Nearly seventy percent of the world’s poor, defined as people who earn less than $2 per day, live in middle-income countries. These countries borrow from IBRD and have a large unfinished social agenda that includes meeting and surpassing the Millennium Development Goals.
Middle-income countries are increasingly important in terms of providing global public goods such as clean energy, trade integration, environmental protection, international financial stability, and the fight against communicable diseases. But most of these countries face constraints in mobilizing the funds needed to invest in infrastructure, health, education, and the reform of policies and institutions essential to improving the investment climate. Not all middle-income countries are able to borrow on foreign markets or access risk management instruments, and often where these sources of finance are available, the maturities are usually short and the rates high.
In response to the needs of middle-income countries, the World Bank Group provides a flexible program of banking, financing and knowledge services that recognizes the heterogeneity of this group of countries. The Bank recognizes that working collaboratively with other multilateral development banks and bilateral cooperation agencies can enhance the scale of involvement at the country level and maximize impact on development results.
At present, the World Bank is reviewing its strategy to enhance support to Middle Income Countries, and plans to discuss this with the development committee at the Annual Meetings in Singapore.
Discussions with the World Bank's Executive Directors in December 2005 have reviewed implementation of a number of actions in support of the Middle Income Countries. The main components of the action plan have been to:
- Clarify the Bank's role in MICs, particularly in lending;
- Remove obstacles to timely quality lending, including inter alia intensifying implementation of the investment lending modernization and simplification agenda, and fiduciary and safeguards policy initiatives;
- Introduce more flexibility into CAS implementation and the CAS process;
- Promote the use of existing IBRD financial products; and
- Introduce a Bank Group approach to providing support through financial institutions.