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Trust funds, which are separate from the Bank’s own resources, are financial and administrative arrangements with external donors that lead to grant funding of high-priority development needs, such as technical assistance, advisory services, debt relief, postconflict transition, and cofinancing. Trust funds help the Bank leverage its poverty reduction programs by promoting innovative approaches for projects, forging partnerships, and expanding the scope of development collaboration.
Many industrial countries, a few of the larger developing countries, the private sector, and foundations make trust funds available to the Bank for specific agreed-on purposes. The Bank also provides some of its own grant resources to selected trust funds.
Contributions, Disbursements, and Balances
The Bank’s trust fund portfolio expanded in fiscal 2003. The contributions received from donors totaled $4.44 billion, an increase of $1.83 billion, or 70 percent over fiscal 2002, and funds held in trust rose from $5.33 billion to $6.89 billion (a 30 percent increase). These figures reflect contributions received on a cash basis for all trust funds except HIPC, the Global Environment Facility (GEF), and the Global Fund to Fight AIDS, Tuberculosis, and Malaria (GFATM), for which contributions are accounted on an accrual basis (starting in fiscal 2003 for GEF and GFATM). The top 10 donors, shown in
table 2.5, accounted for 79 percent of all contributions.
Disbursements during the year totaled $2.56 billion, an increase of $0.63 billion, or 33 percent over fiscal 2002. The five programs with the largest disbursements were HIPC ($751 million), GEF ($409 million), Afghanistan Reconstruction Trust Fund ($182 million), Consultative Group on International Agricultural Research ($118 million), and GFATM ($64 million), totaling $1.52 billion, or 60 percent of total disbursements. Disbursements for all trust funds are reported on a cash basis.
Figure 2.17 shows trust fund contributions and disbursements for fiscal years 1999–2003.
Major New Trust Fund Programs
Responding to emerging development challenges, the donor community agreed to establish several major new trust fund programs for Bank administration during fiscal 2003. These included the Financial Sector Reform and Strengthening Initiative, the Global International Comparison Program, the Global Program to Eradicate Poliomyelitis, and the Least Developed Countries Fund for Climate Change.
Donor Consultations and Trust Fund Policy Reforms
During fiscal 2003 the Bank continued its consultations with trust fund donors on the ongoing trust fund policy reforms and launched a new framework for managing consultant trust funds. The main thrust of these trust fund–related reforms is aimed at standardizing trust fund policies and procedures; aligning trust fund activities with Bank strategies and priorities; improving staff accountability in managing trust funds through a trust fund learning and accreditation program; enhancing the financial controls over trust funds; improving access to financial reporting; and simplifying and standardizing audit arrangements for trust funds.
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