Institutional renewal

Operations evaluation

Commitments and guarantees

Disbursements

Cofinancing & trust
fund programs

Technical assistance

Inspection Panel

Public Information Center

Throughout the fiscal year, every part of the Bank has been involved in shaping a long-term framework for the institution's future direction and laying the groundwork for renewal. At the heart of the resulting Strategic Compact lies the objective of increasing development impact to reduce poverty more effectively.

The compact requires sustained commitment to four related priorities for renewing the Bank over the next thirty months.

Refueling current business activity. Reallocating resources to frontline services to protect the level and quality of client service will enable the Bank to respond to priority programs, such as the rapid growth of the Europe and Central Asia regional portfolio. It will allow the Bank to fund the increased costs of operating field offices, speed up improvement of portfolio management, strengthen overall quality assurance, meet its commitments under the HIPC Debt Initiative, and meet new client demands.

Refocusing the development agenda. Effectiveness is being increased through more attention to social and environmental sustainability and the changing roles of the private and public sectors. The groundwork for refocusing the development agenda already has begun, through building and strengthening partnerships, developing better products and services, and strengthening staff capacities; many examples are discussed throughout the regional and program sections of this Annual Report.

Retooling the Bank's knowledge base. Because access to lessons learned and best practice is key to development effectiveness, a world-class knowledge-management system is being built across the institution to collect, synthesize, and disseminate knowledge and make it more readily accessible to staff, clients, and partners. Better access to information is also a prerequisite for a more decentralized Bank--a key factor for the institution's renewal.

The four thematic networks (Human Development; Environmentally and Socially Sustainable Development; Finance, Private Sector and Infrastructure; and Poverty Reduction and Economic Management) set up during fiscal 1997, the capacity-building work of the Economic Development Institute (EDI), and the Learning and Leadership Center's expanded training programs already are playing pivotal roles in making learning a priority throughout the institution.

Revamping institutional capabilities. To achieve the objectives of the Strategic Compact, the Bank is realigning its information systems, location of work, human resource strategy, and financial management to support a more agile, creative, and client-oriented work environment.

The Strategic Compact demands that the Bank be accountable, and the results of the Bank's renewal program will be measured and justified by the development impact of everything it does. Demand for products and services and progress in meeting business standards and performance will be among the indicators of success. The Bank will track progress made by client countries using the World Development Indicators. This assessment of broad development progress in borrowing member countries complements the Bank's ongoing work to enhance the quality and impact of its operations by strengthening evaluation of its activities; and it is in line with recommendations made by the Development Committee's Task Force on Multilateral Development Banks and the IDA Deputies. The foundation for establishing a stronger more comprehensive framework to track the progress of Bank operations and assess their impact was put in place in July 1996, when all new operations were required to be fitted with specific performance-monitoring indicators. For education projects, for example, performance is monitored through indicators such as net enrollment by level and gender, repetition and dropout rates, student-teacher ratios and textbook-pupil ratios; for environment projects, indicators include rate of deforestation, area of natural habitat, soil nutrient levels, pollution levels, and water quality.

Performance indicators are drawn from sixteen sector-specific "menus" (such as agriculture, education, finance, and poverty reduction) adjusted to the needs of each operation and the feasibility of collecting data in particular countries. About 40 percent of operations approved before July 1996 have also been retrofitted with performance indicators, and the remainder will be retrofitted before the end of fiscal 1998.

The Bank has also set targets for its own performance that are measured in terms of responsiveness to clients (setting business standards for elapsed times between the stages of project development, for example) and by quality-at-entry and portfolio-management evaluations. Progress toward these targets will be reported annually to the Executive Board.