1

Ishpreet Singh – 12P139 Karan Jaidka – 12P141Lucky Sharma – 12P145 Prabhat Singh– 12P154Vignesh Patil – 12P177 Viswanath Kuppa – 12P180

PGPM – Section C – Group 9

2

Partners

Where does money come

from ?

Where does money go ?

Role of World Bank

Help to India

Lessons of experience

History

World Bank

3

• Founded in 1944,at Bretton Woods, New Hampshire• First loan to France in 1947 of $250 million• 1947 - Incorporation into UN System• 1979 - Lending for the fiscal year crosses the $10

billion mark for the first time• 1995 – James D. Wolfensohn becomes Bank president

History

• One of the world’s largest sources of development assistance (FY 2001 provided more than US$17 billion in loans)

• IBRD has 183 members, IDA has 161, the IFC has 174, MIGA has 154 and ICSID has 133

What is World Bank ?

4

World Bank

Group

IBRD

IDA

IFCMIGA

ICSID

5

Partners

International Organizations (EU,IMF,UN,WTO)Affiliates (CGIAR,CGAP, Development Gateway, GEF)NGO’s and Civil SocietyBusiness and the Private SectorDonors & Co-financingStudents and the Academic Community

6

What is IBRD?

• One of five institutions that make up the World Bank Group, the IBRD is structured something like a cooperative owned and operated for the benefit of its member countries

• Founded in 1944, it is the part of the World Bank that works with middle-income and creditworthy poorer countries to– promote sustainable, equitable and job-creating growth; – reduce poverty; and – address issues of regional and global concern

• IBRD's 24-member Board is made up of 5 appointed and 19 elected Executive Directors who represent its 187 member countries

7

What does IBRD do?• Supports long-term human and social development needs that private

creditors do not finance;• Preserves borrowers' financial strength by providing support in crisis

periods, which is when poor people are most adversely affected;• Uses the leverage of financing to promote key policy and institutional

reforms (such as safety net or anticorruption reforms);• Creates a favourable investment climate in order to catalyze the provision of

private capital;• Provides financial support (in the form of grants made available from the

IBRD's net income) in areas that are critical to the well-being of poor people in all countries.

• IBRD helps members achieve results by delivering financial products, knowledge and technical services and strategic advice

• It uses its capacity to call members together to discuss ways to further their specific development objectives

• It works closely with International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Monetary Fund (IMF)

8

How IBRD is financed?• IBRD gets its money from the capital markets• Investors see IBRD bonds as a safe and profitable place to put their money

and their cash finances projects in middle-income countries• IBRD enjoys its high credit rating of AAA because it is backed by the

capital commitments of its 186 shareholder governments• Annual funding volumes vary from year to year, and are currently around

$10-15 billion• IBRD earns an income every year from the return on its equity and from

the small margin it makes on lending• This pays for IBRD's operating expenses, goes into reserves to strengthen

the balance sheet and also provides an annual transfer to the International Development Association (IDA)

• IBRD clients are middle-income and credit-worthy lower income countries

9

Criteria for membership

• Middle-income countries are defined as having a per capita income of between around US$1,000 and US$10,000, which may qualify them to borrow from IBRD

• Low-income countries with a per capita income of less than $1,000 usually do not qualify for IBRD loans unless they are creditworthy

• India, Indonesia and Pakistan are examples of creditworthy low-income countries which are eligible for a blend of financial assistance from both IBRD and IDA

10

What is IDA?

• The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries

• IDA aims to reduce poverty by providing loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions

• IBRD and IDA share the same staff and headquarters and evaluate projects with the same rigorous standards

• IDA charges little or no interest and repayments are stretched over 25 to 40 years, including a 5- to 10-year grace period

• IDA also provides grants to countries at risk of debt distress• IDA is one of the largest sources of assistance for the world’s 81 poorest

countries, 39 of which are in Africa, and is the single largest source of donor funds for basic social services in these countries

• IDA-financed operations deliver positive change for 2.5 billion people, the majority of whom survive on less than $2 a day

11

IDA Fund Allocation (1/2)

• IDA funds are allocated to the recipient countries in relation to their income levels and record of success in managing their economies and their ongoing IDA projects

• The lending terms are determined with reference to – recipient countries' risk of debt distress, – the level of GNI per capita, and – creditworthiness for the IBRD borrowing

• Recipients with a – high risk of debt distress receive 100 percent of their financial

assistance– medium risk of debt distress receive 50 percent in the form of grants

and– Other recipients receive IDA credits on regular or blend and hard-

terms with 40-year and 25-year maturities respectively

12

• IDA-financed operations address – primary education, – basic health services, – clean water and sanitation, – environmental safeguards, – business climate improvements, – infrastructure and institutional reforms

• These projects pave the way toward economic growth, job creation, higher incomes and better living conditions

IDA Fund Allocation (2/2)

13

World Bank – Project Monitoring and Evaluation (M&E)

Performance Indicators

• Measures of inputs, processes, outputs and impacts on projects and strategies

• Used to set targets, track progress, identifying problems early

Logical Framework Approach

• Helps to clarify objectives

• Aids in identification of the “program logic”, outcomes and impact

Theory based Evaluation

• In-depth understanding of the “program theory” or “program logic

• Provides early feedback about what is or is not working, and why

Cost-Benefit and Cost-Effective Analysis

• Tools for assessing whether or not the costs of an activity can be justified by the outcomes and impacts

• Used to identify projects that offer the highest rate of return on investment.

14

Rapid Appraisal Models

• Quick, low-cost ways to gather the views and feedback of beneficiaries and other stakeholders, in order to respond to decision-makers’ needs for information

• Helps in providing rapid information for management decision-making

Participatory Methods

• Provides active involvement in decision-making for those with a stake in a project

• Helps in identifying problems and trouble-shooting problems during implementation and in learning about local conditions

Public Expenditure Tracking Surveys

• Track the flow of public funds and determine the extent to which resources actually reach target groups

• The surveys examine the manner, quantity, and timing of releases of resources to different levels of government

Formal Surveys

• Used to collect standardized information from a carefully selected sample of people or households

• Providing baseline data against which the performance of the strategy, program, or project can be compared

World Bank – Project Monitoring and Evaluation (M&E)

15

World Bank IMFSize and Structure: Slightly complex, 2 major organizations (IBRD and IDA); associated with IFC, ICSID, MGA; about 7,000 staff members

Size and Structure: No affiliates or subsidiaries; about 2,300 staff members

Source of Funding: Acquires most of its financial resources by borrowing on the international bond market

Source of Funding: Draws its financial resources principally from the quota subscriptions of its member countries

Type of Institution: An investment bank, intermediating between investors and recipients, borrowing from the one and lending to the others

Type of Institution: not a bank and does not intermediate between investors and recipients. The IMF is more like a credit union whose members have access to a common pool of resources to assist them in times of need

Recipients of Funding: Developing countries whose per capita GNP exceeds $1,305 may borrow from the IBRD. The IDA lends only to governments of very poor developing nations whose per capita GNP is below $1,305 (interest free, maturity = 35-40 years)

Recipients of Funding: All member nations, both wealthy and poor, have the right to financial assistance from the IMF

Operations: encourage poor countries to develop by providing them with technical assistance and funding for projects and policies that will realize the countries' economic potential

Operations: the IMF continues to urge its members to allow their national currencies to be exchanged without restriction for the currencies of other member countries; provides short- and medium-term financial assistance to member nations that run into temporary balance of payments difficulties

16

World Bank – IMF co-operation

• Focusing on structural reform in recent years has resulted in considerable convergence in the efforts of the Bank and IMF and has led them to greater reliance on each other's special expertise.

• The regular and frequent interaction of economists and loan officers who work on the same country.

• The Bank and the IMF have distinct mandates that allow them to contribute, each in its own way, to the stability of the international monetary and financial system and to the fostering of balanced economic growth throughout the entire membership

17

Perspective about India

• World Bank lending to India is organized around the following key challenges: – achieving rapid and inclusive growth, – building strong partnerships with low-income

states, – agricultural and rural development, and– enhancing infrastructure

18

Current Projects in Execution

19

20

Summary• Primary education is a fundamental right in India, and at the

international level an important Millennium Development Goal to which India and the Bank are totally committed.

• GOI and States increasingly recognize education as a critical input for human capital development, employment/ jobs, and economic growth, and are putting major financial and technical resources into this effort.

• Nevertheless, demand for education far exceeds supply, in terms of both access and quality, at all levels.

Education and the World Bank in India

21

Where does money come from?

WB raises money (IBRD) by lending to developing countries is primarily financed by selling AAA-rated bonds in the world's financial markets

IBRD bonds are purchased by a wide range of private and institutional investors in North America, Europe, and Asia. While IBRD earns a small margin on this lending, the greater proportion of income comes from lending out their own capital.

WB also has US$178 billion in what is known as "callable capital," which could be drawn from their shareholders as backing, should it ever be needed to meet IBRD obligations for borrowings (bonds) or guarantees

22

World Bank: Strategy and Support

• IDA Lending: 0%, 35 years to repay with first 10 years “grace” (no repayment)

• Since FY00: over US$ 1 Billion (Rupees 40 billion) committed to sector.• Over last 10 years: eight State-level District Primary Education Projects• US$ 280 M for VET: support 400 Industrial Training Institutes, for

improved quality and relevance (June 2007)• US$ 250 M for Technical Education and Engineering: reforms in 128

competitively selected engineering institutions in 13 states to address skills shortages

• US$ 70 M for polytechnics in six remote states (possible $300 M additional)

• State education reforms in Orissa and AP• US$ 500 M for SSA I; Additional US$500 M in November 2007 for SSA II

– Increased focus on quality in SSA II– Partner with European Commission and UK DFID– Still a small player: Bank $ is less than 10% of GOI $

23

Collaboration with Civil Society

• Over 7,000 NGOs participating as partners in SSA– Alternative education programs: “bridge courses”– Monitoring of quality– Capacity-building of VECs– Reference Groups advising States, Districts and Blocs– Contracting (e.g. MP with Pratham)

• Not surprisingly, varies greatly by State

24

World Bank Research• Elementary Education

– Impact evaluation regarding:• Incentive payments and schooling inputs on student learning• Dissemination of education information on school governance and

student outcomes• School characteristics and student outcomes• Instructional time on task survey

• Early Childhood Development – focus on integrated (health/nutrition/education) approaches

– Will feed into US$ 450 M Integrated Child Development Services Project

• Secondary Education – major analytical study related to expanding access, particularly for girls and marginalized groups, and to role of private sector

• Higher Education – contribute to debate regarding how India can address skills shortages among HE graduates, linked to economic growth opportunities.

25

World Bank’s Limitations• Engagement in Indian education is largely through centrally-sponsored

schemes, while most implementation happens at the State level. Need to find ways to foster dialogue and technical assistance with States, and increase exchanges with civil society on substantive policy issues.

Additional Issues for Discussion

• Access versus quality tradeoffs• Role of public and private sectors in education financing and provision• Prioritization of education levels (basic, secondary, VET, higher)• Role of civil society in policy debates and project implementation

Country Program Strategy (CPS) • The World Bank prepares a CPS to set out the priority areas of its support to the country’s

development strategy (eg. India’s Five Year Plan)– It serves as an indicative business plan in support of a country’s development goals.– Oriented toward results, the CPS is developed in consultation with country authorities,

civil society organizations, development partners, and other stakeholders.– It identifies the key areas where the Bank's assistance can have the biggest impact on

poverty reduction.

• From this assessment, the level and composition of Bank Group’s financial, advisory, and technical support to the country is determined. Consultations with civil society are key to identifying the internal and external challenges facing countries in its fight against poverty.

• Through consultations, the World Bank Group is able to tap into a broad range of perspectives from those involved or affected by development programs. It aims to integrate comments and new ideas into its operations, policies and final documents.

• Consultations help capture the experience and knowledge of multiple audiences―government, NGOs, academia and think tanks, media and the private sector― to enable greater participation of partners and stakeholders in operations supported by the Bank

26

Focus areas of support identified for CPS 2008-12• Pillar 1: Rapid and Inclusive growth

• Infrastructure building• Enhancing agriculture productivity• Increasing access to finance, for the poor• Leveraging private investments

• Pillar 2: Sustainable development Supporting implementation of the GoI’s low carbon strategy

Cleaner Coal Renewable energy sources - hydel, solar, wind

Integrated coastal zone management and biodiversity conservation Strengthening disaster management (flood management in Bihar)

• Pillar 3: Service delivery improvement Promoting universalization of primary and secondary education; Strengthening public

Health delivery systems (NRHM) Strengthening implementation and effectiveness to national development programs Enhancing delivery of public services, such as water Promoting rural road connectivity, road safety and asset management

27

CPS 2008-2012 : Implementation Highlights1. Scaling up of WBG engagement in India

IBRD/IDA and IFC lending doubled: New areas of engagement: Moving from projects to country-wide programs: Knowledge and Technical Assistance (TA)

2a. Aiming for growth with inclusion Agriculture productivity and sustainability Transport Sector : Financial and private sector development

2b. GoI’s Growth with Inclusion agenda Poverty alleviation and social inclusion Engaging in low income states

3 Sustainable development initiatives

28

Planning the next CPS: current context• India sustaining growth, though at lower levels

– While India’s growth rate in FY11/12 fell under 7%, it still is the second fastest growing economy.

– From 1.7% of world GDP in 1980 to 5.5% in 2010 (4th largest) – An increasing contribution to the international agenda - role within G20,

ASEAN, BRICS initiative etc. – Falling corporate investment from 14% of GDP before crisis to 10%

• Global economic developments could pose serious challenges, given India’s limited fiscal space

• Challenged by unequal benefit distribution –regional, caste, gender, income categories, rural-urban, etc.

• Governance in focus: RTI Act, Women political empowerment, decentralization, E-service

delivery and Corporate governance29

The consultation process for CPS 2013-16• Preparation on draft presentation on CPS

– Consultations with Ministry of Finance and line ministries at the Centre

– Consultations with state government officials across six states including Karnataka, Chhattisgarh, Assam, and Uttar Pradesh

– Civil society Consultations in Delhi and five state capitals – Bangalore, Raipur, Guwahati, Lucknow and Mumbai

• Preparation of CPS– Sharing of next CPS through website and email updates for further

feedback– A separate section on the issues discussed during consultations with

civil society will be prepared30

India Country Partnership Strategy 2013-16

Planning the CPS : India 12th Plan highlights 1st pillar: rapid & inclusive growth

Investment rate of 38.5%; Jobs; Manufacturing, especially in SMEs; Agri growth, improving Business climate, Domestic market integration

One trillion in Infrastructure; Energy

2nd pillar: sustainable development Improving the management of natural resources• Strengthening land acquisition and R&R processes, rationalizing land use in urban

areas, promoting land titling/leasing• Towards “ a credible and fair system of exploitation of mineral resources”• Promoting green development: water & energy efficient, low carbon development

Strengthening natural disaster management/resilience

3rd pillar: enhanced effectiveness of service delivery Reforming the health system Improving quality of (universal) primary education Universalizing access to secondary education by 2017 Enrolling 10 million additional students in higher education (Increasing present gross

enrollment rate of 18% to 25%) 31

CPS 2013-16 : Strategic Objectives under Consideration Catalyzing infrastructure investment and creating bankable projects

Financial engineering, PPP, asset management, Strengthening risk management Regional integration (energy, water resources, transport facilitation) Strengthening project management

Promoting human development Managing demographic growth

Job creation Urbanization

Universalizing access to quality health services Education & skill development Fighting poverty alleviation & promoting social inclusion:

Livelihood (rural & urban) Gender, equality of opportunity

32

CPS 2013-16 : Strategic Objectives under Consideration Supporting/informing key structural reforms

Natural resources management (water, land, mineral) Energy security Agricultural productivity & food security Integration & performance of domestic markets Governance reforms

Scaling up and bringing to fruition GoI’s urban agenda – service delivery such as transport, water, etc. Use of country systems for fiduciary controls and safeguards: Scaling up knowledge

Accompanying India’s transition to a MIC Infrastructure regulatory framework, investment climate, domestic market

integration, governance, social/financial/legal inclusion, public finance management, social and environmental safeguards

Leveraging India’s development experience on behalf of other developing countries: India as a funder and the main provider of knowledge and experience within the South-South experience exchange

Managing Finance Constraints

33

IBRD and IDA Lending by Region │ Fiscal 2012Share of Total Lending of $43 Billion

34

Africa16%

East Asia and Pacific

19%

Europe and Central

Asia14%

Latin America and the

Caribbean22%

Middle East and

North Africa

5%

South Asia24%

IBRD and IDA Lending by Theme │ Fiscal 2012Share of Total Lending of $43 Billion

Economic Management2%

Environmental and Natural Resources

Management14%

Financial and Private Sector Development

19%

Human De-velopment

10%

Public Sector Governance11%Rule of Law

<1%

Rural Devel-opment

13%

Social Devel-opment, Gen-der, and Inclu-

sion2%

Social Protection and Risk Man-

agement13%

Trade and In-tegration

6%

Urban Development10%

IBRD and IDA Lending by Sector │ Fiscal 2012Share of Total Lending of $43 Billion

35

Agriculture, Fishing, and Forestry

5% Education4%

Energy and Mining14%

Finance2%

Health and Other Social

Services16%

Industry and Trade

5%

Information and Communications

<1%

Public Ad-ministration,

Law, and Justice22%

Transporta-tion20%

Water, Sanitation, and Flood Protection

11%

SOUTH ASIATotal IBRD and IDA Lending │

Fiscal 2006–12millions of dollars

FY06 FY07 FY08 FY09 FY10 FY11 -

2,000

4,000

6,000

8,000

10,000

12,000

IBRD Top 10 Borrowers │Fiscal 2012 millions of dollars

36

Indi

a

Mex

ico

Brazil

Indo

nesia

Argen

tina

China

Turk

ey

Pola

nd

Roman

ia

Vietn

am

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

IDA Top 10 Borrowers │Fiscal 2012 millions of dollars

Bangl

ades

hIn

dia

Paki

stan

Vietn

am

Ethi

opia

Ghana

Niger

ia

Kenya

Tanz

ania

Mozam

biqu

e0

500

1,000

1,500

2,000

2,500

South AsiaRegional Snapshot

Total population 1.7 billion

Population growth 1.4%

Life expectancy at birth 65 years

Infant mortality per 1,000 births 52

Female youth literacy 73%

Number of people living with HIV/AIDS 2.7 million

2010 GNI per capita $1,305

GDP per capita index (2000=100) 172

Note: Data for life expectancy at birth, infant mortality rate per 1,000 live births, female youth literacy, and people living with HIV/AIDS are for 2012; other indicators are for 2010 from the World Development Indicators database. HIV/AIDS data are from UNAIDS Report on the Global AIDS Epidemic 2012.

Total Fiscal 2012 Total Fiscal 2012

New Commitments Disbursements

IBRD $1,158 million IBRD $1, 037 million

IDA $5, 288 million IDA $2, 904 million

Portfolio of projects under implementation as of June 30, 2012: $37.8 billion

37

South Asia IBRD and IDA Lending by Theme │ Fiscal 2012Share of Total Lending of $10.1 Billion

38

Environmental and Natural Resources

Management12%

Financial and Private Sec-tor Devel-opment

26%

Human Develop-

ment8%

Public Sector Gov-ernance

7%

Rule of law<1%

Rural De-velopment

22%

Social De-velopment, Gender, and

Inclusion2%

Social Pro-tection and Risk Man-agement

12%

Trade and In-tegration

6%

Urban Development4%

South Asia IBRD and IDA Lending by Sector │ Fiscal 2012Share of Total Lending of $10.1 Billion

Agriculture, Fishing, and Forestry

4%Education

5% Energy and Mining

8%

Finance<1%

Health and Other So-cial Ser-

vices13%

Industry and Trade

4%Information and Com-munica-

tions2%

Public Adminis-tration,

Law, and Justice15%

Transporta-tion39%

Water, Sanitation, and Flood Protection

11%

39

World Bank to lend $5 bn to India for poverty eradication – TOI dated 14th March 2013

Visiting World Bank President Jim Yong Kim told a press conference that the multi-lateral agency will deepen its engagement with India for alleviating poverty

World Bank on 13th March 2013 said it would give $3-5 billion to India in the next four years to push development projects and poverty eradication programmes

There are more than 200 million people in Uttar Pradesh, of which 70 million people are below the poverty line. Eight per cent of the world’s poor are in Uttar Pradesh. If they want to end poverty, they have to end poverty in Uttar Pradesh and in other states

Kim, who had earlier, pegged India’s economic growth at six per cent for the next financial year, said the economy could expand at a higher pace than this rate.

40

Basic Education• Two decades of focused programs in basic education have reduced out-of-

school youth to about 10 M (down from 25 M in 2003), most from marginalized social groups. Net enrollment rate is 85%, with social disparities.

• Key challenge is to finish the “access agenda” and dramatically increase focus on quality, with more attention to classroom processes, basic reading skills in early grades, teacher quality and accountability, community/parent oversight, evaluation/assessment.

• Access and Quality remain big challenges.• Gross enrollment rate of 40%, with significant gaps between genders,

social groups, urban/rural, such that most secondary students are urban boys from wealthier population groups.

• Private aided and unaided schools = 60% of all secondary schools, and growing.

• Overloaded curriculum, poor teaching practices and low primary level quality affect secondary quality.

Secondary Education

41

Vocational Education and Training (VET)• VET system is small, and not responding of needs of labor market; <40%

of graduates find employment quickly.• Insufficient involvement of industry and employers in VET system

management, internships.• Lack of incentives of public training institutions to improve

performance.

Technical and Higher Education• Numerically huge: 330 universities and 18,000 colleges• Substantial private provision in professional education.• But just 11% of youth 18-23 are enrolled.• Problems of capacity, quality, relevance, and public funding. Hard to

retain qualified faculty. Limited research.• Several world-class institutions.

42

GOI Education Strategy• Unprecedented priority to universal elementary education.• Sarva Shiksha Abhiyan: aims to universalize elementary education by 2014, and

improve learning outcomes.• Education cess of 3% on income tax, corporation tax, excise and customs duties

generates necessary resources• Cost-Share: was 50/50 (2007), moving to 65/35 Center/State • Estimate: 11th Plan: ’07-’12: 60,000-70,000 crores (US$17 billion) • Increased focus on quality and upper primary in phase II.• National Mission for Skills is being set up, looking at both VET and secondary

education• New centrally sponsored scheme to update all industrial training institutes (ITIs)• Significant investments in higher education (including reforms and expansion)

are expected

43

Millennium Development Goals

44