The World Bank’s client countries experienced a remarkable year, with average per capita gross domestic product (GDP) rising an estimated 6 percent in 2006. Even more significant, trends of sustained growth are emerging: annual per capita GDP growth in developing countries has averaged 3.9 percent since 2000, and 16 African countries—home to more than a third of the region’s population—have enjoyed annual growth of more than 4.5 percent over the past decade. This growth has benefited the poor, with the number of people living in extreme poverty dipping below 1 billion for the first time since the Bank began measuring poverty, in 1990. Clearly, developing economies are performing. Now is the time to meet that performance with increased aid. Donor countries have committed billions in debt relief and have met emergencies with well-timed assistance, thereby making an important contribution to the ability of poor countries to achieve their development goals. Further support could go beyond mitigating the burden of debt and disaster to enable performers to invest more in priority areas such as infrastructure, education, and health. |  |  © Arne Hoel |
For many low-income countries, the development finance landscape has been transformed by unprecedented access to private capital—though that access is still uneven, with the poorest 51 countries receiving just 8 percent of the total in 2006. Meanwhile, traditional aid now comes from an abundance of donors, including some countries newly arrived at lending, and still others, such as foundations or even individuals, with highly specific goals. Taken as a whole, these are encouraging signs, especially when support aligns readily with national priorities. This transformation underscores the vital convening role of the International Development Association, which serves as a cornerstone of the international aid system in many poor countries. IDA provides such countries with reliable aid support and leverages the assistance of other donors for coherent, country-owned programs and projects. IDA’s efforts forge stronger partnerships between aid providers and recipient countries, leading to better outcomes for the poor. The coming year will be crucial for IDA’s clients, as donors will be confirming their commitments to the 15th replenishment of IDA. IDA15 will provide resources to assist the world’s poorest countries from July 2008 through June 2011—critical years for developing countries trying to achieve the Millennium Development Goals (MDGs). Given the long lag time before development projects yield measurable results, IDA15 may be the last major opportunity for donors to support developing-country efforts to make significant progress toward achieving the MDGs by 2015. For middle-income countries, access to market-based financing and risk-management tools continued to improve in fiscal 2007, as their costs of borrowing declined to near all-time lows. These countries require development partners that are flexible and responsive and that can provide a broad array of financing, risk-management, and credit-enhancement products, provided quickly and at lower transaction costs. International financial institutions, including the World Bank, must adapt to such changes in client complexion and outlook and to the constant changes in the global economic environment. The World Bank uniquely must adapt to these changes while staying loyal to its vision: a world free of poverty. It pursues this end by focusing on its areas of comparative advantage, supporting client countries’ pursuit of sustained and equitable economic growth. The Bank’s support includes knowledge services, financial services, and strategy and coordination services. Additionally, the Bank advocates the adoption of prodevelopment policies around the world, particularly in relation to trade. This report looks at the activities undertaken in the past fiscal year in the fight against poverty. The report pays special attention to Africa and focuses on five critical areas where the Bank can have a distinct impact: health, education, and gender; infrastructure and clean energy; financial and private sector development; governance and anticorruption; and in developing its strategy for middle-income countries. The Millennium Development Goals  |
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