73048 v2 RESPONDING WITH GLOBAL KNOWLEDGE AND EXPERIENCE Sustained growth in many developing countries has pulled hundreds of millions of people out of poverty over the past decade. During the �ve years since the onset of the global economic crisis, developing countries have fared better than developed countries. Signi�cant economic prog- ress in several middle-income countries has helped the developing world during this uncertain �scal time. Low-income countries continue to look to them as developmental models and as prospective donors. In high-income Europe, key structural, �scal, and monetary policy steps contributed to signi�cant improvement in market sentiment during the �scal year. But recently, market tensions have spread, sparked by �scal slip- pages, banking downgrades, and political uncertainty in the Euro Area. This latest bout of tensions is a stark reminder that the aftereffects of the 2008−09 �nancial crisis have not played out fully and that volatility and uncertainty are here to stay. Poverty is still endemic in much of the world. In �scal 2012, slower ex- pansion of markets for exports reduced opportunities for job creation and growth. Lower earnings for millions of migrant workers reduced remit- Ethiopia tances, a major source of income in developing countries. Food prices re- Photo: Stephan Bachenheimer mained volatile, natural disasters ravaged lives and communities, women and girls were still marginalized and victimized, millions of people lacked access to water and sanitation—and at least a billion people went to bed hungry every night. To help address these challenges, the World Bank has been working While the World Bank has a long history of collaboration, these plat- closely with partners, building human capital, creating business environ- forms are among the large-scale initiatives intended to broaden knowl- ments in which domestic and foreign �rms want to operate, identifying edge partnerships as part of the Bank’s move toward a more open ap- and capitalizing on countries’ comparative advantages, and mitigating and proach to development. preparing for the effects of natural disasters and global climate change. Two years after opening its vast storehouse of data to the public, The Bank is also placing even greater emphasis on its modernization the Bank has consolidated more than 5,000 books, reports, research arti- agenda of results, accountability, and openness, both with client countries cles, and research papers in a search engine–friendly Open Knowledge and internally. Today the Bank is a model of transparency, having opened Repository that allows the public to access, distribute, reuse, and build on its information archives two years ago. Widely used data portals and online much of its work—including commercially. The repository, launched in tools allow easy access to and use of World Bank data and knowledge. April 2012, is a one-stop shop for most of the Bank’s research outputs and knowledge products, and it provides free and unrestricted access to any- PRODUCING, COLLECTING, AND SHARING KNOWLEDGE one interested in the Bank’s knowledge. Additional material, including The World Bank is the world’s premier producer of knowledge and experi- foreign language editions and links to data sets, will be added in the com- ence on development. Its research, data, and knowledge platforms inform ing year. not only Bank operations but also the activities of policy makers, research- In a bid to promote knowledge sharing, the Bank became the �rst ma- ers, and civil society throughout the world. jor international organization to require open access and to adopt the To help researchers worldwide conduct their own high-quality, policy- most liberal “Creative Commons� licensing for its research and knowledge oriented analytical work, in �scal 2012, the Bank formed a new computa- products. The repository and Creative Commons licenses are part of a new tional tools team that includes staff with programming, advanced econo- Open Access Policy that took effect July 1, 2012. metrics, and geographic information systems skills. The Bank submitted data to Publish What You Fund and One World Building on its role as a global connector, the World Bank is investing Trust, which produce reports on the openness and accountability of donor about $3 million a year in six new knowledge platforms as a working ex- agencies. In 2012, Publish What You Fund ranked the Bank as having the periment in greater openness and collaboration. The �rst group of three highest rating on aid transparency of all multilateral and bilateral donor platforms, initiated in �scal 2012, included urbanization, green growth, agencies. and information and communication technologies. The jobs, nutrition/ agriculture/food security, and fragility/conflict/violence platforms also REPORTING RESULTS AND MAKING DATA AVAILABLE TO ALL launched. Each platform embodies a new approach to connectivity inside As part of the focus on results, accountability, and openness, the Bank the World Bank and across an international community of research centers, published its �rst Corporate Scorecard in September 2011. The Scorecard academic institutions, think tanks, practitioners, and the private sector. is designed to provide a snapshot of the Bank’s overall performance, in- 1 cluding its business modernization, in the context of development results. It facilitates strategic dialogue between Management and the Board on progress made and areas that need attention. The April 2012 release of the electronic version of the Scorecard pro- vides users with easy online access to indicators, data disaggregated by the International Bank of Reconstruction and Development (IBRD) and the International Development Association (IDA), and regions and countries for selected indicators, time series, and visual presentation of data. It also in- cludes de�nitions, sources, and links to supplemental information and other relevant resources. (See http://corporatescorecard.worldbank.org.) (Fur- ther improvements to the system, including data-download capability in line with Open Data standards, and disaggregation of data by sector are planned for �scal 2013.) In February 2012, the Bank released new estimates of poverty, making the data accessible to all through PovcalNet. (See http://iresearch.world bank.org/PovcalNet.) (In �scal 2010, the �rst Millennium Development Goal (MDG), halving extreme poverty, was achieved well before the 2015 deadline.) This year also saw the release of a new tool for measuring �nancial in- clusion across the world. The Global Financial Inclusion (Global Findex) Database is a set of indicators that measure how adults in 148 economies save, borrow, make payments, and manage risk. The Global Financial Inclusion Indicators is the �rst major output of a 10-year program sup- ported by the Bill & Melinda Gates Foundation. (See http://www.world bank.org/global ndex.) By connecting people and allowing them to learn about what is being Ghana done in other parts of the world, such initiatives help policy makers and Photo: Jonathan Ernst practitioners develop sustainable development solutions that are rooted in results. For the �rst time in 30 years, the Bank introduced a new lending instru- ment, Program for Results (PforR). Launched in February 2012—following Critical inputs into health are sanitation and water. The world achieved discussions with government, civil society, and stakeholders in some a major milestone in �scal 2012, having met the MDG 7 target of halving 40 countries—this innovative type of lending links the disbursement of the proportion of people without sustainable access to safe drinking funds directly to the delivery of de�ned, veri�able results. (See http:// water. With help from the United Nations Children’s Fund (UNICEF), the www.worldbank.org/P4R.) World Health Organization, the World Bank, and others, more than 2 bil- PforR helps countries improve the design and implementation of their lion people have gained access to an improved source of drinking water development programs. In consultation with the Bank, clients de�ne the since 1990. Also during that time, 1.8 billion gained access to improved results in an operation supported by PforR. It focuses the Bank’s technical sanitation. Still, some 2.5 billion people remain without sanitation, and at and �nancial support more strongly on institutional development, particu- least 780 million lack access to improved water. larly capacity to monitor results and strengthen the public expenditure With water at the nexus of so many areas, doing a better job manag- systems of a country. PforR also helps countries strengthen their national ing it is essential to reaching almost all of the development goals. The �duciary and safeguard systems. Bank is the largest external source of �nancing for water projects, which totaled $3.6 billion in �scal 2012, comprising 4 percent of total Bank IMPROVING LIVING CONDITIONS AND lending for General Water, Sanitation, and Flood Protection; 3 percent for SUPPORTING THE MILLENNIUM DEVELOPMENT GOALS Water Supply and Sanitation; 2 percent for Flood Protection; 2 percent for Results-based �nancing (RBF) holds promise across sectors. In health, for Wastewater Collection and Transportation and Treatment and Disposal; example, it improves countries’ ability to monitor progress and evaluate and just under 1 percent for Solid Waste Management. outcomes for MDG 1c (halve by 2015 the proportion of people who suffer Financing is only part of the solution. The Bank also responds to client from hunger); MDG 4 (reduce child mortality); and MDG 5 (improve mater- demand for knowledge, innovation, and nontraditional partnerships that nal health). IDA—the Bank’s fund for the poorest countries—is increasingly are needed now to meet tomorrow’s demands. The majority of this com- encouraging countries to carry out rigorous impact evaluations of health plementary work is supported through water-related programs such as innovations and programs such as RBF. IDA commitments for health dur- the Water and Sanitation Program, the Water Partnership Program, the ing the past decade have delivered antiretroviral therapies to 1.5 million Global Partnership on Output-Based Aid, the Public-Private Infrastructure adults and children with HIV, provided 55 million women with prenatal Advisory Facility, the Cooperation in International Waters in Africa, and the care, purchased or distributed more than 34 million mosquito nets to pre- South Asia Water Initiative. vent malaria, immunized almost 500 million children, and done much Meanwhile, water scarcity in many regions is rising because of rapidly more. (See http://www.worldbank.org/health.) increasing water demands and the impacts of climate change. Billions of 2 The World Development Report 2012: Gender Equality and Development highlighted progress in educational enrollment, life expectancy, and eco- nomic opportunities for women—but it also pointed out that these gains have not been universal. In many parts of the world, too many women still die in childbirth, or, at alarming rates, are not born at all. Women continue to lack voice in the household, and in politics, and the ability to participate in decisions that affect them, their families, and their societies. Their eco- nomic opportunities remain very limited. The Bank is working within �ve strategic directions to operationalize these �ndings and increase the focus on gender equality: informing coun- try policy dialogue, enhancing country-level gender diagnostics, scaling up lending, investing in gender data, and leveraging partnerships. Gender was designated a special theme of IDA16. This �scal year saw a sharp increase in attention to gender issues—the Bank allocated around $29 billion, or 83 percent of total Bank lending, to gender-informed operations, and a total of 208 projects, or 80 percent Philippines of all Bank projects, were rated gender informed. The Bank continues to track gender commitments under the Corporate Scorecard and the Photo: Danilo Pinzon IDA16 Results Measurement Framework, reporting progress quarterly. (See http://www.worldbank.org/gender.) The Bank is also working to improve social protection, critical in the people lack other basics for advancement or survival as well. Nearly a bil- current economic climate. Its new strategy, adopted in �scal 2012, calls for lion people in rural areas are without access to all-weather roads. In thou- extending safety-net coverage to the poorest, most vulnerable people; sands of villages across Africa and Asia, the only light after sunset is from building a coherent and integrated portfolio of national policies and pro- a kerosene lamp, a candle, or a cooking �re; using electricity remains a grams that help people deal with multiple risks, which can be scaled up or dream for more than 1.3 billion people. More than 2.5 billion people de- down in response to crises; taking evidence-based action and encourag- pend on biomass or coal for cooking and heating, a practice that causes ing South-South sharing of knowledge; and increasing access to jobs and the premature death of 1.9 million people a year, most of them women economic opportunities, with a strong focus on early childhood develop- and children, from indoor air pollution. Total demand for infrastructure in- ment and workers’ skills and productivity. (See http://www.worldbank vestment and maintenance from developing countries is estimated at .org/spstrategy.) $1.1 trillion a year, with the greatest needs in Africa and Asia. More than 200 million women, men, and youth are out of work, more To address the infrastructure de�cit, a new strategy, Transformation than 1 billion are marginally employed in low-income or informal jobs through Infrastructure, will guide the Bank’s engagement in infrastructure that keep them earning below their potential, and a demographic surge through 2015. The Bank will maintain support of infrastructure to meet will soon require the creation of millions of new jobs every month. To basic needs. It will also enhance its focus on transformational projects, address unemployment, the Bank continued working with a network of and mobilize further private sector �nancing. Such support, which ac- partners, including academic institutions, think tanks, and the private counted for almost 40 percent of total Bank lending, included $4.5 billion sector, to work jointly on jobs-related activities by linking research to for Transportation, $5.2 billion for Energy and Mining, $3.9 billion for policy. Water, Sanitation, and Flood Protection, and $0.2 billion for Information With Bank support, countries are protecting workers and creating jobs, and Communications in �scal 2012. through programs that include unemployment bene�ts, public works, Another priority area for the Bank is education, the focus of MDG 2 employment services, training, support to self-employment and entre- and MDG 3. The Bank invested more than $3 billion in education in �scal preneurship, approaches that incorporate innovative technologies, and 2012, up from $1.8 billion in �scal 2011. It currently manages an education access to credit. The Bank is also advancing assistance through knowledge- portfolio of $9 billion, with operations in 73 countries. sharing, research, and strategies on a wide range of topics, including labor A major new initiative of the Bank in education is Systems Approach market policies and regulation, productivity, employment and mobility, for Better Education Results (SABER). It collects data on the policies and crises and recovery, and globalization. (See http://www.worldbank.org/ institutions of education systems around the world, and strengthens the jobsworldeconomy.) knowledge foundation for evidence-based policy making. Key priorities include helping countries, through knowledge and �- REDUCING VULNERABILITY TO DISASTERS nancing, reach the education MDGs, improve student learning, and pro- AND INCREASING RESILIENCE TO CLIMATE CHANGE mote skills development by linking education to labor markets—a critical Disasters, many of them climate change–related, contributed to massive objective in today’s context of high unemployment coincident with skills losses this �scal year. Adverse weather conditions (including chronic shortages. In �scal 2012, the Bank began to measure the success of its droughts and floods), increasing international oil prices, Asia’s strong de- new education strategy in terms of countries that take new steps to attain mand for food imports, and the persistent European �nancial crisis con- the MDGs, apply SABER diagnostic tools, collect and use the system’s tributed to the increase of volatility in global food prices. Domestic prices data, and conduct learning assessments. (See http://www.worldbank remained high and volatile in many parts of the world, and the cushion to .org/education.) absorb shocks remained low. If the production of �scal 2012 and the fore- 3 This �scal year, the Bank allocated more than $7.1 billion in lending for low-carbon development and $4.6 billion in lending for climate-resilient development. The loans, credits, and grants bene�ted 104 projects in 55 countries. These numbers have been generated through a new system, approved in �scal 2012, to measure funding that contributes to climate- change adaptation and mitigation, enabling the Bank to report on its cli- mate-related lending in a consistent and transparent manner. Critical to sustainable development is the shift to Hydropower and Other Renewable Energy, and enhanced energy efficiency in Heating and Power. Bank commitments for Hydropower and Other Renewable Energy rose 337 percent from �scal 2007 ($0.4 billion) to �scal 2012 ($1.9 billion). Over the same period, commitments for energy efficiency in Heating and Power have also increased, to $0.3 billion in �scal 2012 from $0.1 billion in �scal 2007. Funding is going to programs like one in Bangladesh that has installed 1.4 million solar home systems in rural low-income households since 2003, demonstrating that clean energy can deliver life-changing Adolescent Girls Initiative electricity. Photo: Simone D. McCourtie In partnership with other multilateral development banks, the Bank ramped up operations and the implementation of projects under the $7.2 billion Climate Investment Funds (CIF), which allocate $2.2 billion to the Strategic Climate Fund and $5 billion to the Clean Technology Fund, every casts for �scal 2013 do not materialize, global food prices could increase $1 from which leverages $8 of co�nancing from other sources. Overall, the rapidly, underscoring the need to remain vigilant and improve the moni- CIF committees have approved $2.1 billion for new projects that support toring of early signals of global and regional crises. developing-country efforts to mitigate and adapt to the effects of climate When disasters strike, poor countries are often confronted with the change. urgent need to provide emergency assistance to victims and to rebuild Through the funds it raises in capital markets, the Bank continues to roads, hospitals, schools, irrigation systems, electric power, and water sup- support innovative �nancing flows for climate-smart investment. Since it ply. These exigencies put pressure on their budgets, frequently forcing �rst launched the World Bank Green Bonds in 2008, it has issued more than them to cut essential nonemergency services. To prevent this from hap- $3 billion through almost 50 World Bank Green Bond transactions in 17 pening, the Bank provided the Philippines with a $500 million Develop- currencies. ment Loan with a Catastrophe Deferred Drawdown Option (Cat DDO), The Bank is also the trustee of 13 carbon funds and facilities (capitalized a contingent line of credit that can be used following natural disasters. at just over $3 billion) that support the mitigation of climate change. Some The loan was the largest Cat DDO the Bank has extended. The Cat DDO 160 active projects are expected to reduce emissions by an estimated 229 helped the Philippine Government undertake recovery and reconstruc- million metric tons of carbon dioxide or its equivalent in other greenhouse tion activities in the wake of tropical storm Sendong. gases, with 78 percent of all such emission reductions achieved by 2013. Seven out of ten World Bank Country Assistance Strategies now recog- In December 2011, the Bank announced two new facilities to help least nize natural hazards as a risk to development. Trust funds have been instru- developed countries access �nancing for low-carbon investments and en- mental in providing rapid response for disaster relief, such as after the tsu- able them to tap into carbon markets after 2012. The BioCarbon Fund’s nami in Aceh, Indonesia, and the earthquake in Haiti. For example, the Haiti third tranche (BioCF T3) will focus on reforestation and landscape projects Reconstruction Fund, which supported the �nancing of IDA operations, that produce cobene�ts such as decreased soil erosion and increased land has funded safety inspections on 400,000 homes, provided grants for fertility. Under the Carbon Initiative for Development (Ci-Dev), public and repair and reconstruction, helped stabilize government operations, ad- private sector entities pledge their support to capacity building and car- dressed a cholera epidemic, and helped thousands of children get back bon market development in the world’s poorest countries. to school. As part of its commitment to reduce its environmental footprint and To address increasing climate variability and climate change—which to maintain carbon neutrality, the Bank measures, reduces, offsets, and threaten to erode development gains—the Bank has moved low-carbon reports on the greenhouse gas emissions associated with its global facili- and climate-resilient development to the forefront of its strategy and ties, major meetings, and air travel. In �scal 2012, the Bank met its goal of operations. Since �scal 2009, all new regional and sector strategies have reducing greenhouse gas emissions 7 percent below a 2006 baseline in its emphasized mitigation and adaptation actions. A new World Bank Group Washington, DC, facilities, and is working to set a new target. Total �scal Environment Strategy, approved by the Board in June 2012, articulates a 2011 emissions for the Bank’s global facilities, including business travel vision for a “green, clean, and resilient world for all.� Under the resilience and major meetings, were approximately 160,484 tons of carbon dioxide pillar, the strategy prioritizes support to countries to reduce their vul- equivalent. Additional details are published in the Bank’s annual sustain- nerability to the range of climate and disaster risks. The Bank also stepped ability-related reports in adherence with international standards, such as up climate-related policy research, as well as knowledge and capacity- the Global Reporting Initiative and the Carbon Disclosure Project. (See building activities, as exempli�ed by the launch in December 2011 of http://crinfo.worldbank.org.) the Open Climate Data Initiative. This initiative will promote better access Conscientiousness stretches outward from the World Bank as well. to climate and climate-related data sets, notably through the Climate Complementing its enhanced efforts to prevent fraud and corruption in Change Knowledge Portal and the Open Data for Resilience Initiative. high-risk projects, the Bank hosted the second meeting of the International 4 SUPPORTING PEOPLE WHO FACE VIOLENCE, CONFLICT, AND FRAGILITY Some 1.5 billion people live in countries or parts of countries affected by violent conflict. Reducing poverty in these settings is a particular chal- lenge. To help countries develop strategies to prevent, manage, and re- cover from violence, conflict, and fragility, the World Bank is working on a range of efforts. For example, in July 2011, the Bank launched the Global Center for Conflict, Security, and Development (CCSD). With staff in Nairobi, Kenya, in addition to Washington, DC, and New York, the CCSD provides country support and access to the latest research and knowledge on what works in volatile environments, as the Bank puts into practice the World Development Report 2011: Conflict, Security, and Development. IBRD/IDA trust funds complement the Bank’s operational work to de- velop capacity and institutions, support poor and vulnerable groups, and help coordinate aid. As administrator of the multidonor State and Peace Building Trust Fund, the Bank oversees a portfolio of 53 grants in 26 Mongolia countries, with a total value of about $118.8 million. Nearly half of the Photo: Dave Lawrence projects are in the Africa region; 22 percent are in the Middle East and North Africa region; and 12 percent are in the Latin America and the Caribbean region. The Bank also administers the Korea Trust Fund for Economic and Peacebuilding Transitions, which prioritizes actions in the Corruption Hunters Alliance to engage members on new technological East Asia and Paci�c region. tools and resources that can support the collective �ght against global In December 2011, 37 countries and international organizations, corruption. An Integrity app in the works, for example, will enable users to including the Bank, endorsed a New Deal for Engagement in Fragile States. report suspected fraud and corruption in World Bank–�nanced projects The recommendations of the new framework include a shift to country- directly to the Bank Hotline. led fragility assessments, stronger support for political processes, more In May 2012, the World Bank’s Sanctions Board announced the debar- effective support for capacity development, greater aid transparency, and ment of eight companies based on investigations in a number of countries more timely and predictable aid. in Africa, Latin America, the Middle East, and South Asia. This brings the total number of �rms debarred by the Bank to 84 during this �scal year. With a functional cross-debarment agreement implemented in �scal 2012 by the World Bank and other multilateral development banks, the impact of these debarments is gaining strength and sending a powerful signal across the development world that fraud and corruption impacting devel- opment resources will not escape punishment. 5