FOR IMMEDIATE RELEASE 

The World Bank

News Release No. 2000/072/S	Contacts: In Prague: Andrew Kircher
+420-2-6117-3153
E-mail: akircher@worldbank.org
In Washington: Ivar Slengesol (202) 458-4897
E-mail: islengesol@worldbank.org
www.worldbank.org/developmentnews  	

WORLD BANK RELEASES 2000 ANNUAL REPORT 

WASHINGTON, September 23, 2000Economic recovery amid persistent development challenges marked the World Bank’s 2000 fiscal year, according to the institution’s 2000 Annual Report, released today ahead of the World Bank/IMF Annual Meetings. Working in a calmer environment with fewer crises, the World Bank, along with its clients and partners, embarked on new long-term efforts to attack poverty.

The institution intensified efforts to curb the AIDS pandemic and other communicable diseases and began to work closely with countries interested in piloting the Comprehensive Development Framework (CDF). In addition, the Bank, together with the IMF, deepened and accelerated debt relief for the poorest, most heavily-indebted countries while helping them to draw up effective and wide-ranging poverty reduction strategies.  

“The World Bank’s track record shows clearly that we are making a difference, and that we are learning and adapting to client needs,” World Bank Group President James D. Wolfensohn writes in the report’s foreword. “We have embarked on a path of change, and we are committed to listening, learning, and acting in partnership until more and more people partake in the many opportunities that the new era of growth, technology, and global development has to offer.”

The changes are indeed real. While projects have become more complex, steady improvements in 
quality through better preparation, greater selectivity and more effective supervision mean that billions of dollars for projects are being used more effectively, with a much greater beneficial impact on development. The share of projects that are at risk of not achieving their development objectives fell to an estimated 15 percent of the total in fiscal year 2000 (FY00), or roughly half the rate in FY96. More than 80 percent of money lent now achieve a satisfactory or better outcome (see figure).

As quality went up, lending declined in FY00, reflecting the Bank’s demand-driven focus. The global economic recovery contributed strongly to the trends in World Bank lending over the last year, as successful economic reforms in many emerging markets restored their access to international capital markets. Bank lending to crisis-affected borrowersKorea, Argentina, Indonesia, Brazil, Russia, and Thailandfell to below US$2 billion, from US$13 billion last year. Overall, new lending commitments from the World Bank to client countries were down to US$15.3 billion in FY00, compared with US$29 billion in FY99. Disbursements in FY00 stood at US$18.5 billion, down from US$24 billion in FY99.

Attention to human development (22 percent of total lending) remained a priority of overall Bank assistance in FY00. Assistance included: multisectoral strategies to fight such killers as HIV/AIDS and malaria that disproportionately affect poor people; sustained efforts to strengthen basic health services; nontraditional approaches to delivering education services to poor people (involving the private sector or directly through scholarships); and continued emphasis on social protection through social funds and social expenditure reforms. A strategy paper on reproductive health complemented lending operations; another on social protection is under preparation.

Key focal points in lending also included economic policy and public sector management (21 percent) and private and financial sector development (13 percent), fundamental drivers of economic growth and poverty reduction. Aimed at attracting private investment, assistance was broad in scope and included institutional and governance reviews; financial sector assessments; and support for stronger, more efficient public institutions, including anti-corrupt judicial systems and regulatory frameworks. A sizable share of lending was focused on the poorest countries as well as on sectors that significantly affect poor people (for example, water supply and sanitation) but where private investment is scarce. Non-lending assistance such as advisory services and technical assistance has also been important.

Environmental management (6 percent) was another important focus of Bank assistance. Analytical studies proposed innovative ways of improving industry environmental performance and are examining environment–health links; lending operations sought to address water supply and usage, protect forests, build institutional and regulatory frameworks, shift environmental management to the community level, and promote disaster forecasting and preparedness.

Regional emphasis of Bank assistance in FY00 are highlighted below:

•	Africa. Working more closely with clients and partnerships is a growing hallmark of Bank assistance to Africa. The Bank’s assistance aims to spur economic growth to higher rates that help achieve significant and sustained poverty reduction, improve governance, and help reverse the HIV/AIDS crisis. Total lending: US$2,159 million. 

•	East Asia and Pacific. The Bank’s assistance strategy changed substantially as countries in the region have been recovering rapidly from the crisis. Lending levels are down from the elevated levels during the crisis, and analytic and advisory services are expanding.  While support for prudent macroeconomic management remains important, the focus of Bank assistance is now squarely on financial and corporate restructuring and governance; public sector performance and governance; and social protection. Total lending: US$2,979 million.

•	Europe and Central Asia. Adapting to rapidly changing circumstances at the country and subregional levels was a key feature of Bank assistance in FY00. The Bank responded quickly to an earthquake in Turkey, floods in Tajikistan, and post-conflict reconstruction in the Balkans. Bank support for reforms was guided by countries’ pace of implementation. Total lending: US$3,042 million.

•	Latin America and the Caribbean. In FY00, the Bank responded to the region’s external fragility and natural disasters by helping cope with worsened poverty as well as the sudden loss of jobs and, in some cases, homes.  Assistance to help countries manage environmental resources in sustainable ways continued, along with other efforts to improve the quality of life of the poor. Total lending: US$4,063 million

•	Middle East and North Africa. Bank assistance focuses on three areas. A first priority is rapid, broad-based, and sustainable economic growth to reduce unemployment, while mitigating rural-urban disparities and improving natural resources management. The second area of support is public sector reform, and the third is reducing the social costs of transition. Total lending: US$920 million.

•	South Asia. Strengthening client ownership of policies and programs and involving poor people in development efforts became focal points of Bank assistance in FY00. A key priority in India was building strong partnerships with reforming states. Other key themes include governance and institution building to strengthen citizens’ voice, better government accountability and anti-corruption efforts. Total lending: US$2,112 million.

An Evolving Bank

The improvements in operational quality noted above stem largely from the Bank’s efforts under the Strategic Compact—between the Bank and its shareholders—to transform itself into an overwhelmingly client-focused organization. In FY00, the Compact’s final year, progress was further consolidated. While the impact of the Compact is measurable in many areas, equally notable is its effect in moving the Bank toward a culture of listening, learning, partnership, flexibility, and innovation, to adapt its services to better meet member countries’ needs.

With a more strongly client-focused culture, the Bank embarked on new long-term efforts in FY00 that could significantly improve the prospects for poverty reduction. These efforts recognize the huge scope of the poverty problem. They go beyond traditional solutions and aim at mobilizing people and institutions everywhere. Forging partnerships, fostering consensus, building awareness, and sharing knowledge, at country as well as global levels, are key themes underlying these efforts. The central challenge is to increase development impact. Some key efforts:

•	The Comprehensive Development Framework (CDF), introduced last year, explicitly recognizes the multi-dimensional nature of the challenges in poverty reduction and the need for extensive partnerships. Country pilots have made progress, but the pace and depth have varied with country circumstances.

•	The Heavily Indebted Poor Countries Initiative (HIPC), “enhanced” at the World Bank-IMF Annual Meetings in September 1999, will double the assistance provided by the original 1996 framework, accelerate delivery of debt relief, and strengthen the link between debt relief and poverty reduction. FY00 was an active year of implementing the enhanced HIPC Initiative framework; debt relief commitments were agreed for seven countriesBolivia, Burkina Faso, Mauritania, Mozambique, Senegal, Tanzania and Uganda. When combined with traditional debt relief mechanisms, the HIPC Initiative will more than halve the outstanding debt of 32 eligible countries. 

•	At the joint Annual Meetings in September 1999, ministers also endorsed a framework to strengthen the link between Bank and IMF programs in low-income countries, including debt relief and poverty reduction. Together with civil society, countries receiving debt relief or concessional lending from the Bank and the IMF will draw up Poverty Reduction Strategy Papers before they receive such resources. Two PRSPs were completed in FY00 by Burkina Faso and Uganda, along with six ‘interim’ PRSPs—roadmaps to a forthcoming PRSP that help avoid delays in debt relief.

•	In FY00, the Bank addressed global challenges that have a profound impact on poverty.  Responding to requests from clients and partners, the Bank has joined many regional and global partners to help address issues that cross national borders. Among such global challenges, HIV/AIDS is of gravest concern. In FY00, the Bank committed to substantially expanding the financial resources it makes available to programs specifically to combat HIV/AIDS and other communicable diseases. To that end, it will initially make $1 billion in International Development Association resources available, while being prepared to move well beyond that level in the future as national and regional programs are developed.

•	Capacity building through knowledge sharing is another key strategic thrust to help achieve poverty reduction. Knowledge sharing increases the potential reach of the Bank’s expertise and the potential for people in the poorest countries to help themselves.  The Bank is advancing this agenda through efforts on several fronts. One example is technology, whose role in bank assistance is growing. An increasing number of projects, many in Africa and Latin America, have Information Technology components. Other support is provided by infoDev, a public-private program helping countries build information and communications technology capability. One application of technology that could advance knowledge sharing vastly is the Global Development Gateway, currently in concept stage.

Partnerships: Listening, Learning, and Collaborating

	Through its work, the Bank increasingly recognizes that progress in all fields requires coalitions: people, groups and institutions working together with a common purpose. Extensive collaboration on the CDF pilot and on PRSPs over the past year is testimony to the centrality within Bank assistance of country partnerships.

“I cannot stress enough the importance of partnerships,” Wolfensohn writes in the foreword. “The task ahead is too formidable for any single institution or set of institutions to tackle. Every one of us has a role to play: private sector, public sector, civil society, non-governmental organizations (NGOs), academia, religious groups, multilateral and bilateral donors, and development organizations.”

The diversity of the Bank’s partnership in FY00 is evident from the following examples:

•	The Bank and the European Union coordinated a comprehensive regional approach for economic and social development in South Eastern Europe.
•	IDA and UNICEF embarked on a new partnership to help Yemen—where human development indicators are among the poorest in the world—improve children’s health and nutritional status and primary school-age girls’ education status.
•	The Bank and an outside panel co-hosted over 4,000 civil society leaders in Buenos Aires to help develop the Bank’s Country Assistance Strategy for Argentina. 
•	The Bank and the Commonwealth Secretariat joined with the IMF, World Trade Organization, EU, UN agencies and regional development banks to address development issues of importance to small states, as laid out in the final report of the Bank-Secretariat Task Force, Small States: Meeting Challenges in the Global Economy.
•	More than 500 participants, including 200 local government heads from 77 cities, came together for the World Competitive Cities Congress hosted by the Bank, to discuss the challenges of explosive city growth: on current trends, a third of the world’s urban people could be living in poverty by 2025.
•	A governance partnership was launched in Indonesia between the government, civil society, private sector, bilateral donors, the Asian Development Bank, UNDP, and the World Bank.
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Read the Annual Report online at:
http://www.worldbank.org/html/extpb/annrep/