2008 Annual Meetings of the

Boards of Governors

Summary Proceedings

Washington D.C.October 11–13, 2008

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THE WORLD BANK GROUP

2008 ANNUAL MEETINGS OF THE

BOARDS OF GOVERNORS

SUMMARY PROCEEDINGS

WASHINGTON, D.C.OCTOBER 11–13, 2008

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THE WORLD BANK GROUP

Headquarters1818 H Street, N.W.Washington, D.C. 20433, U.S.A.Telephone: (202) 477-1234Telex Nos: FTCC 82987

RCA248423WUI64145TRT197688

Facsimile: (202) 477-6391Internet: http://www.worldbank.org

Cable AddressWorld Bank: INTBAFRADIFC: CORINTFINIDA: INDEVASMIGA: MIGAVEST

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INTRODUCTORY NOTE

The 2008 Annual Meetings of the Boards of Governors of the WorldBank Group, which consists of the International Bank for Reconstruc-tion and Development (IBRD), International Finance Corporation(IFC), International Development Association (IDA), MultilateralInvestment Guarantee Agency (MIGA), and International Centre forthe Settlement of Investment Disputes (ICSID), held jointly with that ofthe International Monetary Fund, took place on October 11–13, 2008 inWashington, D.C. The Honorable Zoran Stavreski, Governor of theBank and the Fund for Former Yugoslav Republic of Macedonia, servedas the Chairman.

The Summary Proceedings record, in alphabetical order by membercountries, the texts of statements by Governors, the resolutions andreports adopted by the Boards of Governors of the World Bank Group.The texts of statements concerning the IMF are published separately bythe Fund.

Kristalina I. GeorgievaVice President and Corporate Secretary

THE WORLD BANK GROUP

Washington, D.C.March, 2009

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CONTENTS

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Opening Address by the Chairman Zoran StavreskiGovernor of the Bank and the Fund forFormer Yugoslav Republic of Macedonia . . . . . . . . . . . . 1

Opening Address by Robert ZoellickPresident of the World Bank Group . . . . . . . . . . . . . . . . . 7

Report by Agustín CarstensChairman of the Development Committee . . . . . . . . . . . 18

Statements by Governors and Alternate Governors . . . . . . 21

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Afghanistan . . . . . . . . . . 21Australia . . . . . . . . . . . . 23*Bahamas . . . . . . . . . . . 29Bangladesh . . . . . . . . . . 32Belgium . . . . . . . . . . . . . 34Bolivia . . . . . . . . . . . . . . 36Cambodia . . . . . . . . . . . 37Canada . . . . . . . . . . . . . . 42China . . . . . . . . . . . . . . . 47Croatia . . . . . . . . . . . . . . 49*Estonia . . . . . . . . . . . . . 53Fiji . . . . . . . . . . . . . . . . . 55France . . . . . . . . . . . . . . 59Germany . . . . . . . . . . . . 63Greece . . . . . . . . . . . . . . 65Haiti . . . . . . . . . . . . . . . . 66India . . . . . . . . . . . . . . . . 68Indonesia . . . . . . . . . . . . 69Iran, Islamic Republic of 73Ireland . . . . . . . . . . . . . . 75Israel . . . . . . . . . . . . . . . 78Japan . . . . . . . . . . . . . . . 80*Kiribati . . . . . . . . . . . . 84Korea . . . . . . . . . . . . . . . 87

Lao, PDR . . . . . . . . . . . . 89Malaysia . . . . . . . . . . . . 92Malta . . . . . . . . . . . . . . . 96Moldova . . . . . . . . . . . . 99Myanmar . . . . . . . . . . . . 102Nepal . . . . . . . . . . . . . . . 104Netherlands . . . . . . . . . . 106New Zealand . . . . . . . . 111Pakistan . . . . . . . . . . . . . 115Philippines . . . . . . . . . . . 117Poland . . . . . . . . . . . . . . 119Russian Federation . . . 120*Sierra Leone . . . . . . . . 123Spain . . . . . . . . . . . . . . . 127Sri Lanka . . . . . . . . . . . . 129*Sudan . . . . . . . . . . . . . . 131Switzerland . . . . . . . . . . 135Thailand . . . . . . . . . . . . . 139Timor–Leste . . . . . . . . . 144Tonga . . . . . . . . . . . . . . . 145Turkey . . . . . . . . . . . . . . 148United States . . . . . . . . 150Vietnam . . . . . . . . . . . . . 152

* Speaking on behalf of a group of countries.

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Concluding Remarks by the Chairman the Honorable Zoran Stavreski . . . . . . . . . . . . . . . . . . . . 158

Remarks by Nguyen Van Giau, Governor of the Fund for Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

Documents of the Boards of Governors . . . . . . . . . . . . . . . . 161Schedule of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161Provisions Relating to the Conduct of the Meetings . . 162Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

Joint Procedures Committee . . . . . . . . . . . . . . . . . . . . . . . . . . 164Report II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165Report III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167

MIGA Procedures Committee . . . . . . . . . . . . . . . . . . . . . . . . 169Report I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

Resolutions Adopted by the Board of Governors of the Bankbetween the 2007 and 2008 Annual Meetings . . . . . . . . . 172

No. 589 Transfer from Surplus to Replenish the Trust Fund for Gaza and West Bank . . . . . . . 172

No. 590 Transfer of IBRD Surplus to Food Price Crisis Response Trust Fund . . . . . . . . . . . . . . . 172

No. 591 Direct Remuneration of Executive Directors and Their Alternates . . . . . . . . . . . . . . . . . . . . 172

No. 592 2008 Regular Election of Executive Directors 173No. 593 Allocation of $115 Million of FY08

Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173

Resolutions Adopted by the Board of Governors of the Bank at the 2008 Annual Meetings . . . . . . . . . . . . . . . . . . 174

No. 594 Financial Statements, Accountants’ Report,and Administrative Budget . . . . . . . . . . . . . . . 174

No. 595 Allocation of FY08 Net Income . . . . . . . . . . . 174

Resolution Adopted by the Board of Governors of IFCbetween the 2007 and 2008 Annual Meetings . . . . . . . . . 175

No. 247 Membership of the State of Qatar . . . . . . . . . 175

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Resolution Adopted by the Board of Governors of IFC at the 2008 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . 177

No. 248 Financial Statements, Accountants’ Report,Administrative Budget, and Designations of Retained Earnings . . . . . . . . . . . . . . . . . . . . 177

Resolutions Adopted by the Board of Governors of IDAbetween the 2007 and 2008 Annual Meetings . . . . . . . . . 178

No. 217 Latvia—Change in Membership Status . . . . . 178No. 218 Membership of the Republic of Lithuania . . 179No. 219 Additions to Resources: Fifteenth

Replenishment . . . . . . . . . . . . . . . . . . . . . . . . . 182

Resolution Adopted by the Board of Governors of IDA at the 2008 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . 196

No. 220 Financial Statements, Accountants’ Report,and Administrative Budget . . . . . . . . . . . . . . . 196

Resolution Adopted by the Council of Governors of MIGAbetween the 2007 and 2008 Annual Meetings . . . . . . . . . 197

No. 80 Election of Directors . . . . . . . . . . . . . . . . . . . . . 197

Resolution Adopted by the Council of Governors of MIGAat the 2008 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . 198

No. 81 Financial Statements and the Report of the Independent Accountants . . . . . . . . . . . . . . . . . 198

Reports of the Executive Directors of the Bank . . . . . . . . . 199Transfer from Surplus to Replenish the Trust Fund

for Gaza and West Bank . . . . . . . . . . . . . . . . . . . . . . . 199Transfer of IBRD Surplus to Food Price Crisis

Response Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 201Report of the Boards of Governors of the Bank and the

Fund by the Joint Committee on the Remuneration of Executive Directors and their Alternates . . . . . . . 202

2008 Regular Election of Executive Directors . . . . . . . 211Rules for the 2008 Regular Election of Executive

Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213Statement of Results of 2008 Election of Executive

Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218Allocation of FY08 Net Income . . . . . . . . . . . . . . . . . . . 224

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Reports of the Board of Directors of IDALatvia—Change in Membership Status . . . . . . . . . . . . . 225Membership of the Republic of Lithuania . . . . . . . . . . . 226Additions to Resources: Fifteenth Replenishment . . . . 227

Report of the Board of Directors of IFC . . . . . . . . . . . . . . . 285

Report of the Board of Directors of MIGA2008 Regular Election of Directors . . . . . . . . . . . . . . . . 286Rules for the 2008 Regular Election of Directors . . . . 289Statement of Results of 2008 Election of the Board

of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292

Accredited Members of Delegations at the 2008 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298

Accredited Members of Delegations (MIGA) at the 2008 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328

Observers at the 2008 Annual Meetings . . . . . . . . . . . . . . . . 339

Executive Directors and Alternates, IBRD, IFC, IDA . . . . . 345

Directors and Alternates, MIGA . . . . . . . . . . . . . . . . . . . . . . 347

Officers of the Boards of Governors and Joint Procedures Committee for 2008–09 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349

Officers of the MIGA Council of Governors and ProceduresCommittee for 2008–09 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350

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OPENING ADDRESS BY THE CHAIRMAN THE HONORABLE ZORAN STAVRESKI

GOVERNOR OF THE BANK AND THE FUND FOR FORMER YUGOSLAV REPUBLIC OF MACEDONIA

Introductory Remarks

Allow me to welcome you all to the 2008 Annual Meetings of theInternational Monetary Fund and the World Bank Group. It is a greathonor for my country, Macedonia, to chair these meetings.

At a time of unprecedented challenge and change in the global econ-omy, it is reassuring that the Bretton Woods Institutions have at theirhelms leaders with outstanding experience and energy. I know that fel-low Governors will join me in thanking Mr. Strauss-Kahn and Mr. Zoel-lick for their wise leadership in addressing immediate and longstandingglobal challenges through enhanced external engagement and compre-hensive internal refocusing. Looking forward, I have full confidence thatthey will continue these important efforts and remain vigilant towardnew risks. Governors will also wish to thank Mr. Carstens for his ablechairmanship of the Development Committee, and Mr. Padoa-Schioppafor chairing the IMFC, as well as to congratulate Mr. Youssef Boutros-Ghali on his selection as the new IMFC Chairman.

Global Market Turmoil: New Challenges Call for Timely and Flexible Responses

Fellow Governors, events of the past year starkly reminded us of thewide range of pressing challenges facing the global economy. We are cur-rently in the midst of one of the most serious global financial marketcrises of our time. This financial turmoil, along with the surging food andfuel prices that we have been seeing this year, has forced rapid and flexi-ble reactions from policymakers. At the same time, other challenges—such as climate change, aid effectiveness, and governance of the BrettonWoods Institutions—remain imperative and demand action.

It is vital that we harness the comparative advantage of both theFund and the Bank Group to tackle immediate threats quickly, whilecontinuing efforts to address ongoing challenges. The Bretton WoodsInstitutions are well placed to work with member countries and otherinternational and regional institutions to cushion the impact of finan-cial turbulence so as to prevent a further expansion of the crisis. Thereis also urgent need to improve food security by going beyond an imme-diate emergency response. Yet, the unparalleled scale and complexity

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of the challenges we confront today require that global institutions, likethe Fund and the Bank Group, devise fast and flexible policy responsesso that gains made over the past decade in macroeconomic stabilityand overcoming poverty are not reversed.

Advancing Surveillance Issues

Fund surveillance is a valuable tool in our efforts to promotemacroeconomic and financial stability, but—to remain effective—surveillance needs to be continually updated and enhanced to addressnew challenges. The Fund’s first ever Statement of Surveillance Priori-ties highlights the key elements of the global macroeconomic changesthat surveillance needs to address. In particular, it correctly recognizesthe increased potential for disruptive financial sector spillovers into thereal economy, and the pace with which adverse macroeconomicimpacts spread. To address these developments, the Fund intends tostrengthen its analysis of macro-financial linkages, and extend EarlyWarning Indicators to advanced economies.

This updating builds on other efforts to make surveillance more rel-evant to changing global macroeconomic dynamics. Governors willrecall the refocusing of exchange rate surveillance through the 2007Surveillance Decision. Steps are now being taken to strengthen obser-vance of the decision, and to improve the underpinning methodologicalframework. Looking forward, the Fund must build on this progress—and the findings of the Triennial Surveillance Review—and continue toadapt surveillance in line with the changing global economy.

Strengthening Fund-FSF Collaboration

Ensuring the greatest possible impact of Fund surveillance is also ofvital importance. In this regard, we commend steps to strengthen col-laboration between the Fund and the Financial Stability Forum. TheFund’s lead role in macro-financial surveillance and its near universalmembership complements the Financial Stability Forum’s role in bring-ing together policymakers of the most systemically important financialcenters, international institutions, and standard setting bodies.

Reviewing the Fund and the Bank Group’s Lending and PolicyAdvice Roles

In recent years, positive developments in the global economy andstrengthened domestic policy frameworks have contributed to dimin-ishing requests for Fund lending. In the current pressing circumstances,however, the Fund needs to stand ready to provide fast, timely, and

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flexible financial assistance to its members. In this respect, we areencouraged by the Managing Director’s request that the Fund’s Boardactivate its fast-track loan procedure. We are also encouraged by thedetermination of the Fund to continue adapting its lending instrumentsto changing circumstances. We welcome the innovative instrumentsbeing put in place, including the revamped Exogenous Shock Facility,which will provide faster assistance and in larger amounts to membersexperiencing a shock, as well as the consideration of a new liquidityinstrument for crisis prevention. In this context, the recent review ofthe Fund’s financing role in member countries, which found that Fundfacilities have been used flexibly and have provided the needed sup-port to the membership, is noteworthy.

Last year, the World Bank Group saw a record replenishment of$41.7 billion to IDA-15, jumpstarted by a $3.5 billion contribution fromthe Bank Group’s own income. This is an important vote of confidencefrom the donor community in the Bank Group’s work. We are furtherencouraged by the Bank Group’s efforts this year to develop innova-tive financing instruments and to expand options for its clients. In par-ticular, we welcome the simplification and reduction in IBRD loancharges, the extension in maturity limits, and the initiatives to expandlocal currency financing and to develop local bond markets.

We are also pleased to note the World Bank Group’s strong capital-ization and prudent risk management policies that have kept it strong,allowing it to expand finance in response to client demand. In the cur-rent environment, the Bank Group’s role as a lender cannot be underes-timated. We are also encouraged that the Bank has a team of highlyexperienced financial experts to help assist member countries strengthencrisis preparedness and to respond promptly to crises when they happen.

Financial support is only one aspect of the Fund’s and the BankGroup’s assistance to member countries. Policy advice is increasinglyrequested by governments as they face a more testing external environ-ment and manage growing and complex economies. In this respect, theFund is playing its part, helping countries assess the macroeconomicimpacts of the food and fuel crisis, design targeted measures to alleviateits effects, and calculate the fiscal costs of the necessary policyresponses. The Bank Group has already played an active role with thelaunch of a New Deal for Global Food Policy, which focuses—amongother initiatives—on providing support to the World Food Program tofacilitate food access to the poor, increasing investment in agriculturalresearch, and acting to remove export bans and to reduce distortingsubsidies and trade barriers. The Bank Group has established a $1.2 bil-lion Global Food Crisis Response Program, which provides the overallframework for a comprehensive and rapid response. We urge the Bankto continue its engagement on this matter and provide policy advice and

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financing to the neediest countries in coordination with donors, stake-holders, and civil society.

Regional Developments

Fellow Governors, while downside risks to the global economy andtheir impact on the Western Balkans cannot be underestimated, ourregion is better positioned than ever before to absorb these shocks.After a decade of reforms, rapid growth and stronger domestic institu-tions bode well for a progressive integration of the Western Balkancountries into the European Union. The Fund and the World BankGroup have been valuable partners in this respect. The World BankGroup’s lending and advisory services are increasingly supportingactivities in improving investment climate and infrastructure, in partic-ular by developing power and transport networks that will ensure reli-able energy supply and facilitate regional trade. In addition, severalprojects dealing with climate change and disaster-risk mitigation arealso underway. I call on the governments of Western Balkans countriesto work together to ensure the success of these efforts.

In line with the region, Macedonia has made considerable progressin recent years. Growth increased rapidly in the last two years, macro-economic stability was secured, and a range of important reforms wereundertaken. The government program “Rebirth in 100 steps” includes amulti-sectoral approach encompassing sound economic and regulatorypolicies to improve the investment climate, strengthen the labor mar-ket, promote high-quality education and training systems, and createan efficient social safety net. Macedonia’s progress in the World BankGroup’s Doing Business rankings reflects the improvements achievedso far in the business climate thanks to bold regulatory reforms. Anumber of efforts to modernize and improve the infrastructure are alsoongoing, but major additional investments in infrastructure remain crit-ical for future growth prospects. Macedonia’s overarching goal is tocomplete the EU accession process and to achieve rapid convergencewith EU member states’ income levels in a fiscally, socially, and envi-ronmentally sustainable fashion. The Bank Group and Fund have beenMacedonia’s trusted and reliable advisors in its successful transition,and we look forward to a continued effective partnership.

Ongoing Core Challenges

My fellow Governors, helping member countries respond to press-ing short-term threats should not divert the Fund and the World BankGroup from confronting other ongoing core challenges. Addressing

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these core challenges will strengthen legitimacy and enhance effective-ness, thus increasing the chances of successfully tackling short-termthreats.

Strategic Framework on Climate Change

The World Bank Group has rightly supported developing countries’efforts to integrate climate change considerations into their core devel-opment strategies while maintaining economic growth. The current dis-cussion of the Strategic Framework on Climate Change and Develop-ment is testament to that challenge, and will allow the Bank Group toscale up plans going forward and further foster international collabora-tion on this important global public good. The World Bank Group hasa catalytic role to play in helping to mobilize private sector funding,and in complementing existing and new financing mechanisms. Thenew financing instrument established via the Climate InvestmentFunds is a step in the right direction.

Aid Effectiveness: Accra Agenda for Action

Scaling-up of aid to low-income countries is another pressing chal-lenge. Despite the welcome endorsement of the Accra Agenda forAction (AAA), more can be done to increase aid effectiveness. I urgeall development partners to keep moving the agenda forward. In par-ticular, I encourage donors to continue efforts to share good practices,harmonize monitoring systems, and scale-up capacity building efforts.

Enhancing Voice and Participation of Developing and Transition Economies

The Fund and the World Bank Group are pragmatic institutionsand must adapt to a changing international environment. It is critical toensure fair representation of all members and adequate participationof low-income countries in the governance of both institutions.

In April 2008, the Fund approved a forward-looking package ofgovernance reforms that increases the representation of dynamiceconomies and strengthens the voice of low-income countries. I call onyou—fellow Governors—to show leadership in speeding up domesticapproval of this reform. Keeping in mind the distinct nature of itsdevelopment mandate, the ongoing efforts to explore concrete optionson voice and participation within the Bank Group are also a steptoward enhancing the legitimacy, credibility, and accountability of itsoperations. We urge the Bank to reach a consensus on a comprehensivepackage of reforms as soon as possible.

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But more remains to be done. I thus welcome the establishment ofa joint steering committee of Executive Directors and Fund Manage-ment and the appointment by the Managing Director of a Committeeof Eminent Persons, chaired by Trevor Manuel, to assess the adequacyof the Fund’s current decision-making framework. I also welcome thework underway at the World Bank Group in the area of internal gover-nance; including the recent announcement by the President of a HighLevel Commission, led by Ernesto Zedillo.

Closing Remarks

Fellow Governors, this has been a tumultuous year; unprecedentedin many ways. The global economy is grappling with an acute financialcrisis and a surge in commodities prices, which are undermining confi-dence in a globalized financial system and the open trading system. Thechallenges of globalization are stark, the threat is a retreat to protec-tionism, and solutions are not simple. At times of distress, however,great opportunities arise. We need to seize them through a more effec-tive Fund and World Bank Group, and a strong commitment by mem-ber countries to pursue difficult economic and political reforms. Forthe world to successfully rise to this challenge, bold statements need tobe followed by even bolder actions. With these remarks, I herebydeclare open the 2008 Annual Meetings of the International MonetaryFund and the World Bank Group.

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OPENING ADDRESS BY ROBERT B. ZOELLICK THE PRESIDENT OF THE WORLD BANK GROUP

Modernizing Multilateralism and Markets

Thank you for joining us at these Annual Meetings. I want toexpress my particular thanks to our Chairman, Zoran Stavreski, and,once again, to Agustín Carstens for his leadership of the DevelopmentCommittee and his partnership as a friend. I cannot imagine a betterChair to work with during my first year.

I also want to single out my good colleague, Dominique StraussKahn. We work closely together, and I am fortunate to have a partnerwith such experience, insight, and fine humor.

We meet at an extraordinarily difficult time—a time of uncertaintyand insecurity, with a danger that those fears push us away from—nottowards—a more inclusive and sustainable globalization.

Recent weeks have made 2008 a precarious year—a meltdown infinancial, credit, and housing markets. The continuing stress of highfood, fuel, and commodity prices. Anxieties about the global economy.

People are hurting. Families are worried about what coming dayswill bring.

People are reacting with a sense first of confusion, then frustration,anger, and fear.

These are natural responses, just as we have seen in developed coun-tries. The challenges of psychology will spread around the world as thefinancial and economic effects spread. We need to take them seriously.

October could be a tipping point for many developing countries. Adrop in exports, as well as capital inflow, will trigger a falloff in invest-ments. Deceleration of growth and deteriorating financing conditionswill trigger business failures and increase the risk of banking emergen-cies. Some countries will slip toward balance of payments crises. As isalways the case, the most poor are the most defenseless.

The events of this year are a wake up call. There are storm cloudsover multilateralism and markets.

As food prices soared, agricultural markets started to break downunder political pressures. Some 40 countries imposed bans or restric-tions on exports of food. Others imposed price controls and haltedtrading. The UN strained mightily to get countries to double their con-tributions to food assistance for those most in need. Poverty, hunger,and malnutrition increased.

As the global system for agriculture ran aground, the World TradeOrganization drifted into dangerous waters. The Doha Round has hitthe rocks.

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The Climate Change negotiations organized under the UN Frame-work Convention on Climate Change faces an uphill struggle, nowsteepened by the breakdown in the WTO.

While needs are growing, the international aid system is not keep-ing pace.

Donors bring ideas, energy, and resources, but they also can over-whelm national ownership by developing countries, harming the effec-tiveness of aid. In 2006, there were more than 70,000 aid transactionswith an average project size of only $1.7 million. Last year, the averagedeveloping country hosted 260 donor visits. Vietnam had 752.

National governments are drawn increasingly to provide aid withtheir flag, not through multilateralism that encourages coherence andbuilding local ownership. The G-7 as a whole is far behind its Glen-eagles’ commitments to boost development assistance.

Private financial markets and businesses will continue to be thestrongest drivers of global growth and development. But the developedworld’s financial systems, especially in the United States, have revealedglaring weaknesses after suffering titanic losses.

The international architecture designed to deal with such circum-stances is creaking.

A New Multilateralism

Even as the United States and the world dig out of the present hole,we need to look further ahead: We must modernize multilateralism andmarkets for a New Global Economy.

Some say today’s crisis should take all our energy and focus. But thearchitects of Bretton Woods in 1944 laid the foundations for the futureeven as they still fought the armies of the past.

For us, tomorrow is already here.New economic powers are on the rise.The engagement of rising powers with the global economy has

made them “stakeholders” in the global system that benefited them.These rising powers want to be heard. They want to know what will

be their role in making new rules for the global economy.The developed economy “stakeholders,” in turn, both benefit from—

and are threatened by—the changes. Rising developing economies offermultiple poles of growth that assist their recoveries and offer new possi-bilities, but they also serve as fodder for scaremongers.

With growth rates averaging about 6.6 percent between 1997 and2007, some 25 countries in sub-Saharan Africa, with almost two-thirdsof the region’s population, offer a vision of yet another pole of growththat might be developed over the coming decades. This could be a greatachievement, not only for overcoming poverty and for development,but also freeing untapped talents and energies.

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But it will be an achievement left unrealized unless we have thevision and the courage to stand up to the challenges of economic isola-tionism, and to offer the leadership to help make it happen.

We need a new approach.At its best, multilateralism is a means for solving problems among

countries, with the group at the table willing and able to take construc-tive action together. When multilateralism is dysfunctional, globaliza-tion can be a Tower of Babel, with competing national interests collid-ing to the benefit of none.

The Bretton Woods generation left two legacies: first, specific inter-national institutions and regimes—in various states of service andrepair. Second, and more important, that generation left an intellectual,policy, and political commitment to act multilaterally to turn the prob-lems of an era into opportunities.

The New Multilateralism, suiting our times, is likely to be a flexiblenetwork, not a fixed system. It needs to maximize the strengths ofinterconnecting actors, public and private, profit-making and civil soci-ety NGOs.

The New Multilateralism must respect state sovereignties whilesolving interconnected problems that transcend borders.

This New Multilateral Network needs to be pragmatic. Its baselinework is to foster cooperation by encouraging exchanges of perspectiveson interests, both domestic and international. Often just sharing infor-mation is a start.

We should encourage a search for mutual interests. Sometimesmutual interests can be fostered with incentives—and internationalinstitutions can become catalysts for action. Practical problem-solvingbuilds a culture of cooperation.

Our New Multilateralism must build toward a sense of sharedresponsibility for the health and effective functioning of the globalpolitical economy. This means—chiefly and critically—that it mustinvolve those with a major stake in that economy, those willing to sharein the responsibilities along with the benefits of maintaining it.

We must redefine economic multilateralism beyond the traditionalfocus on finance and trade. Today, energy, climate change, and stabiliz-ing fragile and post-conflict states are economic issues. They arealready part of the international security and environmental dialogue.They must be the concern of economic multilateralism as well.

Priorities

A New Steering Group

The New Multilateralism will still depend principally on nationalleadership and cooperation. Countries matter.

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We need a core group of Finance Ministers who will assume respon-sibility for anticipating issues, sharing information and insights, explor-ing mutual interests, mobilizing efforts to solve problems, and at leastmanaging differences.

For financial and economic cooperation, we should consider a newSteering Group including Brazil, China, India, Mexico, Russia, SaudiArabia, South Africa, and the current G-7.

Such a Steering Group would bring together over 70 percent of theWorld’s GDP, 62 percent of its energy production, the major carbonemitters, the principal development donors, large regional actors, andthe primary players in global capital, commodity, and exchange ratemarkets.

But this Steering Group would not be a G-14. We will not make anew world simply by remaking the old. It should be numberless, flexi-ble, and over time, it could evolve. Others may be added, especially iftheir rising influence is matched by a willingness to help shoulderresponsibilities.

This new Steering Group should meet and videoconference regu-larly to foster a sense of group responsibility.

The IMF and World Bank Group, perhaps with the WTO, can helpsupport this Steering Group. We can identify emerging problems, sup-ply analysis, suggest solutions, and draw on our own broader member-ship to propose coalitions to address issues.

The Steering Group members will still need to work through estab-lished international institutions and regimes that include other states.But the core group would increase the likelihood that countries drawtogether to address problems that are larger than any one state.

We need this mechanism so that countries are not left to fail—withall the human, economic, and political consequences this entails forboth them and their neighbors. We need it so that global problems arenot just mopped up after the fact, but anticipated. We need it todevelop the habit of dialogue and the necessary relationships of trustbefore the crisis hits. We need it to shape multilateral solutions.

International Finance and Development

We have seen the dark side of global connectedness. We need tonavigate toward the light.

The first task will be to overhaul the failed system of financial regu-lation and supervision.

We must ask why so many thoroughly regulated and supervisedinstitutions got into trouble. Any risk-based model, no matter howsophisticated and well supervised, depends critically on the assump-tions. What happens when the assumptions fail?

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The changing conditions that trigger failure will increasingly bedependent on shifts in the world economy. Just as the crisis has beeninternational because of interconnectedness, the reforms will need tobe multilateral.

The Financial Stability Forum (FSF), ably chaired by Mario Draghiof the Bank of Italy, has started to tackle these issues. Whether throughan expanded FSF, a stronger FSF-IMF linkage, or the Steering Group,these financial supervisory issues will need to be addressed in abroader multilateral context.

We must bolster an IMF early warning system for the global econ-omy, focused on crisis prevention and not just crisis resolution.

The financial shock waves in the United States and Europe willreverberate in the global economy. The stark reality is that developingcountries must anticipate and prepare for a drop in trade, remittances,and domestic investment.

Countries with sound fiscal and balance of payments positionsshould be encouraged to spur domestic demand through consumptionand investment. But others have yawning budget gaps, risky currentaccount deficits, balance of payments problems, financial danger, or allfour. The Fund and the Development Banks will need to assist.

The New Multilateralism must put global development on a parwith international finance.

Economic multi-polarity offers stability and opportunity, just like adiversified portfolio of investments. But to boost more inclusive andsustainable growth, we need to think about aid differently.

Two weeks ago at the United Nations, international partners raised$16 billion for development projects. This money is vital, and we needmore if we are to meet the Millennium Development Goals.

But we also must broaden our approach. We must listen to thegrowing number of Africans who are telling us they want markets andopportunities, not aid dependency.

Private capital and markets will remain the drivers of growth. Wemust look beyond projects and programs to new ways of doing thebusiness of development.

At the Bank Group, we are changing our role from that of primarilya lender to a provider of customized financial and development solu-tions for overcoming poverty and spurring growth.

We are also building an IFC investment platform to help intermedi-ate equity investment—not aid—from Sovereign Wealth Funds toAfrica and other poor regions with growth opportunities. This is the“One Percent Solution” I proposed this spring.

Private capital—and especially equity—will be the critical factor inbuilding infrastructure, supplying energy, financing businesses andtrade, and fostering regional integration within an open global economy.

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And it is already happening. In 2008, IFC provided more investment(including syndications) to our clients than our IBRD lending or IDAassistance. Over 40 percent of IFC’s investments were in IDA countriesthis year.

Our Global Emerging Markets Local Currency Bond program, orGEMLOC, aims to catalyze the development of local currency bondmarkets in emerging market countries and facilitate south-southinvestment opportunities.

We are helping our clients—from small farmers to governments—manage development risks through insurance facilities for weather andcatastrophic events. In partnership with DFID, we finalized a weatherrisk management transaction on behalf of Malawi. Under this transac-tion Malawi will receive up to $5 million if an index linked to rainfalldrops significantly below the historical average.

We are developing our business with sub-sovereign entities so wecan get at the roots of local poverty and strengthening governance andperformance at all levels.

We are using our balance sheet and financing capabilities in combi-nation with donors to broaden types of assistance: from the issuance ofvaccine bonds in the Japanese retail market, to advance commitmentsto purchase yet-to-be-developed pharmaceuticals to save lives.

As we move into new fields with new instruments, we need tobecome better partners. To that end, we are ramping up our work tosupport health systems, promoting innovations such as results-basedfinancing, and new ways of working with the private sector and civilsociety. Two weeks ago, at the UN’s Millennium Summit, we joinedwith the UN, governments, non-traditional donors, the private sector,and civil society to boost support for malaria and for primary educa-tion with an additional Bank contribution of $2.6 billion.

The New Multilateralism also needs mechanisms to move muchmore quickly to help those who are most vulnerable in crisis. Rightafter suggesting the idea at our Spring Meetings, as the food crisis hithard, the World Bank created a new $1.2 billion rapid financing facilityfor those endangered by high food prices—to fund nutrition, schoolfeeding, seeds and fertilizers, and other safety nets. We are now expand-ing that Facility to cover those hit by rising fuel prices. These kinds ofvulnerability mechanisms must be flexible, fast, and will need a regularflow of grant funding.

The World Bank Group must also adapt more quickly to meet newneeds of its clients and interests of its shareholders. We need to betteralign our governance with the realities of the 21st century. Yesterday,we reached agreement on an initial reform package on Voice, Partici-

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pation, and Responsibility. This is a start, but we will need to go further.Our Board has advanced work on internal governance.

I am delighted that Ernest Zedillo has agreed to chair a High LevelCommission, to consider a modernization in World Bank Group gover-nance so we can operate more dynamically, effectively, efficiently, andlegitimately in a transformed global political economy. I have askedErnesto to work with colleagues looking at the IMF. In 1944 the archi-tects of the Bretton Woods system seized a moment to build for achanged future. We must be no less ambitious today.

The WTO and the Global Trading System

The Doha global trade negotiations in the WTO are gasping on lifesupport. It is vital that the WTO and an open global trading system notbe buried with them.

Trade negotiations will continue elsewhere. Recent research hasshown how FTA negotiations can support broader opening of markets.But FTAs and preferential arrangements that are not broad-basedcould weaken global liberalization. They need to be linked to globaldisciplines. And the multilateral system remains the only option for lift-ing the heavy hand of trade-distorting support for agriculture, still run-ning at some $260 billion per year in OECD countries.

One option to continue fostering global liberalization is to recog-nize trade facilitation as part of a development plan. There are oppor-tunities to cut costs of trade far in excess of those imposed by tariffsand other trade barriers. The World Bank’s “Doing Business” tradingand “Logistics” indicators have done the diagnostic groundwork.Regional bodies such as APEC have pointed the way.

The World Bank Group is helping countries to simplify and harmo-nize procedures and documentation across a supply chain. We are cur-rently working on a Trade Facilitation Facility to provide technicalassistance, capacity building, and project preparation. We can supportboth country-level projects that respond to client needs and multi-country projects that can facilitate regional trade integration. And wecan help with the implementation of trade facilitation commitmentsassociated with multilateral and regional trade agreements.

A new trade facilitation and development agenda puts the self-interest of lowering costs of trading to work for a multilateral interestof encouraging more integration, efficiencies, and opportunities—meaning more growth, more jobs, less poverty.

This is multilateralism by practical steps, moving ahead where it ispossible to do so.

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Energy and Climate Change

The New Multilateral Network must also interconnect energy andclimate change.

World energy markets are a mess. Producers, fearful of collapsingprices, are wary of new investments. Consuming countries want lowerprices for consumers, but prices high enough to encourage conservation,efficiencies, alternative supplies, and new technologies.And the most vul-nerable countries and people are victimized by the whole confusion—hitby high prices, price volatility, and climate change.

Most oil production is now controlled by national oil companies.These suppliers do not respond to market signals in the same way asprivate producers.

We need a “global bargain” among major producers and consumersof energy. A few years ago, China suggested that the major energy con-sumers organize to deal more effectively with the producers’ cartel.This is an idea worth considering, though with a broader purpose.

At a minimum, such a bargain should involve sharing plans forexpanding supplies, including alternative energy; improving efficiency andlessening demand; assisting with energy for the poor; and consideringhow these policies relate to carbon production and climate change poli-cies. The World Bank Group can play an important role here. Last year,our funding for renewable energy and energy efficiency projects in devel-oping countries grew by over eighty percent to reach US$2.7 billion.

Part of the bargain will also be to provide an opportunity for devel-oping countries to make longer-term investments to reduce vulnerabil-ity to high and volatile fuel prices while supporting the poor with safetynets. With less than one quarter of Sub-Saharan Africans currently hav-ing access to electricity, improving access for the poorest is a criticalcomplement to clean energy investments. Just as we are assisting thosemost vulnerable to high food prices by expanding agricultural produc-tion, we need to help those vulnerable to high and volatile energyprices by improving efficiencies, options for alternative supplies andoff-grid technologies, and regional cooperation. At the request ofshareholders, the World Bank Group is developing an “Energy for thePoor” initiative to help the poorest countries meet energy needs in effi-cient and sustainable ways.

We might consider taking the global bargain further. There mightbe a common interest in managing a price range that reconciles inter-ests while transitioning toward lower carbon growth strategies, abroader portfolio of supplies, and greater international security.

Multilateral understandings about energy futures—leading to clearpricing for carbon—might also be vital for the United Nations Frame-work Convention on Climate Change.

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A climate change accord also will have to be supported by newmechanisms to support forestation and avoid deforestation, developnew technologies and encourage their rapid diffusion, provide finan-cial support to poorer countries, and assist with adaptation. As wediscussed at the Bali Breakfast yesterday, we need to strengthen car-bon markets. The World Bank Group’s launch of two new facilities—the Forest Carbon Partnership Facility and the Carbon PartnershipFacility—enables us to support clients seeking lower carbon devel-opment paths.

Two weeks ago, to help provide additional resources for these chal-lenges, the Bank hosted a pledging session that raised $6.1 billion fromten countries for new Climate Investment Funds—resources whichdeveloping countries can use to address climate change issues withintheir own development and anti-poverty strategies.

Fragile States: Securing Development

Nowhere is the New Multilateral Network needed more than in thefragile and post-conflict states where the “Bottom Billion” live.

Too often, the development community has treated states affectedby fragility and conflict simply as harder cases of development. Yetthese situations require looking beyond the analytics of developmentto a different framework of building security, legitimacy, governance,and the economy. This is not security as usual, or development asusual.

Securing Development is about bringing security and developmenttogether first to smooth the transition from conflict to peace and thento embed stability so that development can take hold over a decadeand beyond. Only by securing development can we put down rootsdeep enough to break the cycle of fragility and violence.

Our appreciation of how best to secure development—to synthesizesecurity, governance, and economics to be most effective—is still mod-est. We face critical gaps in international capabilities.

Ultimately, the most important element in fragile or post-conflictstates is the people of those countries. But it will take much strongerand longer-lasting multilateral assistance to help these people shiftfrom being victims to becoming the principal agents of recovery.

At the World Bank, we are devising new, and I hope improved, part-nerships with the United Nations and others. A new UN-World BankFiduciary Principles Accord will significantly speed up joint responsesto crises. We are pushing ahead with desperately needed arrears clear-ance operations, and establishing a new $100 million State- and Peace-Building Fund to support a more strategic and innovative approach toconflict and fragility.

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The Six Strategic Themes

Last year I outlined six strategic themes for the World Bank Groupto help guide our work—for the poorest countries, especially Africa;fragile and post-conflict states; middle-income countries; global andregional public goods; expanding opportunity for the Arab World; andbuilding knowledge and learning.

These strategic themes run throughout our work. I have highlighteda few examples today.

As we move forward with the six themes, we must continue tomainstream anti-corruption and good governance across all our activi-ties. Publics are right to expect a sharper focus on governance and anti-corruption. Corruption is a cruel tax—first and foremost on the poor.We must fight it wherever we find it.

I am grateful to Paul Volcker and his fellow Commissioners for theirexcellent work—and practical recommendations. We are implementingthe panel’s recommendations and scaling-up our work— including bystrengthening our Institutional Integrity Department, creating a newpreventative and advisory unit to better share and implement lessonslearned, and appointing an International Advisory Board to help adviseour new Vice President.

This work is based on our fiduciary obligations. But it does not endthere. We must build an institutional culture of honesty, integrity, andtrust. And we must encourage and assist our clients—from theyoungest procurement officer to Prime Ministers and Presidents—toembrace this culture, too.

Conclusion

As one executive director recently observed, since our last AnnualMeetings a year ago, the World Bank Group has moved from crisis tocatalyst.

Now the world faces a crisis. It is a moment for the World BankGroup to step up.

We have a sound capital base, strong liquidity, unmatched globalexperience with worldwide reach, and extraordinary people.

Yet we can and must do better.The World Bank Group is at its best when it brings together global

expertise, constantly challenged and updated; investments in people,markets, and institutions; and innovative financing—always conscious,as the Growth Commission emphasized this year, that there is no singletemplate for development. Each country’s circumstances are unique—and special. We must have the humility, practicality, and honesty tolearn what works—and to fix what doesn’t.

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In that endeavor, our greatest asset is the staff of the World BankGroup here in Washington and around the world, who have workedtirelessly this year with clients and partners to support these efforts.Drawing talent from over a hundred countries, we are striving to showhow people with vastly different experiences and from different cul-tures can come together to make a whole far greater than the sum ofits parts.

I am fortunate indeed to gain from the richness of their diversity. Iwant to thank them and to let them know I am proud of them.

We also have an active Board with which we work every day. It hasoffered invaluable guidance as we advance to meet the needs of ourclients, for which I am grateful.

In closing, a word of perspective:Unless we can better share the opportunities and the responsibilities

in the new global economy; unless we can look beyond the financial res-cues to the human rescues; unless we can craft international policiesthat will help bring more peoples and more countries into the economicmainstream, we will not build an inclusive and sustainable globalization.And our world will not be stable—no matter how big our financial res-cue packages. Fate presents an opportunity wrapped in a necessity: ToModernize Multilateralism and Markets. We must seize it.

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REPORT BY AGUSTÍN CARSTENS CHAIRMAN OF THE DEVELOPMENT COMMITTEE

Thank you for this opportunity to share selected highlights of yes-terday’s Development Committee discussion. A more comprehensiveaccount of our work is available in our published Communiqué.

At our meeting, we discussed three broad sets of issues that are ofgreat importance to developing and transition countries. I am going tofocus my remarks today on these same three topics.

First, we spent most of our time discussing the current global situa-tion, including the turmoil in world financial markets, with a specialfocus on the implications for the developing and transition countries.

Beyond the present crisis, we took some time to discuss two sets ofissues that are of long-term significance. We discussed and agreed onan important set of reforms designed to enhance the “voice and repre-sentation” of developing and transition countries in the World Bank onthis important matter.

Finally, we discussed and endorsed a new Strategic Frameworkdesigned to provide a basis for wide-ranging engagement by the WorldBank in helping member countries grapple with the critical challengesposed to them by Climate Change.

So with that outline, let me share with you some of the main pointsof our discussions in these three areas.

First, the current economic situation and the financial crisis. Ourmeeting took place at a critical time for the global economy, with finan-cial markets experiencing unprecedented turmoil. Developing andtransition countries (DTCs)—many of them already hit hard by cur-rent high prices for energy and essential foodstuffs—risk very serioussetbacks to their efforts to improve the lives of their populations fromany prolonged tightening of credit or sustained global slowdown. Thepoorest and most vulnerable groups risk the most serious—and insome cases permanent—damage.

Against this background, we endorsed the very important commit-ments made at the International Monetary and Financial Committee,relating to measures to address the financial sector crisis.

Next, we stressed that aid volumes need to be consistent withexisting commitments and we called for full compliance with thesecommitments.

In support of these concerted actions, we called on the World Bankto join with the IMF in drawing on the full range of its resources—finance, analysis and advice—to help developing and transition coun-tries strengthen their economies, maintain growth, and protect themost vulnerable groups against the impact of the current crises.

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Under the strong and effective leadership of President Zoellick, theWorld Bank Group stands ready to help:

• The Bank recently announced a $1.2 billion rapid financing facility,which is providing immediate help for countries coping with theimpact of high food prices on the poor. We urged countries to con-sider making contributions to this fund.

• We encouraged the Bank and its partners to move forward with aplanned new program—Energy for the Poor—that would providerapid support for countries’ efforts to strengthen social safety nets toprotect the poor against the impact of high fuel bills.

• We noted that IBRD has the financial capacity to comfortably doubleits annual lending to developing countries to meet additional demandfrom clients. IBRD lending was US$13.5 billion last fiscal year.

• We also urged IFC to explore options for helping recapitalize banksin developing countries adversely affected by the global liquidity cri-sis, including the possibility of a fund.

Let me now turn to the second set of issues—our work on reform-ing the World Bank Group. When the Development Committee metthis past April, we called for concrete reform options for the WorldBank Group on these issues to be prepared in time for us to discussthem at these Annual Meetings. I am now very pleased to tell you that,based on intensive work undertaken by member countries and Bankmanagement and staff over the past 6 months, we were in a positionyesterday to review and advance a concrete package of reforms.

First, an additional chair will be created for Sub Saharan Africa onthe Bank’s Board. Second, the voting shares of developing and transi-tion countries’ in IBRD and IDA will increase, giving special emphasisto smaller members. Third, a realignment of Bank shareholding will betaken up by the Bank’s Board in an important shareholding reviewthat will work to an agreed timeline to develop principles, criteria andproposals for shareholding. The review will consider the evolvingweight of members in the world economy and other Bank-specific cri-teria consistent with the WBG’s development mandate, moving overtime towards equitable voting power between developed and develop-ing members. Fourth, there is considerable agreement on the impor-tance of a selection process for the President of the Bank that is merit-based and transparent, with nominations open to all Board membersand transparent Board consideration of all candidates. Recognizing theabove package as an important first step in the ongoing process ofcomprehensive reform, we asked the Boards and Management to takeprompt action to implement this first step.

Third and finally, we discussed and welcomed a new strategicframework that has been developed for the World Bank Group in the

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field of Development and Climate Change. This framework provides abasis for the Bank Group to fulfill its core mission of promoting eco-nomic growth and poverty reduction, at the global, regional and coun-try levels, in the context of the challenges posed by climate change. Weencouraged the Bank Group to customize its support for climatechange adaptation and mitigation efforts to the needs of its differentmember countries. Given the enormous financial gap for addressingclimate change, we also encouraged the Bank to strengthen its resourcemobilization efforts in this field. Finally, we encouraged the BankGroup to play an active role in supporting the development anddeployment of clean and climate-resilient technologies.

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STATEMENTS BY GOVERNORS AND ALTERNATE GOVERNORS

AFGHANISTAN: ANWAR UL-HAQ AHADYGovernor of the Bank

It is a great privilege to address this forum again.Despite deterioration in the security situation during the past year,

the government of Afghanistan has continued to implement existingrestructuring programs, and has launched new major developmentefforts. We submitted our Poverty Reduction Strategy Paper (PRSP) tothe World Bank and the IMF boards in April of 2008. Jointly with thegovernment of France, we convened the Afghanistan Support Confer-ence in Paris last June whereby donors generously pledged new contri-butions of over US$15 billion to help the implementation of ournational development strategy. Our PRSP calls for US$50 billioninvestment in five years. We had about $14 billion in outstandingpledges, and I am quite confident that donors will pledge additionalamounts during the next few years to help finance the implementationof our PRSP. We will submit our first year PRSP implementationreport next April.

Over two years ago, we started our Poverty Reduction and GrowthFacility (PRGF) program with the IMF. We plan to complete the thirdyear of our PRGF program in summer 2009, which is fundamental inachieving debt restructuring under the Heavily Indebted Poor Coun-tries (HIPC) program; and we have successfully implemented most ofthe PRGF recommendations for structural reform. Like in the previousyears, last year we increased our revenues by 27 percent; this year weexpect to increase our revenues by 32 percent. Despite increasing chal-lenges in the way of collecting revenues, I am happy to report that wejust met our second quarter revenue target.

However, like the rest of the world, Afghanistan has suffered fromthe drastic increase in the prices of food and oil. Between 2002 and2007, inflation remained below 10 percent whereas last year it rose toover 20 percent. Increase in the food and fuel prices explains over80 percent of the last year’s inflation. Furthermore, this year’s droughtis projected to cause a decline of about 30 percent in the production ofgrain. Without major imports of grain, we anticipate major food short-ages. Thus, to remedy this situation, in addition to asking donors forfood assistance and expecting the private sector to import a larger

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amount of food, the government has allocated US$100 million to pur-chase grain from international markets.

Last year, the economy grew by 11.5 percent; unfortunately, thisyear, due to the drought, we have lowered our expected growth rate to7.5 percent. Even though we anticipate our structural reforms toenable the private sector to play a much more important role in eco-nomic growth in a few years’ time, for now, donor assistance continuesto be the largest contributor to economic growth. Of course, we arevery grateful to our donors for helping us to rebuild our economy, butas I have said in the past, without addressing the issue of aid effective-ness, we are not likely to have impressive results. With better aid effec-tiveness, we believe we can have much higher growth rates. We are verypleased with the results of the High-Level Forum on Aid Effectivenessthat was convened in Accra, Ghana, during the first week of Septemberthis year. We are thankful for donors agreeing to channel at least50 percent of their assistance through the national budget by 2010.Cost-effectiveness, particularly in procurement, and genuine ownershipof the developmental priorities by the recipients of aid are also veryimportant factors in improving aid effectiveness. We are committed tomutual accountability, enhancing value for money, transparency, andpredictability of aid, and we urge the World Bank Group to developplans to implement the Accra Agenda for Action. Now that donorshave agreed to channel a substantial amount of their resources throughthe national budget, I hope that we will also promote these other criti-cal aspects of aid effectiveness.

Of course, the Bretton Woods institutions play an important role inthe world economic affairs, especially in developing countries. TheIMF’s PRGF program in Afghanistan is a mechanism for market-oriented economic reform, which is expected to promote sustainablegrowth. We appreciate IDA’s continued funding of some of our mostessential development programs as well as rebuilding effective stateinstitutions. Donors, including the World Bank, should support the gov-ernments of developing and post-conflict countries to develop greatercapacity for responding to drastically changing external conditions. Inthis context, we commend President Zoellick in responding to risingglobal food prices. The Bank’s Food Crisis Response Trust will helpcountries to increase food security over time; we indeed hope that thelong-term solutions to food insecurity will receive greater attention.However, it is also necessary for countries like Afghanistan to receiveimmediate assistance to respond to the short-term crisis. We also wel-come the World Bank Group’s collaboration with the UN High LevelTask Force on Global Food Crisis.

I also appreciate the discussion at the IMFC on Saturday on con-crete steps to restore financial stability and the smooth functioning of

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credit markets. Developing countries could indeed suffer greatly froma long global slowdown. It will be therefore crucial to maintain focuson support for sustainable growth, poverty reduction, and the achieve-ment of the Millennium Development Goals (MDGs). We hope thatthe current financial crisis will not reduce the amount of assistanceavailable for development. In this regard, we welcome the world lead-ers’ renewed commitment to the MDGs at the recent United Nations(UN) High Level event. We also welcome the IMF’s mobilization ofthe Poverty Reduction and Growth Facility (PRGF) in response to itsmembers’ needs, and the recent reform for easier and more rapidaccess to concessional assistance in response to external shocks.

We also strongly support the World Bank’s continued focus onaccess to renewable energy, a key requirement for developing countriesto achieve economic growth and make progress towards the realizationof the MDGs. As discussed yesterday in the Development Committee,we recognize the importance of supporting the low-income countries inadapting to the effects of climate change, but we hope that this effortwill not mean redirecting financial resources from other importantdevelopment priorities. Furthermore, there is an additional concernabout the increasing cost of projects due to screening of climate changeimpact.

In conclusion, despite the increased difficulties in our environmentand the complexity of our problems, the government of Afghanistanhas adhered to its economic reform agendas. Our developmentalachievements are still impressive. We thank the IMF for advising us onestablishing an economic system that will enhance sustainable growthand the World Bank for financing some of our essential developmentaland effective state-building programs. Even though we face tremen-dous challenges, with your continued support, I am confident that wewill overcome these problems.

AUSTRALIA: WAYNE SWAN, M.P.Governor of the Fund and the Bank

Global Financial Crisis

We are facing a global crisis, which requires a global solution. Aus-tralia has been participating fully in the international response so far—through our membership of bodies such as the IMF, the Financial Sta-bility Forum (FSF), and the Group of Twenty (G-20).

Progress this weekend represents a significant step forward in theresponse to the challenges we all face.

Australia is very supportive of efforts in the United States and else-where to manage immediate risks to financial stability and restore

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market confidence, and of the US Treasury Blueprint for domesticfinancial regulatory reform. Our central bank is an active participant incross-border initiatives to provide markets with liquidity.

For its part, Australia’s banking system remains resilient, with stableprofits, good balance sheets and few nonperforming loans. Our strongprudential and macroeconomic frameworks have also enabled us towithstand the turmoil well so far.

However, Australia’s financial system is being affected by globalevents, in particular developments in international wholesale fundingmarkets. As a preemptive move to guard against risks, we have decidedto guarantee bank deposits for a period of three years and to guaran-tee, for a fee, wholesale term funding of banks and other authorizeddeposit-taking institutions to enable these institutions to continue toraise funds overseas in the current tight conditions.

These steps are in line with action taken in other countries and withthe Group of Seven (G-7) agreement on Friday that the current situa-tion calls for urgent and exceptional action to stabilize financial mar-kets and restore the flow of credit to support global economic growth.

It is vital that the international community capture the lessons ofthe current global financial crisis and translate them into action. In thewake of the financial crises of the late 1990s, major players acknowl-edged the need to improve domestic regulation and strengthen theglobal financial architecture. Some useful things were done, but notenough.

We support the FSF recommendations and are working within theFSF and international standard setting bodies to ensure their fullimplementation domestically and internationally. This is essential toimproving standards of disclosure, transparency, and prudential regula-tion of financial markets, and to rebuilding longer-term confidence inthe system.

However, Australia believes the FSF recommendations should beenhanced by the inclusion of additional measures in support of conser-vative and consistent prudential standards that apply to all financialinstitutions of systemic importance. And we need to strengthen theglobal financial architecture through the existing forums of the IMF,the FSF, and the G-20.

Australia has proposed a five-point plan.

• First, all systemically important financial institutions, not just com-mercial banks, should be licensed—with licensing subject to full dis-closure and analysis of on- and off-balance sheet exposures.

• This should be imbedded in globally agreed best practice standardsof financial regulation whose implementation would be facilitated bythe IMF and become an integrated part of the IMF’s surveillance

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activities. Central banks in each country would have responsibilityfor financial system stability.

• Second, counter-cyclical regulatory frameworks should ensure banksand other financial institutions build up capital in good times as abuffer for bad times, using predictable rules.

• Third, financial institutions need to have clear internal incentives topromote responsible behavior. There should be higher capitalrequirements for firms with remuneration arrangements that rewardshort-term returns or excessive risk taking.

• Fourth, supervisory systems must be more compatible with account-ing principles that reflect reasonable assessments of the value ofassets over time, so that accounting rules foster a more medium-termperspective.

• And finally, the G-20 would strengthen its input into shaping thework of the IMF and FSF and the implementation of agreed out-comes. The IMF would have a stronger mandate for prudentialanalysis. And the IMF and FSF would develop their capabilities forearly warning of impending institutional vulnerabilities and providetimely advice on remedial policies.

Systemically important emerging market economies must have arole in strengthening the financial architecture. Indeed, while the epi-center of today’s financial crisis is the major advanced economies, it isdisrupting the flow of capital across the globe and therefore all system-ically important countries must be part of the solution.

That is why Australia also sees a central role for the G-20—with itsunique membership of systemically important countries—in providingpolitical authority for reforms to the architecture. This will mean theG-20 placing financial stability at the centre of its work program.

Under our proposals, the G-20 would monitor implementation ofFSF recommendations, encourage their wide adoption, and engage onthe risks facing the global financial system based on regular scenarioanalysis provided by the IMF and FSF. The communication of theserisks must also be significantly improved by combining the IMF’sWorld Economic Outlook and Global Financial Stability Report into asingle, more concise, and better-targeted report that clearly identifiesvulnerabilities and recommends policy responses in a form thatdemands attention by global policy makers.

In addition, given their systemic importance, individual G-20 mem-bers would provide the IMF and FSF with better information on thestability of their domestic financial systems and cross-border exposures.

These proposals would, I believe, build constructively on the workundertaken to date to try to prevent future crises.

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Australia has been active in the IMF’s work to strengthen its finan-cial sector surveillance and related policy advice, and ultimately itscapacity to help prevent future crises. The IMFC has endorsed astrengthened IMF role in these areas, as part of the process of rebuild-ing the international financial architecture:

• The Fund will strengthen its early warning capabilities in relation toidentifying and reporting on risks to global financial stability.

• The Fund will play a key facilitation, analytical and assessment rolein helping build a more robust and coherent financial policy frame-work and advise members on policies to address the weaknessesrevealed by the current financial turmoil.

• The Fund is strengthening its watchdog role in overseeing the imple-mentation of policy reforms. With its wide membership and mandate,the Fund is uniquely placed to tailor, monitor, and evaluate theimplementation of policy recommendations through its bilateral andmultilateral surveillance activities.

To perform these roles effectively, the Fund will collaborate withthe other multilateral forums to exploit complementarities and buildinternational consensus.

Australia has been a key supporter of these reforms and welcomestheir adoption.

We also fully support the use of the Fund’s emergency proceduresto make available substantial resources where necessary to help mem-ber countries cover financing needs, and the accelerated work on thepossible establishment of a new IMF liquidity instrument.

Development Challenges

Many developing countries are likely to face a dual challenge:slower global growth and increased difficulty in accessing credit andinvestment, combined with inflationary pressures driven by high com-modity prices.

The IMF and World Bank will need to work collaboratively andurgently to respond to these issues, recognizing their respective man-dates and comparative advantages.

Countries must also continue to work together to meet shared chal-lenges and be engaged in discussions on global problems such as highfood and energy prices and climate change. These problems will alsorequire considered policy responses at the national level, with inputand advice from organizations like the IMF and World Bank.

Open trade and investment policies, including reduced subsidiesand tariffs, can strengthen developing countries’ economies, improvingtheir resilience to respond to higher global food and fuel prices. Con-

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cluding the Doha round is one of the most important collective stepsthe world can take now to boost global food supplies and improvelong-term food security.

I commend the World Bank for its efforts in helping break the cycleof food insecurity. Australia is committed to doing its share in the cur-rent fight against global food insecurity and was pleased to be able tocommit A$50 million to the World Bank’s multi-donor trust fund.

Climate Change

For a long-term effective solution to climate change, all countries—both developed and developing—will need to be involved. Institutionssuch as the World Bank and the United Nations will also be required towork together to ease the challenges that climate change presents fordeveloping countries, with the IMF also playing an important role inadvising on macroeconomic impacts.

The Australian Government is committed to tackling climatechange and is pursuing policies on energy efficiency, low emissionstechnologies and domestic and international adaptation. Discussions atthe Bali breakfast highlight the important role of market-based mecha-nisms in tackling climate change. The central element of Australia’s cli-mate change policy framework is a national emissions trading scheme,the Carbon Pollution Reduction Scheme. Australia is also pleased to beable to support the UK as G-20 host in 2009, by co-hosting a G-20 cli-mate change workshop in February 2009.

International financial institutions have an important role in com-plementing the work of the United Nations Framework Convention onClimate Change. The World Bank’s Strategic Framework for Develop-ment and Climate Change presents a balanced approach for the WorldBank in addressing climate change, while recognizing the core mandateof the Bank in supporting development outcomes in partner countries.Australia was pleased to be able to announce an Australian contribu-tion of A$150 million to the Climate Investment Funds.

Governance Reforms

Today’s world is very different from the world when the IMF andWorld Bank were conceived and it is important that these changes arereflected in institutional arrangements. Australia strongly supportsefforts by the Fund and Bank to pursue governance reforms. All mem-bers will benefit from a Fund and Bank that have greater legitimacyand relevance, and are therefore more effective in fulfilling theirrespective mandates for international financial stability and povertyreduction.

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The proposed voice and participation reforms considered by theDevelopment Committee represent a good step forward, following thesubstantial quota and voice reforms agreed at the Fund. The Bankreforms will see an increase in the votes of developing and transitioncountries and a third chair for Sub-Saharan Africa—providing opportu-nity for the region to strengthen its voice in decision making at the Bank.

It will be important to build on this reform package to furtherstrengthen the governance and policy framework of the Bank. Realign-ing voting interests in the Bank to reflect the increased economicweight of emerging economies will be fundamentally important to thelong-term relevance of the Bank. Australia looks forward to workingconstructively with members on the challenging reforms that lie ahead.

At the IMF, Australia thanks the Independent Evaluation Office(IEO) for their comprehensive Report on the Evaluation of Aspects ofIMF Corporate Governance—including the role of the Executive Boardand looks forward to further work on these issues, including through theagreed work plan of the Executive Board and the independent assess-ment of the Committee of IMF Governance Reform, chaired by SouthAfrican Finance Minister Trevor Manuel. Australia will continue toengage on proposals to strengthen the roles and accountabilities of theIMF Board of Governors, IMFC, Executive Board, and Management.

Sovereign Wealth Funds

Australia welcomes efforts to accommodate the growth of sover-eign wealth funds, which are becoming increasingly important in globalfinancial markets and have demonstrated that they can have a stabiliz-ing influence in these markets.

We thank the IMF for their work in facilitating and coordinatingthe work of the International Working Group of sovereign wealthfunds. We welcome the release of the Santiago Principles. If widely sub-scribed to, the Principles will build transparency and strengthen confi-dence in the independence and commerciality of sovereign wealthfunds, supporting an open and stable international investment climate.

IMF Refocusing and Budget Reform

Finally, Australia would like to thank the IMF Managing Directorfor his work, supported by the Executive Board, in achieving significantrefocusing of the Fund’s work program on areas of comparative advan-tage, and budget reform involving substantial expenditure savings andthe establishment of a new income model. These are difficult reformsnot often seen in multilateral bodies and should not be underestimated.

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Australia values its close working partnership with the Fund and Bankand we look forward to further ongoing productive dialogue with bothinstitutions to promote global stability and sustainable development.

BAHAMAS: HUBERT A. INGRAHAMGovernor of the Fund and the Bank

(on behalf of the Caribbean Community)

As Governor for The Bahamas, I have been given the distinct honorto speak on behalf of the Caribbean Community (Caricom), namely,Antigua, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana,Haiti, Jamaica, Montserrat, St. Lucia, St. Kitts and Nevis, St. Vincentand the Grenadines, Suriname, and Trinidad and Tobago.

We express our gratitude to the management and staff of the Fundand the Bank as well as the government of the United States of Amer-ica for the arrangements made for these meetings.

These meetings are being held at a critical time. Global economicgrowth is being eroded by exorbitant increases in commodity pricesgravely impacting the living standards of our people. The tremendousuncertainty in global financial markets is seriously threatening employ-ment levels in our countries, with further negative effects on the livingstandards of our people.

The medium-term outlook for less developed countries and smallisland states, such as ours, appears especially challenging. However, webelieve that these challenges can also present opportunities to us all ifthe appropriate international responses are effective.

For our part, we intend to do all we can to implement policies andmeasures that will reposition our economies for early, resilient, sustain-able and strong growth to meet the aspirations of our peoples.

Rise in Energy and Food Prices

While we have been doing our best to overcome these difficulties,the sustained increases in energy and food prices have presented seri-ous macroeconomic, social, and human development challenges forsmall, open economies such as ours.

Like others around the world, the governments of Caricom havebeen preoccupied with the accelerating rates of inflation fuelled by theunprecedented spikes in energy and food prices.

Since food and fuel account for a large component of our consump-tion baskets, the impact of the price increases has been hugely damag-ing to the living standards of our people.

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Moreover, the growing cost of energy is affecting the travel plans ofmany internationally, with direct negative consequences for tourism, aprincipal industry for most Caricom countries.

The severity of the problem has compelled regional Governmentsto implement various support programs to mitigate the adverse effectson poor and vulnerable groups. These actions have placed additionalburden on already strained fiscal accounts.

Since the high prices are expected to persist over the medium-term,there is an elevated risk of social and economic dislocation. We havetherefore intensified our efforts to formulate sustainable regional agri-cultural and energy policies. We hope that these will bolster our abilityto absorb external shocks.

Millennium Development Goals

Despite the challenges facing the region, our countries remainfirmly committed to achieving the Millennium Development Goals bythe year 2015. However, we cannot accomplish these goals and main-tain these standards on our own.

We look forward to and we welcome continued assistance from theBretton Woods institutions and from our development partners. It iswithin this context that we wish to express our sincere appreciation tothe President of the Bank for his invaluable efforts in overseeing a suc-cessful IDA-15 replenishment exercise. This concessional window hascontributed significantly to the economic development of some of ourmember countries.

We recognize IDA’s eligibility criteria in terms of per capita GDPand that some of our members are surpassing these levels. But giventhe special circumstances of small island states, we urge the Bank tocontinue IDA support to the region.

Climate Change

We welcome the enhanced awareness and attention our developedcountry partners are paying to climate change. The recent G-7 meetingwitnessed the adoption of a proposal by member countries to reducegreen house gas emission by 50 percent by the year 2050.

The persistent challenge of climate change, with its dire twin prognosisof sea level rise and stronger and more frequent hurricanes, is especiallytroubling for the Small Island Developing States (SIDS) of Caricom.

Much of our land mass is within 1.5 meters of sea level and ourmost significant economic development has taken place in susceptiblecoastal zones. So we are very much aware of the impact of climatechange on the productive sectors of our economies.

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We have moved with urgency to effect numerous adaptation andmitigation strategies. We believe that our efforts, although small, willmake a meaningful contribution to the global effort.

The introduction of the Climate Investment Funds (CIF) is timely,and we congratulate the Multilateral Development Banks for theirefforts in designing a financial mechanism to assist developing coun-tries in addressing climate change.

Public Debt

We cannot overemphasize the issue of public debt sustainability,which is a serious and growing concern in our region of primarily Mid-dle Income Countries (MIC). Too often, our ability to address socialissues is hampered as a result of heavy debt servicing burdens.

In the case of Jamaica, 54 cents out of each dollar collected in gov-ernment revenue goes to debt servicing. Similarly, our EasternCaribbean States are challenged by rising debt. Consequent to the col-lapse of the Doha Round of trade talks, it is possible that these coun-tries could witness further deterioration of their debt positions andheightened social challenges.

While we are indeed grateful for the assistance of the Bank indetermining options for addressing this issue, we believe that our clas-sification as MIC countries limits the Bank’s potential range of inter-ventions. We therefore recommend that the Bank review the status ofsmall island states and their unique needs.

Voice and Representation

We note the options presented for discussion by the Bank toincrease the level of Voice and Representation for Developing andTransitional Countries (DTCs). We consider reforms arising from dia-logue on this subject as salient to the effectiveness of the institution.Our hope in this regard is for an agreement on a roadmap thataddresses in sequence, and in a timely manner, the options deemednecessary for significant enhancement to the Voice and Participation ofdeveloping countries in the World Bank Group.

Caribbean Technical Assistance Centre

Once again, we place on record our deep appreciation to the Bank,the Fund, and the Caribbean Regional Technical Assistance Centre(CARTAC) for their invaluable contributions to institutional andcapacity building, and the improvement of economic management inthe Caribbean. As we continue to implement the regional agenda and

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strengthen our ability to respond effectively to challenges and toexploit opportunities, we will require well-coordinated assistance fromthe Bank, the Fund and international donors.

Notwithstanding the planned budget cuts, the Caribbean needs toremain a focus of the work of the Fund. To avoid crises, it is importantthat the Fund invest not only in those countries that are systemicallyimportant but also in those that are vulnerable.

Conclusion

Finally, Mr. Chairman, we know that the institutions listen carefullyand with understanding to the views that we have expressed at thesemeetings.

We are sure that the institutions will respond urgently and positivelyto the needs that I have expressed today on behalf of the CaribbeanConstituency, needs which are extremely urgent in the present unsettledglobal economic and financial environment.

We wish both institutions every success in their future endeavors tofulfill their respective mandates.

BANGLADESH: A.B. MIRZA MD. AZIZUL ISLAMGovernor of the Fund and the Bank

I feel privileged to have the opportunity to attend the 2008 AnnualMeetings of the IMF and the World Bank at a very challenging timeconfronting the world economy. The financial market turmoil in someof the developed countries has the potential of exerting considerablenegative impact on growth and poverty reduction in developing coun-tries. We hope the ongoing government interventions would help calmthe volatile situation and restore stability and confidence in the marketplace. This year, we are also halfway through our quest to achieving theMillennium Development Goals (MDGs). It is high time for us to takestock of the progress we have made and evaluate our performance onthe mutual accountability framework enunciated in the MonterreyConsensus for future course of effective action.

According to current estimates while poverty will be halved on aglobal level by 2015, many countries are likely to miss this target by awide margin. The MDGs relating to human development are unlikelyto be met even at the global level. Climate change in conjunction withspikes in the prices of energy and food poses grave threats to the sus-tainability of development and to poverty reduction. The challengesahead of us are, therefore, daunting. The core constraint in achievingprogress in MDGs continues to be lack of adequate development

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financing. We note with concern that real official development assis-tance from Development Assistance Committee (DAC) donorsdeclined in 2006 and 2007. Many poor countries across regions have bynow proved their ability to effectively absorb increased volume of aid.There is an urgent need now for the developed countries to fulfill theirobligations to increase core development assistance to 0.7 percent oftheir gross national income.

We must also renew our commitment to further improve pre-dictability and effectiveness of aid. We firmly believe that the AccraAgenda for Action provides an adequate blueprint to accelerate theprogress we have made since the Paris Declaration. Strengtheneddonor harmonization and alignment with country systems are morecritical now in view of the emergence of increasing number of donorsand new aid modalities. We believe country ownership of the develop-ment agenda, use of country systems and a monitorable results frame-work will be critical for implementing the Accra Agenda for Action.

The recent surge in prices of commodities, oil, and food in particu-lar, has seriously affected the poor in many low-income countries.While welcoming the call by President Zoellick for a ‘New Deal forGlobal Food Policy’ and his initiative to set up a ‘Global Food CrisisResponse Program’ we call upon the World Bank to ensure that assis-tance under this facility is additional to the normal IDA allocation. Wealso welcome World Bank’s recent moves to bring back agriculture sec-tor in the forefront of its agenda for development assistance. Simulta-neously, the international community must delve into the root causesof this crisis and remove policy distortions to ensure food security.

The worst victims of climate change are the low-income developingcountries and the poor communities whose contribution to this cata-strophic change is minimal. Recognizing the inextricable linkagebetween climate change and development, we welcome the strategicframework of the World Bank Group on development and climatechange. We also welcome the establishment of two new Climate Invest-ment Funds. We, however, reiterate our call to address the climatechange issue on the basis of the principle of “common but differenti-ated responsibility” as articulated in the UN Framework Conventionon Climate Change. While we support the need for integrating actionson climate change into the development process, we believe that theseactions should not compromise growth. Climate change action plansmust be country-owned and backed by additional grant resources andtechnology transfer. Countries most vulnerable to climate change dueto their geographic locations should be given adequate grant assis-tance, additional to normal assistance package, to meet both adaptationand mitigation needs.

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Enhancing the voice and representation of developing countries inthe decision making of the Bank is critical for its legitimacy and credi-bility as a multilateral development institution. We reiterate our viewthat the package of reforms to achieve this should address, amongstothers, realignment of shareholding through a Bank-specific formulaincluding weight of member countries in the global economy.

Let me now say a few words about the Bangladesh economy.Despite successive natural calamities and exogenous shocks, macroeco-nomic situation continues to remain stable with growth over 6 percentper annum. Most of the MDGs are within our reach. Surge in fuel andfood prices generated some inflationary pressure, as in many othercountries. Notwithstanding targeted safety net programs of the govern-ment, the inflationary pressure has somewhat retarded our progress inpoverty alleviation.

Let me conclude, with the renewed hope that we will translate ourcommitments into concrete actions to build a world free of poverty.

BELGIUM: JEAN-PIERRE ARNOLDIAlternate Governor of the Fund

More than ever, all member countries should cooperate with theIMF and the World Bank in promoting financial stability, durabledevelopment, and poverty reduction. This requires that the BrettonWoods institutions continue to adjust to the rapidly changing structuresof the global economy.

The ongoing financial crisis calls for more effective Fund surveil-lance, which must be conducted evenhandedly. In doing so, the Fundwill need the full cooperation of its members.

The statement of surveillance priorities, which the IMFC endorsedthis weekend, focuses on the right issues. Special attention must bedevoted to strengthening financial sector surveillance. A reshapedFinancial Sector Assessment Program must be better integrated inFund surveillance. In this field, the Fund should fully exploit synergieswith all relevant standard-setting bodies.

The Fund should take the lead in drawing lessons from the currentcrisis and recommend effective actions to restore confidence and sta-bility, in cooperation with relevant fora and partners.

The Fund must act effectively in giving timely financial assistance tocountries hit by the crisis and to help improve, as needed, their macro-economic policy frameworks.

The Fund’s lending framework has become too complex and nolonger fits the needs of the membership. We welcome the fact that theFund has launched a major review of its financing instruments. Thisreview should cover all existing lending facilities, conditionality, access

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limits, and the cost of borrowing from the Fund. The objective shouldbe to establish a simpler, more coherent and predictable framework,and enable the Fund to fulfill its mandate effectively. We see merit in asingle, flexible facility.

The reform of the Fund members’ quotas and voice improves therepresentation for many countries. The governance of the Fund canalso be further improved. The report of the Independent EvaluationOffice on the Fund’s corporate governance should be carefully consid-ered as part of a more comprehensive review program as outlined bythe Executive Board and the Managing Director.

The World Bank Group has embarked on the reform of voice andrepresentation in its various institutions. We support the package thathas emerged from the discussions. As we know it from the Fund, thisreform is an ongoing process. The objective should be to endow theWorld Bank Group with a system that will allow regular adaptation tochanging relative positions in the world economy while ensuring ade-quate representation of all members, including the smallest and poor-est. This process should be complemented by internal governancereforms, based on the proposed Board effectiveness reform package.

The financial crisis must not let us forget the other crises that affectthe poor. We refer, in particular, to the food and energy crisis. Althoughthe prices of these commodities have declined in the recent past, formany commodities prices remain at historically high levels, and con-tinue to affect the poor in low and middle-income countries. The WorldBank Group and the Fund must act decisively to promote food securityand help overcome the financial consequences for the poor countries.

Climate change is another challenge that calls attention. Whereasuntil recently the biggest problem was that of inaction, now we arefaced with the specter of multiplicity of actions, bringing with it the dan-ger of fragmentation and ineffectiveness. We strongly favor the full useof the existing financing instruments. The World Bank is well placed toplay an important role in shaping the financing mechanisms to combatclimate change, which is an integral part of the development agenda.

Poverty reduction remains an unfinished agenda. In a few weeks, inDoha, we will assess the progress made in promoting developmentsince the Monterrey conference. That assessment will show importantshortcomings. We must decide how to do better. In this, the WorldBank and the IMF, with their unmatched experience and know-howare essential partners.

In closing, I would like to echo what the Managing Director of theIMF told us this morning: strong support for and strengthening theroles of the Bretton Woods institutions, is the best strategy to make ourcooperation as effective as it needs to be. In this, we all benefit fromthe contributions of the institutions’ competent management and staff.

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BOLIVIA: LUIS ALBERTO ARCE CATACORAGovernor of the Fund

The world is in the midst of one of the most severe crises in the his-tory of the capitalist system, potentially more serious than the Depres-sion of the 1930s. According to experts, the worst is yet to come, thuswe in the emerging and developing countries are deeply concerned. Aswe all know, the international financial crisis has its epicenter in thedeveloped countries; yet the smaller countries such as ours are notimmune, even though our capital markets are not integrated with therest of the world. The effects of the crisis could be catastrophic forsome low-income countries that are commodity producers, given theirexternal vulnerability. The external repercussions in terms of prices andexport volumes may endanger poverty reduction policies and jeopard-ize efforts to attain the Millennium Development Goals.

When the smaller countries faced macroeconomic imbalances, theIMF and World Bank recommended structural adjustment policieswith financing subject to strict conditionality. Bolivia and other coun-tries had no choice but to accept these recommendations; however,these policies—based on market forces and limited governmentinvolvement—merely fostered social marginalization, harmed the envi-ronment, and exacerbated poverty. Conversely, when the developedcountries create a crisis like the present one through inadequate gov-ernment supervision of the development of financial markets, noattempt is made to execute an emergency Financial Sector AssessmentProgram (FSAP), let alone adjustment programs.

IMF surveillance ought to focus primarily on the larger countries,however, the Fund and the Bank did just the opposite, resulting in theobvious adverse effects that have radiated across the globe. The crisisin the global financial system, which is attributable to inadequate regu-lation by financial supervisors and speculative behavior by transactorsin the main financial centers, will be resolved at the expense of poorpeople in the developed and underdeveloped countries. The 21st cen-tury demands a qualitative change in managing the crises spreadingaround the world, be they in the spheres of finance, food, energy, or cli-mate change. The developed countries must shoulder their responsibili-ties in this situation; they need to build a new international orderfocused on structural solutions to the economic, social, and environ-mental problems facing the underdeveloped countries.

The governments of the developed countries and multilateralorganizations are proposing short-term financial solutions that do notnecessarily address the structural causes of the crisis and, therefore,may not work. In the current context, the building of a new interna-tional order calls for financial architecture and regulatory institutions

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that promote comprehensive, orderly, and equitable development forall countries.

Those of us whose countries are not to blame for the current crisisbut are nonetheless suffering from its fallout should receive both finan-cial and commercial compensation. Accordingly, it is proposed that theWorld Bank and IMF make available to small countries specific pro-grams that entail resource allocations without conditionality.

One of the key lessons we have learned from the current crisis isthat, unless the State plays its role as leader in the developmentprocess and active participant in the economy, the attainment of theMDGs and poverty reduction will be seriously compromised.

Finally, we are calling upon the President of the World Bank toaccede to the Bolivian government’s request to move forwardBolivia’s denunciation of the Convention establishing the Interna-tional Centre for Settlement of Investment Disputes (ICSID Conven-tion) and withdrawal of its consent to have its disputes heard underICSID jurisdiction.

CAMBODIA: CHEA CHANTO AND AUN PORN MONIROTHGovernor of the Fund and Governor of the Bank

We are pleased to represent Cambodia at this important annual dis-cussion. We meet here today under extraordinary circumstancesrelated immediately to the mandate of our two institutions. The crisiswe face is multi-faceted and affects people all over the globe, mostlythe poor and underprivileged.

A cataclysmic and still enlarging financial crisis of unimagined andunprecedented proportions has engulfed all of us, catching us totallyunprepared and unable to fully grasp its magnitude, extensive labyrinthof complexity and adverse effects spreading to all parts of the globe.This is a man-made tsunami, long in the making. No one in the modernfinancial world could foresee it until its full force has come to unfold inthe recent weeks. All the postmortem, which would, no doubt, be doneon its causes, would not solve the gigantic problems we would all facefor years to come. Of immediate consequence to the developing andpoor nations is that the slowing economies of the developed countriesare shrinking demand for goods and services they import from the for-mer. This in turn will affect millions of jobs and send tens of millionsbelow the poverty line from which they have only recently emerged.The mammoth financial bailout undertaken by the bigger economies toavoid an even bigger crisis puts at risk the level of development assis-tance and accommodation needed from them to meet essential millen-nium development goals in the rest of the world.

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Inflation is running high all over the world reducing growthprospects, leaving the poor not being able to meet even their essentialsurvival needs. Food shortages are occurring in part to due subsidiesprovided to diversion of food crops for bio-energy. Food and fuelprices continue to be high, volatile, and unpredictable. All these factorsfeed into each other, with compounding global effects. Shock waveshave reached every corner of the earth. It is clear that free, unregulatedmarkets cannot correct themselves.

All of us here need to admit that our two global institutions with alltheir research expertise failed to notice such developments in advanceand alert the world. They did not do their global watchdog functions.They seem to have been more absorbed in the euphoria of preachingto developing countries and prescribing to them impossible conditions.Even as they imposed more and more reforms on borrowers, they hadrelegated pursuit of agricultural research, production, and productivity.Our institutions turned the spotlight on poor countries failing even tonotice the mammoth turmoil brewing here in their own backyard.

But, the crisis we face gives us a real opportunity to start afresh. Weneed to critically review the mandate and functions of the two institu-tions so that they get out of 20th century mindsets and become moretuned, alert, capable, responsive, and ready to face the 21st challenges.Cambodia joins in the calls made by others to come up with new roles,shape, structure, and accountability for the two institutions so that theycan truly keep a watch over global developments, not merely in thepoorer part of the world. We need to set in place sensors and triggersthat can alert us in advance about any crisis in the future and to enableus to take adequate alleviating action just as we do when we know ofnatural disasters in the making. We need to protect the world fromsuch disasters in the future.

The review needs to be conducted by a body of experts, drawn fromthe academic world and public finance practitioners including from thedeveloping world. A high-level body needs to be set up consisting ofgovernors of the two institutions with proportional representationfrom all regions.

There is at the same time the need to expand and enhance intraregional cooperation and solidarity through regional bodies, institu-tions, and mechanisms. Effective regional bodies and intra regionalinvestments could possibly cushion against future global shocks.

Even as the world manages the ongoing crisis, it is imperative thatwe don’t lose sight of our long-term global commitments to alleviatethe miseries of the poor in mostly developing countries. The task ofpoverty alleviation and reaching promised millennium developmentgoals cannot afford delays or postponement. If any, it needs muchfaster acceleration and concerted action. Not only our two institutions

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but all other international and bi-lateral partners should ensure thatprograms of assistance to these ends do not slacken but get enhanced.The present dark clouds over our skies should not stop us in ourmarch.

Cambodia is getting fast integrated into the global economy.Because we are less developed we have so far been only bruised by theglobal events and not very severely affected. We already feel the painsof high inflation, slowing economy and reducing exports, which affectour earnest efforts to reduce poverty, which have shown impressivesuccess so far but are at risk now. We can no longer sustain our recentannual double-digit growth rates in the near future. Our inflation willremain higher than we would like. Our immediate concern is not to letanyone slide back into poverty from which they have only recentlystepped out. We see opportunity in the crisis to make our economicbase more diversified by optimally using our natural endowments inrural areas where immense potential for increasing agricultural pro-ductivity remains untapped. The renewed focus on rural areas will alsohelp us to immediately and directly address issues relating to povertyreduction. Direct assistance to poor farmers by way of improved seeds,inputs, and extension services will at once alleviate poverty andbroaden the economic base in a sustainable manner. Both the WorldBank and the UN have clearly acknowledged that this is the need inmost parts of the world.

In the tasks ahead in Cambodia, we need continued help from ourdevelopment partners and international and regional institutions in thefollowing ways at least:

First, write off, or provide swap arrangements in regard to, past out-standing debts, some incurred during a war period dating back to morethan thirty years ago. The released resources could be ploughed backinto the rural economy and toward achieving millennium developmentgoals.

Second, provide funds for direct assistance to the poor in ruralareas to improve their livelihood through better inputs and practices inagriculture.

Third, open up markets in the developed world by reducing tariffand local subsidies for products that we can best supply at lower cost.

Fourth, international institutions start to function more effectivelyas the advocate of poorer countries in the international arena.

The Cambodian delegation looks forward to a meaningful debateand emergence of a clear course of action at this meeting.

We now turn to other matters on our agenda. We agree with the coreobjectives and the broad set of guiding principles as outlined in thepaper on voice and participation at the Bank. We would like to stressthat the voting powers of the smaller members should be protected. We

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support the increase in IBRD basic votes, which will have a biggerimpact on raising the voting power of smaller countries. Practicaloptions for realignment of IBRD shareholding should be considered.We support an additional chair for Sub-Saharan Africa in the Bank’sExecutive Board. We want to see this effort implemented in the broadercontext of Board effectiveness and governance. On the selection ofBank President, we believe that the process should be consistent amongthe World Bank group, IMF and the Regional Development Banks.

We find that the six strategic directions in the Bank’s StrategicFramework for Development and Climate Change support the visionof the World Bank Group of “contributing to an inclusive and sustain-able globalization—to overcome poverty, enhance growth with care ofenvironment, and create individual opportunity and hope.” However,“public goods” are also vital to address adverse effects of climatechange and should not be crowded out of IDA funds. The Bank shouldmobilize additional financial resources to support strong country own-ership and target specific interventions.

We have noted with regret that, by using the International Procure-ment Agency (IPA) arrangement, the Bank financed portfolio for Cam-bodia suffered a decline last year and would do so next year. This wouldrepresent the worst portfolio performance since we began to receiveassistance from the Bank. We are disturbed by such poor results.

We wish now to present to you some highlights of Cambodia’smacroeconomic and financial performance. Our socioeconomic agendais spelt out in the Rectangular Strategy we have developed andadopted in 2004 and is implemented through our National StrategicDevelopment Plan, 2006–2010. The Royal Government formed afterthe recent general elections has reaffirmed this strategy and will con-tinue it in its second phase.

As a result of clear vision and concerted action on a package ofpolicy-oriented measures, despite some difficulties and attendantsocial pains, a number of positive developments are taking place in thecountry. Poverty level in the country declined rapidly in three years,from about 35 percent in 2004 to 30 percent in 2007. In 2008, weexpect that GDP growth would continue at a healthy level, thoughdeclining from the two digit levels seen in the last few years. Per capitaincome rose to US$594 in 2007 increasing by over 50 percent in threeyears from 2004. Foreign reserves doubled during this period and nowstand at $1.9 billion. Exchange rate with US dollar will remain fairlystable. Budget performance would continue to improve with rationali-zation and reorientation of public expenditures.

We are quite optimistic about prospects of revenues from exploita-tion of our oil and natural gas reserves. We will ensure that benefitsaccrue to and are available to all Cambodians whose common heritage

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they are. The additional revenues will be used for targeted investmentsin priority sectors set out in our National Strategic Development Plan.We are fully committed to managing revenues from our naturalresources in a transparent and effective manner for the long-termdevelopment of the country and with full accountability.

Inflation, which was well managed and contained until 2006, sud-denly increased in the last quarter of 2007, spurred both by the exter-nal environment already pointed out and by internal pressures, includ-ing high liquidity in the system. It has continued at a high rate sincethen. This has prompted a more prudent management of prevailingmonetary conditions. The monetary policy implementation has focusedon managing the excess liquidity and the over-involvement of banks inthe real estate sector, which could have adverse consequences. Amongmeasures undertaken were increasing the statutory reserve require-ment from 8 percent to 16 percent, increasing the capital requirementof the banks, and reduction in real-estate lending. In the area of fiscalpolicy, despite few expansionary measures to contain the impact ofinflation on livelihood of the most vulnerable group of population, thegeneral policy line of the Royal Government is limiting spending,increasing current budget surplus, reducing overall budget deficit,increasing Government’s deposit in the banking system and redirectingspending towards productive sectors, especially agriculture and ruraleconomy. However, the Royal Government, conscious of the trade-offbetween inflation and growth, will follow a flexible approach.

In strengthening of the banking system, we have moved away fromjudgmental loan classification to the prudential asset classificationbased on objective criteria, adopted strict criteria for the level of provi-sioning to be applied to various grades of loans, and enhanced creditinformation sharing system. The implementation of reforms andstrengthening of the institutional structure of the banking sector inCambodia has had an all round salutary impact on the financial healthof the banking system, as evidenced by the significant improvements ina number of prudential parameters. The average capital adequacy forthe commercial banks in June 2008 was 25.5 percent, well above thebench mark of 15 percent despite significant growth in the aggregateassets of the banking system. In regard to the assets quality, the non-performing loan ratio, which was as high as 14.8 percent in 2002 and9.9 percent at the end of 2006, declined significantly to 2.6 percent as atthe end of June 2008. These figures have been driven by loan loss pro-visioning by the banks as also by the improved recovery climateenabled by the more supportive legislative environment.

In sum, our system in the banking sector supervision has workedsatisfactorily and the volume of business transactions undertaken bythe sector has been increasing steadily. The level of financial deepening

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has accelerated with increased financial services promoted through theprogressive reforms implemented under Financial Sector Blue Print,2001–2010, which was in late 2007 updated to Financial Sector Devel-opment Strategy, 2006–2010.

Reforms in other areas of the banking activities are also underway.These include strengthening and supporting the growth of microfi-nance institutions, the improvement of corporate governance andbanks internal audit, enhancing credit information sharing system, andenabling financial leasing business for banks. We have also accentuatedour efforts to ensure an efficient implementation of the Law on Anti-Money Laundering and Counter-Financing of Terrorism that wasadopted in 2007 through the recent establishment of the FinancialIntelligence Unit and will allocate resources to facilitate capacity ofthis unit.

Ladies and gentlemen, we wish to record our appreciation of theassistance Cambodia has received from the Bank and the Fund. Wealso urge that the Fund to exclude poor countries from its new schemeon “country contributions” or charging for policy technical assistance.

In conclusion, we wish to once again thank the Board, management,and staffs of the Bank and the Fund for their readiness to respond tothe needs of Cambodia and for providing support over the years.

CANADA: JAMES MICHAEL FLAHERTYGovernor of the Fund and the Bank

We are experiencing a time of global economic and financial uncer-tainty that in some respects is unprecedented in the last half century.Virtually no country is immune to the risks stemming from the turmoilin global financial markets and many are facing serious dislocationsfrom the sharp hikes and volatility in commodity prices we have wit-nessed. In these difficult times, having strong global institutions like theWorld Bank and the IMF is a tremendous asset. We must use themomentum for reforms in both institutions to ensure they are fullyequipped to pursue their important mandates.

Global and Canadian Prospects

The global economy continues to be buffeted by shocks emanatingfrom the turmoil in many parts of the global financial system and byincreases in the prices of commodities central to people’s standards ofliving. Growth in the major advanced economies has slowed sharply,and although emerging markets will remain the major driver of globaleconomic growth, their pace of growth is expected to slow. This hasmade it increasingly important for countries to work together to pro-

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mote a return to strong sustained global growth and stability. I believethat finance ministers should meet again in the coming weeks to ensurecontinual progress. The government of Canada also supports the ideaput forward by President Sarkozy of a leaders’ summit to review meas-ures to strengthen the international financial system.

Many economies are better placed today to weather these shocksdue to past improvements in policy frameworks. Canada, along withothers, took the necessary measures in recent years to put publicfinances on a sound footing. This has provided us with the flexibility torespond to signs of a softening of growth with timely fiscal stimuluswhile continuing to maintain a balanced budget. While headline infla-tion has picked up globally as a result of oil and commodity priceincreases, the increased credibility of central banks who have adoptedstrong policy frameworks have generally kept inflation expectationswell anchored. However, signs of higher inflation are more worrying inseveral emerging market economies, many of which are sacrificingsome of their monetary policy independence by limiting the flexibilityin their currencies.

Economic growth in Canada has weakened since the end of 2007 asa result of the United States slowdown, which, coupled with a higherCanadian dollar, has significantly reduced Canadian exports. However,as a result of the strong dollar and higher commodity prices, Canadianconsumers and businesses have benefited from rising real incomes andprofits. As a result, domestic demand growth in Canada remains soliddespite slower growth overall. Moreover, Canada’s economic funda-mentals remain strong: employment has continued to increase thisyear; the unemployment rate remains near a 33-year low; the financialsector remains strong and well-capitalized; the financial positions ofconsumers, businesses and governments are sound; and core inflationremains low and stable. The IMF expects Canadian growth to be0.7 percent in 2008, increasing to 1.2 percent in 2009.

Core inflation pressures remain contained at 1.7 percent in August2008, despite a recent uptick in headline inflation. Total consumer priceinflation was 3.5 percent in August, compared to a recent low of1.4 percent in March 2008 reflecting increases in the prices of energyand food products following sharp increases in world prices earlier thisyear. On October 8, the Bank of Canada joined other major centralbanks in a simultaneous reduction of policy interest rates by 50 basispoints. This significant action will provide timely support for the Cana-dian economy.

Canada’s fiscal situation remains strong. In fact, it remains the bestof the G-7 countries. According to the IMF’s fall outlook, on a totalgovernment basis, Canada’s budget surplus was 1.4 percent of GDP in2007 and is projected to remain in surplus for 2008 and 2009. Canada

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also has a very strong track record on debt reduction. Our total gov-ernment net debt, as a percentage of GDP, has declined steadily from apeak of nearly 71 percent in 1995 to about 23 percent in 2007.

The IMF’s Role in Low-Income Countries

Canada commends the recent work done by Staff and Managementto address the particular needs of low-income countries through thepresentation of a comprehensive approach to IMF engagement inthese countries. In order to achieve economic growth and povertyreduction, and to reach the Millennium Development Goals, macro-economic and financial stability are essential. This is why the Fund’swork is so important and must remain focused and effective, especiallyin the context of a more stringent budget environment. Key to this willbe avoiding the re-emergence of unsustainable debt in post-debt-reliefmembers and preventing its emergence in other low-income members.Coherence with the World Bank and other institutions and develop-ment partners remains fundamental to the effectiveness of the Fund’sactivities in low-income countries, and should be strengthened furtherwherever possible.

IMF Governance Reforms

Subsequent to the successful conclusion of discussions on a newquota formula this past spring, it is now time to address a broaderreform agenda for the Fund’s governance. The April 2008 report of theIndependent Evaluation Office highlights broad areas that need to beaddressed, such as strengthening the strategic role of the InternationalMonetary and Financial Committee, increasing the strategic focus ofthe Board of Executive Directors as well as clarifying its oversight role,and clarifying the accountability of the Managing Director and Staff.We also need to make further progress to open the selection processfor the heads of international financial institutions. I believe that theseare all relevant issues which, once resolved, will lead to a more legiti-mate and effective institution.

Surveillance Reforms

IMF surveillance is at the heart of the Fund’s mandate of promot-ing global stability and important innovations have been made in thisarea. Recent developments in global financial markets underscore theappropriateness of the Managing Director’s vision for the IMF asbeing an international centre of excellence on linkages between thefinancial system and the real economy. It will be critical to continue to

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strengthen the IMF’s analytic capacity in this area and to continue toimprove the manner in which it communicates its analysis of macrofi-nancial developments to policymakers and the public.

In June of last year, the Fund adopted the 2007 Decision on BilateralSurveillance over Members’ Policies to further improve the effective-ness of its surveillance activities. Since then, we have noticed improve-ments in the focus of Article IV reviews, although the all-important goalof increasing the candor of surveillance reports remains a work inprogress. The time has now come to support the full implementation ofthe 2007 Surveillance Decision, including the use of the ad-hoc consul-tations process to ensure that concrete results are achieved.

In this respect, I am very pleased that the International Monetaryand Financial Committee have just endorsed the IMF’s first Statementof Surveillance Priorities (SSP). I view the new SSP as an importantcomplement to the 2007 Surveillance Decision in that the SSP providesthe opportunity to enhance the focus of IMF surveillance on the mostpressing issues, promote greater consensus within the membership onthe key economic vulnerabilities and risk and the need to addressthem, and improve the accountability of the IMF for its surveillanceoutputs. It is important that we use the SSP to its full potential.

Review of IMF’s Financing Role and Instruments

The recently launched strategic review of the Fund’s lending toolkit is timely. The global economy has changed so much since the Fund’stool kit was originally designed that mere incremental changes areunlikely to ensure a modern and appropriate mix of lending facilities.While some aspects of lending have already been addressed, such aschanges to the Exogenous Shocks Facility, critical work is also neededto ensure coherence and effectiveness across the range of instruments.More fundamentally, the Fund should look back at the context inwhich each lending instrument was first created to evaluate its rele-vance to address today’s challenges.

Food and Fuel Prices

High global food and fuel prices continue to be a critical develop-ment concern, and we commend the Bank and Fund for drawing earlyattention to the crisis and helping to place it high on the internationalagenda. This crisis requires a rapid and effective response. In thisregard, we welcome the prompt action taken by the Bank to facilitate acoordinated and multifaceted response. With offices in more than 100countries, the Bank is well positioned to integrate a response to thefood crisis directly into existing country programs, aligning with the

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country’s priorities in harmonization with other donors. Likewise, weare pleased with the prompt action by the Fund to provide advice,technical support and in some cases funding through PRGF programs.We also welcome recent reforms to the Exogenous Shocks Facility tomake it a more effective crisis response tool.

Action is not only needed to relieve the immediate effects of thecurrent food crisis. As the recent High Level Event on the MillenniumDevelopment Goals (MDGs) noted, the first MDG, to reduce hungerby half, is unlikely to be met by 2015. Thus, food security is an on-goingand serious problem that must not be forgotten once the current crisisis no longer at the top of the international agenda. As an illustration ofthe size of the challenge, it is expected that food production in Sub-Saharan Africa will need to double or even triple over the next fewyears to meet local demand.

In this context, we encourage the World Bank to focus on invest-ments to promote sustainable forms of agricultural production, espe-cially those that would benefit smallholder farmers who are most inneed of support. It is especially crucial to ensure that programs aredesigned to be equitable and to meet the needs of the most vulnerable,often women and girls. Another key part of the solution will be to fos-ter innovations for increased agriculture productivity, includingthrough public-private partnerships.

World Bank Reform

Enhancing the participation of developing and transition countriesin the World Bank’s decision-making processes is an important objec-tive and we are pleased with the discussion and work to date on theBank’s Voice and Participation reform exercise. We will continue tosupport and participate in these efforts.

Adjustments to increase the voting power and shareholding ofdeveloping and transition countries and an additional seat for Africa atthe Executive Board are important components of voice reform, andwe look forward to agreements on these options. We believe that fur-ther measures to improve focus and communication within the Execu-tive Board are equally important, and in this regard, we look forwardto the World Bank’s management and the Executive Board elaboratinga set of specific reforms. We are also pleased with the steps the Bankhas taken to improve the voice of developing and transition countriesin their operational work, such as the appointment of more developingcountry nationals to senior management positions and the decentral-ization of their operations. We encourage the Bank to continue toexplore what more can be done in this regard.

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Stronger engagement of developing and transition countries in theWorld Bank’s decision-making will yield many benefits. Strong partici-pation of all members at the Board of Governors and the ExecutiveBoard will be a key backdrop for the Bank becoming an even betterplatform to support dialogue and collective action on global issues. Itcan help improve the design of new sector strategies and instrumentsas developing and transitions countries bring lessons learned fromtheir own country programs to the table. Finally, more voice for theBank’s client countries at the operational level will help with the suc-cess of lending programs by ensuring that projects are properly tai-lored to country contexts and that governments have a true sense ofownership and accountability over them.

CHINA: YI GANGGovernor of the Fund

The U.S. financial crisis has taken a serious turn for the worse andcontinues to spread across the globe. Economic growth has slowedmarkedly worldwide and we face enormous uncertainty. For the inter-national community, the most urgent task is to join efforts to stem fur-ther deterioration and spread of the crisis—the major threat to globalgrowth—and restore global economic and financial stability. The Bret-ton Woods institutions should fulfill their mandates to maintain globalmonetary and financial stability and facilitate sustainable, balancedgrowth.

We hope the measures adopted by advanced economies to stabilizefinancial markets—particularly the Emergency Economic StabilizationAct of 2008 in the United States—will be implemented quickly andyield positive results in restoring confidence and stabilizing the finan-cial markets. China will continue to strengthen its cooperation withconcerned countries and hopes that all governments will work togetherto overcome the current difficulties and restore international financialstability. From the medium- and long-term perspective, the reserve cur-rency issuing countries must assume international responsibility, com-mensurate with their positions, for advancing structural adjustments,increasing savings, and preserving economic health and sustainablegrowth to benefit balanced and stable growth of the global economy.

In 2008, China has weathered the shocks of natural disasters and anadverse external environment. While maintaining stable and relativelyrapid economic growth, clear progress has been made with structuraladjustments. Consumption has increased, the trade surplus has nar-rowed, and the growth of foreign exchange reserves slowed. The indus-trial structure has been improved. Every effort is being made to protect

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the environment through intensifying energy conservation and thereduction of COD and SO2 emissions. Inflationary pressure hasdecreased with the CPI dropping in recent months to 4.9 percent y-o-yin August. In addition, financial institutions in China remain sound.After several years of comprehensive financial reforms, the capital ade-quacy of financial institutions have reached a historical high, corporategovernance has improved markedly, and risk management strength-ened significantly. There is ample liquidity in the market. Overall, thefundamentals of the Chinese economy are solid and resilient. We areconfident we can weather the financial turmoil. With the global eco-nomic slowdown, it is important that China maintains its stable and rel-atively rapid growth.

We remain committed to expanding domestic demand—householdconsumption in particular—by providing a better social security sys-tem. In the rural areas we are improving medical schemes and makingadditional resources available for infrastructure and education. Thesuccessful implementation of these adjustments will further improvethe external and internal balances.

Here, I would like to make special mention of the substantialprogress in reforming the renminbi exchange rate formation mecha-nism. Exchange rate flexibility has increased markedly and theexchange rate increasingly reflects the fundamentals. From introduc-tion of the exchange rate reform in July 2005 to end-September 2008,the real effective exchange rate (REER) of the renminbi calculated bythe Bank for International Settlements appreciated 21.8 percent, anaverage annual rate exceeding that of the euro, the yen, and currenciesof other emerging Asian economies. From the unification of exchangerates in 1994, the REER appreciated 54.47 percent. In the past twomonths, the renminbi has appreciated 15 percent against the euro. Theongoing improvement in China’s balance of payments demonstratesthat the renminbi exchange rate is closer to the fundamentals.

China attaches significant importance to the role of the BrettonWoods Institutions. The Fund should give the surveillance priority tothe ongoing financial turmoil, deepen its analysis, learn lessons, and lis-ten to the opinions of member countries. In providing a practical andeffective guide for the Fund’s surveillance and in adapting to globaleconomic developments, the 2007 Surveillance Decision should bereviewed and revised as soon as possible so that the Fund can deter-mine where the true risks lie, and adopt effective measures to maintaina stable and orderly global economic and financial system. From themedium- and long-term perspective, the Fund must address the inher-ent deficiencies of the current international monetary system and fos-ter an international financial architecture adaptive to the evolvingglobal economy and financial markets.

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As the largest multilateral development institution, the World Bankshould re-assess the challenges confronting the developing countries—soaring food and fuel prices, higher financing costs, deteriorating bal-ance of payments positions, and mounting inflationary pressures. Withthe advantages of its financing capacity and expertise, the World Bankshould urge the developed countries to shoulder their due responsibili-ties in stabilizing the global economy through targeted measures, car-ried out in an even-handed and professional fashion.

We welcome the World Bank’s active participation in the globalresponse to climate change and formation of the World Bank Group’sStrategic Framework for Development and Climate Change. In accor-dance with the United Nations Framework Convention on ClimateChange and the Kyoto Protocol, we agree that in carrying out its coremission of poverty reduction and development, and, with no policyconditions attached, the World Bank should vigorously encourage thetransfer of low-carbon technologies and provide recipient countrieswith practical aid in facilitating their response to climate change.

Enhancing the voice and representation of developing and transi-tion countries (DTCs) in the World Bank’s decision-making process isan essential component of its governance. Ensuring that all DTCs ben-efit in the reform process and the ultimate achievement of a 50/50 dis-tribution of voting rights is the most fundamental and important objec-tive of World Bank reforms. With the proviso that existing DTCExecutive Director seats are not affected, we support the addition of aChair for the African constituency, and endorse further discussion onthe selection process for leadership of the World Bank in accordancewith the principles of openness, competition, and merit.

CROATIA: BORIS VUJC ICGovernor of the Fund

It is my honor to address the 2008 Annual Meetings of the Boardsof Governors of the World Bank and the Fund here in WashingtonD.C. This year stands out as a year in which the Fund undertook impor-tant governance and finance reforms, broadly supported by its mem-bership. But, it also stands out as a year in which the landscape offinancial markets is being changed, triggered by financial crises in theUS market, and a year in which inflation came back. With no doubt, thelatter two developments represent a test for the international financialsystem and add to the Fund’s challenging task of promoting the stabil-ity of the international monetary system.

Allow me first to outline the major economic developments relatedto Croatia. Thereafter, I will touch on Croatia’s relations with the Fund

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and the Bank, and finally, I intend to discuss a couple of policy issuesrelevant for the Bank/Fund business.

Croatia, like other emerging European economies, was faced withincreasing inflation rates during the last 12-month period, mainly dueto increases in food and energy prices, but also due to demand pres-sures, given strong private consumption growth, especially in the lastyear. More than half of the July inflation rate (8.4 percent; annualized)can be attributed to increases coming from food prices, while an addi-tional quarter comes from oil and electricity prices. However, weexpect the inflation to ease by the year-end, and to come down towards5 percent. In achieving this, the central bank will continue to rely onexchange rate stability that anchors inflationary expectations, as well ason polices that, on the one hand, restrain excess liquidity in the bank-ing system, and on the other hand contain banks’ credit activity withinreasonable limits (i.e. on policies that help contain demand pressuresand safeguard stability of the financial system). The role of the govern-ment also continues to have a paramount importance in curbing infla-tionary expectations by suppressing any wage demands (within theirjurisdiction) that would go beyond productivity gains, which serves asan important signal. It thus helps prevent potential second-roundeffects (through the wage spiral) on inflation. No doubt, besides theprudent policies on the domestic front, future inflationary path willcontinue to depend primarily on global developments in food and oilprices. In this respect, we very much welcome the analysis on commod-ity prices and inflation provided in the coming World Economic Out-look, which gives no reassurance that the price hikes of food, metalsand oil that we have been observing in the recent past are firmlybehind us.

Ongoing distress in global financial and capital markets, particularlyin the US, is not hurting Croatia’s banking system, which accounts forthree-quarters of the total financial system assets in Croatia, and repre-sents the most important source of funding for the economy. Neithercan we see any immediate risks that could arise in the foreseeablefuture (affecting the stability of our banks). This is so because Croatianbanks have not been directly exposed, nor have their parent banks hadany significant exposures to the developments in the US. And thanks tothe central bank’s measures (both monetary and prudential ones) thathave helped build solid cushioning elements into the system over therecent past. On the one hand, these measures have restrained excessivecredit growth and foreign debt build-up, while on the other hand, theyhave ensured a build-up of liquidity reserves in the banking systemthat can help the system in withstanding even the serious internationalfinancial market disturbances we are currently witnessing. We observe,though, some indirect effects of the distress on our banks: lending stan-

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dards tightening and slightly increasing interest rates. But so far, thesefactors have not been affecting banks’ activity in a way that wouldrequire the central bank’s reaction. Also, we observe the impact of thedistress on the Croatian capital market, but this has a very limitedeffect on broader economic activity, given the negligible role of thecapital market in real economy financing, and even helps in both cool-ing private consumption and reducing banks’ foreign borrowing, asmoney has started to move back from investment funds and shares intobank deposits.

Against this background, the Croatian economy is in a coolingmode this year; after the last year’s very strong growth performance(5.6 percent) primarily fuelled by buoyant private consumption. Theeconomy is expected to grow by roughly 4 percent this year, mainlydue to decelerating private consumption and weaker net exports’ per-formance. The budget deficit for 2008 is projected at 1.3 percent ofGDP (ESA 95 methodology). The fiscal impact together with the factthat the pensioners’ debt repayment scheme has entered into the sec-ond stage this year (with lower annual installments paid out to pen-sioners) will, however, have a far less expansionary effect on the econ-omy this year than in 2007. Nonetheless, current account deficit isexpected to deteriorate to –9.7 percent of GDP in 2008, (from –8.6 per-cent of GDP last year), primarily as a consequence of this year’s oilprice hikes. External debt, on the other hand, is likely to improve by 1.7 percentage points of GDP, to 86.9 percent of GDP in 2008. Animportant contribution to an expected relative decline in external debtwill come from banks, since banks have been scaling back their foreignliabilities as a reaction to the central bank’s measures.

While keeping a close eye on inflationary developments in therecent past, the Croatian authorities have remained strongly focusedon external imbalances. In this respect, further fiscal consolidation thatshould help narrow the domestic savings-investment gap continues tobe an objective of the policy stance. Government plans to achieve abalanced budget by 2010. On the monetary and financial fronts, thecentral bank has been taking new measures and vigilantly improvingthe existing ones for quite some time now, with a view to protecting thesoundness of the banking system and supporting the overriding goal ofexternal debt stabilization. As a result, banks’ credit growth deceler-ated to reasonable levels over the last two years (but at no expense forproductive investments), the banking system continues to be well-capitalized and sound, and it is well-positioned to withstand potentialmacroeconomic shocks of a reasonable magnitude.

Turning to my second point—Croatia’s relations with the Fund andthe Bank—I first want to stress that Croatia continues to have openand fruitful discussions with both the Fund staff (within the framework

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of Article IV Consultations) and the Bank staff. The Bank has beensupporting Croatia in its efforts to intensify structural and institutionalreforms that should make Croatia better prepared for the EU mem-bership through Programmatic Adjustment Loans. In addition, Croatiahas benefited from the Bank’s investment lending focused primarily onimproving social welfare, enhancing economic competitiveness, pro-tecting the environment, improving trade and transport infrastructure,and advancing Croatia’s knowledge-based economy.

Croatia has also been actively and intensively participating in anumber of the Fund/Bank initiatives aimed at strengthening the archi-tecture of the international financial system. Let me note in this con-text that in late 2007, the Fund/Bank staff conducted an Update of theFinancial Sector Assessment Program for Croatia, which at the outsetconfirmed the soundness and resilience of the banking system. Also,apart from the ROSCs included in the FSAP, Croatia participated intwo ROSCs in the recent past: the ROSC on Corporate Governanceand ROSC on Accounting and Auditing. Moreover, in close coopera-tion with the authorities, the Bank staff is currently performing a Diag-nostic Review of Consumer Protection and Financial Literacy. Besides,I wish to thank both the Fund and the Bank for providing us withexpertise and technical assistance in specific areas, which is very muchappreciated.

Finally, let me touch on a couple of policy issues relevant for theFund/Bank business. First, regarding the Fund’s governance reformpackage, Croatia supported enhanced voice and participation of low-income countries in the Fund by adopting the relevant Amendment tothe Articles of Agreement of the Fund, as well as the second ad hocquota increase for underrepresented countries based on a new formulathis year. Let me note that the new formula has brought much-neededtransparency into the quota calculation process, and it also strikes rightbalance between the size of countries and their openness. However, itfailed to deliver simplicity. In this regard, any further work on thequota formula should restrain from including new variables, especiallythose for which data availability and reliability is questionable. Second,Croatia gave its support to the Fund’s efforts to develop a more sus-tainable income-expenditure framework by accepting the Amendmentto the Articles of Agreement of the Fund aimed at expanding theFund’s investment authority. With more degrees of freedom to invest,the Fund has obtained an opportunity to put its own finances on a sus-tainable path over the medium-term. However, this opportunityrequires more responsibility on the part of the Fund, especially in timesof financial distress. Third, concerning the Bank, we believe thatincreasing voice and participation of DTCs, is important for furtherenhancing the legitimacy, credibility, and effectiveness of the World

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Bank. We welcome the measures already taken by the Bank to increasecountry ownership and project communication, and we encourage theBank to increase its efforts in this respect. Finally, we are pleased to seethat the trend of improved development outcomes from Bank lendingcontinued over the last three years, and that more and more projectsare now better meeting their development objectives. Therefore, we seethe ARDE as a tool for providing a good analysis of the state of theBank’s program portfolio.

Allow me in conclusion to thank our hosts for their hospitality andexcellent organization of these meetings. Let me also express myappreciation to both Mr. Strauss-Kahn and Mr. Zoellick for their dedi-cated services to our institutions. I wish the Fund and the Bank successin their future undertakings.

ESTONIA: IVARI PADARGovernor of the Bank

(on behalf of the Nordic-Baltic Countries)

I am honored to address the 2008 Annual Meeting on behalf of theeight Nordic and Baltic countries—Denmark, Finland, Iceland, Latvia,Lithuania, Norway, Sweden and Estonia. Our constituency stronglybelieves that the World Bank Group plays a crucial role in the fightagainst poverty and in the achievement of the Millennium Develop-ment Goals. We truly appreciate Mr. Zoellick’s work as the President.

Today, I will mostly focus on gender issues that are very important. Iwill also talk about the needs of Africa, especially the fragile states, theWorld Bank’s role in the Climate Change agenda and the importanceof private sector development. But let me commence by saying a fewwords about the changing global economic environment.

Crisis in the financial markets, global slowdown and increased com-modity prices that have led to high inflation, concern us all, not leastthe poorest countries. This changing external environment stresses theneed for strong multilateral institutions to stand ready to play acounter-cyclical role. Indeed, the first priority for the use of IBRD andIFC capital must be preserving their ability to respond fast to potentialincrease in demand from client countries and companies. We all mustremain committed to the long-term development agenda, regardless ofthe present events. Despite the current financial crises we encourageall donors to fulfill their commitments as agreed in the MonterreyConsensus, including the 0.7 percent of GNI to ODA; and also the fullfinancing of the Multilateral Debt Relief Initiative and the HeavilyIndebted Poor Countries initiative.

We strongly believe that in order to meet the Millennium Develop-ment Goals, it is of vital importance to enhance our efforts on two

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overarching issues, namely gender equality and climate change. As weall know, the aspect of gender is undeniably interlinked with all thedevelopment issues. Economic empowerment of women pays off andhas a large impact on private sector development, health issues, childand maternal mortality, education and more.

The World Bank has estimated that it takes a doubling of resourcesin order to achieve the Millennium Development Goal number 3 ongender equality. With President Zoellick’s six very concrete commit-ments to the gender equality and the timely implementation of theGender Action Plan, the Bank is beginning to show a leadership inplacing women at the center of development. We expect to see thisimportant political leadership translating soon into sufficient resourceallocations.

We are happy to note the World Bank Group’s increasing involve-ment in Sub-Saharan Africa, and especially in the fragile states. Fragilestates are often plagued by violence, conflict and instability. In such sit-uations, the women and children are suffering the most. These groupsare also often excluded from processes and efforts to overcome conflictand violence. We have an obligation, as donors, to give specific atten-tion to the needs of these vulnerable groups.

We commend the Bank for taking on an active role in combatingclimate change whilst underscoring the leadership role of the UnitedNations Framework Convention on Climate Change in the climatenegotiations. The World Bank Group is well positioned to successfullyaddress climate change challenges over the long-term, including part-nering with developing countries in order to help them to establish andexecute climate sensitive development policies. However, the socialdimensions of climate change cannot be ignored. The climate changeimpacts often differ by gender and we believe that the Bank’s regionaland sector strategies must adequately address it.

The role of the private sector as an engine of growth is well-known.In order for the private sector to successfully contribute to nationaldevelopment policies, institutions and regulatory frameworks areessential. We encourage the IFC, in close cooperation with other WorldBank institutions and donors, to continue to pursue private sectordevelopment in the most difficult environments, in particular to Africa.The IFC and other donors play an important catalytic effect; andshould continue investing in countries and sectors where the privatesector otherwise would not.

We welcome the Bank’s increased attention on the role of women inbusiness. The Doing Business Report illustrates numerous obstacles,limitations and discriminations that still exist against women in manydeveloping countries. These are not only obstacles to women, but obsta-

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cles to development and economic growth. We commend the staffs ofthe World Bank and IFC for their ongoing work in developing the Gen-der indicator for Doing Business. We believe it will initiate debate andbring the much-needed attention to the regulatory issues confrontingwomen entrepreneurs. The partnership between the World Bank andthe Nike Foundation on the Adolescent Girls Initiative is another excel-lent example, supported by many countries in our constituency. Wehope to see an increasing World Bank cooperation with the private sec-tor also in terms of more strategic Corporate Social Responsibility andthe economic empowerment of women. Our constituency will continueto work actively with the Bank on these matters.

The World Bank is a dynamic institution. This character allows itsclients to fully benefit from the Bank’s services. As they develop, formerclients can take on more responsibility. Our constituency is a good exam-ple of this—all the Baltic countries have now graduated from IBRDclient country status and are gradually joining the donor activities, whereour Nordic neighbors have already set an impressive standard in deliver-ing up to ODA targets and even exceeding them substantially.

Mr. Zoellick, on behalf of our Nordic-Baltic constituency, I wouldlike to thank you for your dedicated leadership of the World BankGroup and wish you success for the years to come.

FIJI: PECELI VOCEAGovernor of the Bank

It is indeed an honour to address you on this annual meeting of theInternational Monetary Fund and the World Bank, on behalf of thegovernment of Fiji. Hon. Zoran Stavreski, I offer you my congratula-tions on your appointment to chair this joint annual meeting.

The international economy has been beset with a series of chal-lenges in the past year that has raised uncertainties on many fronts.Many advanced economies face recession whilst growths of emergingmarket economies are slowing down. The spillovers of the crisis includ-ing weak external demand, persistent inflation and tight credit condi-tions have become apparent and dim any hope of a quick turnaroundin global growth.

The crisis unfolding in the financial markets is of historic propor-tion. The problems beginning with the sub-prime mortgage marketsmore than a year ago, have reached unprecedented levels. It is evidentthat problems and risks taken on by financial institutions were veiledby huge corporate profits. With financial globalisation, the turmoil onWall Street has serious implications for the rest of the world, as sys-temic risks have the potential to ignite a global credit crunch.

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The fact that countries have taken a comprehensive approach torelieve the stress on their financial institutions and markets indicatesthat the financial crisis has now become a global problem. The systemicnature of the crisis calls for extraordinary or even unorthodox meas-ures to calm the markets, restore financial stability and improve confi-dence. At the same time, we caution that these measures be carefullydesigned to avoid stifling proper functioning of market mechanismsand themselves being sources of risks. Furthermore, the financial regu-latory architecture needs to be modernised and sound risk manage-ment practices developed so as to avoid a repeat of such a massiveglobal financial catastrophe in future.

Small and open economies like ours are deeply concerned aboutthe financial market events, which no doubt will have wide-rangingimpact on us. It adds to the already precarious situation we face inmanaging the risks related to commodity price increases. Policy makingas a result, has become more challenging with the trade-off betweeninflation and growth whilst ensuring financial stability is at the fore-front of policy makers’ consideration. As such, the current crisis callsfor more urgency in strengthening surveillance.

The series of crises that we have seen lately raises a lot of questionsabout the vigilance of the Fund and the Bank. In this regard, we wishto emphasize the following. Firstly, it is important to enhance the sur-veillance of advanced and systemically important economies. It is evi-dent from the crisis that there may have been oversight on this frontthat has now proven disastrous. Secondly, the advanced and systemi-cally important economies should also be included in the vulnerabilityexercise. Thirdly, the Fund should be more holistic in its exchange rateassessment. In addition, we believe that in implementing the 2007Decision, the Fund should focus on the broad macroeconomic pictureand policy mix with due consideration of a country’s specific andunique circumstances in determining the appropriateness of a mem-ber’s exchange rate.

The Bretton Woods institutions have a responsibility to cushion theeffects of the fuel and food price increases on member countries. Quickaction by the Fund and the Bank in analysing the impact of these priceincreases on low and low-middle-income countries, as well as the provi-sion of funding assistance is acknowledged in this regard. To the Fund’scredit, the provision of useful analysis and policy advice to the mem-bers through flagship reports such as the Global Financial StabilityReport and the World Economic Outlook have been useful. We alsowelcome the flexibility exercised in the recent modification of theExogenous Shocks Facility. On the Bank side, we appreciate theprogress made in implementing the Global Food Crisis Response Pro-gram to support countries that have been severely affected by the

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increase in food prices. We also look forward to a similar response pro-gram to assist countries mitigate the impact of high fuel prices.

Nevertheless, I believe more can be done and I am certain thatmembers would prefer much swifter action by the two institutions dur-ing difficult times. As such, we urge the Fund and the Bank to be moreflexible during adverse global developments. A review and reform offunding instruments within the Fund and the Bank may be necessaryand would be welcomed.

Fiji has been affected by the hikes in food and oil prices, but moreseverely by high oil prices given our heavy dependence on importedfuel. Recent surveys conducted by the Bank attest to this. Our authori-ties have implemented measures to counter the impact of the highprices on sections of the population that have been most affected, butwe submit that these measures can only provide short-term relief.

As such, we appeal to the Fund and the Bank for technical as wellas financial support to alleviate the effects of high commodity prices onsmall and remote island countries like Fiji. In line with its mandate, wecall on the Fund and the Bank to provide assistance in the form ofbudgetary support that can create the fiscal space and allow Govern-ments to strengthen social protection programs for the most vulnera-ble. To improve energy supply, we seek the Bank’s assistance in provid-ing affordable financing and technical advice for projects that supportviable long-term energy solutions. In this regard, we call on the Bank toreview its position on the financing of a key renewable energy projectin Fiji.

Poor and developing countries are more susceptible to the impactof climate change, and hence, will bear a bigger burden of the adapta-tion and mitigation costs. As a result, rehabilitation costs of climaticevents are sometimes met at the expense of planned developmentalprograms, which add pressure to government finances. In this regard,we fully support the call for developed countries to take urgent actionin contributing to the mitigation and adaptation costs of developingcountries. Contribution of financial resources must go beyond theexisting envelope of donor assistance for mainstream developmentalprograms. The World Bank’s proposed strategy for climate change pro-vides clarity on its role in expanding financial products and incentives,as well as in building collaborative relations amongst countries. How-ever, the Bank must ensure that its products and programs for climatechange take into account the special needs of member countries, par-ticularly those most vulnerable.

Reforming the World Bank’s governance structure is vital to thelegitimacy and long-term viability of the institution. As such, we feelthe Bank’s unique mandate should be appropriately featured in thereform process. We note the progress made in the last few months and

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we support the proposed increase in basic votes to enhance the votingpower of developing and transition countries. We also support theestablishment of a third Executive Director for the Sub-SaharanAfrican region. In our view, the geographical size and needs of theregion justify the need for an additional chair to contribute to Boardeffectiveness and the Bank’s operations in Africa.

Allow me to provide an update on recent developments in Fiji.Given our current situation, we are aware that a clear and predictableplan for restoring democracy that is supported by the internationalcommunity would be an important part of re-engagement. In thisregard, I wish to assure you that the Interim Government continues tohave effective control over the country. Peace and stability is main-tained whilst positive progress towards democratic elections is beingmade. The population census is completed, a new supervisor of elec-tions has been appointed and the election boundaries are beingreviewed. Combating corruption and promoting good governanceremains high on the agenda of the government. We are also in theprocess of finalising a Draft People’s Charter that aims to set a plat-form for broad political and social reforms. All these efforts are gearedtowards a return to democratic rule. The recent court decision whichwas in favor of the current Authority will help fast track preparationsfor the upcoming elections and we hope that it will also facilitate fullre-engagement of the Fund and the Bank with Fiji.

Fiji’s domestic economy is on the mend following a severe eco-nomic contraction in 2007. A modest growth is expected this year andin the medium term. There are encouraging signs in some sectors,including a rebound in tourism and resumption of gold mining. Butchallenges remain in terms of raising investments and lifting ourexports that would strengthen and sustain growth going forward. Man-aging inflation is equally critical in our efforts to maintain internationalcompetitiveness. Whilst the increasing commodity prices have madethis task difficult, closer coordination between our monetary and fiscalpolicies will ensure that inflation remains in check.

Both fiscal and monetary policies have remained tight and domesticdemand has been managed through controls. The resultant stability ofthe financial sector and reserves levels is testimony to the effectivenessof unconventional methods when the situation demands. However, wewill reverse these controls when the situation improves, following regu-lar reviews of their effectiveness. Fiscal consolidation has also seen ourdeficit and debt levels reduce since 2006, with plans to bring themdown further. Mr. Chairman, despite the many odds stacked against us,Fiji has always honoured its debt and major obligations.

Fiji’s financial system remains robust and is currently insulatedfrom the international financial markets meltdown. We are progres-

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sively implementing the findings of the FSAP to strengthen our super-visory and regulatory capacity, and enhance the ability of the financialsystem to withstand shocks. Furthermore, Fiji has just concluded anArticle IV Mission and the results are awaited with enthusiasm. Asalways, we are appreciative of the policy advice and discussions suchMissions generate.

Fuel accounts for about a quarter of our import bill and is a drainon our reserves. Demand management is now an important policyaspect for controlling our dependency on fuel and its derivatives and topromote increased efficiencies in our use of these products. Similarly,we are pursuing a number of initiatives to secure alternative sources ofenergy to reduce our dependency on fuel imports.

We appreciate the rationale behind the Fund’s reforms relating tocharging Technical Assistance, however, the fact remains that for some,TAs and training are the most tangible benefits we derive as members.The process of applying and seeing the TA through is also taxing onmembers in terms of time and personnel. As a beneficiary of such tech-nical assistance, Fiji expresses concern that charging for technical assis-tance may hinder capacity and institutional building in low and lowermiddle-income countries, even with the system of differentiatedcharges in place. We are comforted with the reassurance that if ineffec-tive, the charging policy will be reversed. Nevertheless, Fiji acknowl-edges the technical assistance that the Fund and the Bank have pro-vided over the years. We also appreciate the work done by the IMFPacific Technical Assistance Centre in Suva and the World BankRegional Office in Sydney in assisting Fiji and other Pacific Islandcountries.

At this point, I would like to reiterate Fiji’s request for a full re-engagement with the Bretton Woods Institutions. As Fiji continues tomake concerted efforts towards democratic rule, we believe our devel-opment objectives could be achieved faster with the support of theFund and the Bank through the provision of affordable financing, par-ticularly, in the face of the current global crisis.

Finally, we wish both institutions well in their future endeavoursand we look forward to your continuous engagement.

FRANCE: CHRISTINE LAGARDEGovernor of the Fund and the Bank

In this uncertain period with regard to the macroeconomic andfinancial conditions, the role of the international institutions as cooper-ation fora, at the forefront of which the IMF and the World Bank, ismore essential than ever. The IMF, under the leadership of DominiqueStrauss-Kahn, has continued to apply its ambitious reform agenda that

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we fully support. The agreements found between Member States in thefirst half of this year on the reform of the IMF quotas and votingshares on the one hand, on the new income model on the other hand,were great achievements. A similar agreement has been reached at theWorld Bank and provides for enhanced legitimacy and effectiveness ofthe institution, consistently with its core mandate.

One year after the triggering of the financial turmoil, no one cancontest that the most urgent obligation falling within the responsibili-ties of public authorities is to restore confidence in financial marketsand more generally in the International Monetary System’s resilience.In my opinion, the current international conditions make necessarythat strong political guidance in the functioning of international institu-tions be ensured and that cooperation among international institutionsand among national authorities be strengthened.

Maintaining strong guidance for both the IMF and the WB with clear objectives and effective instruments is key

The IMF and World Bank have firmly improved the response totheir members’ changing needs and to tackle the new challenges posedto the global economy in the 21st century.

Among the first lessons that can already be drawn from the currentfinancial crisis is that international stability is indeed a global publicgood. Therefore, decisive actions have to be quickly taken to coordi-nate the different responses convened to mitigate the current financialcrisis and prevent future crises to arise. The IMF, with its universalmembership, should play its entire role over these issues, and con-tribute to set up a comprehensive approach aiming at strengtheningour international financial system.

Strengthening surveillance should therefore be on top of objectives. Inthat respect, we welcome the strong focus held in the Triennial Surveil-lance Review and the Statement of Surveillance Priorities on better inte-grating financial sector and macroeconomic stability issues and strength-ening the analysis of cross-country issues, which clarify IMF’s objectivesand are a necessary and timely first step in the adaptation and the rein-forcement of the role of the IMF in terms of surveillance. Likewise, welook forward to the effective implementation of the 2007 SurveillanceDecision over members’ policies, while acknowledging the need to ensureeven-handedness and the fact that the assessment of external stabilityshould not be restricted to exchange rate developments.

Moreover, another priority should be to adapt IMF instruments tonew types of crisis and evolving members’ needs. We want to underlinehere that the global review of IMF lending toolkit must consider simul-taneously the different axes as set out by the Managing Director. First,

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an extensive review of the analytical framework must be undertaken soas to address gaps and overlaps in the toolkit and IMF mandate. In thisrespect, we agree that the IMF lending framework should be stream-lined. Second, we urge the IMF to consider as a priority to put in placea crisis prevention facility aimed at emerging economies, given the riskof the crisis spreading to emerging countries. Third, in order to pre-serve the crucial involvement of IMF in low-income countries, we wel-come the modifications to the Exogenous Shock Facility towards morerapid access and streamlined conditionality. The revised ESF will pro-vide in complement with the poverty reduction and growth facility afull set of adapted instruments to those vulnerable countries the IMFmust assist as part of its mandate. Fourth and lastly, the charge and sur-charge and access-level policy must be re-examined. As per access-level, we need to take into consideration the significant growth ofmany emerging economies.

As the World Bank has also increasingly been called on to respondto emergency situations, its policies and processes were developed tomeet broader circumstances. The World Bank’s new framework forrapid response to crises and emergencies that has been initiated in2007 gave keys in particular to address engagements in fragile states.This move has been maintained by addressing with strong commitmentthe global food crisis, by continuing to implement a reformed HR pol-icy providing greater incentives and protection to the staff working infragile countries and by concluding a fiduciary principles agreementwith the United Nations, but it could be enhanced further to improveflexibility, speed and effectiveness. Mitigating the impact of high foodand oil prices leads to complement existing financial instruments. Inparticular, we encourage the World Bank to work on two issues: firstthe creation of rapid response facilities providing budget support topoor countries facing exogenous shocks complementarily to the reformof the Exogenous Shocks Facility as already considered by the IMF;second the implementation of innovative lending instruments toreduce countries vulnerability : in this respect, a new lending policycould take into account the borrowing space opened by HIPC andMDRI initiatives and study the possibility of implementing conces-sional counter-cyclical loans.

Moreover, the efficiency of our institutions and their capability totackle new challenges has to rely on renewed governance, as far aslegitimacy is a key issue to strengthen our policies and decisions. Theactual outcome of the quota reform has contributed to the enhance-ment of the IMF governance and provides for a relevant starting pointfor the World Bank, which has to maintain momentum after the impor-tant agreement reached yesterday. The agreed package represents asignificant step forward to further increase the legitimacy, credibility,

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and effectiveness of the World Bank. Although a more ambitiousreform package for Sub-Saharan Africa would have been preferred bythe French authorities, the additional chair for Sub-Saharan Africa iswelcome and will enhance the voice of the poorest countries at theboard ; in addition, their voting power will significantly increase both inthe IBRD and the IDA; and the selection process for the President ofthe World Bank Group, genuinely merit-based, transparent and opento candidates irrespective of nationalities, is a welcome step.

Cooperation among international institutions and nationalauthorities is key for restoring confidence and ensuring the properfunctioning of the international monetary and financial system.

Appropriate cooperation and coordination is key in period of tur-moil in a global system in order to restore confidence while avoidingoverlapping.

The IMF contribution to financial stability is essential thanks to itsuniversal membership, its global vision allowing in-depth analysis onthe interlinkages between real and market developments and the com-bination of multilateral and bilateral perspectives.

The implementation of the Financial Stability Forum’s recommen-dations should help solve many of the failures that the turmoil hasrevealed in risk management, the functioning of financial markets andthe supervisory framework. At the EU level, authorities are committedto fully and swiftly implement the FSF recommendations.

While implementing those recommendations is urgent, there is alsoa need to further develop coordination between financial institutions,notably between the IMF and other international financial institutionssuch as the FSF, through joint initiatives and continuous informationsharing. As we agreed in our IMFC session, the Fund shall focus discus-sion, and enhance cooperation, with a wide range of perspectives withthe FSF, the G-20, and others on this issue in an inclusive setting. It willneed to start this initiative immediately and to report to at the latest atour next meeting. Likewise, based on the close interrelations ofnational financial markets at the global level, the IMF, along with theG-20, is a very good place for associating all countries in implementingthe recommendations that were issued on the international scene andtargeted primarily to the more advanced countries.

As for the World Bank, we plead for a strategic review of the BankGroup’s operations that would highlight its comparative advantages,but also areas where other development institutions should lead theinternational community.

Eventually, relations and coordination between the IMF and theWorld Bank are to be strengthened, especially as regards the lending

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policies to middle-income countries. Stronger coordination is a keyissue for insuring a global and consistent response to crisis. This issuecalls for a clear vision regarding the respective roles of the IMF andthe World Bank. We have to address the question of the limit of theirrespective actions and the complementarities of their operations.

To conclude in a few words, the role of the IMF and the WorldBank is more essential than ever for ensuring international macroeco-nomic and financial stability. At the same time, the current conditionsfurther underline the need for continuing implementing their reformagenda. The cooperation between the IMF and the World Bank hasalways been a core issue for France. I wish it will be strengthened inorder to enable both institutions to further develop their legitimacyand their effectiveness. It will allow them to play a central role in build-ing a sounder financial system.

GERMANY: HERMANN REMSPERGERTemporary Alternate Governor of the Fund

At the current juncture, restoring the stability of the financial sys-tem must be a top priority for policymakers around the world. Weshould continue to cooperate closely to this end. We commend the U.S.administration for its resolute efforts to reduce stress in the U.S. finan-cial system as the epicentre of the current crisis.

The European Action Plan of the euro area countries—set up thisSunday—facilitates the funding of banks, allows for an efficient recapi-talisation of banks and ensures sufficient flexibility in the implementa-tion of accounting rules. These unprecedented measures reflect theseverity of the crisis and the willingness to restore confidence and theproper functioning of the financial markets.

In the longer term, fundamental questions of financial regulationmust be addressed at an international level in order to enhance theresilience of the global financial system. In this context, the ongoinginitiatives to globally implement the recommendations of the FinancialStability Forum are welcome and must be sustained.

Given its unique mandate and expertise, the Fund has an importantrole to play in supporting policymakers with its advice and expertise inthese times of financial stress.

Fund surveillance has benefited considerably from efforts tostrengthen the multilateral perspective and financial sector analysis.These efforts must be sustained, along with more candid and system-atic risk assessments. The Fund should also continue its close coopera-tion with the FSF and help members implement the lessons drawnfrom the financial crisis.

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In our view, the Fund’s lending framework has proven effective andflexible enough in the past to support members in need. We are confi-dent that this will continue to be the case. Some improvements to thetool-kit, such as a new pure signalling instrument for middle-incomecountries, should nonetheless be envisaged. The lending frameworkmust, however, remain firmly based on the Fund’s fundamental lendingprinciples. These include in particular the concepts of conditionality,balance-of-payments need, and the exceptional access criteria. They areessential to safeguarding the Fund’s resources and they have not ham-pered the provision of financial support in times of crisis.

We welcome additional efforts to further strengthen the governanceframework. There is some room to further raise the efficiency and effi-cacy of the Fund’s main bodies of governance. However, their respec-tive roles and responsibilities, as laid down in the Articles of Agree-ment, continue to serve the institution well. We are therefore opposedto fundamentally alter this balance.

The financial crisis will dampen growth in many developing coun-tries. This comes on top of the burden imposed by high food and fuelprices. As many of the poorest countries will suffer most from highcommodity prices, rapid and workable solutions are called for. Wetherefore warmly welcome the “Global Food Crisis Response Pro-gram” of the World Bank. We also appreciate the “Energy for the PoorInitiative.” It is an effective mechanism to deal with the high vulnera-bility of poor countries.

Climate change will impede developing countries’ ability to eradi-cate poverty. It is therefore crucial that the International FinancialInstitutions, within their respective mandates, help find effective andefficient ways of reducing greenhouse gas emissions and mitigating theconsequences of climate change. We are pleased to see the recentestablishment of the Climate Investment Fund as an important step inthis context.

Germany has committed about US$900 million to the ClimateInvestment Fund. We expect the World Bank to play a major role inmobilizing financial resources to contribute to poverty alleviation andeconomic growth in the context of climate change.

As to the Voice agenda, there is now a solid basis for reaching anagreement on enhancing the participation of all developing countriesand countries in transition. The Voice reform should take into accountresults of the IMF reform. We welcome the additional chair for Africain the World Bank board. And we also welcome the broad consensus toincrease basic votes as this will serve best to provide increased weightfor smaller countries.

Going forward, we believe that a selective capital increase is anappropriate way to ensure that dynamic emerging countries are ade-

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quately represented. A meaningful voice reform should also lead toimproved participation in formulating and implementing World Bankprograms and projects.

GREECE: GEORGE ALOGOSKOUFISGovernor of the Fund

The global financial system is facing severe problems, which requireurgent and exceptional global action.

We must continue working together to restore confidence, ease theflow of credit, recapitalize the banking sector, and support global eco-nomic growth.

The financial crisis is taking its toll on global growth. All regions ofthe world have been affected, including the euro area economy.

The recent communiqué by the G-7 Finance Ministers and CentralBank Governors suggests a roadmap that will help stabilize financialconditions—if fully implemented. A similar roadmap has been decidedfor the EU by the latest ECOFIN Council and the recent Euro areasummit.

Policy makers in the EU have agreed to closely coordinate theimplementation of decisions to address the financial turmoil as well asthe flexible application of the rules of the Stability and Growth Pact.

Greece is gradually experiencing the impact of the financial crisisalthough developments so far suggest that the Greek economy is show-ing greater resilience than many other European economies. This isindicated by Greece’s relatively high growth rates and falling unem-ployment. In the first half of 2008, growth in Greece reached 3.5 per-cent compared to 1.8 percent for the Euro area economy. The Greekfinancial system also displays greater resilience. However, there is noroom for complacency. Fiscal consolidation and the structural reformsagenda followed since 2004 will continue. This is the best shield in thelight of the worsening global economic climate. At the same time,Greece is taking measures to sustain the soundness and credibility ofits financial system.

With its internal reform nearing completion, the Fund is appropri-ately focusing on helping members meet global economic challenges.The unprecedented nature of the global financial crisis has created newpolicy challenges for the Fund and underlined the need for deeperanalysis of macrofinancial links and spillovers. We welcome the newinitiatives that are being undertaken.

Developing and transition countries (DTCs) make a positive contri-bution in the current international environment. According to theFund, the expected growth in the global economy is almost solely dueto the developing world as advanced economies are expected to

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remain virtually stagnant. However, the financial crisis and the high oiland food prices create additional problems for the developing world.

The role of the Bank becomes even more significant in these diffi-cult times. Recognizing this, Greece has doubled its burden share inIDA-15.

In this difficult juncture, we should all coordinate to restore confi-dence in the international financial system, continue supporting thedeveloping and transition economies, and pursue coordinated policiesto facilitate a global recovery. I am certain that we shall all rise to thetask at hand.

HAITI: DANIEL DORSAINVILGovernor of the Bank

It is a pleasure for me to echo the sentiments of my colleagues whopreceded me at the podium in congratulating, on behalf of the Haitiandelegation, the Secretariats of the Bank and the Fund, for the unequiv-ocal work done to ensure the success of this year’s Annual Meetings ofGovernors, as they have done in previous years.

One year ago, we were able to view the future, at least the nearfuture, with a certain degree of optimism. Of course, we could not, anddid not, anticipate the various shocks with which we have been hit dur-ing the past fiscal year, namely, price hikes, a food crisis, five months ofpolitical uncertainty, a succession of natural disasters that have had adevastating effect on several regions in our country and, at themoment, the financial crisis. Faced with these shocks, like many othercountries, we have had to revise downward our growth objective forthe year 2007–2008, from 4 percent to 1.5 percent.

Last year, while we could not have seen all that lay ahead, in con-gratulating Mr. Dominique Strauss-Kahn on his new position, we didemphasize the importance of reforms in the context of the role of theFund in low-income countries. Furthermore, while commending thedecision of the World Bank Group to allocate US$3.5 billion to thepoorest countries, we stressed the need to review the criteria for grant-ing resources to post-conflict countries, given that access to resourcesbased on past performance is punitive.

Last year, we expressed regret over the fact that the damage sus-tained by Jamaica as a result of Hurricane Dean had brought to thefore the existence of conditions and criteria that are impeding dis-bursement of resources under the Caribbean Catastrophic Risk Insur-ance Facility. The partial assessment of the catastrophes in Haiti pointsto close to 800 deaths, 310 missing persons, approximately 200,000 fam-ilies affected by the disaster, and damage to 110,000 homes. This year,we are expressing the same reservations, in even stronger terms, with

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regard to our situation. That said, we wish to express our gratitude tothe Bank and Fund, as well as to all partners here present, for the sup-port shown to my country when it was put to the test.

While we view reform of the IMF’s Exogenous Shocks Facility as astep in the right direction, we deem it inadequate. We reiterate our callto strengthen the reforms pertaining to the Fund’s role in low-incomecountries. More specifically, we call on the IMF to take the steps neces-sary to ensure that low-income countries continue to benefit from thefull amount of technical assistance they require. This concern is justi-fied by the new contribution policy of member counties to financingassistance in this area.

We are cognizant of the Bank’s efforts to boost available resourcesfor Haiti. However, given the challenges that we have to tackle, wemust point out that an IDA allocation of US$70 million over a three-year period remains small in relation to our work in the areas of devel-opment and poverty reduction. At this juncture, we reiterate our callfor additional resources.

The tremendous loss of human life and physical capital heavilyundermines growth and poverty reduction and leads to greater financ-ing needs. We must provide urgently needed assistance to victims,rebuild our infrastructure, safeguard our environment, rebuild our cap-ital, and restore our productive capacity to pre-disaster levels. Nationalrecovery and reconstruction efforts are being curtailed by the paucityof domestic resources. The Government recently managed to mobilizeresources on the order of US$200 million to begin the recoveryprocess. However, the reconstruction effort requires much moreresources. With the assistance of the World Bank, the European Union,UNDP, IDB, and other partners, we have undertaken a needs assess-ment process, which should soon allow us, in light of recent events, toadjust the sectoral action plans of our Growth and Poverty ReductionStrategy (GPRS). Haiti maintains a committed and steadfast positionwith respect to medium- and long-term objectives in the areas of devel-opment and governance.

Notwithstanding these many shocks, Haiti continues to implementthe reforms undertaken in the context of its financial program sup-ported by the Poverty Reduction and Growth Facility (PRGF), and ismaking strides toward achievement of the completion point under theHeavily Indebted Poor Countries (HIPC) Initiative. Fiscal Year2008–2009, which started this month, marks the third year of thePRGF, and we expect to reach the completion point in 2009. However,the challenges are daunting.

The Government nevertheless intends to forge ahead with thereconstruction of the country and is calling for the support of its part-ners to successfully carry out this undertaking.

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INDIA: ASHOK CHAWLAAlternate Governor of the Bank, on behalf of

Governor of the Fund and the Bank

We meet in Washington at a time when the global economy is undersevere strain. The financial sector turmoil that originated in the U.S isnow unfolding into a full-blown crisis across many developedeconomies and possible spillovers to rest of the world. Inflationarypressures arising out of elevated food and fuel prices have not yet fullysubsided. The recessionary trend is slowly becoming a reality. After fiveyears of high growth, the world economy is now on a sharply decelerat-ing trend. More than 100 million people may have slipped back intopoverty, and our efforts to eliminate poverty have suffered a setback byabout seven years.

Nevertheless, crises do give us an opportunity to quickly take stockof what went wrong and to act in a concerted fashion—not just to alle-viate the immediate effects of the crisis, but also to create a betterworld especially for its poor.

Global Food Crisis

The global food crisis is not a natural catastrophe. It is man made.The fall in world cereal production, low food stock levels, and cropdiversion for the bio-fuel sector have played a major role. Add to these,the role of speculation and financialization of commodities, and wehave an unprecedented crisis.

Some laudable international efforts are underway. However, weneed urgent action on rationalizing the biofuels policy. We should alsoquickly reach agreement on removal of agricultural subsidies; arrive ata successful conclusion of the Doha Development Round; and createthe conditions for a more efficient and fair global food trade.

The Financial Crisis and the Role of IMF

The current crisis and the attempts at its resolution have raised anumber of concerns. In developed countries, risk management andsupervisory practices have lagged behind the pace of financial marketinnovations and new business models. I am afraid there will be substan-tial fiscal costs with attendant implications.

The Fund’s principal mandate is to provide the global public goodof financial stability. The Fund attempts to deliver this mandatethrough two key tasks assigned to it—surveillance and providing thecomfort of readily available financing to members. Separate efforts arealready underway in several fora. It would be more appropriate to

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organize the fragmented efforts on a global scale under the inclusiveumbrella of the IMF.

Voice Reform in the World Bank Group

The ongoing Voice and Participation reform process at the Bank isa great opportunity to make a far reaching reform of its governancestructures so that it continues to play a vital developmental role inglobal economic affairs.

We strongly support and call for immediate implementation of anadditional Board seat for Sub Saharan Africa. However, we feel thatthe proposal approved yesterday on the important dimension of ‘Voiceas voting power and shareholding’ has failed to live up to the promisesmade at the Spring Meeting of 2008.

While in the interest of consensus, we agreed to the proposals at theDevelopment Committee yesterday, we believe that the efforts now tobe made on realignment must lead to substantial and effectiveenhancement of the individual as well as collective voice of DTCs.

Development and Climate Change

We emphasize that issues relating to finance and technology arefundamental to the success of any global strategy to address climatechange. New and additional resources that do not detract from theODA must be provided by the developed countries. It is equally impor-tant to transfer clean, environment friendly technology to the develop-ing countries at affordable prices.

The basis of international cooperation on climate change lies in theUNFCCC principle of “common but differentiated responsibility andrespective capability.” There is no escape from the reality that emerg-ing and developing countries will consume more commercial energy.India is committed to evolve and pursue a strategy of environmentallysustainable development. We have formulated our National ActionPlan on Climate Change and are committed to ensure that our percapita carbon emissions will never exceed the average of the per capitaemissions of developed countries.

INDONESIA: BOEDIONO AND SRI MULYANI INDRAWATIGovernor of the Fund and the Bank

We are meeting at a time of great challenge and risk in the globaleconomy. The global financial crisis, rising commodity prices, and a con-siderable slowdown in global economic growth, are presentingunprecedented challenges in the history of global economy. As this is a

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global crisis, we need a global solution. We believe that given theirmandates, the International Monetary of Funds and the World Bankmust play the leading role in the crisis resolution, provide guidance onthe appropriate policy responses, and reshape the works to betterassess and prevent future crises.

Global Economy and Financial Market

The slowdown in the global economy continues to deepen, with theslow growth in both advanced and emerging economies. Risks togrowth are firmly on the downside, particularly if the financial condi-tions should deteriorate further and that financial strains would bemore intense. Emerging economies are increasingly affected by thespillovers from financial and economic stress in advanced economies,with clear signs of decelerating economic activity and continuing infla-tionary pressures. The immediate challenge is thus for macroeconomicand financial policies to support the recovery and stabilize financialconditions, while keeping inflation under control.

Monetary and fiscal policies are very important to anchor inflation-ary expectations and to mitigate negative feedback loops between thefinancial system and the economy in the near-term. In this regard, wewelcome the policy responses in the US to provide support to theeconomy in the face of financial stress while ensuring adequate liquid-ity to the financial system. Direct fiscal intervention with the use ofpublic sector balance sheet has already taken place in the US and in anumber of advanced countries to contain systemic financial risks.Nonetheless, we view that closer and concerted policy coordination,particularly those among advanced economies, is the key to immedi-ately address the liquidity problem in the global financial system andmanage the orderly deleveraging process. It will also be critical to con-tinue with reforms to strengthen the financial system.

Refocusing the Fund

We welcome the efforts of the Fund to identify the underlyingcauses of these potentially devastating problems. The current crisisonce again provides an important lesson that the rapid financial inno-vation without proper market safeguards and adequate regulation andsupervision can lead to systemic failures. This clearly calls for aredesign of international financial architecture. Reforms in regulationand supervision of institutions and markets are needed and to be coor-dinated on a global scale to mitigate the risk to global financial stabil-ity. We call on the Fund, in closer coordination with other internationalfora including the Financial Stability Forum (FSF), to play a leading

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role to provide the multilateral platform for discussing and eliciting theappropriate responses.

In the short-term, since we are still grappling with crisis, what weneed is to move quickly and coherently with more concrete solutionsto avoid a global financial catastrophe. To this end, the Fund should beadvising members what to do and how best to respond to the falloutfrom the crisis, how to restore the stability and preventing furtherspillover effects. We call on the Fund to play a more proactive role inthe much needed global policy coordination through its multilateralconsultation. Building on its expertise and experience from wide mem-bership, the Fund is better place to provide such policy advices. We alsourge the Fund to expedite the new liquidity instrument to help mem-bers better prepared in their crisis prevention framework as they inte-grate into global financial system.

The turmoil has posed challenges to policy makers and highlightedthe importance of better analysis of global stability risks. In this regard,we commend the Fund’s progress to meet its Reform Agenda. We areconvinced that the reforms will help the Fund become more efficient incarrying out its mandates and sharpen its focus. On surveillance, we arepleased to note that the Fund will enhance its surveillance on macrofi-nancial linkages and advance its early warning framework. However, inthe current global financial crisis, a better integration of multilateralsurveillance into bilateral surveillance should also be prioritized.

We also believe that the Fund’s existing lending instruments arebased on a model that is no longer suited to the needs of a large part ofthe membership. The global financial system has evolved enormouslysince the Fund was created, and so have members’ needs for Fund sup-port. While the Fund has adapted to members’ evolving needs, this wasnot nearly fast enough. In addition to expeditiously concluding thework on a new liquidity instrument, there is urgent need for exploringanalytical considerations for Fund lending, re-examining conditionality,reviewing the Fund’s lending role in low-income countries, and review-ing access limits and financing terms for using Fund resources.

We also welcome the establishment of Committee on the IMF Gov-ernance and Reform. We believe that in addressing global issues, theFund depends heavily on its capability to establish an adaptive and flex-ible management structure. In this regard, we trust that the Committeewould come up with recommendations that benefit all its members.Nonetheless, we must not forget that further addressing the voice andrepresentation of developing and emerging economies remains one ofthe key issues on IMF Governance reform. We call on the Fund tomake further progress in closing the gap between actual and calculatedquota shares to reflect their relative positions in the world economy.

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Strategizing the Bank

The current global challenges also call for the central role of theWorld Bank. We need to mitigate the spillover risks of continued highcommodity and food prices to development agendas. Higher inflationreduces the capacity to advance important development goals. In someextreme cases, it might undo many of the achievements of the pastdecades and push more people into poverty. We believe that the Bankis well positioned to lead a coordinated global effort to tackle theseproblems.

Looking beyond the crisis, we support the Bank’s efforts to achieveits Long-term Strategic Direction. We believe the Strategy provides abetter mechanism for aligning aid with national development strate-gies. We appreciate the increasing role of Country offices to maximizethe Bank’s understanding of client countries.

We are heartened that the Bank remains committed to a leadingrole in advancing climate change efforts. We also applaud the Bank’sfor assisting developing countries to access and maximize the benefitsof various financing schemes. The Bank is well positioned to act as acatalyst in the efforts to increase the private sectors’ climate changerole, as well as facilitating technology transfers.

We believe that tackling corruption and improving transparencyboth at an international and country level is a fundamental conditionfor ensuring a sound path for development. We note that together wecould do more to implement the Stolen Asset Recovery (StAR) Initia-tive. This important project needs concrete and collective efforts toinvestigate, trace, and repatriate stolen assets. A coordinated effortwould help rid the globe of safe havens for stolen assets.

We encourage the Bank to continue with efforts to advance struc-tural reforms and to increase the voice and role of developing countries.This should include efforts to increase representation of staff fromdeveloping countries in the senior management ranks and to empowerall members to participate in the leadership selection process.

Responding to the Crisis—Indonesia’s Experience

In closing, we reaffirm Indonesia’s commitment as a solid and reli-able partner of the Bank and the Fund. We continue to do our part tomitigate the spillover risks of the unfolding crisis into the emergingmarkets. We have so far been able to withstand the negative impact ofthe global crisis, thanks to our prudent macroeconomic policy, strength-ened financial sector, and adequate foreign exchange reserves.Nonetheless, this is a challenging task, particularly given the increasingtrade-off between inflation and growth while preserving financial sta-

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bility. In this context, we have taken measures to adjust the economicpolicy mix to reduce inflationary pressure while maintaining financialstability and growth momentum.

On the fiscal front, in order to secure fiscal sustainability and at thesame time allow the needed fiscal space, we have moved forwardtowards more streamlined subsidies accompanied by well-targetedsocial transfers as well as reinforcing expenditure restraints. On mone-tary front, the central bank has preemptively raised its policy interestrate to curb inflation expectations and the second-round impacts ofdomestic fuel price increase, while at the same time ensure sufficientliquidity in the financial system. Going forward, we will press forwardour effort to enhance our crisis management framework, including ourplan to strengthen legal aspects of the crisis management and protocolthat outlines procedures and clarifies the responsibility of agencies.

IRAN: SEYYED SHAMS AL-DIN HOSSEINIGovernor of the Bank

In the name of Allah, the Compassionate the Merciful. It is mypleasure to address the 2008 Annual meetings of The World BankGroup and IMF.

The global economic outlook has continued to deteriorate with sev-eral advanced economies bordering on recession; in particular therecent turmoil in the United States financial market has impacted mostof the markets worldwide. At the same time, developing and emergingmarket economies are struggling with rising costs and weakening ofexternal demand, while low-income countries are suffering from highcommodity prices. The financial outlook is now subject to greateruncertainty and despite some remedial measures recovery could not beexpected soon. This is a great challenge that will have significant bear-ing on the world economy and which needs to be dealt with in a con-certed and well- thought manner.

It is surprising that the IMF has not foreseen this tremendous finan-cial turbulence in order to send an alerting signal in timely manner.This would have been particularly critical, given the extent of the crisisand its global spillover. Going forward, considering its mandate tooverlook the global financial stability, the IMF needs to play a moreeffective role in helping shape the policy response not only in thedeveloping countries but also in advanced economies in order to safe-guard emerging markets sustainable growth and financial soundness.

On the issue of the Voice and Representation of DTCs I believethat: First, the major source of income and knowledge of the WorldBank is generated from cooperation with developing countries. There-fore, in order to enhance its legitimacy it should move according to a

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defined timetable toward the parity of voting power between DTCsand developed countries.

Second, we emphasize that in implementing an increase in the vot-ing power of the DTCs, this increase should be formulated in a waythat would not dilute the voting power of any single member of devel-oping and transition countries. Third, we strongly support a selectionprocess of IMF Managing Director and the President of the WorldBank that should be fair, competitive, merit based and open to individ-uals from all member countries. We are also of the opinion that theBank and the IMF should take more serious measures to enhancestaff’s diversity in both institutions, particularly at higher manageriallevels from all member countries.

Finally, in order to enhance its image as an impartial and unbiasedmultilateral institution, the World Bank management should engagewith all its developing country members through its country assistancestrategy and investment in their development projects which must beconsidered solely on the basis of their economic merits. In this contextthe World Bank must restrain from being influenced politically whichis against the stipulations of its Article of Agreements. In this direction,we strongly urge the Board of the World Bank to follow up this matteras part of its governance mandate.

On the issue of climate change, the role of advanced economies thatare mainly responsible for this phenomenon is highly significant.Therefore, they should justifiably bear the main costs and burden forthe adaptation and mitigation to climate change in the developingcountries which need to sustain their economic growth and develop-ment in order to reduce poverty, and which cannot afford additionalhigh costs of new technologies. Therefore, developed countries thatpicked the fruit of development and prosperity at the expense of cli-mate change should bear their differentiated responsibility in thisprocess and provide the necessary additional financing and new tech-nologies to developing countries at low cost. The neutrality of the sup-porting multilateral institutions is fundamental for the success of thisprocess.

Next, I wish to touch briefly on the recent economic developmentin my country.

Growth continued to be strong despite some external constraintsand unemployment declined in spite of the rapid growth of the laborforce. Real GDP expanded by 7.6 percent in 2007.

In addition, privatization has gained momentum with a rapidincrease in the purchasing shares by private investors. In this direction,following the reinterpretation of Article 44 of the Constitution, about80 percent of state-owned enterprises will be privatized by 2010.

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For the medium-term the government plans to implement a strat-egy that involves significant reforms, the most important of which is thereform aimed at better subsidy system.

IRELAND: MARTIN MANSERGHGovernor of the Fund and the Bank

I am pleased to attend here today to speak on behalf of Ireland.We meet against a backdrop of extreme global economic and finan-

cial uncertainty with continuing downside risks to the global economy.More than ever now, it is important to have a strong IMF and WorldBank Group, working in co-operation with their members, to promoteglobal economic growth and stability. We must ensure that progressmade in recent years towards achieving the Millennium DevelopmentGoals is not reversed.

IMF Reforms

Ireland welcomes the progress made in the past year in refocusingand reforming the Fund. We support the Managing Director’s ongoingcommitment and efforts to implement the reform agenda set out in theMedium-Term Strategy, which should see the IMF continuing toenhance its role and credibility in the global economy.

Surveillance

IMF Surveillance is particularly important in current economic con-ditions. The key challenge for the Fund is the effective implementationof all the provisions of the 2007 Decision on bilateral surveillance—including the use of the ad-hoc consultation procedure. We join withothers in calling for effective and even handed implementation.

Irish Developments

I would like to turn briefly to developments in Ireland.Ireland has taken swift and decisive action to safeguard the stability

of our financial system and more broadly our economy. Two weeks ago,the Irish Government decided to put in place a guarantee arrangementto safeguard all deposits with and loans to six named credit institutions.The guarantee arrangement will also be available to certain bankingsubsidiaries in Ireland that have a significant presence in the domesticeconomy. This approach has now been approved by the EuropeanCommission. Ireland also strongly welcomes the interventions of other

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European Member States and countries worldwide to ensure stabilitywithin the financial system. Actions by individual countries and byother groupings—such as those announced by the Eurogroup Heads ofState and Government on Sunday night—are crucially important inensuring that policy makers can go beyond a reactive approach to thedifficult market circumstances. Ireland is continuing to work with otherEU member States, the Commission, and the European Central Bankin the work to find an overall framework to address the financial crisis.

The Irish economy is currently being subjected to a number of neg-ative shocks. On the domestic front, a major adjustment is underway inthe residential construction sector, and this has dragged down eco-nomic activity this year.

The more difficult external climate is having an additional detri-mental effect. Weak demand in our main export markets, exchange rateappreciation, the fall-out from global financial market turmoil and,notwithstanding some easing in recent months, higher commodityprices are all having an adverse impact.

The latest data confirm that the economy has slipped into recessionand for this year, we now expect the level of activity to contract.

The contraction in activity has been mainly concentrated in thehigher yielding components of demand, with the result that there hasbeen an accelerated deterioration in the public finances.

To deal with these challenges, the government brought forward thenormal date of our national Budget from December to tomorrow. TheBudget will set out steps to stabilize the situation by strictly prioritizingexpenditure to reflect the changed realities and to ensure that Ireland’seconomy is in the best possible position to resume trend growth asinternational conditions improve.

Development and Aid

On development and aid issues, Ireland’s contribution in recent yearshas increased substantially. This year, we will spend around 900 millioneuro on overseas aid. Proportionately, this makes Ireland the sixthlargest donor per capital in the world, and represents 0.56 percent ofGNP. Ireland’s aid program has always focused on the poorest and mostvulnerable.This focus will continue.

Ireland welcomes the outcome of last month’s High Level Forumon Aid Effectiveness, in Accra, Ghana. The Forum reached agreementon accelerating and deepening the implementation of the 2005 ParisDeclaration on Aid Effectiveness. The Accra outcome is a strong state-ment on the need to improve the deployment and delivery of develop-ment assistance. We join with others in commending the World Bank

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for their contribution to the Forum, and we are confident that theBank will fully play its part in implementing the agreed actions.

The constructive work carried out at the Accra Forum to improvethe quality of aid is a solid foundation for the Doha Financing forDevelopment Conference in November, when aid volumes and the2002 Monterrey Consensus will be under scrutiny. Again, the WorldBank will play a key role in the Doha discussions, particularly in lightof the current global economic conditions.

Debt Relief

Ireland strongly supports debt relief for poor countries with unsus-tainable burdens. We remain committed to total debt cancellation forthe HIPC countries. In this regard, Ireland has recently made an addi-tional contribution of 6m to the HIPC Initiative as an indication ofour continued support for the world’s poorest countries. However,there is a danger that countries which benefited from HIPC and theMDRI will re-accumulate unsustainable levels of debt. Beneficiariesmust therefore be encouraged not to engage in unwise nonconces-sional borrowing. Donor countries wish to see debt relief used well inmaking progress towards the achievement of the Millennium Develop-ment Goals. Every effort should be made to ensure that progress madeis not reversed.

Voice and Participation

Following the reform of Quota and Voice at the IMF earlier thisyear, Ireland supports the current reform process in the World Bank,aimed at widening and strengthening the participation of developingand transition countries in the decision-making of the Bank.

We congratulate the Bank for its commitment to this issue, in keep-ing with the spirit of the Monterrey Consensus and indeed with theAccra Agenda for Action, and we commend the progress that has beenachieved this weekend. We welcome this progress as an important firststep in the ongoing process of comprehensive reform.

In conclusion, I would like to refer to the contributions made in thismorning’s opening session. We should all be encouraged by theaddresses of Managing Director Strauss-Khan and President Zoellick.These demonstrate a proactive approach by both the Fund and theBank to developing an effective global response to tackle the effects ofthe shocks that have hit the world economy, and the discussions of thelast three days. I can assure the institutions of Ireland’s full support forthese efforts.

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ISRAEL: ZVI ECKSTEINAlternate Governor of the Fund

Unfortunately, Governor Stanley Fischer could not be present here.It is a special pleasure for me to be here today to deliver this addresson his behalf, and on behalf of the State of Israel.

I would like to make brief comments on two issues: first, the Israelieconomy; second, the Fund’s Reforms and Policy Agenda. The limitedtime available will not allow me to cover other important topics,including global economic developments, especially in light of financialmarket turbulence, the implication of the current energy and foodprices on the poorer countries and communities that are not endowedwith such resources, and other important issues such as climate change.

The Israeli Economy

Since 2004 and up to the first quarter of 2008, the Israeli economyhas been growing at an average annual rate of more than 5 percent. Inthe second quarter of 2008, GDP growth decreased to approximately 4percent. Given financial turbulence, global slowdown, and the strength-ening of the Shekel, further slowdown is expected in the remainingpart of the year and in 2009.

The Israeli economy is affected, like the rest of the world—by thesubstantial increase in uncertainty in the global financial markets. InIsrael, the economy, in general, and the financial sector, in particular, isin good condition in order to address the possible ramifications of thecrisis. Relative to banks in the US and in Europe, the Israeli bankingsector is conservative and its exposure to the financial turmoil in theUS and Europe is limited. I will briefly review recent macroeconomicdevelopments in Israel.

In 2008, mostly as a result of significant increases in energy andfood prices in the first half of the year, inflation is expected be abovethe target range (1-3 percent per annum), but inflationary expectationsfor the next 12 months are within the target range and inflation islikely to return to the target range in the second quarter of 2009.

The balance of payments is expected to be in 2008 in a surplus ofaround 1 percent of GDP. Controls on capital flows have beenremoved progressively since the early 1990’s, and the capital account isessentially totally liberalized.

On March 24, 2008, the Bank of Israel announced a plan to increaseits foreign exchange reserves by purchasing foreign currency in theopen market. With effect from July 10, the Bank purchases an averageof $100 million a day. This decision was made following an examination

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of the market conditions and in light of the rapid cumulative apprecia-tion of the shekel.

The government debt ratio is on a declining path, yet it still remainstoo high and needs to be reduced further; government spending hasbeen consolidated and needs to be further reduced; unemploymentwent down to 5.9 percent in the second quarter of 2008, and moreneeds to be done to improve the standard of living of the poorestmembers of the population.

On May 2007, the OECD Ministerial Council Meeting decided tostart the accession process with five countries, including Israel. Follow-ing this decision, Israel is now engaged in a dialogue with the organiza-tion, and expects to become a full member of the organization in 2010.The process entails updating legislation and adapting to the Organiza-tion’s advanced standards. It would also serve as an incentive for Israelto continue promoting economic reforms.

At present, we are continuing to work on a new and modern centralbank law that will clearly define the independence of the Bank ofIsrael, while increasing its accountability and transparency.

The Fund’s Reforms and Policy Agenda

The Fund invests substantial energy in reexamining its role, advanc-ing the surveillance agenda, reviewing lending instruments, andstrengthening governance. As part of a re-organization, the IMF hascut spending and the numbers of staff, and highly qualified new profes-sionals have been nominated to senior positions.

First, we welcome the Fund’s sharper focus on refocusing its surveil-lance work. We, as other central banks, have found the Fund’s fiscal pol-icy analysis helpful. The overall quality of Fund’s surveillance is held inhigh regards. These days, the obvious demand around the globe is foradditional value added in the analysis of the financial sector. Needlessto say, the Fund’s FSAP work in identifying financial vulnerabilities hashad a substantial contribution, but there is value in further work on riskassessment and early warnings. The 2008 Triennial Surveillance ReviewPaper (prepared by the Fund’s Strategy, Policy and Review Departmentand discussed in the Board on September 26) states that there is a largeunmet demand for analysis of financial sector issues, exchange rateanalysis and external stability risks, as well as of the of two-way trans-mission channels between financial and real sectors, and cross borderspillover effects. We support the recommendation of the report. It isvaluable to increase efforts in developing a framework of a more sys-tematic macrofinancial surveillance. In addition, it is important to adoptfurther steps in order to speed up the completing of Article IV reportsand to increase its use of interim reports.

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Second, regarding the design of new lending instruments, such asthe Rapid Access Line, the Financial Stability Line and the Rapid Liq-uidity Line, I would like to note that there is indeed value in introduc-ing credit facilities to countries with sound policies, without the tradi-tional conditionality structures. It is desirable that such facilities wouldbe available to increase access to contingent liquidity instruments inorder to assist member countries to reduce the risk of capital accountcrisis and assist those qualifying after being hit by turbulence in globalcapital markets.

Third, the Fund is an effective international organization that is inthe process of improving its governance and accountability. It is impor-tant that member countries’ authorities will benefit from the continuedrelevance of the IMF, especially for global financial issues. Such rele-vance is also tied to the issue of vote and representation. In order toreflect the current global economic situation, new economic powersdeserve a bigger weight in the decision making process. With respect tolow-income countries, the increased desire for vote should be balancedby the implications of increasing the weight of borrowers in any lend-ing financial institution.

Before I conclude, I would like to make another point regarding theglobal financial crisis and state that during this critical period in the so-far ever-worsening crisis, government policy needs to be guided by twocentral principles: central banks need to ensure that sufficient liquidityis provided to the banking system and the money and short-term creditmarkets to ensure their continued effective operation; and govern-ments need to stand ready to inject capital into their banking systemsto ensure the stability of the system and the continued provision ofcredit to the economy.

JAPAN: MASAAKI SHIRAKAWAAlternate Governor of the Fund and the Bank

It is my great privilege to have this opportunity today to address theIMF-World Bank Annual Meetings, representing the government ofJapan.

At the outset, I would like to express my sincere appreciation toMr. Dominique Strauss-Kahn, Managing Director of the IMF, and toMr. Robert B. Zoellick, President of the World Bank, for their excellentleadership at their respective institutions.

The World Economy and Global Financial Markets

The financial crisis that erupted in August 2007 appears to havebecome even more profound today. Credit quality concerns are broad-

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ening, as further declines in house prices and tighter lending conditionsspread across countries, most notably in the United States and Europe.Financial firms face greater difficulties in raising capital to cover losses,while efforts to squeeze assets add to downward pressures on assetprices.

Recent developments in the U.S. financial industry have led to aconsiderable deterioration in market participants’ sentiments.Although the decisive measures adopted by the U.S. authorities haveprevented the global financial system from further disruption, signifi-cant uncertainty remains regarding the way forward. We, as policymak-ers who have the responsibility of dealing with global financial issues,should use the term “crisis” with utmost care, but it would be difficultto blame anyone for describing the current situation of the world econ-omy as a “financial crisis.”

Presumably not independent from the financial turmoil, commodityprices have demonstrated very volatile movements over the past year.The price of oil more than doubled between December 2006 and mid-July 2008, before easing in recent weeks, while, during the same period,food prices rose by over 50 percent.

Although commodity prices have recently leveled off, underlyinginflation has risen, particularly in emerging and developing economies.The tightening of policy rates in some emerging economies is consid-ered to have been behind the curve. Implementing policy responses toinflationary pressures from exogenous shocks will be quite challenging,given weaker growth prospects throughout the world.

Against this backdrop, the world economy is likely to display amarked slow down. Not only are advanced economies expected to gothrough a period of very sluggish growth for the remainder of 2008, butemerging and developing economies are also projected to continue toslow. Hence, it would be advisable that we prepare against a “globalrecession.” We should also bear in mind that the global credit contrac-tion arising from the present financial turmoil could increase the riskof squeezed private capital inflows to emerging economies.

Considering the situation I have just outlined, I believe that now itis a time when the resilience of the international financial system as awhole, as well as the policy responses of individual countries, requiresthorough scrutiny.

We believe that Japan can contribute to the stability of world econ-omy by pursuing to secure its own growth. On August 29, the govern-ment announced a package of measures to address the global surge incommodity prices, and a supplementary budget to implement thesemeasures has just been passed by the Lower House of the Diet. Mone-tary policy continues its accommodative stance. In response to elevatedstrains in the global financial market, the Bank of Japan, with other

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central banks, has taken coordinated action to provide U.S. dollar liq-uidity, and it has supported interest rate cuts implemented by othermajor central banks. The Bank of Japan intends to carefully assess itsoutlook for economic activity and prices, while closely examining thelikelihood of its projections as well as the upside and downside risks,and to implement its policies in a flexible manner.

Since the situation in the international financial markets has anenormous influence on the Japanese economy, we will very attentivelywatch global financial developments and put forth our utmost effortsto maintain the stability of the international financial system.

Expected Role of the Fund

Let me turn to the question of the Fund and expectations regardingits role. In the midst of concerns about the financial crisis and a globalrecession, recently, it has often been questioned whether the Fundproperly fulfils expectations. We have some concerns that, in responseto this criticism, the analytical and advisory capacity as well as the pol-icy tools of the Fund might be scaled back, despite a genuine demandfor them, from the international community.

I would like to offer some proposals regarding possible ways inwhich the Fund can fulfill its expected role.

First, the Fund can make an intellectual contribution to advancedeconomies affected by the financial crises. The Fund is well situated toaccumulate the expertise of member countries on how to respond tofinancial crises. It is therefore important that the Fund build up andorganize member countries’ existing experiences and provide effectiveinput to those countries currently fighting against a financial crisis.The Fund should also improve its ability and capacity to analyzefinancial market issues, and to accelerate its ongoing efforts towardenhancing integration between the analyses of financial markets andthe macroeconomy.

Second, there is room for intensifying the Fund’s engagement withinternational financial crises. Addressing global financial crises, andhelping member countries cope with those crises, both lie at the heartof the Fund’s raison d’etre as an international institution. When emerg-ing economies and smaller countries that host large financial institu-tions implement such measures as providing capital to financial institu-tions and deposit guarantees, to ensure the stability of financial systemsin the midst of a crisis, these countries are likely to encounter difficul-ties in financing their budgetary needs. The Fund should be responsiblefor providing financial assistance in such cases, and should seriouslyconsider how to fulfill this responsibility. It does need to convey to themarket the Fund’s determined commitment to tackle against spreading

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financial stresses, and thus, have a positive impact on restoring confi-dence. If the Fund requires additional resources, Japan stands ready tosupplement needed funds.

Third, the Fund needs to prepare for reduced access to private capi-tal by both emerging and developing economies. As international inter-mediation falters as a result of the global credit crunch, such a situationmay arise as thinner private capital inflows to emerging and developingeconomies leads some countries to face balance of payment difficulties.The Fund should vigorously examine how effectively it can fulfill itsrole and consider possible regimes of international cooperation forthose countries.

Fourth, technical assistance is the Fund’s area of unique competence.Indeed, from a mid- to longer-term perspective, capacity building ofdeveloping countries in the macroeconomic policy field is critical towardachieving economic growth and stability. Japan, for its part, has beenexpanding its financial contributions to the Fund’s technical assistanceprograms through the Administered Account for Selected FundActivities—Japan, and will continue to extend its support for Fund oper-ations in this area. We believe that it is indispensable that technical assis-tance programs be mutually beneficial and offer a tangible outcome forboth recipients and donors. To this end, particular importance is attachedto achieving an objective ex-post evaluation, with specific attentiontoward ensuring accountability to taxpayers in donor countries.

Development Issues and the World Bank

A global tightening of credit triggered by the subprime mortgagecrisis could lead to shrinking private capital flows to developing coun-tries, thus putting at risk the mobilization of resources necessary forinfrastructure investments that support economic growth, indispensa-ble for poverty reduction as well as for the provision of social safetynets. We expect the Bank to actively contemplate how the Bank, andRegional Development Banks, could compensate for the decline in pri-vate capital flows that have been the primary funding source for devel-oping countries, and what kind of catalytic roles the World BankGroup could play in bolstering withered private capital flows.

At such a critical juncture, on October 1, the “new JICA” waslaunched by merging the JICA and the overseas economic cooperationoperation of the JBIC. This marks a creation of one of the largest bilat-eral aid agencies equipped with providing all three aid modalities: tech-nical cooperation, grants, and ODA loans. Facing the risk of shrinkingfinancial flows to developing countries, Japan expects that the Bankand the “new JICA” will make their aid more effective and efficientand produce robust results by means of an exchange of best practices

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and know-how, and its close coordination and cooperation. In fact, atthis year’s TICAD IV, good cooperation was already established in thebroad area of aid for Africa. Also, in the global efforts to tackle thepressing food and climate change issues confronting the internationalcommunity, Japan would like to strengthen even further its cooperationwith the Bank.

Regarding governance reform at the Bank, we welcome the pro-posed comprehensive package that envisages a phased implementationof reform measures. The steady implementation of the measures in thepackage is critical to the success of the reform.

Conclusion

The world economy is experiencing a period of rapid change.Developments in the financial markets of one country are almostinstantaneously transmitted to the financial market of other countries.Moreover, the factors that influence financial markets are increasingtheir tendency to affect the real economy through a so-called “negativefeedback loop.” In such a world, no country can maintain its prosperitywithout thoughtfully considering the health of the global economic sys-tem. Today, we hear many observations indicating that the Fund andthe Bank need to be fundamentally reformed or that they should domuch more to cope with the current new environment. These observa-tions, however, can be interpreted as proof of continued high expecta-tions for the two Bretton Woods institutions. Japan hopes that the Fundand the Bank will live up to those high expectations by fully utilizingtheir splendid human resources.

KIRIBATI: NATAN TEEWE, MPGovernor of the Fund and the Bank

(on behalf of the Federated States of Micronesia, Kiribati, MarshallIslands, Samoa, Solomon Islands and Vanuatu)

Warm greetings from the Pacific. It is a great honor for me todeliver a statement on behalf of the Pacific Constituency comprisingthe Federated States of Micronesia, Kiribati, the Marshall Islands,Palau, Samoa, Solomon Islands and Vanuatu.

Our member nations, with a population of over 1.2 million people,are scattered over several thousand kilometers of the Pacific Ocean.They are different in a lot of ways but they do also share a lot of com-mon economic features. They have common problems of isolation fromthe major markets; they have narrowly based economies and they arevery vulnerable to the impact of climate change.

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We meet here at a time of great uncertainty. The current financialcrisis, coupled with the soaring food and fuel prices, that pose a threatto economic stability world-wide, has also a great negative economicimpact in our region. We are already feeling the pressure of theseevents, which could undermine the gains made through programs ofreform. These events have placed considerable hardship on our people.

Over the years, we have been undertaking wide ranging reforms tobuild our economic strength. Whilst the process has been slow forsome, generally we have moved forward. To achieve great economicgrowth we have to take advantage of our disadvantages; we have to beaccountable to our people and we have to manage our resources to thebest we can. We view economic growth not so much in terms ofincrease in GDP numbers, but more in terms of providing a better lifefor our people, now and in the future.

Unemployment has been a problem in our region. We have to lookoutside our individual countries for job opportunities for our people.We are grateful for the opportunities provided by our developed part-ners. I would like to mention the Recognized Seasonal EmploymentScheme initiated by the New Zealand Government. Not all our mem-bers are involved under the scheme. However, for those who areinvolved, the scheme has created the opportunity for employment inNew Zealand for a limited duration. People employed remit a portionof their income to their families in their respective countries. Thescheme has a positive development impact to the lives of many fami-lies, as well as to the individual economies. Still its initial stage thescheme has its problems, but no doubt and through time, things willimprove. The Australian Government has announced the developmentof a similar scheme. We are anxiously looking forward to the imple-mentation of it. We pray that in the very near future other developedcountries will develop similar schemes to assist those of us who are byour very nature, unfortunate.

With telecommunications, there have been significant effortsPacific-wide to open up the telecommunications sector after years ofmonopolistic regimes. Given our isolation and scatteredness over awide area of ocean, an efficient and affordable telecommunicationssystem, would encourage private sector investment which will in turn,contribute to our economic growth.

Air transportation, for some if not all of us, needs a lot of improve-ment. The significance of tourism to our economies requires efficientairline operations that offer improved connections. Something morethan just a regional approach may be required. Developed countries inthe region may be in a position to offer an answer with the support ofour development partners.

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Climate change has been our chorus in our region and it will con-tinue to be our chorus in the future. It is our chorus because we are themost vulnerable to its negative impacts. We are the least contributorsto green house gas emissions, but we are the worst affected to theextent that some islands may disappear for good as a result of sea levelrise. Climate change is an issue of critical importance to our region, inparticular the low lying atoll countries.

While we support the Bank’s engagement in climate change, we atthe same time pose a question, “Is that enough to answer our worries?”When will be the time to put our pens down and start with tangiblework to reduce the negative impact? Why are we scaring our peoplewith problems of climate change and not assist them resource wise, tocounter the realities of climate change that they are facing? We wel-come the establishment of the Climate Investment Fund and theemphasis on adaptation and renewable energy sources, but we stillhave to see how effective these funds are in overcoming our worries.

With the rise in oil and food prices, we are faced with the seriouschallenge of dealing with widening external and internal imbalances.With such increases, our people barely cope with their family needs, interms of food, electricity, transportation and so forth. There is growingsigns that our people are facing hardship and are beginning to demandfor some form of relief.

After years of being neglected (and excuse me for saying that), wewelcome the increased Bank involvement in our region through theSydney Office, establishment of the country office in Solomon Islands,and satellite offices in Tonga, Samoa, and the placement of Bank staffat the Pacific Financial & Technical Assistance Centre (PFTAC) officein Fiji. We believe that, with those arrangements the Bank’s under-standing of our particular needs will be enhanced and hopefully willimprove the Bank’s response to those needs.

We are aware that the next Regional Framework is in its final stageand will be ready soon. We would again like to reconfirm our prefer-ence for increased analytical work and more strategic focus at thecountry level. We look forward to being closely involved in the consul-tations and the formulation of the next Pacific Strategy.

Regional initiatives present the opportunity to deliver assistance tobenefit a number of recipients, which might otherwise be less cost effec-tive to deliver on an individual basis. High transaction cost of doing busi-ness given our small size, small population, and islands scattered across avast area make regional and sub-regional approaches much more attrac-tive. We have regional entities working well to serve the interests of thePacific. We have the Pacific Plan, which has been endorsed by PacificLeaders, as a source of ideas on regional priorities. And we have theFund and Bank engaged in the Pacific. Yet there seems to be little practi-

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cal partnership taking place in support of regional initiatives. We believethere are opportunities for real impact to take place with improved col-laboration. I therefore urge the Fund and the Bank Group to coordinatetheir programs closely with the Pacific Plan initiatives to ensure comple-mentarity and deliver optimum outcome.

Private sector development has been propagated as the engine foreconomic growth. In our region, private sector growth has been disap-pointing. We believe we have created a favorable environment and putin place appropriate governance structures and best practices, but thereare only a few businesses established and not many foreign investorsshow interest. The 2009 Doing Business Review ranks most Pacificcountries below 100 with the best performer at 39, yet there is no posi-tive reward in terms of new investments. We want to understand themissing part of the puzzle and we believe the Fund and the BankGroup should assist us with better analytical work and realistic advice.

We welcome the progress made on voice and quota reform in theFund and we always believe that the interest of all members should beaccommodated. To ensure that we are not left out the Bank shouldserve us at the ground level by providing an improved Bank-Countryrelationship, an improved standard of service, an improved Bank Man-agement accountability and an innovative approach to promote Bankexposure to under represented regions.

We appreciate the way small states are treated in the IDA15 frame-work. The proposed resource allocation to reflect our special situationsis a step forward. The increased IDA resources to the Pacific countrieswill help a lot in achieving our Millennium Development Goals withinthe stipulated timeframe.

Mr. Chairman, I would like to conclude by acknowledging on behalfof the Pacific Constituency, the improved collaboration we now havewith both the Fund and the Bank Group, and we look forward to acontinued meaningful partnership and practical outcomes that willhelp raise the quality of life of our people.

KOREA: MAN-SOO KANGGovernor of the Fund and the Bank

It is my great pleasure to join you here on behalf of the Republic ofKorea. Today, the world economy and global financial market are ingrave difficulty.

Given the close linkage between financial markets and the realeconomy that we are now observing, our priority should be to stabilizethe financial market.

To this end, it is important that we restore market confidencebefore the on-going financial market turmoil develops into a “Confi-dence Crisis.”

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Policy-makers should enhance predictability in the market by pro-viding transparent and objective information and sending consistentpolicy signals.

In particular, policy coordination and information sharing betweenmember countries are critical in stabilizing the closely inter-linkedglobal financial market.

Drawing upon our experience of the Asian financial crisis, I wouldlike to make two suggestions.

First, policy-makers should take swift actions sufficient to stabilizethe market when necessary.

In this context, I fully support the decisive and timely market-stabilizing measures including liquidity provision and interest rate cuts.

We should not forget, however, that emerging and developingeconomies are suffering the most from the turbulence in financialmarkets.

To ease their burden, I would suggest global market-stabilizingmeasures, such as liquidity provision, engage emerging and developingeconomies through close coordination.

To facilitate policy coordination, I look forward to G-20 taking astronger role. Given its comprehensive membership consisting of bothdeveloped and developing economies, G-20 can be an effective plat-form for global collaboration.

Second, regarding the role of IMF amid today’s uncertainty, I havethree points to make.

• the Fund has a bigger role to play in this unstable financial market. Itshould help the global economy address current turmoil by strength-ening its surveillance.

Specifically, the Fund needs to help member countries enhancethe financial supervisory system in response to the evolving situationin financial markets.

Objective and transparent evaluation and disclosure of the riskinherent in new financial products, will enable us to minimize sys-temic risk and regain investor confidence.

• the Fund should focus its analysis on the macrofinancial linkage byfostering the capability to identify and analyze the spillover processand its risk.

Going further, it needs to make recommendations on macroeco-nomic policies including the counter-cyclical role of fiscal policy torevitalize investment and consumption in the context of slowinggrowth.

• the development of regional surveillance and crisis management sys-tem and its coordination with the IMF are critical to effectivelyaddress the current financial crisis.

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In Asia, for example, the CMI Multilateralization, which is toestablish regional liquidity providing system, can be a desirable com-plement to the IMF.

As for the real economy, it is important that all member countriescooperate to stabilize oil and other commodity prices and, thereby, mit-igate worldwide inflationary pressure.

To this end, commodity-exporting countries should stay away from“export protectionism” and maintain an adequate level of supply. Onthe other hand, developed countries need to take appropriate actionsto stop speculative demand from driving up prices.

Turning to the on-going World Bank reform, the ultimate goal ofgovernance reform is to enhance the Bank’s responsiveness and maxi-mize members’ participation by ensuring their equitable representation.

The first and foremost principle of the reform should be to ensurethat the share structure reflects each member’s relative weight in theglobal economy.

It has been a decade since the Bank realigned its quota in 1998. Thecurrent quota does not fairly reflect the status of emerging anddynamic countries whose economies have experienced significantchanges.

That explains the urgent need for a quota reform, especially for thecountries whose quota falls far short of their economic position. I amconfident that the reform will in turn contribute to achieving the Bank’smandate as it will promote participation by member countries.

Last but not least, I urge you to support North Korea, one of theleast developed countries in the world, in opening up its economy andreforming itself.

To encourage North Korea’s opening and reform, it is important tointegrate the country into the global community.

This will be a challenging task, which requires the efforts of bothKoreas as well as the cooperation of the international community.

In this regard, I would like to emphasize that the forward- lookingstance of the IMF and World Bank is essential.

Once again, I ask for the support of all member countries.

LAO: VIENGTHONG SIPHANDONEGovernor of the Bank

It is my honor and a great pleasure to represent the Governmentof the Lao People’s Democratic Republic at the 2008 Annual Meet-ings of the Boards of Governors of the International Monetary Fundand the World Bank. Let me join my fellow Governors in congratulat-ing Mr. Chairman, the President of the World Bank, the Managing

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Director of the IMF, and the Government and people of the UnitedStates for the excellent arrangements made for this important meet-ing. I would also like to take this opportunity to express my congratu-lations to President Zoellick for continuing his fruitful work inenhancing the World Bank’s role in supporting poverty reduction ofall regions in the world, regardless of the gloomy economic situationin the United States and around the world recently.

Although, the Lao People’s Democratic Republic is not directlyaffected by the sub-prime mortgage crisis in the United States, weshare the concern that this crisis could develop into a global financialmeltdown, and are greatly concerned about the potential effect onemerging countries and poor countries. We urge the U.S. Governmentand other industrialized countries to implement all possible measuresto remedy the situation and to restore the investors’ confidence in thefinancial market.

I would like to take this opportunity to describe the Lao People’sDemocratic Republic’s economic performance during 2007–2008. Ourmacroeconomic situation remains fairly stable, with continued stronggrowth of above 7%, which is expected to continue into 2008. Outputhas expanded in mining, newly emerging processing industries, agricul-ture, new construction of hydropower projects, tourism and other serv-ices, as well as large FDI inflows from neighboring countries.

Nonetheless, there are some risks of rising inflation. After falling toa record low level of 4.5% in 2007, overall inflation climbed to 6.4% inthe second half of 2008. High fuel prices pushed up the cost of individ-ual living, agriculture, and industry. Moreover, we recently faced floodsfrom the north to the south, which affected plantations, livestock, trans-portation, and infrastructure; this has had a cost not only in monetaryterms, but also with regard to the well being of the villagers. Vientianeitself experienced its highest water level in 40 years; thanks to theproactive efforts of the Lao community-government, the private sector,individuals, and the international community from different parts ofVientiane, we were able to save the capital from flooding. We are confi-dent that the Bank and other donors will support us in restoring nor-mal living and working conditions in the regions of the Lao People’sDemocratic Republic affected by the floods

During 2007–2008, the Government has adopted and implementedmany reforms. On fiscal front, the Government has continued theimplementation of a comprehensive medium-term Public ExpenditureManagement Strengthening Program (PEMSP) since 2005, focusing onstrengthening Public Financial Management systems and building thecapacity of the Ministry of Finance and Provincial Finance Depart-ments. In addition, the new Budget Law was adopted in 2007 to

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address weaknesses in the intergovernmental fiscal framework. Otherkey reforms include centralizing the treasury, customs and tax depart-ments, developing a new fiscal transfer system, establishing greatercontrol of public finance resources, and aligning policies to the budget,as well as promulgating the new Audit Law. The implementation of thevalue-added tax has started early this month.

The financial sector remains small and dominated by banks. Thegovernment has taken measures to strengthen the banking sector andlevel the playing field. There are more new investments in the privatebanking sector, the ANZ commercial bank, which is shared by IFC andAustralian ANZ Bank, as well as Phongsavanh Bank, which is Lao’sfirst commercial bank. As a result, the commercial banking law prom-ulgated in 2007 provides for transparent, clear, and easy licensing forestablishing private banks.

Furthermore, in order to fulfill the socioeconomic developmentplans set for the period ahead, the Government has initiated othermajor reforms such as improvement of the business environment,enhanced efficiency of investment, reduction of tariffs under AFTAcommitments, and intensified preparation for WTO accession.

We highly value the support of the international community,including bilateral and multilateral organizations, and internationalfinancial institutions. The Fund and the Bank have continued to pro-vide vigorous support and assistance to the Lao People’s DemocraticRepublic in term of policy advice, infrastructure, economic programsand projects, capacity building, and technical assistance. That supporthas played a vital role in helping the Lao People’s Democratic Repub-lic achieve economic growth and sustainable development. ThePoverty Reduction Support Operations (PRSO) which, from thedonor side, led by the Bank, has remarkably supported the structuralreform to a more market-oriented economy, especially the improve-ment in the legal framework, which will form a foundation for soundand efficient development in the key sectors. We would also like totake this opportunity to urge the World Bank Group to continue theefforts in supporting the social and economic development andpoverty reduction in the poor countries of our region as the Bank doeswith other regions of the world. ODA is an important factor in sup-porting the poor countries of this region to achieve their povertyreduction agenda and MDGs.

On behalf of the Government of the Lao People’s DemocraticRepublic, I would like to express my sincere appreciation to the man-agement and the staffs of the Fund and the Bank, and the fellow mem-ber countries for supporting the Lao People’s Democratic Republic. Iwish the Annual Meetings great success.

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MALAYSIA: WAN ABDUL AZIZ WAN ABDULLAHGovernor of the Fund and the Bank

We welcome the 2008 Annual Meeting of the Boards of Governorsof the World Bank and the International Monetary Fund. We wouldlike to take this opportunity to thank the Bank and the Fund for theongoing efforts in carrying out their respective mandates to eradicatepoverty and improve financial management in member countries. Wealso would like to thank Mr. Robert Zoellick, the president of theBank for the immediate response to support member countriesaffected by the food and energy crisis. We hope the Bank will continueto be receptive to distress calls by member countries and strive to beproactive with workable and pragmatic solutions.

Global Economic Outlook

Prospects of global growth are weighed down by the prolongedfinancial turmoil originating from the United States sub-prime crisis,and the surge in inflation triggered by higher commodity prices. The2008 WEO indicates that developed economies impacted by the finan-cial crisis are bordering on recession during the second half of 2008,while emerging and developing countries which experience high infla-tion are heading for slower growth. The world economy is expected tomoderate further in 2009, unless financial institutions resolve their cap-ital and solvency problems; commodity and housing markets stabilize;and domestic demand in emerging and developing countries continueto strengthen. The current global slowdown clearly underscores theneed for concerted commitments by national and international author-ities to institute policies as well as regulatory and governance mecha-nisms to address the challenges and sustain global growth.

Malaysian Economy

Structural reforms and pragmatic policies undertaken over the pastfive decades have systematically transformed the economy into one thatis broad-based and diversified. More so, since the 1998 Asian crisis,when Malaysia defied the prevailing orthodoxy of the day and under-took radical measures to ensure the economy is more resilient and bet-ter positioned to withstand challenges from the external environment.

The Malaysian economy registered strong growth of 6.3 percent in2007, and posted higher-than-expected growth of 6.7 percent duringthe first half of 2008, despite rising inflationary pressures and externaluncertainties. Steady growth in exports, particularly for commoditiesand resource-based manufactured goods, as well as sustained private

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consumption and investment supported the robust expansion of theeconomy. On a sectoral basis, growth was led by the services sector at7.8 percent. Sturdy growth in wholesale and retail trade as well ashealthy performance in the communication, transport and storage, andfinance and insurance sub-sectors underpinned the expansion in theservices sector. The manufacturing sector recorded 6.3 percent growth,contributed mainly by domestic-oriented industries, such as transportequipment, food and construction-related activities. Growth in the agri-culture sector was 6.1 percent, supported by strong expansion in palmoil production, making Malaysia well-positioned to benefit from thecommodities boom. The Malaysian economy is projected to expand5.7 percent for 2008 and 5.4 percent in 2009.

Fiscal policy is focused on ensuring effective public spending. Thehigher fiscal deficit expected this year is due to increased commitmentsin providing social assistance, sustaining growth momentum and man-aging inflation. Nevertheless, the government remains firmly commit-ted to consolidate its financial position and reducing the budget deficitin 2009. The international reserves, remains high at US$109.7 billion,sufficient to finance 9 months of retained imports and is 4.1 times theshort-term external debt as at 30 September 2008.

In relation to monetary policy, the Central Bank has maintained astable policy interest rate since April 2006. The banking sector remainsresilient, well capitalized with relatively low loan to asset ratios inmortgage financing and little exposure to the US financial crisis. Therisk-weighted capital ratio (RWCR) is at 13 percent; and has betterasset quality with nonperforming loans ratio of 2.7 percent as at end-June 2008. Net funds raised in the capital market were higher atUS$12.3 billion. These strengths ensure the Malaysian financial systemcontinues to perform its intermediation function efficiently. Neverthe-less, the government will remain alert and vigilant in view of theincreasing uncertainties in the global financial market.

World Economic Development Issues

We note the Bank and Fund’s concerns on recent economic devel-opments and their effects on long-term growth as well as on the vulner-able groups. High oil and food prices have had serious consequenceson the world economy, especially developing countries. Rising priceshave not only contributed to inflationary pressures but have also led tosocial unrest, undermining the political stability in some countries. Instriving for solutions to solve these problems, we urge the Bank andthe Fund to be more proactive and aggressive in garnering greaterinternational cooperation to bring about stability in the commoditiesmarket.

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Of grave concern is also the prolonged duration of the financial cri-sis in the United States. Given that financial markets are highly inte-grated worldwide, the risks to international financial stability are veryreal. As the turmoil on Wall Street affects Main Street, we are monitor-ing closely the events unfolding, and are very concerned about the sec-ond round effects on the real sector. If the current financial crisis is notaddressed comprehensively, the global slowdown is bound to worsenand further impact negatively on the low income economies. We, there-fore, hope that the affected individual countries will take strong andimmediate measures to resolve the crisis quickly before the contagioneffects engulf the whole world. We also hope that the Bank will step upefforts to assist the more vulnerable among us.

Going forward, we strongly suggest the Fund to enhance its surveil-lance efforts to address the inadequacies in regulatory and governancemechanisms among member nations to ensure better market oversight,without fear or favor. Countries that have exercised greater disciplinein banking supervision, securities market regulation and corporate gov-ernance, especially in the aftermath of the Asian financial crisis, shouldnot have their economic gains eroded by the risky behavior exhibitedin the more developed markets. We, therefore, agree with the IMFManaging Director that, “a systemic crisis demands systemic solutions,”and that, “vigilance, objectivity and collaboration—on a global scale—will be needed to deal with the challenges ahead,” not the least beingthe spillover of the financial fallout into the real economy. In this con-text, we strongly urge the International Financial Institutions to focuson strengthening the international financial architecture to better iden-tify weaknesses that contribute to economic and financial vulnerabili-ties, providing early warning signals, and instituting preemptive meas-ures and policy reforms to avoid crisis situations.

Climate Change

Climate change is increasingly recognized as a challenge to sustain-able development. We concur that the impact of climate change poses ahigher risk to emerging and developing economies in achieving theirdevelopment goals compared with developed countries. Instituting miti-gation and adaptation measures in response to climate change imposesextra costs to developing countries, many of which are already grapplingwith critical poverty and growth issues. Abandoning developing coun-tries to their own devices to mitigate the effects of climate change isunjust and will not bring equity. Wealthy countries are responsible forthe bulk of past green house gas emissions but enjoy higher gains fromglobal wealth, while the low-emitting poor countries are hard hit by theconsequences of climate change. Developed countries should, therefore,

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assist developing countries with extra resources, in terms of funding, aswell as facilitating technology transfer and capacity building to helpintegrate the process of mitigation and adaptation efforts to climatechange into development projects. However, diverting existing fundsfrom poverty reduction programs into climate change initiatives will notbring equity to developing countries. Specific funds, which have beenestablished in response to the threat of climate change, should continueand developed Countries should honor their agreement under theUnited Nations Framework Convention on Climate Change(UNFCCC) to assist developing country parties that are particularlyvulnerable to the adverse effects of climate change. In this regard, wewelcome the Bank’s efforts in setting up the Strategic Framework forClimate Change as part of measures to mitigate the impact of climatechange. However, we wish to remind the Bank that the financing of cli-mate change actions must be well defined and not be taken frompoverty eradication programs or the IDA allocation.

Voice and Participation Reform

We take note of the progress in the Bank’s voice and participationreform. We would like to reiterate that the reform being undertakenshould bring about equitable and transparent representation in theBank’s governance. While we can subscribe to the parallelism betweenthe Bank and the Fund, the differences in the roles and mandates ofthese respective institutions must be taken into consideration in formu-lating the voice reform. What is appropriate for the Fund is not neces-sarily appropriate for the Bank. This is because both have distinct mis-sions. As such, using the Fund formulae for the Bank’s reform will notreflect its true governance. It is fundamental for the Bank to considervoice reform with a deep understanding of its mandate in order toensure that its specific development mandate and role are reinforced.Of paramount importance, regardless what methodology is adopted, thereform should enhance legitimacy, credibility, and accountability with-out diluting the voice of developing countries, either as a group or asindividual countries, and without imposing an extra financial burden.However, we are concerned that the option of doubling basic voteswould lead to only a marginal increase of 1.2 percentage points todeveloping and transition countries voting power. We also welcome thesuggestion that the selection of the president of the Bank be a moretransparent, merit-based process, and open to all qualified nationals ofall Member-States. We believe that the selection process must reflectthe good governance and democratic principles espoused by the Bank.

In conclusion, we would like to express our appreciation to theBoards of Governors, management and staff of the Bank and the Fund

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for their good work in promoting economic growth, poverty eradica-tion programs and financial stability in resolving the difficult chal-lenges that lie ahead.

MALTA: MICHAEL C. BONELLOGovernor of the Fund

It is an honour for me to address the Annual Meetings of the Interna-tional Monetary Fund and the World Bank. I would like to convey myappreciation to the management of the IMF and the World Bank, thegovernment of the United States of America and the authorities of Wash-ington, D.C. for the excellent arrangements made for these meetings.

I also take this opportunity to welcome New Zealand as a memberof the Multilateral Investment Guarantee Agency.

A warm welcome is extended to Dr. Boutros-Ghali on his appoint-ment as chair of the International Monetary and Finance Committeeand Ms. Izumi Kobayashi as Executive Vice President of the Multilat-eral Investment Guarantee Agency. We are certain that the BrettonWoods institutions will benefit from their experience in internationalaffairs and global finance. The past months have seen a number oforganizational changes in the IMF and the World Bank Group. In thisregard, I would like to express my appreciation for the service and ded-ication of all those who left one institution or the other, and congratu-late their successors on their new appointments.

This year’s meetings take place against a background of severe cri-sis in global financial markets and a hostile and uncertain macroeco-nomic environment which continues to be substantially undermined bydepressed conditions in housing markets and the negative impact untilrecently of a sharp upward trend in oil and commodity prices.

In many economies, and especially in the advanced economies, eco-nomic growth prospects have deteriorated further since the summer.Although the deterioration in terms of inflation might be over, pricepressures are set to remain elevated for a while as supply in commoditymarkets responds only gradually to demand.

This situation is exacerbated by the ongoing turbulence in the finan-cial markets and the persistence of global imbalances, which compli-cates the task for macroeconomic policy. Indeed, the measures thatwould seem to offer the best possibilities for the restoration of smoothlyfunctioning financial markets may not be consistent with the longer-term macroeconomic objectives of fiscal soundness and price stability.

There is no doubt that the commodity price shocks and the eco-nomic slowdown are having a more pronounced impact on highly openeconomies and developing countries. A continuation of present trends

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risks undoing the progress made in recent years towards the Millen-nium Development Goals. As higher commodity prices, lower externaldemand and the automatic stabilizers continue to weigh on the publicfinances of developing countries there is a risk that they will not beable to undertake public sector projects that are necessary to deliversustainable economic growth. Developing countries’ external reservesare also bound to experience erosion as most of them are net commod-ity importers.

In this regard, we welcome the efforts undertaken by the BrettonWoods institutions to make their financial assistance more promptlyavailable to those countries most affected by the energy and foodshocks, and to encourage the resumption of trade liberalisation talks.This should contribute to a faster recovery in economic growth world-wide. It should be emphasised, however, that the upward trend in com-modity prices also reflects structural factors. Consequently the finan-cial assistance available from the Fund and the Bank can only offertemporary respite to an adjustment process that in the medium- tolonger-term will imply an inevitable change in consumption patterns.

We believe that the IMF and the World Bank can facilitate adjust-ment in these countries, first by allowing temporary deviations frompreestablished targets in country programs, provided that end objectivesare not redefined and time frames are set for reverting to optimal policypaths as soon as this is feasible for the borrowing countries concerned.

Second, as the institution responsible for international monetarystability, the IMF must also ensure that the short-term response to thefinancial crisis is conducted without amplifying global imbalances. Thecombination of housing market shocks, elevated commodity prices andongoing financial turmoil highlights the need for a more resoluteimplementation of the policy commitments aimed at ensuring anorderly correction of these imbalances.

Third, the advice and capacity-building initiatives of the Fund andthe Bank can be formulated so as to encourage the adoption of newconsumption patterns, a more efficient use of energy resources and afaster switch to renewable sources of energy.

This, however, has to be achieved with due consideration being givennot only to the two institutions’ respective mandates and comparativeadvantage, but also bearing in mind the availability of knowledge basesof other institutions that have expertise in energy and related environ-mental issues, such as climate change. Through the combined expertisesynergies will be achieved, ensuring an efficient utilisation of resources.

This principle should also guide the activities of the IMF in low incomecountries in general, possibly the area of the Fund’s responsibilities wherethere is the greatest risk of overlap with World Bank operations. The

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recently concluded review of this aspect of the Fund’s work offers a goodopportunity to identify those areas where there might be room to rational-ize its noncore activities and focus instead on those areas where its effortscan add value.

It will also be important to ensure, however, that the Fund’s lendingpolicy as it applies to LICs takes due account of its implications interms of debt sustainability as well as the overall objectives of thebroader review that is underway with regard to the other lendinginstruments available at the Fund.

In a sense, the current international situation has rendered such abroad review timely. It has brought to the fore weaknesses in theaccounting and regulatory framework, as well as channels of financialcontagion that were previously unforeseen. Moreover, unlike the morerecent financial and currency crises, the current one does not have itsorigins in emerging market economies, but in the sophisticated finan-cial markets of the advanced economies.

At this juncture, therefore, it may be relevant to consider whetherthe Fund’s current lending framework only remains relevant to a smallsubset of members under a limited set of circumstances or whether itcould be rendered more relevant to the membership of the Fund as awhole by being endowed with the capacity to respond to a broaderrange of potential events.

We believe that the papers presented by the Fund staff provide auseful first step towards a simpler and more transparent lending frame-work. However, further reflection is required, not least on what instru-ments should be terminated and what new instruments and financingterms would be compatible with the Fund’s mandate. In this regard wenote that some of the proposals put forward, such as the idea of mak-ing financial assistance subject to collateral, do not seem to be consis-tent with the Fund’s mandate and do not really offer a workable alter-native. Furthermore the proposed ‘quiet’ facility would bring intoquestion the Fund’s efforts to enhance its institutional transparency. Inaddition we believe that further analysis should be undertaken by theFund to see how conditionality could be streamlined and tailored tothe circumstances of different countries without departing from theprinciple of uniformity of treatment and without impinging on therevolving nature of the Fund’s resources.

Recent financial market events confirm the continued importanceof the Fund’s surveillance activities and the need for an even handedand transparent approach towards its implementation. To a largeextent, the Triennial Review of bilateral surveillance correctly identi-fies those areas where there seems to be the greatest scope for modifi-cation. Here it would be pertinent to mention the need for more atten-tion to low probability events with potentially significant regional or

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global effects, the links between the financial and nonfinancial sectors,and regional and multilateral spillover effects.

We also see a role for the systematic reporting on the follow-up topast surveillance activities in Article IV Reports. For many members,particularly nonprogram countries that are not considered to be of sys-temic importance and that are not subject to some form of peer pres-sure from other institutions, IMF surveillance remains the best avail-able framework for conveying relevant policy advice and ensuring it isimplemented in a timely and meaningful manner. For this reason toowe share the view of the Managing Director that the newly launched‘ad hoc’ consultation procedure should not replace, but complementregular Article IV Missions. We also welcome the draft Statement ofSurveillance Priorities but reiterate our view that its implementationshould not result in an increase in administrative burden.

I conclude by assuring the management and staff of the Fund andthe Bank of our continued support as they continue to press aheadwith their efforts to refocus and restructure, and in their broaderefforts in promoting international financial stability and poverty reduc-tion in an increasingly global challenging environment.

MOLDOVA: MARIANA DURLEASTEANUGovernor of the Bank

It is an honor for me to participate at this important event and aprivilege to be here during the most challenging and worrisome timesfor the global economy.

Allow me to start with a few words about the recent economicdevelopments in my country.

The Moldovan Economy

Despite a series of exogenous shocks and the severe natural calami-ties experienced during the last three years, the Moldovan economyhas been growing at an average annual rate of 5 percent since 2005.Despite current challenges, the overall performance is expected toimprove in 2008:

• The GDP will increase by 7.5 percent.• The budget deficit is targeted at 0.5 percent of GDP.• Poverty will continue declining to 26 percent from 30 percent in 2006.

Also, FDI increased further in recent years: in 2008 alone, the FDIinflows increased by 2.4 times compared to 2007 and reached 15 per-cent of GDP, due to improved investment environment. Remittancesinflows continue to be strong, they exceeded 30 percent of GDP in the

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last 3 years. This proves the fact that the Moldovan economy is gettingmore and more integrated into the global economy, with the resultingpositive and also negative consequences.

The huge inflow of foreign exchange exerts significant pressure onthe Moldovan currency leading to its appreciation. During the last twoyears, the Moldovan Leu appreciated by over 25 percent against theUS dollar. In turn, this affected the competitiveness of our exports and,as a consequence, we have a continuously growing trade deficit.

Together with the National Bank, the government of Moldova hasbeen conducting a tough fight against inflation. The increase in interna-tional energy and food prices, combined with the significant inflow offoreign exchange makes this fight extremely difficult. Nevertheless, wehave managed to reduce the annual inflation rate from 16.9 percent inMay to 10.7 percent in September and hope to bring this indicator tobelow 10 percent by the end of the year.

The fiscal performance has been strong. The National Public Bud-get revenues increased from 38.6 percent of GDP in 2005 to 41.8 per-cent in 2007. Strong revenue performance allowed the government toimplement a three-fold “liberalization” initiative, which includes capitallegalization, tax amnesty, and introduction of a zero corporate tax rateon the reinvested income. The reform aims at reducing the tax burdenand creating a better business environment.

In the meantime, we are continuing public expenditure reformswith the objective to improve resource allocation for investments andincrease the efficiency and accountability of public spending. Prudentdebt management policy has allowed us to reduce the public externaldebt to GDP ratio from 22 percent in 2005 to 12 percent in 2008.

In the last eight years, the Moldovan economy registered importantachievements in all areas, but serious challenges continue to threatenthe sustainability of these achievements. To deal with these challenges,in 2008, the Moldovan Government began the implementation of theNational Development Strategy for 2008–2011, which aims at:

(i) Enhancing the competitiveness of the national economy,(ii) Development of human resource, enhancing employment and

promoting social inclusion and (iii) Regional development.

Both IMF and World Bank support the new Strategy.

Relations with the Fund

Moldova’s cooperation with the IMF has been on an ascendingtrend in the last few years. Since 2006, we have benefited from about 77 million SDR, which were used to build up Moldova’s international

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reserves, which are now covering more than 4 months of import. Inaddition, we have benefited from important technical assistance,including on strengthening tax administration, strengthening bankingsupervision, and improving national statistics.

Talking about our future cooperation, I would like to raise a fewissues. And, as a Minister of Finance, I will start with fiscal issues. Allthese years, the government of Moldova has been maintaining thebudget deficit below 0.5 percent of GDP, and we are committed to stickto a sound fiscal policy in the future.

However, given the current global challenges that will affect us aswell, we consider that a more balanced approach toward the fiscal pol-icy is needed. The current challenges call for the fiscal policy to draw afine line between balancing the need to help contain inflation, while atthe same time, ensure economic growth and continued decline inpoverty. The risks to the latter two tasks are currently on the downside.Moreover, we do have the resources (from privatization revenues) andwe do not intend to spend on consumption needs. A slight increase indeficit would allow us to finance investment projects that are geopoliti-cally important and socially targeted.

I would also like to call for more flexibility with Fund conditionalitywhich envisages privatizations of high values assets. We all know thatthese kinds of transactions have to take place at the right time, and theright time for the market might not always be the one envisaged in theprogram.

I would also like to request the support of the IMF in helping us tomanage the growing inflows of foreign exchange. I think we all agree thatthere are only a very few small open economies in the world that, likeMoldova, have strong inflows of remittances and of FDI and there is notmuch we can learn from the international experience on this. We wouldappreciate the support of the IMF staff in identifying additional financialinstruments to withdraw the excessive foreign exchange from the market.

Another issue that we would need assistance with is the creation ofa Risk Mitigation Fund to provide support to poor people in the situa-tion of food crisis, increase in energy prices, climate change, financialcrisis, etc. We would like to ask for advice on the best practices regard-ing establishing and managing such a fund.

Relations with the Bank

Regarding our cooperation with the World Bank, we have recentlycompleted the implementation of the previous country assistance strat-egy and are currently defining the new partnership program. We appre-ciate the Bank’s decision to keep the next program flexible and toincrease the share of the budget support.

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I would like to say a few more words about policy conditioned budgetsupport. Starting with 1999, we are implementing nationally ownedreform programs (PRSPs) which should also serve as a basis for IFIs sup-port. Indeed, the policy conditionalities negotiated with the World Bankdo fit the general objectives formulated in our national documents. How-ever, these days, more and more donors are coming up with policy condi-tions. Although we understand that conditionalities are needed to pushfor the implementation of unpopular reforms, having too many of themmight be counterproductive. Maybe you could unify your efforts withother donors (like EU) and have one single document that will define thepolicy conditions? This will make our life much easier in terms of manag-ing the process and implementing the commitments. Also, very often, lit-tle money is accompanied by lots of conditions.

The second issue that I would like to raise is the need to improvethe planning of resources. First, we believe that, in many cases, theBank disbursement procedures continue to take too much time. Inaddition, the disbursement of budget support is conditioned by the ful-fillment of policy commitments which are not entirely in the govern-ment’s hands (like approval by Parliament), which can cause significantdelays in disbursing the money. Both these factors are making ourexpenditure planning exercise very difficult.

Finally, I would like to stress that the IMF and WB relations withsmall countries like Moldova should be more flexible, and allow forongoing adaptation of the range of instruments, tailored to the coun-try’s needs and capable of providing effective assistance with findingthe right response to global challenges.

MYANMAR: U THAN NYEINGovernor of the Fund

I would like to express our appreciation to the host government andthe people of the United States for the hospitality extended to our del-egation. I would also like to thank the managements of the Bank andthe Fund for their excellent arrangements made for this meeting.

At this point, I wish to congratulate Mr. Zoellick and Mr. Strauss-Kahn for their able leadership. Under their leadership and guidance,the institutions have made considerable contribution to the promotionof international cooperation and development.

I would like to take this opportunity to extend my deepest sympa-thies to all the governments and peoples of the countries that hadfaced natural as well as man-created disasters during this year. As acountry that has suffered an unprecedented natural disaster, we sin-cerely can identify well the hardships and sorrows that those countrieshad to face.

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In contrast to last year, we meet here at a time when the globaleconomy remains bleak as down side risks remain. Due to high com-modity prices, natural disasters and the recent financial turmoil, theglobal economy remains weak.

There is no denying that there is still much to be done in order tohave the global economy on the path to sustainable growth. In thiscontext, collaboration and cooperation, not only between advancedcountries, but also between advanced countries and emergingeconomies, are essential for global macroeconomic stability and pros-perity. Effective, focused, and flexible macroeconomic measures maybe needed. The present issues of importance are to maintain the paceof growth, lower inflationary pressures and lessen the impact of thefinancial turbulence.

I would now like to brief the Meeting on recent developments ofthe Myanmar economy. As have been stated in previous year, we havebeen formulating and implementing short-term plans since 1992–93.2007–2008 was the second year of the Fourth Five-Year plan and wehave been able to maintain the momentum of the growth rates thathave been previously achieved. The agriculture sector is still the main-stay of the economy as its share in GDP is around 44 percent, while theindustry sector’s share is 20 percent and the services sector’s share is36 percent. It can be said that our economy is on the right path to sus-tainable growth momentum.

On the external front, the current account is in surplus, due mainlyto surplus in the trade account. The surplus can be attributable toincreases in exports and remittances from abroad. As such, our foreignexchange reserves have also risen considerably.

In the fiscal front, although the budget is still in deficit, the deficit ison a declining trend. We intended and were trying to have a balancedbudget this year. However, as we have to spend for relief, rehabilita-tion, and prevention of contagious diseases for the victims of thecyclone, we expect this year’s expenditure would be quite large. We aremaking efforts and taking necessary measures to increase revenue thatwe hope will help us offset some of the increase in expenditure.

On the monetary front, supervisory and regulatory powers of theCentral Bank have been strengthened and due diligence and care hadbeen taken to ensure that the banking sector is not used for impropertransactions, including money laundering and financing of terrorism.

The only thing that remains to be tackled is the inflation rate, whichis still relatively high but is gradually declining.

In May, the second month of this fiscal year 2008–2009, Myanmarwas struck severely by Cyclone Nargis with unprecedented force, con-centrating mainly on the region most important for agriculture, fishery,and salterns. The cyclone also destroyed and damaged an enormous

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amount of households and displaced hundreds of thousands of people.Thousands of lives were lost while thousands are still missing. Accord-ing to the Post-Nargis Joint Assessment (PONJA) report, the impact ofthe cyclone on the economy and people has been severe due in part tothe fact that it happened right after the harvest of the summer paddy.As such, the recovery needs are significant and span all sectors and theestimation of the total economic losses amounted to about 2.7 per-cent of the projected 2008 GDP. Internal and external assistances havebeen prompt, and timely assistance was rendered to us. I would like totake this opportunity to thank all the organizations that have providedus with humanitarian assistances.

Even with this unfortunate occurrence, I am very much pleased toreport to the meeting that during the first quarter of this year we havebeen able to achieve a relatively good growth rate. We are ready to putall out efforts to maintain our targets and are hopeful that we will beable to overcome whatever difficult tasks that lay ahead in order toachieve macroeconomic stability and growth. In doing so we will begiving due consideration for the development of the social sectors inorder to meet all the MDGs in time.

We have been lucky in one way, as we do not have developed capi-tal or financial markets yet and therefore we will not have directimpact of the recent financial crisis on our economy. However, in thisglobalized world where a country cannot stand alone, we understandthat there would be some indirect impact on Myanmar. We stand readyto cooperate with all the countries in the region in order to overcomewhatever challenges and risks that we might face in the future.

Myanmar has been a member of both organizations for over 56 years.We have always worked closely with these organizations and we willcontinue to do so in the future.

NEPAL: BABURAM BHATTARAIGovernor of the Bank

It is a pleasure and honor for me to address this noble gathering ofthe eminent officials of the World Bank Group and IMF as well as myfellow governors and colleagues as a Finance Minister and Governor ofthe newly born Federal Democratic Republic of Nepal. This annualglobal assembly of development professionals and practitioners pro-vides an appropriate platform that can best be utilized for discussingand deciding on how we can wipe out the curse of absolute povertyfrom the face of the earth and create a decent, egalitarian, peaceful,and prosperous society in all parts of the world.

Let me briefly explain the recent political development in Nepal.We have fought and won the political war—a war to emancipate the

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people of Nepal from all forms of feudal exploitations. Feudal monar-chy that represented stagnation and underdevelopment has come to anend. People of Nepal have become fully sovereign. We have achievedthis through collective efforts and consensus of all political parties. Forthe first time in Nepal’s history, people’s representatives are going towrite the new constitution. After a decade of peoples’ war, the peaceprocess now is moving in the right direction and we will collectivelysteer this to success.

Internal conflict is now over and the country is heading towardslasting peace. The steps that we have traversed so far starting from thesigning of Comprehensive Peace Accord between the CommunistParty of Nepal (Maoist) and the then government in November 2006to the formation of the present coalition government headed by theMaoist party following the Constituent Assembly Election mean thatpolitical instability will no longer remain as a problem. The writing ofnew constitution of the nation within two years will complete the polit-ical transition of establishing People’s Republic of Nepal.

While we have made progress on the political front, we now have tofight the economic war—a war against economic stagnation and depriva-tion of masses from even the basic necessities of life. This is the challengethat we have to face head on. And we must aim to take big leaps. It istime that we take high ambitions and put all-out efforts to achieve them.

During the past 50 years of planning, the growth rate of theNepalese economy has been very low, or barely sufficient to keep pacewith the population growth rate. The rate of savings is just about 11.5percent of GDP, which means high dependence on foreign assistanceto meet the investment requirement for the targeted rate of growth.We realize that poor governance has been one of the fundamentalconstraints for Nepal’s rapid development. We have focused ourefforts on improving governance, minimizing leakages in expendituresand properly targeting public expenditures so that we get the most outof government’s investments.

Nepal is now in a phase of economic transition from feudalism toindustrial capitalism, with appropriate blend of social welfare. And wewant to complete this transition as fast as possible. In this process, wewill have to demolish old growth inhibiting rules, structures and institu-tions and initiate new growth promoting strategies wherein each indi-vidual will be able to realize his/her production potentials. Our vision isto build a ‘New Nepal’ through rapid socio-economic transformation.We have set out the economic agenda with a goal of achieving double-digit economic growth rate in the next two years with, of course, properdistribution. For this, we have opted for a three-pronged strategy: pro-motion of private sector investment in growth-propelling sectors, pub-lic-private partnership in large infrastructure projects and cooperatives

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in rural areas in agriculture, agro-processing, marketing activities andin operating public distribution system.

Our development priority is on water resources and hydropower, andagriculture and tourism as these are the areas in which Nepal has com-parative and competitive advantage. We would be creating investment-friendly environment for foreign direct investment in these areas. Forthis, we would need rapid expansion of physical infrastructures andaccelerated investments in education and health.

As we are embarking upon a challenging journey of rapid economicgrowth focusing on improving the lives of millions of poor people, therising commodity prices have made our development efforts costlier.Commodity prices have also made poor people’s lives even more miser-able. Just when the world community was tackling the rising commodityprices, there is now the other crisis propelled primarily by falling assetprices. The exact magnitude of current financial crisis is not yet knownas each day banks, one after the other in advanced countries, are report-ing financial distress. We are not quite sure where this all will lead to,but the world economic outlook looks bleak for the foreseeable future.I think we have all gathered here at the right time to debate on theseissues and I hope that, collectively, we will find proper solutions.

I urge that when advanced countries focus on correcting theirdomestic economic woes, they should not lose sight of the need ofunder-developed and developing countries.

I take this opportunity to express our sincere thanks to all thosewho have extended support to our peace process and in rebuildingNepal. I would also like to thank the Bank and the Fund for theirrenewed commitment to help achieve our vision of New Nepal.

Before I close, I would like to thank the government and the peopleof the United States for the hospitality. I also thank the Bank and theFund for the excellent arrangements made for the Annual Meetings. Iwish the Annual Meetings a grand success and thank you all for yourgracious presence.

NETHERLANDS: RUUD TREFFERSTemporary Alternate Governor of the Fund and the Bank

We meet in exceptionally turbulent times, affecting all our countriesone way or the other. In recent weeks we have seen that the currentmultilateral system has proven unable to offer a sufficient response tothe complex combination of the financial, climate, food and energycrises. The world is globalized in terms of risks and opportunities, buthardly in terms of effectively responding to global crises. If every coun-try works on a solution only for its own problems, the most vulnerablecountries and groups draw the shortest draw.

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We must change that, and ensure that the current response to thecrises contributes to a structural change in the way we do business at themultilateral level. First, I would like to focus on the role of the Interna-tional Monetary Fund as guardian of international financial stability.Subsequently I will speak about the challenges for the World Bank.

Strengthening the Role of the IMF as Guardian of International Financial Stability

The Fund can play an important role to improve the internationalfinancial architecture—a role that should be complementary to that ofother international financial fora, such as the Financial Stability Forumand the Bank of International Settlements. A strengthened financialstability role of the IMF needs to be reflected in all its tasks, includingsurveillance, its lending framework and in its Technical Assistance.

Enhancing Surveillance

The Fund has a unique position within the international financialarchitecture. Not only does it have an almost universal membership, italso is in active dialogue with member states through its bilateral sur-veillance. This dialogue goes further than just offering local authoritiesfeedback on their policies. Indeed, the Fund’s advisory role is firmlyanchored in its mandate to survey macrofinancial conditions and poli-cies in member states with the purpose to foster open economic rela-tions and prevent negative spillover effects. This close relationship withso many countries makes the IMF a potentially great source of knowl-edge on issues of local, regional and global financial stability. In orderto live up to this potential, surveillance should further be tailored toassessing risks and vulnerabilities in financial sectors and markets froma macro perspective. Although the Fund has made important strides inthis respect, I think there is still room for improvement.

First, the Fund can sharpen its focus on financial sector issues inbilateral surveillance and address them more systematically. Suchenhanced focus requires that the IMF has sufficient financial expertise.Moreover, the statement on surveillance priorities is a step toward amore systematic approach in surveillance. A further step could includedeveloping a framework or “checklist” of macro risks and sector spe-cific vulnerabilities that should be assessed. I see this as a means toquickly incorporate lessons learned through the surveillance of coun-tries and through multilateral surveillance. Moreover, a more system-atic approach in surveillance can also support the implementation ofpolicy advice of other relevant bodies, such as the FSF, and providefeedback on the adequacy of these policy responses.

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But stepping up financial sector surveillance also requires the commit-ment from member states. The current credit crisis shows how disequilib-ria within and between large economies can threaten world-wide finan-cial stability. Therefore, all systemically important economies shouldreach out to the Fund and sign up for an FSAP or an FSAP update.

Second, the Fund’s multilateral surveillance should be aimed atidentifying cross-border financial linkages and risks. The current crisishas shown how closely international financial markets and institutionsare connected. Even though many of us have pointed to the risks ofhighly leveraged and complex financial products, none of us had fore-seen the severity of the chain reactions that followed, when defaults onUS subprime mortgages started to rise. We should not have the illusionthat the next crisis can be predicted by the IMF or any other organisa-tion, but we can strive to develop “early warning systems” that can atleast mitigate the impact of shocks. The Fund can enhance our under-standing how financial shocks ripple though the financial system andhow this system interacts with the real economy.

Third, I think that financial stability considerations should also beat the forefront when the IMF is analyzing the sustainability of a coun-try’s exchange rate. Clearly, the related global imbalances have been—and continue to be—a factor in the current financial turmoil. The 2007surveillance Decision has been an important step in redefining theFunds exchange rate surveillance and I support a firm implementationof this Decision. However, I think that from a financial stability per-spective there is a difference between a potentially overvalued andundervalued exchange rate. History has shown how a sudden down-ward correction of the exchange rate, sometimes triggered by specula-tive attacks, can be the cause of a deep rooted economic crisis. Evenwhen discounting for large methodological problems in assessingexchange rates, I think that the IMF should be very careful in itsapproach toward restoring equilibrium in a country with an overvaluedexchange rate, both in policy advice and in communication.

Adapting the Fund Lending Framework

The Fund is currently reviewing its lending framework. Also in thisarea there might be room for better compatibility with financial stabil-ity challenges. The world-wide credit crisis reflects the vast size ofcross-border capital flows and also reminds us of the importance ofinvestor confidence, not only towards individual financial institutions,but also towards specific countries that for example have relativelylarge financial sectors.

Adapting the Fund’s lending framework to these challenges is noteasy. In a world with large capital flows, confidence could be under-

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pinned by the possibility for the Fund to extend large amounts offinancial support. This might call for an increase in access limits orthe development of an insurance type of instrument. However, Fundsupport only works if it addresses the root causes of a crisis. Thisrequires adequate conditionality, in order to signal a credible adjust-ment of economic policies. But any instrument that quickly disburseslarge financial packages erodes the Fund’s possibility to captureappropriate policy responses. It will be a challenge to find the rightbalance between conditionality and access to financing. In theregard, I think the IMF should also further exploit its role as finan-cial catalyst.

Technical Assistance

This brings me to the third task of the Fund, technical assistance. Inthe midst of a credit crisis, it is easy to forget the important upsides ofinternational capital flows for economic growth and prosperity. Iremain fully convinced of the merits of cross-border financing. There-fore, we should help developing countries in opening-up to outsideinvestment. Together with the World Bank, the IMF can use its techni-cal assistance toolkit to help build institutions that are strong enoughto absorb the roars of international capital markets, while benefitingfrom foreign investment.

World Bank: Playing the Anti-Cyclical Role

The World Bank and other MDBs must now act to mitigate therisks of the current crises, and support the developing countries to grabavailable opportunities, actually helping them to sustain their growth. Iappreciate the initiatives taken by President Zoellick in this regard.Over the last years, the World Bank and other MDBs have createdlarge reserves. These reserves now can and should be used for extrafinancing and further mobilisation of private money flows to counter-cycle negative consequences for poor and vulnerable countries. And,even more than money, these countries need knowledge and top-of-the-bill, on-time advice. To deliver that, a bank has to be close to itsclients. It’s the local response of the World Bank that will make the dif-ference and enable us to think out of the box.

World Bank: Linking Strategy to Reform on the Ground

We strongly support the six strategic themes chosen as the WorldBank’s priorities. Now, we have to act on a translation of these priori-ties into the day-to-day operations of the Bank. How will the Bank

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change its procedures to be better able to address the challenges linkedto each of the priorities?

Two examples. We definitely subscribe to the view of presidentZoellick, that the Bank has an essential role to play in fragile states. Hisrecent speech in Geneva on this topic contains a number of very inter-esting thoughts on this issue. But how is the Bank going to change itsprocedures in such a way that it will be able to react faster to the urgentneeds of fragile states in a post-conflict situation, such as for exampleLiberia? Some progress has been made, but especially in the case offragile states, the Bank needs to be able to act firmly and swiftly inorder to help materialize the peace dividend, and we, as donors, shouldsupport the Bank in adapting its procedures and make that possible.

Another example lies within the priority area Global Public Goods.The Netherlands welcomes the approval of the new Climate Invest-ment Funds and the Strategic Framework on Climate Change andDevelopment as positive first steps towards a more sustained multi-lateral response, within the framework of the UNFCCC. Now we needto move from theory to practice and to put both funds and the Strate-gic Framework into concrete action on the ground. Combating climatechange and fostering development require an integrated approach inCountry Assistance Strategies, and in their implementation.

World Bank: Enhancing the Voice and Participation of DTCs in the World Bank Group

As requested by the Development Committee during its recentSpring meeting, an initial reform package on Voice & Participation hasbeen prepared by Management, and agreed upon yesterday by theDevelopment Committee. The Netherlands welcomes the decision toadd an additional African chair to the Board and to double the basicvotes, as a first step. Moreover, I am pleased with our agreement thatall shareholders will uphold the principles of a merit-based, open andtransparent process for selecting future Presidents of the World Bank.We simply want the best woman, or perhaps even a man for that job,irrespective of her or his passport or political affiliation.

Now, we must keep the momentum and move towards a significantrealignment of shares, reflecting the global mandate of the WBG: wedon’t need static blocs. Shares and voting weights should therefore bedetermined by the relative weight of a country’s economy, and also bya shareholder’s use of the institution, be it through IDA donations andtrust fund support or through the procurement of the WBG’s financialand advisory services. That is only fair.

Accountability and effectiveness are closely intertwined. I amtherefore pleased to see that the document on voice and participation

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pays sufficient attention to improving effectiveness through strength-ening internal governance and accelerating decentralisation.

NEW ZEALAND: JOHN WHITEHEADGovernor of the Bank

Developments in the Global Economy and Financial Markets and Implications for New Zealand

The Annual Meetings this year are taking place at a very challeng-ing time for all member countries. The implications for economic activ-ity and global growth from the current financial market turmoil andhigh commodity prices are serious—addressing these implications willrequire the concerted focus of our governments, with support from theFund and the Bank as appropriate.

The New Zealand economy, like a number of others, is currentlyfacing imbalances in the areas of inflation, household debt, houseprices, and the current account. As a result of drought, higher consumerprices, and previous monetary tightening, output declined in the firsttwo quarters of 2008 and is expected to have declined marginally in theSeptember quarter.

Like others, the New Zealand economy is not immune to interna-tional developments, which we are expecting to be transmitted to NewZealand through the cost and availability of credit, business, and con-sumer confidence, lower terms of trade, and exchange rates.

There are signs the economy is beginning to turn and growth isforecast to be positive in the final quarter of 2008 thanks to the recov-ery from the drought and tax cuts, but will remain subdued throughoutmost of 2009 as negative influences continue to affect the economy.

Maintaining Momentum of Reforms

New Zealand is pleased to see concrete steps in the last few yearstaken by both the Fund and the Bank, which are aimed at enhancingtheir effectiveness, legitimacy, and credibility. In particular, NewZealand welcomes the Fund’s quota and voice reform package, whichincludes a built-in regular review mechanism, the Fund’s efforts toensure that it will operate on a financially sustainable footing, and itsongoing efforts to reform its internal governance. In terms of the Bank,we have been supportive of its efforts to renew its strategic directionand we look forward to agreement on a comprehensive package onvoice and participation reforms in the near future.

Reform is an ongoing and long-term process at both institutionsand it is important for all members to ensure that the momentum to

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continue, firstly for proposed reform on different aspects to be pro-gressed, and secondly for agreed proposals to be implemented.

World Bank Voice and Participation

New Zealand fully supported the Bank’s commitment to develop acomprehensive package on voice and participation reforms for consid-eration by Governors at this meeting.

The eventual package needs to be comprehensive, achieve its aim ofincreasing voice and participation, be based on an inclusive and trans-parent process, and take into account the distinct nature of the Bank’sdevelopment mandate.

We would like to specifically note that we see comprehensiveness asmeaning that the package covers more than just shareholding issues,but includes aspects such as the merit-based appointment of the Presi-dent, strengthening Board effectiveness and efficiency, and enhancingvoice and participation in the Bank’s operational work. New Zealandhas supported and continues to support an open and transparentprocess for the appointment of senior positions at International Finan-cial Institutions, which should be open to candidates from all regions ofthe world based on merit.

The different components of an eventual package are important inensuring that all members continue to have a Bank that will be able todeliver effectively on its mandate. We look forward to further discus-sion on the package in the coming months, with the hope that agree-ment will be reached on its key elements along the agreed timeline.

IMF Principles for Sovereign Wealth Funds

New Zealand is pleased with the consultation, effort and thoughtthat has gone into the development of the Santiago Principles.

We believe that the practices and principles covered in the docu-ment will help ensure that Sovereign Wealth Funds (SWFs) have theappropriate legal framework, objectives, and coordination with macro-economic policies; institutional framework and governance structure;and investment and risk management framework.

IFIs Work on Food and Fuel Prices

New Zealand appreciates the extensive analytical work that hasbeen undertaken by the Bank and the Fund on the food and fuel priceincreases. We are supportive the policy options put together to assistcountries facing particular challenges as a result of price inflation. Webelieve it would be extremely valuable if various regional departments

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could undertake work more specifically tailored to their particularregion, taking the regional and country-based contexts into account.

We also support the financial measures being offered by the Bankand Fund to those countries most affected by the price increases.

Development Effectiveness

New Zealand welcomes the Accra Agenda for Action and encour-ages the Bank to work closely with donor and country partners toimplement it. Addressing these aid effectiveness challenges will alsorequire an internal focus on culture, incentives, systems, and practices.

New Zealand acknowledges the encouraging progress in the Bank’swork on development effectiveness, as noted by the 2008 AnnualReview of Development Effectiveness (ARDE). The use of impactevaluations and the results management system for IDA are promisingdevelopments in corporate-level monitoring and evaluation.

We note that project performance for low-income countries (LICs)continues to show a rising disconnect between the Bank’s optimisticself-ratings of project performance and IEG’s final ratings of develop-ment outcomes. It is highly important to achieve the necessaryimprovements in the Bank performance management system includingstrengthened results frameworks with robust baseline data, for realisticassessments of development results.

The challenge for the Bank to improve performance management ispartly one of changing the incentives and culture of staff towards moreaccurate reporting. This is common to most development agencies. Thepersistence of incentives for staff to work on the preparation of proj-ects rather than implementing them is a well-recognized major issue.This supply-driven culture in project preparation tends to stimulateover-optimism in assessing the likely outcome at the start of a projectin order to get it approved. As shown by the 2008 ARDE, often onlyafter the project has been completed, are more realistic assessmentstaken.

World Bank Engagement in the Pacific

New Zealand welcomes the increasing World Bank engagement inthe Pacific. We anticipate the growing regional presence will facilitatebetter coordination and cooperation efforts for Pacific governments. Inexpanding its outreach it is important that the Bank draws fully on theresources available through other donors’ existing relationships withdeveloping member countries, and adds value to these rather thanattempting to replicate them. The challenge is to ensure that donorswork collectively with each other and our Pacific partners to improve

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efficiency, responsiveness, and accountability of economic advice andprogram delivery.

In this respect, we urge the Bank to expedite further harmonizationefforts in the Pacific by finalizing plans for shared country offices withthe ADB in Samoa, the Solomon Islands, and Tonga. We welcome con-firmation of the decision to co-locate two experts in the IMF’s regionaltechnical assistance facility, PFTAC, in Suva, and look forward to see-ing their impact on strengthened efforts to improve SoE managementand the follow-up of public financial management surveys across theregion.

New Zealand is pleased to be part of the Pacific Regional Infra-structure Facility (PRIF) and we look forward to the upcoming designand prioritization process in phase one. Our interest is particularly inthe potential for improved technical assistance, donor coordination,and a greater emphasis on infrastructure maintenance.

Global Public Goods

New Zealand stresses the need to identify the Bank’s comparativeadvantage in global public goods (GPGs), especially given the Bank’sincreasing array of global programs, notably in climate change. Goingforward it will be necessary for the Bank to strengthen incentives todeliver GPGs at the country level. This could include the provision ofclearer organizational arrangements to best select and link responsesat country, regional, and global levels; enhance the delivery of knowl-edge to country teams working on GPGs; and ensure that the perspec-tives of developing countries are effectively connected with globalresponses. It will be important to draw on the existing knowledge of alldevelopment partners in such situations.

Where GPGs are in conflict with a country’s expressed interest,questions of cost burden and ownership need to be fully considered,while carefully avoiding conditionality- and supply-driven approaches(especially given the substantial increase in GPG trust funds). NewZealand encourages the development of global-level frameworks,which provide incentives to countries including financial mechanismsfor incremental costs, as a positive response. We look forward to moreconcrete recommendations on how to address this challenge, and assur-ances that this issue will be seriously considered.

World Bank New Zealand-Pacific Remittance Project

During the past year a number of New Zealand government agen-cies, in conjunction with the World Bank, have funded and worked onthe New Zealand-Pacific Remittance Project, aimed at reducing the

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transactional costs of remittances in the Pacific region. These costs canbe anywhere from 15 percent to 25 percent of the value of the remit-tance and the World Bank has identified that remittances to the Pacificregion have tripled over the past decade to reach US$425 million.

As an outcome of this project, the government recently approved anew regulation under the Financial Transactions Reporting Act toencourage the development of a more competitive remittance market,with greater transparency, a wider use of formal channels and betterinformed consumers. This should result in a significant reduction in thecosts of remitting money and represents a very practical way to con-tribute to the well-being and quality of family life in the Pacific.

PAKISTAN: SHAUKAT TARINGovernor of the Bank

We are meeting at perhaps the most tumultuous times the world iswitnessing since the establishment of Bretton Woods Institutions. Forthe last more than one year we have seen a series of successive shocksthat were unleashed in the wake of sub-prime crisis. Oil and foodprices shocks have affected the developing countries most profoundly,and we are still reeling under their aftermath. In the days ahead, thesituation is likely to be compounded by the second round effects of theon-going financial crisis.

In the case of Pakistan, we are not merely facing the economic con-sequences of the global crises but are playing the role of a frontlinestate against the war on terror. If on the one hand, more than 100,000of our troops are battling a ferocious militancy, on other, our peoples inthe main cities and federal capital are becoming victims of the suicidebombings. The loss of lives and economic cost imposed by this war arenow rising to an unbearable level. There is a very negligible portion ofthese costs that is defrayed by our partners.

We also had to face the challenge of democratic revival as well. Ourpeople gave a resounding verdict in favor of democracy as the principalinstrument that would rid the country not only of militancy but of theireconomic deprivation also. The battle of democracy has been won aftergreat sacrifices, the most notable is that of our great leader ShaheedMohtarma Benazir Bhutto, who bravely sacrificed her life but has kin-dled a light that would show us the way in dark alleys of war on terror.But unfortunately, the elected leaders have inherited an economy thatwas encumbered by the burden of subsidies accumulated due to unan-ticipated shocks of oil and food prices.

I take pride in stating that despite the gravity of the challenges, thedemocratic government has not abandoned country’s resolve to moveforward and to do things right both in standing up to the call of fighting

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the militancy as well as in preserving the market economy that we haveevolved during the last two decades. We may be amongst the few coun-tries who have successfully adjusted to the unprecedented increases inpetroleum and electricity prices by eliminating nearly all the subsidies.The pain inherent in this adjustment can be gauged by the fact thatthese prices have nearly doubled or will be doubled at the close of theadjustment. We have also successfully met the challenges of food short-ages both through timely imports as well as by aligning domestic agri-culture prices with international prices. On the monetary side, we arefighting rising inflation by interest rates adjustment and by containingthe monetary growth. We have also set the goal to adhere to a zero netgovernment borrowings target from the central bank.

However, these measures have not been accompanied by the sup-port from our development partners that were needed to fully meetthe needs of the economy. Even as the measures have helped containthe rapidly deteriorating macroeconomic framework the challengesremain on the horizon, and for this reason are equally determined torise to their needs.

It should be understandable that adjusting to these shocks was apainful process, particularly for the most vulnerable segments of ourpopulation. To mitigate their sufferings we are launching a major pro-gram of cash transfers to the poorest households in the country. We areconscious of the challenges that are typically faced in targeting thisgroup, and for this reason we will seek Bank’s assistance from its vastexperience in this field.

Although the multiple crises have been difficult to face, they havegiven us an opportunity to undertake a soul-searching exercise andidentify the vulnerabilities that characterized our economy and society.Accordingly, we are drawing fundamental programs to further restruc-ture our economy and strengthen our institutions of governance so thatwe are better prepared to face such challenges in the future.

Besides ensuring macroeconomic stability, our new program will beprimarily aimed at poverty reduction. For this purpose, apart from cashtransfers to the poorest households, we will provide health insurance,skills development opportunity for at least one member of the family,and a suitable development support that will create temporary employ-ment opportunities for each union council, which is the smallest admin-istrative unit. This program will be supported by initiatives to revitalizeagriculture, make the industry competitive, meet the growing energyneeds, raise capital and finance for development, remove infrastructurebottlenecks through public-private partnership and reinvigorate theinstitutions of governance so that a just and fair administrative machin-ery serves as the anchor for the implementation of a vigorous andambitious economic program.

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Mr. Chairman, we look up to our development partnership, espe-cially the IFIs, to help us lead this program, through both their advisoryand financial assistance. We would also recommend that our bilateralpartners also play their role within the larger framework that willevolve through active consultation with the IFIs.

In closing, let me acknowledge the effective role both IMF and WorldBank are playing in the economic development of Pakistan.We are look-ing forward to even stronger ties in the coming days so that Pakistan suc-cessfully meets the challenges posed by multiple global crises.

PHILIPPINES: MARGARITO B. TEVESGovernor of the Bank

This year’s meeting is taking place amidst tumultuous economicevents. And our intensified collective and cooperative efforts are nec-essary to overcome these challenges that threaten to reverse the gainswe have achieved in improving the levels of income and social welfareand reducing poverty incidence.

Such stormy horizon imposes a sense of urgency and significance inthe gathering of international financial leaders here in Washington. Weneed a strong and coordinated action to steer and mobilize resourcesto meaningfully respond to these exceptional challenges. The exchangeof views facilitated among distinguished financial managers andexperts should enlighten and guide each of us in pursuing effectivemeasures to combat financial and economic contagion.

The IMF is well positioned to forge a multilateral response to arrestthe deteriorating atmosphere and restore order and discipline in theglobal financial system. Likewise, enhancement of the Fund’s financingfacilities and easier access thereof are necessary to better assist devel-oping economies insulate themselves against the adverse effects of thefinancial turmoil. We welcome a comprehensive review of the Fund’sfinancial instruments including reforming its Exogenous Shocks Facil-ity to cater more effectively to the needs of its developing membersunder the current volatile environment. A more proactive surveillanceof economic developments in developed economies and deeper analy-sis of policy and regulatory interventions would be most useful in set-ting appropriate macroeconomic and financial responses.

The external shocks from the global financial crisis and economicslowdown likewise pose daunting challenges to the World Bank. Whileefforts to preserve its strong capital position and financial standingshould be strongly pursued, the Bank needs to design more innovativeand quick-response products to sharpen its developmental role for itsdeveloping constituents. The pricing reforms and various innovativeproducts earlier introduced by the Bank are significant steps to address

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the demand for more cost efficient ways of doing business with thisinstitution. Such initiatives serve as incentive for the Bank’s developingmembers in addressing the growing and more complex financial andeconomic risks created by the current hostile global conditions.

Although global commodity prices have started to ease, current lev-els remain historically high. Food supply and price levels, particularlythose of rice, continue to be a priority concern for most developingcountries given its immediate impact on the poor. Prospects for abenign oil price environment, including those for other critical com-modities, still do not appear firm. This uncertainty in the supply andprice of basic commodities imposes a new responsibility for the Bankin view of its mandate to reduce poverty. We therefore fully appreciatethe endorsement of the World Bank’s Group’s “New Deal on GlobalFood Policy” and the establishment of the new $1.2 billion rapidfinancing facility. As a middle-income country, we are pleased to havemade an indirect contribution to the plight of the low-income countriesthrough the use of the IBRD surplus in the setting up of a Trust Fundfor the poorest and most vulnerable countries as part of the “GlobalFood Crisis Response Program.” Acknowledging the funding limitationof the Program, strong coordination with other development partnersand within the World Bank Group is essential to mobilize greaterresources and expand the reach of the Program. We also call on theInternational Finance Corporation to generate greater and moreenthusiasm for private sector engagement in agriculture and infrastruc-ture development to achieve our multiple development priorities foreconomic expansion and competitiveness.

We likewise reiterate our strong advocacy for the Bank’s active col-laboration and faster harmonization process with other developmentparties converging towards the adoption of country systems. Thebroader adoption of country systems would promote country owner-ship and streamline processing and implementation of foreign-assisteddevelopment projects.

The Bank should demonstrate its leadership in adopting good gov-ernance principles. Accelerating the Reform in Voice and Participationin the Bank would be a solid manifestation of this commitment. Withan agreement reached on the Quota and Voice Reform, we hope thatthe Bank can show progress soon, in many aspects of the reforms onVoice and Participation, including their timely implementation. Wefully subscribe that the developing countries’ need to be given votingstrength factoring into the equation such variable as poverty.

The tasks at hand are daunting but not insurmountable. But theepisodes of previous crisis point to the important lesson for all of us towork closely together to successfully navigate through this turbulent jour-ney and return to a path of robust growth and significantly reduce poverty.

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POLAND: PAWEL SAMECKIGovernor of the Bank

It is a great honor for me to participate in the Annual Meetings ofthe World Bank and International Monetary Fund. It is extremelyimportant to gather here and I am grateful to the staff of the Bank andthe Fund for their efforts in organizing this event.

When we met last year, we reflected on potential risks linked to theturmoil on financial markets. Today we know that most of these riskshave turned, unfortunately, into real problems that we need to face. Weare observing diminishing confidence to and within the banking sector,massive support actions by central banks and governments, as well asdecreasing growth rates across the developed world.

Developing economies have been rather resilient, but they are stillfaced with the huge challenges of food and oil prices. Inflation hasreached double-digit rates in many parts of the world. Tighter creditand liquidity conditions are expected to limit investments. These prob-lems complicate significantly the task of monetary authorities world-wide. They may also slow the pace of growth that has helped in liftingmany people out of poverty in the last decade. In brief, we have justentered a global uncertainty, and although the roots of the problems liein the policies and behavior of financial entities in certain countries, theglobal institutions should help put things back to order.

The severity of the current financial turmoil showed that there wasno clear warning system that could have identified symptoms of forth-coming turbulences and help mitigate negative spillovers. Such a sys-tem would require effective regulations for financial sector and coop-eration between national financial supervisors. At the same time, thedepth of the crisis provoked an intensive debate on how far thenational institutions can go with using taxpayer’s money for reformingcountry financial systems. Nevertheless, the uncertainty surroundingthe potential economic consequences calls for rethinking the role ofthe global institutions. The question arises how challenges linked to theinternational consequences of internal financial crises should be moni-tored and analyzed.

There is a crucial role to play for the International Monetary Fund inrestoring confidence and proper functioning of the world financial mar-kets. It is important to underline the Fund’s role that is to be based oneffective surveillance. This should cover fundamental macroeconomiclinkages between the financial sector and the real economy. The IMF’scooperation with the Financial Stability Forum should result in astrengthened prudential financial regulatory framework, implementedand adhered to across the whole membership. Against this backdrop weconsider the Financial Sector Assessment Programs (FSAP) to be one of

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the key elements in the Fund’s toolbox, which provides the governmentswith clear guidance on preventing and coping with the crisis. As a sign ofthe importance of the FSAPs we note that the FSAP-recommendedenhancement of the cross-border cooperation between the nationalfinancial regulators has been thoroughly tested in the recent days.

The Polish financial system still appears to be highly resilient to theturmoil, with no evidence of contagion effects. Nevertheless, there arerisks that the slowdown in the euro area will negatively impact the nearterm growth prospects of all Central and Eastern European countries.

Unfortunately, the problems of the financial markets have coincidedwith a global rise in oil and food prices, as well as with the need to coun-teract global warming. We highly appreciate the World Bank Group’swork on global public goods, and, in particular, on reconciling develop-ment and climate issues. We welcome the country-led, knowledge-based, and results-oriented approach presented in the Bank’s StrategicFramework. We share the opinion that taking steps against climatechange should not compromise progress towards achieving the Millen-nium Development Goals. It should also take into account the specificsituation of both developed and developing countries that heavilydepend on carbon-intensive energy sector.

Global development issues are broadly related to the global gover-nance. We welcome the process of the reform at the Bretton Woodsinstitutions, with its objective to enhance the voice and representationof developing and transition countries. We also note with satisfactionthe ongoing IMF governance reform, as well as the review of theFund’s lending framework, which aim at reducing overlaps and makingfinancial instruments more coherent.

Thanking once again the staff of both the Bank and the Fund fortheir work, I believe that these Annual Meetings will conclude in pro-viding guidelines necessary to find appropriate solutions to the eco-nomic challenges we currently face.

RUSSIAN FEDERATION: ALEKSEI L. KUDRINGovernor of the Fund and the Bank

Our Annual Meetings are taking place during an unprecedentedcrisis, which has shaken the very foundations of the modern financialsystem. The problems in the U.S. financial sector, stemming from theflaws in the regulation of financial institutions, caused a chain reactionaround the world. The simultaneous movement of markets in variousregions, regardless of the countries’ macroeconomic positions, providesclear evidence of high interconnection of the financial systems andeconomies all over the world. It is obvious that the crisis can beresolved only through coordinated international efforts. Decisions

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taken without due consideration of the consequences for other coun-tries could make the situation worse.

The coordinated actions to lower interest rates undertaken by themain central banks on October 8 showed an example of internationalcooperation, but they were not sufficient to calm the markets. The situ-ation required a more systemic and comprehensive response. Furthersteps agreed over the past few days, such as the commitment by the G-7 countries to provide support to the financial systems in accordancewith the agreed action plan and the agreement among 15 euro-areacountries to act in coordinated manner provide a chance to startrestoring confidence in the global financial system.

The recent actions of the Russian authorities were broadly similarto the approach finally adopted by the G-7 and the euro area countries.The Russian Central Bank and the Ministry of Finance have allocatedsignificant funds to maintain the liquidity of the banking system. Inaddition, the Central Bank has lowered the reserve requirements by asubstantial margin. The parliament has significantly raised the level ofdeposit guarantees provided, introduced partial state guarantees forinter-bank credits, and allowed the use of public funds for the recapital-ization of commercial banks. Because of the difficulties being experi-enced by Russian banks and corporations with gaining access to exter-nal financing, the government has made a decision to provide publiccredits for refinancing private external liabilities. It should be under-lined that the level of foreign exchange reserves exceeds the totalamount of Russia’s external liabilities (private and public), whichmeans we can be confident in the country’s financial stability.

One positive aspect for the global economy is the likelihood thatthe steady growth in domestic demand in major emerging markets willcontinue. The financial institutions of these countries have not accumu-lated troubled assets, but their banks and equity markets neverthelessturned out to be vulnerable because of the limited access to externalfinancing and the withdrawal of funds by international investors on ascale reminiscent of the 1997–1998 crisis. This time, however, theemerging markets are better prepared for this sort of developments asa result of their adherence to responsible macroeconomic policies andthe accumulation of significant foreign exchange reserves. Further-more, the relatively low dependence of consumer demand in thesecountries on credit means that one can expect this consumer demandto be more resilient to volatility in the financial markets.

Despite the fact that the financial crisis is at the center of our atten-tion, we must not neglect the problems of low-income countries, forwhich the steep rise in fuel and food prices is a more significant factorcontributing to the worsening of their economic situation. Many coun-tries that import food and fuel have experienced a serious deterioration

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in their balance of payments as well as a decline in reserves, while themajority of low-income countries are now facing higher inflation. Therise in import spending threatens the gains in reducing poverty thathave been made in recent years. Low-income commodity-importingcountries need help from the international community to ease theiradjustment to the new situation. We, therefore, welcome the attentionthat the Fund is giving to low-income countries, especially those thatfind themselves in a difficult situation owing to a drastic deteriorationof the terms of trade. In particular, the reform of the Exogenous ShocksFacility (ESF), which streamlines the conditions for access to the Fund’sresources for countries that have experienced such shocks, is a timelystep. We also welcome the concrete actions taken by the World Bankwithin the framework of the $1.2 billion Rapid Financing Facility toprovide assistance to low-income countries that have been hit by higherfuel and food prices.

One thing is clear to us: No matter how the current financial crisisends, it is obvious that the world will be a different place afterwards.There needs to be a complete reassessment of the role of financial mar-kets and approaches to their regulation and to international coopera-tion in this realm. It is already clear now that the ideology of deregula-tion of the financial sector as a means of increasing its effectivenessreached a dead-end. Approaches to liberalization of capital transac-tions also need to be re-examined in view of the destabilizing effectthat emerging market economies may experience as a result of large-scale capital inflows as well as similarly massive outflows for reasonsarising exclusively from external circumstances. We need to figure outwhether the principles of targeting inflation without taking asset pricesinto account were correct, and analyze the reasons for the appearanceof excess global liquidity and the occurrence of speculative “bubbles.”

The system of economic and financial regulation currently in placefalls short of the one needed for the development of the world econ-omy in the context of globalization. The performance of the worldeconomy is too dependent on the financial and economic policies of afew countries and clearly places many of its participants at a disadvan-tage. The existing mechanisms for the coordination of financial andeconomic policies are not working properly. It also seems that the Bret-ton Woods institutions are reacting more to accomplished facts ratherthan playing an active coordinating role in strengthening the interna-tional financial architecture. And this is in spite of the fact that main-taining global financial stability was at the center of attention of theBretton Woods institutions following the crises of the 1990s.

In this connection, we support the idea proposed by the WorldBank President Robert Zoellick to establish a New Multilateral Net-work for a New Global Economy, within the framework of which a

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new steering group could be created. We believe that this approach willallow us to strengthen the stability of the international financial archi-tecture through the design of effective mechanisms for the coordina-tion of financial and economic policies, and thus to be more successfulin addressing other global problems, such as combating adverse climatechanges.

We believe that the World Bank and the IMF can and should playan important role in setting up these mechanisms. We also believe thatthe Bretton Woods institutions, and the IMF in particular, shoulddevote more attention to the oversight of financial and economic poli-cies of large advanced countries, which have demonstrated seriousweaknesses. Thought should be given to comprehensive measuresaimed at minimizing contagion across countries so as to reduce thehigh price that emerging market and developing countries are forcedto pay for crises that arise through no fault of their own.

We believe that it is not possible to strengthen the role of the Bret-ton Woods institutions and increase their legitimacy without profoundchanges in their governance. These changes should lead to a genuineincrease in the voice, influence, and participation of emerging marketand developing countries in the decision-making process. In thisregard, the recent quota and voice reform that was carried out at theIMF was clearly inadequate. These countries should be assigned alarger role within the World Bank and the IMF, both by increasing thenumber of votes they hold and by expanding their participation in themanagement and staff, based on fairness and transparency. We shouldstress that an increase in the voice and representation of individualemerging market and developing countries should not take place at theexpense of reducing the votes of other countries in this same group.

SIERRA LEONE: DAVID O. CAREWGovernor of the Fund and the Bank(on behalf of the African Governors)

Africa’s economic expansion is expected to continue this year,although the external environment is showing less favorable signs. Theglobal economy has slowed down, oil and food prices have reachedrecord-high levels, and global financial markets are strained. The dete-rioration of the external environment poses significant challenges caus-ing great concern to many countries in our region.

We are particularly concerned about the severe impact that highglobal food and oil prices are exerting on our economies and the wel-fare of our populations. These have already taken a heavy toll on thehard-won macroeconomic stability, economic growth, and povertyreduction gains in our countries. Riots have threatened peace and

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stability in many of our countries, which are still grappling with deepscares on the social fabric.

The current financial turmoil in the advanced economies indicatethat the real economy is decelerating faster than earlier envisaged, withconsumption, labor and housing markets weakening in both the USAand Europe. The confidence shocks continue to exert intense pressureon these economies, with money markets and lending standards tight-ening further. We have witnessed the crisis evolving from one of liquid-ity into that of solvency, in the process, creating a systemic problem ofrecapitalizing the financial institutions. While we share the view thatpublic money should be used when there is a solvency problem, weurge the Fund to quickly develop a set of systematic principles thatshould govern such policy recourse for all countries alike.

Africa has so far been relatively resilient to the current globalfinancial crisis, but there are serious downside risks. The resilience hasstemmed from, among others, solid macroeconomic fundamentals, pru-dent macroeconomic policies, and higher commodity prices. However,the sharper-than-expected downturn for advanced economies and itslikely spillovers on emerging market economies such as China andIndia would have a negative bearing on the growth prospects of Africa.

We would like, nonetheless, to reaffirm our commitment to prudentpolicies and structural reforms, especially those that would help theleast able to cope with these external shocks, while consolidating thegains from macroeconomic stability. However, given the magnitude ofthe crisis, our countries cannot achieve the desired outcome unless anduntil the World Bank and the Fund step up their support to our policyframeworks, and help us address the short- and long-term impact of ris-ing food and oil prices.

In this regard, we welcome the IMF’s immediate responses thatinclude some augmented access to the Poverty Reduction and GrowthFacility (PRGF) for countries under this program and whose balance-of-payments has been severely affected by the current shocks. We alsowelcome the recent review of the Exogenous Shocks Facility (ESF)and we urge the Fund to expeditiously implement the facility in orderto enable greater and faster access by countries in need of resourcesfrom this instrument.

In the World Bank Group, we welcome the New Deal on GlobalFood Policy, including the Global Food Crisis Response Facility, whichprovides $1.2 billion as a rapid response financing, from which severalof our countries have already benefited. We also support the intentionof the World Bank Group to boost its overall assistance for global agri-culture to $6 billion from $4 billion over the coming year and increaseits agriculture lending to Africa from US$450 million to over US$800million.

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Despite these efforts, we would still like to underscore that morefinancial and technical support is required to meet the needs of ourcountries in the present environment. In this regard, we urge the WorldBank to increase its financing to scale-up Africa’s investment in agri-culture, infrastructure, and other related areas, with the view to helpreduce transaction cost and improve productivity. The World BankGroup needs to strategically take a comprehensive approach thatencompasses the whole value chain of the agriculture sector, and toidentify and remove all constraints from farm level all the way to trans-formation and export.

The main cause of Africa’s low agricultural productivity lies on thelimited irrigation and use of productivity-enhancing inputs, includingfertilizers, improved seeds, and pesticides. Thus, we call on the Bankand IFC to step up their support in irrigation and land management,and to facilitate access to inputs by farmers at affordable prices.

The World Bank should also assist our countries in building market-ing and distribution infrastructure facilities in the context of regionalintegration, by providing adequate financing and technical assistance insupport of our Regional Economic Communities (RECs).

We continue to underscore the critical importance of loweringglobal tariffs imposed on our agricultural commodities, and eliminatingsubsidies introduced by the developed countries on their products. Thedistorting developed countries’ agriculture subsidies and tariffs haveleft Africa at a comparative disadvantage, and will have to be tackledfirst if one aims to exploit the continent’s agricultural resources and therelated processing and manufacturing activities. The current hikes infood prices provide a suitable environment to make a breakthrough inremoving subsidies since the developed countries’ producers arealready getting the best returns.

More generally, there is a need to reverse the marginalization ofAfrica in global trade. To this end, we seek the IMF and the Bank’sadvocacy role in unblocking the WTO talks to allow a quick resump-tion and a successful conclusion of the multilateral trade negotiationson issues under the Doha Round in order to ensure fair and balancedinternational trade, and urge all members of the WTO to stay oncourse.

Let me now turn to two important issues that are also of concern tous, related to the ongoing reform agenda at the IMF and the WorldBank, namely, voice and representation, and technical assistance.

We are encouraged by the promising prospects of the ongoing dia-logue in the World Bank Group to facilitate consensus building bystakeholders on a voice and representation reform package. In particu-lar, we welcome the establishment of a third chair for Africa, and urgeits immediate implementation. While acknowledging the doubling of

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basic votes proposed in the package, we are still calling for tripling ofbasic votes, or better, restoring their 1944 level. Furthermore, we callon the Bank to facilitate the increase of our countries’ voting power inthe IDA Board, moving towards achieving parity between developedand developing countries in the long run.

We would also like to welcome the package adopted by the IMFBoard of Governors on April 28, 2008, on quota and voice reform.However, while the agreement is broadly in the right direction, we con-sider it as an initial step towards enhancing and strengthening voiceand representation of the African countries in the IMF Board. Moreneeds to be done to enable a more effective voice and participation ofAfrican countries in the decision-making process of the IMF in particu-lar, and the Bretton Woods institutions in general, to restore their legit-imacy, including the establishment of a third chair for Africa at theExecutive Board of the IMF.

We acknowledge the progress made in enhancing diversity at themanagerial level in the Bank, and we urge both the Bank and the IMFto do the same at all staff levels. A merit-based selection of the Headsof the Bretton Woods institutions, regardless of their nationality, alsoforms an important voice issue that needs to be achieved. Furthermore,the appointment of an African national as Deputy Managing Directorof the IMF is long overdue.

Regarding technical assistance, we reaffirm that the technical assis-tance provided by the Bretton Woods institutions is vital to our coun-tries’ efforts to promote institutional capacity, macroeconomic stability,growth, and poverty reduction. In this regard, we welcome the increas-ing positive role played by the African Technical Assistance Centers(AFRITACs). However, we are deeply concerned about the potentialimpact of the current restructuring and refocusing of the IMF’s activi-ties on the delivery of technical assistance. In particular, we cautionthat any decision to impose fees on technical assistance on countriesshould take into consideration the fact that IMF’s technical assistanceis a public good, and should therefore be financed, as a matter of prin-ciple, by the general membership.

Finally, although our countries contribute the least to the carbonemission, they are the hardest hit by the climate change. Nonetheless, weare determined to play our role in the global effort to reduce the GHGemissions. We, therefore, call for availing us with adequate financialresources, mainly on grant basis, to enable us to play our role effectively.We urge all the stakeholders to expeditiously reach a new deal on thepost-Kyoto Protocol under the auspices of the United Nations Frame-work for Climate Change. While we welcome the recent initiative by theWorld Bank to scale up its climate change activities, we urge the Institu-tion not to compromise its growth and poverty reduction focus.

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SPAIN: PEDRO SOLBES MIRAGovernor of the Fund and the Bank

My address comes to you at a difficult time for the global economy.It is also a time at which our coordination is of vital importance inorder to face the common problems we are experiencing, together.

International Economic Prospects

Global economic prospects have deteriorated since the last AnnualMeetings, with a global growth projection of 3.9 percent, which issharply declining. While industrialized countries have been hardest hitby this economic slowdown, the crisis is increasingly spreading toemerging economies as well.

Financial Crisis

In light of the developments in recent weeks, the internationalfinancial crisis has entered a critical phase, with a sharp decline in con-fidence, the consequence of which is the virtual paralysis of credit andinterbank markets.

As a result of the financial interdependence and the interconnect-edness of banks, countries are being affected by the turmoil, hence theneed, now more than ever, to coordinate the policies we must imple-ment to avoid a worsening of the impact on the real economy.

Against this backdrop, consideration of how best to tackle the diffi-cult situation without losing sight of the long term is needed. Macro-economic policies must regain their effectiveness and maintainstability—achieving these objectives entails, first and foremost, the re-establishment of confidence. To this end, a broad-based, comprehensiveaction plan with the highest level of coordination and participationpossible is necessary.

In the short term, therefore, it is critical to avoid an exacerbation ofproblems related to the credit squeeze, which result in solvency prob-lems that would not otherwise have arisen. It is critical that ordinaryfinancial channels rebound, and the public sector has a key role to playin this difficult task.

Europe

The European financial and banking system is reeling from theimpact of the crisis and the effects on the real economy will be felt.Under these circumstances, Europe has demonstrated the capacity totake unified and coordinated action. The staging of the first summit of

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Heads of State and Government of the Euro Zone in Paris yesterday isa demonstration of the unequivocal commitment to act in a coordi-nated manner when facing systemic problems. The action plan agreedwill help restore confidence and stability in markets.

Also, the participation of the European Central Bank in the recentcoordinated slashing of interest rates is another example of an effort toprovide joint solutions to common problems.

Spain’s Economy

Inevitably, Spain’s economy is also being affected by the turmoildiscussed. Based on our projections, the decline in activity will last intothe coming quarters, with a major adjustment in the housing sector.

Nevertheless, Spain’s economy has structural strengths owing to theeconomic policies implemented during years of robust economicgrowth, which gives us reason to believe that Spain will return to itspotential growth path in the medium term.

These strengths include substantial capital accumulation in recentyears, with significant improvements in infrastructure, human capital,and research and development; a very open economy, with companiescapable of competing on international markets; healthy governmentaccounts; and a robust financial system.

Spain’s financial system is solvent, efficient, and profitable, and webelieve that it is well placed to weather the global financial crisis. Despiterobust credit growth in recent years, lending practices have remained pru-dent under the strict supervision of the Bank of Spain. Provisions setaside in boom periods have been generous and have been bolstered by acounter-cyclical system of requirements imposed by the regulator.

To avoid liquidity problems, the government approved the estab-lishment of a fund of up to EUR 50 billion to buy healthy assets fromfinancial institutions, in accordance with market criteria. This fund sup-plements the measures adopted yesterday by the Eurogroup heads ofgovernment, which were approved today by the government of Spain.These measures include the possibility of temporarily guaranteeing thedebt of banks for periods longer than six months, which, for 2008, mayamount to EUR 100,000 million, as well as the possibility of providingcapital contributions to financial institutions. While the latter measureis being adopted in conjunction with the decisions adopted in Paris, it isnot expected to be implemented at this time.

IMF Reform

The most important item on the IMF agenda must be the responseto the crisis, which poses challenges of a magnitude not seen in many

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years. It is important to review the best short- and long-term economicpolicy responses, as well as the lessons to be learned from the financialcrisis. We firmly believe that the IMF is in an ideal position to facethese challenges, without jeopardizing collaboration with the interna-tional institutions in question.

The IMF’s comparative advantage is derived from its supranationaland multilateral character. Specifically, it is the best-placed institutionto identify overall inconsistencies when the sum of individual decisionsmay not be advantageous at the collective level.

It is for these reasons that we believe that it is important to give theIMF a clear mandate, assigning it a key role as the multilateral organi-zation tasked with supervising and monitoring international financialstability. Furthermore, the credibility of its supervision must be bur-nished, thus enhancing its financial outlook and regional and multilat-eral prospects.

Lastly, the Fund must be mindful of its role as financier and adapt itto the current situation.

World Bank

I would now like to discuss the World Bank’s agenda.In an international context where changes are occurring at a rapid

pace, the World Bank must prioritize its strategic guidelines and seekto promote coordinated actions among the various World Bank Groupinstitutions and with other IFIs.

We endorse the voice and representation process in which theWorld Bank Group is currently engaged. It is necessary to continuemoving this process forward without delay, thereby enhancing the rep-resentation of the developing and transition countries. However, I alsobelieve that the World Bank’s capital structure and the representationof its members must be adapted to reflect their weight in the globaleconomy and their commitment to development. We therefore wel-come the progress already achieved in the reform process, and will con-tinue efforts to reach an agreement as quickly as possible.

Esteemed colleagues, we are confident that joint efforts will enableus to meet these challenges.

SRI LANKA: SARATH AMUNUGAMAGovernor of the Fund and the Bank

The current economic crisis has many dimensions, including thebursting of the housing bubble, high energy costs and food prices,large macroeconomic imbalances among major players in the worldeconomy, regulatory and supervisory failures, and the weaknesses of

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our early warning systems. Although the latest financial market tur-moil began in advanced financial markets, the contagion of this crisiswill not be confined to the boundaries of developed countries. Due tothe increased economic interdependency among nations throughtrade, investment and sophisticated capital markets, it is likely thatmany countries will have to go through a difficult period in the nearfuture.

In that context, we believe that the IMF and the World Bank has animportant role to play to safeguard global financial system stability andhelp maintain a sustainable level of development. At the country levelall possible options should be explored to minimize the adverse conse-quences. In this regard a balanced approach of monetary, fiscal andother policies to help maintain productive investment is required.These policies need to be assisted by sufficient flexibility on the part ofthe Fund and the Bank to help those countries that may need urgentliquidity support and development assistance at this stage.

We take positive note of the progressive steps taken by the manage-ment of the IMF and the World Bank particularly in regard to itsreforms and new development financing initiatives. We cannot stressenough the importance of a contingent liquidity support facility foremerging economies. Similarly, we are confident that the issues relatingto quota reforms of the World Bank group will be resolved taking intoconsideration the claims of developing and emerging market countriesthat are under represented in the current quota structure.

Let me now turn to my own country of Sri Lanka. Given the highdegree of openness of our economy we are by no means an exceptionto the pattern of our peers in the developing world. Sri Lanka is a netimporter of commodities particularly oil. Our recent gains from com-modity exports have been more than absorbed by the sharplyincreased cost of the oil bill, which showed a threefold increase withina matter of two years. High food and energy costs have been the maincause of high inflation in the country. Thanks to the tight monetary pol-icy measures taken and good harvests, inflation, which reached a peaka few months ago, is now on the decline. A drop in oil prices to a rea-sonable level would be a great advantage.

Sri Lanka’s financial system has shown strong resilience to adverseglobal developments. With the implementation of Basel II in 2008, theregulatory framework of banks has been further strengthened.

The comprehensive development programs that has been launchedby the government to address the key constraints for more equitablegrowth has already raised the GDP growth rate to a satisfactory levelof around 6.5 percent compared to the historical average of around 4.5 percent in the past. There has been a sharp reduction in unemploy-ment. Our growth momentum is expected to continue and register

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around 7 percent in 2008, particularly benefiting from improved per-formance in the agriculture sector. The poverty indicators as well asmany other indicators relating to MDGs in Sri Lanka have shownremarkable progress in recent years and we need to sustain theseachievements. My country has achieved most of the MDG goals. Weare pleased that the World Bank has already committed US$900 mil-lion through the new country Assistance Strategy.

I conclude with the wish that through the concerted efforts by allparties, particularly the key players in the world economy, we will beable to recover from this crisis and continue the effort to give a betterlife for all our people.

SUDAN: AWAD AHMED ELGAZGovernor of the Bank

(on behalf of the Arab Governors)

It is an honor for me to deliver this year’s joint Arab speech onbehalf of my colleagues the Group of Arab Governors for the Interna-tional Monetary Fund (IMF) and the World Bank. We welcome thestates that joined our two institutions during the last year.

At the outset, we would like to express our concern in respect ofthe current serious conditions of the global economy not experiencedsince the 1930s. Economic activity is going through a sharp downturn inmany developed economies, with some of such economies entering realeconomic recession. Developing country and emerging economies havestarted to be impacted by financial turbulence, leading to downturn ingrowth rates lately. Such downturn resulted from the prolonged prob-lem, increased external financing crunch, and inflationary pressures.Moreover, markets have become careful to distinguish among coun-tries according to external imbalances affecting them. Global economicdownturn emanated from financial crisis caused by the real estate mar-ket in the United States and the vicious cycle involving the financialsector and the real economy. Consequently, economic policy makersare facing increased difficulty in tradeoff choices between inflation,growth and financial stabilization.

Credit risks are still high despite measures taken by developedeconomies—including assistance extended by respective governmentsand steps taken by central banks—to curb difficulties in finance mar-kets. Consequently, we stress the need for swift addressing of currentcrisis at the international level with close coordination among coun-tries. Comprehensive measures need to be taken to ensure restorationof trust and confidence to the financial sector. A crucial measure to betaken in the short term involves making liquidity available, addressingbad assets, and injecting capital into the financial markets. Supervisory

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and regulatory systems must be enhanced to ensure financial marketstability and obviate recurrence of such crises.

In addition to efforts aimed at addressing this international finan-cial crisis, we call on the world community to increase attention toaddressing the current crisis experienced worldwide in the form ofsoaring commodity prices, particularly food prices, which may lead toincreasing the number of poor people by about 100 million persons,leading to enormous financial burdens for low-income countries, par-ticularly in Africa. As we welcome the various efforts taken to tacklethe different aspects and root causes of the current crisis, we note ini-tiatives taken by the World Bank in support of such efforts. Yet, welook forward to further effective measures such as increased assistanceto World Food Program, helping developing countries to modernizetheir agricultural sectors and increase production and productivity witha view to achieving desired food security. We also note the role con-tributed by IMF to support balances of payment and extend additionalfinancial assistance. Further, we welcome updating streamlining of“External Shock Response Facility” to make it more useful for mem-ber countries.

Donor Arab countries have contributed their role in mitigating suf-fering of the poor and increasing investments in agricultural sector.Special mention should be made of the $500 million grant extended bythe Kingdom of Saudi Arabia to the World Food Program as well asthe generous aid extended by: Kuwait, Qatar, and the United ArabEmirates. In this context, we call on industrial countries to contribute avital role to address the current crisis and take the initiative in reducingsubsidies for their agricultural products as well as restrictions imposedon their imports of the same. Such subsidies and restrictions are stiflingdevelopment of agricultural sectors in developing countries. Further,we call for cessation of using agricultural products for biofuel produc-tion as this has led to escalation of the crisis and increased food prices.

Turning to the role contributed by IMF to achieve monetary andfinancial stability worldwide, particularly in light of potential adverseimpact on global economy due to current financial crisis, we believethat, to enhance that role, developing and emerging countries shouldhave a clear and obvious voice at IMF. In this respect, we welcomeselection of a first chairman from a developing country to head theInternational Financial And Monetary Committee. Moreover, IMFshould enhance its oversight role and apply the same in an equitablemanner to policies of all member countries, including developed coun-tries. As far as emerging economies are concerned, we encourage IMFto explore new mechanisms that provide to such economies rapidfinance to protect such economies from adverse economic crises. Fur-ther we believe that IMF should adopt a budget that will facilitate

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undertaking such a required role. In this respect, we call for swift adop-tion and implementation of resolutions related to enhancement of IMFincome. We are apprised of a decision to charge fees for technical sup-port IMF extends to member countries. This may lead to alienatingdeveloping countries from IMF and denying such countries necessarytechnical assistance. Accordingly, we stress the need to reverse applica-tion of such a decision as soon as possible to prevent any resultingadverse impact.

In view of growing importance of sovereign funds to internationalfinancial system, we note the positive role contributed by such fundsthrough providing capital to markets of developed economies duringthis year’s financial turbulence. These funds target long-term invest-ments and shun speculation and noncommercial objectives. In this con-text, we stress again the importance of preserving voluntary nature ofprinciples and practices agreed in respect of such funds, without anymandatory control. Respective principles should be subject to laws,obligations and practices effective in countries to which each such sov-ereign fund belongs.

The Arab group of states is attentively monitoring increased activ-ity by the World Bank in support of developing country efforts toaddress consequences of climate change and risks emanating from it.We stress that such increased attention to such issues by the Bankshould not have adverse consequences for remaining development pri-orities and programs of the Bank, particularly efforts related to sup-port for growth and poverty reduction in developing countries. More-over, we stress the importance of coordination with specializedinternational organizations in this respect, especially the need forrespecting ratified international covenants and conventions.

We appreciate efforts aimed at reaching a consensus that mayenhance role of developing countries in decision making as well as out-comes of Development Committee deliberations about proposals inthis regard. We look forward to real improvement in developing coun-try voice in the coming Spring Meetings of the World Bank Group. Weparticularly refer to increase of total developing country voting rightstowards parity with those of developed countries, without adverseimpact on the voting rights of any other developing country. We alsolook forward to more diversification in World Bank Group staff, partic-ularly an increase in staff members from developing country group. Wewould like to applaud the decision to create an additional chair in theWorld Bank Board of Executive Directors for Sub-Saharan Africa. Wealso call for a more open mechanism for selection of World BankGroup presidents and IMF Directors.

Turning to developments in our Arab region, we note the fact thatmost countries in the region experienced continued good growth rates

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in the past year despite global conditions of instability. Fruitful effortscontinued in various areas of reform as well as adoption of sound poli-cies leading to more open trade and obvious progress in areas of gover-nance, accountability, and improved investment climate where some ofour countries achieved top rankings. Moreover, increased inflows offinancial resources into oil exporting countries led to increased invest-ment outflows to developing countries, enhancing south-south eco-nomic relations.

Careful to achieve world oil market stability, Arab oil-producingcountries increased investments with a view to increasing oil produc-tion and exports. They also continued close cooperation with oil con-suming countries. It should be noted that oil price increases did notresult from constraints related to the supply-side. They emanated fromfactors related to: world demand and limited refining capacity due toweak investments in refining capacity, unfair taxes imposed by devel-oped countries on energy resources, as well as speculation, which havebecome an outstanding characteristic of oil markets.

Economic growth in Arab countries coincided with acceleratedinflation rates emanating from: higher world prices of commodities,local demand increases, and bottlenecks in local production capacityparticularly in housing sectors. The challenge facing policies of Arabcountries, especially low- and middle-income countries, lies in: securingfood requirements of their peoples, strengthening of growth and con-tainment of inflation, and retaining proper levels of foreign exchangereserves. Many Arab countries have taken measures, including socialassistance, to protect low-income groups from the impact of worldprice increases.

Varying conditions of our countries exposed many of them toimpacts of lower global economy growth and commodity price crisis,particularly food prices, as well as instability of world markets andrecurrent droughts. In addition to efforts made by our countries toaddress such challenges, we commend efforts made by the World BankGroup in our region through increased loans and credits as well as ini-tiative included in World Bank strategy to support economic activity inthe Arab World. We particularly commend the initiative presented byMr. Zoellick. We look forward to a comprehensive plan identifyingrespective priorities, accelerated implementation of this initiative, andallocating more attention to regional projects that lead to more open-ness as well as projects aimed at addressing unemployment andexpanding private sector development.

We call for increased attention to Arab countries suffering effects ofconflicts. We recommend more flexibility in dealing with such countriesand the need for combined efforts and cooperation between all organi-

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zations and agencies concerned to spread benefits and ensure maxi-mum impact of aid extended. While commending the role contributedby IMF and the World Bank in this respect amid difficult circum-stances, we call for continued efforts by the World Bank Group in ourregion to provide effective support to address sufferings of the Pales-tinian people under occupation, building their economy and ending the blockade and closures. We call for reconstruction of Iraq, re-engagement with Somalia and eliminating debt burdens of the Sudan,especially since peace agreements have been concluded. Progress andstability in those countries will undoubtedly benefit all in the regionand the world at large.

We reiterate our urgent call to IMF and the World Bank Group torecruit appropriate numbers of Arab country nationals at all manage-ment levels, particularly higher management levels. It is important thatArab country nationals be accorded appropriate career advancementopportunities as current recruitment and professional promotion ratiosare very low compared to those from other similar regions, especiallyas many staff members from our region lost their jobs due to restruc-turing at IMF this year.

Finally, we understand well that we still have a long way to go in ourefforts to overcome challenges and achieve more progress because ourArab region is characterized by different circumstances and conditionsand faces many of the challenges affecting developing countries. Welook forward in this respect to continued close cooperation with IMFand the World Bank Group as well as all our development partners.

SWITZERLAND: JEAN-PIERRE ROTHGovernor of the Fund

The global economy faces its most difficult period for decades asthe turmoil engulfing financial markets and institutions has intensified.The deep crisis of confidence in financial markets represents extraordi-nary challenges for macroeconomic and regulatory policies. An ade-quate and internationally coordinated response to these challenges ismore important than ever. It should aim at mitigating the short-termimpact of the current turmoil, while ensuring that the right lessons arelearned for the global financial system to function more smoothly andconsistently in the future.

Confronted with this challenge, the immediate response to thefinancial market turmoil by various public authorities in recent monthshas been adequate. They did their best to strengthen the financial sys-tem by providing liquidity, lowering interest rates and intervening inmarkets during critical moments. Unprecedented systemic challenges

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have prompted unprecedented government measures. In the mediumand long term, however, crisis containment measures should be accom-panied by more forceful regulatory measures. Three measures in partic-ular ought to be mentioned here. Capital requirements—risk-weightedcapital requirements—must be increased. The leverage ratio of largeinternational banks must be contained. And finally, liquidity buffersmust be reinforced.

Dealing with the crisis has been made more difficult by the absenceof coordination of government interventions. A more pronounced col-lective effort might prove useful now, or in the future, once this crisis isover. The Fund should be a partner in such a collective effort. Its con-tribution should build on the close cooperation with other interna-tional fora, the Financial Stability Forum (FSF) in particular. The Fundshould contribute to this effort by building upon its comparativeadvantage. The Fund has a global membership. This will allow the Fundto identify more easily global financial risks; to disseminate policy les-sons and best practices; and to provide feedback to international stan-dard setters. More fundamentally, the Fund has the unique capacity ofbeing at the crossroads of financial sector surveillance and macroeco-nomic surveillance. Macrofinancial linkages should become the bread-and-butter of the Fund.

While the outlook for the global economy is worrying, it would bewrong to succumb to pessimism. The same dynamic forces that weighon the global economy today will eventually allow countries and theirfinancial sectors to recover. This is not the first and will not be the lastdifficult period of economic disruption with global repercussions. Weare firmly of the view that we must not underestimate, and should beconfident in, the fundamental strength of market forces to improveeconomic welfare.

In the months to come, the Fund and the World Bank must jointlyand in line with their respective mandate undertake a deeper assess-ment of the impact of the crisis on growth and poverty at a countrylevel, both from a short- and medium-term perspective. They shouldprovide vulnerable countries with policy advice and capacity building,as well as quick and flexible financial assistance where necessary, tomitigate the negative impact on macroeconomic stability, growth andpoverty reduction.

The Annual Meetings provide a welcome opportunity to brieflytake stock of the work done by the Fund and the World Bank. At theFund, good progress has been made in assessing its role and the ade-quacy of its instruments in all main areas of its activity: surveillance,lending, and technical assistance and training. However, much remainsto be done.

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The Fund’s Policy Agenda

Surveillance remains the most important pillar of Fund activity. Thejust completed triennial review of surveillance has confirmed that Arti-cle IV consultations—and the analysis and advice they offer—arehighly valued by country authorities and market participants. Theseconsultations should be further adapted to the global challenges andenhance their focus on core areas. And one of these core areas is thelinkages between the financial sector and the real economy. It is in thisarea that the Fund, as mentioned above, adds particular value.

The surveillance framework has been reinforced by the adoption ofthe 2007 Surveillance Decision. The Decision has given more promi-nent focus to external stability. This is welcome, as are the newly agreedprocedures, which clarify how this Decision will be implemented incases where further fact-finding and dialogue is needed. A key but notthe only element of the focus on external stability is the focus onexchange rate issues. In this regard, two aspects are worth mentioning.First, more effort should be devoted to assessing exchange rate regimesrather than to exchange rate levels; fact is that it is notoriously moredifficult to assess exchange rate levels than regimes. Second, exchangerate assessment should be better integrated with the overall assessmentof macroeconomic and external stability.

Fund lending is likely to resume because of the current financial dif-ficulties that have started to spread to emerging markets. The currentlending instruments together with the activation of the emergency pro-cedure put the Fund in a good position to respond to today’s challenges.This being said, we remain ready to discuss new lending instruments.

As regards technical assistance, there has undoubtedly beenprogress in establishing an accurate and transparent costing thatreflects international best practice. The new policy for country contri-butions, although limited in scope, will enhance ownership by recipi-ents and encourage careful use of limited resources.

Finally, the work on a new sustainable income model has taken abig step forward. Nonetheless, not all the uncertainties have beenresolved so far. The Resolution allowing the broadening of the Fund’sinvestment authority has yet to be ratified by all members. And mem-bers ought to formally consent to gold sales as soon as possible.

Commodities Crisis

The World Bank and the Fund have an important role to play inhelping countries to respond to the high food and fuel prices. The Fundis appropriately addressing the macroeconomic implications, including

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through balance of payments support. The World Bank Group, with itsstrong presence at country levels worldwide, is very well positioned toaddress the short- and long-term components of the crisis. Since Aprilboth institutions have demonstrated through the Global Food CrisisResponse Program their ability to tailor appropriate policy responses tothe needs of developing countries affected by the food price crisis. Asmany partner countries are also affected by the impact of fuel prices,additional interventions are necessary and useful such as the Energy forthe Poor Initiative. Given the extent of the challenges ahead, both insti-tutions must remain vigilant. Close coordination with the UnitedNations will be paramount. Possible trade-offs between emergencyneeds and long-term sustainability must be assessed.

At the same time, the prospects for higher and more stable foodprices also represent an opportunity for further poverty reduction inrural areas, and incentives for higher production. Small farmers shouldalso be able to benefit from higher market prices. The Bank has animportant role to play in tapping these opportunities. I welcome theplanned increase in resource allocation to the agriculture sector, as partof the strategic directions of the World Bank Group.

Voice and Participation

Enhancing the voice, participation, and representation of developingand transition countries (DTC) in the World Bank Group is essential tobetter reflect today’s realities. Switzerland is ready to join a consensuson the adoption of the proposed first stage of concrete options, pro-vided that we do not re-consider this outcome later on. In addition, thesequencing and deadlines for the work program of the second stagerelating to completion of the review of IBRD shareholding must be fur-ther clarified. We strongly believe that the actual outcome of the IMFquotas negotiation must remain the starting point of such a review.

We look forward to periodic reviews of the progress and concreteproposals for realignment of Bank shareholding as part of a compre-hensive reform package.

Strategic Framework for the World Bank Group on Developmentand Climate Change

The poorest countries will suffer most from global warming; we wel-come the integration by the World Bank Group of the climate changedimension in its core mandate of development and poverty reduction.

We agree with the guiding principles of the Strategic Framework,which acknowledge the primacy of the UNFCCC process and ensureconsistency with the recommendations of the Bali Action Plan. Other

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key principles, such as focusing on World Bank group comparativeadvantages, partnering with other multilateral and bilateral actors, andmobilizing the private sector, are also important.

We welcome the multi-sector dimension of the Strategic Frame-work; we thus expect sectors such as agriculture, land use, rural devel-opment, as well as water management and use to become more promi-nent in the Bank Group’s operations. We encourage in particular theBank to pay more attention to regional water and energy issues, espe-cially in Central Asia.

In view of the huge financing needs for mitigating and adapting toclimate change, we support the Bank Group efforts to mobilize andleverage resources from the public and private sector. Creating soundregulatory frameworks and structuring innovative instruments tocrowd in private sector investments is critical; we are convinced thatthe Bank Group has a key role to play in this respect.

The new Climate Investment Funds are a significant channel toscale up resources. We commend the Bank for its instrumental role insetting up the CIFs. Switzerland is participating in the setting up of theStrategic Climate Fund and is looking forward to being part of the‘Scaling-up Renewable Energy Program’ in low-income countries. Inaddition, we strongly encourage the World Bank group to increase itsengagement in renewable energies.

Strategic Directions of the World Bank

At a time of increasing global uncertainties and great challenges, webelieve that a renewed discussion on the Bank’s priorities is para-mount, with a view to reaching consensus on a concrete, concise, andresults-oriented strategic framework. The foreseen discussion on themedium-to-long-term IBRD capital use provides a renewed opportu-nity for close interaction between management and the board toadvance this agenda.

THAILAND: SUCHART THADA-THAMRONGVECHGovernor of the Bank

I am honored to have an opportunity to address at this 2008 WorldBank/IMF Board of Governors’ Annual Meeting today. On behalf ofthe Thai delegation, I would like to express my appreciation to theWorld Bank Group and International Monetary Fund (IMF) for host-ing this meeting.

This year’s meetings take place at a challenging time for the worldeconomy, particularly amid the financial turmoil in the US and Europe.Thailand and Asian countries had experienced similar and severe pain

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in 1997 crisis. We fully understand and realize the hardship and severityas well as consequences of the financial meltdown. We would like togive our full support and encouragement towards the great effortsalready made by the US administration on the bailout packages, whichhopefully will keep such a financial upheaval at bay in the near future.

We are now faced with increasing financial volatility and everyeconomy will unavoidably be affected more or less. Global financialvolatility is likely to have crucial impacts on our growth, economic sta-bility, and development for years to come. So, there must be cohesiveand cooperative visible hands that assist and play pivotal role in pre-venting or lessening the detrimental effect of financial volatility ongrowth, stability, and economic development. The IMF and the WorldBank should actively take part in this endeavor.

As when the volatility spreads, it will hit the developing countriesharder with a longer period of suffering. We would like to urge thatmore assistances and relaxation in terms of funds and trade should begiven to those smaller economies. More importantly, the developedcountries should make every effort to resolve this crisis rapidly andintroduce preventive measures to avoid stagnation on trade and devel-opment of the developing world.

To tackle the imminent effect of current outbreak, Thailand at theoutset has been in full alert and abruptly laid down precautious andproactive measures through extensively engaging ourselves in regionalfinancial cooperation with ASEAN and ASEAN plus 3. These, forexample, include an acceleration of economic integration in ASEANplus 3 regions to cushion the impacts of the financial turmoil. Specifi-cally, measures include CMI Multilateralisation process, which will helpASEAN, plus 3 member countries address short-term liquidity prob-lem or the balance of payments difficulties. A study on bond financingfor infrastructure projects under the Asian Bond Markets Initiative(ABMI) and Credit Guarantee and Investment Mechanism (CGIM) inthe form of a trust fund are also in the pipeline.

I would like to reiterate on the objective of the World Bank, whichis to create “a world free of poverty.” Today, the objective is still goingstrong with the World Bank bolstering the reduction of poverty as anoverarching goal. Within this effort, I praise the World Bank in itsstrive to alleviate poverty in developing countries with sustainable eco-nomic growth by encouraging the poor to take part in development.

Thailand also considers poverty eradication a serious and utmosturgent target to be achieved. This evidence on eradicating poverty hasbeen placed amongst the top priority missions as mirrored in the gov-ernment’s national agenda.

I cannot deny that the problem of poverty in Thailand had longbeen accumulating with the real causes deeply rooted. Past attempts to

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fight poverty had mostly addressed the symptoms and not the realcauses. Approaches tended to be piecemeal and unfocused rather thancomprehensive and sustainable. Thailand believes that in order toreduce poverty, we must bestow opportunity upon the poor and lessfortunate group of people.

Since Thailand has declared war on poverty, many programs to helpthe poor have been implemented. These are targeted towards People’sOpportunity policy. These include debt suspension program, People’sBudget Project or SML, the establishment of the “Village Fund” forvillages and urban communities, and the “People’s Bank” to give thepoor better access to formal financial services and funding. We havealso aimed at creating jobs and enhancing productivity in the commu-nities through the establishment of the “One Village, One Product”Project.

We are confident that we are on the right track of combating povertyand hope to alleviate and eliminate the poor distress permanently.

Let me now turn to matters relating to the World Bank Group.Thailand and the World Bank have been in a development partner-

ship for many years now. As time evolved, the relationships betweenThailand and the Bank Group have also progressed from primarily aborrower-lender relationship toward a knowledge sharing develop-ment partnership.

We are pleased to note that this year the World Bank has justcompleted “Thailand Country Partnership Strategy CompletionReport” which represents an assessment of the World Bank’s 5 yearscontributions in Thailand under the current Country PartnershipStrategy (CPS) endorsed by the Board of Executive Directors inDecember 2002.

Under the CPS, the World Bank has provided support and imple-mentation of the overall reform program through technical support,capacity building and specific project interventions that align withThailand’s national development agenda built around 5 pillars; theseinclude Human and Social Capital, Competitiveness, Poverty andInequality, Natural Resources and the Environment and PublicReform and Governance.

On this regard, we would like to thank the World Bank for your con-tinuous and constructive efforts made throughout this project. We lookforward to working closely in partnership with the Bank again to imple-ment the next level of the CPS in the years to come as this partnershipshowed to be a successful and significant step to effectively contributetowards poverty alleviation and economic growth in Thailand.

The World Bank this year has released the 2009 Doing Businessreport. From the outcome, Thailand has moved six places up the ranking

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from 19th position to 13th. This higher rank in the Doing Businessreport was largely due to the recent reforms in registering properties,protecting investors, trade across border through the adoption of e-customs, paying taxes through e-revenues as well as the improvementof our business climate by easing the cost and days of doing business inthe country.

We would like to praise the Doing Business team for their consis-tent efforts and hard work throughout. It is no doubt that the DoingBusiness indicators have proved to be very useful source of input topolicy makers, business owners, as well as foreign and Thai investorsthat intend to do business in Thailand. Policy makers especially can usethese indicators to improve their business environment and makingevery country becoming more competitive. I therefore would like tocomplement this excellent initiative.

This year the donor community has marked yet another astonish-ment. The funding contributed for the 15th replenishment of the Inter-national Development Association (IDA 15) has been marked as one ofthe largest donor funding since. It is recorded that IDA 15 represents a43 percent increase from IDA 14, complemented by US$16.5 billion ininternal financing from the World Bank Group and prior donor pledgesfor financing debt forgiveness.

On our part, Thailand being one of the subscribing countries haslong been supportive and engaging in the funding of IDA, which aimsat helping the world’s poorest countries. We would like to thank thedonor countries for the funding contributed for the IDA 15. Thisdemonstrated that the donor community is fully committed to helpingcountries overcome poverty and achieve sustainable growth, especiallyin the world’s poorest countries like Africa.

We hope to see that the fund will be accessible to all, especiallythose countries that are the poorest, post-conflict countries or weaklyperformed countries. Therefore, we urge the Bank and the donors totake this into account when reviewing the performance assessment.Criteria such as vulnerabilities and other factors should not be ignored.

Thailand has been an active participant and a major provider offinancial and technical assistance to neighboring Greater Mekong Sub-region (GMS) countries through our Neighboring Countries EconomicDevelopment Cooperation Agency (NEDA) for the implementation ofpriority sub-regional projects. Scopes of activities, inter alia, trade facil-itation, capacity building, and infrastructure financing. Currently, theassistance provided for these countries are still limited. Therefore, weurge the World Bank to consider assisting these countries in term ofmore financial support.

We welcome the progress on the Bank’s reform to enhance voiceand participation of developing and transition countries (DTCs) in the

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World Bank Group. In line with the spirit of the 2002 Monetary Con-sensus, we believe that increasing voice and participation of DTCs iscentral to the Bank’s reform. As such, we support the main objectivesand the guiding principles set forth in the Bank’s reform, to enhancethe participation of all developing and transition countries in theBank’s governance; and to further enhance the legitimacy, credibility,and effectiveness of the World Bank Group.

Finally, we would like to stress to the World Bank and the IMF thatdiversity of staff will reflect the universality of its membership therebyenabling it to offer wide-ranging advice to countries from the perspec-tive of staff with diverse background and experiences.

In this connection, I would like to touch upon the issues of the IMF.We note the progress, welcome the staff’s commitment to the

reform of the IMF, and look forward to ongoing improvements in gov-ernance, as well as modernization of its operational structures toensure this global financial organization is well equipped to face cur-rent and future challenges.

We welcome progress in the development of new income-expenditureframework to securely place IMF’s finances on a more sustainable foot-ing. We also note the progress achieved in strengthening the surveil-lance role of the IMF to help prevent crises and promote domestic andinternational financial stability. We must, however, reiterate the impor-tance and call for firm and even-handed implementation of the surveil-lance framework, particularly, in view of the ongoing financial turmoil.

We welcome the broad agreement to have IMF’s lending mandaterevamped and adapted in order to better reflect the realities of today’sglobal financial system, and to address the imperative needs of low-income countries. We look forward to the upcoming review of condi-tionality associated with IMF facilities, as well as to the overdue pro-posals for new liquidity instruments, to ensure that the lendingapparatus is up-to-date and relevant to all members.

In light of the developments in the world economy, realignments ofquota shares with members’ relative economic positions remain on theIMF’s reform agenda going forward. To this end, we welcome theagreement on the quota and voice reform package to recognize greaterglobal weight of emerging economies, and urge for continuing consid-eration and work on this dynamic reform.

In conclusion, we hope to see in the near future that the role of theWorld Bank will be transformed to meet with the global challenges andurgent problems such as Food and Energy Crises and Climate Change,etc. These risk factors will undeniably become the biggest threats topoverty eradication and development.

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TIMOR-LESTE: EMILIA PIRESGovernor of the Bank

It is an honor and pleasure to address you all today. The risingenergy cost, the growing demand for oil from industrialized countriesand emerging economies, rising food prices, scarcity of land for agricul-ture and of water in many regions, climate change, are only some of theindicators of the serious challenges we have faced in 2008. Add to thatthe recent near meltdown in the global financial markets and 2008 maywell be remembered as the year markets failed.

However, it has not been all bad news. The developing world con-tinues to grow, albeit at a slower pace than before and therein may liepart of the solution to the current global crisis. When we in the devel-oping world face these types of crisis, which we do on a more regularbasis than our colleagues in more economically advanced nations—then we are repeatedly told to increase our openness to the globaleconomy, to trust in the market but to regulate them well. To be honestthis approach has worked. The economies of Asia, the Pacific, andAfrica are still projected to grow and may well be part of the salvationof the current economic woes.

However, for that to happen, we must make sure that in the effortto correct the market failures that have led to some of today’s chal-lenges the world does not overreact and nations become more insularand protective rather than open and competitive. Improving the flowof capital, labor and financial resources from the developing worldwhere economies are growing to the developed where they may stag-nate will be an important part of the recovery process. That is not tosay that targeted intervention cannot help.

Much like in the recent crisis where many Governments have seenthe need for a large injection of liquidity into the financial system, manyof us in the developing world have also had experiences (with equallymixed results) of trying to correct rapidly failing markets in a politicallyand economically charged atmosphere. Indeed, we may be able to sharea lesson or two with some of our more developed partners in terms ofhow to intervene in markets. In Timor, we passed our own EconomicStabilization Act—but this was not in reaction to the recent financialcrisis but the earlier rise in the price of basic commodities.

Through targeted but limited interventions, this year has seen somepositive developments, mainly in the return of the internally displacedpeoples (IDPs) from the 2006 crisis; 25 out of 54 IDP camps have beenclosed. Cash transfers were made to vulnerable groups, including theelderly. Clear targets were set for improving basic health and educationthrough the 2008 National Priority Program.

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Responding to their genuine solidarity as a member of the interna-tional community, Timor-Leste (a least developed country) has alsostarted to help other countries overcome hardships. Apart from donat-ing emergency relief to victims of Tsunami in Indonesia, Timor-Lestewill contribute $1 million in support of the work of UNICEF globally,in 2009. In per capita ratio, this amount would exceed the assistancethat has been provided by many developed countries.

We do this not out of a sense of pride but out of duty and a feelingof shared understanding and responsibility. In Timor we realize we arefortunate that we are somewhat insulated from the winds of marketfailures currently blowing around the world. This is because we haverevenue from natural resources that have so far shielded us. But weknow that as a global partner what affects our partners ultimatelyaffects us and therefore we too, even though we may be a small nation,have our role to play.

Ultimately, global crisis like the current financial crisis will have tobe dealt with by re-looking at global institutions like the IMF andWorld Bank to better prepare them for the challenges of the 21st cen-tury. 2008 has shown us that market failure and inability to regulate arenot only problems for the developing world—but issues that deeplyaffect us all. Therefore, it is up to all of us in this room to look both col-lectively and individually at what can be done to create a more pros-perous world for all its citizens.

TONGA: ‘OTENIFI AFU’ALO MATOTOGovernor of the Fund and the Bank

It is an honor to address the Boards of Governors of the Interna-tional Monetary Fund and the World Bank Group on behalf of thegovernment of the Kingdom of Tonga.

I would like to congratulate and welcome Mr. Dominique Strauss-Kahn on his first Annual Meetings in his capacity as the ManagingDirector of the International Monetary Fund.

I acknowledge the work the IMF and the Bank are doing to helprestore global macroeconomic and financial stability while bolsteringgrowth and reducing poverty. It is at times of crisis many membercountries look to these institutions for guidance and assistance.

Since the last Annual Meetings, the global economy continues toslow down markedly and the global economic prospects have splitalong two contrasting lines. The golden weather of economic growththat major industrialized countries enjoyed for several years has faded.The United States, the Euro zone, and Japan are now experiencingmajor economic slowdowns because of the deepening financial crisis.

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By contrast, the emerging and developing economies are expected toremain resilient with growth slowing slightly to around 7 percent in2008 and 6 percent in 2009. With forecasters predicting that the slow-down of global economic growth will continue through 2009, Tongajoins other member countries in echoing its concern over the impact ofthe current financial crisis. In this current situation, Tonga shares theFund’s view for strong and coordinated policies to mitigate the spillingeffects of the global crisis on the rest of the world.

While addressing the challenges of the global financial turmoil andeconomic stagnation, it is imperative that other short- and long-termissues also receive attention. Global fuel and food prices have esca-lated sharply causing high inflation in many member countries. Theseprice movements send important economic signals and we encouragecontinuing efforts by both the Fund and the Bank to soften the effectsof these price movements on the most vulnerable member countries.

The determination by the Fund and the Bank not to lose sight ofthe long-term objectives because of today’s crisis is a move in the rightdirection. Given time, financial markets will recover and food and fuelprices will stabilize albeit at higher levels. In that respect, I acknowl-edge the efforts from the Fund and the Bank to restore confidence andreduce the human cost of these adjustment processes.

Aid is another area where some coordination is occurring but muchmore action is needed. Effective aid occurs where needs are properlyidentified, and donors work together to complement each other inmeeting the needs. Tonga notes the increasing coordination of aidactivities between the Bank, Fund, and other aid agencies in their oper-ation programs. We support the Fund’s proposed reforms to the Exoge-nous Shocks Facility, which will provide more rapid and effective assis-tance to low income countries in the event of shocks.

The reforms undertaken by the Fund and the Bank are timely inorder to respond more effectively to the global challenges now and inthe future. The move to enhance the voice and participation of devel-oping countries will help improve the alignment of aid efforts andnational needs. We therefore strongly agree with these initiatives.

Domestic Economic Developments

Tonga’s economy has shown resilience in the face of internal andexternal shocks. Preliminary projections indicated that economicgrowth is expected to expand by 2.6 percent in 2008/09 from 1.2 per-cent in 2007/08, with construction, transport, and services providing theimpetus. A number of tourism and agriculture initiatives are also in thepipeline. These initiatives allow Tonga to tap its unused economicpotential and also bring some much-needed diversity into the Tongan

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economy. This will help address the problem of a narrow economic baseand reliance on a few key exports that has been a constraint in expand-ing the Tongan economy. This economic growth is underpinned bystrong remittances, increasing foreign aid and recovery in private invest-ments. These favorable economic developments have allowed the gov-ernment to maintain a balanced budget for 2008/09 financial year.

Furthermore, the government of Tonga continues to pursue its eco-nomic and public sector reforms to stimulate growth and promote pri-vate sector development. Major reforms include moving the taxationsystem from being heavily based on international trade towards an effi-cient low rate broad based taxation system. Public enterprises arebeing rationalized to improve financial performance and some arebeing privatized. Work is also continuing to ease and reduce the cost ofdoing business with good success. Having said that, I would like toacknowledge the ongoing technical and financial assistance from theBank, the Fund and their agencies in supporting us in these reforms.Social and political reforms are ongoing and a fully democratic govern-ment is expected to be in place in 2010.

Tonga’s relative high social development requires higher economicperformance in order to achieve the Millennium Development Goalsand sustain it at that level going forward. There is confidence thatTonga will be on target in areas such as gender equality, health, andeducation. Continued collaboration with external agencies in achievingthe remaining goals is vital.

Notwithstanding the achievements to date, Tonga, like other smallisland states, is affected by the same economic tides that shift the majorplayers. The economy is facing challenges from global surge in foodand fuel prices, posing risks to the external account balance and esca-lating inflation, and vulnerability to climate change and natural disas-ters such as cyclones and earthquakes. These challenges could easilyundermine Tonga’s economic growth. The current global financial tur-bulence raises the risk of a decline in remittances.

The Tongan Government is committed to maintain prudent fiscaland monetary policies to preserve macroeconomic stability and accel-erate economic growth. The Government has given priority to climatechange, which needs adaptation and mitigation measures with supportfrom donor communities. Work is currently being done to explorealternative sources of energy, in addition to more efficient utilization offuel. The financial and technical assistance towards this initiative fromthe Bank Global Facility for Climate Change will greatly assist.

Tonga is doing everything it can to manage these challenges. How-ever, some of these are beyond our control. In this context, Tonga willcontinue to rely on the Fund, the Bank and other donors to assist theeconomy in addressing these challenges.

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To improve aid effectiveness and coordination, Tonga has signed ajoint Declaration of Aid Effectiveness with its development partners.To guide development, the government of Tonga has also produced aStrategic Development Priorities framework. This framework is beingreviewed for the next three years commencing July 2009. The StrategicDevelopment Plan and Declaration of Aid Effectiveness are the firststeps, however, much remains to be done to effectively align and inte-grate aid within Tonga. This ultimately will bring all donors into theDeclaration of Aid Effectiveness.

The Government of Tonga is pleased with the decision by the Bankto establish an office in Tonga, which will strengthen our relationshipand enable better coordination with other donor partners. The TonganGovernment is always grateful to the Fund for the continued coopera-tion on the Article IV Consultations and other technical assistancereceived.

In conclusion, Tonga strongly supports the efforts by the Fund andthe Bank to address the challenges before us and their efforts toreform their institutions so they can respond quickly and appropriatelyto the needs of member countries. I look forward to a continued closeworking relationship with both institutions. I wish the Bank and theFund continued success in dealing with existing and emerging chal-lenges going forward.

TURKEY: MEHMET SIMSEKGovernor of the Fund

This year’s annual meetings are taking place against a backdrop ofdramatic changes in the global financial system. Devastating financialshocks continue to hit global markets. While the epicenter of the finan-cial crisis has been the U.S., the problems quickly spilled over toEurope and elsewhere. Shaken by these financial shocks, the worldeconomy is entering a difficult phase.

Emerging and developing economies, which have been the engineof economic growth, are facing economic slowdown mainly throughtrade and credit channels. While inflationary pressures are likely toease, the risk of a significant slowdown in capital inflows appear high.

To deal with the fallout of the ongoing global crisis, it is clear that acoordinated response is required. We must devise a global fire-fightingstrategy as well as ways of dealing with the impact of the crisis. Webelieve that the Fund is uniquely placed in this respect to coordinate aglobal response. Hence, we expect the IMF to play a more active rolein coordinating the policy response.

In this rather gloomy background, I am pleased to tell you that theTurkish economy has so far been quite resilient to the global shock.

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Real GDP growth, for instance, was 4.2 percent in the first half of thisyear. This is lower than an average annual real GDP growth of 6.7 per-cent in the previous six years. For 2008, the growth is expected to settlearound 4 percent. In the short-term, growth is likely to slow further.However, we remain positive on medium-long term growth outlook.Turkey’s demographics are favorable and we are implementingreforms that would boost productivity.

Thanks to softening commodity prices and weakening domesticdemand, inflation is likely to fall to 7.5 percent next year.

Turkey’s current account deficit, which is likely to have reached6.5 percent of GDP in 2008, looks set to narrow significantly in 2009.The deficit is partially financed by strong FDI inflows with nonbankcorporate sector medium-long term borrowing providing a big chunkof financing. While the global backdrop has deteriorated in recentmonths, Turkey’s strong medium-long term growth prospects shouldcontinue to help attract the necessary funding. In addition, centralbank has about 80 billion US$ reserves.

Fiscal discipline remains the cornerstone of our economic program.Thanks to sustained (and sizeable fiscal adjustment) over the past sixyears, Turkey has lowered the public debt to GDP ratio to around37 percent. We are committed to maintaining the fiscal discipline andkeep the public debt to GDP ratio on a downward path. To enhancethe credibility of our medium-term fiscal framework, we are planningto introduce a formal fiscal rule over the next few months.

Despite a relatively less favorable domestic and global backdrop,we have continued to implement structural reforms. We have adoptedand implemented a number of critical reforms including a landmarksocial security reform, a labor market reform, and energy marketreform. We have also introduced generous incentives to R&D to helpTurkey move up the value chain.

Finally, Turkey’s banking sector is sound and strong. It is well capi-talized, with a capital adequacy ratio of around 17.5 percent as of June2008. The sector has strong asset quality. Banking sector’s net NPLratio was a mere 0.6 percent as of end 1H08. The sector has been prof-itable with an ROE of 24.7 percent in 2007. The system also has nomeaningful currency mismatch.

To sum up, Turkey’s macroeconomic fundamentals are strong. Whilethis does not make us immune to the on-going global shock, it shouldmake us a lot more resilient.

Let me now turn to matters relating to the Fund’s and the Bankagenda.

We commend the management for timely launching of a review ofthe Fund lending instruments, access policy and charges and maturitiesframework. We support removal of the redundant facilities from the

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toolkit. There is also a case for making existing instruments more flexi-ble to address different needs of all membership. We closely follow thediscussion on creation of a new liquidity instrument and would like tothank for different proposals. We should also substantially increase theaccess limits for the Fund financing. The Fund’s charges and maturityframework also needs to be streamlined, in particular, the applicationof surcharges. Hence, we strongly expect the upcoming Fund work toaddress these issues.

On the World Bank side, we welcome the consensus reached by theExecutive Directors on the Voice Reform. The agreement representsan important step in enhancing the voice and participation of develop-ing and transition countries in the World Bank. This first step, however,should continue with a more ambitious second step, which shouldinclude, among others, a meaningful realignment of IBRD sharehold-ing to reflect countries’ relative position in the world economy.

UNITED STATES: CLAY LOWERYTemporary Alternate Governor of the Fund and the Bank

I welcome all of you to Washington.In the last few days, we have witnessed some of the most extraordi-

nary events in our careers as finance officials. The strains and stressesin global financial markets have deepened, posing a great challenge tothe global economic and financial system.

Yet, these very stresses underscore the reality of why we cometogether annually. Since last Friday, Washington has been the stagingground for meetings of the G-7 and G-20 Finance Ministers, the Inter-national Monetary and Financial Committee and the World BankDevelopment Committee. The Financial Stability Forum and the IMFhosted a high-level meeting on global financial turmoil.

We have all united with determination and with the singular focus ofovercoming the world’s financial turmoil. We have exchanged views,shared experiences and set out an action plan. We have done so becausewe know that the problems we face are global, because the world econ-omy and financial markets are more inter-connected than ever before,because we value multilateralism, and because the answer to overcomingchallenges is international partnership, cooperation, and collaboration.

We must all act decisively, individually and collectively, according toour needs, to secure stability and growth for the world economic andfinancial order. None of us can afford to go it alone and each of us hasour part to play. And we must remember that notwithstanding thetemptation to resort to isolationism in the face of the current turmoil,we all benefit from free, open, competitive and soundly regulatedfinancial markets.

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The housing correction in the United States and the lack of confi-dence in mortgage assets has undermined investor confidence at hereand abroad. It is profoundly affecting American families and businesses.

We have tackled this challenge vigorously and head-on.We have acted boldly to provide liquidity to markets. The United

States has created a number of innovative funding facilities to main-tain the functioning of inter-bank markets, guarantee money marketmutual funds, and we have extended dollar swap lines throughout theworld.

We have worked vigilantly to strengthen our financial institutions.A number of significant institutional problems were addressed on acase-by-case basis over the last six months. This approach, while neces-sary, was not sufficient.

Thus, we adopted a systemic approach on a significant scale, to getat the underlying causes of the turmoil. With our new authority underthe Emergency Economic Stability Act, the Treasury is empowered touse up to $700 billion to purchase capital in financial institutions, topurchase or insure mortgage assets, and to purchase any other troubledassets that the Treasury and the Federal Reserve deem necessary topromote financial market stability.

We have also taken steps to ensure the integrity of our financialmarkets and penalize frauds and market manipulation. And we havealso protected our retail savers by temporarily increasing deposit insur-ance, and thus buttressing stability.

Every step of the way, we have worked in lockstep with the interna-tional community. Last Wednesday many of the world’s major centralbanks cut official interest rates in unison with the Fed. Our colleagues inEurope have nationalized or rescued specific financial institutions torestore confidence. They joined us in combating market abuse and theytoo have worked to create a more unified deposit insurance system.

Let me assure all of you that the United States will remain vigilantand committed to working with our global partners to take furtheraction as needed to restore confidence in our markets.

That is why Treasury welcomes the initiatives taken by Europeannations as part of the G-7 action plan to strengthen their financial sys-tem and address funding issues for their financial institutions.

We in the United States are also moving forward on actions underthe G-7 Action Plan announced Friday to improve availability of fund-ing for our banks.

One area where we will continue our strong work with the interna-tional community is to build a new regulatory framework for the futureto limit the chances that yesterday’s mistakes will be repeated tomorrow.The President’s Working Group on Financial Markets has taken impor-tant steps to improve market transparency and disclosure, risk awareness

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and management, capital and regulatory policies, practices regarding theuse of credit ratings and market infrastructure for over-the-counter deriv-atives products. Our work has been undertaken in conjunction with theFinancial Stability Forum and the IMF from day one.

The path ahead of us remains arduous. The current difficulties willnot end tomorrow and even as confidence is restored, recovery will beslow. But as a student of financial history, I have little doubt that thevigorous actions we are taking and our partnership—so readily sym-bolized by this gathering—will overcome the challenges we face andwe will in time emerge stronger.

VIETNAM: NGUYEN VAN GIAUGovernor of the Fund

First of all, I would like to express our high appreciation to our col-leagues at the Bank and the Fund for their excellent arrangements ofthis important event.

Since the last time we met at the 2007 meetings, the global economyhas experienced various complicated developments, albeit severaladvantages. Increasing food and oil prices, the spillover inflation andthe current global financial turmoil have caused the slowdowns in theglobal economic and financial systems, especially the fledging financialsystems of the developing and transitional economies.

Higher prices, particularly oil and food prices, have globally chal-lenged the food and energy security. The U.S. crisis-led financial tur-moil has brought about numerous global macroeconomic problems,higher inflation, demand imbalance, and a gloomy forecast of theglobal economic growth from 4.9 percent to 3.7 percent. Majoreconomies, such as the U.S., Japan, and the E.U., have reset their eco-nomic growth goals. In the region, high and sustainable growtheconomies, including China and ASEAN economies might havegrowth respectively decreasing from 11.4 percent and 6.5 percent in2007 to 10 percent and 5.7 percent in 2008. The global economic tur-moil has caused countries, including Vietnam, to adjust their macroeco-nomic policies as well as financial and monetary policies in an effort tocontain inflation pressure, and higher food and oil prices.

The current situation is setting new challenges for internationalinstitutions, including the Fund and the Bank to take bold actions in aneffort to support their member countries, thereby, contributing to thecontinuation of economic stability and driving forces, and ensuringpoverty reduction achievements. In this connection, Vietnam welcomesefforts made by the Fund and the Bank in safeguarding global financialstability, promoting sustainable growth and reducing poverty.

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It is encouraging that the Fund has recently made substantialefforts in its governance, operational and financial reform. We welcomethe Fund’s success in the first step of strengthening member represen-tation through quotas and voice enhancement. Policy dialogue betweenthe IMF and its member countries is now more candid, and overallmore effective, when better focused on how members’ economic poli-cies impact the stability of their economies and of the economies oftheir partners. Lending activities are also reformed in order to provideassistance faster, in larger amounts, to low-income countries, streamlinepolicy commitments made by borrower governments and also helpaddress commodity price changes, disasters and conflicts. We alsohighly appreciate significant benefits that IMF technical assistancebrings to member countries, with a unique feature of strong surveil-lance-lending-technical assistance relationship. Those reform activitiesare much supported by the IMF’s directions of diversifying revenuesources together with strengthening the effectiveness in resources allo-cation and utilization. However, regarding the issue of cost sharing inTA provision, we would like to note that the priority should be giventoward developing countries, facilitating them to maintain their accessand utilization of the Fund’s assistance.

At the same time, we saw that soaring food and commodity pricesover the past year reaffirmed the role the Bank plays in internationaleconomic development and poverty reduction worldwide. We highlyappreciate the Bank’s ability in tackling the global crises and supportingsustainable growth with care for the environment in its client countrieswhile safeguarding and improving people’s health, education, and otherhuman development outcomes. We also highly appreciate the collabora-tion and partnership the Bank had with numerous other multilateralorganizations and partners to realize the most far-reaching results possi-ble. The Bank’s quick response in May 2008 with a rapid financing facil-ity1 for food crisis is widely acknowledged by all as an immediate actionaddressing immediate needs. In the longer run, the Bank’s recommen-dations on the focus of increasing agricultural productivity and narrow-ing the gap between the urban and rural areas will significantly con-tribute to the agricultural and rural development of the membercountries, thus ensuring the sustainable economic development.

On the financial side, the borrowing member countries highlyappreciate the great efforts made by the Board of Executive Directorsto bring down the commitment fee on the outstanding credits of the

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1 The World Bank report shows the first grants under the facility were approved forDjibouti ($5 million), Haiti ($10 million), and Liberia ($10 million).

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IDA to zero percent. This decision helps the borrowers to reduce costof resource significantly, hence increasing their capacity to invest foreconomic growth and poverty reduction. We also thank the IBRD forits biggest simplification and reduction in its loan pricing since the Asiafinancial crisis. It now makes borrowers to have access to IBRD loansat longer maturities and at price that are lower and more transparentthan they had been.

On the nonfinancial side, we endorse the Bank’s efforts in introduc-ing simple projects that can be easily replicated, mechanism for addi-tional financing of successful projects and revision to emergency andrapid response lending policy. We also endorse the approval of theBoard in April 2008 for piloting the use of country system for financialmanagement and safeguards as it helps harmonize the procedures ofboth the Bank and the borrowing member countries.

However, much needs to be done without delay to alleviate globalcrises. An estimated 2.5 billion people are trying to survive on $2 orless a day. Therefore, in the coming time the role of the IMF and theWB will be more significant in assisting their member countries toaccomplish the cause of economic development and poverty reduction.

In addressing the adverse impact of the current global turmoil onthe macroeconomy of the country, we welcome the coming focus of theIMF’s activities on key issues of global economic and financial concernand its actions to help members to meet the potential global chal-lenges. It would be good for all members that IMF will be making sub-stantial progress in the coming time to enable member countries dealwith imminent crises and urgent tasks, including responding to thechallenges posed by rising food and fuel prices, drawing lessons fromfinancial market crises and advancing key surveillance issues. Regard-ing this, we totally support the call made by IMF Managing DirectorDominique Strauss-Kahn for a global solution to the financial crisis, inwhich the Fund would play the coordination role to organize a globalresponse to weaknesses in the global financial system.

Another IMF priority is to review its lending instruments. We agreethat it is time for the Fund to revise some credit facilities so that it canprovide a more accessible and appropriate source of capital for thosecountries in need. New organizational tools and working practices,especially enhancement of IMF consultations and local capacity build-ing program are much welcomed. We also look forward to furtheradvances of the Fund’s governance agenda, including the next stepbeyond strengthening membership representation through quotas andvoice improvements.

We share the vision of the Bank, which is “to contribute to an inclu-sive and sustainable globalization—to overcome poverty, enhancegrowth with care for the environment, and create individual opportu-

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nity and hope.” This vision reaffirms the commitment of the Bank tofight against poverty and ensure the equal and sustainable develop-ment. In this connection, we think that the Bank should continue tocollaborate closely with its member countries and international part-ners to make further progress in addressing the above-mention chal-lenges. Particularly, we strongly support the Bank’s policy to considerAfrica, especially sub-Saharan Africa, where extreme poverty isexpected to grow, as its priority for action. We also urge the Bank tocontinue to intensify its role in coordinating the necessary availableresources both technical and financial ones to support and assist theother countries in all regions to confront their emerging vulnerabilities,including Vietnam.

Skyrocketing food prices are a harsh reality, resulting in evengreater hunger and malnutrition worldwide. Climate change threatensagricultural productivity and consequently the world’s food supply aswell as the income of most of the poorest people. Natural catastrophes,such as this year’s earthquake in China and cyclone in Myanmar, dev-astate millions who may not survive without immediate disaster relief.Communicable diseases, with HIV/AIDS and malaria being the mostcritical, continue to challenge us. Therefore, we commend the Bank tocontinue to push forward the Global Food Crisis Response Program incollaboration with the United Nation and other partners. We alsoencourage the Bank to advance work on all aspects of voice and partic-ipation, keeping in mind the distinct nature of the Bank’s developmentmandate, and the importance of enhancing voice and participation forall developing and transition countries in the World Bank Group. Asthe change in the climate spans multisectors and development issues,all the countries are at significant risk. Therefore, we urge the Bank tocontinue to scale up its actions like adopting a Strategic Framework forClimate Change, setting up specialized climate funds, in order to helpmember countries to adapt to climate change and mitigate its impactsas well as to turn the challenge of climate change into an opportunityfor development leading to an inclusive and sustainable globalization.

Now let me take this chance to provide a briefing of the latestdevelopments in my country since our last gathering. Over the pastyear, we have achieved the following significant achievements:

2007 was the year we effectively joined WTO, and since then themacroeconomic situation has been severely impacted by complexvolatilities of the world economy: inflation bounced back to 2 digitnumbers (12.63 percent in 2007 and 21.87 percent for the first 9 monthsof 2008 compared with the end of 2007); trade deficit increased sharplyto 29.1 percent of the total exports in 2007 and 32.6 percent of the totalexports in the first 9 months of 2008. Given rapidly increasing inflationand trade deficit exercise being threats to macroeconomic stability, the

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government considered inflation control as the first priority objectiveand focused on directing the implementation of 8 major comprehensivesets of policies, including: (i) tightening monetary policy and ensuringthe liquidity for banking system and the whole economy; (ii) closelymonitoring and enhancing efficiency of public spending; (iii) focusingon production development and ensuring balance of good supply anddemand; (iv) promoting exports, strictly supervising imports to reducetrade deficit; (v) strictly practicing thrift in production and consump-tion; (vi) enhancing market management work to guard against specula-tion, smuggling and trade fraud; (vii) strengthening policies to stabilizepeople’s life and expanding the coverage of implementation of socialsecurity policy; and (viii) promoting information and propagandization.

With the implementation of the government’s policies, includingmonetary policy, macroeconomic developments have shown positivesignals:

• GDP for the first 9 months reached 6.52 percent, still at a high levelcompared with many other countries.

• Inflation was reduced from a monthly average of 2.9 percent for thefirst 6 months to less than 1 percent for July, August, and September.

• The trade deficit narrowed from a monthly average of US$2.3 billionin the first 6 months to the level of less than US$1.0 billion/month inJuly, August, and September.

• Newly granted and added foreign direct investment in the first9 months reached US$57.1 billion, up by 398.5 percent from thesame period of 2007.

• The money market and foreign exchange market are stable, andcredit and total liquidity have a slower trend, ensuring the settlementsafety for the credit institution system.

The Vietnamese economy still maintains the potential of stable devel-opment in medium and long term. However, from now to the end of 2008,the world and domestic economies may have many complex develop-ments, especially the effects of the US financial turmoil; therefore, thegovernment continues to implement tight monetary and fiscal policy butin a flexible way in order to help control inflation, stabilize macroeco-nomic situation, ensure social security and sustainable development.

In addition to our own efforts, the support from WB and IMF isalways appreciated by the government of Vietnam. Particularly, thefinancial support of the WB has contributed significantly to buildingup the key fundamentals for economic development of Vietnam.

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Over the past 15 years, WB has provided financial assistance of morethan US$8 billion for around 80 programs and projects in variousareas. In fiscal year 2009, WB has committed more than US$1.8 bil-lion for 15 programs and projects, of which there will be an IBRD-financed project. Such financing program would make the Bankbecome one of the biggest ODA providers for Vietnam.

In concluding, I would like to convey our sincere thanks to the man-agement and staff of the Fund and the Bank for efficient supportextended to Vietnam thus far. I wish the Meetings a splendid success.

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CONCLUDING REMARKS BY THE CHAIRMANTHE HONORABLE ZORAN STAVRESKI

As the 2008 Annual Meetings of a rather unprecedented year drawto a close, I want to review the major issues that we have discussed andtheir implications for the Fund’s and Bank’s work priorities for thecoming year.

First, these Annual Meetings will be remembered for taking placein the midst of a major financial market crisis. In this regard, we startedto take stock of the lessons that are emerging. We noted that, whilenational authorities in individual countries need to play their part inmitigating the effects of the crisis, the Fund remains well placed—including in collaboration with the FSF—to help prevent and resolveinternational financial crises and disseminate best practices. Particu-larly invaluable are the Fund’s near universal membership, and its mul-tilateral perspective, focusing on cross-country spillovers and the inter-linkages between the macro and the financial sectors. We alsoacknowledged the sound capitalization and prudent risk managementpolicies that have kept the Bank strong, providing it the capacity toexpand finance in response to client demand.

Second, surging energy and commodity prices have not only exacer-bated the impact of the financial market turmoil, but have alsoimposed a high cost on countries’ balance sheets and threatened theiradvances in poverty reduction. We welcomed the Bank’s launch of theNew Deal on Global Food Policy as well as the establishment of theGlobal Food Crisis Response Program and its continued engagement,together with the Fund, in providing member countries with additionalfinancial support and policy advice. We also called on the donor com-munity to play its part in keeping its commitments to increase aid tothe most vulnerable people.

Third, particularly at this critical juncture, Governors called on theFund and the Bank to seize the opportunities for progress and changeso as to remain relevant to their membership. We applauded the Fund’sreform of quota and voice. We also welcomed the Bank’s discussionson concrete options on voice and participation and urged the WorldBank to reach a consensus on a comprehensive package of reforms. Wenonetheless reaffirmed the importance of continuing to review theissue of governance more broadly at both the Bank and the Fund, andsupported the three-pronged approach that the Fund’s ManagingDirectors has proposed in this respect.

Finally, we discussed other ongoing core challenges, and agreed thataddressing climate change is crucial to the development and povertyreduction agenda, given its potential to reverse the progress made by

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developing countries toward achieving the Millennium DevelopmentGoals. In this context, we also agreed on the importance of scaling upaid, improving its effectiveness, and ensuring its delivery against thebackground of a more complex aid architecture.

My fellow Governors, it has been a privilege to serve as Chairmanof the Board of Governors of this year’s Annual Meetings. I thank youall for your support and cooperation, which have resulted in fruitfulmeetings. Allow me to reiterate my deep appreciation to Mr. Strauss-Kahn and Mr. Zoellick for their effective leadership at this difficulttime. I also reiterate my full trust in the staff of the Bretton Wood Insti-tutions for their expertise, dedication, and continued hard work.

I would also like to thank Mr. Anjaria and Ms. Georgieva and thestaff of the Joint Secretariat, particularly the Assistant Secretary forConferences, Ms. Yeo, for successfully arranging the meetings, as well asthe authorities of the United States for their hospitality and assistance.

Finally, let me congratulate His Excellency Minister Nguyen VanGiau of Vietnam, who will succeed me as the Chairman of the 2009Annual Meetings. I wish everyone safe travels home, and I look for-ward to meeting you again next year in Istanbul.

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VIETNAM: NGUYEN VAN GIAUGovernor of the Fund

It is a great honor for Vietnam to accept the chairmanship of theBoard of Governors for 2009. Fellow Governors, please join me inthanking His Excellency Zoran Stavreski for the exceptional manner inwhich he has conducted these meetings.

These meetings have taken place against the backdrop of one of themost serious financial crises of our time. The complexity and scale ofthe challenges involved have reminded us that the strengthened coop-eration of the Bretton Wood Institutions is crucial in confronting thepresent financial crisis and the surge in food and fuel prices. At thesame time, we have also been reminded of the need for these institu-tions to devise timely and flexible responses to ensure member coun-tries’ resilience to external shocks and to help safeguard the poorestfrom the full impact of the current crises.

Our discussions have recognized the importance of Fund surveil-lance in providing sound analysis at national and regional levels and indevoting greater attention to cross-country spillovers and macro-financial linkages. We have been further encouraged by the Fund’scommitment to consider new instruments that will allow for quick andefficient responses to its members’ request for assistance. Similarly, wehave welcomed the active role of the Bank, in particular in providingpolicy advice and financing to the countries that are being hit the mostby rising food and fuel prices, while also standing ready to expandlending in response to the on-going financial turbulence.

At the same time, we have reaffirmed the need for the Fund andthe Bank to remain focused on crucial ongoing core challenges, such asincreasing the role of developing and dynamic economies in the gover-nance of our institutions. We have thus commended the Fund’s quotaand voice reform and the Bank’s continuing discussions in this respect.In addition, we have supported the Bank’s efforts to integrate climatechange into development strategies, and the scaling-up of aid to low-income countries, together with improved aid effectiveness.

Allow me to convey our appreciation to the staffs of the Interna-tional Monetary Fund and the World Bank for their continued hardwork and dedication. Please also let me express our gratitude and deepappreciation to our hosts: the people and authorities of the UnitedStates and Washington, DC.

I look forward to working with all of you to tackle the importantissues we have outlined here, and to seeing you at our Annual Meet-ings next year in Turkey.

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DOCUMENTS OF THE BOARD OF GOVERNORS

SCHEDULE OF MEETINGS1,2

SundayOctober 12 4:45 P.M. Joint Procedures Committee

4:55 P.M. MIGA Procedures Committee

MondayOctober 13 9:30 A.M. Opening Ceremonies

Address from the ChairAnnual Address by Managing

Director, International Monetary Fund

Annual Address by President,World Bank Group3

Annual Discussion2:30 P.M. Annual Discussion (continued)

Following the conclusion Procedures Committees of the Annual Discussion Reports

Chairman, ICSID Administrative Council

Comments by Heads of Organizations

Adjournment

161

1 The Meetings were held at DAR Constitution Hall (Monday a.m. session) andFund Headquarters 2 Conference Hall (Monday p.m. session) and all sessions werejoint.2 The International Monetary and Financial Committee met on Saturday, October 11,2008 at 10:30 a.m. in IMF HQ2 Conference Hall. The Development Committee meton Sunday, October 12, 2008 at 9:30 a.m. in the Preston Auditorium, World BankHQ.3 The World Bank Group consists of the following:

International Bank for Reconstruction and Development (IBRD)International Finance Corporation (IFC)Iternational Development Association (IDA)International Centre for Settlement of Investment Disputes (ICSID)Multilateral Investment Guarantee Agency (MIGA)

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PROVISIONS RELATING TO THE CONDUCT OF THE MEETINGS1

ADMISSION

1. Session of the Boards of Governors of the International MonetaryFund and the World Bank Group will be joint and shall open toaccredited press, guests and staff.

2. Meetings of the Joint Procedures Committee shall be open only toGovernors who are members of the Committee and their advisers,Executive Directors, and such staff as may be necessary.

PROCEDURES AND RECORDS

3. The Chairman of the Boards of Governors will establish the orderof speaking at each session. Governors signifying a desire to speakwill generally be recognized in the order in which they ask tospeak.

4. With the consent of the Chairman, a Governor may extend hisstatement in the record following advance submission of the text tothe Secretaries.

5. The Secretaries will have verbatim transcripts prepared of the pro-ceedings of the Boards of Governors and the Joint ProceduresCommittee. The transcripts of proceedings of the Joint ProceduresCommittee will be confidential and available only to the Chair-man, the Managing Director of the International Monetary Fund,the President of the World Bank Group, and the Secretaries.

6. Reports of the Joint Procedures Committee shall be signed by theCommittee Chairman and the Reporting Members.

PUBLIC INFORMATION

7. The Chairman of the Boards of Governors, the Managing Directorof the International Monetary Fund and the President of the WorldBank Group will communicate to the press such information con-cerning the proceedings of the Annual Meetings as they may deemsuitable.

1 Approved on March 21, 2008 pursuant to the By-laws, IBRD Section 5(d), IFCSection 4(d), and IDA Section 1(a).

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AGENDA

Bank1

Annual ReportFinancial Statements and Annual AuditAllocation of FY08 Net Income Administrative Budget for FY09Annual Report of the Development Committee 2008 Regular Election of Executive DirectorsSelection of the Members of the Joint Procedures Committee

and its Officers for 2008-2009

IFC1

Annual Report Financial Statements and Annual Audit Use of IFC’s FY08 Net Income: Retained Earnings

and Designated Retained EarningsAdministrative Budget for FY09

IDA1

Annual Report Financial Statements and Annual Audit Administrative Budget for FY09

MIGA2

Annual Report Financial Statements and Annual Audit 2008 Regular Election of DirectorsSelection of the Members of the MIGA Procedures Committee

and its Officers for 2008-2009

1 Approved on August 19, 2008 pursuant to the By-laws, IBRD Section 5 (d), IFCSection 4(d), and IDA Section 1(a). 2 Approved on August 19, 2008, pursuant to Section 4(a) of the MIGA By-laws.

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JOINT PROCEDURES COMMITTEE

Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . Macedonia, Former Yugoslav Republic of

Vice Chairmen . . . . . . . . . . . . . . . . . . . . . . . . Costa RicaNamibia

Reporting Member . . . . . . . . . . . . . . . . . . . . Qatar

MEMBERS

Argentina NamibiaBangladesh QatarBrazil Russian FederationCosta Rica Saudi ArabiaFrance SwitzerlandGermany TogoGreece TurkeyGrenada UgandaGuinea-Bissau United KingdomJapan United StatesKorea VietnamMacedonia, Former Yugoslav Republic of

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REPORT OF THE JOINT PROCEDURES COMMITTEE

REPORT II1

October 12, 2008

At the meeting of the Joint Procedures Committee held onOctober 12, 2008, items of business on the agenda of the Boards ofGovernors of the Bank, IFC, and IDA were considered.

The Committee submits the following report and recommendationson Bank and IDA business:

1. 2008 Annual Report

The Committee noted that the 2008 Annual Report and the activitiesof the Bank and IDA would be discussed at these Annual Meetings.

2. 2008 Regular Election of Executive Directors

The Committee noted that the 2008 Regular Election of ExecutiveDirectors of the Bank would be completed on October 13, 2008, and thatthe next Regular Election of Executive Directors will take place in 2010.

3. Financial Statements, Accountants’ Report,and Administrative Budgets

The Committee considered the Financial Statements, Accountants’Reports, and Administrative Budgets contained in the 2008 Bank andIDA Annual Report, together with the Report dated June 26, 2008.

The Committee recommends that the Boards of Governors of theBank and IDA adopt the draft Resolutions. . . .2

4. Allocation of FY08 Net Income

The Committee considered the Report of the Executive Directors,dated August 7, 2008, on the Allocation of FY08 Net Income. . . .3

The Committee recommends that the Board of Governors of theBank adopt the draft Resolution. . . .4

1 Report I related to business of the Fund.2 See page 174.3 See page 224.4 See page 174.

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The Committee submits the following report and recommendationson IFC business:

5. 2008 Annual Report

The Committee noted that the 2008 Annual Report and the activi-ties of the IFC would be discussed at these Annual Meetings.

6. Financial Statements, Accountant’s Report, Administrative Budgetand Designations of Retained Earnings

The Committee considered the Financial Statements and Accoun-tant’s Report, the Administrative Budget, and the Designations ofRetained Earnings based on IFC’s FY08 Net Income contained in the2008 Annual Report, dated June 26, 2008.

The Committee recommends that the Board of Governors of IFCadopt the draft Resolution. . . .1

Approved:

/s/ Zoran Stavreski /s/ A. Shakour Shaalan___________________________ ___________________________Macedonia, Former Yugoslav Qatar—Reporting Member

Republic of—Chairman

(This report was approved and its recommendations were adopted bythe Board of Governors on October 12, 2008)

166

1 See page 177.

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REPORT III

October 12, 2008

The Joint Procedures Committee met on October 12, 2008, and sub-mits the following report and recommendations:

1. Development Committee

The Committee noted that the Report of the Chairman of the JointMinisterial Committee of the Boards of Governors of the Fund andthe Bank on the Transfer of Real Resources to Developing Countries(Development Committee) would be presented to the Boards of Gov-ernors of the Fund and Bank on October 13, 2008, pursuant to para-graph 5 of Resolutions Nos. 29-9 and 294 of the Fund and Bank,respectively. . . .1

The Committee recommends that the Boards of Governors of theFund and the Bank note the report and thank the Development Com-mittee for its work.

2. Officers and Joint Procedures Committee for 2008/09

The Committee recommends that the Governor for Vietnam beChairman and that the Governors for Lithuania and Tunisia be ViceChairmen of the Boards of Governors of the Fund and of the WorldBank Group, to hold office until the close of the next Annual Meetings.

It is further recommended that a Joint Procedures Committee beestablished to be available, after the termination of these meetings anduntil the close of the next Annual Meetings, for consultation at the dis-cretion of the Chairman, normally by correspondence and, if the occa-sion requires, by convening; and that this Committee shall consist ofthe Governors for the following members: The Bahamas, China, Côted’Ivoire, the Czech Republic, Djibouti, France, Germany, Haiti, India,Iraq, Japan, Liberia, Lithuania, Montenegro, New Zealand, Nigeria,Saudi Arabia, Spain, Tunisia, the United Kingdom, the United States,Uzbekistan, and Vietnam.

It is recommended that the Chairman of the Joint Procedures Com-mittee shall be the Governor for Vietnam, and the Vice Chairmen shallbe the Governors for Lithuania and Tunisia, and that the Governor forLiberia shall serve as Reporting Member.

1 See page 18.

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168

Approved:

/s/ Zoran Stavreski /s/ A. Shakour Shaalan___________________________ ___________________________Macedonia, Former Yugoslav Qatar—Reporting Member

Republic of—Chairman

(This report was approved and its recommendations were adopted bythe Board of Governors on October 12, 2008)

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MIGA PROCEDURES COMMITTEE

Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . Macedonia, Former Yugoslav Republic of

Vice Chairmen . . . . . . . . . . . . . . . . . . . . . . . . Costa RicaNamibia

Reporting Member . . . . . . . . . . . . . . . . . . . . Qatar

MEMBERS

Argentina NamibiaBangladesh QatarBrazil Russia FederationCosta Rica Saudi ArabiaFrance SwitzerlandGermany TogoGreece TurkeyGrenada UgandaGuinea-Bissau United KingdomJapan United StatesKorea VietnamMacedonia, Former Yugoslav Republic of

169

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170

REPORT OF THE MIGA PROCEDURES COMMITTEE

REPORT I

October 12, 2008

At the meeting of the MIGA Procedures Committee held on Octo-ber 12, 2008, the items of business on the agenda of the Council ofGovernors of MIGA were considered.

The Committee submits the following report and recommendationson MIGA business:

1. 2008 Annual Report

The Committee noted that provision had been made for discussionof the 2008 Annual Report and the activities of MIGA at this AnnualMeeting.

2. Financial Statements and Annual Audit

The Committee considered the Financial Statements and Accoun-tants’ Report contained in the 2008 Annual Report.

The Committee recommends that the Council of Governors adoptthe draft Resolution. . . .1

3. 2008 Regular Election of Directors

The Committee noted that the 2008 Regular Election of Directorsof MIGA would be completed on October 13, 2008, and that the nextRegular Election of Directors will take place in 2010.

4. Officers and Procedures Committee for 2008/09

The Committee recommends that the Governor for Vietnam beChairman and the Governors for Lithuania and Tunisia be Vice Chair-men of the Council of Governors of MIGA to hold office until theclose of the next Annual Meeting.

It is further recommended that a Procedures Committee be estab-lished to be available, after the termination of this Annual Meeting and

1 See page 198.

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171

until the close of the next Annual Meeting, for consultation at the dis-cretion of the Chairman, normally by correspondence and, if the occa-sion requires, by convening; and that this committee shall consist of theGovernors for the following members: The Bahamas, China, Côted’Ivoire, the Czech Republic, Djibouti, France, Germany, Haiti, India,Iraq, Japan, Liberia, Lithuania, Montenegro, New Zealand, Nigeria,Saudi Arabia, Spain, Tunisia, the United Kingdom, the United States,and Uzbekistan and Vietnam.

It is recommended that the Chairman of the Procedures Committeeshall be the Governor for Vietnam and the Vice Chairmen shall be theGovernors for Lithuania and Tunisia, and that the Governor forLiberia shall serve as Reporting Member.

Approved:

/s/ Zoran Stavreski /s/ A. Shakour Shaalan___________________________ ___________________________Macedonia, Former Yugoslav Qatar—Reporting Member

Republic of—Chairman

(This report was approved and its recommendations were adopted bythe Council of Governors on October 12, 2008)

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172

RESOLUTIONS ADOPTED BY THE BOARD OF GOVERNORS OF THE BANK

BETWEEN THE 2007 AND 2008 ANNUAL MEETINGS

Resolution No. 589

Transfer from Surplus to Replenish the Trust Fund for Gaza and West Bank

RESOLVED:

THAT the Bank transfer from surplus, by way of grant,US$55,000,000 to the Trust Fund for Gaza and West Bank, such trans-fer to be drawn down by the Association as needed; provided, however,that the amount of such grant may at any time be changed by the Asso-ciation into an equivalent amount in other currencies.

(Adopted June 4, 2008)

Resolution No. 590

Transfer of IBRD Surplus to Food Price Crisis Response Trust Fund

RESOLVED:

THAT The International Bank for Reconstruction and Develop-ment immediately transfer from surplus, by way of grant, $85 million tothe Food Price Crisis Response Trust Fund (the “Trust Fund”), estab-lished by the International Development Association (IDA or the“Association”), administered by the Association in accordance with theresolution establishing the Trust Fund.

(Adopted June 13, 2008)

Resolution No. 591

Direct Remuneration of Executive Directors and Their Alternates

RESOLVED:

THAT, effective July 1, 2008, the remuneration of the ExecutiveDirectors of the Bank and their Alternates pursuant to Section 13(e) ofthe By-Laws shall be paid in the form of salary without a separate sup-

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173

plemental allowance, and such salary shall be paid at the annual rate of$230,790 per year for Executive Directors and $199,650 per year fortheir Alternates.

(Adopted July 25, 2008)

Resolution No. 592

2008 Regular Election of Executive Directors

RESOLVED:

(a) THAT the attached Rules for the 2008 Regular Election of Execu-tive Directors are hereby approved; and

(b) THAT a Regular Election of Executive Directors shall take place inconnection with the Annual Meeting of the Board of Governors in2010.

(Adopted August 1, 2008)

Resolution No. 593

Allocation of $115 Million of FY08 Net Income

RESOLVED:

1. THAT the Report of the Executive Directors dated August 7, 2008,on “Allocation of $115 million of FY08 Net Income” is herebynoted with approval;

2. THAT the addition to the General Reserve of the IBRD of $811 mil-lion, plus or minus any rounding amount less than $1 million, and theaddition to the pension reserve of $117 million for the reasons givenin the Report of the Executive Directors, are hereby noted withapproval;

3. THAT the IBRD retain $115 million as surplus; and

4. THAT the IBRD transfer from surplus, by way of grant, $115 mil-lion to the Food Price Crisis Response Trust Fund.

(Adopted September 9, 2008)

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174

RESOLUTIONS ADOPTED BY THE BOARD OF GOVERNORS OF THE BANK

AT THE 2008 ANNUAL MEETINGS

Resolution No. 594

Financial Statements, Accountants’ Report, and Administrative Budget

RESOLVED:

THAT the Board of Governors of the Bank consider the Financial State-ments, Accountants’ Report, and Administrative Budget, included in the2008 Annual Report, as fulfilling the requirements of Article V, Section 13, ofthe Articles of Agreement and of Section 18 of the By-Laws of the Bank.

(Adopted October 13, 2008)

Resolution No. 595

Allocation of FY08 Net Income

RESOLVED:

1. THAT the Report of the Executive Directors dated August 7, 2008,on “Allocation of FY08 Net Income” is hereby noted with approval;

2. THAT the addition to the General Reserve of the IBRD of $811 mil-lion, plus or minus any rounding amount less than $1 million, and theaddition to the pension reserve of $117 million for the reasons given inthe Report of the Executive Directors, are hereby noted with approval;

3. THAT the IBRD transfer to the International Development Asso-ciation, by way of a grant out of the FY08 allocable net income ofthe IBRD, $583.3 million, which amount may be used by the Asso-ciation to provide financing in the form of grants in addition toloans, such transfer to be drawn down by the Association immedi-ately upon approval by the Board of Governors of the IBRD;

4. THAT the IBRD retain $635 million as surplus; and

5. THAT the IBRD transfer from surplus, by way of grant, $40 millionto the Kosovo Sustainable Employment Development Trust Fund.

(Adopted October 13, 2008)

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RESOLUTION ADOPTED BY THE BOARD OF GOVERNORS OF IFC

BETWEEN THE 2007 AND 2008 ANNUAL MEETINGS

Resolution No. 247

Membership of the State of Qatar

WHEREAS, the State of Qatar has applied for admission to mem-bership in the International Finance Corporation in accordance withSection 1(b) of Article II of the Articles of Agreement of the Corpora-tion; and

WHEREAS, pursuant to Section 17 of the By-Laws of the Corpora-tion, the Board of Directors, after consultation with representatives ofthe State of Qatar, has made recommendations to the Board of Gover-nors regarding this application;

NOW, THEREFORE, the Board of Governors hereby

RESOLVES:

THAT the terms and conditions upon which the State of Qatar shallbe admitted to membership in the Corporation shall be as follows:

1. Definitions: As used in this Resolution:(a) “Corporation” means International Finance Corporation.(b) “Articles” means the Articles of Agreement of the Corpora tion.(c) “Dollars” or “$” means dollars in currency of the United States

of America.

2. Subscription: By accepting membership in the Corporation, theState of Qatar shall subscribe to 1,650 shares of the capital stock ofthe Corporation at the par value of $1,000 per share.

3. Payment of Subscription: Before accepting membership in theCorporation, the State of Qatar shall pay $1,650,000 to the Cor-poration representing payment in full for the 1,650 shares of thecapital stock subscribed.

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4. Information: Before accepting membership in the Corporation, theState of Qatar shall furnish to the Corporation such informationrelating to its application for membership as the Corporation mayrequest.

5. Effective Date of Membership: The State of Qatar shall become amember of the Corporation with a subscription as set forth in para-graph 2 of this Resolution as of the date when the State of Qatarshall have complied with the following requirements:(a) made the payment called for by paragraph 3 of this Resolution;(b) furnished such information as may have been requested by the

Corporation pursuant to paragraph 4 of this Resolution;(c) deposited with the International Bank for Reconstruction and

Development an instrument stating that it has accepted with-out reservation in accordance with its law the Articles and allthe terms and conditions prescribed in this Resolution, andthat it has taken all steps necessary to enable it to carry out allits obligations under the Articles and this Resolution; and

(d) signed the original Articles held by the International Bank forReconstruction and Development.

6. Limitation on Period for Fulfillment of Requirements of Member-ship: The State of Qatar may fulfill the requirements for member-ship in the Corporation pursuant to this Resolution until Decem-ber 31, 2008, or such later date as the Board of Directors maydetermine.

(Adopted June 13, 2008)

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RESOLUTION ADOPTED BY THE BOARD OF GOVERNORS OF IFC

AT THE 2008 ANNUAL MEETINGS

Resolution No. 248

Financial Statements, Accountants’ Report,Administrative Budget, and Designations of Retained Earnings

RESOLVED:

1. THAT the Board of Governors of the Corporation consider theConsolidated Financial Statements and Independent Auditors’Report included in the 2008 Annual Report and the Administra-tive Budget contained in the Report of the Board of Governors onIFC’s FY09–11 Business Plan and Budget (the “Report”), as fulfill-ing the requirements of Article IV, Section 11, of the Articles ofAgreement and of Section 16 of the By-Laws of the Corporation;

2. THAT the Report is hereby noted with approval;

3. THAT the Corporation’s FY08 net income of $1,547 million betransferred to undesignated retained earnings;

4. THAT the designation of $100 million of retained earnings in IFC’sFiscal Year 2009 First Quarter financial statements for IFC’s Fund-ing Mechanism for Technical Assistance and Advisory Services ishereby noted with approval;

5. THAT the designation of $450 million of retained earnings inIFC’s Fiscal Year 2009 financial statements for grants to the Inter-national Development Association for use by the Association inthe form of grants in furtherance of IFC’s purpose, which, as setforth in Article I of the Corporation’s Articles of Agreement, is“to further economic development by encouraging the growth ofproductive private enterprise in the Corporation’s member coun-tries, particularly in the less developed areas, thus supplementingthe activities of the International Bank for Reconstruction andDevelopment,” is hereby noted with approval.

(Adopted October 13, 2008)

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RESOLUTIONS ADOPTEDBY THE BOARD OF GOVERNORS OF IDA

BETWEEN THE 2007 AND 2008 ANNUAL MEETINGS

Resolution No. 217

Latvia—Change in Membership Status

WHEREAS Latvia became a member of the Association onAugust 11, 1992, pursuant to the terms and conditions of Board ofGovernors’ Resolution No. 163 entitled “Membership of Latvia”adopted on April 24, 1992;

WHEREAS Latvia has removed all restrictions on the use by theAssociation of the amounts of its initial subscription in the Associa-tion’s lending activities;

WHEREAS Latvia has participated in each of the replenishmentsof the Association’s resources by making subscriptions amounting inthe aggregate to $0.89 million;

WHEREAS Latvia has requested that it be considered as a Part Imember of the Association, and the Executive Directors haveaccepted this request and have recommended to the Board of Gover-nors that the voting rights attached to Latvia’s subscriptions and con-tributions to the Association be adjusted on the basis of its status asPart I member;

NOW, THEREFORE, the Board of Governors hereby

RESOLVES

1. The terms and conditions of the membership of Latvia in the Asso-ciation other than those specifically provided for in this Resolutionshall be those set forth in the Articles with respect to the member-ship of original members listed in Part I of Schedule A thereof(including, but not by way of limitation, the terms and conditionsrelating to subscriptions, payments on subscription, usability of cur-rencies, and voting rights).

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2. Latvia’s votes shall be adjusted as follows: As of the date of thisResolution, 39,757 votes shall be allocated to Latvia in lieu of thevotes allocated to it before the said date, on account of its cumula-tive subscriptions to the resources of the Association through theMultilateral Debt Relief Initiative (MDRI) Replenishment (Boardof Governors’ Resolution No. 211 adopted on April 21, 2006) ofthe Association’s resources, consisting of 57 subscription votes and39,700 membership votes.

(Adopted on January 22, 2008)

Resolution No. 218

Membership of the Republic of Lithuania

WHEREAS the Republic of Lithuania has applied for membershipin the International Development Association in accordance with Sec-tion 1(b) of Article II of the Articles of Agreement of the Association;

WHEREAS the Republic of Lithuania has indicated that it willmake a subscription and contribution to the Association as part of theupcoming Fifteenth Replenishment of the Association.

WHEREAS, pursuant to Section 9 of the By-Laws of the Associa-tion, the Executive Directors, after consultation with representatives ofthe Republic of Lithuania, have made recommendations to the Boardof Governors regarding this application;

NOW, THEREFORE, the Board of Governors hereby

RESOLVES:

THAT the terms and conditions upon which the Republic ofLithuania shall be admitted to membership in the Association shall beas follows:

1. Definition: As used in this Resolution:(a) “Association” means International Development Association.(b) “Articles” means the Articles of Agreement of the Association.(c) “Dollars” or “$” means dollars in currency of the United States

of America.

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2. Initial Subscription:(a) The terms and conditions of the membership of the Republic

of Lithuania in the Association other than those specificallyprovided for in this Resolution shall be those set forth in theArticles with respect to the membership of original memberslisted in Part I of Schedule A thereof (including, but not by wayof limitation, the terms and conditions relating to subscriptions,payments on subscription, usability of currencies and votingrights).

(b) Upon accepting membership in the Association, the Republicof Lithuania shall subscribe funds in the amount of $1,350,000expressed in terms of United States Dollars of the weight andfineness in effect on January 1, 1960, that is to say, pursuant tothe decision of the Executive Directors of the Association ofJune 30, 1986, on the valuation of initial subscriptions,$1,628,573 in current Dollars, and shall pay the latter amountto the Association in US Dollars or in any other freely convert-ible currency. As of the date the Republic of Lithuania willbecome a member of the Association, 604 votes shall be allo-cated to the Republic of Lithuania in respect of such subscrip-tion, consisting of 104 subscription votes and 500 membershipvotes.

3. Effective Date of Membership: The Republic of Lithuania shallbecome a member of the Association with a subscription as setforth in paragraph 2(b) of this Resolution as of the date when theRepublic of Lithuania shall have complied with the followingrequirements:(a) made the payments called for by paragraph 2 of this Resolution;(b) deposited with the International Bank for Reconstruction and

Development an instrument stating that it has accepted inaccordance with its laws the Articles and all the terms and con-ditions prescribed in this Resolution, and that it has taken allsteps necessary to enable it to carry out all its obligations underthe Articles and this Resolution; and

(c) signed the original Articles held in the archives of the Interna-tional Bank for Reconstruction and Development.

4. Limitation on Period for Fulfillment of Requirements of Member-ship: The Republic of Lithuania may fulfill the requirements formembership in the Association pursuant to this Resolution untilDecember 31, 2008, or such later date as the Executive Directors ofthe Association may determine.

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5. Additional Subscriptions and/or Contributions: Upon or afteracceptance of membership, the Republic of Lithuania shall also beauthorized to make the following additional subscriptions and/orcontributions:(a) An additional subscription in the amount of $384,809, compris-

ing subscriptions corresponding to the Third through Four-teenth Replenishments which shall carry 32,525 votes, calcu-lated on the basis of 25 subscription votes and 32,500membership votes, and,

(b) An additional subscription in the amount of $48,975 represent-ing subscriptions to replenishment of the Association’sresources for financing the Multilateral Debt Relief Initiative(MDRI), which shall be subject to the terms and conditions setout in Resolution No. 211 of the Board of Governors of theAssociation entitled “Additions to IDA Resources: Financingthe Multilateral Debt Relief Initiative (the “MDRI Resolu-tion”), which shall carry 5,803 votes, calculated on the basis of 3 subscription votes and 5,800 membership votes, and whichshall be subject to the following terms and conditions:(i) Payment of such additional subscriptions shall be made in

a freely convertible currency within 30 days after theRepublic of Lithuania notifies the Association of its inten-tion to make such additional subscription for the Thirdthrough the Fourteenth Replenishments and, for theMDRI, set out in the MDRI Resolution.

(ii) The rights and obligations of the Association and theRepublic of Lithuania with regard to such additional sub-scriptions shall be the same (except as otherwise providedin this Resolution) as those which govern the 90% portionof the initial subscriptions of original members payableunder Article II, Section 2(d) of the Articles by memberslisted in Part I of Schedule A of the Articles, provided,however, that the provisions of Article IV, Section 2 of theArticles shall not be applicable to such subscriptions.

(c) A subscription and contribution to the Fifteenth Replenish-ment in the amount of Euros 2,230,000, which shall be subjectto the terms and conditions set out in the draft Resolution ofthe Board of Governors attached to the IDA15 Report “Addi-tions to IDA Resources: Fifteenth Replenishment” dated Janu-ary 31, 2008 (submitted to the Executive Directors of the Asso-ciation for discussion).

(Adopted April 3, 2008)

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Resolution No. 219

Additions to Resources: Fifteenth Replenishment

WHEREAS:

(A) The Executive Directors of the International DevelopmentAssociation (the “Association”) have considered the prospec-tive financial requirements of the Association and have con-cluded that it is desirable to authorize a replenishment of theresources of the Association for new financing commitmentsfor the period from July 1, 2008, to June 30, 2011 (the “FifteenthReplenishment”) in the amounts and on the basis set out in thereport of the IDA Deputies, “Additions to Resources: FifteenthReplenishment,” (the “Report”), approved by the ExecutiveDirectors on February 28, 2008, and submitted to the Board ofGovernors;

(B) The members of the Association consider that an increase inthe resources of the Association is required and intend to takeall necessary governmental and legislative action to authorizeand approve the allocation of additional resources to the Asso-ciation in the amounts and on the conditions set out in thisResolution;

(C) Members of the Association that contribute resources to theAssociation in addition to their subscriptions as part of the Fif-teenth Replenishment (“Contributing Members”) are to makeavailable their contributions pursuant to the Articles of Agree-ment of the Association (the “Articles”) partly in the form ofsubscriptions carrying voting rights and partly as supplementaryresources in the form of contributions not carrying voting rights;

(D) Additional subscriptions are to be authorized for ContributingMembers in this Resolution on the basis of their agreementwith respect to their preemptive rights under Article III, Sec-tion 1(c) of the Articles, and provision is made for the othermembers of the Association (“Subscribing Members”) intend-ing to exercise their rights pursuant to that provision to do so;

(E) It is desirable to provide for a portion of resources to be con-tributed by members to be paid to the Association as advancecontributions;

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(F) Additional subscriptions and contributions are to be author-ized for Contributing Members to provide compensation forthe Association’s debt forgiveness commitments under theHeavily Indebted Poor Countries (“HIPC”) Debt Initiativeand to provide financing for arrears clearance operations bythe Association;

(G) It is desirable to authorize the Association to provide financingin the form of grants, guarantees, and the intermediation ofrisk management products in addition to loans; and

(H) It is desirable to administer any remaining funds from thereplenishment authorized by Resolution No. 209 of the Boardof Governors of the Association (the “Fourteenth Replenish-ment”) as part of the Fifteenth Replenishment.

NOW THEREFORE THE BOARD OF GOVERNORSHEREBY ACCEPTS the Report as approved by the Executive Direc-tors, ADOPTS its conclusions and recommendations ANDRESOLVES THAT a general increase in subscriptions of the Associa-tion is authorized on the following terms and conditions:

1. Authorization of Subscriptions and Contributions.(a) The Association is authorized to accept additional resources

from each Contributing Member in the amounts specified foreach such member in Columns (2) (3) (7) and (10) of Table 1attached to this Resolution, and each such amount will bedivided into a subscription carrying voting rights and a contri-bution not carrying voting rights as specified in Table 2attached to this Resolution.(i) As part of the resources described in paragraph 1(a) above,

the Association is authorized to accept additional subscrip-tions and contributions from Contributing Members tocompensate the Association for the Association’s debt for-giveness commitments under the HIPC Debt Initiative inthe amounts and as specified in Column (7) of Table 1attached to this Resolution.

(ii) As part of the resources described in paragraph 1(a) above,the Association is authorized to accept additional subscrip-tions and contributions from Contributing Members to finance arrears clearance operations in the amounts and as specified in Column (10) of Table 1 attached to thisResolution.

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(b) The Association is authorized to accept additional resourcesfrom any member for which no contribution is specified inTable 2 and additional subscriptions and contributions fromContributing Members incremental to the amounts specifiedfor each such member in Table 1;

(c) The Association is authorized to accept additional subscrip-tions from each Subscribing Member in the amount specifiedfor each such member in Table 2.

(d) The rights and obligations of the Association and the Con-tributing Members in respect of the authorized subscriptionsand contributions in paragraphs (a) and (b) above will be thesame (except as otherwise provided in this Resolution) asthose applicable to the ninety per cent portion of the initialsubscriptions of original members payable under Article II,Section 2(d) of the Articles of Agreement (the “Articles”) bymembers listed in Part I of Schedule A of the Articles.

2. Agreement to Pay.(a) When a Contributing Member agrees to pay its subscription and

contribution, or a Subscribing Member agrees to pay its sub-scription, it will deposit with the Association an Instrument ofCommitment substantially in the form set out in Attachment I tothis Resolution (“Instrument of Commitment”) and, withrespect to its contribution for debt forgiveness under the HIPCDebt Initiative or for arrears clearance operations, a Contribut-ing Member will either include such contribution in an Instru-ment of Commitment or make a Debt Relief Transfer Contribu-tion, as defined and specified in paragraph 9(a) of thisResolution.

(b) When a Contributing Member agrees to pay a part of its sub-scription and contribution without qualification and the remain-der is subject to enactment by its legislature of the necessaryappropriation legislation, it will deposit a qualified Instrumentof Commitment in a form acceptable to the Association (“Qual-ified Instrument of Commitment”) and such member:(i) undertakes to exercise its best efforts to obtain legislative

approval for the full amount of its subscription and contri-bution by the payment dates set out in paragraph 3(b) ofthis Resolution; and

(ii) agrees that, upon obtaining such approvals, it will notify theAssociation that any parts of its Qualified Instrument ofCommitment have become unqualified.

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3. Payment.(a) Each Subscribing Member will pay to the Association the

amount of its subscription in full within 31 days after the dateof deposit of its Instrument of Commitment; provided that ifthe Fifteenth Replenishment shall not have become effectiveby December 15, 2008, payment may be postponed by themember for not more than 31 days after the Effective Date asdefined in paragraph 6(a) of this Resolution.

(b) Each Contributing Member that deposits an Instrument ofCommitment that is not a Qualified Instrument of Commit-ment will pay to the Association the amount of its subscriptionand contribution in three equal annual installments no laterthan 31 days after the Effective Date or as agreed with theAssociation, January 15, 2010, and January 17, 2011; providedthat:(i) the Association and each Contributing Member may agree

to earlier payment;(ii) if the Fifteenth Replenishment shall not have become

effective by December 15, 2008, payment of the first suchinstallment may be postponed by the member for not morethan 31 days after the date on which the Fifteenth Replen-ishment becomes effective;

(iii) the Association may agree to the postponement of anyinstallment, or part thereof, if the amount paid, togetherwith any unused balance of previous payments by the Con-tributing Member concerned, is at least equal to theamount estimated by the Association to be required fromthat member up to the due date of the next installment forpurposes of disbursements for financing committed underthe Fifteenth Replenishment; and

(iv) if any Contributing Member deposits an Instrument ofCommitment with the Association after the date when thefirst installment of the subscription and contribution is due,payment of any installment, or part thereof, will be made tothe Association within 31 days after the date of suchdeposit.

(c) If a Contributing Member has deposited a Qualified Instru-ment of Commitment and, upon enactment of appropriationlegislation, notifies the Association that an installment, or partthereof, is unqualified after the date when it was due, then pay-ment of such installment, or part thereof, will be made within31 days after the date of such notification.

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4. Mode of Payment.(a) Payments pursuant to this Resolution will be made, at the

option of the member: (i) in cash, on terms agreed between themember and the Association; or (ii) by the deposit of notes orsimilar obligations issued by the government of the member orthe depository designated by such member, which shall be non-negotiable, non-interest bearing and payable at their par valueon demand to the account of the Association.

(b) The Association will encash notes or similar obligations ofContributing Members, on an approximately pro rata basisamong donors, in accordance with the encashment schedule setout at Attachment II to this Resolution, or as agreed between aContributing Member and the Association. With respect to aContributing Member that is unable to comply with one ormore encashment requests, the Association may agree with themember on a revised encashment schedule that yields at leastan equivalent value to the Association.

(c) The provisions of Article IV, Section 1(a) of the Articles willapply to the use of a Subscribing Member’s currency paid tothe Association pursuant to this Resolution.

5. Currency of Denomination and Payment.(a) Members will denominate the resources to be made available

pursuant to this Resolution in SDRs, the currency of the mem-ber if freely convertible, or, with the agreement of the Associa-tion, in a freely convertible currency of another member,except that if a Contributing Member’s economy experienced arate of inflation in excess of ten percent per annum on averagein the period 2004–2006, as determined by the Association, itssubscription and contribution will be denominated in SDRs orin any currency used for the valuation of the SDR and agreedwith the Association.

(b) Contributing Members will make payments pursuant to thisResolution in SDRs, a currency used for the valuation of theSDR, or, with the agreement of the Association, in anotherfreely convertible currency, and the Association may freelyexchange the amounts received as required for its operations.Subscribing Members will make payments in the currency ofthe member or in a freely convertible currency with the agree-ment of the Association.

(c) Each member will maintain, in respect of its currency paid by itunder this Resolution, and the currency of such member derivedtherefrom as principal, interest or other charges, the same con-vertibility as existed on the effective date of this Resolution.

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(d) The provisions of Article IV, Section 2 of the Articles withrespect to maintenance of value will not be applicable.

6. Effective Date.(a) The Fifteenth Replenishment will become effective and the

resources to be contributed pursuant to this Resolution willbecome payable to the Association on the date (the “EffectiveDate”) when Contributing Members whose subscriptions andcontributions aggregate not less than SDR 9,696 million shallhave deposited with the Association Instruments of Commit-ment, Qualified Instruments of Commitment or Debt ReliefTransfer Notifications (as defined in paragraph 9 (b) of thisResolution), provided that this date shall be not later thanDecember 15, 2008, or such later date as the Executive Direc-tors of the Association may determine.

(b) If the Association determines that the availability of additionalresources pursuant to this Resolution is likely to be undulydelayed, it shall convene promptly a meeting of the Contribut-ing Members to review the situation and to consider the stepsto be taken to prevent a suspension of financing to eligiblerecipients by the Association.

7. Advance Contributions.(a) In order to avoid an interruption in the Association’s ability to

commit financing to eligible recipients pending the effectivenessof the Fifteenth Replenishment, the Association may deem,prior to the Effective Date, one third of the total amount ofeach subscription and contribution for which an Instrument ofCommitment has been deposited with the Association, or forwhich a Debt Relief Transfer Notification (as defined in para-graph 9(b) of this Resolution) has been received by the Associ-ation, as an “Advance Contribution,” unless the ContributingMember specifies otherwise in its Instrument of Commitmentor Debt Relief Transfer Notification.

(b) The Association shall specify when Advance Contributionspursuant to subparagraph (a) are to be paid to the Association.

(c) The terms and conditions applicable to contributions to the Fif-teenth Replenishment shall apply also to Advance Contributionsuntil the Effective Date, when such contributions shall bedeemed to constitute payment towards the amount due fromeach Contributing Member for its subscription and contribution.

(d) In the event that the Fifteenth Replenishment shall notbecome effective pursuant to paragraph 6(a) of this Resolu-tion, (i) voting rights will be allocated to each member for the

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Advance Contribution as if it had been made as a subscriptionand contribution under this Resolution, and (ii) each membernot making an Advance Contribution will have the opportunityto exercise its preemptive rights under Article III, Section 1(c)of the Articles with respect to such subscription as the Associa-tion shall specify.

8. Commitment Authority.(a) Subscriptions and contributions will become available for

commitment by the Association for financing to eligible recipi-ents in three equal annual installments: (i) the first installmentwill become available to the Association for commitment fromthe Effective Date, provided that advance contributions maybecome available earlier under paragraph 7(a) of this Resolu-tion; (ii) the second installment will become available fromJuly 1, 2009, and (iii) the third installment will become avail-able from July 1, 2010.

(b) Any qualified part of a subscription and contribution notifiedunder a Qualified Instrument of Commitment will becomeavailable for commitment by the Association for financingwhen the Association has been notified, pursuant to paragraph2(b) (ii) of this Resolution, that such parts have becomeunqualified.

(c) The Association may enter into financing commitments witheligible recipients conditional on such commitments becomingeffective and binding on the Association when resources underthe Fifteenth Replenishment become available for commit-ment by the Association.

9. HIPC and Arrears Clearance Contributions.(a) Contributing Members making an additional subscription and

contribution to compensate the Association for forgiveness ofdebt under the HIPC Debt Relief Initiative or to financearrears clearance operations, will do so either: (i) through anadditional subscription and contribution to the Association’sregular resources (a “Debt Relief Additional Contribution”) or(ii) through a contribution to the HIPC Debt Initiative TrustFund administered by the Association (a “Debt Relief TransferContribution”).

(b) Contributing Members making a Debt Relief Transfer Contri-bution will either (i) enter into a Contribution Agreement withthe Association as administrator of the Debt Relief Trust Fund;or (ii) for Contributing Members that are already current con-

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tributors to the Debt Relief Trust Fund, send to the Associationa notice of additional contribution, (each constituting a “DebtRelief Transfer Notification”). Such Debt Relief Transfer Noti-fication will provide for a contribution to be made to the DebtRelief Trust Fund in the amounts set forth in Columns (7) and(10) of Table 1 to this Resolution, each to be payable in threeequal annual installments no later than 31 days after the Effec-tive Date, January 15, 2010, and January 17, 2011; provided thatthe Association and each Contributing Member may agree toearlier payment.

(c) When any amount of a Debt Relief Transfer Contribution ispaid to compensate the Association for forgiveness of debtunder the HIPC Debt Initiative or to finance arrears clearanceoperations, such amount of the Debt Relief Transfer Contribu-tion will be treated as a subscription and contribution underthe Fifteenth Replenishment.

10. Authorization of Grants, Guarantees, and Risk Intermediation. TheAssociation is hereby authorized to provide financing under theFifteenth Replenishment in the form of grants and guarantees andthrough the intermediation of risk management products.

11. Administration of IDA14 Funds under the Fifteenth Replenishment.(a) On the Effective Date, any funds, receipts, assets and liabilities

held by the Association under the Fourteenth Replenishmentwill be administered under the Fifteenth Replenishment, sub-ject, as appropriate, to the terms and conditions applicable tothe Fourteenth Replenishment.

(b) Pursuant to Article V, Section 2(a)(i) of the Articles of Agree-ment of the Association, the Association is authorized to usethe funds referred to in paragraph 11(a) above, and fundsderived therefrom as principal, interest, or other charges, toprovide financing in the forms of grants and guarantees underthe terms, conditions, and policies applicable under the Fif-teenth Replenishment.

12. Allocation of Voting Rights under Fifteenth Replenishment. Votingrights calculated on the basis of the current voting rights systemwill be allocated to members for subscriptions under the FifteenthReplenishment as follows:(a) Each Subscribing Member that has deposited with the Associa-

tion an Instrument of Commitment will be allocated the sub-scription votes specified for each such member in Table 2 on the

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effective payment date pursuant to paragraph 3(a) of this Reso-lution. Each Subscribing Member will be allocated the addi-tional membership votes specified in Column c-3 of Table 2 onthe date such member is allocated its subscription votes.

(b) Each Contributing Member that has deposited with the Associ-ation an Instrument of Commitment will be allocated one-thirdof the subscription votes specified for each such member inTable 2 on each effective payment date pursuant toparagraph 3(b) of this Resolution. Each Contributing Memberwill be allocated the additional membership votes specified inColumn b-4 of Table 2 for its subscription on the date suchmember is allocated the first one-third of its subscription votes.

(c) Each Contributing Member that has made a Debt Relief Trans-fer Contribution will be allocated a proportionate share of thesubscription votes specified for such member in Column b-3 ofTable 2 from time to time and at least semi-annually followingpayment of any amount of its Debt Relief Transfer Contribu-tion to compensate the Association for forgiveness of debtunder the HIPC Debt Initiative or to finance arrears clearanceoperations.

(d) Each member that has deposited with the Association a Quali-fied Instrument of Commitment will be allocated subscriptionvotes at the time and to the extent of payments made inrespect of its subscription and contribution.

(e) Any member that deposits its Instrument of Commitment afterany of these dates will be allocated, within 31 days of the dateof such deposit, the subscription votes to which such member isentitled on account of such deposit.

(f) If a member fails to pay any amount of its subscription or sub-scription and contribution when due, the number of subscrip-tion votes allocated from time to time to such member underthis Resolution in respect of the Fifteenth Replenishment willbe reduced in proportion to the shortfall in such payments, butany such votes will be reallocated when the shortfall in pay-ments causing such adjustment is subsequently made up.

(Adopted on April 23, 2008)

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RESOLUTION ADOPTED BY THE BOARD OF GOVERNORS OF IDA

AT THE 2008 ANNUAL MEETINGS

Resolution No. 220

Financial Statements, Accountants’ Report, and Administrative Budget

RESOLVED:

THAT the Board of Governors of the Association consider theFinancial Statements, Accountants’ Report, and Administrative Bud-get, included in the 2008 Annual Report, as fulfilling the requirementsof Article VI, Section 11, of the Articles of Agreement and of Section 8of the By-Laws of the Association.

(Adopted October 13, 2008)

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RESOLUTION ADOPTED BY THE COUNCIL OF GOVERNORS OF MIGA

BETWEEN THE 2007 AND 2008 ANNUAL MEETINGS

Resolution No. 80

Election of Directors

RESOLVED:

(a) That the 2008 Regular Election of Directors shall take place inaccordance with the attached Rules; and

(b) That a Regular Election of Directors shall take place in con-nection with the Annual Meeting of the Council of Governorsin 2010.

(Adopted August 1, 2008)

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RESOLUTION ADOPTED BYTHE COUNCIL OF GOVERNORS OF MIGA

AT THE 2008 ANNUAL MEETINGS

Resolution No. 81

Financial Statements and the Report of the Independent Accountants

RESOLVED:

THAT the Council of Governors of the Agency consider the Finan-cial Statements and the Report of Independent Accountants includedin the 2008 Annual Report, as fulfilling the requirements of Article 29of the MIGA Convention and of Section 16(b) of the By-Laws of theAgency.

(Adopted October 13, 2008)

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REPORTS OF THE EXECUTIVE DIRECTORS OF THE BANK

April 22, 2008

Transfer from Surplus to Replenish the Trust Fund for Gaza and West Bank

1. On October 19, 1993, by the terms of Resolution No. 93-11 andIDA 93-7, the Executive Directors of the International Bank forReconstruction and Development (Bank) and the InternationalDevelopment Association (Association) approved the establish-ment of the Trust Fund for Gaza. On November 11, 1993, by theterms of Resolution No. 483, the Board of Governors of the Bankapproved the transfer from surplus, by way of grant, of US$50 mil-lion to the Trust Fund for Gaza. On August 1, 1995, by the terms ofResolution No. 95-6 and IDA 95-3, the Executive Directors of theBank and the Association amended Resolution No. 93-11 andIDA 93-7 by (a) expanding the territorial scope of the activities tobe financed out of the Trust Fund for Gaza to include such areas,sectors and activities in the West Bank which are or will be underthe jurisdiction of the Palestinian Authority pursuant to the rele-vant Israeli-Palestinian agreements; and (b) changing the name ofthe “Trust Fund for Gaza” to “Trust Fund for Gaza and WestBank”. On October 12, 1995, by the terms of Resolution No. 500,the Board of Governors approved the transfer to the Trust Fundfor Gaza and West Bank, by way of grant out of the Bank’s FY95net income, of US$90 million. On December 19, 1996, by the termsof Resolution No. 96-11 and No. IDA 96-7, the Executive Direc-tors of the Bank and the Association further amended ResolutionNo. 93-11 and IDA 93-7 by (a) introducing flexibility to the termsunder which resources may be provided out of the Trust Fund forGaza and West Bank; and (b) requiring that the repayment oftrust fund credits made out of the Trust Fund for Gaza and WestBank accrue to the Association as part of its resources. Additionalfunding was provided by transfers from surplus or net incomeapproved by the Bank’s Board of Governors on February 3, 1997(US$90 million, Resolution 511), July 13, 1998 (US$90 million, Res-olution No. 519), September 30, 1999 ($60 million, Resolution No.529), February 4, 2004 (US$80 million, Resolution No. 556) and Jan-uary 31, 2007 (US$50 million, Resolution No. 584).

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2. In view of the material contribution that the Bank’s financial assis-tance makes to Palestinian economic welfare, the Executive Direc-tors consider that the Trust Fund for Gaza and West Bank shouldbe replenished. They recommend that the Board of Governorsauthorize the transfer from surplus of the amount of US$55 millionto the Trust Fund for Gaza and West Bank.

3. Accordingly, the Executive Directors recommend that the Boardof Governors adopt the draft Resolution. . . .1

(This report was approved and its recommendation was adopted by theBoard of Governors on June 4, 2008)

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1 See page 172.

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May 29, 2008

Transfer of IBRD Surplus to Food Price Crisis Response Trust Fund

1. In view of the need for assistance to countries as a result of thefood price crisis and in order to promote the purposes of the Inter-national Bank for Reconstruction and Development (the “IBRD”)and the International Development Association (IDA or the“Association”) (collectively, the “Bank”) in these circumstances,the Executive Directors of the Bank consider that a trust fundshould be established forthwith to assist those countries as an ini-tiative for the benefit of the members of the Association as part ofa multi-donor facility. The Executive Directors of the IBRD recom-mend that the Board of Governors of the IBRD authorize theimmediate transfer from surplus of $85 million to the Food PriceCrisis Response (FPCR) Trust Fund.

2. Accordingly, the Executive Directors of the IBRD recommend thatthe Board of Governors of the Bank adopt the draft resolution. . . .1

(This report was approved and its recommendation was adopted onJune 13, 2008)

1 See page 172.

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June 13, 2008

Report of the Boards of Governors of the IMF and the World Bank by the Joint Committee on the Remuneration

of Executive Directors and their Alternates

INTRODUCTION

1. Pursuant to Section 14(e) of the By-Laws of the Fund and Section13(e) of the By-Laws of the Bank, the undersigned were appointedto the 2008 Joint Committee on the Remuneration of ExecutiveDirectors and their Alternates (JCR).

2. The JCR met in Paris on April 28–29, 2008, and in Washington,D.C. on June 13, 2008. The JCR undertook an in-depth review ofthe remuneration of IMF and World Bank Executive Directors andtheir Alternates. This was in line with the process started in 2000 toundertake a full-scale review every four years, with a streamlinedreview being undertaken in the intervening years.

REMUNERATION

3. In accordance with the longstanding practice of JCRs, the Commit-tee considered the roles and responsibilities of Fund and BankExecutive Directors; budgetary and governance developments inthe two institutions—including the expenditure reductions in theOffices of Fund Executive Directors; and factors relevant to theremuneration of Executive Directors and Alternates. These factorsincluded the internal positioning of Executive Directors’ remuner-ation relative to the compensation of the organizations’ manage-ment and staff; information on compensation levels and develop-ments in the public sectors of selected member countries and otherinternational organizations; the effects of consumer price increaseson the real income of Executive Directors; and the current year’ssalary increases for other Fund and Bank personnel.

4. With respect to issue of internal positioning, the Committee—likeits predecessors—considered it important to position the remuner-ation of Executive Directors at an appropriate level in order toreflect their responsibilities in the governance of the institutions. Inthis respect, the Committee was of the view that the maintenanceof an appropriate relationship of Executive Directors’ salaries tothe remuneration of the Heads of the two institutions is the most

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relevant criterion to be taken into account given their respectiveroles within the decision-making and governance structures of theinstitutions. This is also consistent with the provision of the By-Laws of the Fund and the Bank that “In making proposals withrespect to the remuneration of Executive Directors and theirAlternates, the Committee shall bear in mind their functions underthe Articles of Agreement of the [Fund] [Bank] in relation to thoseof the [Managing Director] [President].”1 While recognizing thatpast JCRs had been careful to avoid any link between the salariesof senior staff and Executive Directors in order to avoid any con-flict of interest on the part of the Executive Boards, which decidethe salaries of Fund and Bank staff, the Committee felt that a pri-mary reference to the salary of the Heads of the institutions wouldaddress more effectively any conflict-of-interest concerns, becausethe salaries of the Managing Director and President are approvedby the Boards of Governors of the institutions. The Committee alsonoted that the decline in the level of Executive Directors’ remu-neration relative to the senior staff salary structures that hasoccurred since the mid-1990s, was largely attributable to upwardshifts in the higher ranges of the staff salary structure in responseto competitive market pressures, which are not directly relevant tothe position of Executive Directors.

5. The Committee noted that over the past twenty years, the relation-ship between the remuneration of Executive Directors and the totalremuneration (salary and non-pensionable allowance) of the twoHeads has been fairly stable—although declining slightly fromabout 46 percent in the early 1990s to the current level of 44.3 per-cent. In terms of the base salary of the Fund’s Managing Directorand the World Bank President, the remuneration of ExecutiveDirectors currently stands at 52 percent.2 The Committee consid-ered these relationships to be broadly appropriate. It was also reas-sured, in this connection, by data showing that, over the past twodecades, the educational and professional profiles of ExecutiveDirectors have remained of high standards and relevant to the func-tions of the institutions. The Committee further noted that a

1 Section 14 (e) (ii) of the By-Laws of the Fund and Section 13 (e) (ii) of the By-Laws of the Bank.2 This ratio is lower than in the 1990s, but the decline results almost entirely from therestructuring of the components of the remuneration of the Managing Director andPresident; the restructuring raised the level of the base salary and reduced corre-spondingly the amount of the allowance.

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broadly similar relationship between the salaries of ExecutiveDirectors and those of the Heads of the institutions exists in otherinternational financial institutions with a resident Executive Board.3

6. In light of this, the Committee has referred primarily to the rela-tionship to the base salary of the Heads of the two institutions inassessing the appropriate internal positioning of the remunerationlevels of Executive Directors, and recommends that future JCRsfollow a similar approach. Significant deviations from the currentratio of 52 percent should be carefully evaluated, including withrespect to any corrective actions that the JCR may deem warranted.

7. As part of its comprehensive review, the 2008 Committee alsolooked at the remuneration developments in external comparatorpositions in a number of countries. Recognizing that past JCRs hadraised concerns about the limited usefulness of external compara-tor surveys relative to the resource costs involved, the Committeenarrowed its review of external comparability to the salary levelsand recent adjustments for senior civil servants in the ministries offinance and central banks of the G7 countries. While emphasizingthe limited scope of the review, which cannot be considered to berepresentative of salary developments across the membership atlarge, the Committee was nevertheless reassured that availabledata suggest that there appear not to be major anomalies betweenthe salaries of Executive Directors and of comparator positions innational public sectors. The Committee also noted that 2007–2008salary increases for senior personnel in the civil service and centralbanks of large industrial countries appear, on the whole, to bebroadly aligned with CPI increases, although there is significantvariation across the G7 countries.

8. The Committee also considered the following data:

• The consumer price index (CPI) for the Washington Metropolitanarea has risen by 5.0 percent (May 2007 to May 2008). The remu-neration of the Managing Director of the Fund and the Presidentof the Bank are linked to the May-to-May change in the Washing-ton Metropolitan area CPI in years between major reviews (nor-mally carried out at the start of an appointment term) and willtherefore be increased by 5 percent with effect from July 1, 2008.

3 African Development Bank, Asian Development Bank, European Bank forReconstruction and Development, and Inter-American Development Bank.

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• The salary structure for the Fund’s professional and managerialstaff (Grades A9–B5) has been increased uniformly by 4.2 per-cent with effect from May 1, 2008. The salaries of the Fund’sDeputy Managing Directors, which are indexed on the samebasis as the remuneration of the Managing Director, will beincreased by 5 percent on July 1, 2008.

• The proposed increase in the salary structure for the WorldBank’s staff, which is currently pending with the ExecutiveBoard and is to be effective from July 1, 2008, averages 3.3 per-cent with increases ranging between 1.6 percent and 4.4 percentat the professional and managerial grades.4

9. The JCR reviewed the parallelism between the remuneration ofFund and Bank Executive Directors, and concluded that there con-tinues to be justification for their remuneration to be set at thesame level.

10. Taking all the above considerations into account, the JCR recom-mends an increase in the salary of Executive Directors equal to theMay 2007-to-May 2008 CPI increase for the Washington Metropol-itan area.5 This increase of 5 percent would raise the salary ofExecutive Directors from $219,800 to $230,790 effective on July 1,2008, and would allow the ratio of the remuneration of ExecutiveDirectors to the base salary of the Heads of the two institutions tobe maintained at about 52 percent.

11. The JCR considers that, at 86.5 percent, the ratio between the salaryof Alternate Executive Directors and that of Executive Directorscontinues to be appropriate, and accordingly recommends the sameCPI related increase in the salary of Alternate Executive Directorsfrom $190,140 to $199,650 effective on July 1, 2008.

BENEFITS

12. Within the framework of the applicable resolutions of the Fundand Bank Boards of Governors, each year’s JCR considers the pos-sible extension of any new or modified benefits for Fund and Bank

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4 This does not include the staff salary ranges at Grades J and K, which will beraised by about 5 percent.5 The salaries of both Executive Directors and Alternate Executive Directors cur-rently constitute their total remuneration; beginning in 2000, no separate supplemen-tal allowances have been paid.

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staff to Executive Directors and their Alternates, and whether theextension of such benefits would require the approval of the Boardof Governors or may be left to the Executive Boards of the Fundand Bank.6 The Committee accordingly considered the followingchanges to the benefits of IMF staff that were adopted after the2007 JCR meeting:

(a) The provisions governing the existing early retirement benefitsunder the Staff Retirement Plan (SRP) were revised to providegreater flexibility for staff with shorter service by providing anadditional option that allows staff with three or more years ofservice to retire with an immediate, but actuarially reduced,pension between 50 and 55 years of age (rather than from age55) and, in most cases, somewhat lowers the size of the earlyretirement reductions in the level of pensions.

(b) The eligibility for existing benefits under the Staff RetirementPlan and for Spouse and Child Allowances was extended to thedomestic partners of staff members on the same basis as staffmembers’ spouses, and, for purposes of benefit entitlements, amore consistent interpretation of marriage—based on the lawsof the jurisdiction where the marriage occurs—was adopted.These changes substantially completed the process started in2000 (which has previously applied to Executive Directors) ofproviding comparable treatment under the Fund’s personnelpolicies and benefit programs to staff in traditional and non-traditional family relationships.

13. The Committee also considered changes to World Bank’s StaffRetirement Plan (SRP) that are currently pending with the Bank’sExecutive Board. The principal change involves a modest reduc-tion in the size of the current actuarial reductions applicable toearly retirement pensions under one of the two components—thedefined benefit pension—of the Plan.

14. The JCR determined that it would be appropriate to make theFund’s benefit changes and, subject to Executive Board approval,the Bank’s SRP changes applicable to the Executive Directors andAlternate Executive Directors of the respective organizations.

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6 IMF Board of Governors Resolutions No. 34-7, adopted on July 20, 1979 and No. 31-1, adopted on October 16, 1975, and World Bank Board of Governors Reso-lutions 337, adopted on July 20, 1979, and 301, adopted October 16, 1975.

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There are compelling practical reasons for maintaining consistencyof benefits between Executive Directors and staff, as the need toprovide benefits with different provisions would add greatly toadministrative complexity and costs.

15. With regard to whether the extension of these benefit changes atthe Fund to Executive Directors would require the approval of theBoard of Governors or may be left to the Fund’s Executive Board,the Committee carefully considered the effects that the changeswould have on Executive Directors and Alternates. The Committeedetermined that the changes would not alter the basic nature of theFund’s existing retirement benefits, and they would have a rela-tively small effect on the overall cost of the Plan and general levelof SRP benefits. Depending on individuals’ age and length of ser-vice at their separation, it is expected that the SRP benefits ofsome Executive Directors and Alternates could be raised, with anappreciable increase in a small minority of cases. However, thebenefits of the substantial majority of Executive Directors wouldnot change significantly or at all.

16. Taking into account all of these considerations, the Committee hasconcluded that the Fund’s SRP changes are such that it is not nec-essary to seek the approval of the Board of Governors for thechanges to be applied to the Fund’s Executive Directors and Alter-nates; they may be made available to Fund Executive Directorsand Alternates by the Fund’s Executive Board.

17. The Committee also carefully considered the effects of the changesto the Bank’s SRP and the Fund’s extension of domestic partnerbenefits. In both cases, the Committee similarly concluded that thechanges would not alter the basic nature of the respective organi-zation’s existing benefits, and they would not have a significantimpact on the overall cost of the benefit programs or the value ofthe benefits. The Bank’s SRP revision would have only a limitedimpact on approximately one-half of the value of the retirementbenefit. (The other half of the Plan is a “cash balance” paymentthat would not be affected by the proposed change in the definedbenefit component.) The impact of the Fund’s benefits changeswould also be limited and, as noted, completes a set of measuresalready applied to Executive Directors. The Committee accord-ingly concluded that these benefits may be made available to Bankand Fund Executive Directors and Alternates by the respectiveExecutive Boards.

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18. In addition, the JCR followed up on an issue that had arisen in2007 in the Fund’s Committee on Executive Board AdministrativeMatters (CAM)—and was discussed on a preliminary basis by the2007 JCR—in connection with the alignment of the home leavepolicy for Fund Executive Directors with the new home leave pol-icy for Fund staff.7 To achieve a more full alignment with the homeleave provisions applicable to Fund staff, it had been suggested atthat time that consideration be given to: (a) extending the homeleave entitlement to Executive Directors and Alternates them-selves (now only their family members are eligible); and (b) grant-ing an initial home leave entitlement within the first two-yearperiod of service (at present, the initial entitlement is earned in thethird year of service). The JCR noted that these suggestions wouldinvolve significant changes to the home leave provisions for Execu-tive Directors and Alternates, as prescribed by the Fund’s By-Laws,with potentially non-negligible cost implications. Given the climateof significant budgetary constraint within the Fund—including inthe Offices of Executive Directors themselves—and without pre-judging the rationale of the suggested changes, the Committee feltthat it would not be appropriate to pursue this matter or to seekthe Governors’ approval of such changes at the present time.

JCR PROCESS

19. The 2008 JCR agreed with previous Committees that there is scopefor further streamlining the JCR process while safeguarding itseffectiveness and independence. The Committee considered arange of options towards this end, and saw as most promising aprocess by which—in the years between full-scale reviews (whichwould continue to be scheduled at four-year intervals), and barringexceptional or unexpected developments—future JCRs would pro-pose a salary increase for Executive Directors equal to the year’s(May-to-May) percentage increase in the consumer price index forthe Washington Metropolitan area.

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7 Paragraphs 20-23 of the 2007 JCR Report discuss the alignment of the home leavepolicy in some detail.

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20. This approach would align the JCR process more closely with thepresent process for adjusting the remuneration of the ManagingDirector and World Bank President in the years between the com-prehensive reviews carried out at the start of their appointmentterms. It would also be cost-saving by introducing the expectationthat the JCR would not usually meet annually as it has in the past.At the same time, and consistent with the provisions of the Fundand Bank By-Laws, JCRs would continue to be constituted eachyear in order to decide whether to endorse application of theindexation formula or to determine if there are reasons to departfrom it.8 The availability of a Committee in the years between full-scale reviews would ensure that all relevant factors for assessingthe remuneration of Executive Directors would continue to beconsidered on a timely basis. The annual constitution of a JCRwould also permit benefits issues to continue to be addressed asthey arise, possibly through written communication among Com-mittee members.

21. In light of the foregoing considerations, the Committee recom-mends that, barring exceptional or unexpected developments, the2009-2011 JCRs propose a salary increase for Executive Directorsand Alternate Executive Directors equal to the year’s (May-to-May) percentage increase in the CPI for the Washington Metropol-itan area.9 The next full-scale review, expected to take place in2012, would then be an opportunity to take stock of the experiencewith this new, streamlined process.

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8 Section 14(e) of the Fund By-Laws and Section 13(e) of the Bank By-Laws.9 The specific index that would be used for this purpose is the U.S. Bureau of LaborStatistics Regional (Washington, Baltimore, Maryland, Virginia, West Virginia) Con-sumer Price Index for All Urban Consumers, or its equivalent replacement.

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RECOMMENDATIONS REQUIRING A VOTE BY THE GOVERNORS

22. In light of the recommendations on remuneration of Fund and BankExecutive Directors and their Alternates (paragraphs 10 and 11above), the Committee recommends that the draft resolutions . . .1for the Fund and the Bank, included in Attachments I and II, beadopted by the respective Boards of Governors of the Fund andthe Bank.

23. The Joint Committee directs the Secretary of the Fund and theVice President and Corporate Secretary of the Bank to transmitthis report to the Boards of Governors of the Fund and the Bank,respectively, for a vote without meeting in accordance with Sec-tions 13 and 14(e) of the By-Laws of the Fund and Sections 12 and13(e) of the By-Laws of the Bank.

(This report was approved and its recommendation was adopted on July 25, 2008)

1 See page 172.

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July 9, 2008

2008 Regular Election of Executive Directors

1. Pursuant to Resolution No. 576 of the Board of Governors, a Reg-ular Election of Executive Directors will take place in connectionwith the 2008 Annual Meeting of the Board of Governors. It is pro-posed that this Regular Election be conducted by rapid means ofcommunication so as to conclude a reasonable time in advance ofNovember 1, 2008, when the term of office of the elected ExecutiveDirectors shall commence.

2. The Executive Directors have noted that the size of the Board wasincreased to 24 in 1992, after a large increase in the membership, inorder to preserve broad geographic representation which permits allmajor groups of countries to be represented.As in past years, there isstrong feeling among the Executive Directors that, in the unlikelyevent that there was lack of such wide geographical and balancedrepresentation, prompt corrective action would be called for.

3. The Executive Directors recommend that the maximum and mini-mum percentages of eligible votes required for election of an Exec-utive Director be 10 percent and 2 percent, respectively. Theybelieve that such percentages would provide a range that is broadenough in the circumstances.

4. The Executive Directors recommend that the date from which the2008 Regular Election will be effective be November 1, 2008.

5. The Executive Directors note that under the Articles of Agree-ment of the International Finance Corporation (the Corporation)and the International Development Association (the Association)the elected Directors will serve ex officio as members of the Boardof Directors of the Corporation and Executive Directors of theAssociation.

6. The Executive Directors recommend that the subsequent RegularElection of Executive Directors take place in connection with theAnnual Meeting of the Board of Governors in 2010.

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7. The Executive Directors recommend the adoption by the Board ofGovernors of the attached Rules for the 2008 Regular Election ofExecutive Directors, which provide for the conduct of this Electionby rapid means of communication.

8. The draft Resolution . . .1, embodying the above recommenda-tions, is proposed for adoption by the Board of Governors.

(This report was approved and its recommendation was adopted by theBoard of Governors on August 1, 2008)

1 See page 173.

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Rules for the 2008 Regular Election of Executive Directors

DEFINITIONS

1. In these Rules, unless the context shall otherwise require,

(a) “Articles” means the Articles of Agreement of the Bank.(b) “Board” means the Board of Governors of the Bank.(c) “Chairman” means the Chairman of the Board or a Vice Chair-

man acting as Chairman.(d) “Governor” includes the Alternate Governor and, for actions

taken at any meeting, a temporary Alternate Governor, whenacting for the Governor.

(e) “Secretary” means the Corporate Secretary or any acting Cor-porate Secretary of the Bank.

(f) “Election” means the 2008 Regular Election of ExecutiveDirectors.

(g) “Eligible votes” means the total number of votes that can becast in the election.

2. All actions taken under these Rules, including communications bythe Secretary and the Chairman and nominations and balloting bythe Governors, may be taken by rapid means of communication.

TIMING OF ELECTION

3. The election shall be held by requesting nominations and conduct-ing ballots so as to conclude a reasonable time in advance ofNovember 1, 2008, when the term of office of the elected ExecutiveDirectors shall commence.

BASIC RULES—SCHEDULE B

4. Subject to the adjustment set forth in the Rules, the provisions ofSchedule B of the Articles shall apply to the conduct of the elec-tion, except that:

(a) “two percent” shall be substituted for “fourteen percent” inParagraphs 2 and 5 and “ten percent” shall be substituted for“fifteen percent” in Paragraphs 3, 4 and 5 thereof; and

(b) “nineteen persons” shall be substituted for “seven persons” inParagraphs 2, 3 and 6, “eighteen persons” shall be substitutedfor “six persons” in Paragraph 6, and “the nineteenth” shall besubstituted for the “seventh” in Paragraph 6 thereof.

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EXECUTIVE DIRECTORS TO BE ELECTED

5. Nineteen Executive Directors shall be elected.

SUPERVISION OF THE ELECTION

6. The Chairman shall appoint such tellers and other assistants andtake such other action as he deems necessary for the conduct of theelection.

NOMINATIONS

7. (a) The Secretary shall request nominations from Governors dur-ing a suitable period specified by the Secretary.

(b) Each nomination shall be made on a nomination form fur-nished by the Secretary, signed by the Governor or Governorsmaking the nomination and submitted to the Secretary.

(c) Any person nominated by one or more Governors entitled tovote in the election shall be eligible for election as ExecutiveDirector.

(d) A Governor may nominate only one person.(e) If a nominee withdraws from the ballot after the closing date of

the nomination period, but before the closing date of the bal-lot, the Secretary shall inform all Governors eligible to vote ofsuch withdrawal and invite them to submit nominations of acandidate by rapid means of communication, during a suitableperiod specified by the Secretary. At the end of the prescribedperiod of time for this nomination, the Secretary shall compilea new list of candidates with all individuals who were nomi-nated by at least one Governor in either nomination period,and circulate that list by rapid means of communication to allGovernors eligible to vote with an invitation to vote throughsimilar channels before the end of the balloting period.

BALLOTING

8. (a) Upon the closing of nominations, the Secretary shall send to allGovernors entitled to vote in the election the list of candidatesfor the election, together with an invitation to Governors tovote in the first ballot, and announce the deadline for receipt ofballots.

(b) One ballot form shall be furnished to each Governor entitledto vote. On any particular ballot, only ballot forms distributedfor that ballot shall be counted.

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9. Each ballot shall be taken as follows:

(a) Ballots shall be conducted by deposit of ballot forms, signed byGovernors eligible to vote, with the Secretary. The first ballotshall take place after the close of nominations, concluding nolater than the first day of the 2008 Annual Meeting of the Board.

(b) When a ballot shall have been completed, the Secretary shallcause the ballots to be counted and, as soon as practicable afterthe tellers have completed their tally of the ballots, shallannounce the names of the persons elected. If a succeeding bal-lot is necessary, the Secretary shall announce the names of thenominees to be voted on, the members whose Governors areeligible to vote and the time period for balloting.

(c) If the tellers shall be of the opinion that any particular ballot isnot properly executed, they shall, if possible, afford the Governorconcerned an opportunity to correct it before tallying the results;and such ballot, if so corrected, shall be deemed to be valid.

10. When on any ballot the number of nominees shall not exceed thenumber of Executive Directors to be elected, each nominee shall bedeemed to be elected by the number of votes received by him onsuch ballot; provided, however, that, if on such ballot the votes ofany Governor shall be deemed under Paragraph 4 of Schedule B10

to have raised the votes cast for any nominee above ten percent ofthe eligible votes, no nominee shall be deemed to have been electedwho shall not have received on such ballot a minimum of two per-cent of the eligible votes, and a succeeding ballot shall be taken forwhich any nominee not elected shall be eligible.

11. If, as a result of the first ballot, the number of Executive Directors tobe elected in accordance with Section 5 above shall not have beenelected, a second, and if necessary, further ballots shall be taken. TheGovernors entitled to vote on such succeeding ballots shall be only:

(a) those who voted on the preceding ballot for any nominee notelected; and

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10 Paragraph 4 of Schedule B reads as follows:4. In determining whether the votes cast by a governor are to be deemed to have

raised the total of any person above ten percent of the eligible votes, the ten percentshall be deemed to include, first, the votes of the governor casting the largest numberof votes for such person, then the votes of the governor casting the next largest num-ber, and so on until ten percent is reached.

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(b) those Governors whose votes for a nominee elected on thepreceding ballot are deemed under Paragraph 4 of Schedule Bto have raised the votes cast for such nominee above ten per-cent of the eligible votes.

12. If the votes cast by a Governor bring the total votes received by anominee from below to above ten percent of the eligible votes, allthe votes cast by this Governor shall be deemed to have been castfor the benefit of that nominee without raising the total votes ofthe nominee above ten percent.

13. If on any ballot two or more Governors having an equal number ofvotes shall have voted for the same nominee and the votes of oneor more, but not all, of such Governors could be deemed underParagraph 4 of Schedule B not to have raised the total votes of thenominee above ten percent of the eligible votes, the Chairman shalldetermine by lot the Governor or Governors, as the case may be,who shall be entitled to vote on the next ballot.

14. Any member whose Governor has voted on the last ballot andwhose votes did not contribute to the election of an ExecutiveDirector may, before the effective date of the election, as set forthin Section 18 below, designate an Executive Director who waselected, and that member’s votes shall be deemed to have countedtoward the election of the Executive Director so designated.

ABSTENTION FROM VOTING

15. If a Governor shall abstain from voting on any ballot, he shall notbe entitled to vote on any subsequent ballot and his votes shall notbe counted within the meaning of Section 4(g) of Article V towardsthe election of any Executive Director. If at the time of any ballot amember shall not have a duly appointed Governor, such membershall be deemed to have abstained from voting on that ballot.

ELIMINATION OF NOMINEES

16. If on any ballot two or more nominees shall receive the same low-est number of votes, no nominee shall be dropped from the nextsucceeding ballot, but if the same situation is repeated on such suc-ceeding ballot, the Chairman shall eliminate by lot one of suchnominees from the next succeeding ballot.

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ANNOUNCEMENT OF THE RESULT

17. After the tally of the last ballot, the Chairman shall cause to be dis-tributed a statement setting forth the result of the election.

EFFECTIVE DATE OF ELECTION

18. The effective date of the election shall be November 1, 2008, andthe term of office of the elected Executive Directors shall com-mence on that date. Incumbent elected Executive Directors shallserve through the day preceding such date.

GENERAL

19. Any question arising in connection with the conduct of the electionshall be resolved by the tellers, subject to appeal, at the request ofany Governor, to the Chairman and from him to the Board. When-ever possible, any such questions shall be put without identifyingthe members or Governors concerned.

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INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

2008 REGULAR ELECTION OF EXECUTIVE DIRECTORSSTATEMENT OF RESULTS OF ELECTION, OCTOBER 13, 2008

Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Svein AASS 54,039Denmark 13,701Estonia 1,173Finland 8,810Iceland 1,508Latvia 1,634Lithuania 1,757Norway 10,232Sweden 15,224

Abdulrahman M. ALMOFADHI 45,045Saudi Arabia 45,045

Jorge Humberto BOTERO 58,124Brazil 33,537Colombia 6,602Dominican Republic 2,342Ecuador 3,021Haiti 1,317Panama 635Philippines 7,094Suriname 662Trinidad and Tobago 2,914

Dante CONTRERAS 37,499Argentina 18,161Bolivia 2,035Chile 7,181Paraguay 1,479Peru 5,581Uruguay 3,062

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Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Sid Ahmed DIB 51,544Afghanistan 550Algeria 9,502Ghana 1,775Iran, Islamic Republic of 23,936Morocco 5,223Pakistan 9,589Tunisia 969

James HAGAN 55,800Australia 24,714Cambodia 464Kiribati 715Korea, Republic of 16,067Marshall Islands 719Micronesia, Fed. States of 729Mongolia 716New Zealand 7,486Palau 266Papua New Guinea 1,544Samoa 781Solomon Islands 763Vanuatu 836

Merza H. HASAN 47,042Bahrain 1,353Egypt, Arab Republic of 7,358Iraq 3,058Jordan 1,638Kuwait 13,530Lebanon 590Libya 8,090Maldives 719Oman 1,811Qatar 1,346Syrian Arab Republic 2,452United Arab Emirates 2,635Yemen, Republic of 2,462

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Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Konstantin HUBER 77,669Austria 11,313Belarus 3,573Belgium 29,233Czech Republic 6,558Hungary 8,300Kazakhstan 3,235Luxembourg 1,902Slovak Republic 3,466Slovenia 1,511Turkey 8,578

Dhanendra KUMAR 54,945Bangladesh 5,104Bhutan 729India 45,045Sri Lanka 4,067

Alexey G. KVASOV 45,045Russian Federation 45,045

Giovanni MAJNONI 56,705Albania 1,080Greece 1,934Italy 45,045Malta 1,324Portugal 5,710San Marino 845Timor-Leste 767

Toga MCINTOSH 54,347Angola 2,926Botswana 865Burundi 966Ethiopia 1,228Gambia, The 793Kenya 2,711Lesotho 913Liberia 713Malawi 1,344Mozambique 1,180Namibia 1,773Nigeria 12,905

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Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Seychelles 513Sierra Leone 968South Africa 13,712Sudan 1,100Swaziland 690Tanzania 1,545Uganda 867Zambia 3,060Zimbabwe 3,575

Michel MORDASINI 49,192Azerbaijan 1,896Kyrgyz Republic 1,357Poland 11,158Serbia 3,096Switzerland 26,856Tajikistan 1,310Turkmenistan 776Uzbekistan 2,743

Louis Philippe ONG SENG 31,102Benin 1,118Burkina Faso 1,118Cameroon 1,777Cape Verde 758Central African Republic 1,112Chad 1,112Comoros 532Congo, Dem. Rep. of 2,893Congo, Republic of 1,177Cote d’Ivoire 2,766Djibouti 809Equatorial Guinea 965Gabon 1,237Guinea 1,542Guinea-Bissau 790Madagascar 1,672Mali 1,412Mauritius 1,492Niger 1,102Rwanda 1,296Sao Tome and Principe 745Senegal 2,322Togo 1,355

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Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Jose A. ROJAS R. 72,786Costa Rica 483El Salvador 391Guatemala 2,251Honduras 891Mexico 19,054Nicaragua 858Spain 28,247Venezuela, Rep. 20,611

Bolivariana de

Ruud TREFFERS 73,146Armenia 1,389Bosnia and Herzegovina 799Bulgaria 5,465Croatia 2,543Cyprus 1,711Georgia 1,834Israel 5,000Macedonia, FYR 677Moldova 1,618Montenegro 938Netherlands 35,753Romania 4,261Ukraine 11,158

Sun VITHESPONGSE 41,096Brunei Darussalam 2,623Fiji 1,237Indonesia 15,231Lao People’s Dem. Rep. 428Malaysia 8,494Myanmar 2,734Nepal 1,218Singapore 570Thailand 6,599Tonga 744Vietnam 1,218

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Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Samy WATSON 62,217Antigua and Barbuda 770Bahamas, The 1,321Barbados 1,198Belize 836Canada 45,045Dominica 754Grenada 781Guyana 1,308Ireland 5,521Jamaica 2,828St. Kitts and Nevis 525St. Lucia 802St. Vincent and the 528

Grenadines

ZOU Jiayi 45,049China 45,049

Total Number of Members Voted 177 1,012,392

/s/ /s/ Carmen Maria Madriz Contreras Carl-Hermann G. Schlettwein

(Costa Rica) (Namibia)Teller Teller

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August 7, 2008

Allocation of FY08 Net Income

1. The General Reserve (including cumulative exchange rate transla-tion adjustment) of the IBRD as of June 30, 2008 was $25,888 million.As of that date, the surplus of the IBRD was $0 million, and the Spe-cial Reserve created under Article IV, Section 6 of the IBRD’s Arti-cles of Agreement totaled $293 million. The IBRD’s reported netincome for the fiscal year ended June 30, 2008 (FY08) amounted to1,491 million. IBRD’s Operating Income (referred to as “Net incomebefore Board of Governors-Approved Transfers and net unrealized(losses) gains on non-trading derivatives and borrowings measured atfair value, per FAS 133 as amended” in the FY08 external financialstatements) is used as net income for annual net income allocationpurposes. For FY08, Operating Income was $2,271 million, of which$10 million is excluded from allocable net income and has been trans-ferred to the Externally Financed Outputs Adjustment Account.

2. The Executive Directors have considered what action to take, or torecommend that the Board of Governors take, with respect toFY08 net income. The Executive Directors have concluded that theinterests of the IBRD and its members would best be served by thefollowing dispositions of the net income of the IBRD:

(a) the addition of $811 million to the General Reserve, plus orminus any rounding amount less than $1 million;

(b) the addition of $117 million to the pension reserve represent-ing the excess of the SRP and RSBP contribution amountsover the accounting expense;

(c) the transfer to the International Development Association, byway of a grant of $583.3 million, from FY08 allocable netincome, which amount would be usable to provide financing inthe form of grants in addition to loans;

(d) the retention as surplus of $635 million; and(e) the transfer to the Kosovo Sustainable Employment Develop-

ment Trust Fund, by way of a grant of $40 million, from surplus.

3. Accordingly, the Executive Directors recommend that the Boardof Governors note with approval the present Report and adopt thedraft Resolution. . . .1

(This report was approved and its recommendation was adopted by theBoard of Governors on September 9, 2008)

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1 See page 173.

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REPORTS OF THE BOARD OF DIRECTORS OF IDA

December 6, 2007

Latvia—Change in Membership Status

1. Latvia is a Part II member of the Association. Latvia has requestedthat its membership status in the Association be changed from Part II to Part I. In addition to the technical differences betweenPart I and Part II concerning members’ initial subscription, Part Imembers are expected to make significant contributions to eachreplenishment, commensurate with their economic standing. Theauthorities of Latvia recognize the financial responsibility associ-ated with Part I membership in the Association. Latvia has alsorequested that its voting rights, derived from its cumulative sub-scriptions and contributions to the resources of the Association, beadjusted on the basis of its Part I membership status.

2. The Executive Directors of the Association have welcomed theexpression of a stronger commitment by Latvia to supporting theactivities of the Association, and have accepted its request for achange in its membership status. The Executive Directors recom-mend that the Board of Governors adopt the draft Resolution . . .1which would modify its status in the Association.

(This report was approved and its recommendation was adopted by theBoard of Governors on January 22, 2008)

1 See page 178.

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February 20, 2008

Membership of the Republic of Lithuania

1. In accordance with Section 9 of the By-Laws of the InternationalDevelopment Association, the application of the Republic ofLithuania for membership in the Association is hereby submittedto the Board of Governors.

2. The draft Resolution . . .1 is consistent with membership Resolu-tions with respect to countries joining IDA as “Part I” members.

3. The Republic of Lithuania has indicated that it will make a sub-scription and contribution to the Association as part of the upcom-ing Fifteenth Replenishment of the Association. It will also havethe option to contribute to the replenishment of the Association’sresources to finance the Multilateral Debt Relief Initiative.

4. Representatives of the Republic of Lithuania have been consultedinformally regarding the terms and conditions recommended in theattached draft Resolution and they have confirmed that theseterms and conditions are acceptable.

5. The draft Resolution . . .1 is recommended for adoption by theBoard of Governors.

(This report was approved and its recommendation was adopted by theBoard of Governors on April 3, 2008)

1 See page 179.

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February 28, 2008

Additions to Resources: Fifteenth Replenishment

INTRODUCTION

1. An important channel for multilateral aid. Since its inception in1960, the International Development Association (IDA) hasplayed a pivotal role in the global aid architecture. It is the largestmultilateral channel for providing concessional financing to devel-oping countries with per capita incomes mainly below USD 1,065.1Working with client countries and donors, IDA supports low-income countries in their efforts to achieve broad-based growth,reduce poverty, and improve living standards of the poor. Given itspoverty focus, IDA directs a large share of its resources to coun-tries where people earn less than two dollars a day.2

2. A vital role in the global aid architecture. With the global aidarchitecture becoming more complex, IDA’s role in developingcountries has become all the more important. Not only does IDAprovide direct financing, policy advice, and knowledge services toclient countries, but it also serves as a platform for the effectivedelivery of overall aid. To perform its dual role, IDA relies on itsunique strengths: the scale of its financial resources; extensiveknowledge base and the quality of its policy advice; global reachcombined with local presence; multi-sectoral perspective; and itsconvening power. Further, IDA’s ability to adapt to individualcountry circumstances, to act as a “first mover” when appropriate,and to leverage funding from other partners to scale up poverty-reducing interventions, allows it to play a vital role in reaching thepoor. A strong replenishment allows IDA to play its role as a plat-form for other development partners to obtain results at the coun-try level.

3. IDA’s sources of funding. IDA’s resources come mainly from con-tributions by governments of its donor countries. The number ofdonors has grown over time to 45, to include both developed andmiddle-income developing countries. Donors provide resources

1 IDA’s operational per capita income cut-off in FY08.2 Based on definition provided in Chen and Ravallion (2004). “How Have theWorld’s Poorest Fared Since the Early 1980s?” World Bank Research Observer,Vol. 19, No. 2, pages 141–169.

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according to arrangements reached during periodic replenishmentnegotiations held every three years. Other sources of IDA fundinginclude repayments on outstanding credits, IDA investmentincome, and transfers from the International Bank for Reconstruc-tion and Development (IBRD) and the International Finance Cor-poration (IFC).

4. The Fifteenth Replenishment of IDA. Representatives of donorgovernments (“the IDA Deputies”) and representatives of bor-rower countries (collectively referred to in this report as the “Par-ticipants”) negotiated the Fifteenth Replenishment of IDA’sresources under the chairmanship of Mr. Vincenzo La Via, ChiefFinancial Officer of the World Bank Group.3 To make the discus-sions transparent and to solicit views from a range of stakeholders,Participants consulted with African opinion leaders in Maputo,Mozambique in June 2007 and invited and received commentsfrom civil society on the draft Deputies’ report. In addition, all rel-evant policy papers discussed at the replenishment meetings wereposted on IDA’s external website prior to each meeting, and sum-maries of the discussions were posted following the meetings. Thisreport contains the Participants’ guidance on the policy and finan-cial framework that underpins IDA’s support for economic devel-opment and poverty reduction in eligible countries during theIDA15 period (July 1, 2008 to June 30, 2011).

5. Noteworthy points. The IDA15 replenishment discussions werenoteworthy for several reasons. First, the discussions focused onconsolidating, strengthening, and fine-tuning many significantchanges in the policy framework that were put in place during pastreplenishments, including those relating to the grants framework,results measurement system, resource allocation system, and assis-tance to post-conflict countries. Second, Participants examinedIDA’s role in a complex global aid architecture and concluded thatIDA plays a unique role in reaching the poor, integrating multipledonor programs, supporting country ownership, and acting flexiblyand quickly, to contribute to results at the country level. Third, Par-ticipants reviewed IDA’s role in enhancing development effective-ness of aid at the country level through harmonization and align-ment as well as through its leadership on the results agenda, while

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3 IDA15 meetings: March 5–6, 2007, Paris, France; June 28–30, 2007, Maputo,Mozambique; October 23, 2007, Washington D.C., USA; November 12–13, 2007,Dublin, Ireland; and December 13–14, 2007, Berlin, Germany.

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recognizing the importance of simultaneously implementing thebroader Paris Declaration, and urged IDA to set the highest stan-dards for itself on both fronts. Fourth, Participants reassessed IDA’swork in fragile states and urged that it continue to strengthen itsoperational, procedural and organizational role in these countries,in addition to fine tuning its financing arrangements to betterrespond to their needs. Fifth, Participants reviewed IDA’s resourceallocation system to ensure that resources flow to countries achiev-ing results. They also agreed to simplify the resource allocation for-mula to make it more easily understood by all stakeholders and tofurther enhance its transparency and effectiveness. While reaffirm-ing their support for all low-income countries, Participants urgedIDA to direct more than half of its assistance to countries in Sub-Saharan Africa, if warranted by performance.

6. Organization of the IDA15 report. The report is organized inseven sections. Section I provides the backdrop against which theIDA15 discussions took place. The next three sections contain thethree special themes selected by Participants at the first meeting ofIDA15 discussions held in Paris in March 2007. These are: IDA’srole in the global aid architecture (Section II), IDA’s role in ensur-ing effectiveness of aid at the country level (Section III), and IDA’srole in fragile states (Section IV). Section V contains a discussionon the management of IDA’s resources. Section VI discussesfinancing of debt relief and arrears clearance. Section VII sets forththe recommendation of the Executive Directors to the Board ofGovernors to adopt the draft IDA15 Resolution (see Annex 3).

SECTION I. SUPPORTING IDA COUNTRIES IN ACHIEVINGTHE MILLENNIUM DEVELOPMENT GOALS

A. Progress and Challenges in Achieving the MillenniumDevelopment Goals

7. Significant progress. Recent data point to encouraging signs ofprogress on several fronts in IDA countries. Real Gross DomesticProduct (GDP) per capita grew by 5.5 percent annually between2003 and 2006, more than twice the average growth rate of 2.2 per-cent between 1990 and 2003. This strong growth is associated with adecline in poverty, with extreme poverty falling by two percentagepoints between 2002 and 2004, continuing the trend since 1999. Ifthe growth momentum of the past 15 years continues, it is likelythat the global rate of extreme income poverty will be halved

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between 1990 and 2015.4 In the human development area, someprogress has been made towards the Millennium DevelopmentGoals (MDGs). In addition, other outcome indicators for publicfinancial management and investment climate also showed positivechange, with the regulatory obstacles to private sector develop-ment consistently reduced between 2003 and 2006. Progress inaccess to basic infrastructure was strong in all regions, and theaverage rate of improvement for IDA countries as a whole has sur-passed that of non-IDA developing countries,5 especially in house-hold electrification rates as well as an expansion of the telecommu-nications sector.

8. Daunting challenges remain. While IDA countries as a whole haveimproved outcomes in the recent past, progress varied by indicatorand remained uneven across countries. Despite gains made so far,“the end of poverty is not imminent.”6 While current trends suggestthat the goal on halving extreme poverty by 2015 would likely bereached, it will not be met in Africa. Besides, progress towardsMDGs in the human development area falls well short of what isneeded to achieve many of the targets on time. Neither Africa norSouth Asia is likely to meet any of the human development goals—universal primary education, greater gender parity in education,reduced child and maternal mortality and incidence of disease, andimproved water and sanitation.7 Meanwhile, recent studies showthat the impact of climate change on developing countries couldundermine progress towards the MDGs.8 Moreover, in an increas-ingly interdependent world, rich and poor countries alike share anincreased vulnerability to shocks. Daunting challenges persist atthe halfway point to 2015—the target year for reaching the MDGs.These challenges require IDA and the development community toredouble their efforts in support of growth and development inIDA countries in order to improve the lives of millions of people.

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4 2006 Global Monitoring Report, page 21.5 “Non-IDA developing countries” refer to 69 developing countries that are not eli-gible for IDA grants or credits in FY08. They are mainly middle-income, IBRDclient countries.6 The World Bank (October 2007). “Meeting the Challenges of Global Develop-ment: A Long-Term Strategic Exercise for the World Bank Group.”7 2006 Global Monitoring Report.8 IDA at work note at http://siteresources.worldbank.org/IDA/Resources/IDA-Environment.pdf

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B. Enhancing Aid Effectiveness to Achieve the MDGs

9. Progress supported by increased Official Development Assistance(ODA) flows. The progress made so far in IDA countries has to alarge extent been the result of their own efforts, policies, andresources. In recent years, IDA countries showed gains in macroeco-nomic performance as well as in the quality of public institutions,quality of public administration, transparency, accountability andcontrol of corruption in the public sector.9 The progress has alsobeen supported by increased ODA flows. In Monterrey in 2002, theinternational community pledged to support the efforts of develop-ing countries in achieving internationally agreed development goals,including the MDGs. Since that time, ODA—the main form ofresource transfers to IDA countries—has been steadily rising. ODAreached its highest level in 2005 at USD 106.8 billion, boosted inlarge part by debt relief operations. This rising trend was reversedslightly in 2006, with ODA falling to USD 103.9 billion at currentprices.10 Preliminary estimates suggest that ODA may fall further in2007, as the debt relief amounts taper off. For low-income countriesto achieve the MDGs, ODA needs to resume its growing trend anddonors will, therefore, need to scale up aid in the coming years inaccordance with their international commitments.

10. The way aid is delivered is critical. While aid volumes are impor-tant, the way in which aid is delivered also matters. Recent trendsin ODA and in the global aid architecture pose challenges to theeffectiveness of aid at the country level. Some of these challengesinclude:

• A decline in aid for core development programs. Overall ODAhas increased (growing on average 11.4 percent per year during2001–05) and of that, debt relief has been a critical componentgrowing by 70 percent between 2004 and 2005. However, ODAfor core development programs11 has not grown as quickly

9 World Bank (2007). “Country-Based Scaling-up: Assessment of Progress andAgenda for Action.” Paper prepared for the Development Committee meeting,October 21, 2007.10 In 2006, ODA at 2005 prices and exchange rates reached USD 101.3 billion,resulting in a real decline of 5.1 percent over the previous year.11 ODA for core development programs is defined as total ODA excluding selectedspecial-purpose grants such as debt relief, administrative costs of donors, and emer-gency assistance. See IDA (2007). “Aid Architecture: An Overview of the MainTrends in Official Development Assistance Flows.”

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(4.6 percent per year over the same period), particularly in IDA-eligible countries, which received less than they did on averageduring the early 1990s.

• A shift from infrastructure to social sectors. Over the last twodecades, a rising share of social sectors in total sector-allocableODA to low-income countries (from 29 percent in the early1990s to 52 percent between 2001 and 2004)12 was accompaniedby a declining share of infrastructure and production (from 59 percent to 38 percent over the same period). The decline ininfrastructure is particularly noticeable in Sub-Saharan Africa.

• An increasingly complex aid architecture. The global aid architec-ture has become complex, with: (i) a proliferation of donor chan-nels providing ODA; (ii) fragmentation of ODA flows throughan increasing number of donor-funded activities with decreasingfinancial size; and (iii) a significant degree of earmarking of aidresources for specific uses or for special-purpose organizations,including through the increasing number and size of global pro-grams or “vertical funds.”13 The growing importance of non-DAC and “emerging” donors has also changed the global aidarchitecture significantly in recent years.

11. While the new sources of aid bring much-needed resources to helpdeveloping countries reach their MDGs, the accompanying fragmen-tation and proliferation of aid reduces its effectiveness by:14 (i) pre-senting additional challenges to harmonizing and aligning aid, whichresults in rising transaction costs for recipient countries and donors;(ii) potentially creating wasteful duplication and overlap in the deliv-ery of aid; (iii) causing competition for scarce skills in recipient coun-tries; and (iv) distorting sectoral allocations of public spending bypossibly reflecting global rather than recipients’ priorities as aid flowsbecome increasingly earmarked for specific purposes.

12. The country-based development model. These trends in ODA andthe global aid architecture highlight the need for a country-baseddevelopment model as the means to make effective use of scaled-up ODA at the country level—a view reflected in the Paris Decla-ration on Aid Effectiveness. The country-based model provides a

12 Social sectors, in the OECD/DAC classification, include education; health andpopulation; water and sanitation; government and civil society; and conflict, peaceand security.13 IDA (2007). “Aid Architecture: An Overview of the Main Trends in OfficialDevelopment Assistance Flows.” 14 Ibid.

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platform upon which different ways of delivering aid—traditionalbilateral and multilateral ODA, emerging non-DAC donors, andvertical funds for global public goods—can work together in anintegrated manner under the leadership of recipient countries toachieve results at the country level.

13. The introduction of the Poverty Reduction Strategy (PRS) approachin 1999 was an important step in the evolution of the country-basedmodel which put recipient country governments in the driver’s seat,brought a clearer focus on poverty reduction, emphasized nationalownership of the development effort, and created accountability fordevelopment results. If aid-delivery mechanisms and approaches areframed in the context of national development strategies, their goalswould be mutually reinforcing, making it possible to achieve muchneeded balance and complementarity.

C. IDA’s Support for MDGs through the Country-Based Model

14. IDA and the country-based model. Alignment with the PRS is thecornerstone of IDA’s support to the country-based model and theCountry Assistance Strategy (CAS) provides an anchor for IDA’ssupport at the country level. Thus, IDA effectively has a strategyfor assisting each country—a CAS or Interim Strategy Note(ISN)—which evolves over time to adapt to countries’ evolvingchallenges and priorities. The CAS facilitates alignment with coun-try priorities by taking into account national development pro-grams as well as harmonization with other donor and World BankGroup activities, thereby maximizing impact on the ground. TheCAS also makes it possible for IDA’s program to reconcile globalconcerns and national priorities at the country level. Increasingly,the formulation of IDA’s country strategies in support of the PRSis expected to occur through its participation in joint assistancestrategies with other donors. Finally, IDA provides support for thestrengthening of national capacities, including those for environ-mental and social safeguards, as well as public financial manage-ment and procurement.

15. Financing volumes, quality and results. Within the country-basedmodel, IDA has the capacity to provide financial assistance on alarge scale to countries that continue to rely on ODA as the mainform of external financing. The scale of IDA’s financial assistance,underpinned by its strong focus on quality, is central to the achieve-ment of the MDGs. Assessments by the Independent EvaluationGroup (IEG) show a continuous improvement of the impact of the

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World Bank’s operations measured in terms of project outcomes,sustainability, and contribution to institutional development.15

Going forward, inputs from IEG assessments can be expected toinform improvements in IDA operations.

D. Broad Strategic Directions for IDA Going Forward

16. Way forward. In parallel with the IDA15 replenishment discus-sions, the World Bank Group is discussing its way forward in cat-alyzing “inclusive and sustainable globalization,” fostering sharedgrowth with care for the environment, and improving the livingstandards of people with the overall aim of reducing globalpoverty. The broad framework for the World Bank Group’s strat-egy was spelt out by President Zoellick in his note to the Develop-ment Committee16 and captured in his discussions with Participantsduring the meeting held in Washington, D.C. in October 2007. ThePresident’s vision for the World Bank Group rests on the ongoingLong Term Strategic Exercise (LTSE), which provides some of thebuilding blocks for the long-term strategy.17 The LTSE paperpoints out that in order for economic growth to assist in povertyreduction, it has to be both inclusive and sustainable.

17. Relevant themes for IDA. Four of the six strategic themes high-lighted by the President resonate particularly well with the topicsdiscussed by Participants in the IDA15 discussions. These are:(i) “helping to overcome poverty and spur sustainable growth inthe poorest countries, especially in Africa;” (ii) “addressing the spe-cial challenges of states coming out of conflict or seeking to avoidbreakdown of the state;” (iii) “playing a more active role withregional and global public goods on issues crossing national bor-ders, including climate change, HIV/AIDS, malaria, and aid fortrade;” and (iv) “fostering a knowledge and learning agenda acrossthe World Bank Group to support its role as a brain trust ofapplied experience.”

18. Broad strategic directions. The LTSE reaffirms the importance ofthe two-pillar framework that has underpinned the World BankGroup’s—and IDA’s—work over the last few years to reduce global

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15 IDA (2007). “The Role of IDA in the Global Aid Architecture: Supporting theCountry-Based Development Model,” page 16. 16 World Bank (October, 2007). “Note from the President to the World Bank.”DC2001-0025.17 The World Bank (2007). Op. cit.

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poverty. Within the country-based model, the first pillar focuses onbuilding a strong climate for investment, jobs, and sustainablegrowth and the second pillar on empowering the poor to encouragetheir participation in development. Equity and inclusion are centralto the success of the two-pillar framework as they influence theworkings of both the investment climate and the empowerment ofthe poor.18 The LTSE also notes that two additional perspectivesneed to be weaved into the two-pillar framework: institutions andgovernance processes (particularly in fragile states) as well as globalpublic goods, including environmental sustainability. Consistentwith this approach, IDA’s focus on the two-pillar framework will becomplemented by several cross-cutting issues such as improvinggovernance, fostering gender equality, and addressing global chal-lenges, including issues such as climate change.

19. Private sector-led growth, agriculture, and infrastructure invest-ments. Policies for sustained, broad-based economic growth areimportant for a sound poverty reduction strategy. In turn, growthcan only be sustained in the long run if it is underpinned by a vig-orous, thriving private sector.19 A healthy investment climate is acrucial element in any strategy focusing on promoting sustainedgrowth and poverty reduction. Government policies and behaviorsare important for a sound investment climate, as they can deci-sively influence “the security of property rights approaches to regu-lation and taxation (both at and within the border), the provisionof infrastructure, the functioning of finance and labor markets, andbroader governance features such as corruption.”20

20. IDA supports private sector-led growth through its financial assis-tance and non-lending activities. IDA’s work on private sectordevelopment is complemented and enhanced through IFC’s andMultilateral Investment Guarantee Agency (MIGA)’s private sec-tor investment activities. IDA collaborates with IFC in many IDAcountries, and will intensify this collaboration through: joint workon investment climate, including removing barriers for femaleentrepreneurs; joint approaches to public private partnerships; and

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18 The World Bank (2005). “World Development Report 2006: Equity and Development.” 19 World Bank (2002). “Private Sector Development Strategy: Directions for theWorld Bank Group.”20 World Bank (September, 2004). “World Development Report 2005: A BetterInvestment Climate for Everyone,” page 1.

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joint work on Micro, Small and Medium Enterprises (MSME) sup-port, particularly in Africa. In addition, IDA and IFC will continueto develop innovative approaches, including the use of the promis-ing Output-Based Aid (OBA) projects in IDA countries, to harnessprivate sector activity to meet development goals.

21. In IDA countries, agriculture often accounts for a large share ofGDP and employment. Therefore, growth in agricultural incomes isessential to stimulate broad-based growth in the overall economy,reduce poverty and ensure food security. At the same time, as notedin the 2008 World Development Report, the Doha Round of tradenegotiations need to be urgently concluded, to help pave the wayfor increased exports from low-income countries, especially in agri-culture. Given the diverse constraints to agricultural development,especially in Sub-Saharan Africa and South Asia, interventions haveto be multifaceted and coordinated across a range of activities. IDAhas an important role in agriculture for improving economic com-petitiveness and ensuring equitable distribution of benefits. Goingforward, in accordance with the findings of the 2008 World Devel-opment Report and the recommendations of a recent IEG report,21

IDA will renew its focus on the agricultural sector.

22. Infrastructure services contribute to poverty reduction and privatesector-led economic growth by lowering costs and expanding marketopportunities, thereby increasing productivity and improving thebusiness environment. However, considerable gaps remain in accessto infrastructure services. In the developing world, it is estimatedthat 1.1 billion people are without safe water, 1.6 billion are withoutelectricity, 2.4 billion without sanitation, and more than 1 billionwithout access to an all-weather road or telephone services.22 Thegap in access reflects, in part, a large shortfall in infrastructureinvestment. Closing the infrastructure access and investment gaps isa necessary step to achieve development results and to meet theMDGs, including those for human development (e.g., education,health, empowerment of women and other marginalized groups).

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21 IEG (2007). “Agriculture in Sub-Saharan Africa: An IEG Review.” The reportfound that the agricultural sector has been neglected both by governments and thedonor community, including the World Bank. It finds that the Bank’s limited and,until recently, declining support has been largely piecemeal and “sprinkled” acrossseveral critical areas such as research, extension, credit, seeds, roads, and policyreforms, but with little recognition of the synergy between them. 22 IDA at Work Background Note “Role of IDA in Infrastructure,” May, 2007, page 3.

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23. There is a strong case for scaling up IDA’s support to infrastructureto help close the infrastructure investment gap. IDA remains thelargest multilateral source of physical infrastructure financing andhas recognized expertise in this field. IDA’s financial support forinfrastructure services, combined with policy dialogue and institu-tional capacity building would, where appropriate, also help crowd-in private sector financing to ensure a sustainable, private-sector-ledgrowth in IDA countries.

24. Scaled-up IDA support to infrastructure will continue to be com-plemented by measures to increase the productivity of infrastruc-ture spending as well as by policies and institutional arrangementsthat foster financial, environmental, and social sustainability. Overthe past decade, environmental and social sustainability hasbecome central to IDA’s development assistance. This has beenaccompanied by tighter fiduciary controls to deter corrupt prac-tices and misuse of funds. Furthermore, scaling-up cannot be suc-cessful without responsiveness to local needs: IDA’s strategy oninfrastructure is centered on the need to combine scaling-up infra-structure projects with targeted service delivery to the poor.23

25. Investing in people. To lay the foundations for sustained growth,IDA invests in people by improving the quality and extending thereach of social services to the poor.

• IDA’s Health, Nutrition and Population (HNP) strategy24 aims tosupport countries in their efforts to improve the health conditionsof the poor and the vulnerable and prevent the poor from becom-ing destitute as a result of illness. The objectives of the strategy areto: improve the level and distribution of key HNP outcomes, out-puts, and system performance to improve living conditions, partic-ularly for the poor; strengthen financial protection to prevent des-titution due to illness; enhance financial sustainability; andimprove governance, accountability and transparency. The HNPstrategy also reaffirms a commitment to population issues, includ-ing reproductive health as well as maternal and child health policy,based on IDA’s comparative advantage, and working in collabora-tion with the United Nations Population Fund (UNFP) and theWorld Health Organization (WHO). In view of the changes in the

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23 IDA at Work Background Note “Role of IDA in Infrastructure” op.cit, pages 21–25.24 World Bank (2007). “Healthy Development: The World Bank Strategy for Health,Nutrition, and Population Results.”

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architecture for development assistance for health, IDA will sup-port country efforts by: renewing focus on results; strengtheningclient country efforts to have well-organized and sustainablehealth systems; ensuring synergy between health system strength-ening and priority disease interventions;25 advising client countrieson an intersectoral approach to HNP results; and increasing selec-tivity, improving strategic engagement, and agreeing with globalpartners on division of labor to achieve results at the countrylevel.

• IDA’s education sector strategy focuses on achieving basic educa-tion for all while focusing on the poorest children and girls toensure gender parity, early childhood interventions, innovativedelivery and systemic reform.26 An update of the strategy in 2005takes into account changes in the international aid architecture,including the Education for All Fast Track Initiative; focuses oneducation-labor market linkages; places greater emphasis on thequality of education and learning outcomes; recognizes theimpact of HIV/AIDS on education; accounts for learning gapsacross and within countries; addresses greater demand for sec-ondary education; and considers the role of tertiary educationand lifelong learning in promoting knowledge-driven economicgrowth. To maximize the impact of education on growth andpoverty alleviation, IDA emphasizes three themes: integratingeducation in a country-wide perspective; broadening the strategicagenda through a system-wide approach; and becoming moreresults oriented. These themes ensure that education is looked atwithin the context of overall development strategies and in spe-cific macroeconomic and sectoral contexts.

• Social protection and labor policies contribute to human devel-opment by managing the income and welfare risks that affectvulnerable groups. IDA’s broad policy objectives27 are to:improve earning opportunities and the quality of jobs; improvesecurity for households and communities through better man-agement of risks; and provide assistance for vulnerable groups toimprove equity and reduce extreme poverty. In support of theseobjectives, IDA focuses on labor markets (including eliminating

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25 IDA (2007). “The Role of IDA in the Global Aid Architecture: Supporting theCountry-Based Development Model.” 26 World Bank (1999). “Education Sector Strategy,” and World Bank (2005). “Edu-cation Sector Strategy Update: Achieving Education for All, Broadening our Per-spective, Maximizing our Effectiveness.” 27 World Bank (August, 2000). “Social Protection Strategy: From Safety Net toSpringboard.” R2000-1060.

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harmful child labor, promoting gender equity, and advancingother internationally agreed workers’ rights) and job creation;expanding pensions and old-age income support; strengtheningsocial safety nets; using social funds as community-based mecha-nisms to improve access to social services for the poor and othervulnerable groups; and encouraging governments to integratedisabled people into their poverty alleviation efforts. Going for-ward, to pursue its work on social protection, IDA willstrengthen cross-sectoral activities, better integrate knowledge-management activities and incorporate poverty and socialimpact analysis into policy development.28

26. Cross-cutting themes. IDA will focus on several themes that com-plement and cut across the twin pillars of growth and empoweringthe poor. These include:

• Governance: In the mutual accountability framework agreedupon in the Monterrey Consensus, good governance plays amajor role because it is important for the development perform-ance of a country.29 The World Bank Group’s recently approvedgovernance and anticorruption strategy30 is results oriented andaims at helping developing countries identify their priorities forimproving governance and articulate and implement programsresponding to those priorities in a manner that is sustainable inthe long run. The governance strategy would be implemented atthe country, project and global levels to enhance and integrategovernance and anti-corruption measures. At the country level,the focus would remain on strengthening state capacity andaccountability (through improving public financial managementof revenues and expenditures, procurement, auditing, the judici-ary, and legal reforms, as well as cross-cutting civil service andtransparency reforms), expanding private sector reforms, andengaging systematically with a broad range of stakeholders. Atthe project level, the focus will be on actions to mitigate fiduciaryrisks (through strengthening country systems, tailoring projectsto manage specific sectoral risks, mitigating risks upstream onhigh-risk projects, etc). At the global level, the World Bank willsupport harmonized approaches with other international actors.In this regard, the Stolen Asset Recovery Initiative is an integral

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28 OPCDM (December, 2007). “Sector Strategy Implementation Update FY06.” 29 Swaroop, V. and S. Rajakumar (2002). “Public Spending and Outcomes: DoesGovernance Matter?” World Bank Policy Research Working paper No. 2840.30 World Bank (2007). “Strengthening World Bank Group Engagement on Gover-nance and Anticorruption.”

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part of the World Bank’s governance strategy and helps develop-ing countries recover stolen assets.31 The Governance and Anti-corruption strategy is being further elaborated to strike a bal-ance between short-term signaling in cases of fraud orcorruption and the longer-term efforts to build capacity.

• Gender: Empowerment of women is essential for achievingMDGs and promoting shared economic growth. The WorldBank’s Gender Action Plan32 recognizes that expanding eco-nomic opportunities for women is “smart economics” and notesthat their increased participation in the labor force and associ-ated increased earnings lead to reduced poverty and fastergrowth. The Gender Action Plan targets women’s empowermentin economic sectors, mostly infrastructure, agriculture, privatesector development and finance. The way ahead includes: intensi-fying gender mainstreaming in World Bank and IFC operationsand in economic and sector work; mobilizing resources to imple-ment and scale up initiatives that empower women economi-cally; improving knowledge and statistics on women’s economicparticipation and relationship between gender equality, growthand poverty reduction; and undertaking targeted communicationcampaigns to foster partnerships on the importance of women’seconomic contributions. A status report on the Gender ActionPlan will be discussed at the IDA15 Mid-Term Review.

• Climate change: The impact of climate change is expected tobecome more severe for developing countries, putting theachievement of the MDGs at risk. IDA’s response to the chal-lenge of climate change has been developed as part of the WorldBank’s Clean Energy Investment Framework (CEIF).33 Its mainelements are: (i) improving access to clean energy; (ii) support-ing low carbon development in a manner that improves globalprogress towards carbon emission reduction; and (iii) supportingadaptation to climate change. IDA is able to link global issueswith country strategies and to invest in global public goods at thecountry level. As such, IDA’s project selection and design deci-sions will be guided, among other things, by changing climaticcircumstances in each country.34

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31 http://siteresources.worldbank.org/NEWS/Resources/Star-rep-full.pdf32 The World Bank (2006). “Gender Equality as Smart Economics: A World BankGroup Gender Action Plan (Fiscal Years 2007–10).” 33 World Bank (2007). “Clean Energy for Development Investment Framework: TheWorld Bank Group Action Plan.” DC2007-0002.34 For details, see IDA (2007). “The Role of IDA in the Global Aid Architecture:Supporting the Country-Based Development Model.”

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E. Key Developments since the IDA14 Replenishment Discussions

27. The Multilateral Debt Relief Initiative (MDRI). The MDRI wasproposed in June 2005 and its implementation began on July 1,200635 after its approval by IDA’s Executive Directors and Boardof Governors.36 Under the MDRI, 100 percent of eligible debts toIDA, the African Development Fund (AfDF), and the Interna-tional Monetary Fund (IMF) were cancelled for countries thatreach completion point under the Heavily Indebted Poor Coun-tries (HIPC) Initiative. The MDRI aims to: deepen debt relief toHIPCs while safeguarding the long-term financial capacity of IDAand AfDF; and encourage the best use of additional donorresources for development by allocating them to low-income coun-tries on the basis of performance. Debt relief through HIPC andMDRI has helped lower debt and debt service ratios in many coun-tries, allowing them to increase poverty-reducing expenditures. Toensure that the financing cost of the MDRI does not compromiseIDA’s financial strength and capacity to support low-income coun-tries in the medium to long term, donors agreed to finance IDA’sMDRI costs on a “dollar-for-dollar” basis.

28. The Non-Concessional Borrowing Policy (NCBP). The provisionof debt relief and grants increases borrowing space for low-incomecountries, which presents both opportunities and challenges. If bor-rowing and lending take place at a pace inconsistent with countries’debt-carrying capacity, it will contribute to the risk of unsustainabledebt burdens accumulating within a few years. In response to theserisks, IDA’s NCBP was approved by the Board of Executive Direc-tors in July 2006.37 The NCBP rests on two pillars: enhancing credi-tor coordination around the Debt Sustainability Framework (DSF)and discouraging unwarranted non-concessional borrowing throughdisincentives (also see Section II B).

29. Key policy decisions and discussions at the IDA14 Mid-TermReview. At the IDA14 Mid-Term Review, IDA’s policy framework

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35 IDA (March, 2006). “IDA’s Implementation of the Multilateral Debt Relief Initia-tive.” IDA/R2006-0042. 36 IDA (2006). “Additions to Resources: Financing the Multilateral Debt Relief Ini-tiative.” Resolution No. 211 adopted on April 21, 2006. 37 IDA (2006). “IDA Countries and Non-Concessional Debt: Dealing with the Free-Rider Problem in IDA14 Grant-Recipient and Post-MDRI Countries.”

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was further strengthened through discussions on several key topics.These include discussions on:

• The continued use of joint Bank-Fund Debt SustainabilityFramework (DSF) as the analytical foundation for IDA’s granteligibility system and the confirmation that IDA’s financingterms for IDA-only countries38 would be based on Bank-Funddebt sustainability analyses (DSAs) going forward.

• A framework for assessing the readiness of countries to makeproductive use of development policy operations (DPOs). Therewas broad support for the framework that is embedded in thecurrent policy and it was agreed that the use of DPOs will bebased on country-level assessment of benefits and risks. Therewas also broad agreement for the continuation of the arrange-ments stipulated in the IDA14 report39 and for the ExecutiveDirectors to be informed through the annual Medium-TermStrategy and Finance paper of the past DPO share for IBRD andIDA and the outlook for future years.

• The role of governance in IDA’s Performance-Based Allocation(PBA) system,40 the regional project program pilot,41 progresson the implementation of IDA’s Results Measurement System,42

and IDA’s work in developing the private sector through theAfrica Region MSME program43 and the OBA projects.44

30. Ongoing reforms. IDA also began an important process of reform-ing and modernizing its operational policies to improve its opera-tional effectiveness. Key reforms adopted in the past few yearsinclude:

• The new policy on Additional Financing, adopted in May 2005,which permits IDA to scale up successful operations with greaterspeed and efficiency to enhance the results on the ground.

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38 Countries with per capita income below IDA operational cut-off and no access toIBRD resources. 39 If the projected share of DPO commitments by IDA exceeds 30 percent for anyfuture year, it was agreed that Management would seek additional guidance fromIDA’s Executive Directors.40 IDA (2006). “IDA’s Performance-Based Allocation System: A Review of theGovernance Factor.” 41 IDA (2006). “IDA14 Mid-Term Review of the IDA Pilot Program for RegionalProjects.” 42 IDA (2006). “IDA14 Results Measurement System: A Mid-Term Review Report.” 43 IDA (2006). “A Review of the Joint IDA-IFC Micro, Small and Medium Enter-prise Pilot Program for Africa.” 44 IDA (2006). “A Review of the Use of Output-Based Aid Approaches.”

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• The new policy on Rapid Response to Crises and Emergencies,adopted in February 2007.

• As part of implementation of the new Rapid Response policyand of IDA’s overall effort to improve the effectiveness of itsresponse to fragile states in particular, IDA also adopted organi-zational and staffing changes relating to its work in fragile states,designed to enhance IDA’s local presence and help attract quali-fied staff to work in fragile states. In addition, the MultilateralDevelopment Banks have agreed on a shared approach to iden-tification of fragile situations and more importantly, to protocolsgoverning how to decide the division of labor at the countrylevel according to comparative advantages of each institutionand to explore recruitment methods for local staff that limit dis-tortions to local labor markets.

• IDA has also commenced an important reform of consolidatingand modernizing policies governing investment lending, so as toimprove effectiveness, efficiency and responsiveness of this keylending instrument. It is aimed at creating a single principles-based umbrella policy for investment lending.

31. Transparency and accountability in IDA. Finally, IDA aims tomeet the highest standards of transparency in its operations, poli-cies and publications, and recognizes its responsibility for makingwide-ranging information available to IDA countries and the inter-national development community. To enhance accountability andownership, IDA will strengthen its contacts in recipient countrieswith parliaments and Civil Society Organizations as well as con-tinue to work through international organizations such as the Par-liamentary Network on the World Bank. IDA has taken severalsteps in recent years to increase its openness, transparency andaccountability and will continue its leadership in this area by takingadditional steps during IDA15, including through:

• IDA replenishment discussions: IDA replenishment discussionscontinue to be open and transparent, with representatives fromborrowing countries taking part in them. In addition, consulta-tions are held with regional stakeholders during the replenish-ment meetings to solicit their views on challenges confrontingIDA countries and their development partners.45 Moreover, allrelevant policy papers discussed at the replenishment meetingsare posted on the external web before they are discussed with

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45 During the second IDA15 meeting held in Maputo in June, 2007, participants haddiscussions with opinion leaders from African countries.

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the Participants; comments are sought from Civil Society Orga-nizations on the draft Deputies’ report; and the Chairman’s sum-maries of the discussions are posted on the web following themeeting.

• Country Performance Assessments: To enhance transparency ofits resource flows, IDA will continue to publicly disclose the per-formance assessments on which they are based. Specifically, IDAwill continue to post the Country Policy and Institutional Assess-ment (CPIA) ratings on its external website. In addition, IDACountry Performance Ratings and their components will alsocontinue to be disclosed. During IDA15, IDA aims to make fur-ther efforts to enhance transparency. As part of these efforts,IDA plans to publicly disclose the Post-Conflict PerformanceIndicators (PCPIs) during IDA15 after review by an externalpanel, whose findings will also be posted on IDA’s external web-site. Finally, IDA plans to make allocations and commitmentsavailable to IDA’s Executive Directors for information at theend of each fiscal year, so that they can be tracked.

• Financial flows from extractive industries: IDA aims to continuecommitments made during the IDA14 replenishment discussionsto enhance transparency of revenue flows to governments fromextractive industry projects. IDA’s financial assistance to a proj-ect with significant impact on revenues would continue to bepredicated upon the government having in place, or being in theprocess of establishing a system for accounting for revenues andtheir use. The government should also have in place, or be in theprocess of establishing a system of independent auditing of suchrevenue receipts and the public dissemination of results. IDAaims to continue monitoring the implementation of these sys-tems and take appropriate actions if they are not implemented.

• Disclosure: To broaden the understanding of development issues,stimulate debate and create public support, IDA seeks to con-tinue sharing information on IDA policies and operations. IDAmakes available project, policy, strategy and evaluation docu-ments to the public on its external website, including informationon the implementation or execution status of projects and pro-grams it supports.46 During the IDA15 period, an overall review

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46 On March 8, 2005, the Board approved a number of revisions to the Bank’s policyon the disclosure of information (http://www1.worldbank.org/operations/disclosure/)to reaffirm the Bank’s commitment to ensuring increased transparency about its activ-ities (also see “World Bank Disclosure Policy: Additional Issues—Follow-up Consol-idated Report” (Revised), February 14, 2005, for details).

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of the disclosure policy will be carried out by Management,including progress made in implementing the 2005 revisions. TheWorld Bank aims to continue its efforts to disseminate informa-tion and its research, including through strengthening PublicInformation Centers around the world. In addition, followingapproval of disclosure by the Executive Directors, Managementintends to publicly disclose the results of the independent com-prehensive assessment of IDA’s controls framework, scheduledfor completion in early Calendar Year 2008. In addition, Man-agement aims to implement the findings of this report, and pro-vide at the IDA15 Mid-Term review, an update on progress madein this regard, including outlining a process for the periodicreview of IDA’s controls.

32. Against the backdrop for the report provided in this section, thefollowing sections summarize agreements reached during theIDA15 replenishment meetings on a series of operational, policyand financial recommendations to reinforce the effectiveness ofIDA in all low-income countries, with special focus on Sub-SaharanAfrica. Sections II–IV summarize discussions on the three specialthemes picked by Participants for the IDA15 replenishment discus-sions. The policy papers on which these sections are based arelisted in Annex 4 of this report.

SECTION II. THE ROLE OF IDA IN THE GLOBAL AID ARCHITECTURE

33. Participants examined the role of IDA in an increasingly complexaid architecture as the first special theme of the IDA15 replenish-ment discussions. They reiterated that the challenges associatedwith donor proliferation and aid fragmentation reinforce theimportance of anchoring aid delivery in a country-based develop-ment model aligned with national development strategies to makeit more effective. Along with these challenges to aid effectiveness,Participants also focused on IDA’s role in emerging regional andglobal issues, which include the spread of HIV/AIDS and otherhealth concerns, and the preservation of global environmentalcommons. Finally, going beyond debt relief, Participants looked atIDA’s role in ensuring that recipient countries adopt prudent debtmanagement strategies.

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A. IDA’s Role at the Country, Regional and Global Levels

34. On average since the 1970s, around 70 percent of overall ODA isprovided through bilateral channels and 30 percent through multi-lateral channels. This ODA has been provided by a growing num-ber of donors in recent times, with around 56 bilateral donors andmore than 230 multilateral organizations, funds and programs.47

With so many channels available for donors to provide aid, Partici-pants discussed how to make IDA a distinctive channel for deliver-ing aid in order to achieve results at the country level.

35. IDA’s dual role. Participants were of the opinion that IDA’s role insupporting the country-based model has become more important ina complex aid architecture, and urged Management to significantlystep up its efforts to meet this challenge. IDA’s potential to play thisrole stems from its strengths which include its country level knowl-edge; multi-sectoral approach to development; ability to draw onglobal experience; analytical and research capabilities; and its deliv-ery of large volumes of development finance underpinned by astrong focus on quality and results. Participants noted that thesestrengths enable IDA to tailor its assistance to different country cir-cumstances; help ensure coherence between macroeconomic stabil-ity and long-term development goals through cooperation with theIMF; act as a “first mover” to tackle critical development challengesand introduce policy innovations; leverage funds from other sourcesof aid; and exercise its convening power when needed to help coor-dinate development assistance efforts at the country level. As such,Participants delineated the dual role of IDA in:

• Providing direct financing and knowledge services to clientcountries in support of their priorities and needs; and

• Providing a platform which helps other development partnersoperate effectively to achieve results at the country level.

36. Selectivity. Despite its importance in offsetting adverse effects ofdonor proliferation, aid fragmentation and earmarking, and itswide-ranging development expertise, Participants emphasized thatIDA must become more willing to let others play the leading roleamong donors in every sector or country. In particular, theystressed that the determination of when IDA should lead, when it

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47 IDA (2007). “The Role of IDA in the Global Aid Architecture: Supporting theCountry-Based Development Model.”

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should follow, or not be involved, must be made at the countrylevel in consultation with country authorities and other donors.Depending on country-specific circumstances, other key donorsand organizations, such as the regional development banks, theEuropean Commission or UN agencies, would be better suited toprovide leadership, especially in fragile or post-conflict situations.In this regard, consistent with the country-based model, Partici-pants pointed out that the composition of IDA assistance shouldbe decided in the context of CASs and joint assistance strategies.They stressed that the CAS process helps IDA achieve selectivityat the country level, resulting in country-appropriate choice ofinterventions and assistance both within and across sectors, andasked that this focus on selectivity be strengthened going forward.

37. Support to regional and global programs and priorities. Partici-pants recognized that IDA’s strengths at the country level allow itto also play a pivotal role in addressing regional and global issues.They pointed out that IDA supports the global public goodsagenda by mainstreaming and integrating global programs intonational development strategies, and by investing directly in globalcommons at the country level. They noted that, over the years, IDAhas played these roles with regard to protection of environmentalcommons, communicable diseases, reforms in the internationaltrade system, production and dissemination of global developmentknowledge, and the fostering of global financial stability. Partici-pants pointed out that IDA should draw on its analytical knowl-edge, ability to design complex regional projects, and capacity toforge consensus to foster regional integration. They stressed thatthere is a strong demand for IDA’s regional projects, particularly inSub-Saharan Africa, and noted that this demand is expected toremain strong during IDA15. Participants expected the geographiccoverage of regional projects to evolve in line with demand.Finally, they underscored the importance of continuing coordina-tion with other partners, particularly regional development banks.

38. Areas for improvement. Despite progress so far, to respond effec-tively to emerging challenges in the global aid architecture in amanner consistent with its core mandate and comparative advan-tage, Participants urged IDA to intensify its efforts in four mainareas: (i) strengthening complementarity with vertical approachesto aid delivery; (ii) ensuring appropriate sectoral funding;(iii) addressing the challenge of climate change; and (iv) enhancingalignment and harmonization.

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39. Strengthening complementarity with vertical approaches to aiddelivery. Participants emphasized the need for balance and comple-mentarity between vertical and horizontal aid.48 They noted that,while global programs have brought much-needed attention totheir respective focus areas, they entail risks, including: (i) reducedimpact on the ground in light of recipient counties’ limited capacityto absorb large volumes of earmarked funding; (ii) insufficientintra- and inter-sectoral coordination at the country level; (iii) pro-liferation of separate financing mechanisms; and (iv) medium-termfiscal sustainability risks. Participants pointed out that IDA cansupport the integration of horizontal and vertical aid by providinga ‘horizontal platform’ upon which the vertical funds as well asother sources of aid can operate effectively and mitigate the risksassociated with vertical aid. Participants underscored that the long-term effectiveness of aid channeled through vertical programsdepends on fiscal sustainability, a supportive policy environment—including policy measures in related sectors—and broader capacitybuilding measures. They stressed that IDA should play an impor-tant role in identifying and supporting such policies. Participantsnoted that, going forward, CASs, sectoral strategies and countryanalytical work would need to pay more attention to the interplaybetween vertical funds and the country-based model. It was notedthat IDA already plays an important role in strengthening nationalcapacities, including with respect to environmental and social safe-guards, which can be of use to other donors for providing develop-ment assistance.

40. Ensuring appropriate sectoral funding. Participants stressed theimportance of taking into account overall ODA—not just IDA—flows going to each sector when deciding on the sectoral composi-tion of assistance in the CAS. Participants underscored the needfor sufficient funding for infrastructure, both at the national andthe regional levels to close the infrastructure access and investmentgaps. They further noted that, while overall ODA for the social sec-tors has gone up, a significant part of this increase—particularly forhealth—is provided through vertical funds. Despite the increase inoverall ODA to social sectors, Participants concluded that there isroom for enhanced involvement by IDA in these sectors in waysthat draw on IDA’s sectoral comparative advantages, and provide

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48 Vertical funds can be defined as partnerships and related initiatives that focus“vertically” on specific issues or themes.

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additional volumes that reinforce complementarity and balance. Inthis context, in the health sector, they agreed with the recent WorldBank strategy for Health, Nutrition, and Population,49 whichemphasizes IDA’s core sectoral comparative advantage in healthsystem strengthening.

41. Addressing the challenge of climate change. Low-income countriesare likely to suffer the most from the impact of climate changebecause of their location, low incomes, and low institutional capac-ity, as well as their greater reliance on climate-sensitive sectors likeagriculture. Participants noted that climate change has gainedimpetus and urgency as a development issue and that IDA’s workin this area should be consistent with its core mandate of povertyreduction and economic growth. In this context, they agreed that inview of the multi-sectoral nature of the challenges posed by cli-mate change, IDA is an appropriate platform to mainstream cli-mate actions into country strategies. Participants affirmed that thepriority in IDA countries would be adaptation efforts to adjust toongoing and potential socio-economic effects of climate change,complemented by selective mitigation actions such as expandingaccess to clean energy, including renewable energy, and improvedforest and land management programs.

42. Participants welcomed the proposal to scale up climate actions dur-ing IDA15. In this regard, they supported the planned expansion ofanalytical work, mainstreaming of climate actions in CASs, integra-tion of adaptation actions in IDA investments, scaling up disasterpreparedness, leveraging financing options to increase access to newtechnology, and catalyzing access to innovative private-sector insur-ance products such as weather derivatives in IDA countries. Inorder to enable IDA to catalyze access to such products, the draftresolution of the Board of Governors contains specific authority forthese activities.50 While they noted that IDA will need additionalresources for such scaling up, they stressed that the focus on climateactions should not lead to any earmarking of funds.

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49 World Bank (2007). “Healthy Development. The World Bank Strategy for Health,Nutrition, and Population Results.” 50 Article V, Section 2(a) of IDA’s Articles of Agreement requires IDA to providefinancing in the form of loans. IDA may however provide other forms of financingout of funds from subsequent replenishments where the replenishment authorizationspecifically allows such other method of financing (as for grants and guarantees).

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43. Finally, Participants asked Management to continue coordinatingclimate actions with other development partners, especially theGlobal Environment Facility (GEF). They underlined the need toclarify the respective roles of IDA and GEF in climate change. Par-ticipants requested Management to provide a progress report onclimate change actions at the IDA15 Mid-Term Review.

44. Enhancing alignment and harmonization. Participants stressed theneed for IDA to continue to strengthen its focus on harmonizationand alignment, as a key element of its efforts to further enhancecountry level effectiveness. See Section III C for details.

45. A strong replenishment. To enable IDA to play the platform roleexpected of it in the common efforts towards the MDGs, Partici-pants underscored the need for a “critical mass” of funding througha strong replenishment for IDA. They pointed out that the volumeof financial assistance by IDA ultimately enhances its ability toeffectively deploy its strengths at the country level.

B. IDA’s Role in Ensuring Debt Sustainability

46. Going beyond debt relief. Participants recognized IDA’s role inimproving debt sustainability prospects in client countries, whichwent beyond the provision of debt relief under the HIPC Initiativeand the MDRI. First, IDA plays a key role in helping ensure debtsustainability through its support of growth-promoting policies. Sec-ond, the World Bank, jointly with the IMF, developed and imple-mented the debt sustainability framework (DSF) for low-incomecountries and has produced forward-looking debt sustainabilityanalyses (DSAs). Third, IDA operationalized the DSF by linkinggrant eligibility for IDA-only countries to debt distress risk ratingsemerging from the DSAs. Fourth, IDA implemented the non-con-cessional borrowing policy (NCBP) to help grant and MDRI-eligi-ble IDA countries avoid a rapid re-accumulation of debt. Fifth, theWorld Bank and the IMF continued creditor outreach activities toincrease the effectiveness of the DSF. Finally, the World Bank,together with the IMF, enhanced efforts toward capacity buildingfor stronger debt management in low-income countries.

47. Continue to strengthen the DSF. Participants noted the transitionof the DSF to a more mature phase of implementation. They wel-comed the gradual improvement in the quality and analytical rigorin forward-looking DSAs. Going forward, Participants encouragedIDA to continue strengthening the application of the DSF by:

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(i) conducting a more systematic analysis of total public debt,including domestic debt; (ii) scrutinizing the underlying macroeco-nomic assumptions more carefully; (iii) paying more attention tothe precautionary features of the DSF, such as retrospective analy-sis of departures from the assumptions of previous DSAs;(iv) increasing use of customized stress tests; and (v) providingguidance on the appropriate pace of new borrowing in countrieswith debt-burden indicators well below the debt-burden thresh-olds. Finally, some Participants noted that while non-concessionalborrowing entails greater debt sustainability risks, excessively largevolumes of concessional financing could also contribute to the riskof debt distress, and as such they need to be taken into account inIDA’s work on debt sustainability.

48. DSF and IDA grant allocation. Participants strongly supportedthe DSF as the basis for the grant-allocation system in IDA15,which is an important element of IDA’s toolkit to help addressdebt sustainability challenges in low-income countries.51 Theyendorsed continuing the use of country-specific debt distress riskratings based on the forward-looking DSAs for determining themix of grants and credits for IDA-only countries.52 They alsoagreed that when translating risk ratings into traffic lights someelement of judgment should continue to be incorporated for bor-derline cases and those instances where changed country circum-stances are not reflected in available DSAs. They agreed that thisshould continue to be subject to a World Bank-wide clearanceprocess and carefully monitored.

49. DSF outreach. Participants noted that the effectiveness of the DSFhinges on its broader use by both creditors and borrowers alike.They strongly supported the joint World Bank and IMF outreach

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51 Participants agreed on three exceptions to grant eligibility in IDA15. First, Kosovocontinues to be eligible for grants in IDA15 as long as its status as part of Serbiaunder United Nations’ Administration remains unchanged. If the status changes therelationship between the World Bank and post-status Kosovo would be reconsid-ered. Second, regardless of its debt sustainability outlook, Timor Leste will receivethe grant element (i.e., 60 percent) of its allocation on grant terms in IDA15 becauseof its ongoing post-conflict status and constraints to its ability to contract externalborrowing. Third, pre-arrears clearance allocations continue to be on grant terms tosupport recovery efforts by post-conflict and re-engaging countries. 52 When DSAs are unavailable, a country’s grant eligibility will be based on the com-parison between its latest available debt burden indicators and the applicable exter-nal debt thresholds of the DSF.

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activities to encourage other creditors—including regional devel-opment banks and bilateral creditors—to harmonize their lendingpractices broadly along the lines suggested by the risk assessmentscontained in joint Bank-Fund DSAs. Participants noted that dis-cussions are underway to agree on guidelines for a more active rolefor the major regional banks53 in the DSA process. They also wel-comed the steps taken to make information about the DSF moreaccessible, in particular through dedicated DSF web pages on theWorld Bank and IMF external websites.

50. The Non-Concessional Borrowing Policy (NCBP). Participantsagreed that IDA’s NCBP is an important element of IDA’s role inhelping prevent grant-and MDRI-eligible countries from rapidlyre-accumulating debt. At the same time, they agreed that unilateralaction on the part of IDA is not enough; a concerted creditor anddonor effort is needed to provide appropriate concessionalresources to low-income countries, which in turn, need to adopt aprudent borrowing stance consistent with their debt sustainabilityprospects. Participants noted that relatively few country cases havebeen discussed to date under the NCBP largely due to lack ofinformation on new borrowing and the time lag in receiving suchinformation. They stressed the importance of borrower adherenceto the external debt reporting requirements under the WorldBank’s Debt Reporting System. Participants encouraged the con-tinued application of the NCBP, particularly the ongoing creditoroutreach, including to concessional and non-concessional creditorsfrom emerging market countries. They also urged IDA to continueto follow up on new reported cases of non-concessional borrowingand to inform the IDA Board of any decision to apply a disincen-tive mechanism ahead of Board presentation of the next IDA proj-ect in the affected country.

51. Efforts to strengthen management of debt. Participants underlinedthe importance of debt management as an effective means ofattaining and maintaining debt sustainability, especially in coun-tries benefiting from the MDRI. They noted that the currentefforts included: (i) conducting training workshops on the DSF forIDA borrowers; (ii) expanding the use of the Debt Management

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53 These are the African Development Bank, Asian Development Bank, Inter-AmericanDevelopment Bank, European Bank for Reconstruction and Development, and theEuropean Investment Bank.

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Performance Assessment Tool, which measures and enables themonitoring of government debt management performance overtime; and (iii) developing a medium-term debt management strat-egy toolkit and related advisory services for IDA borrowers. Partic-ipants noted that tools are being developed as public goods, whichwill initially be applied in restricted groups of countries, beforebeing rolled out more broadly for use by all providers of technicalassistance and capacity building in debt management. While theywelcomed the joint World Bank-IMF efforts towards buildingcapacity for stronger debt management in low-income countries,Participants urged Management to accelerate its efforts in this cru-cial area so that a broad group of IDA countries may benefit asquickly as possible. Participants underscored that joint WorldBank-IMF efforts in debt management are needed to complementongoing outreach to creditors and to help reinforce sustainablelending practices. They also emphasized the importance of contin-ued and strengthened cooperation between the various institutionsinvolved in debt management capacity building, building on syner-gies and avoiding overlaps.

SECTION III. IDA’S COUNTRY-LEVEL EFFECTIVENESS

52. A sharpened focus on results. Participants examined the role ofIDA in ensuring effectiveness at the country level to achieveresults as the second special theme of the IDA15 discussions. Theylooked at three sub-themes: (i) the relationship between IDA’sPBA system and country level outcomes; (ii) IDA’s role in moni-toring and measuring results; and (iii) IDA’s role in harmonizationand alignment of aid.

A. Development Outcomes and Resource Allocation

53. PBA system and results. Participants reviewed IDA’s PBA system,and reaffirmed that more IDA resources were being directed tocountries where results were being achieved.54 They noted four mainfindings of the review. First, countries sustaining good policy andinstitutional performance over several decades will open up a size-able advantage in terms of development outcomes over a country

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54 IDA (2007). “Selectivity and Performance: IDA’s Country Assessment and Devel-opment Effectiveness.” The results control for three factors: initial outcome levels,HIV/AIDS and the Africa region.

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with low performance ratings, assuming all other factors remainequal. Second, in countries where the quality of policies and institu-tions undergo a major change, there could be substantial changes inoutcomes for decades. For example, in terms of the Human Develop-ment Index (HDI), strong improvers of policies and institutionalperformance advance at twice the average rate while poor perform-ers see static or declining development outcomes. Third, Africancountries as a group face a much more difficult development chal-lenge—controlling for policies and institutions as well as forHIV/AIDS prevalence rates, they progressed on average at half thespeed of countries in other regions over the past two decades interms of HDI (although this slow progress has been reversed some-what during the past decade). Fourth, country policy and institu-tional performance matters for success of IDA projects. In fact,country performance matters not only during the initial stages of theproject but improvements during the life of the project also increaseits chances of being successful. Going forward, Participantsrequested Management to update the study of the links between aidallocation and results, including experience with PBA and CPIA, aswell as the balance between needs and performance at the time ofthe IDA15 Mid-Term Review. Participants urged Management todraw on the findings of the scheduled IEG review of the CPIA, if itbecomes available in time.

54. Centrality of the PBA system, with ring-fenced exceptions. Basedon the findings of the review, Participants reiterated the centralityof IDA’s PBA system in allocating scarce aid resources because itdirects more resources to countries with good policy and institu-tional performance, which in turn are correlated with better country-and project-level results. They noted that the PBA system makesIDA effective at the country level by: (i) providing a check onexcessive aid allocations to poorly-performing countries, anddirecting resources to better-performing countries; (ii) improvingthe stability and predictability of aid resource flows where this ismost needed—to those countries maintaining a stable or improvingperformance; and (iii) helping provide a standard through the useof performance ratings, which separate exogenous factors thatmake development more or less challenging in different countriesor regions. In this regard, Participants recognized that selective,carefully ring-fenced deviations from the PBA system through cap-ping allocations to some countries, exceptional allocations to post-conflict countries (see Section IV) and topping-up funds forregional projects take into account exogenous factors affecting

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long-term development and help address country-specific andregional needs.55

55. Simplification of the PBA formula. While Participants noted thatIDA’s PBA system, with its carefully ring-fenced exceptions wasworking well, they recognized that the formula has become com-plex over time. The formula has evolved over past replenishments,taking into account new analytical research, changing donor priori-ties and lessons gathered during implementation. While these mod-ifications over successive replenishment cycles have enhanced theeffectiveness of the PBA system in directing funds to countrieswhere results are being achieved, it has had the unintended conse-quence of becoming complex. To make the system more effectiveat the country level by enhancing transparency of resource flows,Deputies agreed to simplify the formula using a linear transforma-tion (details in Annex 1). In addition, Deputies also agreed tochanges in the portfolio performance ratings to include only actualperformance ratings and not forward looking projections, in orderto lower unwarranted volatility in IDA allocations (Annex 1).Starting in IDA15, Participants requested that Management makeallocations and commitments available to IDA’s Executive Direc-tors for information at the end of each fiscal year.

56. Enhancing effectiveness in small states. Participants recognizedthe importance of IDA’s support to small states with populations of1.5 million or less given their vulnerability. Focusing on financialassistance provided by IDA to small states, Participants agreed to raise the base allocation of SDR 1.1 million per year (or SDR3.3 million per replenishment period) provided to all countries toSDR 1.5 million per year (or SDR 4.5 million per replenishmentperiod) to benefit the small states where base allocations constitutean important part of overall allocations. This increase keeps IDA’s

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55 In grant element terms, including assistance provided under the Heavily IndebtedPoor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative(MDRI), Participants noted that Africa is expected to receive an estimated 60 per-cent of IDA’s resources during the IDA15 period. Further, Participants noted thatmany of the policy changes (a systematic approach to arrears clearance, extension ofexceptional allocations to post-conflict and re-engaging countries, increase in theregional project envelope) agreed upon during the IDA15 replenishment discussionswould largely benefit African countries. Finally, Participants also welcomed gradua-tion of countries from IDA as a positive development, which helped releaseresources during IDA15 to all regions, especially to Africa.

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assistance to small states constant in real terms since IDA9. More-over, Participants agreed to raise the cap on IDA allocations fromSDR 13.2 to SDR 19.8 per capita to adjust for dollar inflation sinceIDA9. Such an increase would be in line with IDA’s performanceorientation since the small states more likely to reach this capwould be the better performing ones. Micro states, with very smallpopulations and large fixed costs, would also benefit.

57. Regional projects. Participants reiterated their support for IDA’sregional project program as a way to promote regional integrationin all regions, particularly in Sub-Saharan Africa. In recognition oftheir support, Participants had previously agreed to increase thetopping-up funds to support regional projects from SDR 200 mil-lion to SDR 250 million at the IDA14 Mid-Term Review. In view ofthe continuing strong demand for IDA’s regional projects, Partici-pants proposed a further increase of SDR 150 million per year dur-ing the IDA15 period, for a regional topping-up pool of SDR 1.2billion. In addition, while IDA’s regional project program has gen-erally worked well so far, Participants recognized that some coun-tries with small IDA allocations, including the small states, werehaving difficulty participating in regional projects given the limitedsize of their allocations. This is because the IDA regional projectprogram requires participating countries to contribute a third ofthe cost of their participation in regional projects from their coun-try allocations. Given that regional integration is particularlyimportant for countries with small allocations to overcome disec-onomies of scale, Participants agreed to limit country contributionsto regional projects to 20 percent of the annual allocations. Whilethis ceiling applies to all countries, Participants noted that it isintended to assist countries with small allocations. Participantsrequested Management to provide an overall review of theregional program, as well as the experience with the cap on countrycontributions to regional projects at 20 percent, at the IDA15 Mid-Term Review.

B. Achieving and Measuring Results

58. IDA’s focus on results. The IDA Results Measurement System(RMS) was launched in 2002 during the IDA13 replenishment andenhanced in IDA14 to strengthen IDA’s focus on results. The RMStracks two forms of effectiveness: development or country-leveleffectiveness which refers to the achievement of sustainableimprovements in outcomes on the ground in IDA countries, andagency effectiveness which means the work that organizations in

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the donor community do to ensure that their business practicesconform to the principles of good aid management, have enablingeffects on country capacity and institutions, and thus contribute tocountry-level effectiveness.

59. Two-tiered system. Following that logic, the IDA RMS is a two-tiered system. Tier 1 monitors aggregate progress on 14 countryoutcome indicators grouped into four categories: growth andpoverty reduction, public financial management and investmentclimate, infrastructure, and human development. Tier 2 monitorsIDA’s contribution to development outcomes using indicators ofthe quality and effectiveness of IDA programs as well as examplesof the outputs that IDA produces in four sectors. Participants rec-ognized that while difficulties remain in attributing specific devel-opment outcomes to particular actions by IDA, the RMS signifi-cantly contributed to strengthening the result-orientation of IDAprograms and projects and urged Management to continue itsefforts to further improve the management for results duringIDA15. Participants also urged the World Bank over the comingyears to strengthen tracking of progress on gender and environ-mental outcomes.

60. Tier 1: Monitoring Country Outcomes. Tier 1 RMS provides anoverview of the economic and social progress of IDA countriesduring the IDA14 period. To further strengthen usefulness of Tier 1indicators, Participants asked Management to take two specificactions by IDA15 Mid-Term Review: (i) review Tier 1 private sec-tor development indicators in view of the increased emphasis onprivate sector in IDA15 and closer collaboration between IFC andIDA; and (ii) review the feasibility of developing a Public Expendi-ture and Financial Accountability (PEFA)-based aggregate indica-tor to measure the quality of IDA countries’ public financial man-agement and to replace the current “number of HIPC benchmarksmet” indicator.

61. Statistical capacity building. Participants noted that the IDA RMShas contributed to the awareness of the lack of good quality data toinform decision making by the governments as well as the develop-ment partners. In this regard, they agreed that IDA has a role as theplatform for donors and developing countries to work together inthe area of statistical capacity building under the framework ofPARIS21 as well as the regular Roundtables on Results. Internally,a World Bank-wide committee and an external advisory panel onstatistical capacity building (established in 2006) led the effort to

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significantly scale up support for building statistical capacity. Par-ticipants noted that a major achievement of these World Bank-wide efforts has been the completion of National Strategies for theDevelopment of Statistics (NSDSs) for the majority of IDA coun-tries. Participants requested that IDA, as part of its statisticalcapacity building efforts, work towards the collection and analysisof gender-disaggregated statistics at the country level.

62. While progress has been made, Participants noted that thereremains an urgent need to close the statistical gaps in IDA coun-tries, especially in Sub-Saharan Africa, and to forge progress inimplementation of the NSDSs. They urged IDA to continue itsefforts to: (i) advocate improvements in the quality and frequencyof data collection and reporting in IDA countries; (ii) strengthenlinks between statistical capacity building and public sector budgetand civil service systems/reforms so that incentives for generatingand using data are in place; and (iii) where appropriate, to provideresources for investments in national statistical systems. Conse-quently, in order to strengthen IDA’s platform role in building sta-tistical capacity in IDA countries, Participants urged IDA to adopta two-track approach. First, in each IDA CAS, require a more com-prehensive discussion of weaknesses in country statistical systemsand their use in decision making. When relevant, follow up, asappropriate, in DPOs, Investment lending (IL), Analytical andAdvisory Activities (AAA), CAS Progress Reports (CASPRs),CAS Completion Reports (CASCRs) and Implementation Com-pletion Reports (ICRs). Second, explore the potential for expand-ing and redesigning the existing Trust Fund for Statistical CapacityBuilding (TFSCB) to provide a mechanism to primarily financeand co-finance as well as to supervise investments in statisticalcapacity and implementation of NSDSs.

63. In addition, Participants urged IDA to develop a web-based datastandards system to help IDA countries track their progresstowards meeting internationally accepted norms of data coverage,frequency, and timeliness. Subscribers to the system can provideinformation about their data compilation and dissemination prac-tices for posting on the World Bank’s Bulletin Board (similar toIMF’s Dissemination Standards Bulletin Board), allowing monitor-ing of the quality of development statistics. Participants also askedIDA to intensify its efforts with donors and partners to identify‘lead donors’ for work in selected priority countries and accelerateefforts to develop a sector wide approach to building statisticalcapacity in these priority countries.

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64. Tier 2: Monitoring IDA’s Contribution to Country Outcomes. Thesecond tier of the RMS monitors IDA’s contribution to develop-ment effectiveness across three levels of the World Bank’s work—program, project, and aggregate outputs—while acknowledgingthat outcomes at the country level cannot be attributed to IDAalone. Participants noted that the implementation of the RMS dur-ing IDA14 has contributed to positive shifts in the World Bank’sinternal “results culture,” which needs to be sustained and furthermainstreamed. To ensure greater responsiveness to the IDA RMS,a Results Steering Group was formed to foster greater attention tomanaging for results throughout the World Bank. IDA is imple-menting training programs in developing results frameworks andusing and re-evaluating them systematically during project supervi-sion and at completion to report on outcomes. In addition, revisedICR guidelines have been issued to help with more specific mea-surement of project achievements and to facilitate dissemination ofexperience from project design and implementation. Finally, the“IDA at Work” website provides concrete country, sector, and proj-ect level results, and helps showcase examples of IDA’s contribu-tion to poverty reduction in low-income countries. Participantsendorsed Management’s proposal to continue this exercise.

65. Progress made. Participants discussed the steps taken by Manage-ment in support of the commitments made during the IDA14 Mid-Term Review and progress in Tier 2 indicators since then. In partic-ular, Results-based Country Assistance Strategies (RBCASs) havebeen mainstreamed; quality at entry remains high as evidenced byan increased percentage of projects with information on baselines,well defined Result Frameworks and institutional arrangements forproject monitoring and evaluation (M&E); outcomes as measuredby IEG continue to remain high, even with increasing lending com-mitments by IDA. Participants invited IEG to contribute to discus-sions at the IDA15 Mid-Term Review.

66. Areas for strengthening. Participants noted that despite progress,areas of weakness remain, especially in IDA’s ability to assess keyaspects of IDA contribution to country outcomes as well as totrack development outcomes. A results-based CAS, which linksIDA programs and projects to country priorities and systems, isone of the key instruments for IDA to ensure and monitor its con-tribution to country outcomes. To move the frontier further frommonitoring the number of RBCASs to monitoring their quality,Participants urged IDA to: (i) monitor CASCR self-ratings andtheir independent validation by IEG; and (ii) enhance the quality

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of CAS Results Frameworks by strengthening the emphasis onresults in the corporate review process.

67. With respect to the IDA portfolio, Participants asked IDA to intro-duce additional measures to improve the quality of outcome indi-cators, the availability of baselines for key outcome indicators atentry in IDA projects, and the quality of output and outcomereporting in ICRs for IDA operations. Regarding quality at entryof IDA operations, which is highly correlated with satisfactoryproject outcomes and serves as a leading indicator of projectresults, Participants asked Management to track the percentage ofoperations whose outcome indicators in the project documentscover key aspects of the Project Development Objectives. To bettermonitor the quality of supervision, Participants asked Managementto track the percentage of projects with adequate baselines for keyoutcome indicators, and to seek to ensure that this percentageshows a material year-on-year improvement. To improve the qual-ity of output and outcome reporting in ICRs for IDA operations,Participants asked for two actions. First, in addition to monitoringthe two measures agreed at IDA14 replenishment,56 track the per-centage of ICRs that report on key outputs and outcomes from theresults framework. Second, to address weaknesses in reporting onTier 2 output indicators, based on collaborative efforts betweenNetworks and Regions, develop lists of output indicators for fourto five sectors by IDA15 Mid-Term Review to allow a more accu-rate indicative aggregation of sector-specific outputs. This wouldeventually replace the current practice of reporting on examples ofsector-specific aggregated outputs.

68. Finally, in line with IDA’s focus on results, Management will con-tinue to improve staff and Management incentives for implementa-tion of the results agenda by aligning performance evaluation toresults.

C. Progress in Harmonization and Alignment

69. IDA’s approach to harmonization and alignment. Participantsunderlined that IDA should advance harmonization and alignmentat the country level by helping build capacities and strengthening

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56 Namely: (a) the share of IDA operations that successfully achieve (or are likely toachieve) their development outcomes, and (b) the percentage of projects with satis-factory ICR quality.

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ownership, aligning IDA assistance with country priorities, andworking with country authorities to pursue harmonization withother donors. Participants agreed that IDA’s role in promoting har-monization and alignment is important not only for its own activi-ties, but for the development community as a whole. In this regard,they noted that emerging new donors and creditors bring much-needed resources and development knowledge. Therefore, Partici-pants requested Management to make further efforts to engagewith non-traditional partners, and facilitate “South-South” cooper-ation. Given IDA’s pivotal role in the aid architecture, both inter-nationally and at the country level, Participants urged IDA to con-tinue to provide leadership and aspire to the highest standards as itimplements the Paris Declaration. In this context, Participantsreviewed progress made so far by IDA,57 and urged Managementto take further steps to strengthen harmonization and alignment.Participants welcomed the Matrix of Actions for Harmonizationand Alignment which helps sharpen IDA’s focus on results andasked Management to provide an update on progress at the IDA15Mid-Term Review.

70. Reinforcing country ownership. Recognizing the centrality ofcountry ownership and policy space, Participants underscored theimportance of robust country systems and a continued focus oncapacity building. In this context, they welcomed progress madewith the application of conditionality in development policy oper-ations (DPOs) under the Good Practice Principles, as outlined inthe report discussed by the Board in December 2007.58 Partici-pants endorsed the key messages of the report and the 2007 consultations—to respect ownership, give space to develop home-grown reform programs, and promote greater involvement of localcounterparts in planning and execution of analytic work. Theyasked Management to follow up on the next steps outlined in thereport in order to further strengthen and deepen the implementa-tion of the good practice principles. Participants asked Manage-ment to strengthen its communications with external stakeholdersand continue its dialogue with Civil Society Organizations. Theyalso noted that the scheduled IEG evaluation of PRSCs wouldprovide further analysis on the use of conditionality. Participants

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57 IDA (2007). “IDA’s Role in Strengthening Country-Level Effectiveness: Strength-ening Harmonization and Alignment.” 58 Operational Policy and Country Services (2007). “Conditionality in DevelopmentPolicy Lending.” Posted on the external web at www.worldbank.org/conditionality

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noted that IEG should include external consultations in this evalu-ation. They welcomed the proposal to further review applicationof conditionality as part of the DPO Retrospective in FY09.

71. Assessing the potential impact of reforms. Participants highlightedthe importance of upstream poverty and social impact assessments(PSIAs) of reforms supported by IDA, particularly in sensitive pol-icy areas. They urged IDA to ensure that progress made in the useof PSIAs is sustained and strengthened. They further asked thatsuch analysis be integrated into the PRS processes, be used toinform policy choices and be disclosed wherever possible. Whileconducting PSIAs, Participants urged appropriate use of analyticalcapacity within the countries. Participants also took note of thedraft updated Good Practice Note on PSIAs and welcomed itsposting on IDA’s external website for public comments. They alsonoted that the scheduled IEG review of the World Bank’s PSIAwork will further contribute towards ensuring relevance and qual-ity of IDA’s work in this area. Finally, Participants looked forwardto the review of the World Bank’s use of distributional and socialanalysis as part of the DPO retrospective.

72. Other areas for improvement. Going forward, Participantsrequested IDA to focus on areas where further progress wouldenhance country-level effectiveness. In particular, they asked IDAto pay closer attention to staff and Management incentives,develop country capacity by decreasing reliance on parallel ProjectImplementation Units (PIUs) consistent with the Paris Declara-tion, and provide an analytical framework that can assist IDA’sconsideration of decentralization by laying out options to bettercalibrate and target expertise needed and define cost effectivenessin light of budget implications. Participants also encouraged IDAto continue its work on strengthening country systems and increas-ing their use where appropriate, as well as building country capac-ity in recognition of the fundamental role that country leadershipplays in the successful implementation of the Paris Declarationprinciples.

73. Addressing next generation issues. To further strengthen IDA’s rolein harmonization and alignment, Participants asked Management tocomplement measures identified during the IDA14 Mid-TermReview with several well-targeted additional measures, including:

• issuing guidelines that will require that integration of PIUs intogovernment structures become the default option for IDA proj-

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ects, with any proposal to establish a new parallel PIU (forexample, due to fiduciary concerns) being clearly justified inproject documentation;

• reviewing IDA’s performance on predictability of disbursements,as well as the constraints to medium-term predictability of IDAdisbursements at the country level at the IDA15 Mid-TermReview;

• reporting by Regional Management to the Board periodically, onIDA’s actions at the country level to assist in the preparation andimplementation of country-led strategies or plans for harmoniza-tion and alignment;

• updating CAS Good Practice Note to recognize and encouragejoint or collaborative CAS preparation, provide guidance onhow best to manage this work and encourage such collaborativework when it makes sense from a country perspective;

• leading an effort to gain agreement with other lenders and donorson harmonized requirements in a range of legal documentation;

• stepping up efforts to help countries upgrade their procurementpolicies and procedures and ensure their efficient implementa-tion, working in collaboration with other donors;

• facilitating and supporting partner countries’ efforts to incorpo-rate nontraditional partners—vertical funds, non-DAC donors,and the private sector—in harmonization and alignment actions;

• carrying out—jointly with other interested donors—a survey ofselected IDA country programs and the total amounts of co-financing and of pooled and parallel financing leveraged throughIDA’s budgetary support and investment lending; and

• enhancing incentives for harmonization and alignment by a) continuing to communicate to staff, Management commitmentto harmonization and alignment as key IDA priorities;b) continuing to work with OECD-DAC and others on goodpractice guidance and communicating it to staff; and c) includingreference to harmonization and alignment in Terms of Refer-ences for country/sector directors and managers and as parame-ters for selection and promotion to senior positions.

74. Decentralization. Decentralization of staff and devolution ofdecision-making authority to country offices was seen as critical toIDA’s platform role, to enhancing IDA’s contribution to aid effec-tiveness, and to advancing progress on harmonization and align-ment. Participants noted that IDA has taken several steps todecentralize its staff and looked forward to further progress. Theyrequested Management to address this important issue by review-ing the appropriate skills mix, staff incentives, costs and benefits

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with special attention to fragile states. They acknowledge that in aflat budget environment prevailing in recent years, decentralizationhas entailed trade-offs. They welcomed the efforts being made inthe Africa region, which is pursuing an ambitious decentralizationof internationally recruited staff to country offices as part of theAfrica Action Plan. By planning for all new and vacant internation-ally recruited positions to be based in the field, the Africa Regionexpects to increase the number of internationally-recruited stafflocated in the field by over 50 percent by end-FY08 compared toFY06. The Region also plans to significantly increase the percent-age of projects and programs managed in the field by continuing tomove towards a model where a majority of tasks are managed inthe field with task managers located in one country and working ontwo to three. The Africa Region intends to continue to pursue thisfield-based recruitment effort during the IDA15 period so that thenumber and percentage of internationally recruited staff in thefield would increase.

75. To assist in decentralization, Participants asked Management toanalyze different models of staff location and develop an approachto measure cost effectiveness and better define it in the light ofbudget implications. Participants requested IDA to provide indica-tive estimates for decentralization during the IDA15 period, whichwould facilitate the monitoring of progress in this area. As a firststep, Management agreed to include baseline figures in the Matrixof Actions for Harmonization and Alignment. It will also explorethe possibility of providing indicative projections for the middle ofthe IDA15 period.

76. Finally, Participants urged the development of a draft World BankAction Plan for aid effectiveness in preparation for the High LevelForum on Aid Effectiveness to be held in Accra in September 2008.

SECTION IV. IDA’S EFFECTIVENESS IN FRAGILE STATES

77. Fragile states pose special challenges for IDA. In discussing thisthird special theme,59 Participants noted that fragile states repre-sent a critical challenge for IDA: while they are home to less than19 percent of the total population in IDA-eligible countries, they

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59 IDA (2007). “Operational Approaches and Financing in Fragile States.”

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account for over one third of the extreme poor, almost two fifths ofall child deaths and one third of 12-year-olds who did not completeprimary school. Participants noted that these poor developmentoutcomes in fragile states were a result of several challenges: weakinstitutions, poor governance, unstable political environments, andin some cases, ongoing violence or lingering effects of past severeconflicts. Participants recognized that these challenges made devel-opment assistance to fragile states inherently risky—weak institu-tions undermine effectiveness of aid and high vulnerability torenewed conflict increases the risks that any incipient gains madecould be reversed. Engaging in fragile states can also create reputa-tional and fiduciary risks for IDA.

78. But IDA should strengthen its engagement. Despite these chal-lenges, Participants reiterated the need for IDA to strengthen itsengagement in fragile states, where there are high concentrationsof extreme poverty and low levels of social development. They alsopointed out that the increasing of capacities in many of these coun-tries to absorb higher ODA volumes would also facilitate strength-ened engagement. Participants noted that even if the probability ofdonor interventions (in the form of projects and programs) beingsuccessful is relatively low, improvements in social indicators accru-ing from successful interventions could be high because thesecountries start from very low levels of development. Participantsalso maintained that disengagement and failure to address theproblems of fragile states imposes costs on the neighboring coun-tries: a strong response from IDA is hence in the interests of all itsmembers, as progress in these environments will produce positivespillover effects and help protect the development gains made inthe stronger performers.

A. Strategy, Instruments and Operational Response in Supporting Fragile States

79. IDA’s key objectives in fragile states. Participants encouraged IDAto continue adapting its core strengths in support of the key objec-tives of state building and peace building in fragile states. While rec-ognizing that state building can be complex, Participants noted thatIDA has a crucial role to play by: supporting government processesto develop budget priorities; financing policy reform; financinginfrastructure and basic service delivery through the state; support-ing transparent public-private partnerships; building public financialmanagement systems, including for the management of natural

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resource revenues; and leading analytical work on economic andgovernance issues. Participants also noted that IDA has an impor-tant supporting role in furthering peace-building goals in fragilestates through its core competencies in economic and developmentissues, by adapting economic and social programs to support peace-building goals and by participating in integrated programs withother partners.

80. Differentiating approaches based on country circumstances. Partic-ipants recognized that fragile states are heterogeneous and sup-ported the differentiation of IDA’s role, strategies and operationalapproaches depending on the direction and pace of governancechange. Participants supported a larger role for IDA in post-conflict/peace-building transition or in gradually improving scenarios, wherethere is a reasonable level of government capacity to act as a con-duit for development finance to help it implement pro-poor policiesand adhere to basic governance standards. In prolonged crisis sce-narios, where government capacity is non-existent or severely con-strained, Participants agreed that IDA should focus on maintainingoperational readiness to scale up engagement when appropriateand make use of opportunities to provide funding for basic socialservices where possible. In deteriorating governance/rising conflictrisk scenarios, Participants recognized IDA’s comparative advan-tage was in focusing on economic dialogue, transparency and ring-fenced social development and social protection programs, workingtogether wherever possible with other development partners todecrease conflict risk.

81. Strengthening research and results monitoring. Participants urgedIDA to continue and strengthen its research and operational goodpractice work on fragile states. Participants noted a particular needto focus attention on strengthening operational approaches to situ-ations of deteriorating governance and rising conflict risk andensuring operational readiness in situations of prolonged crisis,where international approaches are less well developed than post-conflict situations. Participants urged IDA to pay close attention tothe gender dimension of conflict, peace-building and reconstruc-tion, and continue to focus on overall results. Participants wel-comed the multi-donor results framework tool developed by theWorld Bank and other partners to assist national authorities inpost-conflict and political transition situations. Participants furtherurged IDA to work with other donors to develop adequate indica-tors for measuring progress on state-building and peace buildingactivities in fragile states.

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82. Working together better in fragile states. Recognizing that supportfor state-building and peace-building roles requires coordinatedaction, Participants encouraged IDA to continue its partnershipwith the UN and other donors. In this regard, they noted that IDA,in response to an IEG evaluation of World Bank’s work in fragilestates, has increased its participation in shared strategies with otherdonors to strengthen cooperation at the country level. They alsonoted IDA has improved collaboration with the UN at several lev-els and welcomed the work by the World Bank and the UN on anew partnership agreement in response to crises and emergencies,urging that this reinforce collaboration while ensuring flexibility toadapt to different country environments and borrower needs. Par-ticipants noted that, going forward, cooperation with the UN sys-tem should be deepened, based on a clearer understanding of therelative comparative strengths of IDA and the UN. In addition,they welcomed the role played by IDA in coordinating joint needsassessments and recovery plans and external financing needs inseveral countries. Participants urged IDA to continue working withregional institutions in leading dialogue on conflict prevention andgovernance. Participants also encouraged IDA to continue workingwith the UN, EC and other bilateral donors at the OECD-DAC torevise the guidance for integrated post-conflict recovery planning,which aims at greater coherence among political, security, develop-ment, and humanitarian actors in fragile transitions.

83. World Bank’s organizational and operational reforms. Partici-pants supported the steps taken by the Executive Directors to finetune IDA’s organizational, policy and procedural approaches tobetter respond to the needs of the fragile states, learning from itsexperience and in close cooperation with other actors. Participantswelcomed the new policy on rapid response in crisis and emergen-cies approved by the Executive Directors in February 2007. TheWorld Bank will report on progress under the new rapid responsepolicy during FY09 to the Executive Directors. They recognizedthat there are fiduciary risks involved in working in emergency sit-uations and noted the risk-mitigation measures put in place by thepolicy. They encouraged measures to further strengthen opera-tional support and build on lessons learned, together withincreased field presence and enhancing human resource systems toattract staff and reward strong performance in these difficult envi-ronments. Participants particularly stressed the need to look notonly at human resource incentives but at the skills and experienceof staff working in fragile states, where knowledge and understand-ing of political economy issues is particularly important. Finally,

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Participants urged IDA to report on progress on human resourcesreforms, cooperation with the UN and other actors, implementa-tion of DAC Principles, adaptation of country assistance strategiesto fragile and conflict-affected environments, and progress ondevelopment of better indicators for measuring progress on state-building and peace building activities in fragile states at the IDA15Mid-Term Review.

B. Financing for Fragile States

84. A review of IDA’s financing arrangements. Participants welcomeda review of IDA’s financing arrangements in fragile states. Partici-pants noted that fragile states face very different challenges andgovernance environments and require different financingapproaches. From a financing perspective, participants noted thatfragile states fall into four categories: (i) countries receiving alloca-tions based on IDA’s PBA system; (ii) countries receiving excep-tional post-conflict allocations; (iii) countries receiving exceptionalallocations upon re-engaging with IDA after a prolonged period ofinactivity but which did not qualify for post-conflict assistance; and(iv) countries that do not receive IDA financing because they arein arrears on IDA payments.

85. PBA system and fragile states. Participants recognized that thefinancing for fragile states based on the PBA system, with carefullyring-fenced exceptions for post-conflict and re-engaging countries,was working well. The PBA system calibrates IDA resources tomany fragile states in line with their governance and policy per-formance. Participants noted while volumes of resources were set bythe PBA system, the terms of IDA’s assistance to fragile states toaddress their special needs were authorized during recent replenish-ment rounds. In particular, the IDA14 grants framework directsgrants to debt-distressed countries, many of which are fragile states.In addition, many fragile states are also expected to receive debtrelief from IDA through the HIPC Initiative and MDRI.

86. Post-conflict countries. Participants supported lengthening theduration of exceptional assistance to post-conflict countries from 7to 10 years by doubling the phase-out period from 3 to 6 years.They maintained that these exceptional allocations during thephase-out period should continue to be calibrated on a case-by-case basis, based on country performance as measured by the Post-Conflict Performance Indicators (PCPIs). In this context, Partici-pants welcomed the proposed public disclosure of PCPIs during

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the IDA15 period, after review by an external panel, whose find-ings will also be disclosed. Participants also supported linking theshare of post-conflict allocations in overall allocations to changesin the overall replenishment size. Further, Participants agreed thatsome post-conflict countries could be graduated from receivingexceptional allocations earlier than ten years depending on countrycircumstances. Participants agreed to the retention of additionalflexibility in deciding post-conflict allocations in the first year asagreed during the IDA13 replenishment discussions.

87. Countries re-engaging with IDA after a prolonged period of inac-tivity. Participants agreed to the lengthening of duration of excep-tional allocations to countries re-engaging with IDA after a pro-longed period of inactivity from 3 to 5 years, including three yearsof phase-out to PBA allocations. They noted that if country per-formance does not improve, then countries should be “graduated”from receiving exceptional allocations before the end of 5 years.They agreed that the level of resources made available would bearound half of what would be provided under the post-conflictallocation system.

88. Participants noted that the increase in financing for post-conflictand re-engaging countries will be proportional to the increase inIDA15 commitment authority, otherwise implementation of thesechanges would take away resources from other countries in thePBA pool.

89. Participants asked Management to present an assessment of theimplementation experience with the lengthened phase-out forpost-conflict and re-engagement allocations at the IDA15 Mid-Term Review.

C. A Systematic Approach to Arrears Clearance

90. Timely and adequate support from IDA. Participants noted thatsix fragile states have arrears to IBRD and/or IDA, and that thearrears are large relative to country capacity to pay as well as toother available sources of financing.60 Once each country is readyfor re-engagement, the arrears constitute a significant barrier toaccess to timely and adequate support for recovery from IDA, aswell as to debt relief available under the HIPC Initiative and

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60 A seventh country, Liberia, cleared its arrears on December 5, 2007.

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MDRI. Participants, therefore, endorsed Management’s proposalfor a systematic approach to help finance the clearance of thesearrears using IDA resources.61

91. Coverage and conditions for support. The approach would coverIDA countries with arrears to IBRD and/or IDA as of December 31,2006 and grandfathered for eligibility under the HIPC Initiativebut that have yet to reach the HIPC decision point.62 Eligiblecountries would only be able to receive exceptional arrears clear-ance support after meeting the World Bank’s requirements for re-engagement, as well as conditions for each operation to financearrears clearance. Such conditions would include a medium-termgrowth-oriented reform program, satisfactory performance underan IMF program, and a financing plan that provides for the fullclearance of arrears to the World Bank and for the normalizationof relations with other multilateral institutions where there are alsoarrears to those institutions. Participants noted that while there aremoral hazards and other risks associated with exceptional supportfor arrears clearance, these risks are reduced by recent IDA poli-cies relating to grants, debt relief and non-concessional borrowing.

92. Tailored approach. Participants also noted that while all of the sixcountries in arrears are currently classified as fragile states theireconomic and financial capacity, and levels of indebtedness, varywidely. These factors would affect the design of arrears clearancepackages, including with respect to the share of arrears that eachcountry would be expected to finance from its own resources. Thisshare and, thus, also the level of support required from IDA, wouldbe determined through a detailed assessment prepared by WorldBank staff. Lastly, Participants noted that each arrears clearanceoperation, and thus also each exceptional arrears clearance alloca-tion, would be subject to the approval of the Executive Directors.

93. Pre-arrears clearance grants. Participants also noted the positiveexperience with the selective use of IDA grants to support earlyrecovery efforts in post-conflict countries in advance of arrearsclearance. They endorsed Management’s proposals to enhance theframework for pre-arrears clearance grants, and urged Manage-ment to finalize these proposals with IDA’s Executive Directors.

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61 IDA (June, 2007). “Further Elaboration of a Systematic Approach to ArrearsClearance.” 62 Two countries would need to be grandfathered into HIPC before they could be eli-gible for exceptional arrears clearance support.

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SECTION V. MANAGING IDA’S FINANCIAL RESOURCES

94. Deputies recognized that the IDA15 replenishment period(FY09–11) is a critical time for the donor community to increaseassistance to developing countries to help them in their efforts toreach the MDGs by 2015. Towards this end, they endorsed a totalreplenishment of SDR 27.3 billion (equivalent to USD 41.6 bil-lion)63 during the IDA15 period, which would constitute the IDA15commitment authority envelope.

A. Commitment Authority

95. Sources of commitment authority. IDA’s commitment authority isbacked by donor contributions, internal resources of IDA,transfers64 from IBRD and IFC, and by other resources, as avail-able. Donor contributions supporting IDA15 commitment author-ity are provided as part of the IDA15 replenishment itself as wellas under the MDRI replenishment. Deputies noted that Manage-ment will review IDA’s commitment authority and report to theBoard on an annual basis, per current practice. This review willtake into account the status of donor financing commitments to theIDA15 replenishment and the MDRI replenishment. In the eventof a shortfall of donor commitments, the level of IDA15 commit-ment authority could be adjusted over the course of the IDA15period. Deputies reiterated the commitment made under MDRI tofully finance the costs to IDA of providing MDRI debt relief, andthat financing of these costs would be additional to regular IDAcontributions.

96. Sources. The volume for each source of funding is as follows:

• Deputies endorsed SDR 16.5 billion (equivalent to USD 25.1 bil-lion) of total donor contributions for the IDA15 replenishment.IDA15 donor contributions comprise: (i) regular contributions ofSDR 14.6 billion (equivalent to USD 22.3 billion), net of thestructural financing gap;65 (ii) contributions to cover IDA’s debtrelief costs under the HIPC Initiative during the IDA15 commit-ment period (FY09–11) of SDR 1.1 billion (equivalent to USD

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63 At the IDA15 foreign exchange reference rate of USD/SDR 1.52448.64 IBRD transfers are made out of its net income. IFC designates grants to IDA outof its retained earnings.65 Including the structural financing gap, the total target volume of regular donorcontributions is SDR 17.8 billion.

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1.7 billion); and (iii) contributions to finance arrears clearanceoperations of SDR 0.8 billion66 (equivalent to USD 1.1 billion).

• Deputies reaffirmed the need to provide additional donor con-tributions for the MDRI replenishment of SDR 4.1 billion(equivalent to USD 6.3 billion), so as to cover IDA’s debt reliefcosts due to the MDRI during the IDA15 disbursement period(FY09–19) as agreed under MDRI.

• Deputies acknowledged proposed commitments against IDA’sinternal resources in the amount of SDR 4.1 billion (equivalentto USD 6.3 billion), subject to approval by IDA’s ExecutiveDirectors. Internal resources include credit repayments receivedfrom both current and past IDA borrowers, as well as resourcesfrom IDA’s liquid assets including investment income.

• Replenishment funding would also comprise expected transfersfrom IBRD net income in the amount of SDR 1.3 billion andgrants from IFC in the amount of SDR 1.3 billion, in each casesubject to availability of net income and annual approvals by theIBRD and IFC (equivalent to an aggregate World Bank Groupcontribution of USD 3.9 billion).

97. Donor contributions of SDR 16.5 billion continue to be the pri-mary source of IDA’s commitment authority, accounting for some60 percent of the total resources supporting IDA15. Donor com-mitments for the IDA15 replenishment (subscriptions and contri-butions) of SDR 16.5 billion as shown in Table 1 of Annex 3 reflectthe agreement reached among donors. Donor contributions for theMDRI replenishment of SDR 4.1 billion are governed by theMDRI Resolution.67 Under the terms of the MDRI Resolution,IDA has undertaken to reflect changes in actual and estimatedcosts of MDRI debt forgiveness by making adjustments to donorcontributions to the MDRI every three years normally in conjunc-tion with regular replenishments.68 A revised CompensationSchedule and revised Donor Contribution tables to the MDRIResolution will be provided to members reflecting the updatedcost estimates for the MDRI as of September 30, 2007. Corre-sponding adjustments to reflect these updated amounts are also

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66 Total estimated arrears clearance costs during IDA15 are SDR 907 million, ofwhich donors pledged to cover SDR 742 million.67 “Additions to IDA’s Resources: Financing the Multilateral Debt Relief Initiative,”IDA Resolution No. 211 adopted by IDA’s Board of Governors on April 21, 2006(the “MDRI Resolution”).68 Paragraphs 1(f), 2(c) and 2(d) of the MDRI Resolution.

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required in the payment schedule attached to each member’sInstrument of Commitment for its MDRI subscription and contri-bution.69 Section VI provides further information regardingdonors’ contributions to finance debt relief costs under the HIPCInitiative and the MDRI and for arrears clearance operations.

• Prospective new members and donors. Participants welcomedChina, Cyprus, Egypt, Estonia, Latvia and Lithuania to theIDA15 discussions as new IDA members and new donors. Partic-ipants welcomed representatives from Argentina and Croatia asobservers to replenishment discussions and encouraged them tobecome donors to IDA.

Participants noted that, in their view, there are still a numberof countries that have the economic capability to contribute toIDA but have not yet done so. Participants acknowledged Man-agement’s efforts to reach out to these countries and agreed thatefforts should continue to encourage them to become IDAdonors.

• Burden-sharing. Participants acknowledged the dual challenge ofsecuring an adequate replenishment size while achieving anacceptable burden-sharing framework. Deputies noted thatadjusted Gross National Income (GNI) remains a useful point ofreference for IDA shares, but that it cannot be followed rigidlyas the basis for determining replenishment shares. In view ofsubstantial exchange rate movements in recent months andyears, Deputies agreed that flexibility was required on the part ofeach donor for a successful outcome of the replenishment.

• Pro rata provision. Donor contributions become available inthree equal tranches to the extent they are unqualified. It is thepractice of some donors to deposit qualified instruments of com-mitment to IDA because payments are subject to annual legisla-tive approvals. In view of this, since IDA7, donors under the prorata provision have restricted the use of part of their contribu-tions proportionate to any payment shortfall from donors whosecontributions exceed 20 percent of the total. This provision didnot apply in IDA14 since no single donor contribution accountedfor 20 percent of total donor contributions. Deputies agreed todiscontinue the use of the pro rata provision for IDA15 to ensurepredictability of resources and protect the interests of IDArecipients.

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69 Members will be notified of the necessary amendments to their MDRI Instrumentsof Commitment and the payment schedule following adoption of the IDA15 Resolu-tion by the Board of Governors.

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• Additional contributions. Donors may, at any time, make addi-tional contributions to the amounts shown in Table 1 of Annex 3.Such contributions would reduce the financing gap and result in acorresponding increase in IDA’s available commitment authority.

• Voting rights. Participants agreed that the existing IDA votingrights system continue for the IDA15 period.

98. Internal resources. To increase IDA’s commitment authority, Par-ticipants endorsed IDA’s existing practice of using internalresources to complement donor resources. They supported theanalysis presented during the replenishment discussions demon-strating that IDA would have an adequate level of internalresources to continue to support future replenishments. Partici-pants noted that credit repayments constitute an important compo-nent of internal resources and recognized the impact of the MDRI,HIPC Initiative and IDA grants on credit reflows. They confirmedtheir commitment to compensate IDA for these forgone reflows ona “dollar-for-dollar” basis. Participants reviewed the structure ofIDA’s liquid resources and discussed Management’s projectionsregarding IDA’s long-term financial capacity.

99. IBRD and IFC contributions. Participants welcomed the under-taking for a planned record contribution of USD 3.5 billion70

from World Bank Group resources in support of an ambitiousIDA15 replenishment. Participants noted that the ability of IDAto assist low-income countries over the next three years dependsheavily on the agreed IDA15 funding package and that a criticalcomponent of this funding package was the continued ability ofIBRD and IFC to contribute financial resources to IDA. Suchtransfers are approved annually by IBRD’s Board of Governorsand IFC’s Board of Directors.71 Participants emphasized theimportance they attach to continued and substantial transfersfrom IBRD and IFC to IDA. They urged IBRD and IFC to main-tain their financial support to IDA15, consistent with IBRD’s andIFC’s financial priorities.

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70 This amount is expected to generate additional investment income of USD 400 mil-lion and provide total financing for IDA15 of USD 3.9 billion, equivalent to SDR2.6 billion.71 IFC’s Board of Governors notes with approval the designation of retained earn-ings by IFC’s Board of Directors.

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B. Replenishment Effectiveness

100. Deputies recommended that financing for IDA15 be made sub-ject to an effectiveness condition similar to that used under previ-ous IDA replenishments. The purpose of such a condition is toensure that most donor financing, including contributions bymajor donors, is in place on time. Deputies recommended thatIDA15 become effective when Instruments or Qualified Instru-ments of Commitment accounting for 60 percent of the totaldonor contributions have been received by IDA. They recom-mended a target effectiveness date for the replenishment ofDecember 15, 2008.

101. Deputies noted the expected limited availability of commitmentauthority for making grants at the start of the IDA15 period,before the replenishment becomes effective. Principal reflowsderived from credits extended in replenishments prior to IDA11cannot be used for the financing of grants as the associatedreplenishment resolutions did not authorize the making of grants.IDA would, therefore, need to rely on donor contributions toback new grant commitments during IDA15. Since many IDAcountries receive their entire assistance in the form of grants, thetimely availability of donor contributions to support commitmentauthority for grants is of particular concern.

102. In response to this concern, Deputies noted the importance ofproviding their Instruments of Commitment as early as possible,so as to advance the date of reaching the threshold for replenish-ment effectiveness.72 Deputies also noted two options to addressthe constraint associated with the provision of grants, both ofwhich were used with success in IDA14: (i) the continued use ofthe Advance Contribution Scheme; and (ii) the use of conditionalgrants and convertible credits.

• Advance Contribution Scheme. In past IDA replenishments,some donors agreed that a share of their contributions could beused before the replenishment becomes effective. Under thisAdvance Contribution Scheme, one-third of the amount speci-fied in a contributing member’s Instrument of Commitmentwould be released for commitment authority purposes, provided

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72 Some donors’ budgetary and legislative timetables permit them to make their con-tributions at an early stage in the fiscal year.

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that at least a defined minimum threshold volume of total donorInstruments of Commitment has been received. In view of thelimited availability of commitment authority for grants duringthe first six months of IDA15, Deputies agreed to eliminate thethreshold for the Advance Contribution Scheme, following thesame procedure as in IDA14.

Consequently, unless stated otherwise by the donor, one thirdof that donor’s contributions will be released for commitmentimmediately upon receipt of the donor’s Instrument of Com-mitment by IDA. The second and third tranches of donor con-tributions will be released at the beginning of each fiscal year,on July 1, 2009 and July 1, 2010, respectively.

• Conditional grants and convertible credits. Deputies noted twoother options to address constraints on commitment authority:(a) using conditional grants; and (b) converting credits to grants.Grants during the first six months of IDA15 could be made con-ditional upon availability of sufficient commitment authorityfrom donor contributions. Alternatively, IDA15 grant operationscould be approved as credits in the first six months of IDA15with an automatic conversion to grant terms as and when suffi-cient donor resources become available. Upon conversion, anyIDA service and commitment charges paid under the creditwould be refunded to the borrower. To the extent required, Man-agement would adopt a combination of conditional grants andconversion of credits into grants, as described above, followingthe same procedures that were used successfully in IDA14.

C. Contribution Procedures

103. Payments. Deputies recommended that the contribution and pay-ment arrangements for donors continue as in previous replenish-ments. Donors will provide their contributions in the form of cashor notes in three equal annual installments. The first installmentwill be due 31 days after the replenishment becomes effective,which is expected by December 15, 2008, except for advance con-tributions which will be paid as specified by IDA. The secondinstallment will be paid no later than January 15, 2010, and thethird installment no later than January 17, 2011. IDA may agree topostpone any payment under the terms of the IDA15 Resolution.

104. Deputies recommended that subscription and payment arrange-ments for non-donors continue as in previous replenishments. Sub-scription payments of non-contributing members will be fully paidin one installment and in national currency, either in cash or notes.

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105. Encashment. Donor contributions will be encashed on an approxi-mately pro rata basis among donors following the agreed regularencashment schedule (Attachment II of the IDA15 Resolution).Donors may, with the agreement of Management, adjust theirencashments to reflect their legal and budgetary requirements.Deputies agreed to indicate any special preferences in this regardto Management when donors deposit their Instruments of Commit-ment. Deputies recognized that the timing of encashments affectsIDA’s resource base. They agreed that in exceptional cases, shouldunavoidable delays occur, IDA’s encashment requests to theaffected donor are expected to be adjusted to take into account anypast payment delays by that donor and any related lost income toIDA. IDA may also agree with any member on a revised encash-ment schedule that yields at least an equivalent value to IDA.

106. Valuation of contributions. Deputies agreed to denominate theircontributions in their respective national currencies if freely con-vertible, in SDRs, or, with the approval of IDA, in any convertiblecurrency of another member country. They also agreed to deter-mine the currency of denomination for each donor contributionas of the date of conclusion of the IDA15 replenishment discus-sions. For the purpose of establishing the equivalence of valueamong different currencies and the SDR, donors agreed to usethe average daily exchange rate for the period April 1, 2007,through September 30, 2007. To help maintain the value of contri-butions from donors with high inflation rates, contributions fromdonors with domestic annual inflation of 10 percent or higher in2004–2006 will be denominated in SDRs.73

107. IDA14 funds carried into IDA15 replenishment. Deputiesagreed that the IDA14 funds carried over into the IDA15 will beadministered under the terms of the IDA14 replenishment withrespect to financial management matters such as payment,encashment, and allocation of voting rights. For ongoing opera-tional matters, such as commitment authority, IDA15 terms, con-ditions and procedures will apply.

108. Reporting of contributions. Participants requested Managementto report regularly to the Executive Directors on the status of each

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73 Inflation is measured by the rate of change of the national Consumer Price Index(CPI), or the GDP deflator in case of donor countries for which the CPI is notavailable.

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donor’s commitment and actual contributions to IDA and toinclude this information in the Annual Report of the World Bankand other publications as appropriate. Participants also requestedManagement to analyze the structural financing gap in IDAreplenishments for the IDA15 Mid-Term Review.

SECTION VI. FINANCING OF DEBT RELIEF AND ARREARS CLEARANCE

109. Participants reiterated their strong support for the HIPC Initia-tive and MDRI, which provide debt relief to the world’s poorestand most indebted countries. They noted the progress that hasbeen made in the implementation of the enhanced HIPC Initia-tive since its adoption at the beginning of IDA12. They alsonoted IDA’s implementation of the MDRI beginning in FY07,the second year of the IDA14 period, and reviewed updated costestimates for IDA’s lost credit reflows and the status of donorfinancing for the MDRI. In addition, Deputies discussed thefinancing arrangements for exceptional IDA allocations forarrears clearance beginning in IDA15 and supported expandingthe scope of the HIPC Trust Fund (which will be renamed as theDebt Relief Trust Fund after approval of such amendments byHIPC donors and IBRD’s and IDA’s Executive Directors) toaccept resources from donors and IBRD net income transfers forthis purpose.

A. The HIPC Initiative

110. Impact on IDA finances. Participants reviewed the impact ofHIPC debt relief on IDA’s finances. They reaffirmed the basicHIPC principle that debt relief should not reduce IDA’s capacityto support poverty reduction and development and should beadditional to other IDA assistance. They noted that currentresources available to finance IDA’s debt relief costs will be fullyutilized by the end of calendar year 2008, i.e., early in the IDA15period. IDA will, therefore, need additional financing of aboutSDR 1.2 billion during the IDA15 period to finance forgonecredit reflows due to the HIPC Initiative.

111. Two mechanisms. Deputies supported the continued use of the twomechanisms introduced in IDA14 for donors’ HIPC-related contri-butions: (a) contributing to IDA directly; or (b) channeling contri-

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butions through the Debt Relief Trust Fund.74 The HIPC-relatedcontributions will be recorded separately from regular IDA contri-butions in order to ensure that HIPC debt relief is additional toother IDA assistance. As in IDA14, each donor’s share will bedetermined based on the agreed burden-sharing and shown as aseparate column in Table 1 of Annex 3 of the IDA15 Resolution.

112. Donor funds provided directly to IDA will be treated in the samemanner as regular contributions, becoming part of IDA’s generalresources. Donors can choose to submit one Instrument of Com-mitment that would include the amount of the HIPC-related con-tribution, or separate Instruments of Commitment for regularIDA contributions and HIPC-related contributions. Donors canpay their HIPC contributions in cash or promissory notes. Sincethese additional contributions will reimburse IDA for its forgonereflows during FY09–11, they will be drawn down over this three-year period. Donors will receive voting rights for contributionsupon payment to IDA15.

113. Donors can also make HIPC contributions directly to the DebtRelief Trust Fund. Donors would sign contribution agreements withIDA, as administrator of the Debt Relief Trust Fund, specifying thecontribution amount and payment modalities—in cash or in promis-sory notes to be drawn down over a three-year period. Donors willdeposit their contributions in the World Bank component of theDebt Relief Trust Fund, and contributions will be transferred toIDA to reimburse IDA for its forgone credit reflows. Since thesefunds become part of IDA’s general resources at the time of transferfrom the Debt Relief Trust Fund to IDA’s cash accounts, donors willreceive additional voting rights in IDA following such transfers.Management will report periodically to donors on the status of theircontributions to the Debt Relief Trust Fund.

B. The MDRI

114. Replacement of lost credit reflows. In the spring of 2006, donorsand shareholders approved IDA’s participation in the MDRI,which provides 100 percent cancellation of eligible debt owed toIDA by countries reaching the HIPC completion point. Starting

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74 Upon approval of amendments to the HIPC Trust Fund by donors and the Execu-tive Directors.

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on July 1, 2006 and over the next four decades of MDRI imple-mentation, IDA is projected to cancel an estimated total amountof SDR 24.7 billion (equivalent to USD 37.6 billion) of creditreflows from eligible HIPC countries. Under the MDRI replen-ishment arrangements, donors have committed to compensateIDA’s MDRI costs on a ‘dollar-for-dollar’ basis, over the durationof the cancelled credits. Donors “affirmed their unanimous com-mitment to provide MDRI financing additional to donors’ regularsupport to IDA in real terms75 with IDA14 as the baseline, andthey emphasized that this commitment should be sustained overthe entire 40-year period of IDA’s forgone credit reflows.”76

Under the MDRI, donors agreed that the “contribution baselinewould be indicative in nature and intended to demonstrate trans-parently the delivery by donors on their strong commitment tothe additionality of debt relief financing. The aggregate level ofsuccessive IDA replenishments will ultimately depend on eachmember’s sovereign decision on its future contributions to regularIDA replenishments.”77 Participants noted that the agreed vol-ume of donor contributions for IDA15 represented an increase ofabout 25 percent over IDA14, thus exceeding the MDRI baseline.Participants reiterated the need for full replacement of the lostcredit reflows due to the MDRI so as to ensure that the debtrelief granted by IDA will be additional for recipient countries,providing further resources for their development efforts.

115. MDRI replenishment. Donor contributions for IDA’s MDRIcosts are recorded under a separate replenishment and added toIDA’s general resources, following established IDA procedures.Deputies reaffirmed the need for full replacement of lost creditreflows due to debt relief and their commitment “to fully financethe costs to IDA of providing MDRI debt relief over the 40-yeartime span of the MDRI”.78 To preserve IDA’s advance commit-ment capacity—under which IDA uses its stream of available

75 Under MDRI, donors “established a contribution baseline at the level of regulardonor contributions in IDA14, to be kept constant in real SDR terms over time.” Seeparagraph 52 of “IDA’s Implementation of the Multilateral Debt Relief Initiative”(IDA/R2006-0042), approved by IDA’s Executive Directors on March 28, 2006.76 Paragraph 42 of “Additions to Resources: Financing the Multilateral Debt ReliefInitiative,” approved by IDA’s Executive Directors on March 28, 2006.77 Paragraph 39, ibid.78 Paragraph 5, ibid.

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future credit reflows to back future disbursements on approvedcredits and grants—Deputies acknowledged the need to provideunqualified, firm MDRI financing commitments over the disburse-ment period of each future IDA replenishment. Specifically, in thecontext of the MDRI replenishment, donors recognized that: “Itwill be critical to provide an Unqualified Commitment for subscrip-tions and contributions in FY07 and 08”. For the remainder of thefirst decade of MDRI implementation (FY09–16), donors recog-nized that: “Firm, Unqualified Commitments are also needed overthis period. Participants recognized that some donors wouldrequire periodic approval of their contributions over this period,resulting in the provision of some portion of Qualified Commit-ments. . . . Participants encouraged IDA’s donors to take all nec-essary steps in successive replenishments to provide firm financingon a rolling basis.”79 To back IDA15 commitment authority,Deputies reaffirmed the urgent need to provide additional donorcontributions for the MDRI replenishment of SDR 4.1 billion, soas to cover IDA’s debt relief costs due to the MDRI during theIDA15 disbursement period (FY09–19) as agreed under theMDRI. In that context, Participants noted with appreciation that anumber of donors have already provided unqualified MDRIfinancing commitments over 40 years, including Ireland, Kuwait,Luxembourg, Portugal, Russia, and South Africa.

116. Participants noted that the value of IDA’s lost credit reflows underthe MDRI will continue to fluctuate over the 40-year period, andthat the MDRI financing arrangements include a mechanism toadjust the compensatory amounts payable by donors in conjunc-tion with every regular IDA replenishment. Participants reviewedthe updated cost estimates for the MDRI, as of September 30,2007, which provide the basis for updates to the MDRI cost tablesand donor payment schedule. Revised tables to the MDRI Resolu-tion reflecting the updated cost estimates will be provided tomembers. Corresponding adjustments to reflect these updatedamounts are also required in the payment schedule attached toeach member’s Instrument of Commitment for its MDRI subscrip-tion and contribution. Donors noted that, in the Instrument ofCommitment, each member had agreed to amend its Instrumentof Commitment to reflect any such adjustment.

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79 Paragraph 19 (a) and (b), ibid.

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117. Monitoring donor contributions. Participants reaffirmed thatthere should be continued monitoring of donor contributions tothe MDRI. For transparency, donor contributions to the MDRIwill continue to be recorded separately from regular IDA replen-ishment contributions, as additional to donors’ regular financialsupport to IDA. They noted that donor contributions to theMDRI have been reported in IDA’s fiscal year 2007 financialstatements and will continue to be reported regularly in IDA’sfuture financial statements during the IDA15 period. Such report-ing will contain information on the volume of debt relief deliv-ered by IDA under the MDRI and the amount of compensatorydonor resources received.

C. Financing of Arrears Clearance Operations

118. Burden shares. The cost of providing exceptional support forarrears clearance to countries eligible per the criteria set out inSection IV.C and that could be expected to clear arrears beforethe end of the IDA15 period is estimated to be SDR 0.9 billion.Donors agreed that this amount is included as a new, additionalpart of IDA’s overall new financing commitments during IDA15based on fair burden shares. In general, therefore, Donors sup-ported the use of their HIPC (i.e., IDA13) burden shares tofinance arrears clearance operations in IDA15; this would beappropriate since exceptional support for arrears clearance front-loads HIPC debt relief, which IDA donors have committed tofinance on an ongoing basis. Most donors expressed support toscale up their HIPC burden shares to close the structural gap forfinancing arrears clearance operations in IDA15. Participants alsonoted that the IDA-financed clearance of arrears to IBRD wouldlead to a corresponding increase in IBRD’s income. They notedthat such increases would result in an increase in IBRD’s abilityto make financial contributions to IDA additional to the indica-tive level proposed for the IDA15 period. Participants expressedthe hope that such additional contributions would be used toclose the structural gap in the MDRI financing framework.

119. Set aside of resources. Participants agreed that the resources pro-vided to finance arrears clearance operations would be releasedfor commitment only when such arrears clearance actually takesplace. Hence any unused resources during the IDA15 periodwould be carried over into IDA16, and used to finance arrearsclearance operations when the eligible countries become ready to

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re-engage. They also agreed that if the resources requested forIDA15 would be insufficient to cover the full cost of the excep-tional support, the shortfall would be made up in IDA16, in thesame manner that HIPC costs are updated at each replenishmentbased on use and availability of resources. Once the projectedarrears for eligible countries have been cleared, Deputies will dis-cuss how to use the remaining funds.

120. Debt Relief Trust Fund. Participants noted that the widening ofthe scope of the HIPC Debt Initiative Trust Fund (Debt ReliefTrust Fund) to allow it to receive donor contributions for arrearsclearance provided an additional avenue for donors to finance thecost associated with arrears clearance. They also noted that anydonor making bilateral contributions towards coverage of arrearsclearance costs into the arrears clearance window of the DebtRelief Trust Fund, ahead of IDA15, will have the option of havingthese contributions credited against the donor’s burden-sharedcontributions for arrears clearance financing during IDA15. Simi-larly, in IDA15, donors have the option of contributing directly toIDA or channeling their contribution for arrears clearancethrough the Debt Relief Trust Fund. The Debt Relief Trust Fundwould be able to receive contributions from IBRD net income,which would be used to address any remaining structural gap inthe financing of IDA’s debt relief costs, including HIPC andMDRI.

121. IBRD debt. In HIPC countries with debt to IBRD, Participantsalso agreed that IDA provide debt relief grants or credits wherethese would be necessary in order for the World Bank to deliverits share of debt relief under the HIPC Initiative. Such debt reliefgrants from IDA (for interim HIPC relief on IBRD debt servicepayments) and prepayment by IDA of remaining IBRD claims atthe HIPC completion point are part of the implementationmodalities for IDA’s delivery of debt relief under the HIPCprocess.80 The countries for which such assistance could berequired are Côte d’Ivoire and Zimbabwe, if Zimbabwe is reclas-sified as a HIPC. The amounts required for this purpose are notexpected to be significant during the IDA15 period.

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80 IDA (2000). “Heavily Indebted Poor Countries (HIPC) Initiative: Note onModalities for Implementing HIPC Debt Relief under the Enhanced Framework,”IDA/R 2000-4, approved by the Executive Directors on January 25, 2000.

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SECTION VII. RECOMMENDATION

122. The Executive Directors recommend to the Board of Governorsthe adoption of the draft IDA15 Resolution. . . .1

(This report was approved and its recommendation was adopted bythe Board of Governors on April 23, 2008)

1 See page 182.

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REPORT OF THE BOARD OF DIRECTORS OF IFC

May 2, 2008

Membership of the State of Qatar

1. In accordance with Section 17 of the By-Laws of the InternationalFinance Corporation, the application of the State of Qatar for mem-bership in IFC is hereby submitted to the Board of Governors.

2. Representatives of the State of Qatar have been consulted infor-mally regarding the terms and conditions recommended in theattached draft Resolution and they have raised no objectionthereto.

3. Accordingly, the Board of Directors recommends that the Board ofGovernors adopt the Resolution. . . .1

(This report was approved and its recommendation was adopted by theBoard of Governors on June 13, 2008)

1 See page 175.

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REPORT OF THE BOARD OF DIRECTORS OF MIGA

July 9, 2008

2008 Regular Election of Directors

1. Resolution No. 75, adopted by the Council of Governors on August3, 2006, provides that a Regular Election of Directors shall takeplace in connection with the 2008 Annual Meeting of the Councilof Governors. It is proposed that this Regular Election be con-ducted by rapid means of communication so as to conclude a rea-sonable time in advance of November 1, 2008, when the term ofoffice of the elected Directors shall commence.

2. Since the 2006 Regular Election of Directors, a Category Onecountry (New Zealand) and three Category Two countries (Dji-bouti, Liberia and Montenegro) completed all of their membershiprequirements.

3. The Report of the Ad Hoc Committee on the Rules for the 2006Regular Election of MIGA Directors stated once again in para-graph 3 that:

The Committee expressed the view, as reflected in the Report of theBoard of Directors, that at a time when membership in MIGAbecame equivalent to that of the Bank (International Bank forReconstruction and Development), the MIGA Board of Directorswould become identical in size and composition with that of theBoard of Executive Directors of the Bank and would be based on thesame principles of preserving a broad geographic pattern of represen-tation and of allowing all major groups of countries to be represented.

4. The Board is now composed of 24 Directors, representing roughlythe same constituencies as in the Bank; these Directors represent172 MIGA member countries (as opposed to 185 IBRD, 167 IDAand 179 IFC member countries), while, as stated in paragraph 2above, at least another four member countries will participate inthe upcoming election.

5. This increase in membership since 2006 indicates that effortsshould continue toward achieving homogeneity among the Boardsof MIGA and the other institutions of the World Bank Group.Moreover, the number of common issues being dealt with by theExecutive Directors/Directors of the World Bank Group institu-tions have continued to increase in number and complexity.

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6. In view of these developments and noting that Article 2 of theMIGA Convention mandates the Agency to complement the activ-ities of other members of the World Bank Group, the Board ofDirectors makes the following recommendations.

RECOMMENDATIONS

Size of the Board

7. The Board of Directors recommends that the number of Directorsremain at its present twenty-four.

Composition of the Board

8. The Board of Directors urges the Governors to form, as closely aspossible, the same constituencies in the MIGA Board of Directorsas those for the Boards of other World Bank Group institutions.

9. During the informal meeting held on May 20, 1991, it was the con-sensus of Directors that, beginning with the 1992 Election of Direc-tors, Governors should be urged to nominate candidates based inWashington, D.C., and all Governors complied with this suggestionin the 1992, 1994, 1996, 1998, 2000, 2002, 2004 and 2006 RegularElections. It is again recommended that Governors be urged tonominate the same persons as Directors of MIGA as those nomi-nated to the Boards of the other World Bank Group institutions.

10. It is further recommended that Directors, particularly those electedby more than one Governor, appoint the same persons as Alter-nate Directors of MIGA as those appointed to be Alternate Exec-utive Directors/Alternate Directors to the Boards of the otherWorld Bank Group institutions.

Term of Office

11. Article 32(c) of the Convention and Section 10 of the MIGA By-Laws provide that the Council of Governors shall determine theterm of office of the Directors. It is desirable that the term of officeof MIGA’s Directors should coincide with those of the Boards ofthe other World Bank Group institutions to facilitate elections ofpersons holding positions on these boards. Thus, the Board ofDirectors recommends that the Council continue this practice. It isalso recommended that the 2008 Regular Election of Directors beheld by requesting nominations and conducting ballots by rapid

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means of communication so as to conclude a reasonable time inadvance of November 1, 2008, when the term of office of theelected Directors shall commence.

Maximum and Minimum Percentages of Votes Applicable to the Election

12. For the purpose of Schedule B to the MIGA Convention, para-graph 9 of the Rules for the 2006 Regular Election of Directors setthe maximum and minimum percentages of voting power applica-ble to the 2006 Regular Election at 15 and 3, respectively, of eligi-ble votes. These percentages appear appropriate for the election ofthe number of Directors to be recommended in the attachedreport, and therefore the Board of Directors recommends that theybe made applicable to the 2008 Regular Election of Directors. Inthe unlikely event that these percentages are inappropriate due toadditional new countries having become members of the Agencyand subscription to additional shares prior to the 2008 RegularElection, the Council of Governors could modify them before thestart of the election.

13. On October 3, 2004, the Council of Governors adopted ResolutionNo. 70 entitled “Parity of Voting Power in MIGA” so that theaggregate number of votes of Category One members would bethe same as the aggregate number of votes of the Category Twomembers as required by Article 39 of the Convention. Therefore, amember country’s vote is calculated on the basis of its membershipvotes plus its subscription votes plus the parity votes.

14. The Board of Directors also recommends that the subsequent Reg-ular Election of Directors take place in connection with theAnnual Meeting of the Council of Governors in 2010.

15. Accordingly, the Board of Directors recommends that the Council ofGovernors adopt the Resolution . . .1 and Rules for the 2008 Regu-lar Election of Directors embodying the above recommendations.

(This report was approved and its recommendation was adopted by theCouncil of Governors on August 1, 2008)

288

1 See page 197.

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Rules for the 2008 Regular Election of Directors

DEFINITIONS

1. In these Rules, unless the context shall otherwise require,

(a) “Convention” means the Convention establishing the Agency.(b) “Council” means the Council of Governors of the Agency.(c) “Chairman” means the Chairman of the Council or a Vice

Chairman acting as Chairman.(d) “Governor” includes the Alternate Governor or any tempo-

rary Alternate Governor, when acting for the Governor.(e) “Secretary” means the Corporate Secretary or any acting Cor-

porate Secretary of the Agency.(f) “Election” means the 2008 Regular Election of Directors.(g) “Eligible votes” means the total number of votes that can be cast

in the election of the Directors to be elected pursuant to the pro-visions of paragraphs 6 to 11 of Schedule B to the Convention.

2. All actions taken under these Rules, including communications bythe Secretary and the Chairman and nominations and balloting bythe Governors, may be taken by rapid means of communication.

TIMING OF ELECTION

3. The 2008 election shall be held by requesting nominations and con-ducting ballots so as to conclude a reasonable time in advance ofNovember 1, 2008, when the term of office of the elected Directorsshall commence.

BASIC RULES—SCHEDULE B

4. The provisions of Schedule B of the Convention shall apply to theconduct of the election. For this purpose:

(a) Twenty-four Directors shall be elected.(b) Six Directors shall be elected separately, one each by the Gov-

ernors of the six members having the largest number of shares.The person nominated by each of the said Governors shall bedeemed to be elected upon being so nominated.

(c) The Directors not elected separately pursuant to paragraph 4(b)above shall be elected in accordance with the rules in para-graphs 5 through 12 below.

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SUPERVISION OF THE ELECTION

5. The Chairman shall appoint such tellers and other assistants andtake such other action as he deems necessary for the conduct of theelection.

NOMINATIONS

6. (a) The Secretary shall request nominations from Governors dur-ing a suitable period specified by the Secretary. As noted in theReport of the Board of Directors to the Council of Governorsdated July 9, 2008, Governors are urged to nominate the samepersons as the Directors of MIGA as those elected to theBoards of the other World Bank institutions, and to form thesame constituencies in the MIGA Board of Directors as thosein the Boards of the other World Bank Group institutions. Inaddition, the Directors, particularly those elected by more thanone Governor, are urged to appoint the same persons as Alter-nate Directors of MIGA as they have in the Boards of theother World Bank institutions.

(b) Each nomination shall be made on a nomination form furnishedby the Secretary, signed by the Governor or Governors makingthe nomination and submitted to the Secretary.

(c) Any person nominated by one or more Governors entitled tovote in the election shall be eligible for election as Director.

(d) A Governor may nominate only one person.(e) If a nominee withdraws from the ballot after the closing date

of the nomination period, but before the closing date of theballot, the Secretary shall inform all Governors eligible to voteof such withdrawal and invite them to submit nominations of acandidate by rapid means of communication during a suitableperiod specified by the Secretary. At the end of the prescribedperiod of time for this nomination, the Secretary shall compilea new list of candidates with all individuals who were nomi-nated by at least one Governor in either nomination period,and circulate that list by rapid means of communication to allGovernors eligible to vote with an invitation to vote throughsimilar channels before the end of the balloting period.

BALLOTING

7. (a) Upon the closing of nominations, the Secretary shall send to allGovernors entitled to vote in the election the list of candidatesfor the election, together with the invitation to Governors tovote in the first ballot, and announce the deadline for receipt ofballots.

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(b) One ballot form shall be furnished to each Governor entitledto vote. On any particular ballot, only ballot forms distributedfor that ballot shall be counted.

8. Each ballot shall be taken as follows:

(a) Ballots shall be conducted by deposit of ballot forms, signed byGovernors eligible to vote, with the Secretary. The first ballotshall take place after the close of nominations concluding nolater than the first day of the 2008 Annual Meeting of theCouncil of Governors.

(b) When a ballot shall have been completed, the Secretary shallcause the ballots to be counted and, as soon as practicable afterthe tellers have completed their tally of the ballots, shallannounce the names of the persons elected. If a succeedingballot is necessary, the Secretary shall announce the names ofnominees to be voted on, the members whose Governors areeligible to vote and the time period for balloting.

(c) If the tellers shall be of the opinion that any particular ballot isnot properly executed, they shall, if possible, afford the Governorconcerned an opportunity to correct it before tallying the results;and such ballot, if so corrected, shall be deemed to be valid.

9. For the purposes of paragraph 6 of Schedule B to the Convention,the following percentages of total votes are decided, namely, amaximum of 15 percent of eligible votes and a minimum of 3 per-cent of eligible votes.

ANNOUNCEMENT OF THE RESULT

10. After the tally of the last ballot, the Chairman shall cause to be dis-tributed a statement setting forth the result of the election.

EFFECTIVE DATE OF ELECTION

11. The effective date of the election shall be November 1, 2008, andthe term of office of the elected Directors shall commence on thatdate. Incumbent elected Directors shall serve through the day pre-ceding such date.

GENERAL

12. Any question arising in connection with the conduct of the electionshall be resolved by the tellers, subject to appeal, at the request ofany Governor, to the Chairman and from him to the Council.Whenever possible, any such questions shall be put without identi-fying the members or Governors concerned.

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MULTILATERAL INVESTMENT GUARANTEE AGENCY

2008 REGULAR ELECTION OF DIRECTORS STATEMENT OF RESULTS OF ELECTION,

OCTOBER 13, 2008

Directors elected separately by the Governors of the six member coun-tries having the largest number of shares:

Members Whose Votes Candidate Elected Counted Toward Election Total Votes

E. Whitney DEBEVOISE United States 32,823

Toru SHIKIBU Japan 9,238

Michael HOFMANN Germany 9,195

Ambroise FAYOLLE France 8,824

Susanna MOOREHEAD United Kingdom 8,824

ZOU Jiayi China 5,789

Directors elected by the Governors of member countries other thanthose listed above:

Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Svein AASS 8,038Denmark 1,524Estonia 374Finland 1,316Iceland 349Latvia 430Lithuania 446Norway 1,491Sweden 2,108

Abdulrahman M. ALMOFADHI 5,787Saudi Arabia 5,787

Gino ALZETTA 11,501Austria 1,625Belarus 492Belgium 3,836

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Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Czech Republic 1,043Hungary 1,253Kazakhstan 627Luxembourg 463Slovak Republic 650Slovenia 439Turkey 1,073

Jorge Humberto BOTERO 7,405Brazil 2,865Colombia 1,029Dominican Republic 406Ecuador 580Haiti 334Panama 490Philippines 743Suriname 341Trinidad and Tobago 617

Dante CONTRERAS 5,839Argentina 2,469Bolivia 479Chile 1,114Paraguay 400Peru 916Uruguay 461

Sid Ahmed DIB 7,217Afghanistan 377Algeria 1,403Ghana 691Iran, Islamic Republic of 1,918Morocco 872Pakistan 1,422Tunisia 534

James HAGAN 7,740Australia 3,278Cambodia 423Korea, Republic of 1,050Micronesia, Fed. States of 309Mongolia 317

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Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

New Zealand 772Palau 309Papua New Guinea 355Samoa 309Solomon Islands 309Vanuatu 309

Merza H. HASAN 8,835Bahrain 395Egypt, Arab Republic of 1,068Iraq 609Jordan 430Kuwait 1,898Lebanon 509Libya 808Maldives 309Oman 425Qatar 500Syrian Arab Republic 555United Arab Emirates 915Yemen, Republic of 414

Dhanendra KUMAR 7,225Bangladesh 858India 5,630Sri Lanka 737

Alexey G. KVASOV 5,787Russian Federation 5,787

Giovanni MAJNONI 7,974Albania 361Greece 752Italy 5,229Malta 391Portugal 932Timor-Leste 309

Toga MCINTOSH 10,975Botswana 347Burundi 333Ethiopia 382Gambia, The 309

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Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Kenya 562Lesotho 347Liberia 343Malawi 336Mozambique 430Namibia 366Nigeria 1,746Seychelles 309Sierra Leone 391South Africa 1,921Sudan 465Swaziland 317Tanzania 507Uganda 492Zambia 577Zimbabwe 495

Michel MORDASINI 6,449Azerbaijan 374Kyrgyz Republic 336Poland 1,023Serbia 666Switzerland 2,902Tajikistan 389Turkmenistan 325Uzbekistan 434

Louis Philippe ONG SENG 7,994Benin 367Burkina Faso 320Cameroon 366Cape Verde 309Central African Republic 319Chad 319Congo, Dem. Rep. of 855Congo, Republic of 374Cote d’Ivoire 569Djibouti 309Equatorial Guinea 309Gabon 428Guinea 350Guinea-Bissau 309

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Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Madagascar 435Mali 402Mauritius 412Rwanda 391Senegal 515Togo 336

Jose A. ROJAS R. 6,331Costa Rica 465El Salvador 381Guatemala 399Honduras 437Nicaragua 439Spain 2,524Venezuela, Rep. 1,686

Bolivariana de

Ruud TREFFERS 12,020Armenia 339Bosnia and Herzegovina 339Bulgaria 902Croatia 589Cyprus 442Georgia 370Israel 1,094Macedonia, FYR 347Moldova 355Montenegro 320Netherlands 4,081Romania 1,237Ukraine 1,605

Sun VITHESPONGSE 6,596Fiji 330Indonesia 2,108Lao People’s Dem. Rep. 319Malaysia 1,279Nepal 381Singapore 531Thailand 1,001Vietnam 647

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Members Whose Votes Counted Number

Candidate Elected Toward Election of Votes Total Votes

Samy WATSON 10,405Antigua and Barbuda 309Bahamas, The 435Barbados 379Belize 347Canada 5,484Dominica 309Grenada 309Guyana 343Ireland 909Jamaica 578St. Kitts and Nevis 309St. Lucia 347St. Vincent and the 347

Grenadines

Total Number of Countries Voted 170 218,811

/s/ /s/ Carmen Maria Madriz Contreras Carl-Hermann G. Schlettwein

(Costa Rica) (Namibia)Teller Teller

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ACCREDITED MEMBERS OF THE DELEGATIONS AT THE 2008 ANNUAL MEETINGS

298

* Temporary<> Not a member of IFC# Not a member of IDA

Afghanistan

GovernorAnwar ul-Haq Ahady

Alternate GovernorWahidullah Shahrani

AdviserKhaleda AttaMurtaza BahramiSaid Tayeb JawadShah MehrabiTia Raappana

Albania

GovernorRidvan Bode

Alternate GovernorFatos Ibrahimi

AdviserMimoza Vangjel DhembiToni GoguNezir HaldedaGramoz KolasiElona KrypaGenci Mamani

Algeria

GovernorKarim Djoudi

Alternate GovernorAbdelhak Bedjaoui

AdviserHadia AmraneHadji BabaammiMohamed BensabriSid Ahmed DibAhmed El-HamriRostom Fadli

Amine KherbiSoraya MellaliAmor Nedjai

Angola

AdviserJoaquim Flavio CoutoAna Beatriz G. De Ceita Da CostaMauro FonsecaBernardo LourencoLucombo Joaquim LuveiaMario MiguelAmadeu Leitao NunesCelso Justino PongololaMatias SacutingoBeatriz Ferreira de Andrade Santos

Antigua and Barbuda #

GovernorWhitfield Harris

Alternate GovernorCurtis Silston

AdviserDeborah-Mae Lovell

Argentina

GovernorCarlos Fernandez

Alternate GovernorMartin Abeles*Pablo Barone*

AdviserFelix Alberto CamarasaVictorio CarpintieriAdrian ConsentinoBernardo LischinskyHector TimermanLuis Viana

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Armenia

GovernorVahram Nercissiantz

Alternate GovernorTigran Davtyan

AdviserTigran SargsyanAdrine Ter-Grigoryan

Australia

GovernorWayne Swan

Alternate GovernorPaul Flanagan*

AdviserNicolas Keith BrownRebecca BryantJean-Bernard CarrascoJames ChalmersRobert ChristieMatthew CoghlanRobin DaviesDamien DunnJim HaganSteven MorlingKellie OlsenSusan RichardsPaul ScottAndrew Thomas

Austria

Alternate GovernorEdith FrauwallnerMarcus Heinz*

AdviserCarl De ColleGerhard GunzKonstantin HuberWalter Mayr

Azerbaijan

Alternate GovernorIlqar Fatizada

AdviserAzar AlasgarovYashar AliyevRashad OrujovUlvi Fuad SeyidzadeAshraf Shikhaliyev

Bahamas, The #

GovernorZhivargo Laing

Alternate GovernorColin Higgs*

AdviserJerry ButlerPaul FeeneyRhoda M. JacksonCorrine L. MillerChet NeymourCarl OliverSharon TurnerSimon D. WilsonSimon R. Young

Bahrain #

GovernorAhmed Bin Mohammed Al-Khalifa

Alternate GovernorYousif Abdulla Humood

Bangladesh

GovernorA.B. Mirza Md. Azizul Islam

Alternate GovernorMd. Aminul Islam Bhuiyan

AdviserMd. Mahfuzul HaqueMd. Humayun KabirZakir Ahmed KhanMuhammad Zulqar Nain

Barbados

GovernorDarcy Boyce

299

* Temporary<> Not a member of IFC# Not a member of IDA

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Alternate GovernorGrantley W. Smith

AdviserDonna FordeMichael Ian KingPatrick McCaskie

Belarus #

GovernorVladimir Amarin

Alternate GovernorGennady Medvedev*

AdviserAndrei JumkouOleg KravchenkoOleg MorozovMikhail V. NikitsenkaOleg PopovSergei RoumasAlexandr Rutkovsky

Belgium

GovernorBernard Andre Clerfayt

AdviserGino AlzettaPatrik De CosterKurt DelodderErwin De WandelPhilippe GerardWilly KiekensChristian PanneelsJohan RosseelStephane J.M.E.B. RottierDirk SlaatsDominique Struye de SwielandeHarold Vandermeulen

Benin

AdviserAbel AgbebleoAdam Dende AffoNounagnon Aristide DjidjohoBabatunde Mohamed GadoMartin Nani GbedeyCyrille OguinHermann Orou Takou

Bhutan

GovernorLyonpo Wangdi Norbu

Alternate GovernorKapil Sharma

Bolivia

GovernorCarlos Villegas Quiroga

Alternate GovernorLuis Alberto Arce Catacora

AdviserVarinia Cecilia Daza ForondaHernando Larrazabal CordovaRaul S. Mendoza Patino

Bosnia and Herzegovina

GovernorNikola Spiric

Alternate GovernorGordana Zivkovic

AdviserDragana AleksicVjekoslav BevandaDara Crnic-BabicAleksandar DzombicAdnan HadrovicHaris IhtijarevicDonko JovicSveto MileticBisera Turkovic

Botswana

GovernorSerwalo S.G. Tumelo

Alternate GovernorBoniface G. Mphetlhe*

AdviserLapologang Caesar LekoaIta Mary MannathokoOntefetse Kenneth MatamboMichael MolelekePeggy Onkutlwile Serame

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Brazil

GovernorMaria Celina B. Arraes

Alternate GovernorLuiz Eduardo MelinMarcos Galvao*Henrique de Campos Meirelles*Antonio de Aguiar Patriota*Rogerio Studart*

AdviserMaria Isabel Rezende AboimLeandro Martins AlvesPompeu Andreucci NetoFernanda ArraesLuis Antonio BalduinoPaulo Henrique Braga da SilvaRodrigo CabralMarco Aurelio CardosoLuciano Galvao CoutinhoJose Pedro Fachada SilvaJoao Carlos FerrazMarcelo E. FicheEduardo FingerlIves FulberAdmilson GarciaRenata GrafArtur Cardoso de LacerdaRogerio LotSandro MarcondesJose Carlos MirandaRicardo de Moraes MonteiroSergio NazareAlvaro Luiz Vereda OliveiraAlexandre P. RegoEduardo SaboiaPaulo SampaioCarlos Henrique Moojen de

Abreu e SilvaRamiro Alves da SilvaLuis Gustavo Mansur SiqueiraNatalia B.S. SpeerPaulo Fontoura ValleCarlos Augusto Vidotto

Brunei Darussalam <>#

GovernorAbdul Rahman Ibrahim

Alternate GovernorAminuddin Taib*

AdviserZaki HassanolShamsul Bharin HussainHoneyta MustaphaIrwan Rashid

Bulgaria #

Alternate GovernorDimitar Kostov

AdviserLachezar BorisovRumyana Kyuchukova

Burkina Faso

GovernorFrancois M. Zoundi

Alternate GovernorLene Sebgo

AdviserIssa Benjamin BaguianBoureima BalimaMarie Didier FrancoisIssaka Kargougou

Burundi

GovernorClotilde Nizigama

Alternate GovernorLeon Nimbona

AdviserEdouard BizimanaDonatien BwaboBeatrice HamenyayoPamphile MuderegaDesire MusharitseJacques NgendakumanaNicodeme NimenyaDieudonne NintunzeCelestin NiyongaboMathias SinamenyeBonaventure Sota

301

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Cambodia

GovernorAun Porn Moniroth

Alternate GovernorVissoth Vongsey

AdviserRatha CheyBonnaroth HoulPhalla KimSopheak KimMeng Eang NaySeilava RosSrey SiyoutKresna Tauch ChanRithipol Tith

Cameroon

GovernorLouis Paul Motaze

Alternate GovernorDieudonne Evou Mekou

AdviserPhilibert AndzembeGeorges Diffo NigtiopopDidier EdoaBlaise Essomba NgoulaJoseph Bienvenu Foe AtanganaNazaire Fotso NdefoIdriss Ahmed IdrissYves Sererin KamgnaBarthelemy KouezoBela LazareRene T. Mbappou EdjengueleLucie Mboto FoudaArmel MbouloukoueGregoire Mebada MebadaAlphonse NgbakoFrancois NgoubeneMichelin NjohEdith Strafort PedieAlexandre Renamy-LariotJean Tchoffo

Canada

GovernorJames Michael Flaherty

Alternate GovernorMargaret BiggsThora Broughton*Antoine Brunelle Cote*Brendan Carley*Adam Chambers*Nancy Clifford*John Davies*Graham Flack*Nathalie Gauthier*Laird Hindle*Gary Holub*Diane Jacovella*Anna Kwik*Tiff Macklem*Steven McLaren*Chisholm Pothier*Steve Pugliese*Jonathan Rothschild*Samy Watson*

AdviserChadrick BuffelRobert ChiewJim HaleyAlanna HeathJulian KaraguesianSusan LoveDavid Cal MacWilliamSheila NivenMichael WilsonTerence F. Winsor

Cape Verde

Alternate GovernorSandro De Brito*

Central African Republic

GovernorSylvain Maliko

Alternate GovernorBendert Bokia

AdviserAssane Abdalla KadreAlbert BesseMarie Laure Dengou Dokossi-

NozikoumHonore Mbaye

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Chad

GovernorOusmane Matar Breme

Alternate GovernorDoudoua Bichara

AdviserMahamat Ali Adoum

Chile

GovernorAndres Velasco Branes

Alternate GovernorMario Campos*Luis Cespedes Cifuentes*Eric Parrado*Raul Saez*

AdviserFrancisco BernasconiDante Contreras

China

Alternate GovernorLi YongXiaoxia Sun*Wu Jianjun*Yang Yingming*Xiaosong Zheng*Zou Jiayi*

AdviserZhijun ChengRui LiZhenyi TangWang YanningYing WangWang ZhongjingFan WuDongning XuLicheng YaoYixin YaoGuochun ZhangTianwei ZhangCiyong Zou

Colombia

GovernorOscar Ivan Zuluaga

Alternate GovernorCarolina RenteriaCarolina Barco*Jorge Humberto Botero*Luis G. Echeverri*Viviana Lara Castilla*Juan Pablo Zarate*

AdviserIvan DuqueMaria Catalina EscobarMaria Alejandra Gutierrez

Comoros

GovernorIbrahim Houssen Hassan

Alternate GovernorSaid Abdillah

Congo, Democratic Republic of the

AdviserChiriji Celestin Chiza ChivaZola DiambuanaDieu Donne Essimbo Numayeme

ManuMakiadi Ephem GhondaGenevieve InagosiJean Claude KabongoKayembe Kayembe WaBlaise Kiangala Ne TulenteCamille Kos’isaka NkombeFirmin EyOlanga KotoNtahwa KuderwaPierre Le BellerLobota LiondjoNumbi LumbilaPaul LuwansanguMapon Matata PonyoFaida MitifuJoseph Mukania KabweTambo A. Kabila MukendiPongola Honore MulanguKashama Mkoy Mulossa DedeJean-Claude NachegaTadi Lewa Ndongala

303

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Nzinga Vincent NgongaMawakani SambaJean Sefu-IdongeJose Sele YalaghuliTshamala SergeFelicien Tshibangu LuamuelaMoise Tshimenga Tshibanguwa Bilenga Tshishimbi

Congo, Republic of

GovernorPierre Moussa

AdviserLipipi CatherinSerge Mombouli

Costa Rica

GovernorGuillermo Zuniga Chaves

Alternate GovernorFrancisco de Paula GutierrezCarmen Maria Madriz Contreras*

Cote d’Ivoire

GovernorPaul Antoine Bohoun Bouabre

Alternate GovernorHenri Philippe Dacoury-Tabley*Kouame Kouassi*

AdviserCharles KoffiJeanne Kouame-FoldahYehouan Anatole Tohougbe

Croatia

GovernorIvan Suker

Alternate GovernorZdravko Maric

AdviserSilvija BelajecKolinda Grabar-Kitarovic

Marijan GubicVladimira IvandicAnton KovacevJelena PericIvan PitesaHrvoje RadovanicSvjetlana Ricl-Jozef

Cyprus

Alternate GovernorKyriacos Kakouris*Leslie G. Manison*Andreas Trokkos*

AdviserMichael Sarris

Czech Republic

GovernorMiroslav Kalousek

Alternate GovernorEva Anderova*

AdviserKarel BauerPavel FrelichOndrej JakobPavel KafkaPetr KavanIvan KocarnikJan KohoutMiloslav KubicekJiri MaceskaPetr PolacekPetr SedlacekIvana Vlkova

Denmark

GovernorUlla Toernaes

Alternate GovernorIb Petersen

AdviserGeert Aagaard AndersenEva GrambyeJens Haarlov

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Klaus Kirkegaard JensenLotte MachonFriis Arne PetersenTrine Thygesen

Djibouti

GovernorAli Farah Assoweh

Alternate GovernorSimon Mibrathu

AdviserRoble OlhayeMohamed Kayad Sikieh

Dominican Republic

GovernorJuan Temistocles Montas

Alternate GovernorVicente Bengoa Albizu

AdviserJaime AlvarezMagdalena LizardoLuis Reyes

Ecuador

GovernorMaria Elsa Viteri Acaiturri

Alternate GovernorMiguel Ruiz Martinez

AdviserPablo ProanoKarina SaenzXavier Santillan

Egypt, Arab Republic of

GovernorMahmoud Mohieldin

AdviserAshraf El RabieyMaher ElsherifHossam Nasser

Amr RamadanAhmed RostomHisham Seif EldinSameh Shoukry

El Salvador

GovernorGuillermo Funes

Alternate GovernorManuel Rosales

AdviserLuis Adalberto AquinoNelly Lacayo Anderson

Equatorial Guinea

GovernorJose Ela Oyana

AdviserMiguel EngongaJob Obiang Esono MbengonoAgustin Loeri-BisquitLuis Ondo Obono

Eritrea

AdviserGebreselassie Y. Tesfamichael

Estonia

GovernorIvari Padar

Alternate GovernorMartin Poder*

AdviserRiina LaigoUlle LohmusToomas MoorHelen Popp

Ethiopia

GovernorSufian Ahmed

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AdviserHabba Haaleo AddisuDemissie Dejene BedanieE. Getachewu GizawMulu KetselaElias MadeboFelleke MammoAbie Sano MehamedYewondowssen Teshome TesemaEyob TesfayeEyob Tekalign Tolina

Fiji

GovernorPeceli V. Vocea

Alternate GovernorSanjay Rohit Prasad*

AdviserMakereta Alfereti-KonroteVeretariki LomalagiPenijamini Lomaloma

Finland

Alternate GovernorVelipekka Nummikoski*Marjatta Rasi*

AdviserPasi HellmanInkeri HirvensaloPekka HukkaTuuli JuurikkalaPauli KariniemiTapani KaskealaTeppo KoivistoJarmo KuuttilaTimo LaitinenAri-Pekka LattiSatu-Leena Santala

France

GovernorChristine Lagarde

Alternate GovernorXavier Musca

AdviserDavid AppiaGerard BeletJerome CachauYves CensiGenevieve Chedeville-MurrayBenoit CoeureSonia CriseoAude de AmorimIsabelle DeleuAlain DemarolleHelene DjoufelkitCorinne DromerBertrand Marie Jean DumontAmbroise FayolleFrancois GiovalucchiAntoine GobeletHerve GonsardPierre JailletMuriel JakubowiczFrederick Jeske-SchonhovenKacim KellalRegis KoetschetAmina LahrecheJean-Pierre LandauMarc LautreFrederic LefebvreEmmanuel LenainRoland LommeFrancois MarionRaphael MartinezChristian MassetMarc MertilloEmmanuel MoulinDanielle Noirclerc-SchoenbergElizabeth PeriCyrille PierreJean-Guillaume PoulainCaroline RegisJulien RenckiLuc RigouzzoJean-Michel SeverinoMarc-Olivier Strauss-KahnAgnes SurryBruno SylvestreLuis VassyPierre VimontJean-Patrick Yanitch

Gabon

Alternate GovernorChristian Bongo Ondimba

306

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AdviserYolande Assele EbindaAlba BiffotVanessa BongoCarlos BoungouSymphorien EngoneSonia Melissa KwaouMichele C. LamarcheHuguette Moussodou M.Jean Philippe Ndong Biyogho

Gambia, The

GovernorMousa G. Bala Gaye

Alternate GovernorMod A.K. Secka

AdviserAbdul ColeAbdoulie JallowBua Saidy

Georgia

GovernorNika Gilauri

AdviserMarekh Khamaladez

Germany

GovernorHeidemarie Wieczorek-Zeul

Alternate GovernorMichael Hofmann*Adolf Kloke-Lesch*Klaus D. Stein*Ruediger Von Kleist*Stephan von Stenglin*Juergen Zattler*

AdviserStephan BetheGeorg Michael BlomeMichael BrendleHolger FabigRoger FischerPaul GaraycocheaUwe Gehlen

Johannes HaindlQays HamadHolger IlliHans-Peter JugelBenjamin KnoedlerClaudia MuellerKlaus SchariothJoachim SteffensGerhard ThiedemannHolger Ziegeler

Ghana

Alternate GovernorAnthony Akoto Osei

AdviserFrancis AddoRegina Ohene-Darko AdutwumRichard Winfred AnaneNelly ApoYaw Opoku AtuaheneMichael AyesuKwame Bawuah-EduseiAngela Brown FarhatKofi FrimpongDrusilla Frimpong AddoPaul S.M. KorantengFrancis Kpodo-DiabaEdward KwakyeWinnifred Nafisa MahamaJosephine ManuSamuel Mensah Peter Ofori-AsumaduKwabena Boadu Oku-AfariKevin OkyereDavid Oppon-KusiMatilda Osei-AgyemanYvonne Odoley QuansahDavid Mawuko Awumee Quist

Greece

GovernorGeorge A. Provopoulos

Alternate GovernorPanayotis ThomopoulosGeorge Politakis*

AdviserCharalambos DimitriouGerassimos Floros

307

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Karolos GadisDimitrios GiannosNikolaos KeranisTryphon KollintzasVasiliki KrokidaAlexandros MalliasMarkella Eleonora MantikaEmmanouela MarkoglouIoannis PapadakisSpyros P. PapanicolaouPanagiotis A. PliatsikasParaskevi ProtopapasPanagiotis VaragkisAugustinos VitzilaiosMiranda Xafa

Grenada

GovernorV. Nazim Burke

Alternate GovernorTimothy Antoine

Guatemala

GovernorJuan Alberto Fuentes

Alternate GovernorLuis Alejandro AlejosJose Ricardo Barrientos*

AdviserAnai HerreraIvar RomeroTomas Rosada

Guinea

GovernorOusmane Dore

Alternate GovernorDjigui Camara

AdviserMadikaba CamaraBintou CondeAlpha Oumar DiakiteAbdoulaye Diallo

Kalidou DialloMohamed DiareFatoumata DiopAbraham Richard KamanoSaoudatou SowFacinet SyllaSekou Traore

Guinea-Bissau

GovernorCarlos Mussa Balde

Alternate GovernorJeremias Pereira

AdviserVasco Da SilvaGabriela A. Fernandes GomesRomao Lopes Varela, Jr.Marcellino Vaz

Guyana

GovernorAshni Singh

Alternate GovernorLawrence T. Williams

Haiti

GovernorDaniel Dorsainvil

Alternate GovernorMarie Victoire Vanette Vincent*

AdviserRaymond Alcide JosephAlfred Fils MetellusYves Rock Abel MetellusRomel Troissou

Honduras

GovernorRebeca Patricia Santos

Alternate GovernorHugo Alejandro Castillo

308

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AdviserOrlando GarnerHugo Rolando Noe PinoElizabeth RiveraRoque RiveraYani Rosenthal Hidalgo

Hungary

Alternate GovernorAlmos Kovacs*Zsuzsanna Varga*

AdviserSandor Karacsony

Iceland

Alternate GovernorArni M. Mathiesen

AdviserFinnus Thor BirgissonThordur GudjonssonJonas HaraldssonAlbert JonssonAnna Katrin Vilhjalmsdottir

India

Alternate GovernorAshok ChawlaDhanendra Kumar*Madhusudan Prasad*Arvind Virmani*

AdviserBhupinder Singh BhallaSubrahmanyam BhamidipatiNavin Kumar ChoudharyKrishnamurti DamodaranRaminder JassalSaranyan KrishnanRakesh MohanDeepak MohantyMaddirala NagarajuVishal NairR.K. PattnaikPartha RayRanendra SenVediappa SenthilShyamala ShuklaJawed Usmani

Indonesia

Alternate GovernorPaskah Suzeta

AdviserAdriyantoSalman Al-FarisiIrfa AmpriAdi CahyadiAmnu FuadiyEdward Robert GustelyRidwan HassanEdward HutabaratDian LestariSudjadnan ParnohadiningratSinggih RiphatTri Iriastuti RusliMaurin SitorusLanggeng SuburPinkan TulungLukita Dinarsyah TuwoNoeroso L. Wahyudi

Iran, Islamic Republic of

GovernorSeyyed Shams Al-din Hosseini

Alternate GovernorKoorosh Taherfar*

AdviserSeyed Kazem Delkhosh AbatariFarid GhaderiGholamreza Mesbahi MoghaddamMohammadreza Tabesh

Iraq

GovernorBaker J. Al-Zubaidy

Alternate GovernorFaik Abdul Rasool

AdviserZaidoon AbdulwahabAmmar Al DurraNaufel Al HassanKarim Muslim AlmusawiYasser Baker Al-ZubaydiZaid Baker Al-ZubaydiSamir Shakir Mahmood Sumaida’ie

309

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Ireland

GovernorMartin Mansergh

Alternate GovernorDonal Cahalane*Carmel Keane*Marianne Nolan*Michael J. Somers*

AdviserMichael CollinsAdrian J. KearnsSuzanne MitchellThomas Whelan

Israel

Alternate GovernorOhad Bar-Efrat*Oded Brook*

AdviserYoav Soffer

Italy

GovernorMario Draghi

Alternate GovernorCarlo Monticelli

AdviserPaola AnsuiniFederico ArcelliCarlo BaldocciStefano BeltramePerluigi BolognaDante BrandiMaria CannataSebastiano CardiAngelo CarrieroGiovanni CastellanetaAdolfo Di CarluccioLuigi Di SantoGiannandrea FalchiLuca FerrariFrancesco GaliettiGiorgio GomelVittorio GrilliGiorgio Leccesi

Silvia LimonciniGiandomenico MaglianoGiovanni MajnoniFrancesca MannoMarco MartellaMassimiliano MazzantiEdoardo PucciFabio RossiArrigo SadunChiara SalabeFrancesco SpadaforaBasilio Antonio TothFrancesca ValeriCarlo VillanacciVincenzo Zezza

Jamaica #

GovernorAudley Shaw

Alternate GovernorWesley George HughesDonald George Wehby*

AdviserRichard BernalSharon A. CrooksFranz HallAnthony JohnsonSharon MillerDarlene Marie Morrison

Japan

GovernorShoichi Nakagawa

Alternate GovernorMasaaki ShirakawaMitsuhiro Furusawa*Akinari Horii*Daisuke Kotegawa*Daikichi Momma*Takehiko Nakao*Toru Shikibu*Naoyuki Shinohara*Masato Watanabe*

AdviserYuichi AdachiShuhei AokiToshinori Doi

310

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Daiho FujiiHajime HayashiNaoki HikotaSatoshi IkedaYoichiro IkedaAkihiro InoTakamitsu IshiiTetsuro ItoMotoo KakiharaMasato KandaTakeshi KatoMichihiro KishimotoTakayuki KobayashiNaohisa KonitaEiji KozukaTakahito MarushimaSusumu MatsumotoKen MatsushitaTakashi MiuraNaruki MoriTokio MoritaKenichi NishikataTakaaki NomotoTakuya NomuraRisa OhkawaKenji OkamuraShinsuke OkawaYoshihito SaitoWataru SakataRie ShimizuHitoshi ShimuraYoshihiro SugimotoKenji SuwazonoShinji SuzukiAtsushi TajimaHiroshi TakamiYasuo TakamuraRintaro TamakiMasaru TanakaAiko ToyamaAkihiro TsuchiyaYasusuke TsukagoshiAtsushi UchidaKoji UemuraMotofumi UmemuraAiichiro YamamotoTakashi YamamotoTatsuo YamasakiAkihiko YoshidaTomoyuki Yoshida

Jordan

GovernorSuhair Al-Ali

Alternate GovernorGhaith Zureiqat

AdviserZaid Raad Al-HusseinHazar Ibrahim BadranFawaz Farouk Bilbeisi

Kazakhstan

GovernorGalymzhan Pirmatov

AdviserDastan EleukenovOlzhas Issabekov

Kenya

GovernorJohn N. Michuki

Alternate GovernorJoseph Kanja Kinyua

AdviserFlorence AbonyoGalma M. BoruPhilip Kituti KalokiJohn KamauMoses KanagiJames Mwangi KiiruJackson KinyanjuiPeter MachariaJames Omingo MagaraWashington Jakoyo MidiwoJoseph MuchemiJohn MuyaGeoffrey Ngungi MwauBeatrice NgoeJustus NyamungaPeter N.R.O. OgegoChrysanthus Barnabas OkemoRaphael Owino OtienoSeif Suleiman

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Kiribati

GovernorNatan Teewe

Alternate GovernorTimi Kaiekieki

Korea, Republic of

GovernorMan Soo Kang

Alternate GovernorSeongtae LeeEun-Bo Jeong*Gwang Ju Rhee*

AdviserDongkoo ChangTaek-Kyu ChangJae Hoon ChoiJae-Hyuk ChoiSang Mok ChoiSo Young ChoiNamki HongByoungha HwangHan Chul JangBeomseok KimDo-Hyeong KimJae Hwan KimKyu Ok KimMyung Kee KimSeung Tae KimDonghun LeeJeong Wook LeeKangone LeeSeong-Yeon LeeEun-Suk ParkHyun-Woo ParkWonshik ParkJin Hong RimSangpyo SuhKeun Man YookTae Sik YoonKyong Hwa Yu

Kuwait

Alternate GovernorAbdulwahab Ahmed Al-Bader

AdviserAdel AlasossiWaleed Al-BaharMarwan Al GhanemEid Al-RasheediYousef B.Y.H. Al-RoumiSaleh Y. Al-SagoubiAhmed Al TahousHesham Ibrahim Al-WaqayanFahad Khaled Al ZamamiAhmad Mohammed Abdulrehman

BastakiFarouk A. BastakiKhalifa Hamada

Kyrgyz Republic

GovernorTadjikan B. Kalimbetova

Alternate GovernorAzamat S. Dikambaev

AdviserSadriddin DjienbekovZamira Sydykova

Lao People’s Democratic Republic

GovernorViengthong Siphandone

Alternate GovernorThipphakone ChanthavongsaPhiane Philakone*

AdviserRithikone PhoummasackMonesavanh PhoutthavongKhuanchai SiphakanlayaBounthanh Vongsoury

Latvia

GovernorAtis Slakteris

Alternate GovernorKaspars Gerhards

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AdviserInguna DobrajaEmils JakrinsInese LiepinaAndris Liepins

Lebanon

GovernorMohamad Chatah

Alternate GovernorAlain A. Bifani

AdviserNadine AboukhaledKevork Hagop BaboyanWafaa CharafeddineAntoine ChedidMarwan FrancisWalid HaidarMazen Soueid

Lesotho

GovernorMoeketsi Majoro

Alternate GovernorMotena Tsolo

AdviserMosito Nicholas KhethisaNthoateng Cecilia LebonaManong LesomaHabofande Augustinus MakopelaMalcolm MurrayDavid Mohlomi RantekoaMonaheng SeletengMoepi Sematlane

Liberia

GovernorAugustine Kpehe Ngafuan

Alternate GovernorAmara Konneh

AdviserNatty B. DavisVishal Gujadhur

Francis T. KarpehToga McIntoshSteven RadeletDabah Varpilah

Libya

GovernorAbdulhafid Mahmoud Zlitni

Alternate GovernorAli Ramadan Shnebesh

AdviserOmar Abu-ShaalaMokhtar A. M. Ben HamoudaSelim K. Selim IhmoudaSaleh Ahmed KeshlafSaid Rashwan

Lithuania #

Alternate GovernorRamune Vilija Zabuliene

AdviserJurgita KazlauskaiteLina VanagieneAudrius Zelionis

Luxembourg

Alternate GovernorArsene Joseph Jacoby*

AdviserMarc BichlerJerome HamiliusGeorges HeinrichSerge KolbPatrick MarquartMiguel Marques-GomesDirk MevisGuy SchullerJean-Louis SiweckSandra Thein

Macedonia, Former Yugoslav Republic of

GovernorZoran Stavreski

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Alternate GovernorTrajko Slaveski

AdviserPetar EsmerovZoran JolevskiVioleta JovanoskaNadica KostoskaMartin MartinoskiKristina PavlovskaNatasa Stojmanovska

Madagascar

GovernorIvohasina Fizara Razafimahefa

Alternate GovernorHenri Bernard Razakariasa

AdviserHonore RandrianarisonSylvia Monique RasoarilalaChristian Guy Dettriga

Rasolomanana

Malawi

GovernorGoodall E. Gondwe

Alternate GovernorKen Lipenga

AdviserCharles S.R. ChukaSingano Dalitso KabambeJane KambalamePerks Master LigoyaRhino MchengaKenna MphondaHawa Olga NdiloweElias E. NgalandeLevie Jeremiah SatoRabson ShabaTed Sitima-Wina

Malaysia

GovernorWan Abdul Aziz Wan Abdullah

Alternate GovernorIbrahim Mahaludin Puteh

AdviserNoraini Abd HamidIsmail Hj BakarFawziah BegumMat Aron DeramanIsham IshakIlango KaruppannanJohan Mahmood MericanNik Edora Nik IbrahimHayati OmarKuppammal RamasamyShahrol Anuwar SarmanSuhaimi TajuddinRahamat Bivi YusoffAzrin Adlina Zainol Abidin

Maldives

GovernorRiluwan Shareef

Mali

GovernorAhmadou Abdoulaye Diallo

Alternate GovernorInhaye Ag Mohamed*

AdviserAbdoulaye DaffeAbdoulaye DiopMariam KonateAssitan KouyateMohamed Ouzouna MaigaAbdoulaye ToureAboubacar Alhousseyni ToureHawaye ToureIdrissa TraoreBoubacar Sidiki Walbani

Malta #

GovernorJason Azzopardi

Alternate GovernorLino Mintoff

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AdviserLino BriguglioMark Miceli

Marshall Islands

GovernorJefferson Barton

Alternate GovernorJemi Nashion

Mauritius

GovernorRama Krishna Sithanen

Alternate GovernorAli Michael Mansoor

AdviserVinod BusjeetDhanandjay GoboodunHemraz Oopuddhye JankeeDenise Chin Ying Lan Hing PoJoyker NayeckGowreesangkharsing RajpatiKeerteecoomar Ruhee

Mexico

GovernorAgustin Carstens

Alternate GovernorRicardo Ochoa RodriguezJorge Familiar*Claudia Grayeb Bayata*Gerardo Rodriguez Regordosa*

AdviserJose A. BalbuenaRodrigo BrandAngel Manuel O’DoghertyHector Samano

Micronesia, Federated States of

GovernorFinley S. Perman

Alternate GovernorRose Nakanaga

Moldova

GovernorMariana Durlesteanu

Alternate GovernorEugeniu Cozmulici*

AdviserNicolae Chirtoaca

Mongolia

GovernorBatbayar Balgan

Alternate GovernorBolormaa Lkhagvasuren

AdviserDamba BaasankhuuDavaasuren DamdinsurenNyamaa Tumenbayar

Montenegro

GovernorIgor Luksic

Alternate GovernorMilorad Katnic

AdviserRadica Zekovic

Morocco

Alternate GovernorNizar BarakaZouhair Chorfi*

AdviserAicha AfifiSabah BenchekrounAbdeslam ChebliMohamed El GuerroujKhalid GuelzimJaouad HamriAli LamraniAziz MekouarFouzia Zaaboul

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Mozambique

GovernorAiuba Cuereneia

Alternate GovernorErnesto Gouveia Gove

AdviserAntonio Pinto de AbreuFernando Felisberto GoenhaMaria Teresa MartinsArmando A. PangueneLuis SitoeHonorata Sulila-BlackAdriano Isaias Ubisse

Myanmar

GovernorMyo Nwe

Alternate GovernorKhin Thida Maw

AdviserMyint LwinKyaw Win

Namibia #

GovernorPeter H. Katjavivi

Alternate GovernorCarl-Hermann G. Schlettwein

AdviserUripurua Chris HovekaJulia Imene-ChanduruMorven M. LuswenyoPatrick NandagoCecilia NdishishiBertha NjemboAsoka Seneviratne

Nepal

GovernorBabu Ram Bhattarai

Alternate GovernorRameshore Prasad Khanal

AdviserSuresh Chandra ChaliseMadhav Prasad GhimirePrithivi B. PandeRadhesh PantAshoke RanaAnil Shah

Netherlands

GovernorWouter Bos

Alternate GovernorBert KoendersRudolf Treffers*

AdviserKatja BerkhoutMacha KempermanDavid Johan KuijperJan Willem Le GrandWijnand MarchalDirk Jan NieuwenhuisKees-Jaap OuwerkerkKees RadeStephan RaesMark TimmermansJoris Herman van DijkMarjolein Van MilligenAndre WesterinkHerman Wijffels

New Zealand

GovernorJohn Whitehead

Alternate GovernorJackie A. Frizelle

AdviserMatthew DalzellRebekah Mawson

Nicaragua

GovernorAlberto Jose Guevara Obregon

Alternate GovernorAntenor Rosales Bolanos

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AdviserRaul BarriosArturo Cruz-SequeiraEdward JacksonRamon PerezRuth Salgado

Niger

GovernorBoubacar Moumouni Saidou

Alternate GovernorMaman Ousmane

AdviserD. Maiga Toure

Nigeria

GovernorM. Abiodun Alao

Alternate GovernorHaruna MohammedAbraham Nwankwo*

AdviserOladele Bernard AkinrolabuOluwasegun Ibidapo-ObePaul Inape IzenuwaP. OdiachiAbdulkareem Olabanji OlaoyeEbenezer Ayodele OmotosoLarai Hajara ShuaibuHamza TahirSani Muhammed Zorro

Norway

Alternate GovernorHakon Arald GulbrandsenAtle Leikvoll*

AdviserSvein AassPer Oyvind BastoeSigrid BayTom EriksenLeif ErvikArvinn Eikeland GadgilAllon GrothIngrid Ofstad

Elin RognlieHaakon SmedsvigNarve SolheimAnja ThomsenHarald TollanBente Weisser

Oman

GovernorDarwish bin Ismail Al Balushi

Alternate GovernorMohammed Jawad Sulaiman

AdviserNajeeb Al-BusaidiAli Mohamed Redha Al-Haj JaffarWarith Al-KharusiHussain Malallah Al Lawati

Pakistan

GovernorShaukat Fayaz Ahmed Tarin

Alternate GovernorFarrakh Qayyum

AdviserHusain HaqqaniAshfaque Hasan Khan

Palau

GovernorMarino Rechesengel

Alternate GovernorSally Techitong-Soalablai

Panama

GovernorHector E. Alexander

Alternate GovernorAracelly Mendez*

AdviserJorge Mateo MilwoodBeatriz Ordas de Rodriguez

317

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Papua New Guinea

GovernorLeonard Wilson Kamit

Alternate GovernorAloysius Hamou

AdviserJohn Tuaim

Paraguay

GovernorDionisio Borda

Alternate GovernorManuel Vidal Caballero Gimenez

AdviserFrancisco OguraGustavo Ruiz DiazJulio Taboada

Peru

GovernorLuis Valdivieso Montano

Alternate GovernorJose Arista Arbildo

AdviserRoberto Abusada SalahMiguel Angel Ostos RiosJorge Gustavo Vega

Philippines

GovernorMargarito B. Teves

Alternate GovernorDiwa C. GuinigundoRolando Andaya*Ralph G. Recto*

AdviserEdgardo J. AngaraAlfredo C. AntonioRicardo Balbido, Jr.Jimmy BlasLeonilo G. Coronel

Soledad Emilia J. de Jesus CruzRey Anthony DavidRosalia de LeonEjercito EstradaWilly Calaud GaaJesus JacintoJose Edgar LedonioCecilia de Jesus LeeJaime LopezHermilando MandanasThomas MarceloAurelio Montinola, IIIAngelito NayanErika PulidoVioleta SevaCarlos SorretaEdna Villa

Poland

GovernorPawel Samecki

Alternate GovernorJerzy Stopyra*

AdviserMonika Borowska-MassalskaMichal Tomasz KrupinskiSebastian StolorzAnna Trzecinska

Portugal

GovernorNuno Sousa Pereira

Alternate GovernorRosa Maria CaetanoNuno Mota Pinto*

AdviserAna Carneiro Torres FerreiraLuis Manuel Bastos QuintaneiroLuis Adriano Alberti Varennese

MendoncaMaria Jose Vidal

Qatar #

GovernorYousef Hussain Kamal

318

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Alternate GovernorAbdurahman Dashti

AdviserAli Bin Fahad Al-HajriRifaat K. BasantiMohamed KabirFahad Kafoud

Romania #

GovernorVarujan Vosganian

Alternate GovernorCristian Popa

AdviserAna Georgia BabiciDaniela DarabanClaudiu Grigoras Doltu

Russian Federation

GovernorAleksei Kudrin

Alternate GovernorAlexey G. Kvasov*Dmitry Pankin*

AdviserAndrey AleevYulia AnikeevaAndrei BokarevAndrei BugrovVladimir DashkoTimur EyvazovAleksei FokinAleksander GorbanGerman O. GrefNikolai GrikoVadim GrishinNadezda IvanovaStanislav KatashVladimir KhrebtovSergey KislyakMikhail KorobkinAndrei KostinPavel KuznetsovDmitry KvitkoBoris M. LvinAndrey Matveev

Eugene MiagkovSergei NosachevKonstantin PanovAlexey ProskuryakovAndrei SerebriakovOksana SergienkoAndrey ShinaevVasiliy TitovLidia Nikolaevna Troshina

Rwanda

GovernorJames Musoni

AdviserGeorge KatureebeJames KimonyoChristian Shingiro

St. Kitts and Nevis

GovernorTimothy Harris

Alternate GovernorJanet Harris

AdviserIzben Williams

St. Lucia

GovernorMark Louis

Alternate GovernorIsaac Anthony

AdviserClenie Greer-LacascadeMichael Louis

St. Vincent and the Grenadines <>

Alternate GovernorLaura Anthony-Browne

Samoa

GovernorHinauri Petana

319

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Alternate GovernorTekauita Lusia Sefo

AdviserIulai Lavea

San Marino <>#

GovernorTito Masi

Alternate GovernorLuca Papi

Sao Tome and Principe

GovernorAngela M. Viegas Santiago

Alternate GovernorAmerico Oliveira

AdviserSusan Jayne AkroydJuan Carlos Vilanova PardoOvidio Pequeno

Saudi Arabia

GovernorIbrahim A. Al-Assaf

Alternate GovernorYousef I. Al-BassamAbdulrahman Mohammed

Almofadhi*

AdviserAhmed Al-BalawieHamad Al-BazaiKhaled M. A. Al-FayezSuliman Al-GwaizAbdulrahman Al-HamidyAbdullah I. Al-HudaithiAbdullatif H. Al-JaberFahad AljuwaidiMubarak Al-KhafraAbdulhamid Al-KhalifaAhmed Al-KholifeyAbdulrahman M. Al-KudsiTaha A. Al KuwaizMajid Al-Moneef

Ahmed A. Al NassarSaad Mohammed A. Al NefaeeSaeed Al-QahtaniRashed Abdulaziz Al-RashedMansour Al-SaawiJammaz Al-SuhaimiSulaiman M. Al-TurkiSami Al-YousefJitendra G. BorpujariSami Ben DaamechRobert EidSaid H. HashimRichard R. HerbertSubodh Kumar KeshavaJean MarionMelhem F. MelhemAbdulaziz A. O’HaliHutham S. OlayanKhaled OlayanLubna OlayanKhalid OudghiriAftab Qureshi

Senegal

Alternate GovernorMamadou Faye*

AdviserDjibril CamaraSouleymane DialloSogue DiarissoAdama DiopGnoumka Toure DioufSalem MerzougFatoumata Binetou NdaoAmadou Lamine NdiayeDiagna N’DiayeBirame SeneAly SowMassar Wague

Serbia

Alternate GovernorDiana Dragutinovic

AdviserBiljana Chroneos-KrasavacBozidar DjelicTatjana IsakovicMarija Rosic

320

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Seychelles #

GovernorDanny Faure

Alternate GovernorBeryl Shirley Samson*

AdviserPeter LaroseJean-Maurice Parnet

Sierra Leone

GovernorDavid O. Carew

Alternate GovernorSheku S. Sesay

AdviserAbu BanguraOsman BanguraSheku Ahmed BanguraJames ComynIbrahim Sorie ContehMatthew DingieSahr Lahai JusuJoseph Tekman KanuJames Sanpha KoromaSheku MesaliWinston Newman SamuelsAllieu Sesay

Singapore

GovernorTharman Shanmugaratnam

AdviserHeng Chee ChanSharon Wai Sum ChanMark Chin Kang ChenFrederick ChooAlvina Yishu HanG. JayakrishnanSeah Bee LengAlvin C.T. LimWei Min Rosemary Lim

Slovak Republic

GovernorPeter Kazimir

Alternate GovernorPeter Sevcovic

AdviserAndrej DrobaMarek JakobyMartin KacoJana KovacovaMario Vircik

Slovenia

Alternate GovernorAndrej KavcicAndrej Sircelj*

AdviserKsenija MaverMetka PrevcStanislava Zadravec-Caprirolo

Solomon Islands

GovernorSnyder Rini

Alternate GovernorShadrach Fanega

AdviserRick Nelson Houenipwela

South Africa

GovernorTrevor Andrew Manuel

Alternate GovernorElias Lesetja Kganyago

AdviserAnalisa BalaLungisa FuzileMarlon GeswintSamantha HenkemanReginald Dumisa JeleChristopher LoewaldJason MiltonAaron Daniel MmineleMonde MnyandeDondo Andrew MogajaneRenosi MokateIsmail MomoniatKurt Joseph Morais

321

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Nhlanhla NeneAndre Frank PillayCleo Rose-InnesMichael SachsGerrit van Schalkwyk

Spain

GovernorPedro Solbes M.

Alternate GovernorDavid Vegara Figueras

AdviserRosario Casero EcheverriAntonio CorderoMarta Garcia JaureguiMaria Jesus Luengo MartinAurelio Martinez E.Agustin Navarro de Vicente-GellaLuis OrgazEulalia Agustina Ortiz

Sri Lanka

GovernorSarath Leelananda Bandara

Amunugama

Alternate GovernorJaliya Wickremasuriya*

AdviserYasoja GunasekeraSeyed Zahir MoulanaPrabashini PonnamperumaAminda RodrigoP SelvarajTissa Wijeratne

Sudan

GovernorAwad Ahmed Elgaz

Alternate GovernorLual A. Deng

AdviserFatahelrahman AliMakki Mohammed Alian

Hazim Abdelgadir Ahmed BabikerYousif Mohamed BashirMoses Mabior Deu AwulElmutasim Abdalla Ahmed ElfakiTarig Khalafalla ElkhidirGamal Malik Ahmed GoraishAbdalla Ibrahim Ali IsmailOboy Ofilang ItorongodilOmer El Faroug Sayed KamilAkeec K.A. KhocEmmanuel Bol KuanyinSalvatore Garang MabiorditOmer Mahgoub SulimanHassan Ahamed Taha

Swaziland

Alternate GovernorDumisani E. Masilela

AdviserAdelaide Sonile GumbiEphraim Mandla HlopheLindiwe KuneneKhangeziwe Glory MabuzaBhadala T. MambaNdumiso Comfort MambaZwelethu MinsiPatrick Ben NdzinisaLonkhululeko Sibandze

Sweden

Alternate GovernorBjorn Fritjofsson*Joakim Stymne*

AdviserBjorn BlombergElin CarlssonErik EldhagenIngemar ErikssonChristina HartlerTorgny E.O. HolmgrenMia Horn af RantzienStefan IsakssonPernilla Josefsson LazoAnne-Charlotte MalmIngrid NilssonSusanna NilssonPer TrulssonEwa Wiberg

322

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Switzerland

GovernorDoris Leuthard

Alternate GovernorJorg Giovanni Frieden*Michel Mordasini*

AdviserOlivier BurkiOlivier ChaveEmilija GeorgievaHenri GetazChristophe HansDanielle Meuwly MonteleoneManuel SagerFrancoise SalameJakob SchaadStephan SchmidHolger TauschWerner WeberMarkus ZimmerliUrs Ziswiler

Syrian Arab Republic

GovernorAdib Mayaleh

Tajikistan

GovernorSafarali Najmuddinov

Alternate GovernorMatlubkhon Davlatov*

AdviserAbdujabbor ShirinovZavkidjon Zavkiev

Tanzania

GovernorMustafa Haidi Mkulo

Alternate GovernorGray S. Mgonja

AdviserAbihudi Selemani BarutiAudifax Aloise Choma

Gerase KamugishaNgosha Said MagonyaMwinyihaji Mwadini MakameMwanaid Athumani MtandaCharles K. MutalemwaE. Ombeni SefueAmeir H. ShehaJoseph SokoineStephen Wasira

Thailand

GovernorSuchart Thada-Thamrongvech

Alternate GovernorSomchai Sujjapongse*Pongpanu Svetarundra*

AdviserAcksiri BuranasiriWoravit ChailimpamontriPongsak ChajiamjanKannikar ChalitapornRapibhat ChandarasrivongsPongsak ChewcharatNipatsorn KampaTachaphol KanjanakulAmpon KittiamponDamrong KraikruanPoowanida KunpalinSukuman LadpliChakkrit ParapuntakulKaival PongnontakulKhan PrachuabmohSoros SakornvisavaDeepak SarupSiribha SatayanonKanit SukonthamanChularat SuteethornBenjarat TanongsakmontriApisak TantivorawongKunteera UjjinPattrawan VechasartPorametee VimolsiriSun VithespongseSongchai WongwatcharadamrongPhilaslak Yukkasemwong

Timor-Leste

GovernorEmilia Pires

323

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Alternate GovernorJoao Goncalves

AdviserJorge CamoesConstancio PintoJoao Mariano Saldanha

Togo

Alternate GovernorSimfeitcheou Pre

AdviserFrancis Dogo

Tonga

Governor‘Otenifi Afu’alo Matoto

Alternate Governor‘Aisake V. Eke

Trinidad and Tobago

GovernorKaren Nunez-Tesheira

Alternate GovernorSuzette Ann Marie Taylor

AdviserPaul Christian ByamAinsley Oswald GillSamuel Aldwyn MartinMaurice Aurelius Suite, IIMarina Valere

Tunisia

GovernorMohamed Nouri Jouini

Alternate GovernorKamel Ben Rejeb

AdviserTarek Ben YoussefSlaheddine BouguerraAyech BouselmiSamir ChebilFarhad Khlif

Turkey

GovernorIbrahim H. Canakci

Alternate GovernorMemduh Aslan Akcay

AdviserCihan AktasSerkan AtaBirol AydemirCeyriye AysoySeyit Ahmet BasErdem BasciOmer BayarBesir BaymazTevfik BilginTahir CanatanBaris CinarHayrettin DemircanEvren DilekliYusuf Bora EnhosCandan ErgenMehmet Ali ErtuncEkrem Mehmet EskarOzgu EvirgenMehmet HazOmer KarademirCigdem KoseMelih NemliS. Elvan OngunOzgur PehlivanSuleyman SemdinogluMustafa SevenVeysi SimsekSibel TokgozIbrahim TurhanErhan UstaAbdullah YavasMehmet YenerGunay YesildorukMehmet Yorukoglu

Turkmenistan #

GovernorDovletgeldi Sadykov

Alternate GovernorGochmyrat A. Myradov

324

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AdviserSapargeldy AnnarejepovDovran MuradnazarovMered Bairamovich Orazov

Uganda

GovernorEzra Suruma

Alternate GovernorC. M. Kassami

AdviserPerezi KamunanwireDavid KihangireFred MuhumuzaGeorge NdyamubaCharles Ssentongo

Ukraine

GovernorHryhoriy Nemyrya

Alternate GovernorAnatoliy Maksyuta*

AdviserVolodymyr FedorchukViktor KapustinOleksandr KupchyshynVolodymyr LytvynHennadii NadolenkoViktor NikitiukOleksandr PinskyiIgor RokhmanyukOleh ShamshurTamara SolyanykMykola UdovychenkoIhor Zhovkva

United Arab Emirates

GovernorYounis Haji AlKhoori

Alternate GovernorMajed Ali Omran

AdviserMahmood Abdulrahim AbdulqaderAbdulla Al AwarNasser Al Shaali

Hamad Al Hurr Al SuwaidiBob ClarkeDavid EldonDana KadrieSuresh Muthukrishna KumarDalia LahhamRich PudnerChirag ShahJames Andrew SpindlerAbdulshakoor TahlakSanjay UppalMohammed Kamran Wajid

United Kingdom

GovernorDouglas Alexander

Alternate GovernorMartin Dinham*Georgie Drummond*Stephen Field*Josh Fleming*Alexander Gibbs*Robert Murray Hills*Stewart James*Nicholas B. Joicey*Catherine Macleod*Susanna Moorehead*Stephen John Pickford*Vijay Pillai*Habib Nasser Rab*Hannah Elizabeth Robinson*Daniel Rosenfield*Jenny Scott*Nemat Talaat Shafik*James Ian Talbot*Sally Taylor*Thomas Joseph Thornton*Lindsey Jennifer Whyte*

AdviserOliver KeetchBenedict LattoErica McAlpineClaire MoranAnthony VigorKelly Wright

United States

GovernorHenry M. Paulson, Jr.

325

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Alternate GovernorReuben Jeffery, IIIGregory J. Berger*E. Whitney Debevoise*Ana Guevara*Neel Kashkari*Robert Kimmitt*Clay Lowery*Karen Mathiasen*David McCormick*Mark Sobel*Daniel Sullivan*

AdviserKatherine Janel AlmquistAndrew BaukolSeth Howard BleiweisJonathan BloomEdith R. BoehlerKen BorgheseVirginia BrandonStacy CarlsonSusan M. ChunBenjamin Jared CushmanNova DalyMichele DavisThomas DebassRoland de MarcellusRobert DohnerJaroslav I. DutkewychRichard FigueroaHenrietta Holsman ForeJamie FrancoDavid FreudenwaldDavid FultonEarl GastTimothy GoodeMathew P. HaarsagerWilliam HamminkMaureen HarringtonMichael HeathJeffery HillJohn HurleyDayna A. HutchingsJulia JacobyRachel JarpeDavid KavanaughWilliam LaitinenJudith S. LaufmanRachel LeathamStuart LeveyBryan Matthew Lopp

Darius MansNicholle ManzAnthony MarcusW. Larry McDonaldBrookly Jean McLaughlinMichael MetzlerEric MeyerMatthew MohlenkampKatherine MonahanAlexei MonsarratFranklin MooreRichard MorfordLiza MorrisWilliam C. MurdenDavid NelsonAdrian A. NgasiNorman K. NicholsonMalachy NugentJulie NutterPatrick M. O’BrienBrian O’NeillFrancisco J. ParodiParker M. PayneDaniel Walter PetersTraci Ann PhillipsWilliam PizerSonja V. RenanderMarlene SakaueRobert W. SalitermanBriana SaundersMarguerite SiemerAldo SiroticAndrew SnowPatrick StuartSusan ThompsonLuyen Doan TranKaren D. TurnerBeth UrbanasBrooke WalkerAmy WestlingJames WilkinsonDavid S. WilliamsJordan WinklerTsung-Tao Yang

Uruguay #

GovernorAlvaro Garcia

Alternate GovernorAzucena Arbeleche*

326

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AdviserAdrian FernandezCarlos Steneri

Uzbekistan

GovernorRavshan Gulyamov

Alternate GovernorShukhrat Abdusha Vafaev

AdviserBakhtier IbragimovAbdulaziz Kamilov

Vanuatu

GovernorSela Molisa

Alternate GovernorBetty Zinner-Toa

Venezuela, Republica Bolivariana de #

GovernorPedro Olveira

AdviserAsier AchuteguiIhonell Roland CamposJose Ricardo Conde MartinezCarlos FigueredoAngelo Rivero-SantosClara Rodriguez

Vietnam

GovernorXuan Ha Tran

Alternate GovernorDang Anh Mai

AdviserBinh Hoa NguyenBui Van DungPhan Thi Thu HienTran Xuan HuyHuong Lan NguyenKim Xuyen Thi NguyenMinh Tien Nguyen

Than Khac NguyenThuy Thi Thu NguyenLap PhamDang Van ThanhBinh Phuong TranLy Hoai Van

Yemen, Republic of

GovernorAbdulkarim I. Al-Arhabi

Alternate GovernorMutahar Abdulaziz Al-Abbasi

AdviserAbdulwahab Al-HajjriFouad Al-KohlanyIbrahim AlnahariAdonis FakhriGalal Mohamed MoulaNabil Shaiban

Zambia

GovernorNg’andu Peter Magande

Alternate GovernorDanies Kawama Chisenda

AdviserPamela Kasese BwalyaSamuel BwalyaNgoza Beatra ChilongaChisala KalabaBen KangwaInonge Mbikusita-LewanikaSitumbeko MusokotwaneNawa Musiwa MuyatwaMichael Umbunda MwaangaWillie Ndembela

Zimbabwe

GovernorMachivenyika T. Mapuranga

Alternate GovernorNicholas Mhute

AdviserAlphios Ncube

327

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328

ACCREDITED MEMBERS OF DELEGATIONS (MIGA)AT THE 2008 ANNUAL MEETINGS

* Temporary

Afghanistan

GovernorAnwar ul-Haq Ahady

Alternate GovernorWahidullah Shahrani

Albania

GovernorArdian Fullani

Alternate GovernorFatos Ibrahimi

Algeria

GovernorKarim Djoudi

Alternate GovernorAbdelhak Bedjaoui

Antigua and Barbuda

GovernorErrol Cort

Alternate GovernorWhitfield Harris

Argentina

GovernorCarlos Fernandez

Alternate GovernorMartin RedradoMartin Abeles*Pablo Barone*

Armenia

GovernorVahram Nercissiantz

Alternate GovernorTigran Davtyan

Australia

GovernorWayne Swan

Austria

Alternate GovernorEdith FrauwallnerMarcus Heinz*

Azerbaijan

Alternate GovernorIlqar Fatizada

The Bahamas

GovernorHubert A. Ingraham

Alternate GovernorColin Higgs*

Kingdom of Bahrain

GovernorAhmed Bin Mohammed Al-Khalifa

Alternate GovernorYousif Abdulla Humood

Bangladesh

GovernorA.B. Mirza Md. Azizul Islam

Barbados

GovernorDarcy Boyce

Alternate GovernorGrantley W. Smith

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Belarus

GovernorVladimir Amarin

Alternate GovernorGennady Medvedev*

Belgium

GovernorBernard Andre Clerfayt

Alternate GovernorFranciscus Godts

Bolivia

GovernorCarlos Villegas Quiroga

Alternate GovernorLuis Alberto Arce Catacora

Bosnia and Herzegovina

GovernorNikola Spiric

Botswana

GovernorSerwalo S.G. Tumelo

Alternate GovernorBoniface G. Mphetlhe

Bulgaria

Alternate GovernorDimitar Kostov

Burkina Faso

Alternate GovernorLene Sebgo

Burundi

GovernorClotilde Nizigama

Alternate GovernorLeon Nimbona

Cambodia

GovernorAun Porn Moniroth

Alternate GovernorVissoth Vongsey

Cameroon

GovernorLouis Paul Motaze

Alternate GovernorDieudonne Evou Mekou

Canada

GovernorJames Michael Flaherty

Alternate GovernorMargaret BiggsThora Broughton*Antoine Brunelle Cote*Brendan Carley*Adam Chambers*Nancy Clifford*John Davies*Graham Flack*Nathalie Gauthier*Laird Hindle*Gary Holub*Diane Jacovella*Anna Kwik*Tiff Macklem*Steven McLaren*Chisholm Pothier*Steve Pugliese*Jonathan Rothschild*Samy Watson*

Cape Verde

GovernorCristina Duarte

Central African Republic

GovernorSylvain Maliko

Alternate GovernorBendert Bokia

329

* Temporary

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Chad

GovernorOusmane Matar Breme

Chile

GovernorAndres Velasco Branes

Alternate GovernorMario Campos*Luis Cespedes Cifuentes*Eric Parrado*Raul Saez*

China

Alternate GovernorLi YongXiaoxia Sun*Wu Jianjun*Yang Yingming*Xiaosong Zheng*Zou Jiayi*

Colombia

GovernorOscar Ivan Zuluaga

Alternate GovernorCarolina RenteriaCarolina Barco*Jorge Humberto Botero*Luis G. Echeverri*Viviana Lara Castilla*Juan Pablo Zarate*

Congo, Democratic Republic of the

GovernorAthanase Matenda Kyelu

Alternate GovernorJean-Claude Masangu Mulongo

Congo, Republic of

GovernorPierre Moussa

Alternate GovernorPacifique Issoibeka

Costa Rica

GovernorGuillermo Zuniga Chaves

Alternate GovernorFrancisco de Paula GutierrezCarmen Maria Madriz Contreras*

Cote d’Ivoire

GovernorPaul Antoine Bohoun Bouabre

Alternate GovernorKoffi Charles DibyKouame Kouassi*

Croatia

GovernorIvan Suker

Alternate GovernorZdravko Maric

Cyprus

Alternate GovernorKyriacos Kakouris*Leslie G. Manison*Andreas Trokkos*

Czech Republic

GovernorMiroslav Kalousek

Denmark

GovernorUlla Toernaes

Alternate GovernorIb Petersen

Dominican Republic

GovernorJuan Temistocles Montas

Alternate GovernorVicente Bengoa Albizu

330

* Temporary

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331

Ecuador

GovernorMaria Elsa Viteri Acaiturri

Arab Republic of Egypt

GovernorMahmoud Mohieldin

Equatorial Guinea

GovernorJose Ela Oyana

Alternate GovernorEstanislao Don Malavo

Estonia

GovernorIvari Padar

Alternate GovernorMartin Poder*

Ethiopia

GovernorSufian Ahmed

Alternate GovernorAbi Woldemeskel Bayou

Fiji

GovernorPeceli V. Vocea

Alternate GovernorSanjay Rohit Prasad*

Finland

Alternate GovernorPeter NybergVelipekka Nummikoski*Marjatta Rasi*

France

GovernorChristine Lagarde

Alternate GovernorXavier Musca

Gabon

Alternate GovernorChristian Bongo Ondimba

Gambia, The

GovernorMousa G. Bala Gaye

Alternate GovernorMod A.K. Secka

Georgia

GovernorNika Gilauri

Germany

GovernorHeidemarie Wieczorek-Zeul

Alternate GovernorMichael Hofmann*Adolf Kloke-Lesch*Klaus D. Stein*Ruediger Von Kleist*Stephan von Stenglin*Juergen Zattler*

Ghana

Alternate GovernorAnthony Akoto Osei

Greece

GovernorGeorge A. Provopoulos

Grenada

GovernorV. Nazim Burke

Alternate GovernorTimothy Antoine

* Temporary

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Guatemala

Alternate GovernorJuan Alberto Fuentes

Guinea

GovernorOusmane Dore

Alternate GovernorDjigui Camara

Guinea-Bissau

GovernorCarlos Mussa Balde

Guyana

Alternate GovernorAshni Singh

Haiti

GovernorDaniel Dorsainvil

Alternate GovernorCharles Castel

Honduras

GovernorRebeca Patricia Santos

Alternate GovernorEdwin Araque Bonilla

Hungary

Alternate GovernorZsuzsanna Varga

Iceland

Alternate GovernorArni M. Mathiesen

India

Alternate GovernorAshok Chawla

Madhusudan Prasad*Arvind Virmani*

Iran, Islamic Republic of

GovernorSeyyed Shams Al-din Hosseini

Iraq

GovernorBaker J. Al-Zubaidy

Ireland

Alternate GovernorDonal Cahalane*Carmel Keane*Marianne Nolan*Michael J. Somers*

Italy

GovernorMario Draghi

Jamaica

GovernorAudley Shaw

Alternate GovernorWesley George Hughes

Japan

GovernorH.E. Shoichi Nakagawa

Alternate GovernorDaikichi Momma*Takehiko Nakao*Toru Shikibu*Naoyuki Shinohara*Masato Watanabe*

Jordan

GovernorSuhair Al-Ali

Alternate GovernorGhaith Zureiqat

332

* Temporary

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Kazakhstan

GovernorGalymzhan Pirmatov

Kenya

Alternate GovernorJoseph Kanja Kinyua

Korea, Republic of

GovernorMan Soo Kang

Alternate GovernorSeongtae Lee

Kuwait

Alternate GovernorBader Mohamed Al-Saad

Kyrgyz Republic

GovernorTadjikan B. Kalimbetova

Alternate GovernorAzamat S. Dikambaev

Lao, People’s Democratic Republic

GovernorViengthong Siphandone

Alternate GovernorThipphakone Chanthavongsa

Latvia

GovernorAtis Slakteris

Alternate GovernorKaspars Gerhards

Lesotho

GovernorTimothy T. Thahane

Alternate GovernorMoeketsi Majoro

Liberia

GovernorAugustine Kpehe Ngafuan

Alternate GovernorAmara Konneh

Socialist People’s Libyan ArabJamahiriya

GovernorAbdulhafid Mahmoud Zlitni

Alternate GovernorAli Ramadan Shnebesh

Lithuania

Alternate GovernorRamune Vilija Zabuliene

Macedonia, Former Yugoslav Republic of

GovernorZoran Stavreski

Alternate GovernorTrajko Slaveski

Madagascar

GovernorIvohasina Fizara Razafimahefa

Alternate GovernorHenri Bernard Razakariasa

Malawi

GovernorGoodall E. Gondwe

Alternate GovernorKen Lipenga

Malaysia

GovernorWan Abdul Aziz Wan Abdullah

Alternate GovernorIbrahim Mahaludin Puteh

333

* Temporary

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334

* Temporary

Mali

GovernorAhmadou Abdoulaye Diallo

Mauritius

GovernorRama Krishna Sithanen

Alternate GovernorAli Michael MansoorRadhakrishna Chellapermal*

Micronesia, Federated States of

GovernorFinley S. Perman

Alternate GovernorRose Nakanaga

Moldova

Alternate GovernorEugeniu Cozmulici*

Mongolia

GovernorBatbayar Balgan

Alternate GovernorBolormaa Lkhagvasuren

Montenegro

GovernorIgor Luksic

Alternate GovernorMilorad Katnic

Mozambique

GovernorAiuba Cuereneia

Alternate GovernorErnesto Gouveia Gove

Namibia

GovernorCarl-Hermann G. Schlettwein

Nepal

GovernorBabu Ram Bhattarai

Alternate GovernorRameshore Prasad Khanal

Netherlands

GovernorWouter Bos

Alternate GovernorBert KoendersRudolf Treffers*

New Zealand

GovernorJohn Whitehead

Alternate GovernorJackie A. Frizelle

Nicaragua

GovernorAlberto Jose Guevara Obregon

Alternate GovernorAntenor Rosales Bolanos

Nigeria

GovernorSanusi Daggash

Norway

Alternate GovernorHakon Arald GulbrandsenAtle Leikvoll*

Oman

GovernorDarwish bin Ismail Al Balushi

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335

* Temporary

Alternate GovernorHani Daood Al Bahrani

Pakistan

GovernorWaqar Masood Khan

Palau

GovernorMarino Rechesengel

Alternate GovernorSally Techitong-Soalablai

Papua New Guinea

GovernorAloysius Hamou

Paraguay

GovernorDionisio Borda

Alternate GovernorManuel Vidal Caballero Gimenez

Peru

GovernorLuis Valdivieso Montano

Alternate GovernorJose Arista Arbildo

Philippines

GovernorMargarito B. Teves

Alternate GovernorRolando Andaya*Ralph G. Recto*

Poland

GovernorMichal Baj

Portugal

GovernorNuno Sousa Pereira

Alternate GovernorRosa Maria CaetanoNuno Mota Pinto*

Qatar

GovernorYousef Hussain Kamal

Alternate GovernorAbdullah Bin Soud Al-Thani

Romania

GovernorVarujan Vosganian

Alternate GovernorCristian Popa

Russian Federation

GovernorAleksei Kudrin

Alternate GovernorAlexey G. Kvasov*Dmitry Pankin*

Rwanda

GovernorJames Musoni

St. Kitts and Nevis

GovernorTimothy Harris

Alternate GovernorJanet Harris

St. Lucia

GovernorMark Louis

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336

* Temporary

Alternate GovernorIsaac Anthony

St. Vincent and the Grenadines

Alternate GovernorLaura Anthony-Browne

Samoa

GovernorNickel Lee Hang

Alternate GovernorIosefo Bourne

Saudi Arabia

GovernorIbrahim A. Al-Assaf

Alternate GovernorYousef I. Al-BassamAbdulrahman Mohammed

Almofadhi*

Serbia

Alternate GovernorDiana Dragutinovic

Sierra Leone

GovernorDavid O. Carew

Alternate GovernorSheku S. Sesay

Singapore

GovernorTharman Shanmugaratnam

Slovenia

Alternate GovernorAndrej KavcicAndrej Sircelj*

Solomon Islands

GovernorSnyder Rini

Alternate GovernorShadrach Fanega

South Africa

GovernorTrevor Andrew Manuel

Alternate GovernorElias Lesetja Kganyago

Spain

GovernorPedro Solbes M.

Alternate GovernorDavid Vegara Figueras

Sri Lanka

GovernorSarath Leelananda Bandara

Amunugama

Alternate GovernorJaliya Wickremasuriya*

Sudan

GovernorAwad Ahmed Elgaz

Alternate GovernorLual A. Deng

Swaziland

Alternate GovernorMbuso C. Dlamini

Sweden

Alternate GovernorBjorn Fritjofsson*Joakim Stymne*

Switzerland

GovernorRaymund A. Furrer

Alternate GovernorMichel Mordasini*

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Tajikistan

Alternate GovernorMatlubkhon Davlatov*

Tanzania

GovernorMustafa Haidi Mkulo

Alternate GovernorGray S. Mgonja

Thailand

GovernorSuchart Thada-Thamrongvech

Alternate GovernorSomchai Sujjapongse*Pongpanu Svetarundra*

Timor-Leste

GovernorEmilia Pires

Alternate GovernorJoao Goncalves

Togo

Alternate GovernorSimfeitcheou Pre

Trinidad and Tobago

GovernorKaren Nunez-Tesheira

Tunisia

GovernorMohamed Nouri Jouini

Alternate GovernorKamel Ben Rejeb

Turkey

GovernorIbrahim H. Canakci

Alternate GovernorMemduh Aslan Akcay

Turkmenistan

Alternate GovernorGochmyrat A. Myradov

Uganda

GovernorEzra Suruma

Alternate GovernorC. M. Kassami

Ukraine

GovernorHryhoriy Nemyrya

United Kingdom

GovernorDouglas Alexander

Alternate GovernorMartin Dinham*Georgie Drummond*Stephen Field*Josh Fleming*Alexander Gibbs*Robert Murray Hills*Stewart James*Nicholas B. Joicey*Catherine Macleod*Susanna Moorehead*Stephen John Pickford*Vijay Pillai*Habib Nasser Rab*Hannah Elizabeth Robinson*Daniel Rosenfield*Jenny Scott*Nemat Talaat Shafik*James Ian Talbot*Sally Taylor*Thomas Joseph Thornton*Lindsey Jennifer Whyte*

United States

GovernorHenry M. Paulson, Jr.

337

* Temporary

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Alternate GovernorReuben Jeffery, IIIGregory J. Berger*E. Whitney Debevoise*Ana Guevara*Michael Kaplan*Neel Kashkari*Clay Lowery*Karen Mathiasen*David McCormick*Mark Sobel*

Uruguay

GovernorAlvaro Garcia

Alternate GovernorAzucena Arbeleche*

Uzbekistan

Alternate GovernorMurat Yakubjanov

Vanuatu

GovernorSela Molisa

Alternate GovernorBetty Zinner-Toa

Venezuela, Republica Bolivariana de

Alternate GovernorPedro Olveira

Vietnam

GovernorXuan Ha Tran

Alternate GovernorDang Anh Mai

Yemen, Republic of

GovernorAbdulkarim I. Al-Arhabi

Alternate GovernorMutahar Abdulaziz Al-Abbasi

Zambia

GovernorNg’andu Peter Magande

Zimbabwe

GovernorMachivenyika T. Mapuranga

Alternate GovernorWillard L. Manungo

338

* Temporary

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339

* Temporary

Abu Dhabi Fund for Development

Shabeeb Al Darmaki

African Development Bank Group

Donald KaberukaMimi AlemayehouThierry de LonguemarAugustin FloryAbdulmajed GadadPatrick Claude GiraudLouis A. KasekendeFrederic Assomption KorsagaGantsho Mandla S.V.Onike Nicol-HouraMonojeet PalAlex RugambaPreeti SinhaPeter SinonGraham Murray StegmannTimothy TurnerTetsuya UtamuraPierre Nicolas van PeteghemYogesh VyasMagatte WadeRolf B. WestlingAzagne George

African Export-Import Bank

Jean-Louis EkraSamuel MugoyaBenedict O. Oramah

African Fund for Guarantee and Economic Cooperation

Magaye GayeMaman-Lawal Mossi Bagoudou

African Trade Insurance Agency

Peter M. JonesAstere GirukwigombaIsrael KamuzoraOmingo MagaraCyprien Sakubu

African Union

Erastus J.O. MwenchaBankole AdeoyeAmina Salum AliLouise BaileyElham Mahmoud Ahmed IbrahimJulius KagambaSeraphine ManirambonaRichard M. MkandawireGolmame TeferaRhoda TumusiimeOlukorede WilloughbyMoctar O.A. Yedaly

Andean Development Corporation

Enrique GarciaFelix BergelLuis Miguel CastillaCarolina EspanaGabriel FelpetoAlejandro GumucioHugo Sarmiento

Arab Bank for Economic Developmentin Africa

Ebe Ould Ebe

Arab Fund for Economic and SocialDevelopment

Abdlatif Y. Al-HamadHusam Omar Khalil

Arab Monetary FundJassim Abdulla Al-MannaiYisr Burnieh

Asian Development Bank

Haruhiko KurodaShyam BajpaiIndu BhushanRoger BurstonSeethapathy ChanderThelma Diaz

OBSERVERS AT THE 2008 ANNUAL MEETINGS

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340

* Temporary

Toshimasa DojimaKatherine M. FerreyCharles GreenwoodShuichi HosodaMikio KashiwagiMasahiro KawaiMaria Teresa KhoBindu N. LohaniDan MillisonKazu SakaiNaoki SakaiRobert SchoellhammerWoochong Um

Bank for International Settlements

Herve HannounGavin BinghamPeter DittusHermann GreveGuenter Anton PleinesBruno Tissot

BIS-Financial Stability Forum

Svein AndresenPatrizia BaudinoMarina Moretti

Black Sea Trade and Development Bank

Hayrettin KaplanErsen EkrenAndrei KondakovGeorge Kottas

Caribbean Community

Edwin W. CarringtonFay Ingrid HoustyCarl GreenidgeDavid F. Hales

Caribbean Development Bank

Compton BournePatrick Desmond BruntonIan DurantCarl HowellDenny Lewis-BynoeWarren SmithTessa Williams-Robertson

Center for Latin American MonetaryStudies

Monetary StudiesKenneth G. CoatesAdriana AlverdeCorina ArtecheLuiz BarbosaJaime Osvaldo CoronadoMaria Luisa Gutierrez

Central African Economic and Monetary Community

Hassan Adoum BakhitBenoit Ketchekmen

Central African States DevelopmentBank

Anicet G. DologueleOscar Ngole

Central American Bank for EconomicIntegration

Nick RischbiethHernan Danery AlvaradoYu-Yuan HouJose Felix MaganaAlejandro Jose Rodriguez Zamora

Central American Monetary Council

Alfredo BlancoWilliam Calvo V.

Common Fund for Commodities

Ali MchumoJaved Akhtar

Common Market for Eastern and Southern Africa

Sindiso NgwenyaTidenekialesh AsfawAlex Gitari KwimenyaMichael GondweCarol JilomboKombo James MoyanaCris M. Muyunda

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341

* Temporary

Commonwealth Secretariat

Indrajit CoomaraswamyVasantt Kumar JogooJonathan OckendenConstance Elizabeth Vigilance

Cooperation Council for the ArabStates of the Gulf

Nasser Ibrahim Al-Kaud

Council of Europe Development Bank

Raphael AlomarJacques Mirante PereThierry PoirelApolonio Ruiz LigeroLuca SchioImre Tarafas

East African Development Bank

Godfrey B. TumusiimeMahesh K. Kotecha

Economic Community of West African States

Mohammed Ibn ChambasChristian N. AdovelandeLambert N’galadjo BambaRemi GbaguidiComla KadjeDavid Lansana Bockari KamaraNelson O. MagbagbeolaMercedes MensahMohamed Ben Omar NdiayeOusseini SalifouThierno Bocar Tall

Economic Cooperation Organization

Murat UlusOmer Faruk BaykalNadeem Karamat

European Bank for Reconstruction and Development

Thomas MirowAlex AuboeckErik BerglofOlivier Descamps

Johann Peter Art LankesIsabelle LaurentPeter ReinigerManfred J. SchepersJosue TanakaNicholas TesseymanAxel Van NederveenAnthony Robert WilliamsMarian DaltonJulie Green

European Central Bank

Jean-Claude TrichetElisabeth Ardaillon-PoirierLorenzo Bini SmaghiRicardo LlaudesFrank MossLucas D. PapademosGeorges PineauFrancisco Ramon-BallesterRaymond RitterRegina Karoline SchuellerJuergen StarkJoerg StephanAgnese de LeoMichele Kirstetter

European Commission

Joaquin AlmuniaLouis MichelMoreno BertoldiMarco ButiElisabetta CapannelliAntonio de LeceaServaas DerooseGeraldine DufortKarin Gardes-KoutnyPeter KerstensDespina ManosAmy MedearisNigel NagarajanAngelos PangratisBernard PetitMaciej PopowskiLoukas StemitsiotisMattias SundholmHeliodoro Temprano ArroyoGerassimos ThomasBenedicte van den BergVlassia VassikeriLuc VeronBenjamin Pearson

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342

* Temporary

European Investment Bank Group

Barbara Bargagli-PetrucciSophie BillonMartin CurwenCarlos da Silva CostaPhilippe de Fontaine ViveBertrand de MazieresThomas HackettPlutarchos SakellarisFiona Turner

Food and Agriculture Organization of the United Nations

Hafez M.H. GhanemDaniel J. GustafsonKeith Wiebe

Inter-American Development Bank

Luis Alberto Moreno MejiaAmal-Lee AminEdward BartholomewHugo Eduardo Beteta Mendez-RuizOtaviano CanutoSusana CardenasWinston CoxSoren ElbechLuis Alberto GiorgioGerard S. JohnsonRobert KaplanLori KerrSantiago LevyEduardo LoraAngela Marcarino ParisHilen MeirovichSantiago PastranaSteven PuigGerman QuintanaBruno Walter Coelho SaraivaHans SchulzDesmond ThomasCarla TullyDaniel M. Zelikow

IADB-Inter-American Investment Corporation

Orlando Ferreira CaballeroSteven ReedCarlos Roa

International Fund for Agricultural

Development

Lennart BageUday AbhyankarCheryl MordenThomas PesekMatthew WyattBonnie Lynn Harris

International Labour Organization

Juan SomaviaMarina ColbyPhilippe EggerArmand PereiraStephen Pursey

Islamic Development Bank

Rami AhmadKhaled M. Al-AboodiGhassan Youssef Al-BabaAbdul Aziz M. Zahir Al HinaiGhada AttiehAftab A. CheemaAmadou Boubacar CisseSirelkhatim SidahmedMusa Hassan SillahNijad SubeiSidi Mohamed Ould TalebSalah Ameur Jelassi

Islamic Financial Services Board

Rifaat Ahmed Abdel KarimFarrah Mohamed Aris

Kosovo

Ahmet ShalaGani GerguriIlir IbrahimiHajdar KorbiDriton QehajaArie RabfogelHashim Rexhepi

Kuwait Fund for Arab Economic Development

Osama Alattal

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343

* Temporary

Latin American Association of Development Financing Institutions

Rommel AcevedoRicardo Palma-Valderrama

Latin American Reserve Fund

Rodrigo Bolanos ZamoraAna Maria CarrasquillaJuan Carlos AlfaroIker Zubizarreta

League of Arab States

Ashraf Riad

Nordic Investment Bank

Johnny AkerholmLars EibeholmNils Erik EmilssonJens HellerupHilde KjelsbergKari KukkaHarro PitkanenHeidi Susanne Syrjanen

OPEC Fund for International Development

Suleiman Jasir Al-HerbishSaid AissiFuad AlbassamAnajulia Taylhardat de TarterHelen Abu JurjiRanya Nehmeh

Organisation for Economic Co-operationand Development

Angel GurriaRichard H. CareyCarolyn ErvinSusan FridyStephen Paul GroffIan HawkesworthBrenda KillenJean-Marie LeGrandKaori MiyamotoGabriela RamosHolly RichardsJavier Santiso

Klaus Schmidt-HebbelSandra Wilson

OECD-Development Assistance Committee

Eckhard DeutscherJames MichelJens Sedemund

Organization of American States

Victoria AbaloIrene KlingerJoaquin Salcedo

Organization of the Petroleum Exporting Countries

Mohammad Alipour-Jeddi

Pacific Islands Forum Secretariat

Sanjesh Naidu

P. L. O.

Jihad Al WazirAziz Abu-DaggaSamir Abdullah AliMazen Saleem JadallahMohammad ShtayyehJamilah Shami

Southern African Development Community

Angelo Eduardo Mondlane

United Nations

Susan BajardiSuzanne BishopricFarooq ChowdhuryHazem FahmyManuel F. MontesDaniel PlatzFrank SchroederDavid SmithJomo Kwame SundaramRichard TynerRob Peter Vos

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344

* Temporary

United Nations Children’s Fund

Bjorn Gillsater

United Nations Conference on Tradeand Development

Heiner Flassbeck

United Nations Development Programme

Kemal DervisPaolo GalliMagnus MagnussonAd MelkertRosemary NuamahFrederick S. TipsonMarissa Ayento

United Nations Economic Commissionfor Africa

Abdoulie JannehKasirim Nwuke

United Nations Economic Commissionfor Latin America and the Caribbean

Ines BustilloHelvia Velloso

United Nations Industrial DevelopmentOrganization

H. Stephen Halloway

West African Development Bank

Abdoulaye Bio TchaneAmadou Oumar Mballo

West African Economic and MonetaryUnion

Soumaila CisseAbdoulaye DiopEloge HouessouFelix Bruno Kafando

West African Monetary Institute

Temitope OshkioyaEmmanuel Terlumun Adamgbe

Turkey Planning Team 2009 Annual Meetings

Cavit DagdasNurettin AkkayaMustafa Soner AksuCemil Mehmet ArslanOnur AtaogluAbdurrahman AtmacaNihal AydoganSenay AydoganMevlut BulutHasan CanpolatSimge ColakogluMehmet ComcuogluYavuz DeliceEbru EjderOzkan EkerHuseyin ErenCaner EsenturLevent GulsoyHakan GurgenAydin HaskebabciIlhan KaraDilek KarragacAyse KetenHatice KokdenAyhan KurtogluErol KuzubasiogluDidem Emine MutlayAyhan MutluZeynep OkyayHatice Camay OzalpOzgur OzaslanUla PacaliSaadettin ParmaksizMesut PektasMehmet Ali SaglamHasan SahinkayaErcan TanrisalLevent UlkuMustafa UstunFeza Faruk UstunkayaSeray YilmazGullu Yilmazturk

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EXECUTIVE DIRECTORS AND ALTERNATES IBRD, IFC, IDAOctober 12, 2008

Alternate ExecutiveExecutive Directors Directors

Svein Aass Jens Haarlov(Norway) (Denmark)

Abdulrahman Almofadhi Abdulhamid Al-Khalifa(Saudi Arabia) (Saudi Arabia)

Gino Alzetta Melih Nemli(Belgium) (Turkey)

Felix Alberto Camarasa Francisco Bernasconi(Argentina) (Chile)

E. Whitney Debevoise Ana Guevara(United States) (United States)

Mat Aron Deraman Chularat Suteethorn(Malaysia) (Thailand)

Jorge Familiar Jose A. Rojas(Mexico) (Republica Bolivariana de Venezuela)

Ambroise Fayolle Frederick Jeske-Schonhoven(France) (France)

Jim Hagan Do-Hyeong Kim(Australia) (Republic of Korea)

Merza H. Hasan Mohamed Kamel Amr(Kuwait) (Arab Republic of Egypt)

Michael Hofmann Ruediger Von Kleist(Germany) (Germany)

Mulu Ketsela Mathias Sinamenye(Ethiopia) (Burundi)

Dhanendra Kumar Zakir Ahmed Khan(India) (Bangladesh)

Alexey G. Kvasov Eugene Miagkov(Russian Federation) (Russian Federation)

Giovanni Majnoni Nuno Mota Pinto(Italy) (Portugal)

345

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Alternate ExecutiveExecutive Directors Directors

Susanna Moorehead Stewart James(United Kingdom) (United Kingdom)

Michel Mordasini Michal Tomasz Krupinski(Switzerland) (Poland)

Louis Philippe Ong Seng Agapito Mendes Dias(Mauritius) (Sao Tome and Principe)

Toru Shikibu Masato Kanda(Japan) (Japan)

Rogerio Studart Jorge Humberto Botero(Brazil) (Colombia)

Javed Talat Sid Ahmed Dib(Pakistan) (Algeria)

Samy Watson Ishmael Lightbourne(Canada) (The Bahamas)

Herman Wijffels Claudiu Grigoras Doltu(The Netherlands) (Romania)

Zou Jiayi Yang Yingming(People’s Republic of China) (People’s Republic of China)

346

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DIRECTORS AND ALTERNATES MIGA

October 12, 2008

Directors Alternate Directors

Svein Aass Jens Haarlov(Norway) (Denmark)

Abdulrahman Mohammed Almofadhi Abdulrahman Mohammed Almofadhi(Saudi Arabia) (Saudi Arabia)

Gino Alzetta Melih Nemli(Belgium) (Turkey)

Felix Alberto Camarasa Francisco Bernasconi(Argentina) (Chile)

E. Whitney Debevoise Ana Guevara(United States) (United States)

Mat Aron Deraman Chularat Suteethorn(Malaysia) (Thailand)

Jorge Familiar Jose A. Rojas(Mexico) (Republica Bolivariana de Venezuela)

Ambroise Sixte Armel Francois Frederick Jeske-Schonhoven(France) (France)

Jim Hagan Do-Hyeong Kim(Australia) (Republic of Korea

Merza H. Hasan Mohamed Kamel Amr(Kuwait) (Arab Republic of Egypt)

Michael Hofmann Ruediger Von Kleist(Germany) (Germany)

Mulu Ketsela Mathias Sinamenye(Ethiopia) (Burundi)

Dhanendra Kumar Zakir Ahmed Khan(India) (Bangladesh)

Alexey G. Kvasov Eugene Miagkov(Russian Federation) (Russian Federation)

Giovanni Majnoni Nuno Mota Pinto(Italy) (Portugal)

347

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Directors Alternate Directors

Susanna Moorehead Stewart James(United Kingdom) (United Kingdom)

Michel Mordasini Jakub Karnowski(Switzerland) (Poland)

Louis Philippe Ong Seng Agapito Mendes Dias(Mauritius) (Sao Tome and Principe)

Toru Shikibu Michihiro Kishimoto(Japan) (Japan)

Rogerio Studart Jorge Humberto Botero(Brazil) (Colombia)

Javed Talat Sid Ahmed Dib(Pakistan) (Algeria)

Samy Watson Ishmael Lightbourne(Canada) (The Bahamas)

Herman Wijffels Claudiu Grigoras Doltu(The Netherlands) (Romania)

Zou Jiayi Yang Yingming(People’s Republic of China) (People’s Republic of China)

348

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OFFICERS OF THE BOARDS OF GOVERNORS

IBRD, IFC AND IDA AND JOINT PROCEDURES COMMITTEE

FOR 2008–2009

Chairman. . . . . . . . . . . . . . . . . . . . . Vietnam

Vice Chairmen . . . . . . . . . . . . . . . . LithuaniaTunisia

Reporting Member . . . . . . . . . . . . . Liberia

Members . . . . . . . . . . . . . . . . . . . . . The BahamasChinaCôte d’IvoireCzech RepublicDjiboutiFranceGermanyHaitiIndiaIraqJapanLiberiaLithuaniaMontenegroNew ZealandNigeriaSaudi ArabiaSpainTunisiaUnited KingdomUnited StatesUzbekistanVietnam

349

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OFFICERS OF THE MIGA COUNCIL OF GOVERNORS

AND PROCEDURES COMMITTEE FOR 2008–2009

Chairman. . . . . . . . . . . . . . . . . . . . . Vietnam

Vice Chairmen . . . . . . . . . . . . . . . . Lithuania Tunisia

Reporting Member . . . . . . . . . . . . . Liberia

Members . . . . . . . . . . . . . . . . . . . . . The BahamasChinaCôte d’IvoireCzech RepublicDjiboutiFranceGermanyHaitiIndiaIraqJapanLiberiaLithuaniaMontenegroNew ZealandNigeriaSaudi ArabiaSpainTunisiaUnited KingdomUnited StatesUzbekistanVietnam

350

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