The World Bank Group

Updated September 2004

1. Facts

Norway is a member of the following World Bank institutions:

The International Bank for Reconstruction and Development (IBRD)

Established: 1944, operative from 1946
Share capital: NOK 1 327 billion, 6 per cent of which is paid in, the remainder is guaranteed.
Membership: 184 countries, largest shareholders: USA, Japan, UK
Norway’s interest/voting power: 0.64 per cent
Fiscal 2002 lending: NOK 80.5 billion to operations in 40 countries
Largest borrowers: Brazil, India, Indonesia, China
Provides loans and analytical and advisory services to middle-income and poor countries

The International Development Association (IDA)

Established: 1960
Latest replenishment: IDA 13, 2002, result: NOK 115 billion
Membership: 164 countries
Donors: 41 countries, largest contributors: USA, Japan, Germany, UK
Norway’s interest: 1.5 per cent, payment 2002: NOK 584 million
Fiscal 2002 lending: NOK 80.5 billion for operations in 40 countries
Largest borrowers: India, Vietnam, China, Bangladesh
Provides technical assistance and loans on very favourable terms to the poorest countries

The International Finance Corporation (IFC)

Established: 1956
Share capital: NOK 17.15 billion
Membership: 175 countries, largest shareholders: USA, Japan, Germany
Norway’s interest: 0.75 per cent
Fiscal 2002 lending: NOK 25.2 billion for operations in 75 countries
Provides loans and technical assistance for private sector investment in developing countries

The Multilateral Investment Guarantee Agency (MIGA)

Established: 1988
Share capital: NOK 15.6 billion, largest shareholders: USA, Japan, Germany
Membership: 159 countries, largest clients: Brazil, Argentina, Peru
Norway’s interest: 0.76 per cent
Fiscal 2003 guarantees issued: NOK 9.5 billion
Provides guarantees to foreign investors in developing countries against losses caused by non-commercial risks.

2. World Bank’s Mission

The World Bank Group’s mission is to fight poverty through sustainable economic growth. As the most significant source of financing for the poorest countries, the Group is an important player in development efforts. The World Bank is also an important knowledge centre and a proactive contributor to the development debate. This is shown by initiatives such as the Comprehensive Development Framework and the Poverty Reduction Strategy Papers (PRSP), and by the Assessing Aid report and the debt relief initiative for Highly Indebted Poor Countries (HIPC). The World Bank has committed itself to the UN’s Millennium Development Goals.

Among the Group’s main strengths are its considerable financial resources and expertise, and one of its weaknesses is its tendency to be self-sufficient, i.e. it is not always good at working in partnership with recipient countries and other donors.

3. Norwegian World Bank Policy

In accordance with the White Paper no. 35 (2003-2004), Fighting Poverty Together, Norway’s policy with regard to the World Bank Group attaches importance to the following:

• stress that the Bank should put poverty reduction on top of its agenda and that poverty reduction should be acknowledged as a target in itself and not just as a tool for economic growth.
• seek to ensure that the Bank’s activities are in accordance with the MDGs
• seek to ensure that the Bank continues to assist countries with PRSPs and facilitates real national ownership, and that it bases its activities in a particular country on these strategies
• promote deeper and broader co-operation between the World Bank and the IMF, and between these institutions, the regional development banks and the UN system
• promote the further development of the tools and methods used in Poverty & Social Impact Analyses so as to achieve a balance between the macro-economic, structural and social dimensions of a country’s development that will result in maximum poverty reduction
• stress that the World Bank should further improve the harmonisation between bilateral and multilateral donors
• further improve the co-ordination between the Bank’s activities and Norwegian bilateral assistance
• further enhance co-operation with Norwegian embassies and make it more effective in order to establish an optimal basis for participation in decision-making in the Bank’s’ governing bodies
• continue the efforts to ensure that important cross-sectoral issues like environmental protection, gender equality and good governance are taken into account, among other things through the fund for environment and social development established on Norway’s initiative
• further enhance the Human Rights perspective in the Bank’s activities
• support the Bank’s efforts to promote private sector development in poor countries, among other things through a Norwegian-initiated fund for this purpose
• support the Bank’s efforts in the education and health sectors
• support measures to make the Bank more effective, for example by encouraging closer co-operation across departments and regions
• continue the efforts to strengthen the position of the developing countries in the International Finance Institutions
• continue the efforts to reduce the predominance of economists among the Bank staff and recruit employees with backgrounds covering a broader range of fields
• continue to use Nordic co-operation and other alliances, especially the Utstein co-operation, to actively influence the Bank’s policy and activities?

4. Arenas for exerting influence

a) Work in the Board of Executive Directors

The Executive Directors are responsible for the conduct of the Bank’s operations. Norway is part of the constituency of Nordic and Baltic countries, which co-operate very closely with each other. Weekly telephone conferences are held between the Nordic countries, at which joint instructions are agreed on. This active Nordic co-operation gives Norway a good opportunity for obtaining recognition for its views. One of the strengths of this system is that it provides opportunities to draw on other countries’ sector and country expertise and for them to draw on Norway’s. It provides valuable access to the knowledge and expertise of the embassies and country offices in the Nordic countries.

b) Development Committee, biannual and annual meetings

The biannual and annual meetings in the DC are important arenas, where the governors (in Norway’s case the Minister for International Development) can discuss general issues. The fact that development and finance ministers from donor and recipient countries are gathered together at these meetings makes them important decision-making fora.

c) Negotiations

The International Development Association is the part of the World Bank that provides financial help to the poorest countries. It mobilises resources by holding replenishment negotiations between donor countries every third year. The IDA 14 ^th> replenishment for the period 2005-2008 will be negotiated in 2004. These negotiations are not only concerned with financial contributions. They are also an important arena for policy development, and establish firm guidelines for the Bank’s activities. Furthermore they influence the replenishment negotiations in the regional development banks.

d) Co-financing

Through its earmarked contributions to the World Bank Group, Norway seeks to ensure that the Group’s activities are in line with Norwegian development policy. Among the most important goals here are promoting environmentally sustainable economic growth, social development and poverty reduction. Norway’s contributions help to finance studies and operations where the country can play a catalytic role in connection with the Group’s policy and activities. This form of support also enables Norway to experience how the decisions made in the governing bodies are actually put into practice. The support is in broad pooled in a small number of multi-donor funds such as environment and sustainable development, private sector development, education and gender equality.

e) Bilateral contacts

During visits to Norway by World Bank representatives, meetings are arranged with the relevant departments and sections in the Ministry of Foreign Affairs, NORAD and the, and with consultancy firms, research institutions and NGOs. In connection with the current reorganisation of the co-financing arrangements, Norway is making active efforts to expand and deepen the contact between World Bank Group staff and Norwegian experts. The Foreign Ministry also has regular contact and meetings with the Bank staff. The co-operation on co-financing also provides an opportunity for an active dialogue between the Bank staff and Norwegian authorities and experts.

5. Priority tasks in 2004

• follow up the results of the IDA 13 ^th> replenishment negotiations
• follow up the HIPC initiative in accordance with the revised debt relief plan
• implement the new guidelines for structural adjustment loans
• complete the IDA 14 ^th> replenishment negotiations
• follow up the work of the Board of Governors
• prepare for and participate in the biannual and annual meetings in the Bank