At the summit a consensus emerged on moving toward a new development path that will combine growth with environmental responsibility and social equity, in both rich and poor countries. Poverty reduction is much more than a development aid issue—it is also an issue of global stability, the summit emphasized.

One key message emerging from Johannesburg and the Bank’s own operational experience is clear: enlightened public policy, a responsible and accountable private sector, and proactive civil society organizations are needed to achieve the WSSD targets and the Millennium Development Goals (MDGs) by 2015. The spirit of cooperation and of constructive engagement generated among all stakeholders in Johannesburg is a promising start. (See www.johannesburgsummit.org.)

STRATEGIES FOR THE ENVIRONMENT

In fiscal 2003 the Bank’s Board of Executive Directors endorsed a suite of sector strategies, titled “Reaching the Rural Poor,” “Water Resources Sector Strategy: Strategic Directions for World Bank Engagement,” and “A Revised Forest Strategy for the World Bank Group,” with a corresponding forest policy. Together with the environment strategy, now in its second year, these represent a clear movement toward sustainable use of natural resources. They are aligned with the MDGs and are consistent with WSSD development priorities.

Through its environment strategy, the Bank is paying particular attention to the links among the environment, poverty, and development, along with how the environment affects the health, livelihoods, and vulnerability of poor people. (See www.worldbank.org/environmentstrategy.)

Progress has been made, especially in three key areas:

1. Establishing poverty-environment links. Providing targeted environmental inputs to Poverty Reduction Strategy Papers (PRSPs), and identifying “best practices” through a review of environmental content in PRSPs (for example, in the Republic of Yemen paper). The Bank is also increasing the use of programmatic approaches and lending instruments (for example, in the Mexico Environment Structural Adjustment Loan) to enhance environmental policies and institutions.
2. Undertaking strategic analyses. The Bank is using Country Environment Analysis in India and Tunisia, Strategic Environmental Assessments (such as the Nile Basin Initiative), Poverty-Environment Analyses (such as the Poverty-Environment Nexus in East Asia), and economic indicators to strengthen development outcomes. In fiscal 2003, 52 new projects with environmental lending amounting to $1.1 billion were approved. This represents 6 percent of total Bank new lending in fiscal 2003.
3. Realigning institutional incentives and resources. To complement changes in the Bank’s lending and analytical work in client countries, the Bank is also strengthening its incentive structure and institutional resources. Green Awards have encouraged environmental mainstreaming. Environmental and safeguards training—both within the Bank and for our clients—has increased substantially. The Bank is using the Mainstreaming Fund for the Environment to support strategy implementation and cross-sectoral analysis. Through a new database, the Bank is now providing up-to-date environmental indicators and trends.

SAFEGUARD POLICIES

In fiscal 2003 the Bank’s executive directors and senior management reaffirmed the importance of continued compliance with safeguard policies. In line with this affirmation, the Bank drafted a framework paper for improving development effectiveness for safeguard policies, which is now posted on the Web for public comment from borrowers and other stakeholders. (See www.worldbank.org/safeguards.) This framework paper included provisions for the use of safeguard pilot programs to test new approaches to meeting the safeguard policy objectives of the Bank, including undertaking pilot programs concerning harmonizing national procedures, developing review mechanisms for new lending instruments, testing the use of borrower safeguard systems, and examining innovative approaches. The Bank also worked closely with the members of the International Financial Institutions Working Group on Environment to develop a common approach for environmental impact assessment that was issued at the High-Level Forum on Harmonization in Rome (February 2003, www1.worldbank.org/harmonization/romehlf). In addition, the Bank approved a new operational policy for forests in November 2002, which also addresses safeguard issues. The Bank continued to support extensive safeguards capacity-building and training activities for staff, borrowers, and other stakeholders at headquarters and in the field, focusing on their application in project identification, preparation, appraisal, and supervision.

AGRICULTURE, RURAL DEVELOPMENT, AND FORESTS

In fiscal 2003 lending volumes were $1.9 billion for rural development. The Bank’s new rural strategy will promote broad-based rural growth that enhances agricultural productivity by focusing on poor people, addressing the entire rural area, building alliances with stakeholders, and identifying the impacts of global developments such as trade protectionism and climate change. (See box 4.6, box 4.7, and www.worldbank.org/ruralstrategy.)

The Bank is the world’s largest financier of protected forests. To meet this challenge it has created a new forests strategy, which covers all forest types and focuses on three areas:

1. Protecting vital local and global environmental services and values provided by forests
2. Harnessing the potential of forests to reduce poverty
3. Integrating forests into sustainable economic development.

The new policy will seek to expand the 8 percent of forest areas under protection in developing countries and maintain a strict ban on logging in these critical forests. In addition, by reengaging in areas of forests outside the protected areas, the livelihoods of poor people will be improved. A revised Operational Policy, which covers all forest types rather than focusing specifically on tropical moist forests, allows support for sustainable harvesting operations located in forests identified as “noncritical,” but only when these operations comply with independent certification standards.

Access to fresh water is vital to agriculture and rural development. By integrating better management of water resources with the development of infrastructure, the new water resources strategy will contribute to halving poverty by 2015. To provide more security against climatic variability, the strategy will assist countries in developing and maintaining well-performing hydraulic infrastructure, in continuing policy reform, and in mobilizing public and private financing. Support for water infrastructure will be provided based on a business model that not only meets high social and environmental standards but also provides for more rapid and consistent decision-making. (See www.worldbank.org/water.)

The Bank also supports the Consultative Group on International Agricultural Research (CGIAR). In fiscal 2003 three countries and one private foundation—Israel, Malaysia, and Morocco, and the Syngenta Foundation—joined the CGIAR, strengthening the partnership. In addition, such key members as Canada, Spain, and the United States announced increased support for the CGIAR. As part of a reform program, a new science council was established to ensure the quality and relevance of CGIAR science, and innovative challenge programs were launched to tackle globally significant problems, such as micronutrient deficiencies and water scarcity.

SOCIAL DEVELOPMENT

To ensure that Bank projects and programs integrate principles of social sustainability, the Bank is consolidating its approach to social development. The effort is based on stock-taking exercises, as well as extensive consultations with external partners. (See www.worldbank.org/sdstrategy.)

The Bank has also been assisting governments in introducing social accountability in public programs, including budget management, service delivery, and formulation of poverty reduction strategies. It developed and has started pilot testing frameworks and tools for assessing the environment for civic engagement. (See www.worldbank.org/participation.)

In community-driven development, the Bank’s portfolio has stabilized at approximately $2 billion, emphasizing partnerships between local governments and community-based organizations. Moreover, the Bank is working on increasing the impact of community-driven development, as well as on the links between it and other areas, such as broader decentralization reform, conflict, social capital, and community foundations. (See www.worldbank.org/cdd.)

Recognizing the importance of social analysis, the Bank is developing guidance on its application projects and policy. (See www.worldbank.org/socialanalysisisourcebook.) It is also applying poverty and social impact analysis (PSIA) to determine the consequences of policy reform on social groups. As part of this effort, the Bank launched the first “User’s Guide for Poverty and Social Impact Analysis.” (See www.worldbank.org/psia.)

During fiscal 2003 the Post-Conflict Fund approved grants worth more than $9.1 million to continue its support to conflict-affected countries, particularly the vulnerable low-income countries under stress. The Bank has also been exploring the links between conflict and natural resource management. (See www.worldbank.org/conflict.)