Overview of World Bank Activities in Fiscal 1998

Overview

World Bank Activities in Fiscal 1998

Strategic Compact
International Development Targets
HIPC Initiative
Operations Approved, FY 98
IBRD and IDA Commitments, FY98
Trends in Lending, FY 96-98

The World Bank's purpose is to help borrowers reduce poverty and improve living standards through sustainable growth and investment in people. In fiscal 1998, the Bank made strong headway in implementing the Strategic Compact, aimed at increasing development impact and playing its part in the fight against poverty more effectively. The Board of Executive Directors reviewed two progress reports on the compact in fiscal 1998 that documented improvements in the quality, timeliness, and quantity of operational work, and in organization, processes, and ways of doing business (see box 1).
The Bank's renewed capacity to deliver high-quality services through effective partnerships was tested in fiscal 1998 in its ability to respond to a new challenge--the East Asian financial crisis, which speeded up the pace of change across the institution--and in the strong turnaround in the performance of the Africa region, which had been the starting place of the Bank's renewal program.
Following the dramatic downturn in financial markets in several East Asian countries early in the fiscal year, the Bank moved quickly to adjust both lending programs and advisory services. The crisis risks undermining one of the most remarkable economic achievements of the twentieth century--and perhaps the single most effective antipoverty performance in history. As an institution whose core mandate is poverty reduction, the Bank helped support the international effort to restore confidence and sustainable growth by focusing on both the financial and the human dimensions of the crisis--including unemployment, food shortages, and the effects on the poorest and most vulnerable groups.
The Bank pledged some $16 billion to support reform programs in the countries facing critical situations, of which $5.65 billion was disbursed. This included a $3,000 million loan to the Republic of Korea, the largest loan in the Bank's history, which was processed in record time.
The East Asian crisis underscored the prudence of the Bank's renewed financial sector emphasis under the Strategic Compact. As the East Asian financial crisis rapidly escalated, the Bank geared up to respond quickly and credibly. Additional resources were approved to reinforce the financial sector program, and the Special Financial Operations Unit was established to help respond to the crisis in all affected countries, not just in East Asia, by providing support to help its clients strengthen weak financial systems and reduce the impact of the crisis on poor and other vulnerable people. Staff capacity was built up through recruitment; collaboration and coordination with external partners were enhanced, including with the new Financial Sector Advisory Service established with the help of a PHRD grant, and with European donors through the Asia-Europe Meeting (ASEM) Trust Fund; and a Central Bank secondment program was established in several countries.
The international effort consisted of close partnerships--from other multilateral institutions, particularly the International Monetary Fund (IMF), and with nongovernmental organizations (NGOs). Working in close coordination with the IMF, for example, the Bank promptly organized a series of technical assistance missions to assist the governments of Indonesia, the Republic of Korea, and Thailand--including helping to identify and address problems in the financial and corporate sectors.
While addressing new challenges to meet the needs of client countries facing crises in East Asia, the Bank and its African clients began to reap the rewards of stronger partnerships and closer client focus.
Continued growth, improved economic policies, and increased political openness in many parts of the region, together with a new generation of African leaders, created greater opportunity for development in the region. Lending commitments to Africa increased by almost two thirds to $2,873.8 million after fiscal 1997's downturn, reflecting significant policy improvements in some African countries and the completion of the Bank's renewal process, which had delayed the pace of commitments in fiscal 1997. At $2,506 million, disbursements also remained high.
The Bank's focus on working more closely with client partners was exemplified in Africa in fiscal 1998. The Bank's president participated in two key meetings in Kampala and Dakar with African leaders where he learned from them firsthand about their development priorities and how the Bank could best help meet them.
The special needs of Africa's heavily indebted countries progressed as Uganda became the first country to reach its completion point under the Heavily Indebted Poor Countries (HIPC) Debt Initiative in April 1998, when the Boards of Executive Directors of the IMF and IDA agreed that the necessary conditions had been fulfilled. The Bank's assistance was provided in the form of grants for education, purchase and cancellation of outstanding debt owed to IDA, and servicing debt owed to IDA over the next five years (see also box 2-1). Decisions to provide assistance under the initiative were taken for three African countries (Burkina Faso, Côte d'Ivoire, and Mozambique) and two South American countries (Bolivia and Guyana). Eligibility for the initiative was reviewed for four more African countrieswith Guinea-Bissau and Mali expected to receive HIPC debt relief, while the debt situations for Benin and Senegal were confirmed sustainable after the full application of existing debt relief mechanisms (see table 1).
Both the World Bank and IMF remain committed to meeting their full shares of the cost of the initiative. The IBRD'S Board of Governors approved the transfer of $250 million from IBRD surplus and net income to the HIPC Debt Initiative Trust Fund, the principle vehicle through which the Bank will deliver its debt relief. The IMF has provided sdr 250 million to its Enhanced Structural Assistance Facility (esaf)-HIPC Trust to finance special esaf operations under the initiative and approved an additional transfer of sdr 40 million. In addition, fifteen bilateral donors made contributions or pledges of about $275 million to the HIPC Trust Fund to assist other multilateral creditors (including the African Development Bank Group) in providing their respective shares of debt relief to qualifying hipcs.
This year several East Asian and African nations, along with some Latin American countries, were among those confronted by another external event that caused them to turn to the Bank and its partners for urgent support: the severe weather conditions resulting from El Niño oscillation. Several governments anticipated damage and disaster and requested the Bank's help to prepare themselves. Partnership with the Inter-American Development Bank (IDB), the United States Agency for International Development (USAID), and the United States National Oceanic and Atmospheric Administration (NOAA), together with the Bank's streamlined procedures, helped facilitate speedy responses to these requests for help. A seminar held in collaboration with the Bank's Environment Department, the Economic Development Institute (EDI), and the International START Secretariat provided a forum for participants from governments, NGOs, the private sector, and others to plan for long-term activities to mitigate the impact of drought induced by El Niño.
Supporting reconstruction after conflict remained a major activity in several countries, including Angola, Bosnia and Herzegovina, Rwanda, and Tajikistan.
The Bank is committed to the development targets adopted by the international community for improving the lives and environment of people who live in its client countries (see box 2). While more people in its client countries are healthier, better fed, and more educated than ever before, progress is uneven among countries, and much more needs to be done. Increasing its development effectiveness lies at the heart of the Bank's renewal. Evaluations completed in fiscal 1998 showed steady improvementsBank operations achieved better results, portfolio quality was improved, and evaluation processes were enhancedbut indicated that continued progress in meeting the development effectiveness goals set out in the Strategic Compact will depend on current efforts to sustain and strengthen the portfolio. The Annual Report on Portfolio Performance (ARPP) showed improvement in the overall portfolio performance as both actual and potential problem projects declined from 31 percent of the portfolio to 26 percent by commitment value and from 34 percent to 30 percent by number of projects.
The Bank's strategic underpinning for refocusing the development agenda to improve development effectiveness is the country assistance strategy (CAS), the centerpiece of Bank-government interaction. A CAS evaluation report prepared in fiscal 1998 documented improvements in CASs, and identified three priorities for further advances: sharper strategic selectivity, more candid treatment of risks, and enhanced self-evaluation and monitoring of CAS implementation. Improvements were evident in two directions: increased client focus and strategic selectivity.
Mainstreaming the social dimensions of development is key to effective and sustainable development, and some 125 social assessments were completed or underway in fiscal 1998. Regional social development action plans were prepared, and resources for social development were provided under the Strategic Compact. An increasing number of CASs paid special attention to social development issues, and the involvement of key stakeholders in the preparation process of many also helped meet social objectives.
The goals and targets of the Rural Development Action Plan, approved in fiscal 1997, also are supported under the Strategic Compact. Initiatives in support of the plan included development of rural strategy papers for Guinea, Madagascar, Mali, and Uganda; dissemination of a rural development and water strategy in Morocco and Yemen and development of a rural water strategy for Tunisia; and initiation of a regional rural development strategy for South Asia and of sector studies on agricultural marketing and land markets in Sri Lanka.
The important role that partnerships are playing in reinforcing the Bank's development activities and enhancing development effectiveness is illustrated throughout the pages of this Annual Report. The Partnership Group was established in fiscal 1998 to help build and facilitate further partnerships to make the Bank a more efficient player in development.
A central tenet of the evolving role of the World Bank is to build it into a world-class knowledge institution through a knowledge management system that extends across the World Bank and outsideto mobilize knowledge and learning for better results. Underpinning this effort in fiscal 1998 was an action plan for consolidating information management and technology systems to ensure that individual Bank units' efforts align with institutional priorities. Prototype knowledge management systems in education and health were established, and a common framework for the systems was set up in the Bank's regional offices.
While the regional offices' knowledge management efforts focused on developing country-level information and live databases, the thematic networks began implementing a knowledge management program in fifteen sectors (such as education, finance, health, infrastructure, and poverty), with information being compiled around eighty "knowledge domains." Work began on establishing a community of practice for each topic, which includes help desks, advisory services, a directory of expertise, collections of statistics and information about the Bank's operations and activities, and collections of know-how emphasizing best practices and lessons learned. Provision is being made for external clients to access the system.
The Bank helps to facilitate learning and strengthen client country capacity through EDI's activities. As greater emphasis has been placed on knowledge as a catalyst of reform, EDI's role has increased. In fiscal 1998 the efficiency of EDI's services was improved and its reach extended: some 23,250 direct participants, including national leaders, government officials, parliamentarians, journalists, private entrepreneurs, NGOs, and educators were reached through 402 EDI learning activities. Partnerships within the Bank were strengthened: with the Bank's thematic networks, for example, EDI launched and piloted core courses on development prioritiesfrom banking, finance, and regulation to environment and sustainable development and from governance to human and social development. These courses help spread up-to-the-minute knowledge on key development challenges. To integrate client training programs into overall development efforts, EDI provided program support, on a selective basis, in the preparation of twelve CASs in fiscal 1998.
The Global Distance Education network, established in fiscal 1998, is using interactive television, videoconferencing, and the Internet to deliver training and policy services to more development partners than is possible through face-to-face learning. An interactive electronic classroom was set up in the Bank's Main Complex, and core courses are being converted to distance education delivery.
The cost effectiveness review (CER) was completed and endorsed by the Board of Executive Directors in October 1997, and implementation began. The CER implementation is leading to changes in systems and procedures to deliver better services while realizing estimated potential savings in fiscal 1999 through fiscal 2001. These changes, targeting higher productivity in the frontline and generating savings through efficiency gains in the backline, are on track to realize the Strategic Compact's goal of having frontline resources account for 60 percent of the budget while support activities account for 40 percent by fiscal 1999.
To help make the budget an instrument of the Bank's strategy and link resource allocation more closely with institutional priorities, a new more strategic and transparent planning and budgeting process was developed at a strategic forum held in January 1998. Among the outcomes of the forum were:

agreement on five Bank Group-wide corporate priorities;
an intensified action program for implementing the internal renewal program; and
budget allocation principles designed to align resources better with corporate priorities.

Bank management and the Board of Executive Directors monitored progress in reaching the objectives set out in the Strategic Compact to maximize the Bank's effectiveness in the fight against poverty.
In fiscal 1998 the Board of Executive Directors endorsed reform of the Bank's human resources policies to align them with the needs of the new Bank. The new strategy will help the Bank attract and retain the best people from all over the world, treat them fairly over the course of their Bank careers, and foster teamwork, learning, and innovation.
An independent inspection panel established by the executive directors in September 1993 helps to ensure that the Bank's operations adhere to the institution's operational policies and procedures regarding the design, preparation, or implementation of a project. Any group of individuals who may be directly or adversely affected by a Bank-supported project or projects may ask the panel to investigate complaints that the Bank has failed to abide by its policies and procedures. The executive directors decide, on the recommendation of the panel, whether an inspection will take place.
The Panel continues to receive numerous queries concerning potential requests for inspection. It has received thirteen formal requests for inspection to date, eleven of which were found to be admissible, and seven have been acted upon.
Against this backdrop, Bank and IDA commitments increased significantly: commitments by the IBRD amounted to $21,086.2 million, up $6,561.3 million from fiscal 1997, and commitments by IDA amounted to $7,507.7 million, up $2,885.9 million from fiscal 1997. IBRD disbursements, at $19,232 million, were up $5,234 million compared to fiscal 1997, and IDA's disbursements were $5,630 million, down $349 million from fiscal 1997. Figures 1 and 2 show fiscal 1998 lending by region and by sector, and table 2 shows trends in lending by sector.
During the fiscal year the Republic of Palau became a member of the IBRD, increasing the membership to 181. At the end of the fiscal year, action was pending on membership in the IBRD for the Federal Republic of Yugoslavia (Serbia/Montenegro).
The Republic of Palau also joined IDA in fiscal 1998, bringing total membership to 160. At the end of the fiscal year, action was pending on membership in IDA for Barbados, Ukraine, Venezuela, and the Federal Republic of Yugoslavia (Serbia/Montenegro).
On June 23, 1998, the Board of Governors of the IBRD approved a selective capital increase (SCI) of 23,246 shares for five countries (Brazil, Denmark, the Republic of Korea, Spain, and Turkey) in recognition of discrepancies that had developed over time between these countries' shareholding and their economic positions.

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Contents

	Overview
	World Bank Activities in Fiscal 1998
Strategic Compact International Development Targets HIPC Initiative Operations Approved, FY 98 IBRD and IDA Commitments, FY98 Trends in Lending, FY 96-98	The World Bank's purpose is to help borrowers reduce poverty and improve living standards through sustainable growth and investment in people. In fiscal 1998, the Bank made strong headway in implementing the Strategic Compact, aimed at increasing development impact and playing its part in the fight against poverty more effectively. The Board of Executive Directors reviewed two progress reports on the compact in fiscal 1998 that documented improvements in the quality, timeliness, and quantity of operational work, and in organization, processes, and ways of doing business (see box 1). The Bank's renewed capacity to deliver high-quality services through effective partnerships was tested in fiscal 1998 in its ability to respond to a new challenge--the East Asian financial crisis, which speeded up the pace of change across the institution--and in the strong turnaround in the performance of the Africa region, which had been the starting place of the Bank's renewal program. Following the dramatic downturn in financial markets in several East Asian countries early in the fiscal year, the Bank moved quickly to adjust both lending programs and advisory services. The crisis risks undermining one of the most remarkable economic achievements of the twentieth century--and perhaps the single most effective antipoverty performance in history. As an institution whose core mandate is poverty reduction, the Bank helped support the international effort to restore confidence and sustainable growth by focusing on both the financial and the human dimensions of the crisis--including unemployment, food shortages, and the effects on the poorest and most vulnerable groups. The Bank pledged some $16 billion to support reform programs in the countries facing critical situations, of which $5.65 billion was disbursed. This included a $3,000 million loan to the Republic of Korea, the largest loan in the Bank's history, which was processed in record time. The East Asian crisis underscored the prudence of the Bank's renewed financial sector emphasis under the Strategic Compact. As the East Asian financial crisis rapidly escalated, the Bank geared up to respond quickly and credibly. Additional resources were approved to reinforce the financial sector program, and the Special Financial Operations Unit was established to help respond to the crisis in all affected countries, not just in East Asia, by providing support to help its clients strengthen weak financial systems and reduce the impact of the crisis on poor and other vulnerable people. Staff capacity was built up through recruitment; collaboration and coordination with external partners were enhanced, including with the new Financial Sector Advisory Service established with the help of a PHRD grant, and with European donors through the Asia-Europe Meeting (ASEM) Trust Fund; and a Central Bank secondment program was established in several countries. The international effort consisted of close partnerships--from other multilateral institutions, particularly the International Monetary Fund (IMF), and with nongovernmental organizations (NGOs). Working in close coordination with the IMF, for example, the Bank promptly organized a series of technical assistance missions to assist the governments of Indonesia, the Republic of Korea, and Thailand--including helping to identify and address problems in the financial and corporate sectors. While addressing new challenges to meet the needs of client countries facing crises in East Asia, the Bank and its African clients began to reap the rewards of stronger partnerships and closer client focus. Continued growth, improved economic policies, and increased political openness in many parts of the region, together with a new generation of African leaders, created greater opportunity for development in the region. Lending commitments to Africa increased by almost two thirds to $2,873.8 million after fiscal 1997's downturn, reflecting significant policy improvements in some African countries and the completion of the Bank's renewal process, which had delayed the pace of commitments in fiscal 1997. At $2,506 million, disbursements also remained high. The Bank's focus on working more closely with client partners was exemplified in Africa in fiscal 1998. The Bank's president participated in two key meetings in Kampala and Dakar with African leaders where he learned from them firsthand about their development priorities and how the Bank could best help meet them. The special needs of Africa's heavily indebted countries progressed as Uganda became the first country to reach its completion point under the Heavily Indebted Poor Countries (HIPC) Debt Initiative in April 1998, when the Boards of Executive Directors of the IMF and IDA agreed that the necessary conditions had been fulfilled. The Bank's assistance was provided in the form of grants for education, purchase and cancellation of outstanding debt owed to IDA, and servicing debt owed to IDA over the next five years (see also box 2-1). Decisions to provide assistance under the initiative were taken for three African countries (Burkina Faso, Côte d'Ivoire, and Mozambique) and two South American countries (Bolivia and Guyana). Eligibility for the initiative was reviewed for four more African countrieswith Guinea-Bissau and Mali expected to receive HIPC debt relief, while the debt situations for Benin and Senegal were confirmed sustainable after the full application of existing debt relief mechanisms (see table 1). Both the World Bank and IMF remain committed to meeting their full shares of the cost of the initiative. The IBRD'S Board of Governors approved the transfer of $250 million from IBRD surplus and net income to the HIPC Debt Initiative Trust Fund, the principle vehicle through which the Bank will deliver its debt relief. The IMF has provided sdr 250 million to its Enhanced Structural Assistance Facility (esaf)-HIPC Trust to finance special esaf operations under the initiative and approved an additional transfer of sdr 40 million. In addition, fifteen bilateral donors made contributions or pledges of about $275 million to the HIPC Trust Fund to assist other multilateral creditors (including the African Development Bank Group) in providing their respective shares of debt relief to qualifying hipcs. This year several East Asian and African nations, along with some Latin American countries, were among those confronted by another external event that caused them to turn to the Bank and its partners for urgent support: the severe weather conditions resulting from El Niño oscillation. Several governments anticipated damage and disaster and requested the Bank's help to prepare themselves. Partnership with the Inter-American Development Bank (IDB), the United States Agency for International Development (USAID), and the United States National Oceanic and Atmospheric Administration (NOAA), together with the Bank's streamlined procedures, helped facilitate speedy responses to these requests for help. A seminar held in collaboration with the Bank's Environment Department, the Economic Development Institute (EDI), and the International START Secretariat provided a forum for participants from governments, NGOs, the private sector, and others to plan for long-term activities to mitigate the impact of drought induced by El Niño. Supporting reconstruction after conflict remained a major activity in several countries, including Angola, Bosnia and Herzegovina, Rwanda, and Tajikistan. The Bank is committed to the development targets adopted by the international community for improving the lives and environment of people who live in its client countries (see box 2). While more people in its client countries are healthier, better fed, and more educated than ever before, progress is uneven among countries, and much more needs to be done. Increasing its development effectiveness lies at the heart of the Bank's renewal. Evaluations completed in fiscal 1998 showed steady improvementsBank operations achieved better results, portfolio quality was improved, and evaluation processes were enhancedbut indicated that continued progress in meeting the development effectiveness goals set out in the Strategic Compact will depend on current efforts to sustain and strengthen the portfolio. The Annual Report on Portfolio Performance (ARPP) showed improvement in the overall portfolio performance as both actual and potential problem projects declined from 31 percent of the portfolio to 26 percent by commitment value and from 34 percent to 30 percent by number of projects. The Bank's strategic underpinning for refocusing the development agenda to improve development effectiveness is the country assistance strategy (CAS), the centerpiece of Bank-government interaction. A CAS evaluation report prepared in fiscal 1998 documented improvements in CASs, and identified three priorities for further advances: sharper strategic selectivity, more candid treatment of risks, and enhanced self-evaluation and monitoring of CAS implementation. Improvements were evident in two directions: increased client focus and strategic selectivity. Mainstreaming the social dimensions of development is key to effective and sustainable development, and some 125 social assessments were completed or underway in fiscal 1998. Regional social development action plans were prepared, and resources for social development were provided under the Strategic Compact. An increasing number of CASs paid special attention to social development issues, and the involvement of key stakeholders in the preparation process of many also helped meet social objectives. The goals and targets of the Rural Development Action Plan, approved in fiscal 1997, also are supported under the Strategic Compact. Initiatives in support of the plan included development of rural strategy papers for Guinea, Madagascar, Mali, and Uganda; dissemination of a rural development and water strategy in Morocco and Yemen and development of a rural water strategy for Tunisia; and initiation of a regional rural development strategy for South Asia and of sector studies on agricultural marketing and land markets in Sri Lanka. The important role that partnerships are playing in reinforcing the Bank's development activities and enhancing development effectiveness is illustrated throughout the pages of this Annual Report. The Partnership Group was established in fiscal 1998 to help build and facilitate further partnerships to make the Bank a more efficient player in development. A central tenet of the evolving role of the World Bank is to build it into a world-class knowledge institution through a knowledge management system that extends across the World Bank and outsideto mobilize knowledge and learning for better results. Underpinning this effort in fiscal 1998 was an action plan for consolidating information management and technology systems to ensure that individual Bank units' efforts align with institutional priorities. Prototype knowledge management systems in education and health were established, and a common framework for the systems was set up in the Bank's regional offices. While the regional offices' knowledge management efforts focused on developing country-level information and live databases, the thematic networks began implementing a knowledge management program in fifteen sectors (such as education, finance, health, infrastructure, and poverty), with information being compiled around eighty "knowledge domains." Work began on establishing a community of practice for each topic, which includes help desks, advisory services, a directory of expertise, collections of statistics and information about the Bank's operations and activities, and collections of know-how emphasizing best practices and lessons learned. Provision is being made for external clients to access the system. The Bank helps to facilitate learning and strengthen client country capacity through EDI's activities. As greater emphasis has been placed on knowledge as a catalyst of reform, EDI's role has increased. In fiscal 1998 the efficiency of EDI's services was improved and its reach extended: some 23,250 direct participants, including national leaders, government officials, parliamentarians, journalists, private entrepreneurs, NGOs, and educators were reached through 402 EDI learning activities. Partnerships within the Bank were strengthened: with the Bank's thematic networks, for example, EDI launched and piloted core courses on development prioritiesfrom banking, finance, and regulation to environment and sustainable development and from governance to human and social development. These courses help spread up-to-the-minute knowledge on key development challenges. To integrate client training programs into overall development efforts, EDI provided program support, on a selective basis, in the preparation of twelve CASs in fiscal 1998. The Global Distance Education network, established in fiscal 1998, is using interactive television, videoconferencing, and the Internet to deliver training and policy services to more development partners than is possible through face-to-face learning. An interactive electronic classroom was set up in the Bank's Main Complex, and core courses are being converted to distance education delivery. The cost effectiveness review (CER) was completed and endorsed by the Board of Executive Directors in October 1997, and implementation began. The CER implementation is leading to changes in systems and procedures to deliver better services while realizing estimated potential savings in fiscal 1999 through fiscal 2001. These changes, targeting higher productivity in the frontline and generating savings through efficiency gains in the backline, are on track to realize the Strategic Compact's goal of having frontline resources account for 60 percent of the budget while support activities account for 40 percent by fiscal 1999. To help make the budget an instrument of the Bank's strategy and link resource allocation more closely with institutional priorities, a new more strategic and transparent planning and budgeting process was developed at a strategic forum held in January 1998. Among the outcomes of the forum were: agreement on five Bank Group-wide corporate priorities; an intensified action program for implementing the internal renewal program; and budget allocation principles designed to align resources better with corporate priorities. Bank management and the Board of Executive Directors monitored progress in reaching the objectives set out in the Strategic Compact to maximize the Bank's effectiveness in the fight against poverty. In fiscal 1998 the Board of Executive Directors endorsed reform of the Bank's human resources policies to align them with the needs of the new Bank. The new strategy will help the Bank attract and retain the best people from all over the world, treat them fairly over the course of their Bank careers, and foster teamwork, learning, and innovation. An independent inspection panel established by the executive directors in September 1993 helps to ensure that the Bank's operations adhere to the institution's operational policies and procedures regarding the design, preparation, or implementation of a project. Any group of individuals who may be directly or adversely affected by a Bank-supported project or projects may ask the panel to investigate complaints that the Bank has failed to abide by its policies and procedures. The executive directors decide, on the recommendation of the panel, whether an inspection will take place. The Panel continues to receive numerous queries concerning potential requests for inspection. It has received thirteen formal requests for inspection to date, eleven of which were found to be admissible, and seven have been acted upon. Against this backdrop, Bank and IDA commitments increased significantly: commitments by the IBRD amounted to $21,086.2 million, up $6,561.3 million from fiscal 1997, and commitments by IDA amounted to $7,507.7 million, up $2,885.9 million from fiscal 1997. IBRD disbursements, at $19,232 million, were up $5,234 million compared to fiscal 1997, and IDA's disbursements were $5,630 million, down $349 million from fiscal 1997. Figures 1 and 2 show fiscal 1998 lending by region and by sector, and table 2 shows trends in lending by sector. During the fiscal year the Republic of Palau became a member of the IBRD, increasing the membership to 181. At the end of the fiscal year, action was pending on membership in the IBRD for the Federal Republic of Yugoslavia (Serbia/Montenegro). The Republic of Palau also joined IDA in fiscal 1998, bringing total membership to 160. At the end of the fiscal year, action was pending on membership in IDA for Barbados, Ukraine, Venezuela, and the Federal Republic of Yugoslavia (Serbia/Montenegro). On June 23, 1998, the Board of Governors of the IBRD approved a selective capital increase (SCI) of 23,246 shares for five countries (Brazil, Denmark, the Republic of Korea, Spain, and Turkey) in recognition of discrepancies that had developed over time between these countries' shareholding and their economic positions.

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Contents