunized• 33.3 million mosquito nets

purchased/distributed to prevent malaria• 113 million gained access to an improved g p

water source• 2.5 million women given antenatal care• 1.8 million health personnel trained to p

improve services quality• Over 3 million teachers recruited • Over 2 million classrooms built• Over 118,000km roads constructed or

rehabilitated• Public Sector management reforms in

60% of IDA countries (IDA 14 & 15)60% of IDA countries (IDA 14 & 15)

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Annex 2: IBRD ResultsIn the last decade:• Over 20 million people gainedOver 20 million people gained

access to water and 10 million to sanitation

• 100 million have improved water resource managementS t t• Support to telecommunications sector in over 40 countries

• 2007-2009, over 40,000 km of roads constructed or

h bilit t d d 40 000 krehabilitated and 40,000 km roads repaired or maintained

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Annex 3: The Reach of IFC’s ProjectsProjects

In 2009, our clients provided:

• 2.2 million jobs

• $112 billion in micro, small, and medium enterprise loansenterprise loans

• 8 million patients with health care treatment

• 35 million people with clean water

• 29 million people with power connections29 million people with power connections

• 1.4 million students with education services

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