WB Group extended aid, guarantees totalling $6.9 billion to South Asia last fiscal
Thursday, 6 September 2007
FE Report
The World Bank (WB) Group extended loans, credits, grants, equity investments, and guarantees totalling nearly US$6.9 billion to South Asia in fiscal year 2007, said a WB press release.
The amount is an increase of US$2.3 billion over the previous year, demonstrating the institution's continuing role in fighting poverty as South Asian countries look for ways to tackle their social challenges even while most of their economies grew aggressively.
The eight countries of South Asia, including Bangladesh, are using WB Group support in more than 78 projects designed to overcome poverty and enhance growth - for example, by improving education and health services, promoting private sector development, building infrastructure, and strengthening governance and institutions.
Contributing to this increase was: US$1.6 billion from the International Bank for Reconstruction and Development (IBRD) which provides financing, risk management products, and other financial services; US$4.03 billion from the International Development Association (IDA) which provides interest-free loans and grants; US$1.18 billion from the International Finance Corporation (IFC) which makes equity investments, and provides loans, guarantees and advisory services to private-sector business in developing countries; and US$76 million from the Multilateral Investment Guarantee Investment Agency (MIGA), the group's political risk insurance agency.
"South Asia is home to the largest number of people in the world living below one dollar a day, so the agenda for poverty alleviation in the region remains very large," said WB Vice President for South Asia Praful Patel.
"The lending numbers from the IDA and IBRD in FY2007 are in line with the scaling up strategy we developed for the region three years ago," he added.
Globally, the WB Group committed US US$34.3 billion in fiscal year 2007, up US$2.7 billion (7.8 per cent) from fiscal year 2006. India was by far the largest borrower from IBRD and IDA, accounting for US$3.75 billion, or 15 per cent of total lending from these two institutions.
Nearly 60 per cent of the WB Group's commitments to South Asia came from IDA, and more than two-thirds of this lending financed projects in the areas of rural development and human development such as health, education, nutrition, and HIV/AIDS.
"There's a huge demand for IDA resources in South Asia and there's a huge prospect for making a real impact on the ground to reduce poverty," said Patel. "These types of programmes would not be possible without IDA funding. IDA leverages government programmes, enabling them to innovate and scale up," he added.
Many of the Bank's projects in the last fiscal year supported existing programmes that are delivering results. For instance, in Afghanistan the Bank approved a US$120 million IDA grant for the Second National Solidarity Programme, a community-led reconstruction and rural infrastructure initiative that has reached about 14 million rural people-74 per cent of Afghanistan's rural population-since its inception in 2002.
Looking ahead, the Bank will focus on cross-cutting reforms such as governance and fiscal management, and continue addressing deficiencies in the region's investment climate, such as weak infrastructure, red tape and corruption.
IBRD lending in the past year focused on helping South Asia close its infrastructure gap with road and irrigation projects. Looking ahead, the Bank will broaden its commitment to infrastructure with the first hydro project in a generation up for consideration early in the fiscal year that just started.
IFC's investment commitments in the South Asia region reached US$1.07 billion for 30 projects in FY07, and it mobilised an additional US$102 million through syndications. Its portfolio spreads across eight sectors in Bangladesh, Bhutan, India, the Maldives, Nepal and Sri Lanka. The financial and manufacturing sectors are the largest with infrastructure displaying the most rapid growth.
Three quarters of the $2.6 billion of the disbursed and outstanding regional portfolio is in India, with Bangladesh at $147 million, the second largest. Private sector projects worth US$3 billion were supported as a result of IFC's assistance to the Indian corporate sector.
The World Bank (WB) Group extended loans, credits, grants, equity investments, and guarantees totalling nearly US$6.9 billion to South Asia in fiscal year 2007, said a WB press release.
The amount is an increase of US$2.3 billion over the previous year, demonstrating the institution's continuing role in fighting poverty as South Asian countries look for ways to tackle their social challenges even while most of their economies grew aggressively.
The eight countries of South Asia, including Bangladesh, are using WB Group support in more than 78 projects designed to overcome poverty and enhance growth - for example, by improving education and health services, promoting private sector development, building infrastructure, and strengthening governance and institutions.
Contributing to this increase was: US$1.6 billion from the International Bank for Reconstruction and Development (IBRD) which provides financing, risk management products, and other financial services; US$4.03 billion from the International Development Association (IDA) which provides interest-free loans and grants; US$1.18 billion from the International Finance Corporation (IFC) which makes equity investments, and provides loans, guarantees and advisory services to private-sector business in developing countries; and US$76 million from the Multilateral Investment Guarantee Investment Agency (MIGA), the group's political risk insurance agency.
"South Asia is home to the largest number of people in the world living below one dollar a day, so the agenda for poverty alleviation in the region remains very large," said WB Vice President for South Asia Praful Patel.
"The lending numbers from the IDA and IBRD in FY2007 are in line with the scaling up strategy we developed for the region three years ago," he added.
Globally, the WB Group committed US US$34.3 billion in fiscal year 2007, up US$2.7 billion (7.8 per cent) from fiscal year 2006. India was by far the largest borrower from IBRD and IDA, accounting for US$3.75 billion, or 15 per cent of total lending from these two institutions.
Nearly 60 per cent of the WB Group's commitments to South Asia came from IDA, and more than two-thirds of this lending financed projects in the areas of rural development and human development such as health, education, nutrition, and HIV/AIDS.
"There's a huge demand for IDA resources in South Asia and there's a huge prospect for making a real impact on the ground to reduce poverty," said Patel. "These types of programmes would not be possible without IDA funding. IDA leverages government programmes, enabling them to innovate and scale up," he added.
Many of the Bank's projects in the last fiscal year supported existing programmes that are delivering results. For instance, in Afghanistan the Bank approved a US$120 million IDA grant for the Second National Solidarity Programme, a community-led reconstruction and rural infrastructure initiative that has reached about 14 million rural people-74 per cent of Afghanistan's rural population-since its inception in 2002.
Looking ahead, the Bank will focus on cross-cutting reforms such as governance and fiscal management, and continue addressing deficiencies in the region's investment climate, such as weak infrastructure, red tape and corruption.
IBRD lending in the past year focused on helping South Asia close its infrastructure gap with road and irrigation projects. Looking ahead, the Bank will broaden its commitment to infrastructure with the first hydro project in a generation up for consideration early in the fiscal year that just started.
IFC's investment commitments in the South Asia region reached US$1.07 billion for 30 projects in FY07, and it mobilised an additional US$102 million through syndications. Its portfolio spreads across eight sectors in Bangladesh, Bhutan, India, the Maldives, Nepal and Sri Lanka. The financial and manufacturing sectors are the largest with infrastructure displaying the most rapid growth.
Three quarters of the $2.6 billion of the disbursed and outstanding regional portfolio is in India, with Bangladesh at $147 million, the second largest. Private sector projects worth US$3 billion were supported as a result of IFC's assistance to the Indian corporate sector.