Pursuing low-carbon energy
Access to modern, reliable, and affordable energy is critical for countries to meet their development needs, but it must be pursued in a sustainable manner. The World Bank works with governments to provide low-carbon options for energy access that fit every country’s circumstances, including renewable sources like solar. For example, the Bank is providing more than $1 billion in lending for India’s solar projects, including a rooftop solar initiative that will deliver electricity to millions. Through off-grid solutions, over 1 million households in Ethiopia are gaining access to energy, mostly with solar lanterns and home systems. Smart grids are boosting the uptake of renewable energy in Turkey, Ukraine, and Vietnam. Comprehensive analytical tools—like the Regulatory Indicators for Sustainable Energy (RISE), which assess countries’ policies and regulatory support for sustainable energy—help governments to craft policies that attract private sector investments as well as to track progress toward access to energy for all.
Providing safe water and sanitation for all
As the world’s largest multilateral source of financing for water in developing countries, the World Bank is committed to working closely with partners to achieve the visionof “A Water-Secure Worldfor All.” To this end, the Bank prioritizes the sustainability of water investment, and supports financingthat includes mobilizing private capital to move toward safe water and sanitation for all. The work promotes inclusive accessto the benefits of water, institutions that manage water equitably, and resilience to help countriescope with the impact of external shocks on water. In Bangladesh, for example,a rural water supply and sanitation project has provided nearly 1.2 million people with access to improved water sources and hygienic latrines. Water and sanitation service delivery cannot be addressed separately from sustainable and safe management. With the United Nations, the World Bank convened a High-Level Panel on Water committed to acting on developing water resources, and in September 2016, issued an Action Plan thatwill help to ensure theavailability and sustainable management of water and sanitation for all.
Reaping the benefits of digital technologies
Digital technologies are rapidly changing the way people, businesses, and governments communicate, transact, and access services and information. The digital economy is becoming a critical driver of economic growth, investment, and job creation, so the adoption of digital technology by traditional industries is important for improving productivity and opening access to new markets. The World Bank supports countries and their citizens as they take advantage of these opportunities. This support includes expanding affordable Internet access to the more than 4 billion people who remain unconnected, developing digital infrastructure, and building the digital skills and institutions necessary to participate in the digital economy. In October 2016, the Bank launched a new Digital Development Partnership (DDP) with participants from the public and private sectors to operationalize the lessons of the World Development Report 2016: Digital Dividends. The DDP will help to close the global digital divide to ensure that everyone can reap the economic and social benefits of connectivity. The IDA-financed Regional Communications Infrastructure Program has supported nine countries in eastern and southern Africa, which have significantly increased access, improved quality, and lowered the cost of international connectivity by as much as 90 percent through market competition reforms and thousands of kilometers of network infrastructure investment.
Growing through better transport connectivity
Transport enables the movement of people, goods, and ideas around the globe, and provides better access to economic opportunities, such as jobs. Transport also plays a major role in social inclusion. Rural roads can unlock a world of opportunities for isolated communities, while urban transport that benefits low-income com- munities can promote access to affordable ways to reach jobs. Ensuring that such outcomes are sustainable means tackling climate change mitigation in this sector—which accounts for 23 percent of the world’s energy-related CO2 emissions—by supporting the development of low-carbon, efficient transport systems. In Dar es Salaam, Tanzania, for example, a $225 million IDA credit and a $200 million IDA Scale-Up Facility credit are supporting the expansion of the city’s bus rapid transit system. The system’s first phase has already reduced travel time and costs for commuters, saving them up to 90 minutes a day.
Partnering with the private sector on infrastructure
The World Bank is committed to helping governments make informed decisions about improving access to quality, sustainable infrastructure services, including where appropriate, using public-private partnerships. During this fiscal year, several initiatives occurred to support good decision making by policy makers on infrastructure projects, often in collaboration with other multilateral development banks (MDBs) or development partners. In April 2017, the second Global Infrastructure Forum took place under the theme Delivering Inclusive, Sustainable Infrastructure. Participants from the MDBs, the G-20 (Group of 20), client countries, civil society, and the private sector discussed how MDBs can best work with countries and the private sector to create markets for infrastructure projects.
Expanding knowledge was also a priority. With partners from across the multilateral development community, the Bank released an updated online Public-Private Partnerships: Reference Guide, which included new contributors and the addition of topics ranging from environmental and social issues to risk mitigation and credit enhancement. In addition, the Global Infrastructure Facility—a partnership to expand the market for private financing of infrastructure in emerging markets—hit a milestone with 20 investment projects now under support, with the combined potential to catalyze more than $13 billion in commercial financing.
Boosting agriculture to create jobs
Roughly 80 percent of the world’s extreme poor live in rural areas and depend largely on farming to make a living. Because the food system currently provides more jobs than any other sector in many countries, boosting agriculture can be one of the most powerful tools against poverty. For nearly a decade, the Bank-supported Bihar Rural Livelihoods Project, popularly known as ”JEEViKA,” improved the livelihoods of more than 1.8 million women from rural households in Bihar, India. The project established ’one-stop shops’ for agriculture, which connected farmers with credit, inputs, agricultural training, and farmer field schools. Backyard poultry farms, dairy training, product marketing assistance, and other livelihood interventions helped to boost annual incomes by 30 percent. Job skills training improved employment prospects for over 29,000 rural youth. The project also empowered women and marginalized groups with access to government institutions and financial services, enabling $98 million in credit and facilitating more than $22.5 million in household savings.
Strengthening protection for natural resources
Natural resource assets are rapidly being depleted. The costs associated with increased scarcity are very high. Through the development of natural capital accounts, the World Bank is helping clients to better manage these assets, which typically make up about 36 percent of total wealth in developing countries. Work on environmental sustainability promotes strong governance of marine and coastal resources by supporting sustainable fisheries and aquaculture, establishing protected coastal and marine areas, and reducing ocean pollution. In Peru, for example, a series of environmental development policy loans have improved the sustainability of anchoveta fishing stock through a quota system. As a result, fishers are receiving better prices for the anchoveta they catch, and commercial fishing companies have invested in more sustainable activities.
Promoting investment through reforms to reduce risk
Reducing real or perceived risks to investors across macroeconomic, business, and financing dimensions is a prerequisite for creating markets that can attract the investment needed to create opportunity. In the Arab Republic of Egypt, for example, the World Bank has provided a series of development policy loans to support a reform program that is helping the country to recover from a downturn in investment. The reforms introduced by the government have boosted confidence in the Egyptian economy. They sparked strong interest by foreign investors, as evidenced by a sharp rise in portfolio inflows in January 2017, which amounted to $1.2 billion, a 10-fold increase compared to only a few months earlier. In Haiti, with World Bank Group support, the government secured $203 million in actual investments and support for 15,800 new direct jobs in the country’s garment sector. The joint World Bank–International Finance Corporation (IFC) Haiti Investment Generation Program brought together public officials, the private sector, and foreign investors on promotion strategies and special economic zones. Despite the challenging local environment, the program helped to attract new investors to the garment sector.
Tapping new sources of financing
Stable and diversified financial markets are also an essential building block for achieving inclusive, sustainable growth. In an environment where long-term bank financing is becoming increasingly scarce, countries need to tap into new sources of financing to meet their development needs. This year, together with IFC, the World Bank launched the Joint Capital Markets Initiative. It promotes capital market development in emerging countries by supporting liquid, diverse, long-tenor financing and well-regulated local capital markets. This new initiative will ensure that countries receive end-to-end analytical, advisory, and financing support for developing their markets.
Mobilizing domestic resources for effective services
Countries that can effectively deliver services grow faster, innovate, and respond more quickly to internal and external shocks. But without a sufficient revenue base, governments have difficulty funding basic state services, such as road construction, health care, and public safety. Research has found that countries that collect less than 15 percent of GDP in taxes are at a disadvantage, not only in providing services but also in economic growth. The World Bank’s Global Tax Team has stepped up its work in coordinating across institutions on international tax issues and delivering country-based interventions. In Armenia, for example, the Bank is helping the government to strengthen tax collection to overcome some of the setbacks it incurred during the financial crisis. So far, about 35,000 tax inspectors have been trained, about 96 percent of tax services are provided electronically, and the amount of tax collected has gone up 38 percent.
Facilitating trade and integration
Increased trade integration has helped to drive economic growth in developing economies in recent decades, lifting millions out of poverty. The World Bank works with governments to design and implement policies to maximize trade competitiveness in both goods and services. The Great Lakes Trade Facilitation Project is facilitating cross-border trade between the Democratic Republic of Congo and its neighbors in eastern and southern Africa by reducing costs, time wasted, and harassment to improve the operating environment at the border for traders. The project targets the constraints faced by small-scale traders, especially women, in cross-border trade. It seeks to improve land and lake border facilities and develop systems to better connect farmers to regional markets.
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