The World Bank Group: Russia and Beyond

1. The World Bank Group: Russiaand Beyond Pedro Alba Country Director and Resident Representative Of the World Bank in the Russian Federation May 25, 2011

2. Working for a World Free of Poverty The World Bank Group is not a bank in its common sense; we are made up of five unique development institutions owned by 186 member countries: • The International Bank for Reconstruction and Development (IBRD) supports growth in middle-income countries and reduces poverty in creditworthy poorer countries • The International Development Association (IDA) focuses on the world’s poorest states • The International Finance Corporation (IFC) provides financing for the private sector in developing countries • The Multilateral Investment Guarantee Agency (MIGA) insures new foreign investments in developing member countries against the major political risks • The International Centre for the Settlement of Investment Disputes (ICSID) offers a mechanism to settle international investment disputes

3. World Bank Staff World Bank Staff is: • 10,000 people • 120 Country Offices • 55% : from developing countries • 170 nationalities • 140 languages

4. Who Runs The World Bank? We are run like a cooperative, with our member countries as shareholders. The number of shares a country has is based roughly on the size of its economy: • The United States (16.41 percent); • Japan (7.87 percent); • Germany (4.49 percent); • The United Kingdom (4.31 percent); • France (4.31 percent); • Russia (2.79 percent). The rest of the shares are divided among the other member countries.

5. Lending in 2010 IBRD key financial indicators in 2010,in millions of USD dollars: • Operating income: 800 • Loans outstanding: 120,103 • Total assets: 283,010 • Total equity: 37,555 IDA key financial indicators in 2010,in millions of USD dollars: • Development credits outstanding: 113,474 • Total sources of development resources/total equity: 128,275

6. Lending in 2010 Lending by Regions in 2010: LATIN AMERICA AND THE CARIBBEAN IBRD | $13,667 million IDA | $240 million Portfolio of Projects | $32.1 billion AFRICA IBRD | $4,258 million IDA | $7,179 million Portfolio of Projects | $35.3 billion MIDDLE EAST AND NORTH AFRICA IBRD | $3,523 million IDA | $214 million Portfolio of Projects | $8.7 billion EUROPE AND CENTRAL ASIA IBRD | $10,196 million IDA | $620 million Portfolio of Projects | $24.4 billion SOUTH ASIA IBRD | $6,689 million IDA | $4,645 million Portfolio of Projects | $33.7 billion EAST ASIA AND PACIFIC IBRD | $5,865 million IDA | $1,652 million Portfolio of Projects | $28.4 billion

7. Lending in 2010 Top borrowers in 2010:

8. Results on the Ground Projects we have supported have helped to: • Build rural roads in Vietnam; • Reduce tuberculosis infections in China; • Fight HIV/AIDS in Brazil; • Get money to rural poor people in Pakistan; • Double the income of people who live in rural areas in Turkey; • Track government spending for education in Uganda; • Encourage economic growth in Mozambique; • Support women who are starting their own businesses in the Kyrgyz Republic; • Provide debt relief.

9. Principles of The World Bank Partnershipwith Russia The World Bank supports Russia’s: • key economic and social development priorities • contribution to global public goods By focusing on activities/areas: • with strong client demand • that need international knowledge or greater local capacity • that complement IFC or other development partners • where Russia also commits significant financial resources

10. Who are partners for The World Bank in Russia? IBRD collaborates with: • Federal authorities; • Regions and cities; • Development banks/financial institutions; • Non-financial development institutions; • Institutions that contribute to development of Russia’s economic potential or deliver social/economic services; • Business Associations; • Think-tanks and academia; • Civil society organizations.

11. The World Bank Cooperation with Russia Russia is a critical partner of the Bank in development issues. The World Bank has a long, deep, and really successful partnership with Russia being engaged at three levels – bilateral, regional and global At the Bilateral level: Work with Russia on the new Country Partnership Strategy • US$ 25 million Loan Agreement for the Financial Education and Financial Literacy Project, worth a total of US$ 113 million

12. The World Bank Cooperation with Russia At the Regional Level: Regional cooperation beyond the border of Russia • Framework Agreement between the World Bank and the Eurasian Development Bank (EDB) including the EURASEC Anti-Crisis Fund (ACF) At the Global Level: Russia is an official donor for development: • IDA ($108 million) • multilateral mechanisms ($500 million for health, malaria control, food and energy security, education, financial literacy, and agriculture).

13. The World Bank Group and Russia’s Priorities Traditional Financial Instruments • Analytical and advisory activities • IBRD loans in support of federal programs • WBI capacity building activities • Carbon financing • Grants (applied at the federal level).

14. The World Bank Group and Russia’s Priorities New Financial Instruments • Fee for Service: Analytical work and technical assistance is provided by the Bank on reimbursable basis including preparation of strategies and sector analyses for regions; technical support for specific investment activities. • Sub-national loans: Sub-national projects are developed without sovereign guarantees. Sub-sovereign lending by the Bank Group’s Sub-National Development Program is aimed at creditworthy regions and entities. The Program is managed jointly by IBRD and IFC.

15. The World Bank Group and Russia’s Priorities Enhancing Russia’s Role as a Donor Cooperation includes capacity building and learning-by-doing in joint development assistance programs. Capacity is being developed for an aid reporting system and regulatory framework with support from DFID and Government funds. Knowledge Sharing The Bank has made progress with the federal government, in identifying a small sub-set of regions that may become the target of concentrated work programs with the Bank.

16. Current Partnership Strategy with Russia:Looking to the Future Rapid Growth • Sustaining Rapid Growth, including active participation in economic policy debates • Monitoring the investment climate • Supporting public investment and PPPs for growth and diversification • Working with regions to identify and overcome barriers to growth, supporting investments in priority areas at the regional level, and providing direct assistance to the private sector.

17. Current Partnership Strategy with Russia:Looking to the Future Russia’s Global Role To enhance Russia’s global Role, the Bank partners with the Russian government in support of its emergence as an international donor and active member of multilateral organizations: • Assistance in establishing Official Development Aid System in Russia as an emerging donor • Access to the Bank’s instruments for channeling country’s development aid assistance and contributions.

18. Current Partnership Strategy with Russia:Looking to the Future Public Sector Development • Improving Public Sector Management and Performance, including remaining engaged in supporting programs for modernizing selected public sector institutions • Improving government administration, the judiciary, local self-government, and budgetary management at federal and sub-national levels.

19. Current Partnership Strategy with Russia:Looking to the Future Social & Communal Services In addition to continued general cooperation with the federal government, the Bank concentrates much of its support for improving social service delivery at the subnational level. Activities include: • Improving the health of the general population • Modernization and improvement of the education system and vocational training • Upgrade of targeted social assistance • Improvement in the provision of housing and communal services

20. The Russian Federationin Development Perspective The development goals for Russia are: • Maintaining prudent macroeconomic policies • Making public administration more efficient • Engaging citizens in budget decisions • Restructuring the health sector • Educating children for the Global Information Society • Delivering better communal and social services, with cost savings

21. From Previous CPS to New CPS Country Partnership Strategy (CPS)–a framework for cooperation endorsed by the Government of the Russian Federation and the World Bank Board of Executive Directors CPS FY07-11 – Key Pillars: • Sustaining Rapid Growth • Improving Public Sector Management and Performance • Improving the Delivery of Social and Communal Services • Enhancing Russia’s Regional and Global Roles CPS FY12-15 – To be agreed in consultation with federal and regional authorities

22. Principles of Partnership and Partners - IFC • IFC’s role in Russia is to facilitate the growth and diversification of the private sector by: • Integrating advisory and investment services for a programmatic approach; • Focusing on frontier products, sectors & regions; • Addressing climate change and improving energy efficiency of the economy; • Investing in export-oriented growth sectors and value-added manufacturing; • Promoting private sector investment in infrastructure & social services, including at the municipal level; • Developing financial markets, particularly in the regions to reach SMEs and promote regional development; • Building long-term client relationships. • IFC provides investment & advisory services to the private sector and to creditworthy municipalities. IFC collaborates with other IFIs, donors, federal authorities, regions & cities, and institutions which contribute to the growth and diversification of the private sector.

23. Possible Priority Areas for the new Country Partnership Strategy (CPS) FY12-15 • Increase Diversification for Growth • Innovation • Investment Climate • Infrastructure • Public Expenditure Effectiveness • Expand Human Potential • Employment Opportunities • Health, Education and Skills • Social and Communal Services • Deepen Russia’s Global Role • Economic and Financial Center • Energy Efficiency and Environmental Protection • Russia as Donor: Official Assistance to Development

24. Instruments for CPS FY12-15 • AAA • Investment lending (SIL, FIL, TA) • Results-Based lending • Guarantees • Fee-based Services • Subnational lending (direct or through intermediary e.g. VEB) • New Modalities (project services without lending)

25. The World Bank’s Projects in Russia Federal Lending: Since 1992 World Bank has financed over 70 projects in Russia for the amount of 14.27 bln US$ Subnational Lending: Several sub-national projects are being developed without sovereign guarantees, primarily focusing on regional infrastructure. The Program is managed jointly by IBRD and IFC. Fee-Based Services: Analytical work and advisory work is provided by the Bank on reimbursable basis including preparation of strategies and sector analyses for regions; technical support for specific investment activities.

26. The World Bank in Russia Thank you!