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House of Commons
International Development
Committee
The World Bank
Fourth Report of Session 2010–11
Volume I
EMBARGOED ADVANCED COPY
Not to be published
in full, or in part, in any form before
00.01 on Tuesday 1 March 2011
HC 605
House of Commons
International Development
Committee
The World Bank
Fourth Report of Session 2010–11
Volume I
Volume I: Report, together with formal
minutes, oral and written evidence
Additional written evidence is contained in
Volume II, available on the Committee website
at www.parliament.uk/indcom
Ordered by the House of Commons
to be printed 15 February 2011
HC 605
Published on 1 March 2011
by authority of the House of Commons
London: The Stationery Office Limited
£0.00
The Committee Name
Rt Hon. Malcolm Bruce MP, (Liberal Democrat, Gordon) (Chairman)
Hugh Bayley MP, (Labour, City of York)
Richard Burden MP, (Labour, Birmingham, Northfield)
Mr Sam Gyimah MP, (Conservative, East Surrey)
Richard Harrington MP, (Conservative, Watford)
Pauline Latham MP, (Conservative, Mid Derbyshire)
Jeremy Lefroy (Conservative, Stafford)
Mr Michael McCann MP, (Labour, East Kilbride, Strathaven and Lesmahagow)
Alison McGovern MP, (Labour, Wirral South)
Anas Sarwar MP, (Labour, Glasgow Central)
Chris White MP, (Conservative, Warwick and Leamington)
The following members were also members of the committee during the
parliament:
Mr Russell Brown MP, (Labour, Dumfries, Galloway), Mr James Clappison
(Conservative, Hertsmere) and Ann McKechin MP, (Labour, Glasgow North)
Publications
The Reports and evidence of the Committee are published by The Stationery
Office by Order of the House. All publications of the Committee (including press
notices) are on the Internet at www.parliament.uk/indcom
Committee staff
The staff of the Committee are David Harrison (Clerk), Mick Hillyard (Second
Clerk), Anna Dickson (Committee Specialist), Chlöe Challender (Committee
Specialist), Tony Catinella (Senior Committee Assistant), Susan Monaghan (Senior
Committee Assistant), Vanessa Hallinan (Committee Assistant), and Nicholas
Davies (Media Officer)
Contacts
All correspondence should be addressed to the Clerk of the International
Development Committee, House of Commons, 7 Millbank, London SW1P 3JA.
The telephone number for general enquiries is 020 7219 1223; the Committee’s
email address is [email protected]
The world Bank 1
Contents
Report Page
Summary 3 
1  IDA and the IDA16 replenishment 7 
IDA 16 package 9 
Size of replenishment and UK’s contribution 10 
Permanent Crisis Response Window 13 
IDA16 priorities and targets 14 
2  Areas of concern 17 
Procurement process 17 
Governance and accountability 19 
Engaging with civil society and Parliaments 21 
Independent Evaluation Group 24 
Gender 25 
Environment 26 
Results 27 
3  Conclusion 29 
 
Annex 1: Committee’s Visit Programme in Washington 31
Conclusions and recommendations 33 
 
Formal Minutes 37 
Witnesses 38 
List of printed written evidence 38 
List of Reports from the Committee during the current Parliament 38 
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Summary
The World Bank is the world’s pre-eminent development institution leading global efforts
to promote economic growth, sustainable development and poverty reduction. In this
report, we focus on the International Development Association (IDA), the arm of the
World Bank, which provides grants and interest-free loans to poor countries. A new
funding and policy framework was agreed for IDA, the 16th replenishment, in December
2010 and will run for the period 2011-2014. IDA16’s total replenishment is set at $49.3
billion with finance provided from a number of sources, including donor contributions
amounting to $26.4 billion from 51 donors. The UK, which is the second largest
contributor to IDA16, is pledged to contribute £2,664 million. The agreed priorities for
IDA16 include fragile and conflict-affected states, gender and climate change.
We support the scale of the UK contribution and the priorities for IDA16. We support the
establishment of a permanent Crisis Response Window to help poor countries affected by a
natural or economic disaster. However, we call for improvements in a number of areas.
DFID should press for:
• improvements in the Bank’s procurement process
• an open and meritocratic process for selecting the current President’s successor
• a more equitable allocation of voting shares for developing countries. However, the
UK, as one of the largest contributors, should retain sufficient influence within the
Bank
• the Independent Evaluation Group, which assesses the Bank's activities, to be
strengthened
• the Bank’s achievements on gender to be closely monitored to ensure that the
promotion of girls’ education is an early priority for IDA16
• affordable energy access for the poor, a faster transition to low carbon energy use,
and more support to improve the financial viability of renewable energy.
We welcome further engagement by the Bank with Parliamentarians and civil society in
developing countries. To facilitate a wider debate within the House on the UK's decision to
provide substantial sums to IDA, we call for the draft order to approve the UK’s
contribution to the IDA16 replenishment to be debated on the floor of the House.
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1. The World Bank, which is the world’s pre-eminent development institution, has for
many years received large sums from the UK taxpayer. Our predecessor Committees
examined the institution regularly. The last report on the World Bank was in 2008: DFID
and the World Bank. 1 As one of our first tasks, we decided to undertake a brief inquiry into
the World Bank following up on recommendations in the 2008 report. We also wished to
consider the 16th replenishment of the International Development Association (IDA), the
arm of the World Bank that deals with the poorest countries. In this report we have not
considered all the important World Bank organisations, including the International
Finance Corporation and the International Bank for Reconstruction and Development.
We intend to examine them in our next inquiry into the World Bank Group.
2. We announced our inquiry on 9 September 2010 with the following terms of reference:
• the effectiveness of the World Bank Group, including the International Finance
Corporation;
• the 16th replenishment of the International Development Association, which will
set IDA’s priorities for the future;
• the World Bank and IMF Annual Meetings, which are expected to cover possible
reforms of the institutions and their new priorities ; and
• the way the World Bank involves Parliamentarians and others in developing
countries.
3. We received written evidence from: the Department for International Development
(DFID); ActionAid; Adam Smith International (ASI); Bretton Woods Project (BWP);
Christian Aid; Parliamentary Network on the World Bank (PNoWB); and the Trades
Union Congress (TUC). We held two oral evidence sessions. The first was with DFID
(Right Hon. Alan Duncan MP, Minister of State for International Development and DFID
officials), and the second with Non-Governmental Organisations (NGOs): Jesse Griffiths
(Bretton Woods Project); Ed Hedger, Overseas Development Institute (ODI); and Peter
Young (ASI)). We also had a series of informal briefing meetings in Washington (in early
November 2010) with officials from the World Bank and the International Monetary Fund
(IMF). We met Mr Robert Zoellick, President of the World Bank Group, in Washington
and London. A list of the Washington meetings is annexed to this report. We would like to
thank all those who contributed to the inquiry, formally or informally.
4. In Chapter 1, we look at IDA, the IDA16 replenishment, the establishment of a
permanent Crisis Response Window and IDA’s targets. In Chapter 2, we consider a
number of areas that attracted criticism during our inquiry or were highlighted in our
predecessor’s report, namely: the Bank’s procurement process; its governance and
accountability; its engagement with civil society and Parliament; the Independent
Evaluation Group (IEG); and the Bank’s activities on gender, environment and results. In
Chapter 3, we set out our conclusions.
1 Sixth Report of Session 2007-08, DFID and the World Bank, HC 67-I
6 The world Bank
Box 1: World Bank Group World Bank Group
The World Bank Group comprises five organisations:
International Development Association (IDA), a “soft” lender, which provides governments
of eligible countries with advice and finance (highly concessional loans and grants), aimed at
boosting economic growth, reducing inequalities and improving people’s living conditions;
International World Bank for Reconstruction and Development (IBRD), a relatively “hard”
lender, which provides governments of middle income and credit-worthy countries with advice
and loans on more favourable terms and in larger volumes with longer maturities than the
international capital market will generally provide;2
International Finance Corporation (IFC), which provides finance and advisory services for
private sector investment;3
Multilateral Investment Guarantee Agency (MIGA), which insures investors against political
risk and advises governments with the purpose of promoting foreign direct investment into
developing countries;4
Convention on the Settlement of Investment Disputes (ICSID), which provides facilities for
conciliation and arbitration of international investment disputes.
The IDA and IBRD are collectively referred to as the World Bank.5 The World Bank employs some
10,000 staff across 109 country offices, is one of the United Nations’ specialised agencies, and is
made up of 184 member countries. The Bank’s mission is to eradicate poverty and its activities
play a key role in efforts to achieve the Millennium Development Goals (MDGs).6 The World Bank
provides advice, loans, guarantees and grants and is able to mix its financial instruments
according to the characteristics of each partner country. The World Bank is funded by capital
contributions from shareholders, borrowing on the capital markets and its own resources.
Source: Based on World Bank sources
2 IBRD lending is provided on market related terms.
3 IFC is the world’s largest provider of multilateral financing for the private sector in the developing world. Source:
World Bank.
4 In financial year 2010 MIGA issued guarantees totalling $1.5 billion (£945 million) in developing countries. Source:
World Bank.
5 In this Report the terms ‘the World Bank’ and ‘the Bank’ refer to the World Bank Group institutions and not just the
IBRD and IDA.
6 Second Report of session 2010-11, The 2010 Millennium Development Goals Review Summit, HC 534
The world Bank 7
1 IDA and the IDA16 replenishment
5. The World Bank describes the International Development Association (IDA), its soft
lending arm, as "the single largest source of donor funds for basic social services to the
poorest countries."7 IDA currently provides assistance (financial and advisory) to the
governments of 79 of the world’s poorest countries, of which 39 are in Africa.8 The
financial assistance takes the form of:
• IDA loans (also known as credits) which incur no interest, have capital repayments
periods of up 40 years, and a 10-year grace period. Gross disbursements of new
loans increased in 2009 by 26% (year on year) from $6.9 billion to $8.7 billion9; and
• IDA grants, which carry a 0.75% service charge and are provided to poor countries
with serious debt problems. IDA disbursement of grants increased in 2009 by 19%
(year on year) from $2.1 billion to $2.5 billion.
6. In addition to providing finance, the World Bank is a major source of analysis,
knowledge and high-level policy advice to governments, for example on designing health
or education systems (“a Knowledge Bank”).10 The Bank, which can influence other donors
and capital markets in their policy towards a borrowing country, also played an important
role in helping to coordinate the response to the 2008 global financial crisis. The various
arms of the World Bank Group (as described above) work closely together, for example,
IDA, IBRD and IFC will help Low Income Countries (LICs) to “graduate” from IDA to
IBRD lending and ultimately to full creditworthiness in international capital markets.11
7 See What is IDA?, World Bank.
8 To be eligible, IDA borrowers must (a) lack sovereign creditworthiness, (b) have a per capita income of less than
US$1,095 (in fiscal year 2009) and (c) must meet certain "performance" criteria set by the World Bank. Source:
BICUSA.org.
9 IDA new loan commitments rose only 15% in 2009 (year on year) to $10.4 billion.
10 The World Bank has more than 1,000 Advisory Services staff spread across 84 offices across in 66 countries. In fiscal
year 2010, Advisory Services expenditures totalled $268 million, of which 61 percent went to International
Development Association (IDA) countries. Source: World Bank.
11 The various parts of the World Bank group also work closely with regional development banks, for example, the
African development Bank. Our predecessor Committee reported on the African Development Bank in 2008 HC 441-
1.
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Box 2: Selected IDA case studies
“Nicaragua - Social Protection Project
WASHINGTON, February 3, 2011 - The World Bank’s Board of Executive Directors
today approved the following project:
IDA Credit: US$19.5 million equivalent
Terms: Maturity = 40 years; Grace = 10 years
Project ID: P121779
Project Description: The objectives of the Social Protection Project are to: (i) improve
the basic conditions of welfare and social wellbeing of extremely poor beneficiary
families with children in selected poor localities in Nicaragua; (ii) strengthen the capacity
of the Ministry of the Family, Youth and Children (MIFAN) to implement the family and
community-based social welfare model; and (iii) promote pre-school and primary school
attendance through the provision of school lunches.
****
Pakistan - Khyber Pakhtunkhwa and FATA Emergency Recovery Project
WASHINGTON, January 20, 2011 - The World Bank’s Board of Executive Directors
today approved the following project:
IDA Credit: US$250 million equivalent
Terms: Maturity = 35 years; Grace = 10 years
Project ID: P121394
Project Description: The objective of the project for Pakistan is to support the
Government of Pakistan, specifically the Khyber Pakhtunkhwa province and Federally
Administered Tribal Areas, in their recovery efforts through providing safety net support
grants to poor and vulnerable households affected by the militancy crises, providing
conditional cash transfers for human development to poor and vulnerable households
and strengthening necessary capacities and systems for post-disaster safety nets.”
Source: The World Bank
7. Since it was established 50 years ago, IDA has provided $222 billion, which in recent
years has averaged $13 billion per year of concessional funding.12 Nearly half of IDA’s total
funding has gone to Africa.13 The World Bank claims that over the past 10 years IDA has:
• helped to save about 13 million lives
• immunised over 310 million children
• improved access to water for 100 million people
• supported 100 million children going to school every year
• supported judicial reform
• supported improvements in public financial management
• supported transparency
• supported environmental stewardship
• supported recovery from natural disasters in Aceh, Haiti, and Pakistan.14
12 IDA was launched on September 24, 1960 with an initial funding of $912.7 million.
13 IDA’s largest single borrowers are India, Pakistan, Nigeria, Vietnam, and Ethiopia (2009).
14 Achievements mentioned by President Zoellick,President, World Bank Group, Media Teleconference on IDA, 15
December 2010 at the Press Conference announcing the IDA16 agreement
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The Bank’s own research indicates it had made “a very significant contribution to
development gains in many poor countries” and that 80% of IDA projects achieved their
objectives in 2003-2005.15
IDA 16 package
8. Every three years donors agree a new funding package for IDA. The current framework,
IDA15, finishes at the end of June 2011. IDA16 will run from 1 July 2011 to 30 June 2014:
the last full replenishment before 2015 and the target date for the Millennium
Development Goals.16
9. The funding and policy framework for its successor, IDA16, was agreed on 15 December
2010. The Bank’s Executive Deputies recommended that donors contribute SDR 17.6
billion ($26.4 billion) to IDA16 in order to achieve an overall total replenishment of SDR
32.8 billion ($49.3 billion). The $49.3 billion represents a dollar cash increase of 17.3% on
the $41.7 billion agreed for IDA15.17 The main elements of the IDA16 package as agreed in
December are:
a. a total funding package of $49.3 billion, comprising:
i. donor pledges ($26.4 billion) from 51 donors comprising
traditional donors (G20 countries etc) and new donors (countries
that have graduated or about to graduate from IDA)18
ii. additional donor contributions of $5.3 billion to cover IDA’s debt
relief costs due to the Multilateral Debt Relief Initiative (MDRI)
during the IDA16 disbursement period19
iii. internal Bank resources of $9.9 billion, subject to approval by
IDA’s Executive Directors
iv. accelerated repayments payments ($1.8 billion) from lower
middle income countries that have graduated out of borrowing
interest-free loans from IDA20
v. additional voluntary prepayment by China ($1 billion)
vi. $3 billion of transfers from within the World Bank Group ($2
billion from the revenues from IBRD and about $1 billion from
IFC) 21
15 Ev 36
16 World Bank Press Release - Brussels, December 15, 2010
17 The funding package includes donor pledges, investment income, donor contributions to the Multilateral Debt
Relief Initiative replenishment; credit repayments received from both current and past IDA borrowers; and transfers
from IBRD net income and grants from IFC. Source: Draft of IDA16 Deputies, December 2010.
18 Robert B. Zoellick, President, World Bank Group, Media Teleconference on IDA, 15 December 2010. President Robert
Zoellick was unable to reveal individual names during the conference, but referred to the “bigger developing
countries”. The Final draft Deputies report identifies China.
19 For the MDRI, the IDA16 disbursement period is financial years 2012 to 2022.
20 IDA loans can run for 40 years, but since IDA is a rolling fund these accelerated prepayments are from countries that
have graduated from IDA, have a per capita (Gross National Income) level above a specific threshold, are IBRD
creditworthy and subject to the approval of IDA’s Executive Directors after considering the borrower’s economic
development. China and India are expected to make accelerated repayments. The Bank views this funding as South-
South support. Interest rates on outstanding IDA loans are expected to rise.
21 Robert B. Zoellick, President, World Bank Group, Media Teleconference on IDA, 15 December 2010
10 The world Bank
vii. $2 billion from hardening of terms on loans to countries that
have recently graduated from IDA
b. establishment of a permanent Crisis Response Window to be used as a regular
tool to support low income countries affected by natural disasters and
economic calamities (for example as used for Haiti)
c. special thematic priorities to include fragile and conflict-affected states,
gender, and climate change
d. results to be measured, so that taxpayers, shareholders, clients, and
beneficiaries, can see the results of IDA’s investments
e. about half of IDA funding expected by the World Bank to be disbursed over
the period to sub-Sahara Africa
f. the US and the UK are the two largest donors to IDA16, contributing 15.7%
and 15.6% of the total donor pledges respectively.
10. Many of the general features of IDA16, for example its priorities and sources of
funding, were not unusual and did not differ significantly from the previous IDAs. The
crucial elements that were unknown until the December announcement were the size of
the total replenishment package and the level of funding from particular sources, for
example the net income from other parts of the World Bank Group. The final figures for
individual contributions will not be published until April 2011 when the Final Deputies’
Report is published. We have used the figures in the Draft Deputies’ Report. Here, we
concentrate on:
• size of the IDA16 replenishment and the UK’s contribution
• establishment of the permanent Crisis Response Window
• IDA16 priorities and targets
Size of replenishment and UK’s contribution
11. On 16 December 2010, the UK announced that its contribution to IDA16 would
amount to an average of £888 million for each of the three years (a total of £2.7 billion).22
This represents 15.6% of the total donor pledges or 12% of the total target for donor
contributions.23
12. According to the Bank, the replenishment for IDA16 ($49.3 billion) represents a dollar
cash increase of 17.3% on the $42 billion agreed for IDA15 (or nearly 20% when expressed
in Special Drawing Rights (SDRs)).24 Bretton Woods Project (BWP), however, calculates
22 DFID press release, “Britain backs drive to lift millions out of extreme poverty”
23 The total target for donor contributions was set at SDR22.5 billion. This includes donor pledges (SDR17.2 billion),
additional investment income (SDR233 million) and SDR4.9 billion (“structural gap”). The “structural gap” is the
difference between the actual donor pledges and investment income and the IDA16 target for contributions (which
was set at SDR22.5 billion). The Bank obtains the U.S. Dollar equivalent figures by converting the SDR amount using
the average exchange rates for the U.S. Dollar against the SDR over the period April 1 to September 30, 2010
(SDR1=USD1.50233).
24 The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official
reserves. For the purposes of the IDA, the SDR is used as a unit of account. The value of an SDR is based on a
weighted basket of currencies (the euro, Japanese yen, pound sterling, and U.S. dollar) and is calculated on the basis
of exchange rates quoted at noon each day in the London market.
The world Bank 11
that when compared with the final IDA15 the increase for IDA16 is only 13% when
expressed in SDRs.25 Regardless of the precise percentage increase, the $49.3 billion figure
represents a significant increase on IDA15 during a period of austerity.
13. At the 15 December 2010 press conference where the global sums for IDA16
replenishment were announced, President Zoellick said:
This record IDA replenishment will help improve the lives of over 200 million
people, bring healthcare to 30 million people and give access to clean water to 80
million people, among many other areas such as roads and health and education and
infrastructure.26
14. The following table, which shows the ten largest donors percentages, shows the UK’s
pledge was the second largest to IDA16, marginally smaller than that made by the US.
Box 3: Top 10 largest donors
The top ten largest donor pledges to IDA16 (as
percentage of donor pledges)
US 15.7%
UK 15.6%
Japan 14.1%
Germany 8.4%
France 6.5%
Canada 5.2%
Spain 4.0%
Netherlands 3.9%
Sweden 3.8%
Italy 3.1%
Source: World Bank
15. The relatively large UK contribution reflects the UK’s shared interests with IDA.27 In
addition to the traditional donors, the pool of donors has been widened to include new
donors as developing countries graduate to middle income status. As regards the UK,
DFID set out its case for its contribution to IDA16 in its Written Ministerial Statement:
IDA is an important and effective channel for international efforts to achieve the
Millennium Development Goals (MDGs). As the emerging findings of the
Government’s comprehensive Multilateral Aid Review demonstrate, its high quality
analysis and the deep expertise of its staff are drawn on by governments in IDA
countries to develop robust national poverty reduction strategies and make good
public spending choices. In its own programmes, IDA delivers flexible assistance in
support of countries’ priorities. As well as investing in areas such as health,
education, agriculture it also helps countries develop the institutions, the policies and
25 Final IDA contributions increased over the course of the IDA15 replenishment as a result of additional contributions,
a carry-over from IDA 14 and other factors.
26 Op cit
27 The UK was the largest single donor to IDA15.
12 The world Bank
practices that underpin sustained poverty reduction and economic growth e.g.
helping to strengthen accountability and tackle corruption. The World Bank has a
strong track record of robust evaluation and lesson learning, and its new
transparency policy puts it at the forefront of multilateral agencies in this regard.
In light of IDA’s strengths, its central role in helping the international community
achieve the MDGs, and the results and reforms it has committed to deliver, the UK
will provide an average of £888 million a year for the next three years.28
16. We have heard two criticisms of the overall size of the IDA16 replenishment. First, the
IDA package should have been larger: UNESCO called for a package of $60bn.29 Secondly,
the UK’s contribution should have been conditional on the World Bank making
substantial reforms. Bretton Woods Project recommended that the:
UK should not increase its dollar contribution to IDA in the current replenishment
but should instead focus on achieving substantial reforms of the World Bank and
IFC [International Finance Corporation] in key areas, including health, gender,
climate and energy, and the private sector, and in radically improving the legitimacy,
transparency and accountability of the institution.”30
17. According to Bretton Woods Project, the World Bank has not made enough progress
on those areas “to be given the seal of approval that would come with the UK increasing its
dollar contribution.31
18. When we put this argument to the Minister, he told us that the UK was not in favour of
the stark condition put forward by the Bretton Woods Project, although he had some
sympathy with what they were saying. He said: “I don’t think waving such a big stick is the
right way to go about this.” A DFID official pointed out the adverse consequences of every
member of IDA seeking to attach its own separate conditions to IDA: “there would be
absolutely no certainty, no predictability and no ability for countries to know how much
money they were going to get, and the whole thing would collapse.”32
19. In terms of timing, we asked the Minister how he could agree to an increase in funds
for IDA16 in December before he had completed the Multilateral Aid Review (MAR), the
results of which are not expected to be announced until 1 March. He replied that:
We all know there is a collision between the timing of that [decision on IDA16] and
the timing of the MAR, but we will sort that to the satisfaction of the World Bank, I
hope. They will remain as a significant partner. Put it this way—they are not at the
bottom of the class with a dunce’s cap on facing the corner.33
28 HC Deb, 16 Dec 2010, col 129WS
29 For example, see UNESCO, the Education for All: EFA Global Monitoring Report, 2010.
30 Ev 40
31 Q 119
32 Q8
33 Q 18
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20. As regards priorities, DFID told us that it had achieved progress against its priorities
during replenishment negotiations, for example, IDA16 will have a stronger focus on
“results” and a strengthened role in fragile states and on gender and climate change. The
Minister told us:
There are four main things for assessing the merits of an IDA replenishment: results,
their ambition, their delivery at country level and their cost control. We are having
serious discussions with them, and our influence on IDA replenishment round is
quite strong.34
Permanent Crisis Response Window
21. The 2008 global financial crisis revealed a fundamental weakness in IDA architecture,
namely: IDA’s fixed capital prevented it from responding flexibly and promptly to help
poor countries affected by the global financial crisis. The clients of IDA — the world’s
poorest countries — were expected to absorb most of the effect of the global shock
themselves.35 DFID told us that concerns were raised during consultations with low
income countries, in particular with a number of African Finance Ministers, about the
inability of the institutions to respond and support their needs during the crisis. In
contrast, the IMF and IBRD were able to mobilise substantial sums of additional funding
to support high and middle income countries.
22. In November 2009, the World Bank agreed to set up a crisis response facility on a pilot
basis. The World Bank allocated $1.6 billion (£1 billion) of resources for this purpose,
including £100 million from DFID. In total 56 IDA countries were identified as potentially
eligible to benefit from these additional resources during 2010. In the event, money from
the crisis response facility was used as part of the Bank’s emergency response to the Haiti
earthquake.36
23. According to DFID, the UK played a pivotal role in encouraging the World Bank to
consider the feasibility of establishing a permanent crisis response facility for the benefit of
the poorest countries.37 A DFID official told us:
our proposal was that IDA should have a particular thing called a Crisis Response
Window that would allow it to hold back some money in the event of a shock, and
also potentially to reach across to the hard lending arm of the IBRD and to leverage
some of that money, paying it back over time in the future.38
24. The discussions during the IDA16 replenishment were successful and a new permanent
facility — the Crisis Response Window — to help poor countries affected by a natural or
34 Q7
35 Ev 39
36 Ev 38
37 Q5
38 Q5
14 The world Bank
economic disaster is now being established under IDA16.39 The following table summarises
various features of the Crisis Response Window.
Box 4: The Crisis Response Window
Features of Crisis Response Description
Window
Trigger Mechanism Crisis Response Window may be invoked by an exogenous economic
shock that affects a significant number of IDA countries or a natural
disaster that is exceptionally severe and intense.
Country Eligibility All IDA countries are potentially eligible.
Fiscal Analysis Analysis to be used to assess the amount of core development spending at
risk (e.g. spending on health, education, maintenance of infrastructure
and social protection).
Allocation Framework Resources to be allocated as part of a two stage process and in accordance
to the likely impact; for natural disasters, the size of the Crisis Response
Window allocation will be based on a number of factors, including the
severity of the crises, the cost of recovery and availability of Crisis
Response Window funds.
Size and use of Funds Size of facility to be capped at 5 percent; accelerated disbursement
procedures to be used.
Terms of support Usual IDA terms for particular country.
Source: Based on Draft of IDA16 Deputies’ Report, World Bank, September 2010
25. We heard some concerns about the possible operation of the Crisis Response Window:
Bretton Woods Project said that it would be a “disaster” to allow low income countries to
borrow more during a crisis.40 Bretton Woods Project called for a mechanism to transfer
some of the increase in the IMF’s Special Drawing Rights that was agreed at the London
Summit in 2009, of which only £19 billion of the £250 billion overall increase had gone to
low income countries.41 Bretton Woods Project was also not convinced that the Bank,
which reacted slowly during the 2008 financial crisis, was the right organisation to take the
lead on Crisis Response Window. Adam Smith International (ASI) agreed and claimed
that in fragile and conflict-affected states the Bank’s systems were not suitable “for the very
speedy response” that would be required.42
IDA16 priorities and targets
26. As noted above, the agreed priorities for IDA16 include fragile and conflict-affected
states, gender and climate change. According to DFID, it successfully pressed for IDA16 to
be given objectives against which IDA would set measurable targets. For example, two
objectives and their respective targets are set out below.
39 HC Deb, 16 Dec 2010, col 129WS
40 Q 120
41 Q 89
42 Q 89
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Box 5: Objectives and Targets
1) Objective: Improving the Lives of Poor People:
IDA has set itself the target of:
• Providing 80 million people with access to improved water sources
• Providing 2 million people with access to improved sanitation facilities
• Immunising 200 million children
• Providing at 30 million more people with health services, including 2 million
pregnant women
• Recruiting and train 2 million teachers
2) Objective: Helping countries create wealth and jobs: IDA provides a range of
support including funding key infrastructure, such as power, irrigation and roads.
This is essential for boosting trade, encouraging private investment, and enabling
people to access markets, schools and health centres. IDA has set itself the target
of constructing and rehabilitating 80,000 kms of roads.43
Source: DFID
27. As part of our World Bank inquiry, the Minister outlined the advantages of multilateral
institutions:
They have a scale that, because it is a collective endeavour, significantly exceeds
anything that we can do on our own. They have a reach that we also cannot always
do on our own. Their footprint is wider and, for various reasons that are coming out
of the bilateral review, we may choose to delineate our footprint on the world map
differently. They are seen more often than not, if not always, to be neutral. As such,
they are a benign, non-political influence in the countries in which they work, and
they allow for co-ordination of money flows and efforts that again a bilateral effort
cannot do on its own.
28. The Minister told us that the World Bank satisfies those criteria. We agree. We support
the increase in funding to IDA 16 and the scale of the UK’s contribution. We trust that
DFID’s contribution is not just becaus


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