Alphabet Soup of International Financial
Institutions
There are risks and costs to a program of
action. But they are far less than the
long-range risks and costs of comfortable
inaction.
John F. Kennedy
US Democratic politician
(1917 - 1963)
Comparison of US vs. China from the UN
Website
World Bank
• Established July 1, 1944
• After the onset of WWII at
Bretton Woods, New Hampshire
to help rebuild Europe.
• The first loan of $250 million was
to France in 1947 for post-war
reconstruction
Norwegian Delegation,
Bretton Woods,
July 1944
The World Bank Group
http://siteresources.worldbank.org/EXTABOUTUS/Resources/wbgroupbrochureen.pdf
World Bank Group Membership
Percentage of Votes for Member Countries
16%
8%
4%
4%
4%
64%
United States
Japan
Germany
United Kingdom
France
The Remaining 179 Countries
• Total member countries in each institution:
•
•
•
•
•
IBRD - 184
IDA – 165
IFC – 178
MIGA – 167
ICSID – 142
http://siteresources.worldbank.org/EXTABOUTUS/Resources/wbgroupbrochureen.pdf
Bolivia and Lesotho
• World Bank Voting Power: 0.24%
• Middle Income: 2003 GNI per
capita was between $766 and
$9,385.
• Moderate Indebted
• World Bank Voting Power: 0.19%
• Low Income: 2003 GNI per
capita less than $765
• Less Indebted
• Scale of Severe, Moderate, Less
• Scale of Severe, Moderate, Less
Global Development Finance: Mobilizing Finance and Managing Vulnerability (2005)
Why does the World Bank need a new Water
Resources Policy?
Three Problem Areas
addressed by World Bank
• Fragmented public investment programming and sector
management.
• Excessive reliance on overextended government agencies.
• Public investments and regulations that have neglected water quality,
health, and environmental concerns.
http://siteresources.worldbank.org/OPPORTUNITIES/Images/projectcycle-ar03_big.gif
1993 Policy Recommendations
• Project planners should assess water resources within a comprehensive framework prior to
design and implementation.
• More detailed guidelines, training, and information should be provided to borrowers.
• Water agencies need to establish and follow arrangements for coordinating their activities.
• Do not attempt to use cost-benefit analysis to justify projects that fail to consider environmental
damage.
• Poverty relief should be a project goal at the design stage.
• Adequate databases should be put in place to monitor and evaluate the impact of Bank’s lending
on the physical environment and on the populations affected.
• Water users should be given more responsibilities for managing water.
Water Resources Sector Strategy
• Released in 2004
• Strategic Directions for World Bank Engagement
• Why?
• Water-Related Services account for 16% of all lending over the last decade.
st
1
Challenge
• Water Resources Management
• Pay closer attention to:
•
•
•
•
•
Water Quality
Conservation
Groundwater Management
Watershed Management
Institutional Reform
nd
2
Challenge
• Rules of Engagement
• Establish a consistent set of rules.
• Currently not performing as a predictable, timely and effective
partner.
Messages of the Strategy
• Water resources management and development are central to
sustainable growth and poverty reduction.
Messages of the Strategy (cont)
• Most developing countries need to be active in both management
and development of water resources infrastructure.
• The main management challenge is not a vision of integrated water
resources management by a “pragmatic but principled” approach.
• Assist countries in developing and maintaining appropriate stocks of
well-performing hydraulic infrastructure and in mobilizing public and
private financing, while meeting environmental and social standards.
Messages of the Strategy (cont)
• Re-engage with high-reward-high-risk hydraulic infrastructure, using a
more effective business model.
• Perceived to have a major comparative advantage in the water
sectors, and there is, accordingly, a strong demand for services and a
strong demand to engage.
• Water assistance must be tailored to country circumstances and be
consistent with the overarching Country Assistance Strategies and
Poverty Reduction Strategy Papers.
Water Services and Water Resources
Scope of Strategy
Water Portfolio
New Strategy Example –
Brazil
Background of Brazil
• 8th Largest Economy
• Strong domestic capacity in water service and water resources
management.
• Middle Income
• Voting Power: 1.53%
Importance of New Strategy
• Developing sequenced, prioritized approaches to dealing with the
daunting set of water-related service and resource management
challenges.
• Giving priority to acting where there is a strong demand for change,
and supporting political reformers willing to implement the change.
• Starting with the low-hanging fruit and then, with credibility and
experience, moving on to bigger challenges.
• Requirement to stay engaged in the twin challenges of management
and development.
Questions for Discussion
•
Do we as engineers need to understand how funding is obtained
for projects in our respective areas?
•
Are the financial institutions are only means of enforcing global
policy? Should this be there responsibility?