role of world bank in global trade

8/13/2019 Role of World Bank in Global Trade

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S.P. MANDALIS

R. A PODAR COLLEGE OF COMMERCE AND ECONOMICS

MATUNGA (E), MUMBAI-400 019.

A PROJECT REPORT ON

Rol o! "o#l$ B%&' & Glo%l T#%$

SUBMITTED B*

A+%+%#% A. Go/%

M.COM (SEM. I) ECONOMICS OF GLOBAL TRADE AND

FINANCE

SUBMITTED TO

UNI2ERSIT* OF MUMBAI

3013-301

PROJECT GUIDE

P#o!. 55555555555555555

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S.P. MANDALIS

R. A PODAR COLLEGE OF COMMERCE AND ECONOMICS

MATUNGA, MUMBAI-400 019.

CERTIFICATE

This is to certify that M#6M. N%555555555555555555 of M.Com Business

Management Semester I (2012-2013) has successfully comlete! the ro"ect on Tl

un!er the gui!ance of P#o!.555555555555555555

Course Co-or!inator #rincialD#. (M#) 2&% P7%l D#.(M#) S+o%&% 2%8$%&

#ro"ect $ui!e%Internal &'aminer

#rof.

&'ternal &'aminer#rof.

D% S%l o! + Coll:

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AC;NO"LEDGEMENT

I acno*le!ge the +alua,le assistance ro+i!e! ,y S. # Man!alis . /. #o!arCollege of Commerce &conomics for three year !egree course in B.M.S.I secially than the #rincial r.(Mrs) Sho,ana asu!e+an for allo*ing us to use

the facilities such as 4i,rary Comuter 4a,oratory internet etc.Isincerelythan the M.Com Co-or!inator r. (Mrs) inita #imale for gui!ingusin the right !irection to reare the ro"ect.I than my gui!e #rof. (5ame of $ui!e) *ho has gi+en his%her+alua,le time no*le!ge an! gui!ance to comlete the ro"ect successfully intime.

My family an! eers *ere great source of insiration throughout my ro"ect theirsuort is !eely acno*le!ge!.

S:&%8# o! + 8$&

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DECLARATION

I (Stu!ents 5ame) of R. A. PODAR COLLEGE OF COMMERCE

@. ?orl! Bans Current ole an! Ma"or Challenges 7ortunities

1> - 1;

;. Inuts Tren!s an! &+olution of ?orl! Ban Tra!e/ssistance

1= - 21

=. ifferent efinitions Conflicting &'ectations 22 - 2>

10. /ssessment of ?orl! Bans Suort for Tra!e 2> - 3:

11. Conclusion 3@

12. eferences Sources 3;

OBJECTI2E

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The o,"ecti+e of this ro"ect is to enhance the un!erstan!ing a,out the role that The ?orl!Ban lays in imro+ing an! enhancing glo,al tra!e.

?orl! Ban an! IMA *or in tra!e olicy co+ering tra!e-relate! con!itionality a!+isoryser+ices an! tra!e relate! caacity ,uil!ing. uestioning the Ban an! Aun! aroach totra!e li,eralisation.

The role of ?orl! Ban inclu!es Caacity ,uil!ing integrate! frame*or tra!e-financecoherence tra!e-relate! in+estment tra!e con!itionality an! national !e+eloment lans.

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TITLE

ole of ?orl!

Ban in $lo,alTra!e

INTRODUCTION

In 8uly 1=99 reresentati+e of 99 nations assem,le! at a Dnite! 5ation (D5) Monetary Ainancial conference *hich *as hel! in Bretton*oo!s 5e*


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conference resulte! in the most am,itious lan for the *orl! economy. /s a !eli,eration ofthis conference t*o international financial institutions *ere esta,lishe! namely InternationalMonetary Aun! (IMA) International Ban for econstruction an! e+eloment (IB).The common o,"ecti+e of these institutions is to hel raise stan!ar!s of li+ing in!e+eloing countries ,y channeling financial resources from !e+eloe! countries to the!e+eloing *orl!. The articles of agreement of IB *ere formally accete! ,y a ma"ority

of its articiants ,y ecem,er 2@ 1=9>. Si' months later on 8une 2> 1=9: the ?orl!Ban oene! for ,usiness rocee!e! to call u caital from its mem,er go+ernments.The ?orl! Ban $rou is actually comrise! of fi+e searate arms. T*o of those arms Ethe International Ban for econstruction an! e+eloment (IB) an! the Internationale+eloment /ssociation (I/) *or rimarily *ith go+ernments an! together arecommonly no*n as Fthe ?orl! BanG. T*o other ,ranches E the International AinanceCororation (IAC) an! Multilateral In+estment $uarantee /gency (MI$/) E !irectly suort

ri+ate ,usiness in+esting in !e+eloing countries. The fifth arm is the International Centerfor Settlement of In+estment isutes (ICSI) *hich ar,itrates !isagreements ,et*eenforeign in+estors an! go+ernments. This *e,age outlines ey features of the t*o arms thatare no* collecti+ely referre! to as the ?orl! Ban IB an! I/. The ?orl! Ban is

not a ,an in the common sense of the *or!. / single erson cannot oen an account oras for a loan. ather the Ban ro+i!es loans grants an! technical assistance to countriesan! the ri+ate sector to re!uce o+erty in !e+eloing an! transition countries.

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>ISTOR* AND PURPOSE

In 200= the ?orl! Ban ro+i!e! H9:.= ,illion for 303 ro"ects in !e+eloing countries*orl!*i!e *ith our financial an!%or technical e'ertise aime! at heling those countriesre!uce o+erty.

The Ban is currently in+ol+e! in more than 1;00 ro"ects in +irtually e+ery sector an!!e+eloing country. The ro"ects are as !i+erse as ro+i!ing microcre!it in Bosnia an!


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The current rimary focus of the ?orl! Ban centers on si' strategic themes1. T+ 7oo# =o8. #o+erty re!uction an! sustaina,le gro*th in the oorestcountries esecially in /frica.2. Po=o&!l= %&$ !#%:l %. Solutions to the secial challenges of ostconflictcountries an! fragile states.

3. M$$l - &=o =o8. e+eloment solutions *ith customie! ser+ices as *ell asfinancing for mi!!le - income countries.9. Glo%l 78l= :oo$. /!!ressing regional an! glo,al issues that cross national ,or!erssuch as climate change infectious !iseases an! tra!e.>. T+ A#% /o#l$. $reater !e+eloment an! oortunity in the /ra, *orl!.:. ;&o/l$: %&$ l%#&&:. 4e+eraging the ,est glo,al no*le!ge to suort !e+eloment.

The ?orl! Ban ro+i!es lo* - interest loans interest - free cre!its an! grants to !e+eloingcountries. Theres al*ays a go+ernment (or Fso+ereignG) guarantee of reayment su,"ect togeneral con!itions. The ?orl! Ban is !irecte! to mae loans for ro"ects ,ut ne+er tofun! a tra!e !eficit. These loans must ha+e a reasona,le lielihoo! of ,eing reai!. The

I/ *as create! to offer an alternati+e loan otion. I/ loans are free of interest an!offere! for se+eral !eca!es *ith a ten - year grace erio! ,efore the country recei+ing theloan nee!s to ,egin reayment. These loans are often calle! o! lo%&.Since it issue! its first ,on!s in 1=9@ the IB generates fun!s for its !e+eloment *orthrough the international caital marets. The ?orl! Ban issues ,on!s tyically a,out H2>

,illion a year. These ,on!s are rate! /// (the highest ossi,le rating) ,ecause they are,ace! ,y mem,er states share! caital an! ,y ,orro*ers so+ereign guarantees. Becauseof the /// cre!it rating the ?orl! Ban is a,le to ,orro* at relati+ely lo* interest rates.This ro+i!es a cheaer fun!ing source for !e+eloing countries as most !e+eloingcountries ha+e consi!era,ly lo* cre!it ratings. The ?orl! Ban charges a fee of a,out 1

ercent to co+er its a!ministrati+e o+erhea!s.

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CURRENT STRATEGIC T>EMES

1. F#%:l S%

The Challenge E Many of the *orl!Ls oorest countries ha+e face! a +icious cycle ofconflict an! o+erty. Some ;0 ercent of the 20 oorest countries ha+e suffere! a ma"or*ar in the ast 1> years ,ringing e'traor!inary suffering to their eole an! often affectingthe larger region. #eace can also ,e fragile countries emerging from *ar face a 99 ercentchance of relasing *ithin fi+e years. &+en *ith rai! rogress on economic reco+ery itcan tae a generation or more "ust to return to re*ar li+ing stan!ar!s.

The Strategy E


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face constraints in mo,iliing the fun!s they nee! to in+est in infrastructure an! essentialser+ices. They also nee! hel to reform olicies an! institutions in *ays that imro+e thein+estment climate.The Strategy E The ?orl! Ban $rou is *oring to meet mi!!le-income countries secificnee!s *ith tailore! assistance that !ra*s on an array of cometiti+e financial ro!ucts an!no*le!ge an! learning ser+ices. These countries are also increasingly imortant artners in

their *or to a!!ress critical cross-,or!er an! glo,alissues such as clean energy tra!e integration en+ironmental rotection internationalfinancial sta,ility an! the fight against infectious !iseases.

4. Glo%l P8l= Goo$ I8

The Challenge E $lo,al u,lic goo!s are asects of !e+eloment that reach across ,or!erse'amles inclu!e the en+ironment u,lic health an! international tra!e an! financialinfrastructure. /ctions are often nee!e! that e'ten! ,eyon! *hat maret systems orin!i+i!ual countries can !o on their o*n E !e+eloing ne* +accines for instance an!re!ucing car,on emissions to a!!ress glo,al *arming.The Strategy E The ?orl! Ban $rou is heling sur multilateral action an! glo,al

artnershis in+ol+ing go+ernments nonrofit organiations an! socially resonsi,lecororations. Their *or on glo,al u,lic goo!s focuses on the en+ironment eseciallyclimate changeK controlling communica,le !iseases such as


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"ORLD BAN; AND TRADE RESEARC>

The !istinguishing feature of the ?orl! Ban *or on international tra!e is that it is anintegral art of the Bans *or on !e+eloment an! o+erty re!uction. The ?orl! Banassists !e+eloing countries to formulate li,eral tra!e olicies e'ressly in their rocess of!e+eloment an! o+erty re!uction an! ro+i!es technical assistance or olicy a!+ice to the

go+ernments to*ar!s an oen tra!e regime. The Ban un!ertaes research to ,etterun!erstan! the role of international tra!e in !e+eloment an! o+erty re!uction. The Banhas also contri,ute! significantly to the !e+eloment of techniJues an! olicy tools foranalying the imact of tra!e olicy reforms. /t the same time the ?orl! Ban through

olicy - ,ase! loans has suorte! tra!e reforms in many !e+eloing countries such asre!uction of tariffs elimination of Juantitati+e restrictions or imro+ement of foreigne'change systems etc.

The tra!e olicies of most !e+eloing countries ha+e ,ecome significantly more li,eralsince the 1=;0s reflecting olicy !ecisions ,ase! on information an! analysis originating inthe ,roa!er research community - inclu!ing the ?orl! Ban. There is a long history of

tra!e research at the Ban ha+ing laye! a significant role in heling to accumulatee+i!ence an! !ra* the lessons from e'erience *ith in*ar! looing tra!e olicies. It is anarea in *hich resources continue! to ,e in+este! e+en as the emhasis of Ban oerationsshifte! to other areas in the 1==0s. The continue! engagement an! resulting core ofe'ertise in research an! olicy analysis hele! to un!erin the significant e'ansion oftra!e-relate! acti+ities that ,egan in 2002.

The research rogram reson!s ,oth to riority areas for research i!entifie! ,y clientreJuests an! oerational !eman! from the regions an! ro+i!es an imetus an! lea!ershifunction. The latter in+ol+es i!entifying emerging or neglecte! issues that are imortant for!e+eloing countries. / ma"or function of the research rogram is to a!!ress tra!e issues

that are of glo,al imortance - such as the ?T7 an! the !esign%imact of regionalintegration agreements on ,oth mem,ers an! e'clu!e! countries. esearch in tra!e lieother research ,y the Ban is in art oriente! to the !e+eloment community as a *holean! aims to hel i!entify riority areas for action an! shae the !iscussion of tra!e-relate!issues *ith a +ie* to imro+e the rosects of !e+eloing countries to use tra!e as aninstrument to re!uce o+erty.

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"ORLD BAN; AND TRADE

Rol o! #%$ & $lo7&

Tra!e is a ey means to fight o+erty an! achie+e the Millenium e+eloment $oals. Itallo*s countries to imort i!eas an! technologies realie comarati+e a!+antage an!

economy of scale an! foster cometition an! inno+ation to increase ro!ucti+ity an!

achie+e higher sustaina,le emloyment an! economic gro*th.

Countries oen to international tra!e ha+e ten!e! to ro+i!e more oortunities to theiroulation an! to gro* faster. /s note! ,y the Commission on $ro*th an! e+elomentall !e+eloing countries that ha+e e'erience! sustaine! erio!s of high economic gro*th

rosere! ,y ,eing oen to glo,al marets. :: million. The share of tra!e-relate! len!ing intotal Ban len!ing has gro*n from an a+erage of 2 ercent in A02-A03 to an a+erageof @ ercent in A11-A12. 7+erall Ban len!ing for A12 stan!s at H93.: ,illion.

Tra!e facilitation an! maret access continues to account for the ,ul of the tra!e-relate!

ortfolio. Tra!e-relate! ro"ects suorting tra!e facilitation an! maret access comrise!almost half the A12 tra!e ortfolio follo*e! ,y ro"ects *ith a focus on regionalintegration e'ort !e+eloment an! cometition. The ?B$s Tra!e Aacilitation Aacilitysuorts imro+ements in tra!e facilitation systems that re!uce !e+eloing countries tra!ecosts an! imro+e cometiti+eness. /s of March 2012 9; ro"ects *ith a total ,u!getallocation of H39.: million *ere aro+e! mainly ,enefiting /frican countrie.

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The ?B$ has stee! u its suort of tra!e finance since the 200;-0= crisis. /s of

8anuary 2012 the International Ainance Cororation (IAC) the Bans ri+ate sector armhas suorte! o+er 32000 glo,al tra!e transactions *orth H90 ,illion through the $lo,alTra!e Ainance #rogram ($TA#) an! the $lo,al Tra!e 4iJui!ity #rogram ($T4#). The$T4# is ,eing re-launche! for another 3 years follo*ing the recent glo,al uncertainty an!!ro in liJui!ity. The IAC has also launche! the Critical Commo!ity Ainance #rogram

(CCA#) suorting tra!e finance in glo,al agricultural commo!ities tra!e an! energy-relate! goo!s in the *orl!s oorest countries. In a!!ition the ?B$ is monitoring theeffects of !e+eloments in agricultural marets an! rising foo! rices.

To ,etter monitor tra!e olicy !e+eloments the ?B$ has continue! to suort the

$lo,al Tra!e /lert a "oint +enture of thin tans aroun! the *orl! an! maintains theTemorary Tra!e Barriers ata,ase.

The Ban also intro!uce! a regional tra!e integration *e,site featuring the $lo,al

#referential Tra!e /greements ata,ase *hich ro+i!es !etaile! information on free tra!eagreements aroun! the *orl!. In cooeration *ith other international !e+eloment artnersthe ?orl! Ban launche! the Transarency in Tra!e Initiati+e to ro+i!e free an! easyaccess to !ata on country-secific tra!e olicies such as tariffs non-tariff measures an!ser+ices regulations. In a!!ition !uring the fall of 2010 the ?B$ re+ame! ?orl!Integrate! Tra!e Solutions a tra!e analysis soft*are tool that allo*s users to access aglo,al tra!e !ata,ase.

"+ #%$ !%=l%o& 7o#%&

Aor all sectors tra!e facilitation is a central element of tra!e integration. Customs an!,or!er management mo!erniation ugra!es in tra!e-relate! infrastructure inlan! transitcorri!or management logistics ser+ices information systems an! ort efficiency facilitateon-time tra!e in goo!s an! ser+ices at lo*er transaction costs.

In general research fin!ings oint to the nee! for a focus on ho* !e+eloing countriescan !i+ersify tra!e ho* to connect remote areas an! lagging regions to *orl! marets*hich tyes of tra!e facilitation are most effecti+e ho* ,est to !esign regional an!multilateral tra!e agreements an! on ho* to increase formal-sector emloyment of the

oor an! *omen in the ro!uction of internationally tra!e! goo!s an! ser+ices.

"+% A# + "o#l$ B%&' C8##& Rol %&$ M%o# C+%ll&: %&$ O77o#8&

4ie the IMA the ?orl! Ban has ,oth its critics an! its suorters. The criticisms of the?orl! Ban e'ten! from the challenges that it faces in the glo,al oerating en+ironment.Some of these challenges ha+e comlicate! causesK some result from the conflict ,et*eennations an! the glo,al financial crisis. The follo*ing are four e'amles of the *orl!s!ifficult nee!s that the ?orl! Ban tries to a!!ress1.&+en in 2010 o+er 3 ,illion eole li+e! on less than H2.>0 a !ay.2./t the start of the t*enty-first century almost a ,illion eole coul!nt rea! a ,oo orsign their names.3.4ess than 1 ercent of *hat the *orl! sen!s each year on *eaons *oul! ha+e ute+ery chil! into school ,y the year 2000 ,ut it !i!nt haen.

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9.Aragile states such as /fghanistan *an!a an! Sri 4ana face se+ere !e+elomentchallenges *ea institutional caacity oor go+ernance olitical insta,ility an! oftenongoing +iolence or the legacy of ast conflict./ccor!ing to the Encyclopedia of the New American Nation an! the New York Times the?orl! Ban is criticie! rimarily for the follo*ing reasons

A$% &=o7&=. The ?orl! Ban an! its len!ing ractices are increasingly

scrutinie! *ith critics asserting that Fthe ?orl! Ban has shifte! from ,eing a 6len!er oflast resort to an international *elfare organiationG resulting in an institution that isF,loate! incometent an! e+en corrut.G /lso incriminating is that Fthe ,ans la' len!ingstan!ar!s ha+e le! to a rai!ly !eteriorating loan ortfolio.G

R/%#$&: o# 877o#&: &!!=& o# =o##87 =o8. The ,ans len!ing olicies

often re*ar! macroeconomic inefficiency in the un!er!e+eloe! *orl! allo*ing inefficientnations to a+oi! the tyes of fun!amental reforms that *oul! in the long run en! o+ertyin their countries.

Many analysts note that the ,est e'amle is to comare the fantastic gro*th in &ast /siato the !elora,le economic con!itions of /frica. In 1=>0 the regions *ere alieNSouthOorea ha! a lo*er er caita $# than 5igeria. But ,y ursuing macroeconomic reformshigh sa+ings in+esting in e!ucation an! ,asic social ser+ices an! oening their economiesto the glo,al tra!ing or!er the F#acific TigersG ha+e ,een a,le to lift themsel+es out of

o+erty an! into *ealth *ith +ery little hel from the ?orl! Ban. Many countries in/frica ho*e+er ha+e relie! rimarily on multilateral assistance from organiations lie the?orl! Ban *hile a+oi!ing fun!amental macroeconomic reforms *ith !elora,le ,ut

re!icta,le results.Conser+ati+es oint out that the ?orl! Ban has lent more than H3>0 ,illion o+er a half-century mostly to the un!er!e+eloe! *orl! *ith little to sho* for it. 7ne stu!y argue!that of the si'ty-si' countries that recei+e! fun!ing from the ,an from 1=@> to 2000 *ell

o+er half *ere no ,etter off than ,efore an! t*enty *ere actually *orse off. The stu!yointe! out that 5iger recei+e! H:3@ million ,et*een 1=:> an! 1==> yet its er caita$5# ha! fallen in real terms more than >0 ercent !uring that time. In the same erio!Singaore *hich recei+e! one-se+enth as much ?orl! Ban ai! ha! seen its er caita$5# increase ,y more than : ercent a year.

Fo=8&: o& l%#: 7#o= #%+# +%& lo=%l &%. Some critics claim that ?orl!

Ban loans gi+e reference to Flarge infrastructure ro"ects lie ,uil!ing !ams an! electriclants o+er ro"ects that *oul! ,enefit the oor such as e!ucation an! ,asic health care.GThe ro"ects often !estroy the local en+ironment inclu!ing forests ri+ers an! fisheries.Some estimates suggest Fthat more than t*o an! a half million eole ha+e ,een !islace!

,y ro"ects ma!e ossi,le through ?orl! Ban loans.G Aaile! ro"ects argue

en+ironmentalists an! antiglo,aliation grous are articularly illustrati+e FThe Sar!arSaro+ar !am on the 5arma!a i+er in In!ia *as e'ecte! to !islace almost a Juarter of amillion eole into sJuali! resettlement sites. The #olonoroeste Arontier e+elomentscheme has le! to large-scale !eforestation in the Brailian rain forest. In Thailan! the #aMun !am has !estroye! the fisheries of the Mun i+er imo+erishing thousan!s *ho ha!ma!e their li+ing fishing an! fore+er altering the !iet of the region.G Aurther the larger

ro"ects ,ecome targets for corrution ,y local go+ernment officials ,ecause there is somuch money in+ol+e!./nother e'amle *as in 200= *hen an internal au!it foun! that the IAC ha! Fignore! itso*n en+ironmental an! social rotection stan!ar!s *hen it aro+e! nearly H200 million inloan guarantees for alm oil ro!uction in In!onesiaPIn!onesia is home to the *orl!s

secon!-largest reser+es of natural forests an! eat s*ams *hich naturally tra car,on!io'i!eNthe main greenhouse gas that causes climate change. But ramant !estruction of

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the forests to mae *ay for alm oil lantations has cause! giant releases of C72 into theatmoshere maing In!onesia the thir!-largest emitter of greenhouse gases on the

lanetP6Aor each in+estment commercial ressures *ere allo*e! to re+ail au!itors*rote.G


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international !e+eloment goals esta,lishe! in 2000 at the Millennium Summit that all 1=2Dnite! 5ations mem,er states an! t*enty-three international organiations ha+e agree! toachie+e ,y the year 201>. They inclu!e re!ucing e'treme o+erty re!ucing chil! mortalityrates fighting !isease ei!emics such as /IS an! !e+eloing a glo,al artnershi for!e+eloment. The ?orl! Ban is focuse! on the follo*ing four ey issues

1. I&=#%$ #%&7%#&=. In resonse to the criticisms o+er the !eca!es the ?orl! Ban

has ma!e rogress. More of the ?orl! Bans !ecision maing an! country assessments area+aila,le u,licly. The ?orl! Ban has continue! to *or *ith countries to com,atcorrution ,oth at the country an! ,an le+els.

2. E7%&$&: o=%l 8 & + !:+ o& 7o#. In 2001 the ?orl! Ban ,egan toincororate gen!er issues into its olicy. FT*o years later the ?orl! Ban announce! that it*as starting to e+aluate all of its ro"ects for their effects on *omen an! girlsG notingthat Fo+erty is e'erience! !ifferently ,y men an! *omenG an! Fa full un!erstan!ing ofthe gen!er !imensions of o+erty can significantly change the !efinition of riority olicyan! rogram inter+entions.G

3. I7#o& & =o8 =o7& %&$ &=#%&: 7o#. The ?orl! Bansolicies an! its role as a !onor ha+e hele! imro+e the a,ility of some countries to

secure more of the glo,al re+enues for ,asic commo!ities. In *an!a for e'amle reformstransforme! the countrys coffee in!ustry an! increase! e'orts. Oenya has e'an!e! itse'orts of cut flo*ers an! Dgan!a has imro+e! its fish-rocessing in!ustry. ?orl! Banefforts ha+e also hele! /frican financial comanies !e+elo.

9. I7#o&: !!=&= & $# &$8# %&$ l#%:&: + 7#% =o#. The ?orl!Ban has *ore! closely *ith ,usinesses in the ri+ate sector to !e+elo localinfrastructure inclu!ing o*er transortation telecommunications health care an! e!ucation.In /fghanistan for e'amle small !ams are ,uilt an! maintaine! ,y the locals themsel+esto suort small in!ustries rocessing local ro!uce.

The ?orl! Ban continues to lay an integral role in heling countries re!uce o+erty an!imro+e the *ell-,eing of their citiens. ?orl! Ban fun!ing ro+i!es a resource tocountries to utilie the ser+ices of glo,al comanies to accomlish their o,"ecti+es.

Qise in $lo,al Tra!e o+er > !eca!es

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I&78, T#&$, %&$ Eol8o& o! "o#l$ B%&' T#%$ A%&=

Dntil the 1=;0s the Ban *as ro"ect-focuse! ,ut in the 1=;0s an! 1==0s it ,ecameincreasingly in+ol+e! in olicy reform using nonin+estment loans. 4en!ing for tra!ea!"ustment through Structural an! Sector /!"ustment 4oans (S/4s an! S&C/4s) to a!!ress

,alance of ayments ro,lems accounte! for 2> ercent of all a!"ustment len!ing !uring the1=;0s. Ban analytical *or *as also imortant in the

olicy !ialogue *ith client countries.

L&$&: I&78 o T#%$

I&$ carrie! out a comrehensi+e re+ie* of the Bans ortfolio to i!entify tra!e-relate!ro"ects. Ban tra!e-relate! suort can ,e classifie! into si' main areas tra!eli,eraliation institutional tra!e facilitation (for e'amle customs) infrastructure-relate! tra!efacilitation (for e'amle air freight orts) ri+ate tra!e financing u,lic tra!e financingan! technical assistance for tra!e negotiations an! the ?T7 accession rocesses.

Magnitude, Relative Importance, and TrendsBan len!ing for tra!e *as su,stantial !uring the erio! un!er re+ie*. Bet*een 1=;@ an!2009 the Ban suorte! more than >00 len!ing oerations that *ere artly or fullyfocuse! on tra!e in 11@ countries. This assistance of a,out H3; ,illion suorte!freestan!ing tra!e loans an! loans *ith tra!erelate! comonentsNa,out ;.1 ercent of totalBan commitments !uring this erio!.

esite the common ercetion that tra!e *as a large art of the Bans ortfolio theshare of tra!e-focuse! len!ing oerations in the Bans total commitments *as comara,leto that for the Bans ma"or sectors of assistance such as e!ucation health an! u,licgo+ernance.

Since reaching "ust o+er H3 ,illion annually in 1==3 Ban len!ing for tra!e has +arie! ,utcontinues a long-term attern of !ecline. Se+eral concurrent e+ents may ,e line! to thistren!. To ,egin *ith many countries li,eralie! their tra!e regimes in the 1=;0s so thattra!e-relate! len!ing a!"ustment ,ecame less necessary an! it is not surrising that tra!elen!ing *oul! !ecline. 4i,eraliation *as further !eeene! through regional agreements.

In a!!ition o+er this erio! the International Monetary Aun! (IMA) ,ecame morerominent in tra!e olicy a!+ice an! incororate! tra!e con!itionality in its stan!-,yarrangements. The share of Aun! rograms *ith formal tra!e con!itionality rose from >>

ercent in the years ,efore 1==> to @0 ercent ,et*een 1==; an! 2001 though this has!roe! in the four years since (IMA 200>). The !ecline in Ban len!ing *oul! ha+e ,eene+en more !ramatic if not for the &ast /sia crisis in 1=== an! the emergence of ne*clients in &uroe an! Central /sia (&C/) !uring the 1==0s. Se+eral of these clientsun!ertoo tra!erelate! oerations inclu!ing a large multicountry tra!e facilitation ro"ect in2001.

In the ast four years a mo!est resurgence in tra!e-relate! len!ing has occurre! intan!em *ith rene*e! interest in tra!e ,y the Ban an! its clients. This len!ing is limite!to a fe* countries an! focuses on tra!e facilitation initiati+es *hich comrise t*o-thir!s ofall ne* len!ing. $i+en the significant +olume of re+ious a!"ustment len!ing it is unclear

*hether that len!ing *ill reco+er to the le+els of the early to mi!-1==0s.

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Thematic Focus: From Trade Liberalization to Trade Facilitation

The o+erall figures conceal a shift in the comosition an! emhasis of tra!e len!ing o+erthe ast t*o !eca!es. ?hile Ban assistance in the early 1=;0s focuse! on !irect len!ingto !e+eloment ,ans through lines of cre!it for tra!e finance ,y the ,eginning of 1=;@len!ing *as concentrate! on tra!e li,eraliation an! more !irect

tra!e romotion acti+ities such as suorting tra!e-relate! institutions an! e'orters.Together these t*o categories accounte! for @0 ercent of all len!ing for tra!e ,et*een1=;@ an! 1==9. In art this *as line! to the e'ort-le! gro*th messages of the 1987WorldDevelopment eport. But it *as also attri,uta,le to reform-min!e! olicy maers(nota,ly in 4atin /merica) *ho ,elie+e! in the ,enefits of tra!eli,eraliation.

uring the mi!-1==0s *hile tra!e li,eraliation remaine! an imortant comonent ofBan len!ing for tra!e (33 ercent) the focus on tra!e facilitation acti+ities intensifie! asattention shifte! to ,roa!er in+estment climate issues such as the imortance of tra!elogistics in cometiti+eness an! the glo,al +alue suly chain. 7n the infrastructure si!egreater emhasis on the tra!e ,enefits from infrastructureimro+ements *as e+i!ent in ma"or commitments suorting international roa! corri!ors an!

orts. The num,er of loans !e+ote! to tra!e-relate! institutions (rimarily customs)accounte! for 3@ ercent of tra!erelate! len!ing ,et*een 1==> an! 1=== maing this thesingle largest thematic area supported.

4en!ing for tra!e li,eraliation has mo+e! in *a+es across egions o+er time suggesting aFneigh,orhoo!G effect. 4arge amounts initially suorte! a set of early reforms in the 4atin/merica an! Cari,,ean egion (4/C). The emhasis then shifte! to Su,-Saharan /frica.

7+er time the Ban mo+e! to suort Mi!!le &ast an! 5orth /frican countries an! thenmost recently to &astern &uroe an! Central /sia. 4en!ing to &ast /sia *as concentrate!!uring the crises in the late 1==0s.

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In the ast four years len!ing for the institutional an! infrastructure asects of tra!efacilitation has increase! further as a share of tra!e-relate! len!ing. Institutions-relate! tra!efacilitation accounte! for almost half of all tra!e-relate! len!ing ,et*een 2000 an! 2009*hile len!ing for tra!e li,eraliation !ecline! noticea,ly. ?hile len!ing an! a!+ice relate!to the multilateral tra!ing system continues to ,e minuscule the num,er of Ban len!ing

oerations inclu!ing such suort !uring the 3 most recent years *as !ou,le the num,er!uring the rece!ing 13 years.

Much of the Bans earlier *or on tra!erelate! caacity ,uil!ing *as em,e!!e! inlen!ing oerations an! is more roerly !efine! as technical assistance. Bet*een fiscalyears 1=;@ an! 2000 there *ere 2= tra!erelate! technical assistance ro"ects of *hich 20are close! an! = are still acti+e. The o+er*helming ma"ority of these inter+entions (20 outof 2=) focuse! on suort for customs reform an! mo!erniation or on analysis relate! totra!e olicy reform.

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T>E BAN;S ROLE

DIFFERENT DEFINITIONS, CONFLICTING EPECTATIONS

The lac of consensus a,out the ?orl! BanLs secific role (an! ho* it shoul! ,e

translate! into an oerational mission measura,le o,"ecti+es an! olicies) has ,ur!ene! theinstitution for years. ifferences of oinion a,out the fun!amental role of the Ban go

,eyon! the fact that some sharehol!ing countries ,orro* from the Ban *hile othersro+i!e the fun!s.

?hile there are many e'ectations an! !efinitions of the fun!amental role of the Banfour !ifferent mo!els or ersecti+es are the most common. The first is the +ie* that the?orl! Ban is a financial interme!iary the Ban-as-a-,an mo!el. / secon! ersecti+e ormo!el is the +ie* of the Ban as an e+angelical agent in charge of changing the ,eha+iorof go+ernments in !e+eloing countries. The fourth is the +ie* that the ?orl! Ban is a

mechanism to transfer financial resources from richer to oorer countries.

Arom the Ban-as-,an ersecti+e the ?orl! BanLs role is Juite simly to ,e a ,an.Therefore maintaining the institutionLs long-term financial integrity is a crucial urose on*hich all other goals !een!. The secon! mo!el +ie*s the Ban as an instrument for thea!+ancement of the national interest of the countries *ith more influence on its !ecisions.Such national interest is e'resse! in their olicies to*ar!s other countries in rocurementgoals for their comanies in ro"ects finance! ,y the Ban or e+en in e'an!ingemloyment oortunities at the Ban for their nationals. The thir! is the e+angelicalmo!el. / gro*ing constituency sees the BanLs com,ination of money access no*le!ge

an! e'ertise as a o*erful instrument to con+ert the souls of go+ernments imlementingmisgui!e! u,lic olicies. This is in fact a more concrete manifestation of the e'ectationthat the BanLs main role is to suort a li,eral (or maret-,ase!) economic system ase'resse! in the romotion of li,eral tra!e an! in+estment regimes.

/nother +ersion of this aroach sees the Ban as an instrument for the romotion of+alues not rea!ily accete! ,y the tra!itional o*er structures *ithin !e+eloing countries.Increasing in+estment in an! attention to *omen en+ironmental rotection an! ,ettergo+ernance in terms of resect for human rights or accounta,ility an! transarency ingo+ernment !ecisions are the rime e'amles of the sort of o,"ecti+es that flo* from this

ersecti+e of the BanLs role.

Still others maintain that the a!+isory an! RimrimaturR roles of the ,an *ill gro* e+enfaster in the future as economic an! institutional constraints *ill increasingly limit its roleto act as a financial interme!iary. The argument is that the BanLs accumulate!!e+elomental e'ertise an! its caacity to generate an! !isseminate olicy-rele+antno*le!ge ha+e ,een gra!ually relacing its financial resources as its main assets. /s !onorcountries face increasing fiscal constraints an! ai! ,u!gets cannot coe *ith mounting!eman!s the BanLs caital *ill not gro* as fast as the nee!s of the ,orro*ers. This tren!*ill resuma,ly accelerate in the future ushing the Ban to*ar!s its no*le!ge-

interme!iary research-center consulting-comany role.

Ainally the fourth *i!ely hel! +ie* is that the Ban e'ists to transfer resources to oor

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countries. It is imossi,le accor!ing to this +ie* for an institution that has the romotionof !e+eloment at the core of its e'istence not to ha+e the suly of caital to !e+eloingcountries as its ,asic function. This ersecti+e stan!s in shar contrast *ith the firstmo!el *hich taes the +ie* that the Ban is a financial interme!iary.

The assumtion that the Ban is first an! foremost a ,an lea!s naturally to the

assumtion that it is an institution that has a fi!uciary resonsi,ility to its !eositors an!has to a!minister its loan ortfolio accor!ingly. The Ban raises fun!s in the caitalmarets at remium interest rates thans to the guarantees ro+i!e! ,y its sharehol!inggo+ernments an! go+ernment guarantees it secures for the loans it maes. It then len!sthese fun!s to !e+eloing countries at lo*er interest rates that those they *oul! normallysecure on their o*n.

But for those *ho assume that the Ban e'ists to transfer ,a!ly nee!e! resources to oorcountries ha+ing its essential urose !efine! as that of a financial interme!iary isconfusing means an! en!s. Aor the resource-transfer mo!el !e+eloment is the o,"ecti+ean! finance the instrument. Therefore it assumes that the ,an is a !e+elomentalinstitution first an! a financial interme!iary secon!. The Ban-as-,an ersecti+e reson!s

that *hile this may ,e true in ractice if the caacity of the Ban to raise cheaer fun!sfrom international financial marets is imaire! money for all the other !e+elomentalo,"ecti+es *ill ,e less rea!ily a+aila,le.

The resource-transfer ersecti+e counters ,y stressing the nee! for the in!ustrialie!countries to !o more for !e+eloing countries. In its more e'treme formulation the resourcetransfer mo!el of the Ban lea!s to a +ie* that e'ects the institution to resem,le less a

,an than a fun! that must ,e erio!ically relenishe! ,y its richer sharehol!er-!onors. Infact this is the role laye! ,y the BanLs concessionary cre!it arm the Internationale+elomental /ssociation (I/) *hich instea! of loans gi+es Rcre!itsR to the oorest

countries (!efine! as those *ith er caita incomes of less than H1200 er year) chargingonly a small Rser+ice feeR an! no interest rate. But accor!ing to the resource-transfer

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ersecti+e I/Ls geograhical an! financial scoe is too narro*. It argues that moremoney to more countries shoul! ,e transferre! if the !e+eloing *orl! is going to ha+e aserious chance to o+ercome its immense o,stacles. Aurthermore in recent years thisRresource transferR role has ,een !eclining. The BanLs net !is,ursements ha+e ten!e! to!ecrease su,stantially an! in some !e+eloing regions the Ban often e'tracts more fun!sthat it transfers. The Rnegati+e net transfersR of the Ban to the !e+eloing *orl!s ha+e

thus ,ecome the focal oint of most of the seeches of the $o+ernors of the Banreresenting ,orro*ing countries at their annual meetings.

But for those assuming that the ?orl! Ban is a ,an negati+e transfers shoul! not ,e acause of alarm. /ccor!ing to a Ban official

FI thin it erfectly normal that after a erio! of strong gro*th the Ban hasno* reache! a erio! of maturity. The ,anLs e'osure cannot ,e increase!*ithout significant !angers for the rating of the institution ,y financial marets.It *oul! ,e !angerous to !efine any net transfer target since it *oul! meanthat the ,an *oul! constantly increase its e'osure an! in ractice refinance

its o*n interest charges. I *oul! insist on strengthening the ,alance sheet ,othon the asset si!e imro+ing the Juality of the ortfolio an! on the lia,ilitysi!e ,uil!ing a stronger caital ,ase through larger ro+isions for losses an!more reser+es.G

Such *i!ely !iffering assumtions a,out the ,asic role of the ?orl! Ban naturallyengen!er +ery !ifferent +isions a,out its goals an! olicies. The stan!ar!s ,y *hich to

"u!ge the organiationLs erformance or the changes nee!e! to reson! to ne* ro,lems arealso +ery !een!ent on the assumtions a,out the BanLs role. The Juality of the ,anLsloan ortfolio for e'amle shoul! not ,e the to riority if the main oerational goal isto aro+e as many loans er year as ossi,le. This is the resource-transfer mo!el. If

instea! maintaining a to cre!it rating for the Ban ,y financial marets is seen as acon!ition *ithout *hich its other !e+elomental o,"ecti+es cannot ,e achie+e!-the Ban-as-

,an mo!el-then the Juality of the loans ,ecomes a central o,"ecti+e. Therefore transferringresources to clients shoul! not tae rece!ence o+er the Juality of the loan ortfolio.

Some also argue that these t*o o,"ecti+es nee! not ,e mutually e'clusi+e an! that theJuality of the ortfolio can ,e interrete! simly as an oerational constraint on the goalof ma'imiing the resources transferre! to ,orro*ing countries. But art of the !ifficulty inthe !e,ate o+er the Bans role an! o,"ecti+es is that *hat for some are o,"ecti+es forothers are means-or olicies-to achie+e other higher or!er goals. Aor some transferring

resources is the goal. Aor others o+erty re!uction is the goal an! transferring resources-inclu!ing no*le!ge-is a means to a!+ance to*ar!s that o,"ecti+e.

4en!ing to the countries of &astern &uroean an! the former So+iet Dnion ro+i!es a +eryillustrati+e e'amle of the ractical reercussions of the lac of consensus o+er the BanLsrole. The ?orl! Ban (together *ith the IMA) has ,een u,licly criticie! ,y somego+ernments in the $-@ for not reacting Juicly enough to the nee!s an! the emergenciesof these ne* clients. This accusation is +ali! for those *ho thin the BanLs role is totransfer resources to its clients. It is in+ali! ho*e+er for those *ho thin the Ban is a

,an as some $-@ go+ernments ha+e state!. This e'amle is also cite! ,y those *ho hol!

the +ie* that the Ban is simly an instrument to a!+ance the interests of its moreinfluential sharehol!ers. Arom this +ie*oint e+en the a!otion of the !ifferent ersecti+esa,out the fun!amental role of the Ban ,y the more o*erful sharehol!ers reson!s to

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their circumstantial interests an! therefore changes through time. #roonents of thisersecti+e cite as an e'amle the fact that the same countries that ha! urge! caution an!restraint in the BanLs actions !uring the !e,t crisis-citing the nee! to imeril the BanLsfinancial integrity-ha! no Jualms in checing these soun! financial rinciles at the !oor*hen ressing the Ban to tae imme!iate an! massi+e actions to ai! the former So+ietDnion.

The conseJuences of the lac of consensus among its o*ners a,out the fun!amental role ofthe ?orl! Ban ha+e ,ecome more +isi,le in recent years as a result of changinginternational circumstances nota,ly the en! of the col! *ar. But !ifferent +ie*s a,out the

,asic function of the Ban ha+e shae! its e+olution since its incetion an! *ill ro,a,lycontinue to coe'ist in the foreseea,le future. e+eloment is a multifacete! rocess an! thesharehol!ers of the Ban are olitical actors su,"ect to simultaneous contra!ictory ressures.This o,+iously limits the BanLs caacity to focus its efforts. /s a senior ,an official utit

FThese !ifferent +ie*s are hel! ,y the same sets of sharehol!ers-in!ee! often ,ythe same sharehol!er. ?hich +ie* re!ominates !een!s on the su,"ect an! time./n institution that gets such !i+erse an! +aria,le gui!ance as a stea!y !iet *illha+e ro,lems in focusing on fe*er o,"ecti+es far greater than those create! ,yinternal constraintsPG

ASSESSMENT OF "ORLD BAN;S SUPPORT FOR TRADE

B* IEG (INDEPENDENT E2ALUATION GROUP)

&'orts an! imorts ha+e risen as a share of the gross !omestic ro!uct ($#) across a*i!e range of countries fuele! in art ,y Chinas remara,le tra!e erformance an! thegro*th in ser+ices tra!e. Tra!e olicies ha+e also ,een significantly li,eralie!. /+erageimort tariffs ha+e fallen stea!ily o+er the erio! although the fall in other forms of

rotection has ,een more gra!ual. The ?orl! Ban has ,oth influence! an! ,een influence!,y these !e+eloments.

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The Ban has suorte! the reform of tra!e olicies an! the strengthening of tra!e-relate!institutions an! infrastructure in its client countries. Bet*een fiscal years 1=;@ an! 2009a,out ;.1 ercent of total Ban commitments (H3; ,illion) *ent to 11@ countries to helthem ,etter integrate into the glo,al economy. This financing has ,een accomanie! ,y alarge +olume of analysis in oerational economic an! sector *or (&S?) research

u,lications on tra!e an! *oring aers on tra!e-relate! toics.

The Bans interest in tra!e has gone through three hases each *ith a Juite !ifferentaroach. uring the first hase (starting in the 1=;0s) the Ban focuse! largely on the

tra!itional tra!e agen!a relate! to oening u economies. The Ban ,ase! its in+ol+ementon the imortance of tra!e for economic gro*th an! on the role of oenness in enhancinga countrys economic efficiency. By increasing the incenti+es for an! rofita,ility of

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e'orting Ban suort for tra!e reform *as e'ecte! to hel e'an! an! !i+ersifye'orts. The fin!ings of se+eral large multicountry comarati+e stu!ies reare! !uring this

erio! reinforce! this message (Chosi an! #aageorgiou 1=;:KOrueger Schiff an! al!es1==1K Michaely an! others 1==1K Thomas an! 5ash 1==1K Cooer an! others 1==3).

uring the secon! hase from the mi!- to late-1==0s the Bans emhasis on tra!e

!ecline! although the imact of earlier tra!e reforms *as still laying out. /nalytical *oran! (to a lesser e'tent) ne* len!ing *ere less than in the first hase. The most e+i!entasect of the !iminishe! attention to tra!e *as the !o*nsiing of Ban units *oring ontra!e issues. Concurrently the elimination of the ol! technical units un!er the reorganiationof 1==: !iserse! tra!e e'erts throughout the institution an! se+eral su,seJuently mo+e!on to *or on non-tra!e issues.

In the thir! hase initiate! *ith the collase of the ?orl! Tra!e 7rganiation (?T7)Seattle tra!e ministerial meeting in 1=== gro*ing ressure to !eli+er on the Millenniume+eloment $oals an! interest from !e+eloment artners (nota,ly ,ilateral !onors) le! theBan to rearaise its tra!e acti+ities. This hase has focuse! on the glo,al tra!ing system

an! F,ehin!-the-,or!er ,arriersG to tra!e.

In 2001 a !ecision *as ma!e to e'an! consi!era,ly the Bans *or on tra!e issues an!,y 8uly 2002 a ne* sector unit !e!icate! to tra!e ha! ,een esta,lishe! in the Ban. Ina!!ition a +irtual Tra!e eartment *as create! ,ringing together staff *oring on tra!eissues from the e+eloment &conomics Comle' (&C) the #o+erty e!uction an!&conomic Management 5et*or (#&M) an! the ?orl! Ban Institute (?BI). In this thir!stage the Ban increasingly treate! the multilateral tra!ing system as a frame*or *ithin*hich its client countries coul! achie+e greater economic integration (on eJual footing) an!larger num,ers of the oor *oul! ,e lifte! out of o+erty.

This e+aluation assesses the !e+eloment effecti+eness of Ban tra!e assistance ,et*een1=;@ an! 2009 ,ase! on the Bans state! strategies an! o,"ecti+es. FTra!eG in thisconte't refers to len!ing an! nonlen!ing acti+ities that enhance the en+ironment an!caa,ility of Ban clients to tra!e goo!s an! ser+ices in the glo,al economy. /s art ofthis stu!y a re+ie* of the Bans len!ing ortfolio an! economic an! sector *or *ascarrie! out to i!entify tra!e acti+ities. Si' main areas of len!ing suort *ere i!entifie!tra!e li,eraliation institutional tra!e facilitation (for e'amle customs) infrastructure-relate!tra!e facilitation (such as air freight orts) ri+ate an! u,lic tra!e finance an! technicalassistance for tra!e negotiations.

?hile there *as no formal tra!e strategy rior to 2001 three ey !ocuments ro+i!e!strategic an! technical gui!ance on Ban tra!e olicy a!+ice the 1987 World Developmenteport !nd"striali#ation and $orei%n Trade the 1=;; e+eloment Committee aer ontra!e an! the section on tra!e a!"ustment len!ing in 7erational irecti+e (7) ;.:0.

The main olicy reforms em,e!!e! in these !ocuments inclu!e! relacing Juantitati+erestrictions *ith tariffs as a first stage of tra!e li,eraliation maintaining lo* an! relati+elyuniform tariffs for efficiency an! olitical economy reasons an! realistic e'change ratesreJuiring lo* inflation. The !ocuments also encourage! stu!ies of the economic costs ofe'isting olicies e+aluations of the e'ecte! ,enefits of reform imro+e! !ata on in!icatorsan! measures of nominal an! effecti+e rotection an! strengthene! caacity of reforming

countries to assess their o*n olicies. The ?orl! e+eloment eort (?) alsosuorte! the increase! use of con!itionality in structural a!"ustment len!ing as a catalystfor tra!e reform. Together *ith a 2002 Boar! reort on tra!e these !ocuments ro+i!e the

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strategies an! o,"ecti+es against *hich Ban tra!e assistance is e+aluate!.

"o#l$ B%&' T#%$ A= 19@3001

Ban suort from 1=;@ through 2001 *as e'ecte! to (1) re!uce !isincenti+es fore'orting ,y eliminating the anti-e'ort ,iasK (2) e'an! an! !i+ersify e'orts there,yincreasing foreign e'change earningsK (3) mae imorts more rea!ily a+aila,le an! increase

imort cometition in final ro!uctsK an! (9) hel countries ,etter integrate into the glo,aleconomy.

The tyical tra!e olicy reform acage suorte! ,y the Ban ha! four comonentsI7o#-#l%$ #olicies such as eliminating or re!ucing Juantitati+e restrictions an! othernontariff ,arriers re!ucing imort tariff le+els an! !isersion maing tariff regimes moreuniform an! transarent re!ucing imort surcharges imro+ing imort roce!ures an!eliminating official reference rices. E7o#-#l%$ #olicies relate! to maing imorts a+aila,le for e'ortingK re!ucing e'ort

,ans ta'es an! licensesK re!ucing the antie'ort ,iasK e'ort cre!it an! financingK an!other e'ort incenti+es.

E=+%&: #% %&$ !o#:& =+%&: %&%:& Mo+ing to*ar! maret-!etermine!e'change rates e'change rate !e+aluation or ste a!"ustment an! a*ay from thea!ministrati+e allocation of foreign e'change. I&$8#%l %&$ o+# 877o#&: 7ol= #ricing reform in+estment romotioncometition olicy mareting ri+atiation la,or marets an! safety nets.

Ban suort for tra!e reform *as generally consistent *ith the 1=;@ ? on tra!e7erational irecti+e ;.:0 an! the literature on tra!e olicy reforms. &liminatingJuantitati+e restrictions (s) an! a!!ressing e'change rate !iseJuili,ria *ere often the firstactions the Ban recommen!e! in line *ith the literature. Most tra!e loans initiallycontaine! measures to a!!ress ,oth imort li,eraliation an! to re!uce !isincenti+es fore'orting. But in 19 countries that together recei+e! >> loans the Ban focuse! only onimort-relate! measures. 7+er time the Ban has ai! increase! attention to e'ort-relate!

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measures relati+e to imort li,eraliation.

More generally o+erall con!itionality associate! *ith tra!e has !ecline! across egions an!greater reliance is ,eing lace! on floating or single tranche con!itions rather than on rioractions as *as re+iously the case. The !ecline in con!itionality reflects the mo+e to*ar!more oen regimes a shift in the Bans focus to*ar! longer-term institutional an!

structural olicies a concurrent rise in IMA tra!e con!itionality an! a rise in tra!eli,eraliation through regional tra!ing arrangements (T/s). In more recent years the shiftalso liely reflects the e+olution of the Bans aroach to*ar! greater country-o*ne!con!itionality an! less rescrition as outline! in 7erational #olicy ;.:0 on !e+eloment

olicy len!ing.

Aour areas of concern emerge ho*e+er. Airst the literature suggests the imortance ofmacroeconomic sta,iliation to comlement tra!e reforms. But the Ban sometimessuorte! tra!e reforms in the resence of serious macroeconomic insta,ility. Secon! it iscrucial that comlementary measures such as remo+ing mareting an! rice !istortions as*ell as cometition olicy re!ucing la,or maret rigi!ities an! imro+ing the regulatory

en+ironment (currently more commonly thought of as Fin+estment climateG issues)accomany tra!e reforms. ?hile this *as the case sometimes comliance *ith thesecon!itions ten!e! to ,e the lo*est of all con!itions un!erscoring the olitical an!other !ifficulties associate! *ith their imlementation. Thir! tra!e-relate! ro"ects !i! nota!eJuately atten! to the o+erty an! !istri,utional outcomes inclu!ing la,or maret!ynamics an! this continues to ,e a ma"or *eaness in ro"ect !esign. Aourth the Ban!i! not tae the e'ternal en+ironment into account sufficiently an! thus !i! not !istinguishthe imact of e'ternal tra!e olicies an! shocs on tra!e outcomes for !ifferent grous of!e+eloing countries.

/ common criticism of the Bans tra!e olicy a!+ice is that it has follo*e! a Fone-siefits-allG aroach. The In!een!ent &+aluation $rou (I&$) e'amine! all a!"ustmentloans aro+e! ,et*een 1=;@ an! 2009 that containe! tra!e olicy comonents. ?hile theloans follo*e! seJuencing that *as ,roa!ly in line *ith the 1=;@ ? an! the economicliterature I&$ foun! little e+i!ence of a generic (or one-sie-fits-all) aroach to tra!ereform in the Bans client countries. Countries +arie! in the e'tent of macroeconomicsta,iliation they ha! achie+e! ,efore the reform *as intro!uce! an! in ho* an! *henthey chose to use e'ort-relate! olicies to stimulate tra!e romotion. Moreo+er countries*ere heterogeneous in ho* !eely they reforme! an! in the range of comlementary

olicies they intro!uce! to suort the tra!e reform.

$i+en the concerns raise! a,o+e an! in light of the e+ol+ing circumstances it can ,eseen that Ban tra!e a!+ice an! suort !uring the 1=;0s an! 1==0s *as too narro* infocus. Secifically it un!erestimate! the comle'ity an! seJuencing of comlementary

oliciesK the role of the e'ternal en+ironment (taing that en+ironment as largely gi+en)K theinteraction among tra!e gro*th an! !istri,utional outcomesK an! the country-secificconte't (such as initial con!itions an! institutions) in *hich these olicies interacte!.ConseJuently Ban a!+ice *as too otimistic a,out the ,enefits of tra!e li,eraliation forgro*th in the short run.

Project-level utcomes

Tra!e-relate! ro"ects ha+e imro+e! in erformance o+er time. In general tra!e a!"ustment

loans ha+e erforme! ,etter than other a!"ustment loans in terms of ro"ect outcomes (;:+ersus @; ercent satisfactory) *hile tra!e in+estment loans erforme! slightly *orse thanother in+estment loans (:= +ersus @2 ercent satisfactory resecti+ely). /t an aggregate

2=


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le+el ositi+e ro"ect outcomes *ere more liely to ,e associate! *ith mi!!leincomecountries lo* con!itionality goo! institutional frame*ors an! rior &S?. #ro"ect !esignunrealistic assumtions an! unsta,le macroeconomic en+ironments contri,ute! mostfreJuently to unsatisfactory outcomes for in!i+i!ual ro"ects.

utputs

The ro"ect !ata an! aggregate !ata from 9> samle countries sho* that Ban a!+ice an!len!ing contri,ute! to systematic re!uctions in rotection an! to maing tra!e regimes moreoen though the ace !iffere! across countries. Many !e+eloing countries sharly re!uce!the le+el an! !isersion of their imort tariffs an! their use of Juantitati+e restrictions *iththe greatest re!uctions in 4atin /merica. e+eloing countries also largely eliminate! e'ortta'es licenses an! ,ans. Blac maret remiums also !isaeare! as countries mo+e! theire'change rate regimes to*ar! maret-,ase! systems an! foreign e'change a+aila,ilityimro+e! nota,ly in /frican countries. The Ban *as less successful in heling countriesre!uce other nontariff ,arriers nota,ly in the Mi!!le &ast an! 5orth /frica.

utcomes

The e'ort suly resonse *as often +aria,le. ?hile e'ort !i+ersification occurre! inmost egions the lo* ,ase from *hich nontra!itional e'orts gre* in /frica meant e+enrai! gro*th rates *ere ina!eJuate to !ramatically change the comosition of /fricase'ort ,asets. Moreo+er many /frican countries e'erience! an erosion of cometiti+enessin their e'ort ,asets contri,uting to increase! marginaliation in glo,al tra!e. Imortsreson!e! to the reforms un!ertaen gro*ing rai!ly in all egions an! easing inutconstraints for imorters.


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e'ogenous shocs (!roughts commo!ity rices) an! timely imlementation ofcomlementary olicies *ere critical in !etermining *hether or not in!i+i!ual countriesreae! the full ,enefits of tra!e reform.

B%&' T#%$ A= 3001@04

The Bans recent tra!e rogram *hich *as re+ame! in 2001 has t*o o,"ecti+es (1)

mae the *orl! tra!ing system more Ffrien!ly to !e+elomentG or recirocally oenK an!(2) mae tra!e an imortant art of country !e+eloment strategies. The Ban emloye!research articiation in glo,al olicy !iscussions an! a!+ocacy tra!e caacity ,uil!ingan! mainstreaming of tra!e as tools to achie+e these o,"ecti+es. The assessment of!e+eloments !uring this erio! has to ,e consi!ere! in the conte't of the relati+ely ,rief

erio! un!er re+ie*. This is esecially liely to ,e a factor in the mainstreaming agen!a *hich necessarily reJuires greater commitment an! action ,y oerational units.

The resurgence in the Bans attention to tra!e is not rimarily characterie! ,y greatertra!e len!ing or con!itionality. Instea! it is reflecte! in a higher rofile in glo,al a!+ocacyan increase! +olume of tra!e-relate! analysis an! greater attention to the institutions

caacity to reson! to tra!e-relate! analytical nee!s an! oerational suort.

This e+aluation fin!s the Bans o,"ecti+es ,et*een 2001 an! 2009 to ,e rele+ant timelyan! largely resonsi+e to the rai!ly changing glo,al en+ironment on tra!e issues.


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rather than !irectly influencing outcomes. Staff in!icate that the Bans glo,al a!+ocacyrole is useful in ositioning the Ban among client countries esecially those in *hom theinstitution might other*ise ,e less engage! on tra!e issues (such as in 4atin /merica).

The Ban is meeting its tra!e-relate! caacity ,uil!ing (TCB) o,"ecti+es une+enly an! itaears that as currently state! the o,"ecti+es may not a!eJuately cature the scoe an!

riorities of Ban acti+ities. Secifically the Ban is meeting its commitment to a!+isecountries on tra!e olicy through a !ramatically increase! +olume of tra!e-relate! analytical*or that is the ,asis for country olicy !ialogue as *ell as through caacity ,uil!ingcomonents in len!ing oerations.

The Ban has also increase! its !ialogue *ith regional tra!e institutions. This is eseciallynota,le in the /frica egion. /nalysis has ,een con!ucte! on common e'ternal tariffsre+enue imlications an! ossi,le tra!e !i+ersion for se+eral T/s (such as the &ast/frica Community the &conomic Community of ?est /frican States an! Dnion&conomiJue et Monetaire 7uest /fricaine) as *ell as on &conomic #artnershi /greements*ith the &uroean Dnion. In 4atin /merica *or on Central /merica Aree Tra!e

/greement(C/AT/) *ith 4atin /merican officials *as timely.

The Ban is !oing less *ell heling countries to meet its state! o,"ecti+es of a!otingaroriate regional olicies an! articiating more effecti+ely in negotiations. It has ,eenleast effecti+e in heling countries manage e'ternal shocs an! a!"ustment costsrelate! to tra!e li,eraliation.

The most high-rofile initiati+e in the Bans TCB *or is the Integrate! Arame*or forTra!e-elate! Technical /ssistance (the IA) a multi!onor multiagency colla,orationoriginally set u in 1==@ to ro+i!e tra!erelate! technical assistance to the 9= least!e+eloe! countries (4Cs). ?hile !iagnostic nee!s assessments ha+e ,een carrie! out foralmost half of eligi,le 4Cs follo*-u an! imlementation ha+e ,een slo*.

Concrete roosals an! aro+als for tra!e caacity ro"ects are finally emerging. /s ofMay 30 200> 23 acti+ities (H;.1 million) ha! ,een aro+e!. / re+ie* of the roose!acti+ities suggests o+erla *ith other !onor acti+ities in some cases !efeating the uroseof !onor harmoniation. More generally the ace is slo* relati+e to the oha negotiationsan! the nee!s i!entifie! in the iagnostic Tra!e Integration Stu!y (TIS) an! there is nomechanism to ensure that the most critical riorities arefun!e! first.

T*o in!een!ent e+aluations of the IA *ere un!ertaen in 2003 an! 2009. /mong themain e+aluati+e fin!ings are that !esite a 2001 restructuring *eanesses from the originalrogram remain inclu!ing insufficient focus on imro+e! tra!e outcomes rather than therocess alone an! a shortage of fun!s (financial an! a!ministrati+e) to meet the i!entifie!!eman!s for technical assistance in !e+eloing countries. More generally I&$s re+ie* of2: glo,al u,lic rograms ro+i!es some useful lessons (7& 2009a). The most rele+antfor the IA are the nee! to lin financing to riorities in a systematic fashion to strengthenan! streamline the go+ernance an! management of rograms an! to !e+elo a results-,ase!management frame*or.

32


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Progress to!ard Mainstreaming Trade

Mainstreaming tra!e in Ban oerations has se+eral !imensions (&S? tra!e in assistancestrategies no*le!ge management an! incororation of rele+ant tra!e issues in sectoracti+ities an! strategies)K the Ban is !oing ,etter along some !imensions than others. Ithas reson!e! Juicly to ee u *ith the ?T7 negotiations an! other glo,al tra!e issuesan! to catalye a rai! increase in tra!erelate! analytical *or. Tra!e eartment staffmem,ers ha+e ,een an imortant art of this imro+ementNsharing their e'ertise throughmission articiation contri,utions to an! lea!ershi of reorts an! as eer re+ie*ers.

/fter sustaine! !ecline from the mi!-1==0s follo*ing the conclusion of the Druguay

oun! &S? on tra!e issues has risen in recent years in e+ery egion e'cet 4atin/merica an! the Cari,,ean *hich starte! at a high le+el. In the ast three years strategicegional flagshis on tra!e ha+e ,een carrie! out in e+ery egion e'cet /frica (*hereone is un!er *ay) an! ha+e ,een *ell focuse! on the articular concerns of the egionsthey co+er.

Dn!erinning this re+ersal is the greater interest of client countries in tra!e issues as theygrale *ith more comle' integration into the glo,al economy greater commitment an!interest of !onors lea!ing to a!!itional trust fun!s an! !e+eloment of a ne* tra!efocuse!economic reortNthe TIS *hich *as an imortant initial catalyst in surring analyticaltra!e *or in lo*-income countries ,y the Ban.

The focus of tra!e &S? ,roa!ene! o+er time from changes in incenti+es an! general tra!eerformance in the 1=;0s to encomass a ,roa!er !efinition of cometiti+eness (la,or costsan! infrastructure) an! e'ternal en+ironment consi!erations (such as the imact of egionalarrangements or maret access issues). Increasing attention has ,een gi+en to the analysisof egional tra!e integration issues *ith analysis an! a!+ice to egional organiationsnota,ly in /frica (&conomic #artnershi /greement an! common e'ternal tariffs forse+eral /frican T/s) an! 4atin /merica (such as the DS-C/AT/ agreement).


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esite the o+erall increase in oerational tra!e &S? the Ban has !one less *ell insystematically mainstreaming tra!e in Country /ssistance Strategies an! in sector acti+itiesan! olicies although the tren! is imro+ing. egional tra!e coor!inators (TCs) in each ofthe Bans si' oerational egions are e'ecte! to facilitate the information flo*

,et*een country management units (CMDs) an! the #&M 5et*or an! to ro+i!estrategic !irection on tra!e issues.


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ersecti+e to sector issues.


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Thir! as has ,een !one ,et*een the Transort an! /griculture Dnits on the one han!an! the Tra!e eartment on the other I&$ recommen!s that *oring arrangements *iththe #ri+ate Sector eartment ice-#resi!ency ,e esta,lishe! to highlight the interface

,et*een the t*o areas an! ,ring the glo,al !imension to ,ear more recisely. This cross-fertiliation of tra!e an! the nee! for ,etter integration of tra!e an! the finance ri+atesector an! infrastructure (A#SI) *or rogram is esecially e+i!ent in the *or on tra!e in

ser+ices. $reater interaction ,et*een the Tra!e eartment staff secialists in tra!e inser+ices an! the su,sectoral e'ertise in transort o*er finance telecoms an! so onlocate! in A#SI is nee!e!.

Recommendation .:

$trengthen /no!ledge Management '00orts

T*o actions are imortant in this area

Airst a concerte! effort to ,ring all country economists u to !ate on the main featuresan! alications of the ?orl! Integrate! Tra!e Solution (?ITS) soft*are *oul! enhancetheir a*areness of the glo,al tra!e issues an! their imlications for the countries they *or

on. It *oul! also ena,le them to suer+ise research assistants an! consultants an! to seefurther training if an! *hen nee!e!. Secon! no*le!ge management efforts coul! reflect greater cross-fertiliation *ith othernet*ors an! ,etter integrate tra!e *or !one in the center *ith country-le+el *oron agriculture economic olicy la,or marets an! ri+ate sector !e+eloment. /s artof these efforts the ossi,ility of "oint thematic grous *ith other net*ors shoul! ,ee'lore!. More generally I&$ recommen!s a more effecti+e use of no*le!gemanagement tools tailore! to ey target grousNacross sectors. / mechanism to o,tainregular systematic fee!,ac from oerational staff on the most imme!iate an! rele+anttra!e-relate! toics *oul! ,e helful as the sur+ey i!entifie! gas !esite thecan+assing con!ucte! ,y regional tra!e coor!inators !uring the year. Ainally greatersharing of country e'erience in articular areas much as *as !one *ith the *or inagricultural stan!ar!s is nee!e!. This *ill reJuire greater suort from the center toensure Juality at entry for ro"ect !esign as *ell as economic an! sector *or.

3:


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CONCLUSION

The ?orl! Ban has ,een laying an imortant role in romoting economic!e+eloment to the mem,er countries since its e'istence. The ,an has hele! in the

esta,lishment of reasona,le International loan con!itions. It has also hele! to !e+eloa system of multilateral tra!e an! in+estment ,y ermitting the ,orro*ing countries tosen! the rocess of loan in any country they lie. The ,an has also romote!regular ser+icing an! reayment of loan ,y the ,orro*ing countries ,ecauseultimately all the mem,er countries are "ointly resonsi,le for any financial ,ite!uring the oeration.

The ?orl! Ban has encourage! the ,orro*ing an! len!ing of fun!s for the soun!!e+eloment ro"ects only. Before e'ten!ing loans the Ban loos into the feasi,ilityof the ro"ect. The loan is grante! only if the ro"ect is +ia,le.

The ?orl! Ban has ren!ere! +alua,le ser+ices to the !e+eloing countries of the*orl!. It has e'ten!e! loans to those less !e+eloe! countries for the ro"ects lieagriculture irrigation o*er transort e!ucation era!ication of o+erty etc. /s aresult of ?orl! Ban !e+eloment assistance the !e+eloing countries ha+e ma!e asu,stantial economic rogress. The Ban may not come u to the e'ectations of the!e+eloing countries. But in e+aluating its role *e shoul! not ignore the limitations*ithin *hich it has ,een instrumental in accelerating the ace of economic gro*th in!ifferent mem,er countries of the *orl! +i. the !e+eloing an! the !e+eloe!mem,er countries of the *orl!.

The ?orl! Ban has until no* sho*n Juite a heart for glo,al tra!e imro+ingglo,aliation an! li,eraliation. It has its o*n shortcomings as an organiation too.But *ith the human ten!ency of imro+ement e+en the organiation is correcting its

ast errors an! is reare! to face future challenges in international tra!e an!,usiness.

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REFERENCES

Carnegie &n!o*ment #u,lication- Moiss 5aUm /ril 1==9

International Business 7ortunities an! Challenges in a Alattening ?orl! +.1.0

- Mason /. Carenter an! San"yot #. unung

Challenges an! Strategies of The ?orl! Ban (In!ian Streams esearch 8ournal)- r. oshanumar M. Bhigania May 2012

A/Ls from *e,.*orl!,an.org

/ssessing ?orl! Ban Suort for Tra!e (1=;@-2009)/n I&$ (In!een!ent &+aluation $rou) &+aluation

- ?orl! Ban 200:

&conomies of $lo,al Tra!e an! Ainance- Dni+ersity of Mum,ai
http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21http://www.carnegieendowment.org/experts/?fa=expert_view&expert_id=21

role of world bank in global trade

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