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Alphabet Soup of International Financial Institutions. Constance L. Danner. 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).
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Alphabet Soup of International Financial Institutions Constance L. Danner
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. KennedyUS Democratic politician (1917 - 1963)
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 • Total member countries in each institution: • IBRD - 184 • IDA – 165 • IFC – 178 • MIGA – 167 • ICSID – 142
http://siteresources.worldbank.org/EXTABOUTUS/Resources/wbgroupbrochureen.pdfhttp://siteresources.worldbank.org/EXTABOUTUS/Resources/wbgroupbrochureen.pdf
World Bank Voting Power: 0.24% Middle Income: 2003 GNI per capita was between $766 and $9,385. Moderate Indebted Scale of Severe, Moderate, Less World Bank Voting Power: 0.19% Low Income: 2003 GNI per capita less than $765 Less Indebted Scale of Severe, Moderate, Less Bolivia and Lesotho Global Development Finance: Mobilizing Finance and Managing Vulnerability (2005)
Three Problem Areasaddressed 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.gifhttp://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.
1st Challenge • Water Resources Management • Pay closer attention to: • Water Quality • Conservation • Groundwater Management • Watershed Management • Institutional Reform
2nd 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.
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?