2010 spring meetings endorse $86B capital increase, voting reform
- 2010 Spring Meetings Endorse $86 Billion Capital Increase, Voting Reform World Bank, April 26, 2010
- Development Committee endorses historic package of support for the World Bank
- Gives developing countries more influence
- Expands Bank’s capacity to provide finance while setting post-crisis strategy
- Endorses comprehensive reform program
On the final day of the 2010 World Bank-IMF Spring Meetings, the Development Committee of the World Bank and IMF Boards of Governors endorsed an $86 billion boost in capital for the Bank and a historic shift in voting power for developing countries, to 47.19 percent for IBRD.
The committee also backed the Bank’s new post-crisis strategy and a comprehensive reform package to make the Bank faster, more flexible, and more accountable.
At the closing press conference, Bank President Robert Zoellick said endorsement of the shift in voting power was “crucial for the Bank’s legitimacy” and added that we need to “consign outdated concepts like ‘Third World’ to the history books.”
“This extra capital can be deployed to create jobs and protect the most vulnerable through investments in infrastructure, small and medium sized enterprises, and safety nets,” Zoellick said. “In a period when multilateral agreements between developed and developing countries have proved elusive, this accord is all the more significant.”
Committee Chairman Ahmed bin Mohammed Al Khalifa, Minister of Finance, Kingdom of Bahrain, called the changes an “unprecedented renewal of the World Bank Group.”
He said the committee recognized that the crisis response had put stress on the Bank and said the package endorsed by the committee would help the Bank deliver a more effective strategy in a more transparent way.
“The Development Committee has endorsed a new World Bank Group for a new world,” he said.
2009 World Bank Annual Report
- Source: World Bank Annual Report 2009
The World Bank Group, among the world’s largest development institutions, is a major source of financial and technical assistance to developing countries around the world. Its member institutions—the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID)—work together and complement each other’s activities to achieve their shared goals of reducing poverty and improving lives.
The Bank Group’s purpose is to advance ideas about international projects on trade, finance, health, poverty, education, infrastructure, governance, climate change, and more to benefit all people in developing countries, especially the poor seeking new opportunities.
The passing of the Millennium Development Goals midpoint is a strong reminder that the international community must remain focused on meeting the basic needs of the world’s impoverished peoples. For the Bank Group, this means providing funding and technical assistance as well as redoubling efforts to improve service delivery and help countries strengthen investments in recovery and development projects.
The global economic crisis heightens the need for action. To prevent it from wiping out decades of developmental progress, the Bank Group has increased efforts to protect the most vulnerable in the poorest countries, maintain long-term infrastructure investment programs, and sustain private sector–led economic growth and employment creation.
It is also ramping up work to help governments strengthen their health systems, promoting innovative community-based practices to deal with global challenges such as HIV/AIDS and malaria.
"We’ve mashed up Google Maps with World Bank data to give you a visual entry point to browse our projects, news, statistics and public information center by country."
World Bank anti-corruption efforts
- Source: World Bank Report Highlights Progress in Addressing Corruption Risks World Bank, October 22, 2009
"The World Bank took strong steps in the past fiscal year to address corruption risks and ensure anti-corruption remains a critical element of its development mission, a new report says.
During the fiscal year ending on June 30, 2009, the World Bank debarred 13 firms and individuals from participating in Bank-funded activities for engaging in fraud and corruption, according to the report. The Bank also developed enhanced due diligence tools to assist operational staff, and finalized a settlement with Siemens AG, which had acknowledged past misconduct in its global business, according to the Annual Report of the World Bank’s Integrity Vice Presidency (INT) for Fiscal Year 2009.
“As the Bank Group ramps up its commitments to support countries affected by the global crisis, we must assure our donors and client governments that we are responsible stewards of funds; that we are doing enough to guard against delinquent companies and risk-prone sectors; and that we are helping governments show their people, through governance and anticorruption efforts, that they can have confidence in government and public institutions,” said World Bank Group President Robert B. Zoellick.
INT is mandated to investigate allegations of fraud and corruption in World Bank Group-financed projects as well as possible staff involvement in such misconduct. In addition, INT contributes to the World Bank’s overall governance and anti-corruption agenda.
Guided by the 2007 recommendations of an Independent Review Panel headed by former U.S. Federal Reserve Chairman Paul Volcker, INT has increased its focus over the past year on mainstreaming preventive measures into projects and positioning integrity early on in the project cycle as part of the development solution. The report notes that the Bank has implemented all 18 recommendations of the Volcker report.
During this fiscal year, INT signed two cooperation agreements with the European Anti Fraud Office (OLAF) and the UK’s Serious Fraud Office (SFO) that allow for joint investigations and information sharing respectively. In addition, INT organized regional meetings with national prosecution authorities creating the basis for an International Corruption Hunters Network which will be launched in 2010. Participating authorities agreed on a number of initiatives to enhance their fraud investigation and anticorruption efforts at global and regional levels.
“Over the past year, we intensified our efforts to ensure that a greater amount of Bank funds are recovered or saved as a result of INT work. The investigations we conducted generated a number of lessons that we are currently compiling as an important contribution to project teams and members of the international development community,” said Leonard McCarthy, World Bank Vice President for Integrity. “Looking ahead, we are further developing our tools and networks among teams and clients to enhance the impact of INT’s investigations and preventive services.”
For more on INT and to download the full report, please visit www.worldbank.org/integrity
- Source: Improving Development Outcomes Annual Integrity Report The World Bank Group, Fiscal Year 2007
"In 2001, the World Bank group established the Department of Institutional Integrity (Int) to investigate allegations of fraud and corruption in Bank-financed projects as well as possible staff misconduct.
Int’s findings have underscored the need for a strong focus on anti-corruption. the results of investigations and detailed Implementation Reviews—substantive analyses of documents, processes, and contract implementation to identify indicators of fraud and corruption throughout selected projects—have revealed serious weaknesses in implementation, particularly in the area of procurement.
This report describes some of these investigative findings, and it explains how the World Bank group is taking action to hold wrongdoers accountable; to address risks in our lending programs; and to hold our staff to the highest professional standards.
To be successful, the fight against corruption and for better governance must be waged by all World Bank group units, not just Int.
Other principal offices pursuing our broader engagement in governance and anticorruption include the poverty Reduction and economic management (pRem) network; the World Bank Institute; operations policy and Country services (opCs); the legal vice presidency; and the Bank group’s regional staff. In order to be most effective, the Bank also works with numerous external stakeholders, including other multilateral and bilateral development institutions, civil society, and the private sector.
In fiscal year 2007, with the advocacy of president Paul Wolfowitz, the Bank group’s Board unanimously endorsed a new strategy entitled “strengthening World Bank group engagement on governance and Anticorruption.” the strategy’s three pillars are to:
- build capable, transparent, and accountable institutions through assistance to countries;
- minimize corruption in Bank-funded projects by assessing corruption risk in projects upstream, actively investigating allegations of fraud and corruption, and strengthening project oversight and supervision; and
- expand global partnerships to address corruption.
World Bank launches “MultiCat Program”
- Source: World Bank launches “MultiCat Program” Frontiers of Risk Management, October 19, 2009
The World Bank (International Bank for Reconstruction and Development) announced today the launch of the MultiCat Program — a catastrophe bond issuance platform that gives governments and other public entities access to international capital markets to insure themselves against the risk of natural disasters. This is the first time a platform has been designed specifically to help governments from developing countries access affordable insurance coverage through the capital markets.
The MultiCat Program allows participants to buy insurance coverage for multiple perils, countries and regions. The types of events that may be insured are earthquakes, floods, hurricanes and other wind storms. The program establishes a common documentation, legal and operational framework for future catastrophe bond issuances, which will also carry the MultiCat brand name.
The program is flexible and supports a wide variety of structures, including the pooling of multiple risks, to take advantage of diversification benefits. One of the World Bank's main goals for the platform is to achieve cost efficiency for its clients by offering investors the opportunity to diversify their portfolios with assets that are uncorrelated with other assets and by enlarging the traditional investor base for catastrophe bonds.
"The MultiCat Program is an important step on the road to improving liquidity, reducing transactions costs and facilitating diversification across countries and risks for catastrophe bond investors," said Kenneth Lay, Vice President and Treasurer of the World Bank. "We believe this will translate into much better access to coverage on significantly better terms for the governments and other public agencies that use it to manage disaster risk, and thus lessen the financial and economic impact of natural catastrophe."
In developing MultiCat, the World Bank worked closely with the Government of Mexico, one of the most experienced sovereign issuers in the catastrophe bond market. Mexico's successful use of the MultiCat platform to issue a US$290 million series of notes is the first offering using the new World Bank platform.
"The partnership between Mexico and the World Bank, under its MultiCat Program, has allowed us to efficiently transfer a pool of catastrophic risk — earthquake and hurricane — to the market for the first time, and we are very satisfied with the results achieved," said Alejandro Werner, Vice Minister of Finance, Government of Mexico. "We are also very proud to have contributed to the creation of this platform that also makes a new set of catastrophe risk management instruments available to other members of the World Bank.
The World Bank Treasury acted as arranger for the transaction, and appointed Goldman Sachs and Swiss Re as co-lead managers and joint bookrunners and Munich Reinsurance Company as advisor in the transaction.
The MultiCat Program expands the World Bank's catastrophe risk financing menu, which also includes the Catastrophe Deferred Drawdown Option (CAT DDO), a line of credit that provides immediate access to financing following a natural disaster, and intermediation services for weather hedges and the Caribbean Catastrophe Risk Insurance Facility.