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1 ECSPF, the World Bank and the IMF presentation by: Dr. Khaled F. Sherif, Sector Manager Europe and Central Asia Private and Financial Sector Development.

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Presentation on theme: "1 ECSPF, the World Bank and the IMF presentation by: Dr. Khaled F. Sherif, Sector Manager Europe and Central Asia Private and Financial Sector Development."— Presentation transcript:

1 1 ECSPF, the World Bank and the IMF presentation by: Dr. Khaled F. Sherif, Sector Manager Europe and Central Asia Private and Financial Sector Development Unit The World Bank

2 2 An Overview of the World Bank Group Founded in 1944, the World Bank Group consists of five closely associated institutions. They are: â International Bank for Reconstruction and Development (IBRD), â International Development Association (IDA), â International Finance Corporation (IFC), â Multilateral Investment Guarantee Agency (MIGA), and â International Center for the Settlement on Investment Disputes (ICSID)

3 3 World Bank at a Glance âSeeks to promote the economic development of the worlds poorer countries âAssists developing countries through long-term financing of development projects and programs âProvides to the poorest developing countries whose per capita GNP is less than $400 a year special financial assistance through the International Development Association (IDA) âEncourages private enterprises in developing countries through its affiliate, the International Finance Corporation (IFC) âAcquires most of its financial resources by borrowing on the international bond market âHas an authorized capital of $95 billion, of which members pay in about 9 percent âHas a staff of 6,500 from over 100 member countries

4 4 International Bank for Reconstruction and Development (IBRD) âprovides loans and development assistance to middle-income countries and creditworthy poorer countries. âvoting power is linked to members' capital subscriptions, which in turn are based on each country's relative economic strength. ânot a profit-maximizing organization but has earned a net income every year since 1948. âestablished in 1945 â181 member countries (shares allocated to each member reflect its quota in the IMF, i.e. the countrys relative economic strength in the world economy) âSource of funds: paid-in capital, capital market borrowings, repayments on earlier loans, retained earnings.

5 5 International Development Association (IDA) âprovides long-term loans at zero interest to the poorest of the developing countries. âsupports efficient and effective programs to reduce poverty and improve the quality of life in its poorest member countries. âhelps build the human capital, policies, institutions, and physical infrastructure needed to bring about equitable and sustainable growth. âIDA's goal is to reduce the disparities across and within countries, to bring more people into the mainstream, and to promote equitable access to the benefits of development. âestablished in 1960, includes 160 member âSource of funds:Contributions from governments, transfers from IBRD profits, repayments on earlier IDA credits.

6 6 International Finance Corporation (IFC) âIFC shares the primary objective of all Bank Group institutions: to improve the quality of the lives of people in its developing member countries. âfinances and provides advice for private sector ventures and projects in developing countries in partnership with private investors and, through its advisory work, helps governments create conditions that stimulate the flow of both domestic and foreign private savings and investment. âpromotes economic development by encouraging the growth of productive enterprise and efficient capital markets in its member countries. âestablished in 1956, includes 174 members âSource of Funds:Member capital, borrowings from capital markets (80%) and IBRD (20%)

7 7 Multilateral Investment Guarantee Agency (MIGA) âencourages the flow of foreign direct investment to its developing member countries. âfacilitates investment primarily by providing investment guarantees against noncommercial risks (currency transfer, expropriation, and war, for example). âprovides technical assistance to help countries disseminate information on investment opportunities, and to build capacity for investment promotion. âMIGA has its own operating and legal staff and is legally and financially a separate entity from the World Bank, on which it draws, however, for certain services. âestablished in 1988, has 149 members âSource of Funds:Member capital

8 8 International Center for the Settlement on Investment Disputes (ICSID) âprovides facilities for the settlement, by conciliation or arbitration, of investment disputes between member countries and nationals of other member countries. âprovisions referring to arbitration under the auspices of ICSID are a common feature of international investment contracts, investment laws, and bilateral and multilateral investment treaties. âan autonomous international organization with close links with the World Bank. All of its members are also members of the Bank. Unless a government makes a contrary designation, its Governor for the Bank sits ex officio on ICSID's Administrative Council. Established in 1966, has 131 members. âThe expenses of the ICSID Secretariat are financed out of the Bank's budget, although the costs of individual proceedings are borne by the parties involved.

9 9 WBs Development Assistance Strategy Process âThe Comprehensive Development Framework (CDF) Principles: â helps countries think about the priorities for development and how to get there; â helps countries build a holistic vision and strategy for development that relies on partnership and the activities of many different players. â comprehensive focus on the relations between macro, structural, social and institutional elements of poverty reduction â emphasis on institutional change for long-term success, process rather than a product, focus on programs and policies and not on projects

10 10 WBs Development Assistance Strategy Process (contd) âThe Country Assistance Strategy (CAS): â vehicle for Board review of the Banks assistance strategy for IDA and IBRD borrowers. â describes the Banks strategy based on an assessment of priorities in the country, â indicates the level and composition of assistance to be provided based on the strategy and the countrys portfolio performance. â prepared with the government in a participatory way; its key elements are discussed with the government prior to Board consideration.

11 11 Lending Products ] Different forms of lending products are: âAdjustment Operations – SAL, PSAL, FSAL, PAL âInvestment Operations -- TAs, general development projects âLearning and Innovation Loans (LILs) – Gateway, information development projects

12 12 Project Cycle â A typical World Bank project goes through the following 5 project cycles â IDENTIFICATION â APPRAISAL â NEGOTIATIONS â BOARD APPROVAL â SUPERVISION

13 13 Europe and Central Asia Private and Financial Development Unit (ECSPF) âassists its clients to reduce poverty on a sustainable basis through growth led by the development of their private and financial sectors. âformed on July 1, 1997. âserves Europe and Central Asia region, covering 28 countries: â FSU: Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Moldova, Russian Federation, Tajikistan, Turkmenistan, Ukraine, Uzbekistan â Central and Eastern Europe: Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, FYR Macedonia, Poland, Romania, Slovak Republic, Slovenia, Turkey, FR Yugoslavia

14 14 Example of ECSPFs projects ] Albania ] Financial Sector Adjustment Credit âcontinued reform of the banking sector including the privatization of the Savings Bank and further strengthening of the banking regulation and supervision, âenhancement of the bankruptcy and debt resolution framework, âreform of the nonbank financial sector, including further development of the regulatory and supervisory framework for the insurance sector and the privatization of the Insurance Institute of Albania (INSIG). âThe credit (US$15 million) to be released in 2 tranches subject to the Government's achievement of specific benchmarks necessary for the successful implementation of the program: â privatization of the Savings Bank and the INSIG; â strengthening of the regulatory framework for banks and the insurance sector; â strengthening the bankruptcy, secured transactions and debt workout frameworks; â further improvement in the financial sector infrastructure.

15 15 Example of ECSPFs projects ] Ukraine ] Private Sector Development (PSD) âEnterprise Restructuring (market adjustment) to support and help accelerate Government's reform effort by: â providing advisory services through the implementing agency, the Ukrainian Center for Enterprise Restructuring and Private Sector Development (UCER) aimed at improving the profitability, productivity, and general operational, financial and managerial efficiency of private and privatized enterprises; â supporting and facilitating development of a highly qualified domestic consulting industry which thoroughly understands the unique local business and political climate in the process of economic development and transition; âTo strengthen constituency for reform at the oblast level consisting of entrepreneurs, managers, local academia, consultants and other stakeholders benefiting from enterprise restructuring and market- friendly business environment.

16 16 Example of ECSPFs projects ] FR of Yugoslavia ] Privatization and Restructuring of Banks and Enterprises âlaunching the restructuring and privatization (R&P) process of some of the most problematic large SOEs in Serbia â establish a consistent approach and methodology for the R&P process of large SOEs that cannot be sold as is â support the R&P of a number of large loss-making enterprises by funding expert restructuring agents âsupporting the implementation of a comprehensive bank resolution strategy aimed at the creation of viable financial sector. â support the restructuring or liquidation of insolvent banks under the control of Bank Rehabilitation Agency (BRA) and the privatization of all state-majority owned banks

17 17 Example of ECSPFs projects ] Turkey ] Export Finance Intermediation Loan (EFIL) âprovide, through the management of Turkish Eximbank and by utilizing the Participating Financial Institutions (PFIs), short and medium term working capital and investment finance to private exporting enterprises to assist the Turkish exporting sector. âenable a strategic dialogue and close interaction with the major banks and the Bankers Association in Turkey, through setting up of stricter and upgraded prudential eligibility criteria and banking standards for capital adequacy, foreign exchange exposure, connected and insider lending and risk management systems. âfacilitate further efficiency gains and other institutional development of Turk Eximbank itself.

18 18 The International Monetary Fund at a Glance âOversees the international monetary system âPromotes exchange stability and orderly exchange relations among its member countries âAssists all members -both industrial and developing countries- that find themselves in temporary balance of payments difficulties, by providing short-to medium - term credits âSupplements the currency reserves of its members through the allocation of SDRs (special drawing rights); to date 21.4 billion SDRs have been issued to member countries in proportion to their quotas âDraws its financial resources principally from the quota subscriptions of its member countries âHas at its disposal fully paid-in quotas now totaling SDR 90 billion (more than $120 billion) âHas a staff of 1,700 from over 100 member countries

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