PowerPoint Presentation Economic Growth and development in Southeast Asia

More WB…

• World Bank is heavily dominated by US interests, with strong ties to the US treasury
• All WB presidents are US, nominated by the US president
• Beginning to change with in response to changing distribution of wealth, changing global financial flows (including but not limited to aid flows)
• World today looks very different than 1970s/80s
• World Bank consists of five affiliated institutions operating in 100+ countries (20,000+ staff and consultants)
• IBRD
• International Development Association (IDA)
• International Finance Corp (IFC)
• Multilateral Investment Guarantee Agency (MIGA)
• International Center for Settlement of Investment Disputes (ICSID)
• Most funding provided by the WB is not aid
• IBRD lends to middle income countries at market rates
• Borrows from international capital markets, relends to developing countries at cheaper rates than countries can obtain directly
• But demand for IBRD loans has been falling, esp as countries progress, become more creditworthy and can access international markets
• WB has becomes lender of last resort. Increasing exposure in poor, conflict affected and fragile states

IDA provides aid through grants and highly concessional loans

• Donor countries (primarily DAC but increasingly others) contribute funds to IDA (referred to as IDA replenishment), which are used to provide concessional loans and grants to IDA eligible countries
• IDA eligible – GNI per-capita less than $1215 (2015)
• IDA gives grants plus loans on concessional terms e.g. 25-38 year repayment period, 5 year grace period, initiation fee of only .75%, low interest schedule
• Annual lending envelopes determined by Country Policy and Institutional Assessments (CPIAs)
• But there is a lot of momentum in the system, process not transparent
• Currently 59 IDA only countries, 18 blend countries (based on creditworthiness), plus India (can access IDA on “exceptional basis” through 2017)
• Several countries that receive high ODA are included on the “blend” list i.e.
• Ethiopia, Pakistan, Nigeria, Vietnam, Zimbabwe
• Countries with the biggest “exposure” (outstanding IDA loans and commitments)
• China, Brazil, Turkey, India, and Indonesia (concessionary, no rush to repay)