WB

 

Board of Executive Directors of the World Bank

The World Bank Group (WBG) is an independent specialized agency of the United Nations system which works to diminish poverty levels and support sustainable development strategies. It is an association of five development institutions that provide technical and financial assistance to member countries. The two main ones are the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The others are the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for the Settlement of Investment Disputes (ICSID).

Every country that take part in one of the aforementioned institutions is represented in two main decision organs of the World Bank Group: the Board of Governors, and the Board of Executive Directors. The Board of Governors is the ultimate police maker of the World Bank Group and is composed of all countries’ finance authorities, who meet once a year. The executive directors have specific duties delegated by the Board of Governors. Four of the five institutions that form the World Bank Group have a Board of Executive Directors (the exception is the ICSID, which has an autonomous structure). The four Boards of Executive Directors decide on proposals to be implemented by their respective institutions. They meet regularly at the Bank’s headquarters in Washington, United States.

UFRGSMUN is going to simulate the Board of Executive Directors of the International Bank for Reconstruction and Development (IBRD). The IBRD is the earliest institution of the World Bank Group, founded after the ratification of the Bretton Woods Agreement, in 1944. Post-war reconstruction of Europe was its original objective, but its focus has evolved into assisting middle-income and creditworthy low-income countries. To that end, the IBRD provides low-interest loans decided upon by its Board. Twenty five executive directors compose the Board and represent the 188 member countries of the IBRD. Each of the five largest shareholders in the World Bank Group—France, Germany, Japan, the United Kingdom, and the United States—appoints one executive director to the Board. China, the Russian Federation, and Saudi Arabia also indicate their own representatives. The remaining 17 executive directors are elected to represent each a determined group of countries.

 

TOPIC: Infrastructure investments in the Middle East & North Africa

Infrastructure is essential to the development of any nation. It is understood here as basically comprising three types of projects: transport (roads, railroads, ports and airports), energy (power plants, electricity grid, and oil and gas pipelines) and telecom infrastructure (mainly optical fiber). Improvements in those services are crucial for economic growth, as they reduce production costs and stimulate rural, industrial and trade activities. Moreover, national output, consumption and exports may all soar. It also enhances the competitiveness of a country in the global market. Working in infrastructure itself is also important to foster job creation, specially during periods of high unemployment rates as nowadays. Given the heavy costs demanded by these sorts of projects, investments in infrastructure usually involve discussions about public debt, privatization, and public-private partnerships.

Besides improving economic performance, infrastructure may help diminish income disparities and gender inequality issues, as well as promote sustainable development with a “green financing” approach. Nevertheless, private sector has not managed to properly deal with this question by its own, and public sector stood out as an important infrastructure promoter, either by financing projects with national development banks or by granting public guarantees to private investment funds (World Bank 2011, 6). In 2011, infrastructure became the “single largest business line for the World Bank Group, with $26 billion in commitments and investments” (World Bank 2011, 2).

Infrastructure in the Middle East and North Africa (MENA) has recently become a special focus of attention for the World Bank. According to the Bank (2010), there is a lack of infrastructure in those regions which will undermine their growth if not urgently addressed. There must be investments between $75 billion and $100 billion a year to sustain the growth rates that have been achieved in recent years, an amount that the private sector cannot afford on its own (World Bank 2010). Therefore, the World Bank, alongside with other partners, launched the Arab Financing Facility for Infrastructure (AFFI) in 2010 to address the issue. The 2011 Arab Spring highlighted the challenges to be overcome with the support of international organizations, given the “contraction of the fiscal space, limiting resources for investment and refocusing governments’ priorities toward non-economic infrastructure/social investments” (World Bank 2011, 70).

The Board of Executive Directors shall formulate policies on how to better provide loans regarding the topic of discussion. It must be decided which type of infrastructure the World Bank will prioritize, how each sector of the economy will be benefited, what conditions a country must present in order to receive a loan, what specific countries should receive more attention and so on. The Board shall also evaluate the approval of investment projects in specific countries. Furthermore, the executive directions shall bear in mind the regional context and how to manage it as a whole. Infrastructure investments in the MENA region can affect the Arab integration and also interfere in interests of the whole international community, as a large portion of trade activities and energy systems pass through the area. The levels of regional economic integration are low, which leaves a “huge potential for developing intraregional trade and regional infrastructure” (World Bank 2011, 77). Thereby, it is fundamental that both national and transnational perspectives be taken into consideration by the Board.

 

References

World Bank, 2010. Bank Announces Facility to Address Critical MENA Infrastructure Gap. Available at http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/ 0,,contentMDK:22730539~menuPK:51062075~pagePK:34370~piPK:34424~theSitePK:4607,00.html. Last retrieved on 22 jan 2013.

___________, 2011. Transformation through infrastructure: Infrastructure Strategy Update FY2012-2015. Available at http://siteresources.worldbank.org/INTINFRA/Resources/Transformationthroughinfrastructure.pdf. Last retrieved on 23 jan 2013.