|With a strong portfolio improvment program and sharper self-evaluation and monitoring systems in place, the World Bank is starting to turn around its portfolio performance.
In two World Bank reports—the Annual Review of Development Effectiveness and the Annual Report on Portfolio Performance—evaluators presented the institution's Board of Executive Directors the results for operations that exited the Bank's portfolio in fiscal years 96 to 97 (FY96-97), as well as for the 1,766 active projects from FY1997.
The Bank typically judges the projects it supports as "satisfactory" only if they meet a very ambitious set of objectives—including both development impact and an economic rate of return of 10 percent or above. Even given this tough standard, this year's evaluation reports conclude that the Bank may reach the goal of 75 percent satisfactory ratings for its operations by the year 2000 and that a longer-term goal of 80 percent or higher is feasible.
The Bank must stay the course to realize the full benefits of its Portfolio Improvement Program launched in April 1996. There was consensus that operational work must concentrate on four areas: focusing attention on high priority problem areas; improving the quality of project supervision; raising the quality of monitoring and evaluation; and enhancing the quality of new projects proposed for financing.
The Annual Review of Development Effectiveness produced by the independent Operations Evaluation Department (OED) looks at the Bank's completed projects. Data for FY96 show that 71 percent of projects had satisfactory outcomes, compared with an average of 67 percent from FY90-95. Initial results for FY97 indicate a share of satisfactory outcomes as high as 76 percent.
The proportion of Bank projects with satisfactory borrower performance increased to 71 percent in FY96 and to 74 percent for the FY97 sample from an average of 65 percent in FY90-95.
The study also found that overall Bank performance was satisfactory for 74 percent of operations in FY96 and 77 percent in the FY97 sample.
According to OED, the proportion of projects with high or substantial institutional development impact increased to 39 percent in FY96-97 from an average 30 percent in FY90-95. While the number of projects rated as having likely sustainability inched upward to 48 percent in FY96 from 46 percent in FY90-95, the overall picture is sobering: it is uncertain that the benefits of about half of all Bank operations will be sustained over the longer run. Ensuring institutional development and sustainability are therefore in the forefront of the Bank's management objectives.
The Annual Report on Portfolio Performance, produced by the Quality Assurance Group (QAG) looks at on-going projects. The study shows a consistent improvement in active projects, due in large part to better working relationships between operational staff and borrowers. The report predicts that this trend will continue as the Bank aggressively focuses on correcting high priority problem areas and as project managers step up the quality of project supervision.
The Bank's portfolio in FY97 comprised 1,766 operations, with a total of $141 billion. While the number of operations remained essentially unchanged, total commitments decreased by nearly $2.4 billion during the year. In real terms, commitments declined more sharply, continuing the downward trend experienced during the past several years; since FY92, the decline has been nearly 10 percent. Total loan disbursements in FY97, however, rose for a third year in a row to a record $20 billion.
Portfolio changes in recent years include a rapid enlargement of the Eastern Europe and Central Asia portfolio; a decline in operations in the electric power and telecommunications portfolio; and an expansion in lending for education and health, nutrition, and population. The OED and QAG reports have been submitted to the Bank's Executive Directors and will be published in the new year. For more information, call Merrell Tuck-Primdahl at (202) 473-9516, or e-mail email@example.com.
|Outcome Results, Bankwide by Exit Fiscal Year|
|Notes: Broken lines (Exit FY97) indicate preliminary results, with less than 50% coverage of exited operations.|