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Sarah Farhat/World Bank

Building human capital—a project for the world

For the past 25 years, humanity has experienced huge gains through investments in people: more children are surviving their fifth birthdays and going to school, more poor people are protected by safety nets, and there is greater life expectancy globally. These are important gains, because building human capital is essential for competitiveness and growth. However, the world continues to face a critical human capital gap. Hundreds of millions of children and youth are not learning enough to prepare them for jobs of the future, weak health systems are failing to provide universal health coverage, and four out of five poor people in low-income countries still lack access to social safety nets. Moreover, technology is changing the very nature of work, lending further urgency to ensure that quality investments in people and their skills are made.

To drive more and better investments in people, the World Bank’s new Human Capital Project (HCP) will place human capital at the center of the global agenda and Bank-client engagement, and employ the full range of World Bank services. The HCP is developing a Human Capital Index in late 2018, which is intended to stimulate awareness, prioritization, and action at the country level. This innovative, international metric will reflect countries’ investments in the next generation, initially measuring survival (will children born today survive to school age?); schooling (how much will children complete and how much will they learn?); and health (will they leave school in good health, ready for further learning and/or work?).

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Securing the foundation for human capital

Investing in the first years of life is vital for economic development, given the impact of nutrition and early stimulation on brain development and subsequent adult productivity. The World Bank estimates that the average country would have 7 percent more GDP per capita today if childhood stunting had been eliminated when today’s workers were children. The Bank has prioritized investment in the early years as critical to securing the foundation for human capital, working closely with partners with the aim of scaling up investments in more than 30 priority countries.

For example, in Rwanda, where the government has made a public commitment to dramatically reduce stunting, the Bank has utilized $176 million in IDA and private sector grants to support cross-sectoral investments, with a special focus on the first 1,000 days of life. The innovative Rwanda program brings together supply-side nutrition interventions, demand-side conditional cash transfers, a focus on early childhood development, and a planned agriculture project. The World Bank has leveraged significant resources from the private sector through The Power of Nutrition, nearly $100 million of which has already been programmed across IDA projects in Ethiopia, Tanzania, Côte d’Ivoire, Madagascar, and Rwanda.

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Realizing the promise of education

World Bank operations and technical work in education take an integrated approach to creating, supporting, and enhancing education systems that deliver learning for children, young adults, and those who need skills later in life. The Bank is also advancing the gathering and dissemination of evidence on what works based on rigorous impact evaluations. Shifting the emphasis in education from inputs to outcomes is helping strengthen education systems and improve results.

The World Development Report 2018: Learning to Realize Education’s Promise has been timely in an era of rapid economic and social change. It points to a massive learning crisis affecting virtually all developing countries, underscoring that schooling without learning is both a wasted opportunity and a great injustice. Learning-adjusted years of schooling—a means for interpreting the productivity of an education system—is an important new measure that has emerged following this report. New data now show that children in low-performing countries acquire, on average, about five years less schooling than those in the highest-performing countries.

President Kim’s 2015 commitment at the World Education Forum to double World Bank results-based financing in education from $2.5 billion to $5 billion by 2020 has been achieved in half the time, with more than $7.1 billion committed as of June 30, 2018, signaling increasing client-country demand for stronger education systems and for the results that matter in education. The World Bank works with countries to ensure that funds are appropriately directed and spent smartly across regions and schools.

Ensuring that vulnerable girls can go to secondary school is another foundational investment in human capital. The World Bank has already fulfilled a key education commitment—to invest $2.5 billion over five years in education projects directly benefiting adolescent girls. More than $4.0 billion has been invested since 2016, three years ahead of schedule. The investments, largely concentrated across Sub-Saharan Africa and South Asia, are helping provide adolescent girls with access to quality education at the secondary level, and ensuring they remain in school using scholarships, conditional cash transfers, and basic school facilities. In Lebanon, for example, the Bank is working with the government to promote equitable access to education, with a focus on girls and refugees, while in Tanzania, it is boosting girls’ enrollment by making schools affordable, reducing the time and distance to school, and providing teacher training on ways to reduce gender-based violence.

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Pursuing universal health coverage and innovative financing for health

Working with partners, the World Bank has focused its health investments and research in areas that are especially vital to helping countries achieve universal health coverage by 2030. Some of these areas include ending preventable maternal and child mortality, reducing child stunting, strengthening health systems and health financing, ensuring pandemic preparedness and response, promoting sexual and reproductive health and rights, and preventing and treating communicable diseases.

In December 2017, new data published by the World Bank and the World Health Organization in the Tracking Universal Health Coverage: 2017 Global Monitoring Report highlighted alarming gaps in the health and well-being of the global population that have serious implications for human capital and the economic prospects of countries. Currently, half the world’s population lacks access to essential health services. Furthermore, 800 million people spend at least 10 percent of their household budgets on health expenses. For nearly 100 million people, these expenses are high enough to push them into extreme poverty. The report was launched during the Universal Health Coverage Forum in Tokyo, which was co-organized by the Bank to drive increased political commitment and accelerate progress toward universal health coverage by 2030. High-level speakers at the Forum included World Bank Group President Jim Yong Kim, Japanese Prime Minister Shinzo Abe, United Nations Secretary-General António Guterres, WHO Director-General Tedros Adhanom Ghebreyesus, and UNICEF Executive Director Anthony Lake, as well as heads of state and ministers from over 30 countries.

Ensuring that every woman, child, and adolescent has access to health care and nutrition is fundamental to building human capital. The Global Financing Facility (GFF), an innovative country-driven financing platform hosted by the World Bank Group, is working toward this goal. Linked to IDA and IBRD, it generates a large return on investment for countries. As of June 2018, 20 projects totaling $3.3 billion in World Bank financing and supported by $452 million in GFF Trust Fund grants have been approved by the World Bank. For example, in Cameroon, which has one of the highest maternal mortality ratios in the world and where under-five mortality remains extremely high in the country’s north, the government is using the GFF to help serve neglected people and places with increased child vaccination, maternal immunization against tetanus, family planning, and access to quality essential health and nutrition services.

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Promoting universal social protection coverage to reduce human capital gaps

Social protection systems promote human capital development from the early years to adulthood by investing in the health and education of children, connecting people to jobs, and protecting the elderly and other vulnerable population. By supporting families’ human capital investments while increasing household consumption, social protections help to reduce poverty. The State of Social Safety Nets, published by the Bank in April 2018, shows that over a third of very poor people receiving social safety net benefits in 79 countries escaped extreme poverty. The report helps benchmark where countries and regions stand in terms of social safety net spending, key performance indicators, and the impact on reducing poverty and inequality.

The report also shows that only 45 percent of the global population are covered by social protections, while only one in five poor people have access to social protections in the poorest countries. The World Bank is committed to supporting social protections and helping countries to develop national social protection systems to substantially cover the poor and the vulnerable by 2030. At the seventh Ministerial Roundtable on Social Safety Nets in April 2018, ministers of finance and economy and other officials gathered to reaffirm the importance of social safety nets in building the resilience of poor and vulnerable households, thereby protecting human capital.

By the end of fiscal 2018, the World Bank had 87 active social protection and labor projects, representing investments of $15 billion. In Rwanda, for example, the Bank has supported more than 500,000 new extreme poor beneficiaries with cash transfers that promoted social protection system development and improved investments in early childhood development, nutrition, and education, as well as productive activities by families. In Bangladesh, the Bank supports cash transfer programs for vulnerable populations, including the elderly, widowed, and persons with‐disabilities, and is helping to expand the coverage of social protection programs to 6 million poor people by 2023.

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Investing in gender equity to ensure opportunities for all

The World Bank Group Gender Strategy focuses on four key areas to support countries in achieving greater gender equality: improving human endowments which is essential to build human capital; removing barriers to women’s ownership and control of assets; removing constraints for more and better jobs; and enhancing women’s voice and agency.

Helping countries to remove barriers to women’s ownership and control of productive assets such as land and housing, as well as to improve access to the finance, technology, and insurance services needed to make assets productive, is vital for women’s economic opportunities. Supporting these efforts, the Bank Group launched the groundbreaking Women Entrepreneurs Finance Initiative (We-Fi), which aims to mobilize more than $1 billion to unlock finance, markets, and information constraints faced by women-owned small and medium enterprises in developing countries. We-Fi is an example of how the Bank Group is mobilizing finance from the private sector and ensuring that the public-sector tackles policy and regulatory barriers. The initiative has already catalyzed interest from banks and financial institutions in Africa, India, and Germany, who recognize that investment in women is good for their bottom line.

The Bank is also providing project support to countries to remove such barriers. In Ethiopia, for example, the Women’s Entrepreneurship Development Program is piloting the use of modern technologies, including psychometric testing and data-driven algorithms, to help unlock access to formal finance for women business owners. Psychometric testing measures characteristics such as knowledge, skills, education, abilities, attitudes, and personality traits to predict the likelihood that a person will pay back a loan. Women entrepreneurs who do not have collateral are able to take an interactive test on a tablet computer that predicts their likelihood to repay. If they score highly, they can borrow without traditional collateral.

The Bank is also focused on increasing women's voice and representation in society and in key economic sectors. The IDA-financed Bihar Transformative Development Project, the second phase of rural livelihoods support in one of India’s poorest states, fosters the development of women’s self-help groups, which serve as an important platform for amplifying women’s voice. Such groups are important platforms for communication and learning among women, and have been used to drive behavioral changes in community health and hygiene practices and to connect women with national nutrition and sanitation programs. They have also helped women from 7.5 million households to access financial services and generate income in the farm and non-farm sectors, with a further 4.5 million households expected to participate by 2022.

In addition to these efforts, the institution targeted constraints to more and better jobs for women, focusing especially on reducing occupational sex segregation, enhancing skills training, improving the safety and accessibility of transport services, and providing services for child and elder care. Efforts are also being undertaken in fragile and conflict-affected areas and include engaging men and boys to tackle challenges related to child marriage, gender-based violence, and adverse social norms.

The World Bank is leading by example on its commitment to gender equality. For instance, it is implementing an action plan on recommendations received in July 2017 from the Task Force on Sexual Exploitation and Abuse, to strengthen interventions to reduce gender-based violence in World Bank infrastructure operations.

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Developing strong, inclusive economies and ensuring that all people can participate to their fullest potential will help position countries for a brighter future. Yet severe threats to development remain, which, if not addressed, could roll back decades of economic progress and poverty reduction gains.

Tanvir Murad Topu/World Bank

Managing natural resources for current and future generations

Natural resources are under threat globally, from dwindling fish stocks and eroded coastlines, to unhealthy air and degraded landscapes. The World Bank is working with its clients to better manage land, sea, and freshwater natural resources. Pollution caused an estimated 9 million premature deaths in 2015 alone. The World Bank is working with clients to address pollution and increasing its support for environmental quality data and monitoring, particularly for air quality. In Ulaanbaatar, Mongolia’s capital and a heavily polluted city, the Bank’s $15 million intervention supported the installation of energy-efficient stoves and boilers, which helped improve air quality with a 60-70 percent reduction in particulate concentration. Another Bank priority is creating sustainable ocean economies. In West Africa, where about 42 percent of the region’s GDP is generated in coastal areas, a new regional project is helping to build the resilience of communities that are particularly vulnerable to the effects of poor coastal development, erosion, and frequent flooding. The $210 million West Africa Coastal Areas Resilience Investment Project will protect against coastal erosion through a range of activities, including fixing dunes, restoring wetlands and mangroves, replenishing beaches, and building seawalls and dikes. The projects in Mongolia and West Africa are guided by the Bank’s safeguard policies, which address environmental and social risks.

The World Bank is also working with countries to think of wealth in terms beyond GDP and put a value on their natural resources. A new publication, The Changing Wealth of Nations 2018, tracked the natural wealth of 141 countries over 20 years and recognized the contribution to the economy of assets like forests, wetlands, and agricultural land. The use of natural capital accounting puts countries in a better position to make policy and investment choices that will boost economic growth and support sustainable development.

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Acting in the face of a changing climate

Ranked as the second warmest year on record, 2017 underscored the severe impacts that climate change is already bringing. Floods in South Asia, severe drought in Africa, and devastating hurricanes in the Caribbean came at an enormous cost to lives, property, and economies. As extreme events like these become more frequent and more severe, slow-onset climate impacts such as sea level rise, water scarcity, and crop failure are also forcing people to leave their homes in increasing numbers. According to the World Bank report Groundswell: Preparing for Internal Climate Migration, by 2050, more than 143 million people in Sub-Saharan Africa, Latin America, and South Asia could be forced to move within their own countries in search of less vulnerable places to live.

The World Bank is continuing to support countries to meet their climate change commitments under the Paris Agreement, actively working with countries to help them deliver on their Nationally Determined Contributions by translating their pledges into specific policies, and providing knowledge sharing, technical assistance, and financing. The Bank is moving quickly toward meeting its targets under its Climate Change Action Plan, such as its commitment to increase climate financing to 28 percent of the Bank Group’s portfolio by 2020. In fiscal 2018, the World Bank Group committed $20.5 billion to over 450 climate-related projects, which accounts for 32.1 percent of the total lending volume. Since the launch of the Climate Change Action Plan, this increased financing for climate action has driven strong results and contributed to 18 gigawatts of new renewable energy generation or integration in developing countries, supported 22 climate-smart agriculture investment plans for 20 countries, and enabled 38 million people in 18 countries to have access to reliable weather data and early warning systems so that they are prepared for and safe from natural disasters, among other investments.

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Partnering to affirm climate change commitments

The World Bank partners with governments, the United Nations, and the private sector to accelerate progress in the fight against climate change. The One Planet Summit, a collaboration between the Government of France, the United Nations, and the World Bank, which took place in December 2017 to mark the two-year anniversary of the signing of the Paris Agreement, was a prime example of this.

The gathering of heads of state from more than 50 countries, UN organizations, private sector CEOs, mayors, philanthropists, and researchers called on participants to go further in their own climate change commitments, and provided a forum to mobilize badly needed finance for climate action. Speaking alongside President Emmanuel Macron of France and United Nations Secretary-General António Guterres, President Kim announced several new World Bank and IFC climate commitments. Among them, the World Bank Group will report greenhouse gas emissions from the investment projects it finances in key emissions-producing sectors, such as energy, starting in 2018. Additionally, after 2019 the World Bank Group will no longer finance upstream oil and gas, other than in exceptional circumstances.

A key theme of the summit was the power of the private sector to fight climate change by providing the innovation, financing, and tools required for a transition to a low-carbon economy. Investors from top asset managers, pensions funds, insurers, and sovereign wealth funds joined the Climate Action 100+ to encourage companies to cut greenhouse gas emissions and improve the disclosure and oversight of climate-related threats, while another 225 financial institutions made additional climate pledges.

In addition, the World Bank and its partners launched or renewed a series of climate initiatives that aim to improve disaster resilience and advance climate action worldwide, including a new partnership to finance urban resilience between the World Bank’s City Resilience Program and the Global Covenant of Mayors for Climate & Energy, as well as the Africa Hydromet Program, a commitment to raise at least $100 million annually through 2024 in new, direct investments annually for hydromet modernization in 15 countries and four regional climate centers in Africa.

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Building resilience proactively into cities and societies

Resilience against global shocks and threats can be built into the structures of cities and societies with careful planning and proactive forethought. Globally, 54 percent of the population lives in urban areas today, and by 2045, the number of people expected to live in cities will increase by 1.5 times to 6 billion. The Bank’s work in urban development aims to build sustainable cities and communities through an urbanization process that is inclusive, resilient and low carbon, productive, and livable. The Bank’s City Resilience Program, for example, is an effort to assist city governments in building greater resilience to climate and disaster risk. The program works to provide the technical expertise or access to financing that cities sometimes lack to make the necessary and costly investments to strengthen their urban resilience. It will achieve this by leveraging the Bank’s expertise and assisting cities to expand access to capital. Since launching in June 2017, the program has engaged with 45 cities across the world on developing investment programs in resilient infrastructure.

Over the past decade, the Bank has emerged as the global leader in disaster risk management (DRM), supporting client countries in assessing exposure to hazards and addressing disaster risks. The Bank provides technical and financial support for risk assessments, risk reduction, preparedness, financial protection, and resilient recovery and reconstruction, and all World Bank-supported projects are now screened for climate and disaster risk to ensure that they build the resilience of people on the ground. Over the past six years, annual World Bank DRM investment has increased from $3.7 billion in fiscal 2012 to $5.3 billion in fiscal 2018, or 11 percent of total Bank commitments. In providing support for DRM, the Bank promotes a comprehensive, multisectoral approach to managing disaster risk.

The World Bank's social development programs are another way to help build resilience into society. The Bank’s support spans all sectors and areas of its work, promoting social inclusion of the poor and vulnerable by empowering people, building cohesive and resilient societies, and making institutions accessible and accountable to citizens. These programs are supported by analysis to make sure Bank lending operations benefit the poor and vulnerable in the countries it serves. In addition, the Bank continues to mainstream citizen engagement across its portfolio of operations, and has an active portfolio of projects on community empowerment and community-driven development, an approach that gives control over planning decisions and investment resources for local development projects to community groups.

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Building household resilience and responding to shocks

The World Bank is increasingly helping countries to develop systems for responding to crises by utilizing risk modeling and mapping, strengthening early warning systems, ensuring financial protection are in place before a shock hits, and investing in adaptive social protection systems that ensure households are prepared for crises and social protection systems are ready to respond. Such crises response systems allow governments to identify people who are vulnerable to becoming poorer in the face of a shock, what their recovery needs may be, and how to finance and deliver support to them in times of crisis. This year, the Bank supported the sharing of experience in developing such systems through the South-South Learning Forum on “Building Resilience through Adaptive Social Protection.” More than 250 participants, including government officials from 68 client countries, attended the February 2018 forum.

The World Bank is supporting countries in bolstering social protection systems in challenging environments. For example, the Bank supported the Ethiopia Rural Productive Safety Net Program, which includes innovative linkages to disaster and humanitarian responses through government-run social protection systems. The Bank is also supporting adaptive social protection systems across the Sahel region, including the ability to scale up to respond to shocks and climate responsive transfers in Burkina Faso. In partnership with the United Nations, the Bank is helping Yemen to use its existing social protection systems to help households cope with ongoing conflict there. An innovative IDA-IFC joint project in Côte d’Ivoire is a good example of World Bank Group social protection work in action. It is helping expand social protection coverage by leveraging innovations in technology. Vulnerable households are receiving cash transfer grants from the government through mobile money technology. About 210,000 individuals from poor households have benefited from mobile money accounts and digital cash payments. 

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Increasing support to fragile and conflict-affected places

Poverty and fragility are increasingly interlinked. By 2030, projections show that between 43 and 60 percent of the world’s extreme poor will live in settings marked by fragility, conflict, and violence (FCV), and serious risks such as violent extremism, climate change, pandemics, and food insecurity are on the rise.

The World Bank Group is scaling up efforts to maximize its impact in FCV situations. As a top development priority, the Bank Group is doubling resources for FCV-affected countries to more than $14 billion under the 18th replenishment of IDA. New financing mechanisms include $2 billion to support refugees and host communities, $2.5 billion to spur private enterprise, and a Risk-Mitigation Regime that supports proactive initiatives to help countries mitigate fragility risks. Efforts this fiscal year focused on quickly operationalizing these new windows. For the IDA18 Refugee Sub-Window, eligibility was established for nine countries that collectively host more than 62 percent of refugees located in IDA and IBRD/IDA blend countries. Cameroon became the first country to benefit from the window, with the approval of $130 million in grants in May 2018 to help provide refugees and host communities with access to health care, education, social safety nets, and social and economic infrastructure. The Bank is also helping to address the needs of Rohingya refugees in Bangladesh through an additional $50 million supported in part by the window to an existing Health Sector Support Project, with contributions from the Government of Canada. This is the first in a package of support that could total as much as $480 million designed to improve education, promote skills development, and provide basic services, including water and sanitation, for refugees in a phased manner.

The global prevalence of fragility has long been characterized by a flat, unbending line. The World Bank aims to turn the flat line into a sharp, downward curve. To that end, the World Bank, in partnership with the United Nations, is working to refocus the international community’s attention toward prevention. In March 2018, the two institutions published the joint report, Pathways for Peace: Inclusive Approaches to Preventing Violent Conflict, which estimated that violent conflict costs up to $13.6 trillion per year globally. According to the study, prevention could save up to $70 billion annually.

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Responding quickly to disease outbreaks

A severe pandemic can cause millions of deaths and significant losses of global GDP. World Bank investments support expanding the pandemic preparedness capacity of country health systems to halt disease outbreaks before they become pandemics. Under the IDA18 program, these investments will be made in at least 25 countries, along with pandemic preparedness investments in several IBRD countries. In addition, the Bank’s support to the International Working Group on Financing Preparedness, as well as its leadership in engaging policy makers—country finance ministers, in particular—on several pandemic simulations, have helped drive home the importance of investing in pandemic preparedness.

In the event of severe outbreaks or pandemics, the Pandemic Emergency Financing Facility (PEF) will enable the Bank to engage with a rapid and early response. Supported by the World Health Organization, the private sector, and donors such as Japan, Germany, and Australia, the PEF is the first-ever form of pandemic insurance, using an innovative combination of public and private financing, including from capital markets. The PEF, which consists of both a cash and insurance component, became operational in July 2017 for an initial three-year period and now covers all 77 IDA countries with pandemic insurance at no cost. In May 2018, the PEF made the first commitment from its cash window in the form of a $12 million grant to bridge the financing gap for the Ebola response in the Democratic Republic of Congo. The quick disbursement of these resources helped the government to focus their efforts on the immediate response to the crisis, rather than raising funds.

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Hendri Lombard/World Bank

In all of the areas described above, the World Bank strives to bring the best development solutions to its clients. But the unique strength of the World Bank is its ability to combine expertise from many sectors to help countries design, finance, and implement sustainable projects that provide more benefits and make a greater impact. In providing such interdependent and multisectoral solutions, the Bank helps to realize sustainable outcomes while responding to local, country, and regional priorities.

In Bangladesh, for example, the Bank is supporting projects that are working to improve the country’s transport connectivity, but that also have broader effects because of the integration of multiple sector approaches. The ongoing $360 million commitment to the Regional Waterway Transport Project will improve the navigability of 900 kilometers of inland waterways along the Chittagong-Dhaka-Ashuganj Corridor and connecting routes, incorporating solutions from the Bank’s expertise in transport, but also trade, the environment, and infrastructure to help reduce travel time and costs for cargo and passengers and to sustainably boost national and regional trade. The project also supports improvements to social inclusivity by developing key river ports to include safe, sanitary, and female-friendly facilities such as bathrooms and waiting rooms. Similarly, the $150 million Regional Connectively Project will modernize trade-related infrastructure, systems, and procedures to increase Bangladesh’s connectivity and trade with India, Bhutan, and Nepal. With improvements to key land ports, the investments will increase trade volumes and reduce clearance time at border posts. In addition to the trade, transport, and infrastructure solutions that comprise this project, the investments will also incorporate a perspective informed by gender issues. The project will pilot activities to help remove bottlenecks faced by women in trade and business, as well as skills development programs to bring more women traders into formal trade networks and global value chains. The insights gained from this project will help to develop specific infrastructure, logistics, and transport services for women in the future.

As these projects demonstrate, by leveraging the collective knowledge base of the institution, as well as the lessons learned from its operations and the experiences of country members, the World Bank provides layered solutions for the projects it supports. Integrating an environmental perspective into an infrastructure project or a gender-informed perspective into a trade project allows the Bank to facilitate development impacts that are greater than the sum of their parts and that can endure. As the Bank continues its work along the path toward meeting its goals, it will continue to develop diverse perspectives and innovative ideas as part of the support it offers to country clients to help them meet their development needs.